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Kratz v. Richard J. Boudreau & Associates, LLC

United States District Court, D. New Hampshire

August 22, 2017

Patricia Kratz, Plaintiff
v.
Richard J. Boudreau & Associates, LLC, and Schlee and Stillman, LLC, Defendants Opinion No. 2017 DNH 153

          ORDER

          Steven J. McAuliffe United States District Judge.

         Plaintiff, Patricia Kratz, filed this suit against her employer, Richard J. Boudreau & Associates, LLC. (“RJBA”). She seeks damages against Boudreau under Title VII and NH RSA 354-A for sexual harassment and retaliation, and asserts those identical claims against Schlee and Stillman, LLC (“Schlee & Stillman”) as a “successor” to Boudreau. (Schlee & Stillman purchased all of Boudreau's assets in April of 2015.) Schlee & Stillman moves for summary judgment on Kratz's claims. While it is a close call, on the record as it has been presented, the motion is necessarily denied.

         STANDARD OF REVIEW

         When ruling on a motion for summary judgment, the court is “obliged to review the record in the light most favorable to the nonmoving party, and to draw all reasonable inferences in the nonmoving party's favor.” Block Island Fishing, Inc. v. Rogers, 844 F.3d 358, 360 (1st Cir. 2016) (citation omitted). Summary judgment is appropriate when the record reveals “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a).

         In this context, a factual dispute “is ‘genuine' if the evidence of record permits a rational factfinder to resolve it in favor of either party, and ‘material' if its existence or nonexistence has the potential to change the outcome of the suit.” Rando v. Leonard, 826 F.3d 553, 556 (1st Cir. 2016) (citation omitted). Consequently, “[a]s to issues on which the party opposing summary judgment would bear the burden of proof at trial, that party may not simply rely on the absence of evidence but, rather, must point to definite and competent evidence showing the existence of a genuine issue of material fact.” Perez v. Lorraine Enters., 769 F.3d 23, 29-30 (1st Cir. 2014). In other words, if the nonmoving party's “evidence is merely colorable, or is not significantly probative, ” no genuine dispute as to a material fact has been proved, and summary judgment may be granted. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986) (citations omitted).

         So, to defeat a properly supported motion for summary judgment, the non-movant must support his or her factual claims with evidence that conflicts with that proffered by the moving party. See generally Fed.R.Civ.P. 56(c). It naturally follows that while a reviewing court must take into account all properly documented facts, it may ignore a party's bald assertions, speculation, and unsupported conclusions. See Serapion v. Martinez, 119 F.3d 982, 987 (1st Cir. 1997). See also Scott v. Harris, 550 U.S. 372, 380 (2007) (“When opposing parties tell two different stories, one of which is blatantly contradicted by the record, so that no reasonable jury could believe it, a court should not adopt that version of the facts for purposes of ruling on a motion for summary judgment.”).

         BACKGROUND

         Construing the record in the light most favorable to plaintiff, and resolving all reasonable inferences in her favor, the relevant facts appear to be as follows.

         RJBA began business as a debt collection law firm in 2001. Richard Boudreau owned 99 percent of RJBA; the remaining one percent was owned by Keith Mitchell, who began working for RJBA as its head of litigation in 2006, and then worked as its Managing Attorney until RJBA's closure in April, 2015. At its peak, the firm had ten offices in several different states, including New Hampshire, Massachusetts, Rhode Island, Connecticut, Virginia, North Carolina, South Carolina, Georgia and Texas. See Document No. 32-2 at 64:1-4; Document No. 32-4 at 8:4-14.

         RJBA and Schlee & Stillman

         Beginning around 2013, RJBA saw its business begin to decline. Concerned that RJBA might not survive the decline, Boudreau attempted to consolidate RJBA's business operations in Woburn, Massachusetts, and decreased its workforce by approximately 40 percent. However, Boudreau's efforts to save the firm were unsuccessful, and eventually RJBA was dissolved.

