Tanner, J. Richard v. Jupiter Realty Corp ( 2006 )

In the
United States Court of Appeals
For the Seventh Circuit
____________
No. 04-4318
J. RICHARD TANNER,
Plaintiff-Appellant,
v.
JUPITER REALTY CORPORATION,
Defendant-Appellee.
____________
Appeal from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 04-C-1504—James F. Holderman, Judge.
____________
ARGUED MAY 31, 2005—DECIDED JANUARY 5, 2006
____________
Before EASTERBROOK, ROVNER, and WOOD, Circuit Judges.
WOOD, Circuit Judge. From March 2002 to June 2003, J.
Richard Tanner worked as an Asset Manager in the Atlanta
office of Jupiter Realty Corporation (Jupiter), a Chicago-
based commercial real estate company. Shortly after
Tanner expressed some concerns about one of the company’s
loans, Jupiter fired him. Believing that this action was in
retaliation for his whistle-blowing, Tanner sued, invoking
the federal court’s diversity jurisdiction. Applying Georgia
law to the claim, the district court granted summary
judgment for Jupiter. We affirm.
2 No. 04-4318
I
On several occasions in April and May 2003—about
two months before the alleged whistle-blowing activity
began—Jupiter informed Tanner that it might close its
Atlanta office. On May 27, 2003, Kevin Moyer, a Vice
President and the Manager of Jupiter’s Atlanta office, told
Tanner that the company had finalized its decision to do so.
Tanner learned at the same time that he was going to lose
his job as of July 25, 2003, because Jupiter planned to
transfer all of Tanner’s accounts to Sonya Michieli, who was
about to move to Chicago from Jupiter’s Denver
office, which was also slated for abandonment.
Meanwhile, in June 2003, Jupiter decided to sell two
properties that Tanner had been managing: 3875 Faber
Place and 3955 Faber Place. G.E. Capital was the lender for
those properties. Jupiter’s loan agreement with G.E.
Capital made special provision for taxes that had to be paid
when Jupiter sold property to a third party. The critical
language in the agreement required Jupiter to repay its
loan to G.E. Capital according to the following rules:
[G.E. Capital receives] 100% of the net sales or net
refinancing proceeds for such Project received by
Borrower less an amount equal to the assumed income
taxes on any gain, if any, payable by Borrower as a
result of the sale or refinancing triggering this release;
provided, that Borrower shall provide to Lender upon
request all information reasonably requested by Lender
to evidence the amount of income taxes described above.
On June 3, Jeremy Glendenning, Jupiter’s Portfolio Man-
ager, sent Moyer an email that included a worksheet
reflecting Jupiter’s plans to use the retained amount
from the proceeds of the sales of the Faber properties to pay
down its equity investment in the properties rather than to
pay the taxes. Moyer forwarded the email to Tanner, who
became concerned with Jupiter’s proposed use of the money.
No. 04-4318 3
Tanner later stated that he was also concerned that Jupiter
had overstated its tax liability, apparently as a way of
holding back more money from G.E. Capital than it should
have done.
This concern prompted Tanner to send an email to
Moyer on June 13, 2003, in which he expressed his con-
cern about several issues related to Jupiter’s responsibili-
ties to G.E. Capital and his desire to speak to Moyer
about it when Tanner returned from vacation on June 23,
2003. The opportunity to talk to Moyer arose almost
immediately. On June 25, 2003, Moyer and Tanner traveled
from Atlanta to Greenville, South Carolina, for a meeting
with Jupiter employees from Chicago, including Jerry Ong,
one of Jupiter’s Executive Vice Presidents. The purpose of
the meeting was to facilitate the transfer of Tanner’s
portfolio to Michieli. On the way to the meeting, Tanner
explained to Moyer what concerned him about the computa-
tion of the tax sale gains on the Faber properties. It is fair
to say that the conversation did not have the effect Tanner
was hoping for. Once in Greenville, Moyer spoke with Ong
about his conversation with Tanner. The two men inferred
that Tanner was trying to extort money from Jupiter and
that he was a threat to the company. They decided that
Tanner should not be allowed to return to Jupiter’s office.
Nonetheless, they also decided to pay him through July 25,
2003, and give him one week of severance pay. On the car
ride back, Moyer gave Tanner the bad news. Evidently
prepared for it, Tanner responded that he had already
packed his belongings from his office.
On February 25, 2004, Tanner filed a complaint against
Jupiter alleging retaliatory discharge, invoking the fed-
eral court’s diversity jurisdiction. On November 24, 2004,
the district court granted Jupiter’s motion for summary
judgment. Applying Illinois’s choice of law rules, the
court concluded that the substantive law of Georgia applied
to Tanner’s claim. That made the decision to rule for
4 No. 04-4318
Jupiter easy, since Georgia does not recognize the common
law tort of retaliatory discharge. Alternatively, the court
found that even if Illinois law applied, it would still grant
summary judgment for Jupiter because Jupiter had decided
to terminate Tanner’s employment well before Tanner made
known his concerns about Jupiter’s alleged wrongdoing, and
the latter events had no effect on Tanner’s final day of work
or pay.
II
We review a district court’s grant of summary judg-
ment de novo. Copeland v. County of Macon, 403 F.3d
929, 932 (7th Cir. 2005). Summary judgment is proper if
“there is no genuine issue as to any material fact and [ ] the
moving party is entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(c); see also Celotex Corp. v. Catrett, 477
U.S. 317, 322-23 (1986). In conducting our review, we take
all facts in the light most favorable to the non-moving
party. Ezell v. Potter, 400 F.3d 1041, 1046 (7th Cir. 2005).
