Nelson v. Long Lines Ltd. (335 F. Supp. 2d 944, 2004)

MEMORANDUM OPINION AND ORDER REGARDING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT

BENNETT, Chief Judge.

TABLE OF CONTENTS

/. INTRODUCTION AND BACKGROUND . O LQ

A. Procedural Background. O LQ

B. Factual Background. lO

II. LEGAL ANALYSIS.954

A. Standards For Summary Judgment.954

1. Requirements of Rule 56 . 954

2. The parties’ burdens.954

3. Summary judgment in employment discrimination cases.955

B. Nelson’s ADEA Claim .956

1. The direct evidence paradigm.956

2. Nelson’s direct evidence.958

a. The speaker.959

b. The content.959

c. The causal link.960

3. The circumstantial evidence paradigm .960

a. Nelson’s prima facie case.962

b. Nelson’s showing of pretext.963

C. Nelson’s Fair Labor Standards Act Claim.964

1. Requirements ofFSLA.965

2. Single enterprise under FSLA.965

a. Related activity.965

b. Common control or unified operations .966

c. Common business purpose.966

D. Breach Of Implied Covenant Of Good Faith And Fair Dealing.967

E. Promissory Estoppel .968

F. Unjust Enrichment.971

III. CONCLUSION .972

I. INTRODUCTION AND BACKGROUND

A. Procedural Background

On September 19, 2002, Philip Nelson filed a complaint in this court against his former employer, defendant Long Lines, Ltd. (“Long Lines”) and Charles Long, the owner of Long Lines, alleging five causes of action: (1) a claim of age discrimination in violation of the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. § 621 et seq.,; (2) a claim for unpaid overtime compensation under the overtime pay provisions of the Fair Labor Standards Act (“FLSA”), 29 U.S.C. § 201 et seq.; (3) a pendent state law claim for breach of the covenant of good faith and fair dealing; (4) a pendant state law claim for promissory estoppel; and (5) a pendent state law claim for unjust enrichment.

Defendants have filed a Motion for Summary Judgment on all of Nelson’s claims. First, in their motion, defendant Long contends that the ADEA claim against him must be dismissed because there is no individual liability for age discrimination under the ADEA. Defendant Long Lines contends that Nelson’s ADEA claim must be dismissed because Nelson cannot establish a prima, facie case of age discrimination and there is no evidence of pretext sufficient to create a jury issue. With respect to Nelson’s FLSA claim, defendant Long Lines asserts that the underlying entity which employed Nelson, Manhattan Beach, Inc., is not an “enterprise engaged in commerce” under the FLSA and therefore the overtime requirements of the FLSA do not apply to it. Alternatively, defendant Long Lines asserts that because of Nelson’s supervisory role at the resort, he was not entitled to receive overtime pay. Defendants also seek summary judgment on Nelson’s claim of breach of the covenant of good faith and fair dealing during his employment on the ground that this claim is not recognized by Iowa law. Alternatively, defendants contend that the conduct complained of was not bad faith conduct required for such a claim. With regard to Nelson’s claim of promissory estoppel, defendants assert that Nelson’s proof on this issue must fail as a matter of law because the alleged promise was not sufficiently definite and Nelson’s reliance occurred prior to the making of any promise. Finally, defendants seek summary judgment on Nelson’s unjust enrichment claim found in Count V on the ground that Nelson was told not to use his personal equipment in the performance of his work duties. Nelson has filed a timely resistance to defendants’ Motion for Summary Judgment, arguing that there are genuine issues of material facts in dispute regarding all of his claims.

Subject matter jurisdiction over Nelson’s federal claim is proper pursuant to 28 U.S.C. § 1381 (federal question). The court has jurisdiction over the state law claim alleging violations of Iowa common law pursuant to 28 U.S.C. § 1367(a), which confers “supplemental jurisdiction over all claims that are so related to the claims in the action within such original jurisdiction that they form part of the same case or controversy under Article III of the United States Constitution.” 28 U.S.C. § 1367(a).

