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Krause v. Nevada Mutual Insurance Co.

United States District Court, D. Nevada

June 24, 2015

SANDRA K. KRAUSE, Plaintiff(s),


JAMES C. MAHAN, District Judge.

Presently before the court is a renewed motion for summary judgment submitted by defendants Nevada Mutual Insurance Company (hereinafter "NMIC") and Trean Corporation (hereinafter "Trean"). (Doc. # 197). Plaintiff Sandra Krause filed a response, (doc. # 205), and defendants filed a reply, (doc. # 214).

Also before the court is a partial motion for summary judgment submitted by Krause. (Doc. # 200). Defendants filed a response, (doc. # 216), and Krause filed a reply, (doc. # 221).

Finally before the court is defendants' motion for leave to supplement the record. (Doc. # 241). Krause filed a response, (doc. # 245), and defendants filed a reply, (doc. # 247).

I. Background

This case arises out of Krause's employment at Trean. Trean, a Minnesota corporation, provides management and consulting services to insurance companies. One such company was NMIC, a Nevada corporation that maintains a contractual agreement with Trean. Under this agreement, Trean provides NMIC professional services, including insurance reporting, claims administration, and underwriting functions.

Trean and NMIC share several of the same corporate officers and directors. Andrew O'Brien is the president of both companies. Patricia Schaffran, plaintiff's former supervisor, is a senior vice president at Trean and serves as its chief financial officer and human resources manager. Schaffran is also the corporate secretary and treasurer for NMIC.

Trean hired plaintiff as its vice president of claims in May 2007. Plaintiff performed claims administration for NMIC, working out of the company's office in Las Vegas, Nevada. She performed similar services for Benchmark, a subsidiary of Trean. Her initial base salary was $110, 000. Plaintiff qualified for standard benefits, such as medical and retirement, and was afforded additional benefits not offered to any other vice president, including assistance with her mortgage and car insurance. She received raises and bonuses throughout her tenure.

During 2008, Charles Wallace, an NMIC founder who worked in the same Las Vegas office as plaintiff, began engaging in conduct that plaintiff found offensive. Robert McBride, an attorney providing defense work to NMIC's clients, sent messages containing pornography to Wallace's work email and to friends outside of NMIC. Plaintiff never received these emails. In August 2008, NMIC assigned plaintiff to review discovery materials for a suit between NMIC and McBride's firm over a billing dispute. During her review, she noticed the exchange of pornography. As a result of the emails, NMIC removed McBride from its panel of defense attorneys.

Shortly thereafter, plaintiff and O'Brien discussed the pornography exchange at a meeting, where O'Brien made a comment about pornography being "not that bad." Plaintiff expressed concern to Schaffran about both the emails and O'Brien's comment, (Doc. # 206-4 p. 9), but neither plaintiff nor Schaffran filed a formal written complaint.

The next incident occurred in October 2008, during a risk management seminar that NMIC hosted for doctors. Plaintiff gave a presentation regarding agitated patients under the influence of drugs or alcohol, advising doctors not to touch such patients. After the presentation, Wallace joked to the attendees about plaintiff's advice. "If you see me out sometime in that state and condition... you can touch me." (Doc. # 207-5 p. 346). Plaintiff complained to Wallace directly about his comment and then reported it to Schaffran.

Finally, in November 2008, Trean instituted mandatory sensitivity training, which included Wallace. Plaintiff alleges that he made inappropriate comments during this training.

Plaintiff claims that, following her complaints about Wallace's conduct, the company retaliated against her. First, plaintiff alleges retaliation because in May 2009 defendants sent out customer satisfaction surveys to doctors regarding their interaction with the claims department. Plaintiff asserts retaliation because surveys were sent regarding only the claims department. The staff earned positive reviews, and customers specifically complimented plaintiff's work. Trean also sent out surveys in 2010, receiving similar responses.

Next, plaintiff alleges retaliation because sometime in 2010, Trean had one of its vice presidents, Steven Novak, conduct an audit of subsidiary Benchmark's claims department, which plaintiff oversaw. Plaintiff asserts the audit was retaliatory because (1) it was her responsibility to arrange for such audits, (2) it was planned without her knowledge, and (3) she believed Novak was unqualified to perform the audit.

Finally, plaintiff alleges retaliation because O'Brien cancelled a meeting with her and never rescheduled or followed up to see what she wanted to discuss. In August 2010, plaintiff scheduled a meeting with O'Brien, who lives in Minnesota but was visiting Las Vegas for a hearing. Plaintiff sought to discuss her workplace concerns regarding differential treatment of female employees and the aforementioned "retaliatory" events. O'Brien was unable to make the meeting, and had Schaffran inform plaintiff of the cancellation. Plaintiff never attempted to reschedule the meeting and did not follow up further with O'Brien.

Plaintiff resigned her position on December 9, 2010, effective January 16, 2011. However, she entered into an independent consulting arrangement with Trean to assist in transitioning the claims in her department, which lasted a few months. Plaintiff subsequently filed a charge of discrimination and retaliation with the EEOC against Trean and brought suit.