         Before the firm dissolved, however, RJBA began negotiating an asset purchase agreement with Schlee & Stillman. As part of those negotiations, Schlee & Stillman reached out to and negotiated facilitating agreements with several of RJBA's creditors. Specifically, Schlee & Stillman resolved potential issues with: (1) Cummings Properties, the owner of property that RJBA leased for its office in Woburn, Massachusetts; (2) Pentucket Bank, RJBA's main creditor, which had extended RJBA a $1.3 million line of credit in return for a security interest in RJBA's assets, including its capital, receivables and equipment; and (3) Brooks Properties, the holders of a mortgage on property RJBA had purchased in Salem, New Hampshire. While the record is not entirely clear, Schlee and/or Stillman also spoke with Mitchell concerning a pending litigation matter against RJBA involving Citizens Bank. See Document No. 32-4 at 49:19 - 50:1; 14:16 - 15:9.

         On April 1, 2015, an asset purchase agreement between RJBA and Schlee & Stillman was executed. Under the agreement's terms, Schlee & Stillman paid $15, 000 directly to Pentucket Bank in return for all of RJBA's assets. The asset purchase agreement between RBJA and Schlee & Stillman included a provision that released Schlee & Stillman from “all liabilities and obligations of [R]BA] with respect to current or former employees.” Document No. 32-3 at 2.

         On the same day, April 1, 2015, Schlee & Stillman opened a Woburn branch, hiring the majority of RJBA's employees. Those employees included Boudreau, who became Schlee & Stillman's regional attorney manager, and Mitchell. Robert O'Brien, a litigation attorney who had been working with RJBA for several years, had already begun working as an attorney for Schlee & Stillman, as of January 1, 2015. Schlee & Stillman assumed RJBA's lease of the property in Woburn, and began operating its newly established branch out of that same office.

         Patricia Kratz & RJBA

         Patricia Kratz began working for RJBA as a debt collector on April 21, 2014, about one year before its dissolution. Shortly after starting work, Kratz says she was subjected to frequent sexual harassment by her training manager, Richard Fradette. For example, she says Fradette would take hold of her hand and not let go; would touch her hair; rub her head, shoulders and back; and would pinch her on the side of the waist. In addition, Fradette made comments to Kratz that were sexual in nature, including telling her that he took Viagra; that she was beautiful, and should be a model; and that he was celibate in his marriage and wanted a new wife. Fradette also allegedly propositioned Kratz, asking her for a hug, or that she go out for drinks with him, and not tell her husband.

         On May 15, 2014, Kratz complained to Greg Ormond, RJBA's Director of Operations, that she was being sexually harassed by Fradette. Kratz then met with Ormand and a Human Resources representative concerning her complaint. However, no remedial action was taken.

         Following Kratz's complaint, she was ridiculed by other RJBA employees, including managers, for complaining about sexual harassment. In addition, she was given poor quality leads to call. Eventually, on June 2, 2014, Kratz was fired, purportedly for not meeting her assigned quota. Because other RJBA employees who did not meet their quota were not terminated, Kratz contends that her discharge was retaliatory - that she was actually fired because she complained about sexual harassment.

         On June 12, 2014, Kratz filed a formal Charge with the New Hampshire Commission for Human Rights and the Equal Employment Opportunity Commission (“EEOC”). Notice of the Charge was sent to RJBA on June 19, 2014. RJBA filed an answer to the Charge on August 18, 2014, which was signed and sworn to by Mitchell.

         On November 12, 2014, the parties engaged in an unsuccessful mediation proceeding. Robert O'Brien appeared at the mediation as RJBA's attorney, and Mitchell spoke with the mediator by phone. The parties exchanged settlement proposals, but no resolution was reached. Following the mediation, the Charge remained under investigation at the Human Rights Commission and the EEOC until after the asset purchase was completed. On April 13, 2015, Kratz obtained a Right to Sue letter.

         On June 18, 2015, Kratz filed this suit, asserting claims against RJBA under Title VII and NH RSA 354-A for sexual harassment and retaliation, and against Schlee & Stillman based on a “successor liability” theory.

         Kratz's Claim and ...


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