B. Factual Background

The summary judgment record reveals that the following facts are undisputed. Philip Nelson was born on October 3,1939. In the Spring of 1996, Nelson was hired by Charles (“Chuck”) Long to work at Manhattan Beach Resort. At the time, Nelson worked for Village West Resort at Lake Okoboji, Iowa. Nelson had been originally hired by Long Lines, Inc. to work at Village West Resort, which Long Lines owned. Long Lines also owned another resort in the same area, Manhattan Beach Resort. Long Lines is an Iowa corporation whose function is to own the stock of its subsidiary corporations and to handle some administrative functions for them. Long Lines is the sole shareholder of Manhattan Beach, Inc., which was incorporated on November 30,1999. Prior to that date, Manhattan Beach Resort had been operated as a division of Long Lines. Manhattan Beach, Inc. is a separate corporation from Long Lines and is located at Wapheton, Iowa, about 100 miles from Sergeant Bluff, Iowa, where Long Lines is located. Manhattan Beach, Inc. has never had more than $500,000 in total annual income. Long Lines provided payroll services for Manhattan Beach, Inc. under an arrangement whereby Manhattan Beach reimbursed Long Lines for such services.

In 1996, Long Lines sold Village West Resort. Nelson was told by Long that when the ownership of Village West Resorts was separated from Manhattan Beach Resort that Nelson could work at Manhattan Beach Resort. Manhattan Beach Resort is a resort whose business is to provide recreational housing by renting units to customers. Manhattan Beach Resort is owned by Manhattan Beach, Inc. All of the houses and units at Manhattan Beach Resort were part of the resort property, including those occupied by Mr. and Mrs. Chuck Long and his sister. On February 16, 2000, Nelson signed an Employee Acknowledgment Form in which he indicates that he was an at will employee of Long Lines.

Nelson was responsible for taking care of the entire facility. Nelson was designated the resort supervisor, worked without direct supervision, and no one told him what work to do at the resort on a day-today basis. Nelson made hiring decisions and determined the number of employees that were needed. He arranged for the placement of advertisements for summer help. Nelson hired two or more employees for the summer season and directed their work by telling them what to do and where he wanted them to work on a daily basis. Nelson kept track of the workers’ time and-sent the time sheets to the corporate office for processing but he did not fax his hours to Long Lines. Nelson contacted, hired and supervised the cleaning service. He told the cleaning service where they needed to clean. Nelson also monitored the facilities and arranged for service people to make repairs where needed. Nelson contacted the carpet cleaning service each year and obtained towels and bedding from a laundry service. He also made arrangements with a plumber for the installation of drains. In addition, Nelson obtained quotes from contractors for the repair of sidewalks at the resort. On a few occasions, Nelson contacted a tree service to remove trees from the resort. Nelson also looked into the costs for housekeeping staff as part of management’s consideration of changing the basis of rentals to nightly or weekly. No one ever told Nelson that he had to work more than eight hours a day and he never requested authorization to hire additional help. Chuck Long believes that he never asked Nelson to do anything that he would not have done himself.

Chuck Long made the decision to fire Nelson, in consultation with his Chief Financial Officer, Tom Grimsley. Charles Long was 58 years of age when he decided to fire Nelson. Grimsley carried out the task of telling Nelson that he was fired. Nelson was 61 years of age at the time of his termination on May 2, 2001. Long’s stated reason for firing Nelson was because the resort did not need a manager and because of poor work performance. Nelson remembers that on one occasion, on March 13, 2000, Long asked him his age. After Nelson told Long his age, Long reportedly stated in reply, “[Y]ou probably want to work til you’re 65.” Nelson Dep. at p. 77. Nelson responded, saying, “[Y]es, I would probably want to do that.” Nelson Dep. at p. 77. Neither Long nor anyone else at the resort ever made any other age related comment during Nelson’s tenure with Manhattan Beach Resort and Nelson does not recall seeing or receiving any documents or letters that were derogatory of older people. Grims-ley decided, with Long’s input, not to replace Nelson with another manager but to divide his duties between two people who were already employed at Manhattan Beach Resort. The responsibility for maintenance was assigned to Mick Wilson, who was 57 years old at the time of Nelson’s termination, and the management responsibilities, including marketing and guest relations, were assigned to Theresa Grosvenor, who was 37 years old at the time Nelson was fired. Grosvenor is Long’s sister-in-law. Nelson bases his belief that age was a motivating factor in the decision to fire him based on Long’s asking him his age and that younger workers took over his duties after he was terminated.