Plaintiff initiated this suit on December 21, 2011 in the Eighth Judicial District of Nevada. (Doc. # 1-1). Plaintiff alleged (1) gender-based discrimination in violation of Title VII; (2) gender-based discrimination in violation of state law; (3) retaliation in violation of Title VII, (4) intentional infliction of emotional distress; (5) constructive discharge; (6) negligent hiring, supervision and retention; (7) tortious interference with an employment relationship; and (8) breach of the covenant of good faith and fair dealing. (Doc. # 1-1).

Defendants petitioned for removal to this court on March 1, 2012. (Doc. # 1). Defendants then filed a motion to dismiss. (Doc. # 5). This court granted defendants' motion on counts four through eight. (Doc # 31). Three claims remain: (1) gender discrimination under 42 ยง U.S.C. 2000e et seq. (Title VII); (2) gender discrimination under N.R.S. 613.310 et seq.; (3) and retaliation under both aforementioned discrimination statutes. (Doc # 1-1).[1]

Defendants now move for summary judgment on all claims. (Doc. # 197). Plaintiff moves for partial summary judgment on her gender discrimination claims. (Doc. # 200).

After defendants and plaintiff fully briefed their respective motions for summary judgment, plaintiff discovered evidence that Trean did not include one of its former vice presidents, Ryan Saul, on the compensation chart that it provided to plaintiff during discovery. The chart from Trean contained comprehensive compensation information for the assistant vice presidents and vice presidents that Trean employed from 2008 through 2011, the time period that Trean employed plaintiff. However, the chart did not list Saul as a vice president or make any reference to his employment at Trean.

Plaintiff filed a motion to supplement the summary judgment record with newly discovered evidence related to Saul's employment. (Doc. # 235). Plaintiff sought to admit two new exhibits: (1) a press release by Trean, which publicly announced the hiring of vice presidents Steve Novak and Ryan Saul, and senior vice president Sean Ryan; and (2) a printout of Saul's LinkedIn page, which indicated that Trean had employed him from February-March 2009. (Doc. # 235 at 7). Plaintiff asserted that these exhibits would bring necessary light to her gender-based pay discrimination claim. Defendants indicated that they did not oppose the motion. The court granted plaintiff's motion on March 27, 2015. (Doc. # 242).

Defendants filed their own motion to supplement the record. Defendants assert that Trean inadvertently excluded Saul from the compensation chart. Defendants assert that they became aware of Trean's inadvertent exclusion of Saul only when plaintiff filed her motion to supplement the record. (Doc. # 241 at 3). Defendants assert that, upon receiving plaintiff's motion to supplement the record, they offered to stipulate to reopen discovery relating to Saul and plaintiff's motions for leave in an effort to provide both plaintiff and the court with all relevant information on those issues. ( Id. at 4). Defendants further assert that plaintiff declined their offer to stipulate to reopen discovery, prompting defendants to file the instant motion to supplement the record. ( Id. ). Therefore, defendants ask that they be allowed to supplement their disclosures to plaintiff.

The court will address defendants' motion to supplement the record first, as the court's determination of whether to allow defendants to supplement affects the evidentiary record this court may consider in evaluating the parties' motions for summary judgment.

II. Legal Standards

A. Rule 26(a) disclosures

Rule 26(a)(1)(A) provides that parties must provide initial disclosures to the opposing parties without awaiting a discovery request. The disclosures must include: (i) the name of each individual likely to have discoverable information that the disclosing party may use to support its claims and defenses; (ii) a copy of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses; and (iii) a computation of each category of damages claimed by the disclosing party. See Fed.R.Civ.P. 26(a)(1). In the event that a party learns that its disclosures are incomplete or inaccurate, it has a duty to supplement them "in a timely manner." See Fed.R.Civ.P. 26(e).

When a party fails to meet its initial disclosure obligations, the court turns to Rule 37(c) to determine whether sanctions are appropriate. Rule 37(c)(1) provides that a non-compliant party is "not allowed to use the information or witness to supply evidence on a motion... unless the failure was substantially justified or harmless." The party facing the sanction has the burden of showing substantial justification or harmlessness. See Yeti by Molly, Ltd. v. Deckers Outdoor Corp., 259 F.3d 1101, 1106-07 (9th Cir.2001). Even where nondisclosure was neither harmless nor justified, however, the court is not required in all instances to exclude evidence as a sanction. Jackson v. United Artists Theatre Circuit, Inc., 278 F.R.D. 586, 594 (D. Nev. 2011). Rule 37(c)(1) also enumerates a number of other potential sanctions, including payment of reasonable expenses incurred, an order that the movant may inform the jury of the opposing party's failure, and any other "appropriate" sanction, including those listed in Rule 37(b)(2)(A)(i)-(vi).

The court has wide discretion in determining the appropriate sanction. See Yeti, 259 F.3d at 1106. In determining the appropriate sanction, the court looks to five factors: (1) the public's interest in expeditious resolution of litigation; (2) the court's need to manage its docket; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions. See Wendt v. Host Int'l, Inc., 125 F.3d 806, 814 (9th Cir. 1997). Moreover, where evidence exclusion "amount[s] to dismissal of a claim, the district court [is] required ...

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