13-001911 Kelli Lawhead vs. Adams And Reese, Formerly, D/B/A Igler And Dougherty Law Offices, P.A. Status: Closed Recommended Order on Monday, July 21, 2014.

Summary: Petitioner did not prove by a preponderance of the evidence that Respondent was Petitioner's employer on the date of the alleged unlawful termination, or that Respondent was liable to Petitioner under any theory of successor liability.

STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

KELL I LAWHEAD ,

Petitioner ,

vs. Case No. 13 - 1911

ADAMS AND REESE, FORMERLY d/b/a

IGLER & DOUGHERTY LAW OFFICES,

P.A. ,

Respondent .

/

REVISED RECOMMENDED ORDER OF DISMISSAL

A Motion hearing was conducted in this matter on

January 10, 2014 , in Tallahassee , Florida, before Suzanne Van

Wyk , a designated Administrative Law Judge of the Division of

Administrative Hearings.

APPEARANCES

For Petitioner: Lauren F. Strickland , Esquire

Marie A. Mattox, P.A.

310 East Bradford Road

Tallahassee , Florida 32 303

For Respondent: Leslie A. Lanusse , Esquire

Adams and Reese, LLP

701 Poydras Street

4500 One Shell Square

New Orleans, Louisiana 70139

STATEMENT OF THE ISSUE

Whether Respondent was PetitionerÓs employer at the time of

PetitionerÓs alleged unlawful termination , or is otherwise

liable to Petitioner for alleged unlawful termination under any

theory of successor liability .

PRELIMINARY STATEMENT

On January 18, 2013 , Petitioner filed a Charge of

Discrimination with the Florida Commission on Human Relations

(FCHR), alleging that Respondent discriminated against h er b ased

on her disability . The basis for the charge was PetitionerÓs

dismissal from employment following an extended hospital stay

for migraine headaches.

An investigation of the charge was made by FCH R. On

April 12, 2013 , FCHR issued its Notice of Determination : No

Cause and Determination: No Cause , wh ich conclud ed that there

was no reasonable cause to believe that a discriminatory

employment practice had occurred.

Petitioner disagreed with FCHRÓs determination and timely

filed a Petition for Relief (Petition) on May 17, 2013 . The

petition was forwarde d to the Division of Administrative

Hearings for a formal hearing.

The final hearing was scheduled for August 28, 2013 , but

was canceled and placed in abeyance upon PetitionerÓs Unopposed

Motion for Continuance and representation that the parties were

discussing settlement and that Petitioner would be seeking to

amend her Petition . The undersigned requested a status report

on or before September 25, 2013. No status report was filed.

On October 1, 2013, Petitioner filed an Amended Petition

naming Ð Igle r & Dougherty Law Offices, P.A.Ñ (Igler &

Dougherty) , as an additional Respondent. The undersigned sua

sponte entered an Order to Show Cause why Igler & Dougherty

should not be dismissed for lack of jurisdiction because the

entity was not named in Petitio nerÓs original charge of

discrimination. Both parties timely filed a Response thereto,

and Petitioner requested an evi dentiary hearing on the matter.

In addition to its Response to the Order to Show Cause,

Respondent filed a Motion for Summary Judgment requesting the

undersigned to dismiss Adams and Reese because it was not

PetitionerÓs employer at the time the alleged act of

discrimination occurred and did not assume any liabilities of

her employer. The undersigned denied RespondentÓs Motion for

Summary Judgment and requested available dates from the parties

for an evidentiary hearing on the issue of w hether Adams and

Reese was PetitionerÓs employer at the time of her dismissal, or

otherwise responsible for the alleged discriminatory act.

A hearing was scheduled for December 4, 2013, but

rescheduled to January 10, 2014, on PetitionerÓs Unopposed

Motion for Continuance. The hearing commenced as schedule d.

At the hearing, the parties offered the testimony of

Petitioner and Charles P. Adams, Adams and ReeceÓs Managing

Partner. PetitionerÓs Exhibits 1 and 2 were admitted into

evidence. RespondentÓs Exhibits 1, 3 - 6, and 8 - 10 were admitted.

At the close of the hearing, the undersigned ruled in the

negative on the issue of whether Adams and Reese was

PetitionerÓs employer at the time of her dismissal, or was

otherwise responsible for the alleged discriminatory employment

practice. That ruling is memorialized herein. The

undersignedÓs ruling on the jurisdictional issue is made in an

Order Striking PetitionerÓs Amended Petition for Relief entered

on March 20, 2014 .

