J. Sabater v. PA Insurance Dept. ( 2019 )

IN THE COMMONWEALTH COURT OF PENNSYLVANIA
James Sabater, :
Petitioner :
:
v. :
:
Pennsylvania Insurance Department :
and Michael F. Consedine, individually, :
and in his official capacity as :
Insurance Commissioner, : No. 637 M.D. 2014
Respondents : Submitted: December 11, 2018
BEFORE: HONORABLE ROBERT SIMPSON, Judge
HONORABLE PATRICIA A. McCULLOUGH, Judge
HONORABLE CHRISTINE FIZZANO CANNON, Judge
OPINION NOT REPORTED
MEMORANDUM OPINION
BY JUDGE FIZZANO CANNON FILED: January 3, 2019
Respondents the Pennsylvania Insurance Department (Department) and
Michael F. Consedine (collectively, Respondents) seek summary relief in the form
of an amended motion for summary judgment requesting that this Court dismiss
James Sabater’s (Petitioner) petition for review. For the reasons set forth below, we
deny Respondents’ application for summary relief.
Petitioner initiated this suit by filing a complaint in this Court on
December 8, 2014, alleging a claim under Pennsylvania’s Whistleblower Law, Act
of December 12, 1986, P.L. 1559, as amended, 43 P.S. §§ 1421-1428
(Whistleblower Law), and a separate claim of wrongful termination (Petition for
Review).1 On January 7, 2015, Respondents filed their Answer to
Complaint/Petition for Review, which denied Petitioner’s claims and alleged in new
matter that Petitioner (1) voluntarily resigned his position and, alternatively, (2) had
committed egregious violations of an internal management directive covering the
acceptable use of Department information technology that would have warranted
Petitioner’s dismissal had he not resigned. Petitioner answered Respondents’ new
matter on January 27, 2015. The parties completed discovery in mid-June 2018, and
Respondents filed the instant amended application for summary relief.
Pennsylvania Rule of Appellate Procedure 1532(b) provides that, “[a]t
any time after the filing of a petition for review in an appellate or original jurisdiction
matter the court may on application enter judgment if the right of the applicant
thereto is clear.” Pa.R.A.P. 1532(b); Summit Sch., Inc. v. Dep’t of Educ., 108 A.3d
192, 195 (Pa. Cmwlth. 2015). In deciding a request for summary relief, “this [C]ourt
must determine whether it is clear from the undisputed facts that either party has a
clear right to the relief requested.” Bell Atl.-Pennsylvania, Inc. v. Tpk. Comm’n, 703
A.2d 589, 590 (Pa. Cmwlth. 1997), aff’d, 713 A.2d 96 (Pa. 1998). “The record, for
purposes of the motion for summary relief, is the same as a record for purposes of a
motion for summary judgment.” Summit, 108 A.3d at 195–96. Pursuant to
Pennsylvania Rule of Civil Procedure 1035.1, the record in a motion for summary
judgment includes any: “(1) pleadings, (2) depositions, answers to interrogatories,
admissions and affidavits, and (3) reports signed by an expert witness that would, if
filed, comply with [Pa.R.C.P. No. 4003.5(a)(1)], whether or not the reports have
been produced in response to interrogatories.” Pa.R.C.P. No. 1035.1. However,
1
On December 10, 2014, this Court issued an order advising that Petitioner’s complaint
would be treated as a petition for review addressed to the Court’s original jurisdiction. See Order
dated December 10, 2014.
2
“[i]t is well established that testimonial affidavits or deposition testimony alone,
even if not contradicted, [are] insufficient to establish the absence of a genuine issue
of material fact because the credibility of the testimony is a matter for the factfinder.”
Dep’t of Transp. v. UTP Corp., 847 A.2d 801, 806 (Pa. Cmwlth. 2004); see also
Borough of Nanty-Glo v. Am. Sur. Co. of New York, 163 A. 523 (Pa. 1932); Pa.R.C.P.
No. 1035.5, Note. “In ruling on applications for summary relief, [this Court] must
view the evidence of record in the light most favorable to the non-moving party and
enter judgment only if there is no genuine issue as to any material facts and the right
to judgment is clear as a matter of law.” Eleven Eleven Pa., LLC v. State Bd. Of
Cosmetology, 169 A.3d 141, 145 (Pa. Cmwlth. 2017) (internal brackets omitted).
Here, Petitioner is a former employee of the Department, where he
served as an actuary from February 2005 until his resignation on June 11, 2014.
Petitioner’s first claim arises under Section 3 of the Whistleblower Law, which
provides:
Persons not to be discharged.–No employer may
discharge, threaten or otherwise discriminate or retaliate
against an employee regarding the employee’s
compensation, terms, conditions, location or privileges of
employment because the employee or a person acting on
behalf of the employee makes a good faith report or is
about to report, verbally or in writing, to the employer or
appropriate authority an instance of wrongdoing or waste
by a public body or an instance of waste by any other
employer as defined in this act.
43 P.S. § 1423(b). Petitioner maintains that Respondents violated the Whistleblower
Law by forcing his retirement in retaliation for Petitioner refusing to acquiesce to
3
alleged collusion between the Department and Aetna, Inc. (Aetna),2 and for making
good faith reports to the Actuarial Board for Counseling and Discipline and proper
personnel within the Department regarding his concerns related to Aetna rate
irregularities. Petitioner claims his concerns regarding certain Aetna practices,
including rate increases implemented without regulatory approval, and various
reports regarding the conduct of other actuaries, led Respondents to engage in a
course of conduct that culminated with Petitioner’s constructive termination. In
addition to his whistleblower claim, Petitioner also makes a common law wrongful
termination claim in which he alleges he was constructively terminated by the
Department for his actions and concerns related to Aetna.
