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Paskert v. Kemna-Asa Auto Plaza, Inc.

United States District Court, N.D. Iowa, Western Division

November 7, 2018

KEMNA-ASA AUTO PLAZA, INC. et al, Defendants. Month Units Sold Collections Percentage Sales Associate Compensation: Estimated Collections Compensation:


          Leonard T. Strand, Chief Judge.


         This matter is before me on (1) a motion (Doc. No. 39) for summary judgment filed by defendant Brent Burns and (2) a motion (Doc. No. 40) for summary judgment filed by defendants Auto$mart, Inc., Kenneth Kemna (Kenneth), Kemna Motor Company (Kemna Motor) and Brent Weringa. Plaintiff Jennifer Paskert has filed resistances (Doc. Nos. 55, 57) to both motions and the defendants have filed replies (Doc. Nos. 60, 61, 62). Oral argument is not necessary. See N.D. Iowa L.R. 7(c).


         Paskert commenced this action by filing a complaint (Doc. No. 2) on January 31, 2017. She filed a first amended complaint (Doc. No. 11) on April 13, 2017, and a second amended complaint (Doc. No. 31) on April 26, 2018. Based on these amendments, Burns, Weringa, Kenneth, Auto$mart, Inc., and Kemna Motor are the five named defendants.

         Paskert alleges that she was subjected to a hostile work environment and harassment on the basis of sex by her supervisor, Burns, while she was employed by Auto$mart, Inc., from May to November 2015. Id. at ¶¶ 14-22. Paskert asserts claims for hostile work environment discrimination and retaliation in violation of both Title VII of the Civil Rights Act of 1964 and the Iowa Civil Rights Act (ICRA). Id. at ¶¶ 23-39. Trial is scheduled to begin February 11, 2019.


         Any party may move for summary judgment regarding all or any part of the claims asserted in a case. Fed.R.Civ.P. 56(a). Summary judgment is appropriate when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).

         A material fact is one “that might affect the outcome of the suit under the governing law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Thus, “the substantive law will identify which facts are material.” Id. Facts that are “critical” under the substantive law are material, while facts that are “irrelevant or unnecessary” are not. Id. “An issue of material fact is genuine if it has a real basis in the record, ” Hartnagel v. Norman, 953 F.2d 394, 395 (8th Cir. 1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986)), or “when ‘a reasonable jury could return a verdict for the nonmoving party' on the question, ” Woods v. DaimlerChrysler Corp., 409 F.3d 984, 990 (8th Cir. 2005) (quoting Anderson, 477 U.S. at 248). Evidence that only provides “some metaphysical doubt as to the material facts, ” Matsushita, 475 U.S. at 586, or evidence that is “merely colorable” or “not significantly probative, ” Anderson, 477 U.S. at 249-50, does not make an issue of material fact genuine. Put another way, “‘[e]vidence, not contentions, avoids summary judgment.'” Reasonover v. St. Louis Cnty., 447 F.3d 569, 578 (8th Cir. 2006) (quoting Mayer v. Nextel W. Corp., 318 F.3d 803, 809 (8th Cir. 2003)). The parties “may not merely point to unsupported self-serving allegations.” Anda v. Wickes Furniture Co., 517 F.3d 526, 531 (8th Cir. 2008).

         As such, a genuine issue of material fact requires “sufficient evidence supporting the claimed factual dispute” so as to “require a jury or judge to resolve the parties' differing versions of the truth at trial.” Anderson, 477 U.S. at 249 (quotations omitted). The party moving for entry of summary judgment bears “the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record which show a lack of a genuine issue.” Hartnagel, 953 F.2d at 395 (citing Celotex, 477 U.S. at 323). Once the moving party has met this burden, the nonmoving party must go beyond the pleadings and by depositions, affidavits, or otherwise, designate specific facts showing that there is a genuine issue for trial. Mosley v. City of Northwoods, 415 F.3d 908, 910 (8th Cir. 2005). The nonmovant must show an alleged issue of fact is genuine and material as it relates to the substantive law. Id. If a party fails to make a sufficient showing of an essential element of a claim or defense with respect to which that party has the burden of proof, then the opposing party is entitled to judgment as a matter of law. Celotex, 477 U.S. at 322.