The undersigned entered a Recommended Order of Dismissal in

this case on March 2 0, 2014. On June 11, 2014, the Commission

entered an Agency Order Remanding Petition for Relief from an

Unlawful Employment Practice, explaining that the undersigned

failed to make findings of fact and conclusions of law to

support her ruling that Respond ent Ðwas not otherwise liable for

the alleged discriminatory practice.Ñ The undersigned accepted

remand by Order dated June 13, 2014, and instructed the parties

to file proposed recommended orders solely on the issue of

successor liability within 20 days of the date of the Order.

Respondent timely filed a Proposed Recommended Order, which

was considered in the preparation of this Order. Petitioner did

not file a proposed recommended order.

FINDINGS OF FACT

1 . Petitioner was employed as a Legal Assistant by Igler &

Dougherty Law Offices, P.A. (Igler & Dougherty) , in Tallahassee,

Florida, for approximately three - and - a - half years.

2 . Petitioner was terminated by Igler & Dougherty by

l etter dated February 6, 2012, allegedly for failure to make

Ðadequate progression to date.Ñ

3 . Petitioner alleges that she was unlawfully terminated

after treatment for migraine h eadaches during an extended

hospital stay.

4 . Respondent , Adams and Reese, LL P , is a limited

liability law partnershi p headqua rtered in Louisiana, with

offices in Louisiana, Mississippi, Tennessee, Texas, Alabama,

Florida , and Washington, D.C.

5 . Charles P. Adams , Jr., is RespondentÓs M anaging

P artner .

6 . In mid - summer 2012, Respondent approached George Igler,

Par t n er in Igler & Dougherty, about the possibility of joining

Adams and Reese to establish the firmÓs Tallahassee office.

7 . Mr. Adams was primarily responsible for all discussions

with Mr. Igler and other members of Igler & Dougherty who

eventually joined Respondent .

8 . On October 1, 2012, Respondent announced the official

open ing of its Tallahassee office . The new office was located

at 2457 Care Drive, the building that formerly housed Igler &

Dougherty.

9 . At no time before October 1, 2012, did Respondent

maintain a n office or employ individuals in Tallahassee,

Florida.

10 . Mr. Igler and Mr. Dougherty joined Respondent as

partner s . Other former Igler & Dougherty lawyers joined

Respondent as partners and associates .

1 1 . Respondent also hired some of the support staff from

Igler & Dougherty. Respondent did not hire Petitioner.

1 2 . Respondent did not merge with Igler & Dougherty, did

not acquire the assets of Igler & Dougherty, and did not assume

the liabilities of Igler & Dougherty.

1 3 . Igler & Dougherty retained its accounts receivable and

work in progress, and Mr. Igler and Mr. Dougherty continued to

wrap up the business of Igler & Dougherty after joining Adams

and Reese.

14 . Respondent is managed by its Managing Par tner and an

Executive Committee comprised of six partners. None of the

attorneys or employees of Igler & Dougherty hired by Respondent

are Executive Committee members.

15 . Respondent has two classes of partners, capital

partners and income p artners . Only capital p artners have an

ownership interest in the firm.

16 . Only one of the seven attorneys hired by Respondent

from Igler & Dougherty, Mr. Igler, is a capital partner. On

October 12, 2012, the date Respondent opened its Tallahassee

office, Respon dent had 114 additional capital partners, none of

whom had worked for Igler & Dougherty.

17 . At no time did Respondent employ Petitioner.

Respondent did not participate in PetitionerÓs termination nor

did it have any role in the decision to terminate her .

18 . At the time Petitioner filed her Charge of

Discrimination with the Commission, the Florida Secretary of

State website showed that Igler & Dougherty, P.A., was an active

Florida registered corporation.

CONCLUSIONS OF LAW

19 . The Division of Adminis trative Hearings has

jurisdiction over the parties to and the subject matter of this

proceeding . § 120.57(1), Fla. Stat . (201 3) .

20 . Section 760.10 , Florida Statutes (2012) , provides, in

pertinent part:

(1) It is an unlawful employment practice

for an employer:

(a) To discharge or to fail or refuse to

hire any individual, or otherwise to

discriminate against any individual with

respect to compensation, terms, conditions,

or privileges of employment, because of such

individual's race, color, religion, s ex,

national origin, age, handicap, or marital

status.