During the summer of 2000, Manhattan Beach experienced substantial vacancy rates and was not experiencing satisfactory rates of return. In 1999, Manhattan Beach Resort had total income of $263,842.00; in 2000, it was $227,238.00. In the fall or winter of 2000, Long told Nelson that he wanted Nelson to separate his tools and equipment from those owned by the resort. By the early spring of 2001, Nelson had not separated his tools and equipment from the resort’s, although Long and Grimsley had reminded him to do so.

Manhattan Beach resort operates generally from Memorial Day to Labor Day. The necessary duties of the manager in the off-season should not consume more than one-half time. Nelson accepted an offer of free housing and moved into an apartment at the resort in the spring of 1996. Neither Long Lines nor Chuck Long did anything to make Nelson sell his house and move into this apartment. Nelson was not threatened or coerced into moving into the resort apartment and by doing so he received free housing, utilities, appliances and the use of some of the resort furniture. Nelson did not sell his house until i999, even though he moved to the resort in 1996 and continued to receive tax deductions for interest and taxes for three years after moving to the resort. Nelson drove a pickup truck provided by the company during his employment. He used the company truck for personal use but also retained his own pickup truck and another vehicle for his personal use.

Nelson did not have a contract that required him to remain on the job and he did not complain or request additional help when he received additional responsibilities. When Chuck Long or his wife asked Nelson to perform tasks, the Longs were never threatening or rude or unkind. Nelson stopped looking for a job in 1989 when he was first hired by Village West and in 1996, when Chuck Long hired him to work at Manhattan Beach Resort.

Nelson purchased equipment and tools for the resort, and when he did so, he submitted the bills to the corporate offices. No one ever told Nelson not to purchase tools for the resort. Nelson used Long Lines’s credit and charged equipment to the resort at a location that also made equipment available to rent. At one point, Chuck Long saw Nelson using his own riding lawn mower, which was being stored at the resort, at no cost to Nelson, after Nelson sold his house. Before that, Long was unaware that Nelson acquired and used books, equipment, or tools that he personally owned in his duties at the resort. Long told Nelson not to use his own equipment for resort work. Nelson continued to use his personal mower after being told not to use it.

Nelson did not have any agreement with the resort that he would be paid rent for equipment that he used. He did not at any time ask or report to anyone that he was using his own tools and equipment. Nelson bought a seeder and used it at the resort without telling anyone. He did not bill the resort for its use. Nelson also bought a sprayer after he moved onto the resort property but did not bill the resort for it or for its use. He also bought a pole pruning saw but did not bill the resort for it. Nelson also bought gardening books on his own. He did not submit bills to the company for the books, even though he had previously purchased equipment for which he submitted bills that were paid without protest. Neither Chuck Long nor anyone else at the resort told Nelson to take a gardening course. Nelson’s wages were never reduced in the off season.

II. LEGAL ANALYSIS

A. Standards For Summary Judgment

This court has considered in some detail the standards applicable to motions for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure in a number of prior decisions. See, e.g., Swanson v. Van Otterloo, 993 F.Supp. 1224, 1230-31 (N.D.Iowa 1998); Dirks v. J.C. Robinson Seed Co., 980 F.Supp. 1303, 1305-07 (N.D.Iowa 1997); Laird v. Stilwill, 969 F.Supp. 1167, 1172-74 (N.D.Iowa 1997); Rural Water Sys. # 1 v. City of Sioux Ctr., 967 F.Supp. 1483, 1499-1501 (N.D.Iowa 1997), aff'd in pertinent part, 202 F.3d 1035 (8th Cir.), cert. denied, 531 U.S. 820, 121 S.Ct. 61, 148 L.Ed.2d 28 (2000); Tralon Corp. v. Cedarapids, Inc., 966 F.Supp. 812, 817-18 (N.D.Iowa 1997), aff'd, 205 F.3d 1347, 2000 WL 84400 (8th Cir.2000) (Table op.); Security State Bank v. Firstar Bank Milwaukee, N.A., 965 F.Supp. 1237, 1239-40 (N.D.Iowa 1997); Lockhart v. Cedar Rapids Community Sch. Dist., 963 F.Supp. 805 (N.D.Iowa 1997). The essentials of these standards for present purposes are as follows.