         To determine whether a genuine issue of material fact exists, I must view the evidence in the light most favorable to the nonmoving party. Matsushita, 475 U.S. at 587-88. Further, I must give the nonmoving party the benefit of all reasonable inferences that can be drawn from the facts. Id. However, “because we view the facts in the light most favorable to the nonmoving party, we do not weigh the evidence or attempt to determine the credibility of the witnesses.” Kammueller v. Loomis, Fargo & Co., 383 F.3d 779, 784 (8th Cir. 2004) (citing Quick v. Donaldson Co., 90 F.3d 1372, 1376-77 (8th Cir. 1996)). Instead, “the court's function is to determine whether a dispute about a material fact is genuine.” Quick, 90 F.3d at 1377.

         IV. RELEVANT FACTS [1]

         A. The Parties

         Plaintiff Jennifer Paskert is a resident of Dickinson County, Iowa, and a female. Doc. No. 31 at ¶ 2. She was employed by Auto$mart, Inc., as a sales associate from May to November 2015. Id.

         Defendant Auto$mart, Inc., is an Iowa corporation that operates a “buy here, pay here” used car dealership in Spirit Lake, Iowa. Doc. No. 40-2 at 21, 34, 93. Kenneth testified that Auto$mart, Inc., typically has three employees. Id. at 44. Auto$mart, Inc., maintains its own financial records and has its own auto dealer's license from the Iowa Department of Transportation. Id. at 48.

         Defendant Kenneth Kemna splits his time between Florida and Iowa. Doc. No. 40-2 at 95. He is the sole owner of Auto$mart, Inc., [2] and is also the sole or part owner of several car dealerships and related business entities that are interrelated. Id. at 91-94. Kenneth provided this chart in connection with his motion for summary judgment:

         (Image Omitted)

         Doc. No. 40-2 at 92. If lines were added to indicate employees who draw their pay from more than one of these entities, those lines would become quite tangled. Nevertheless, each of the entities is separately registered and they reportedly pay each other for various services.[3] Kenneth is on the board of directors of each entity but does not handle the day-to-day affairs of the businesses. Id. Kenneth estimates that he was at the Auto$mart, Inc., store in Spirit Lake for less than two hours in all of 2015. Id. at 40. Kenneth retains the authority to fire employees at each of his businesses. Id. at 39.

         Defendant Brent Weringa is an Iowa resident. Id. at 73. In 2015, he was employed as a manager by Kemna Motor d/b/a Auto$mart of Algona and was also a consultant for the Auto$mart, Inc., through KMC finance. Id. at 75. Kenneth described this arrangement as follows:

A: Brent Weringa's payroll records were for Kemna Motor Company d/b/a Auto$mart of Algona of which 80 percent approximately of his compensation was remunerated back from Kemna Holdings. Kemna Holdings was paid by a company called KMC Finance which is our finance arm that buys paper - finance contracts from the Auto$marts.
So Brent Weringa's role was to protect KMC Finance's obligations and work as a consultant with the Auto$marts through KMC Finance to make sure those payments were properly made by all of its debtors.
Q: So Brent Weringa in 2015 was employed by Kemna Motor Company?
A: Brent Weringa had 20 percent employment with Kemna Motor Company d/b/a Auto$mart. 80 percent of his [pay] was subcontracted back out to Auto$marts and KMC Finance through Kemna Holdings . . . as a consultant.

Doc. No. 40-2 at 38. Weringa testified that he did not have supervisory authority over the employees of Auto$mart, Inc., although he was involved in overseeing the company. Id. at 38-39. Weringa was present for Paskert's interview. Doc. No. 40-2 at 51. Weringa explained that Auto$mart, Inc., would include him on hiring because selling at Auto$mart, Inc., was closely related to collections, which he oversaw. Id. at 75-76.