Respondents, on the other hand, contend that they did not violate the
Whistleblower Law because no “wrongdoing” occurred under the Whistleblower
Law. Respondents also claim Petitioner cannot establish a causal connection
between the concerns he raised regarding Aetna and his ultimate separation from the
Department where: (a) Respondents agreed with Petitioner’s concerns; (b)
Respondents undertook an independent actuarial review and conducted an
“oversight” market conduct examination in response to Petitioner’s concerns; (c)
Petitioner was promoted from Actuarial I to Actuarial II after his reports and prior
to his separation from the Department; (d) nearly two years expired between
Petitioner raising concerns and Petitioner’s departure from the Department; (e)
Petitioner voluntarily resigned from his position with the Department; and (f) the
misconduct that ultimately led to Petitioner’s resignation was discovered as a result
of an investigation into a different Department employee. Finally, Respondents
argue that, even if Petitioner’s resignation could be viewed as a constructive
2
Aetna is a managed healthcare company that provides insurance plans and related services
and whose Pennsylvania rates and operations are overseen by the Department.
4
termination, the Department had more than adequate evidence of Petitioner’s
violation of an internal Department management directive to have legitimately
warranted Petitioner’s termination. In their application for summary relief,
Respondents advance these assertions and contend that they are supported by
undisputed material facts.
To prevail on a Whistleblower Law claim, a petitioner must prove that,
prior to the alleged retaliation, he or she reported or was about to report in good faith
an instance of wrongdoing. Section 4(b) of the Whistleblower Law, 43 P.S. §
1424(b). A petitioner must do more than merely demonstrate that he or she was
terminated sometime after making a report. Golaschevsky v. Dep’t of Envtl. Prot.,
720 A.2d 757, 759 (Pa. 1998). Instead, “[t]he causal connection that the
Whistleblower Law requires must be demonstrated by concrete facts or surrounding
circumstances that the report of wrongdoing or waste led to the plaintiff’s dismissal,
such as that there was specific direction or information received not to file the report
or that there would be adverse consequences because the report was filed.” Evans
v. Thomas Jefferson Univ., 81 A.3d 1062, 1070 (Pa. Cmwlth. 2013) (quoting
Golaschevsky, 720 A.2d at 759) (internal quotations omitted). “The Whistleblower
Law is not designed to provide insurance against discharge or discipline for an
employee who informs on every peccadillo of his fellow employees.” Id. at 1070
(internal quotations omitted). If a petitioner proves a causal connection between the
report of wrongdoing and his or her eventual termination, then the burden shifts to
the respondents to show that their actions were lawful. O’Rourke v. Dep’t of Corr.,
778 A.2d 1194, 1200 (Pa. 2001); see also 43 P.S. § 1424(c). “[A]n employer should
not incur liability for independently justified adverse personnel action simply
5
because animus may exist based upon prior reports of wrongdoing.” O’Rourke, 778
A.2d at 1204.
Respondents allege no material facts are in dispute in the instant matter.
Based on the deposition testimony of their own witnesses, Respondents contend that
they hired an independent actuarial firm to review the concerns raised by Petitioner
and then initiated a limited scope oversight market conduct examination to further
investigate Petitioner’s concerns. Respondents note that, although the investigation
revealed that Aetna had internally implemented unapproved rate increases, Aetna
never charged consumers those rates and thus owed no restitution. Respondents
further note that Aetna took corrective measures relative to the rate increases.
Respondents conclude that, because they investigated Petitioner’s concerns and that
investigation concluded without the imposition of fines or other penalties against
Aetna, no facts remain in dispute regarding either Petitioner’s concerns or
Respondents’ response thereto. Additionally, Respondents argue that because (1)
Petitioner received a promotion following his reported concerns and (2) the
misconduct that led to his resignation was discovered via an investigation into the
conduct of another Department employee, no dispute as to the material facts of
Petitioner’s separation from the Department exists between the parties.
Petitioner counters with allegations that the same deposition testimony
and above alleged “facts,” together with his sworn affidavit, evidence instead that
Respondents forced him to resign from the Department through the pretextual use
of an internal management directive governing the use of email and the internet.
Petitioner also notes that many questions of fact exist as to the conduct of his
superiors after he reported his concerns regarding Aetna’s rate increases and whether
6
such conduct, and the subsequent investigation for alleged management directive
violations, was in retaliation for his reports regarding Aetna.
This case does not present a situation where there are no outstanding
issues of material fact and the Court can simply apply the law. Instead, despite
Respondents’ insistence to the contrary, necessary findings of fact remain to be made
by a fact-finder, including, inter alia, conduct and motivation surrounding
Petitioner’s treatment after reporting Aetna’s alleged irregularities, the Department’s
internal investigation that revealed violations of Respondents’ management
directives, and the circumstances and factors directly leading to Petitioner’s
resignation, as well as the parties’ competing interpretations thereof. Such factual
disputes prevent the Court from granting the application for summary relief at this
time.
Accordingly, we deny Respondents’ application for summary relief in
the form of an amended motion for summary judgment.
__________________________________
CHRISTINE FIZZANO CANNON, Judge
7
IN THE COMMONWEALTH COURT OF PENNSYLVANIA
James Sabater, :
Petitioner :
:
v. :
:
Pennsylvania Insurance Department :
and Michael F. Consedine, individually, :
and in his official capacity as :
Insurance Commissioner, : No. 637 M.D. 2014
Respondents :
ORDER
AND NOW, this 3rd day of January, 2019, the Amended Motion for
Summary Judgment of the Pennsylvania Insurance Department and Michael F.
Consedine is DENIED.
__________________________________
CHRISTINE FIZZANO CANNON, Judge