21 . Petitioner maintains that Adams and Reese,

particularly Mr. Dougherty, discriminated against her on account

of her disability.

22 . The term ÐemployerÑ is defined in section 760.02(7) as

Ðany person employing 15 or more employees for each working day

in each of 20 or more calendar weeks in the current or preceding

calendar year, and any agent of such person.Ñ Though not

explicit in t he statute, the ÐemployerÑ must have an employee -

employer relationship with the person alleging discrimination in

order to be liable for an unlawful employment practice under

section 760.10(1).

23 . The facts do not support a conclusion that Adams and

Rees e was PetitionerÓs employer at the time Petitioner was

terminated, or that Adams and Reese was responsible for her

termination . Petitioner was neither employed nor terminated by

Adams and Reese.

24 . Nor can Adams and Reese be liab le to Petitioner for

alleged unlawful termination of Petitioner under any theory of

successor liability . Traditional corporate law holds that the

liabilities of a predecessor corporation may not be imposed on

the successor corporation unless :

The successor expressly or impli edly assumes

obligations of the predecessor; (2) t he

transaction is a de facto merger; (3) The

successor is a mere continuation of the

predecessor; or (4) The tr ansaction is a

fraudulent effort to avoid the liabilities

of the predecessor.

Bernard v. Kee M f g. Co. , 409 So. 2d 1047 , 1049 (Fla. 1982);

Anders for Anders v. Jacksonville Elec . Auth . , 443 So. 2d 330

(Fla. 1 st DCA 1983) .

25 . Applying this rule in the instant case, the

undersigned finds no facts on which liability could be imposed

on Respondent for PetitionerÓs alleged unlawful termination.

26 . It is undisputed that Respondent did not aquire the

accounts receivable or work in progress from Igler & Dougherty.

There was no merger of the two companies. There is no evidence

that Respondent otherwise assumed the assets or liabilities of

Igler & Dougherty. Thus, Respondent is not liable to Petitioner

under the first theory of suc cessor liability.

27 . A de facto merger occurs when one corporation is

absorbed by another without formal compliance with statutory

requirements for a merger. See Lab. Corp. of America v. ProfÓl

Recovery Network , 813 So. 2d 266 , 270 (Fla. 5th DCA

2002) (citations omitted)(de facto merger occurred where the

corporations were governed by a sole officer and shareholder,

shared the same attorney and registered agent, conducted the

same business, ha d substantially the same employees and

customers, the same te lephone and fax numbers, and the same

accounting system and computerized databases).

To determine if a de facto merger has

occurred, the finder of fact may look at any

factors reasonably indicative of commonality

or distinctiveness. ÒThe bottom - line

ques tion is whether each entity has run its

own race, or whether there has been a relay -

style passing of the baton from one to the

otherÓ. Id. (citations omitted).

28 . Ð To find a de facto merger there must be a continuity

of the selling corporation evidence d by the same management,

personnel, assets and physical location; a continuity of the

stockholders, accomplished by paying for the acquired

corporation with shares of stock; a dissolution of the selling

corporation; and assumption of the liabilities. Ñ Mu nim v. Azar ,

648 So. 2d 145, 153 - 54 (Fla. 4th DCA 1994) .

29 . In Serchay v. NTS Ft . Lauderdale Office Joint Venture ,

707 So. 2d 958, 960 (Fla. 4 th DCA 1998), the court refused to

impose successor liability on an entity solely because the

successor entity used some of the predecessorÓs equipment and

office space and took on former employees of the predecessor.

The court also noted that the dissoluti on of the predecessor,

the timing of which is a key element in assessing whether a de

facto merger occurred, was involuntary. Id .

30 . In the case at hand, there was no de facto merger of

Igler & Dougherty with Respondent. Management of Respondent

does n ot include the same management team as that of Igler &

Dougherty. Respondent is managed by Charles Adams, Jr. and an

Executive Committee, none of whom are former Igler & Dougherty

managers. Respondent did not hire all the former employees of

Igler & Doug herty. Respondent had Ðrun its own raceÑ with over

590 attorney s and staff members prior to hiring attorneys and

staff from Igler & Dougherty.

31 . Finally, there was no evidence that Igler & Dougherty

dissolved shortly after Respondent opened its Tallahassee

office. In fact, there was no evidence that Igler & Dougherty

ever dissolved.

