Kathleen Ryl-Kuchar v. Care Centers Incorporated ( 2009 )

In the
United States Court of Appeals
For the Seventh Circuit
Nos. 08-2688 & 08-2823
KA TH LEEN RYL -K UCH A R ,
Plaintiff-Appellee/
Cross-Appellant,
v.
CA RE CENTERS , IN CO RPO RA TED , an Illinois corporation,
individually and as plan administrator of the Care Centers
Employees Health Insurance Plan,
Defendant-Appellant/
Cross-Appellee.
Appeals from the United States District Court
for the Northern District of Illinois, Eastern Division.
No. 05 C 3223—James F. Holderman, Chief Judge.
A RGUED A PRIL 17, 2009—D ECIDED M AY 11, 2009
Before FLA U M , EVA N S , and WILLIA M S , Circuit Judges.
EVA N S , Circuit Judge. Kathleen Ryl-Kuchar has been a
busy woman these last few years. Since giving birth to
triplets in the summer of 2003 she has been locked in a
struggle with her former employer, Care Centers, Incorpo-
2 Nos. 08-2688 & 08-2823
rated, over the retroactive termination of her health insur-
ance. With any luck, though, we can put this belabored
matter to rest—and get everyone on to bigger and better
things. The case started out with a number of claims, but
all we have left at this point is Ryl-Kuchar’s action under
the Family and Medical Leave Act. Care Centers
appeals from the district court’s decision denying judg-
ment notwithstanding the verdict after the jury found in
favor of Ryl-Kuchar.
Ryl-Kuchar began working for Care Centers in 1985 when
she was 15 years old. In the beginning she was only a part-
time dishwasher. But she worked her way up through the
ranks, finally landing the salaried position of dietary con-
sultant, which she held in 2002. Towards the end of that
year Ryl-Kuchar discovered she was pregnant, and soon
thereafter that she was carrying triplets. She relayed this
information to a worker in the human resources depart-
ment in 2003, who in turn told Ryl-Kuchar that she could
take up to 12 weeks of FMLA leave. But Ryl-Kuchar didn’t
seize the opportunity just yet—she wasn’t due until late
summer, after all. Instead, she maintained her normal
schedule until mid-May when, being “too big to fit behind
[the steering] wheel” of her car, she began to work from
home. Even then she wasn’t on FMLA leave: she was still
working; she performed her usual duties; and the arrange-
ment had the blessing of Chief Operating Officer Mark
Steinberg. Yet the number of hours she put in dipped to
below 35 per week, which would be critical to how
things played out in the future.
On July 17, 2003, Ryl-Kuchar gave birth to three healthy
boys. After a short stay in the hospital, she returned
home and, amazingly, got right back to work. With the
Nos. 08-2688 & 08-2823 3
help of her sisters, she was able to make it through July.
Once they left, however, the task of caring for three infants
all by herself was, understandably, just too much. So Ryl-
Kuchar commenced her FMLA leave with the intent to
resume work in the fall. By the time late September rolled
around, though, she decided she needed much more time
with her children and would have to sacrifice her job.
She resigned on October 1.
Everything went fine until mid-November. Then
suddenly Ryl-Kuchar’s health insurance was retroactively
cancelled with an effective date of June 15—a month
before she gave birth, and naturally a time when the
medical bills were piling up. Ryl-Kuchar didn’t realize
this turn of events until early 2004, when her bills started
to come back unpaid. What had happened, it turns out, is
that the employee benefits association affiliated with Care
Centers, CCS Veba, had determined that Ryl-Kuchar
became a part-time employee in June when she was
working from home, thereby losing eligibility for health
insurance.
In the lawsuit that followed, Ryl-Kuchar collected evi-
dence to show that the real reason for the cancellation was
her decision to take FMLA leave. The first obstacle was
imputing the action to Care Centers, since CCS Veba was
ostensibly a separate organization. But Ryl-Kuchar pointed
out that the plan administrator for CCS Veba was married
to the owner of Care Centers; CCS Veba was referred to as
the “insurance department” of Care Centers; and the organi-
zations shared the same facilities. With this in place, she
moved on to motive. She noted that Care Centers was
concerned with rising health care costs, as evidenced by
an article in the company newsletter, and that the claim
4 Nos. 08-2688 & 08-2823
that she became a part-time employee in June had no basis
in fact. Even though she may have worked less than
35 hours per week during that stretch of time, she re-
mained a salaried employee, and her pay remained the
same. It was only after Ryl-Kuchar took FMLA leave that
CCS Veba—or Care Centers, depending on one’s perspec-
tive—audited her payroll records and found there had
been a “mistake.” With this and other evidence, Ryl-Kuchar
pressed both interference and retaliation claims at trial.
She argued that Care Centers interfered with her FMLA
right to continued health insurance and that it did this
in retaliation for her decision to go on leave.