1. Requirements of Rule 56

Rule 56 itself provides, in pertinent part, as follows:

Rule 56. Summary Judgment

(b) For Defending Party. A party against whom a claim ... is asserted ... may, at any time, move for summary judgment in the party’s favor as to all or any part thereof.

(c) Motions and Proceedings Thereon.... The judgment sought shall be rendered forthwith if 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 judgment as a matter of law.

Fed. R. Civ. P. 56(a)-(c) (emphasis added). Applying these standards, the trial judge’s function at the summary judgment stage of the proceedings is not to weigh the evidence and determine the truth of the matter, but to determine whether there are genuine issues for tidal. Quick v. Donaldson Co., 90 F.3d 1372, 1376-77 (8th Cir.1996); Johnson v. Enron Corp., 906 F.2d 1234, 1237 (8th Cir.1990). An issue of material fact is genuine if it has a real basis in the record. Hartnagel v. Norman, 953 F.2d 394 (8th Cir.1992) (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986)). As to whether a factual dispute is “material,” the Supreme Court has explained, “Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Rouse v. Benson, 193 F.3d 936, 939 (8th Cir.1999); Beyerbach v. Sears, 49 F.3d 1324, 1326 (8th Cir.1995); Hartnagel, 953 F.2d at 394.

2. The parties’burdens

Procedurally, the moving party bears “the initial responsibility of informing the district court of the basis for its motion and identifying those portions of the record which show lack of a genuine issue.” Hartnagel, 953 F.2d at 395 (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986)); see also Rose-Maston, 133 F.3d at 1107; Reed v. Woodruff County, Ark., 7 F.3d 808, 810 (8th Cir.1993). “When a moving party has carried its burden under Rule 56(c), its opponent must do more than simply show there is some metaphysical doubt as to the material facts.” Matsushita, 475 U.S. at 586, 106 S.Ct. 1348. Rather, the party opposing summary judgment is required under Rule 56(e) to go beyond the pleadings, and by affidavits, or by the “depositions, answers to interrogatories, and admissions on file,” designate “specific facts showing that there is a genuine issue for trial.” Fed. R. Civ. P. 56(e); Celotex, 477 U.S. at 324, 106 S.Ct. 2548; Rabushka ex. rel. United States v. Crane Co., 122 F.3d 559, 562 (8th Cir.1997), cert. denied, 523 U.S. 1040, 118 S.Ct. 1336, 140 L.Ed.2d 498 (1998); McLaughlin v. Esselte Pendaflex Corp., 50 F.3d 507, 511 (8th Cir.1995); Beyerbach, 49 F.3d at 1325. If a party fails to make a sufficient showing of an essential element of a claim 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 Corp., 477 U.S. at 323, 106 S.Ct. 2548; In re Temporomandibular Joint (TMJ) Implants Prod. Liab. Litig., 113 F.3d 1484, 1492 (8th Cir.1997). In reviewing the record, the court must view all the facts in the light most favorable to the nonmoving party and give that party the benefit of all reasonable inferences that can be drawn from the facts. See Matsushita Elec. Indus. Co., 475 U.S. at 587, 106 S.Ct. 1348; Quick, 90 F.3d at 1377 (same).

3, Summary judgment in employment discrimination cases

Because this is an employment discrimination case, it is well to remember that the Eighth Circuit Court of Appeals has cautioned that “summary judgment should seldom be used in employment-discrimination cases.” Crawford v. Runyon, 37 F.3d 1338, 1341 (8th Cir.1994) (citing Johnson v. Minnesota Historical Soc’y, 931 F.2d 1239, 1244 (8th Cir.1991); Hillebrand v. M-Tron Indus., Inc., 827 F.2d 363, 364 (8th Cir.1987), cert. denied, 488 U.S. 1004, 109 S.Ct. 782, 102 L.Ed.2d 774 (1989)); see also Snow v. Ridgeview Medical Ctr., 128 F.3d 1201, 1205 (8th Cir.1997) (citing Crawford); Helfter v. United Parcel Serv., Inc., 115 F.3d 613, 615 (8th Cir.1997) (quoting Crawford); Chock v. Northwest Airlines, Inc., 113 F.3d 861, 862 (8th Cir.1997) (