We review a district court’s application of choice of law
principles de novo. Gramercy Mills, Inc. v. Wolens, 63 F.3d
569, 572 (7th Cir. 1995).
When a district court sits in diversity, it must apply
the choice of law principles of the forum state to deter-
mine which state’s substantive law governs the proceed-
ing. French v. Beatrice Foods Co., 854 F.2d 964, 966 (7th
Cir. 1988) (citing Klaxon Co. v. Stentor Electric Mfg. Co.,
313 U.S. 487, 496 (1941)). In this case, as the district
court did, we look to Illinois’s choice of law rules. For tort
actions, Illinois instructs the court to ascertain the forum
with the “most significant relationship” to the case. Esser v.
McIntyre, 661 N.E.2d 1138, 1141 (Ill. 1996). “Under this
test, the law of the place of injury controls unless Illinois
has a more significant relationship with the occurrence and
with the parties.” Id. Four factors are supposed to guide the
No. 04-4318 5
court’s decision: “(1) where the injury occurred; (2) where
the injury-causing conduct occurred; (3) the domicile of the
parties; and (4) where the relationship of the parties is
centered.” Id. The court evaluates these factors “in light of
the policies underlying the laws of those jurisdictions.” Id.(internal citations omitted).
Looking at these factors, we agree with the district
court that a strong case can be made for applying Georgia
law. Tanner was employed in Jupiter’s Atlanta office
and was fired from that office on May 27, 2003, when
Jupiter informed him that it was closing the office. If
instead we chose to look at the place where Moyer told
him to pack up and leave, it would be either Georgia or
possibly South Carolina during the drive back to the
office. Next, we look at where the conduct that caused the
injury occurred. See, e.g., French, 854 F.2d at 966 (con-
sidering the location of the actual loss of the job, the cause
of the termination, and the events leading up to the termi-
nation). Tanner learned that he was going to lose his job on
May 27, 2003, when Moyer told him that the Atlanta office
would be closing. This conversation took place in Georgia.
Even if we accept Tanner’s assertion that his discharge
occurred on June 25, 2003, the conduct leading to the
discharge did not take place in Illinois. Tanner sent his
June 13, 2003, email to Moyer in Georgia and his conversa-
tion with Moyer on the way to Greenville occurred in either
Georgia or South Carolina. As is often the case, the domicile
factor is not very helpful: Tanner was domiciled in Georgia,
and Jupiter in Illinois. Last, we consider where the rela-
tionship of the parties is centered. Tanner’s employment
relationship with Jupiter was located primarily in Atlanta.
Although the Chicago office directed his employment
activities and the decision to close the Atlanta office was
made in Chicago, Georgia was the location of the alleged
injuries and where Tanner worked for the duration of his
tenure with Jupiter.
6 No. 04-4318
On the assumption that Georgia law applies, Tanner’s
case is doomed at the outset. Georgia does not recognize the
tort of retaliatory discharge. See Reilly v. Alcan Aluminum
Corp., 528 S.E.2d 238, 240 (Ga. 2000) (“[T]he inability of an
at-will employee to sue in tort for wrongful discharge is a
fundamental statutory rule governing employer-employee
relations in Georgia.”); see also Evans v. Bibb Co., 342
S.E.2d 484, 486 (Ga. Ct. App. 1986) (declining to create a
common law wrongful discharge claim based on a plaintiff’s
filing of a worker’s compensation claim).
We recognize, however, that several of the factors give
some support to a finding that Illinois law applies. Jupiter
was an Illinois corporation with its principal place of
business in Illinois, and Tanner argues that the firm
directed everything from Illinois. Even if we were to find
that Illinois law applies, however, Tanner still loses. First,
we think it unlikely that Illinois would recognize a cause of
action for retaliatory discharge on these facts. Three years
after first recognizing the tort of retaliatory discharge, the
Illinois Supreme Court explained that to be actionable, the
“matter must strike at the heart of a citizen’s social rights,
duties, and responsibilities before the tort will be allowed.”
Palmateer v. International Harvester Co., 421 N.E.2d 876,
878-79 (Ill. 1981). While Illinois may recognize a cause of
action for an employee who reports corporate fraud or
mismanagement, see Johnson v. World Color Press, Inc.,
498 N.E.2d 575, 576 (Ill. App. Ct. 1986) (allowing a claim
based on a employee’s disagreement with accounting
practices to go forward), it is unlikely to do so when a close
look at the allegations shows that no corporate misconduct
has been described. Here, Jupiter’s decision to use the
Faber properties’ sale proceeds to pay down their equity
investment had no effect at all on its tax liability to the
government. It just meant that it would satisfy that liability
with a different package of dollars than the one it received
in conjunction with the sale. Nor is it readily apparent how
No. 04-4318 7
G.E. Capital could have been harmed by this arrangement.
The loan agreement expressly gave G.E. Capital the right to
request any information from Jupiter used “to evidence the
amount of income taxes” related to Jupiter’s tax liability
calculation. Given these protections, G.E. Capital (surely a
sophisticated party) easily could have demanded proof that
the amount withheld for taxes was proper.
The materials gathered for the summary judgment
motion show that Jupiter terminated Tanner on May 27,
2003, when it told him that the Atlanta office would
be closing and his portfolio was being assigned to an-
other person. Any way one considers it, Tanner has not
shown that there are genuine issues of fact that might allow
him to prevail.
We AFFIRM the judgment of the district court.
A true Copy:
Teste:
________________________________
Clerk of the United States Court of
Appeals for the Seventh Circuit
USCA-02-C-0072—1-5-06