32 . The evidence did show that Respondent opened its

Tallahassee office in the same space formerly occupied by Igler

& Dougherty, for which Respondent entered into a lease separate

from Igler & Dougherty, and utilized some of the same office

equipment and phone lines. However, those facts alone are

insufficient for a determination that a de facto merger

occurr ed.

33 . Respondent is not liable to Petitioner for alleged

unlawful termination on a de facto merger theory of successor

liability.

34 . A continuation of business that results in liability

of the successor corporation is merely a continuation or

reincar nation of the predecessor corporation under a different

name. Muni m , 648 So. 2d at 154. The Ð purchasing corporation

must not merely be a Ò new hat Ó for the seller with the same or

similar entity or ownership. Ñ Id . While having common

attributes does not automatically impose liability on a

successor corporation, merely repainting the sign on the door

and using new letterhead certainly gives the appearance that the

new corporation is simply a continuation of the predecessor

corporation. Lab. Corp. , 813 So . 2d at 270. The key element of

a continuation is a common identity of the officers, directors,

and stockholders in the two corporations. See Serchay , 707

So. 2d at 960; Munim , 648 So. 2d at 154.

35 . None of the attorneys Respondent hired from Igler &

Dougherty serve as either RespondentÓs managing partner or as

members of RespondentÓs Executive Committee. While Mr. Igler

was hired as cap it al partner, having an ownership interest in

the firm, he is one of approximately 140 capital partners . None

of t he other capital partners ever worked for Igler & Dougherty.

Thus, the Tallahassee office of Adams and Reese was not just a

mere continuation of the business of Igler & Dougherty , and

cannot be liable to Petitioner for alleged unlawful termination

under t his theory of successor liability .

36 . ÐFlorida has long recognized the principle that a

voluntary conveyance by one who is indebted is presumptively

fraudulent when attached by a judgment creditor upon a debt

existing at the time of the conveyance.Ñ Mun im , 648 So. 2d at

152.

37 . Section 726.105, Florida Statutes (2013), prohibits

any transfer of business Ðwith actual intent to hinder, delay,

or defraudÑ any present or future creditor. When determining

whether there was actual intent, considerations may be given to

several factors, including the timing of the transfer.Ñ

§ 726.105(2), Fla. Stat . A suit or threatened suit before the

transfer is made or obligation incurred would be sugge stive of

actual intent. See Id ; Perrot v. Frankie , 605 So. 2d 118, 120

(Fla. 2d DCA 1992)(transfer of property to daughter by quitclaim

deed during pendency of personal injury litigation against

father held to be fraudulent transfer to protect the asset ) .

38 . In the case at hand, no such fraudulent intent can be

inferred. Respondent opened its Tallahassee office and hired

Mr. Igler and other lawyers and employees of Igler & Dougherty

in October 2012. Petitioner did not file her Charge of

Discrimination until January 18, 2013. Petitioner presented no

evidence that Igler & Dougherty had knowledge of any possible

claim relative to PetitionerÓs previous employment which would

prompt a transfer of corporate liability. In fact, Petitioner

presented no evide nce that Igler & Dougherty was ever served

with her Complaint of Discrimination or had actual or

constructive knowledge of her Complaint.

39 . Petitioner presented no evidence from which the

undersigned can infer act ual intent to defraud. Thus,

Respondent cannot be liable to Petitioner for alleged unlawful

termination under this theory of successor liability.

40 . Chapter 760, Part I, is analogous to Title VII of the

Civil Rights Act of 1964, 42 U.S.C. § 2000e, et seq. Cases

interpreting Title VII are, therefore, applicable in construing

and applying chapter 760. Brand v. Fla . Power Corp. , 633 So. 2d

504, 509 (Fla. 1st DCA 1994); see also , Valenzuela v.

GlobeGround N . A m . , LLC , 18 So. 3d 17 (Fla. 3rd DCA 2009); Fla.

State Univ. v. Sondel , 685 So. 2d 923 (Fla. 1st DCA 1996); Fla.

Dep't of Cmty. Aff. v. Bryant , 586 So. 2d 1205 (Fla. 1st DCA

1991).

41 . Petitioner has the burden of proving by a

preponderance of the evidence that Respondent committed an

unlawful employment practice. See St. Louis v. Fla. Int'l

Univ. , 60 So. 3d 455 (Fla. 3rd DCA 2011); Fla. Dep't of Transp.

v. J.W.C. Co. , 396 So. 2d 778 (Fla. 1st DCA 1981).

42 . The United States Supreme Court has established the

requirements for proving a prima facie case of discriminatio n,

which can vary depending on differing factual situations.