         Defendant Brent Burns was the manager of the Auto$mart, Inc., dealership in Spirit Lake. Doc. No. 40-2 at 20. Burns accepted this position in January 2015. Doc. No. 39-3 at 21. Burns had the authority to hire and fire employees, including Paskert. Doc. No. 40-2 at 39. Burns testified that he considered Weringa to be his supervisor and that Weringa had final authority over decisions such as hiring and firing. Doc. No. 39-3 at 23-24.

         Defendant Kemna Motor is a General Motors dealership in Algona, Iowa, and also owns an Auto$mart dealership in Algona. Id. at 91. Kemna Motor typically has 30 employees.

         KMC Finance, LLC, is a Florida limited liability corporation that acquires the consumer finance contracts entered into by Auto$mart branded dealerships. Doc. No. 40-2 at 94. Kemna Holdings, Inc., [4] contracted with Auto$mart, Inc., Kemna Motor and other entities to provide services such as accounting, payroll, employee benefits, human resources, insurance, information technology, leadership training and consulting. Id. at 92-93. Each entity pays Kemna Holdings for these services. Id. at 93. Kemna Holdings does not appear to have any employees. At times, employees from Kenneth's businesses would do work for Kemna Holdings, which would in turn be billed to the business that needed the work done. For example, Lynn Hoover, a Kemna Motor employee, did payroll and personnel assistance for Auto$mart, Inc., through this arrangement. Id. at 38. Hoover did not have hiring, firing or supervisory authority at Auto$mart, Inc. Id.

         Although Paskert was ostensibly employed by Auto$mart, Inc., many of the employment forms she completed name other businesses within Kenneth's various enterprises. Her application for health insurance lists “Kemna Auto Center” in Algona as her employer. Doc. No. 56-3 at 36. Her direct deposit form has “Kemna Auto Center” in the heading and her form I-9 lists “Kemna Auto Center” as the “Employer's Business or Organization Name, ” again with an Algona, Iowa, address. Id. at 40-42. Paskert signed an information security program agreement to comply with the policies and procedures outlined in “Kemna GM Center's Information Security Program.” Id. at 45. “Kemna Motor Co” took out a driver's insurance policy for Paskert. Id. at 47. Paskert enrolled in a MetLife insurance program through her employer “Kemna” located in Algona, Iowa. Id. at 50. Paskert's October 31, 2015, paycheck was drawn from an account titled “Kemna Express Lube” in Fort Dodge, Iowa. Doc. No. 56-2 at 4. The forms terminating Paskert's insurance and employment also contain “Kemna GM Center, ” “Kemna Auto, ” and “Kemna Auto Center” in the headings. Id. at 5-7, 50. Paskert's time clock summary report for the first week in November (before she was discharged) contains “Kemna Auto” in the header, as does the time report for the entirety of her time at Auto$mart, Inc. Id. at 8-13.

         Kenneth explained this paperwork discrepancy as Kemna Holdings “subletting” work to Kemna Motor:

Q: Okay. So if we have seen records that refer to Kemna Motor Company . . . in Ms. Paskert's file . . . . Why would Kemna Motor Company be involved in her personnel file as opposed to Kemna Holdings?
A: That's a great question. As I stated earlier, we had just a few days to switch over from Kemna-Asa Auto Plaza to Auto$mart, Inc. Kemna Holdings was subletting work to employees of Kemna Motor Company. I had employees in Kemna Motor Company that had the experience and the time, and Kemna Holdings paid Kemna Motor Company on a sublet basis to have some of their employees provide services for Kemna Holdings which in turn provided the services to Auto$mart, as well as other entities that we do business with.

Doc. No. 40-2 at 38.