The FMLA entitles an employee to 12 weeks of leave
every year for certain life events. Pirant v. United States
Postal Service, 542 F.3d 202, 206 (7th Cir. 2008). These include
the birth and care of a child, as well as a “serious health
condition” that renders the employee unable to perform
her job. 29 U.S.C. § 2612(a)(1)(D). Incapacity due to
pregnancy is a “serious health condition.” 29 C.F.R.
§ 825.114(a)(2)(ii); Aubuchon v. Knauf Fiberglass GmbH, 359
F.3d 950, 951 (7th Cir. 2004). If the employee is insured
under a group health plan, like Ryl-Kuchar was, the
FMLA requires her employer to maintain the coverage
while she is out on leave. 29 U.S.C. § 2614(c)(1).
To prevail on her interference claim, Ryl-Kuchar had
to show that: (1) she was eligible for FMLA protection;
(2) Care Centers was covered by the FMLA; (3) she was
entitled to FMLA leave; (4) she provided sufficient notice
of her intent to take leave; and (5) Care Centers denied
her benefits to which she was entitled (in this case, con-
tinued health insurance). Smith v. Hope School, 560 F.3d 694,
Nos. 08-2688 & 08-2823 5
699 (7th Cir. 2009). As for retaliation, since Ryl-Kuchar
opted for the direct method of proof, she was only
required to show that Care Centers retroactively cancelled
her health insurance “to punish her for requesting or
taking FMLA leave.” Id. at 702.
The jury found that Ryl-Kuchar had carried her burden,
and it awarded her just over $30,000 in damages (the total
amount of her unpaid medical bills). After denying Care
Centers’s motion for judgment notwithstanding the
verdict, the district court awarded prejudgment interest
and liquidated damages (the norm in FMLA cases, see
29 U.S.C. § 2617(a)(1)(A)), bringing the total up to over
$85,000.
Care Centers asks us to reverse the district court’s
decision denying its motion for judgment notwithstanding
the verdict. We review this decision de novo, Pierce v.
Atchison, Topeka & Santa Fe Ry. Co., 65 F.3d 562, 567 (7th Cir.
1995), asking “whether the evidence presented, combined
with all reasonable inferences permissibly drawn there-
from, is sufficient to support the verdict when viewed in a
light most favorable to the party against whom the motion
is directed,” Haley v. Gross, 86 F.3d 630, 632 (7th Cir. 1996).
See also Lasley v. Moss, 500 F.3d 586, 590 (7th Cir. 2007). In
other words, a trial court should overturn a verdict only
where the evidence supports but one conclusion—the
conclusion not drawn by the jury. Pierce, 65 F.3d at 568.
This standard is tough; Care Centers is no match.
Let’s start with the retaliation claim. Certainly—and this
applies to the interference claim as well—there was ample
evidence to conclude that CCS Veba was just an arm of
Care Centers, not a separate entity. So the jury was within
6 Nos. 08-2688 & 08-2823
its rights to impute CCS Veba’s motivation to Care Centers
and, if that motivation was retaliatory in nature, find in
favor of Ryl-Kuchar. The evidence of retaliatory motive
wasn’t overwhelming, but it was sufficient to meet the
preponderance of the evidence standard. Taken together,
the inconsistencies, the timing of the decision, and Care
Centers’s concerns about rising health care costs provided
reasonable grounds to infer retaliation. The jury was
entitled to dismiss Care Centers’s excuse that the reason it
waited so long to determine Ryl-Kuchar was a part-time
employee was because it was in the midst of changing
the way it monitored workers’ hours. It was not unrea-
sonable for the jury to conclude, based on the evidence,
that the real reason was because Ryl-Kuchar elected to
take FMLA leave.
The interference claim is easier still. Viewing the
evidence in the light most favorable to Ryl-Kuchar, a rea-
sonable jury could have found that Care Centers inter-
fered with her right to continued health insurance cover-
age. A reasonable jury could have concluded that Ryl-
Kuchar was in fact a full-time employee until she took
FMLA leave in late July or early August, thus entitling her
to health insurance not only through that date, but also
through the date she resigned while out on leave. 29 U.S.C.
§ 2614(c)(1); see also 29 C.F.R. § 825.100(b) (“An employee
on FMLA leave is . . . entitled to have health benefits main-
tained while on leave as if the employee had continued
to work instead of taking the leave.”).
The judgment based on the jury’s verdict is AFFIRM ED
and the case REM A N DED for calculation of the appropriate
fee award under 29 U.S.C. § 2617(a)(3). Ms. Ryl-Kuchar is
Nos. 08-2688 & 08-2823 7
also awarded her costs on this appeal. In accordance with
her attorney’s request at oral argument, Ryl-Kuchar’s cross-
appeal is DISM ISSED .1
1
We have considered the arguments made by Care Centers
regarding damages and find them unpersuasive.
5-11-09