McDonnell - Douglas Corp. v. Green , 411 U.S. 792, 802 n.13 (1973) ;

see also , Schwartz v. State of Fla . , 494 F. Supp. 574, 593

(N.D. Fla. 1980). In short, those requirements are:

[t]hat a Title VII plaintiff carries the

initial burden of showing actions taken by

the employer from which one can infer, if

such actions remain unexplained, that it is

more likely than not that such actions were

Ð based on a discriminatory criterion illeg al

under the Act. Ñ

Furn co Const r . Corp. v. Waters , 438 U.S. 567, 576 (1977)( citing

Teamsters v. U . S . , 431 U.S. 324, 358 (1977) ) .

43 . If a Petitioner proves a prima facie case of

discrimination, the burden shifts to the employer Ðto articulate

some legitimate nondiscriminatory reasonÑ for the adverse

employment action. McDonnell - Douglas Corp. v. Green , 411 U.S.

at 802.

44 . Once the employer succeeds i n carrying its burden of

produc ing a nondiscriminatory reason for the challenged action,

the employee must show that the employerÓs reason is pretextual.

The final and ultimate burden of persuading the trier - of - fact,

by a preponderance of the evidence, remains at all times with

the emp loyee. St. MaryÓs Honor Center v. Hicks , 509 U.S. 502,

507 - 508 (1993); Tex. DepÓt of Cmty. Aff. v. Burdine , 450 U.S.

248, 257 (1981).

45 . In this case, Petitioner failed to prove that

Respondent was her employer, thus failing in her initial prima

facie c ase of discrimination. Respondent did not discharge

Petitioner, or otherwise discriminate against Petitioner with

respect to compensation, terms, conditions, or privileges of

employment, because the evidence is uncontroverted that

Respondent was not in an employee - employer relationship with

Petitioner.

46 . Likewise, Petitioner failed to prove that Respondent

was liable to Petitioner for alleged unlawful termination based

on an y theory of successor liability.

47 . Petitioner simply filed her complaint agai nst the

wrong entity. While Mr. Igler and Mr. Dougherty were members of

RespondentÓs law firm at the time Petitioner filed her

complain t, Igler & Dougherty remained an independent, legal

corporate entity capable of being sued in its own name.

48 . The hearing in this case was limited to a

determination of the employer - employee relationship between

Petitioner and Respondent as well as RespondentÓs liability

under any theory of successor liability . Based upon the limited

scope of the proceeding, the issu e of whether Petitioner was

discriminated against or was the subject of an unlawful

employment practice by Respondent was not reached. Thus, this

order should not be construed as having any stare decisis effect

in any subsequent proceeding involving Petit ionerÓs actual

employer.

RECOMMENDATION

Based on the foregoing Findings of Fact and Conclusions of

Law, it is RECOMMENDED that the Florida Commission on Human

Relations issue a final order dismissing the Petition for Relief

filed by Kelli Lawhead in FCHR No. 201 3 - 00581 .

DONE AND ENT ERED this 21st day of July , 2014 , in

Tallahassee, Leon County, Florida.

S

Suzanne Van Wyk

Administrative Law Judge

Division of Administrative Hearings

The DeSoto Building

1230 Apalachee Parkway

Tallahassee, Florida 32399 - 3060

(850) 488 - 9675

Fax Filing (850) 921 - 6847

www.doah.state.fl.us

Filed with the Clerk of the

Division of Administrative Hearings

this 21st day of July , 2014 .

COPIES FURNISHED :

Violet Denise Crawford, Agency Clerk

Florida Commission on Human Relations

2009 Apalachee Parkway , Suite 100

Tallahassee, Florida 32301

Lauren F. Strickland, Esquire

Marie A. Mattox, P.A.

310 East Bradford Road

Tallahassee, Florida 32303

Leslie A. Lanusse, Esquire

Adams and Reese, LLP

701 Poydras Street , Suite 4500

New Orleans , Louisiana 70139

Lauren L. Tafaro, Esquire

Adams and Reese, LLP

701 Poydras Street

4500 One Shell Square

New Orleans, Louisiana 70139

Cheyanne Costilla, General Co unsel

Florida Commission of Human Relations

2009 Apalachee Parkway, Suite 100

Tallahasse e, Florida 32301

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions within

15 days from the date of this Recommended Order. Any exceptions

to this Recommended Order should be filed with the agency that

will issue the Final Order in this case.