         B. Paskert's Employment

         1. Hiring and Training

         Burns hired Paskert as a sales associate in May 2015. Her job duties included car sales, collections, repossessions and preparing cars for sale. Paskert testified that Weringa and James Bjorkland - an experienced co-worker who shared the same job duties - trained her in sales. Id. at 53. Sales training took the form of role-playing exercises. Either Paskert or Bjorkland would play the role of a customer and they would go through the “sticker pitch” on a specific car. Id. at 53. Other than these role-playing exercises, Paskert testified that she did not receive any other training in sales. Paskert states specifically that she never received a sales training manual. Doc. No. 56 at 165. Burns trained Paskert in collections. Doc. No. 40-2 at 53. For the first two to three months of her job, before she was sufficiently trained in any category, Paskert primarily worked on cleaning and preparing cars for sale. Doc. No. 39-3 at 7.

         Despite “not having any supervisory duties, ” Weringa completed a 90-day performance review of Paskert's work on September 30, 2015. Doc. No. 56-2 at 3. Weringa scored Paskert as “satisfactory” in job performance, job knowledge and attendance, and commented that she should continue her training. Id.

         At some point, Paskert's focus shifted to collections and secretarial duties, rather than sales. Bjorkland described the transition as follows:

Q: Now, you've made the statement that Jennifer handled the collections. What do you mean by that?
A: It started out as me training her, which I never really ever got the opportunity to do. She was improperly trained because it started out, you know, she learned the passwords and the procedures, which is a big part of it. The handbook obviously was another part of it. The motto that they have there that I still have burnt into my mind, which I'm not going to repeat now, and it was supposed to be - Beings I had experience with selling the vehicles, you want somebody that has the time. Brent didn't have the time. There might have been a couple times he had her in his office with the collections end of it, which I didn't do a lot of the collections. I collected payments, but as far as the calling people up - We ended up having a meeting after three months that I was going to be focusing on the sales end of it. Jennifer was going to be the collections. It wasn't a manger's title or anything, but she was doing such a wonderful job. Collections were at a minimum. I mean, she was doing very good at what she was doing, and then [Burns] was going to do his duties, so . . .

Doc. No. 40-2 at 9. While Paskert had success with collections, Weringa wanted her to be more involved with sales and requested that she spend more time shadowing Bjorkland. Id. Bjorkland states that Burns prevented that from happening. Id. (“Q: Why was it that she didn't get the opportunity to shadow you? A. Because she got called back in because she was supposed to be the secretary and answer the phone. Q: Called back in by who? A: Brent Burns.”), see also Id. at 54 (Paskert's testimony that “if the phone range, I had to go back and answer the phone . . . [Burns] said that he was busy doing other things, that he was not going to be available to do that.”).

         Bjorkland further testified that there was not much need for a second salesperson at Auto$mart, Inc., Spirit Lake location: “Very rarely did you ever have more than one person on the lot. I mean, it's a little dealership, so I took the [customer] every time.” Id. at 10. Indeed, it appears that Auto$mart, Inc., sold an average of 15 cars per month from June 2015 to October 2015. Paskert testified that she did not have the opportunity to conduct any sales due to the lack of training: “I was out on the lot, but I was instructed [by Weringa] to just carry on a conversation with them and answer any questions about the car until either James or [Burns] was available to speak with them. And then at that point I would be able to sit in on it . . . until I was properly trained.” Doc. No. 40-2 at 54. Paskert further testified that Burns instructed her to defer sales to Bjorkland and Burns because they had more experience. Id. at 56.

         Burns disputes that Paskert was attempting to finish her training to be a salesperson. Doc. No. 39-3 at 28. He testified that she “refused to go through the formalized training and refused to take sales training input from me.” Id. This behavior began “[a]lmost immediately upon hire.” Id. Burns agreed that he directed her to allow Bjorkland and himself to handle sales in the first instance. Id. at 32. Kenneth, who was in the dealership less than two hours for the entire year of 2015, testified that he believed Paskert had the exact same training as Bjorkland and that she just was not performing. Id. at 38.

         2. ...

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