Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-alnd-2_14-cv-01941/USCOURTS-alnd-2_14-cv-01941-0/pdf.json

Nature of Suit Code: 442
Nature of Suit: Civil Rights Employment
Cause of Action: 42:2000e Job Discrimination (Employment)

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF ALABAMA

SOUTHERN DIVISION

MEMORANDUM OF OPINION

Before the Court is Defendant D.R. Horton, Inc.-Birmingham’s 

(“Horton’s”) Motion for Partial Summary Judgment1 (Doc. 162), as well as 

Plaintiff Peter J. Ferrari’s (“Ferrari’s”) Motion for Summary Judgment 

(Doc. 172). Also before the Court are Horton’s two Motions to Strike. 

(Docs. 188 and 190.) Ferrari brought this action asserting retaliation 

under 42 U.S.C. § 2000e, et seq. (“Title VII”), and Alabama state common 

law claims for (1) negligent/wanton hiring, training, supervision and/or 

retention, (2) invasion of privacy and (3) intentional infliction of 

emotional distress/outrage. Horton filed counterclaims for Alabama state 

common law breach of fiduciary duty and duty of loyalty, intentional 

 

1 Horton moves for summary judgment on all Plaintiff’s claims and for partial 

summary judgment on its own counterclaims. 

PETER J. FERRARI,

Plaintiff,

 vs.

D.R. HORTON, INC.-

BIRMINGHAM,

Defendant.

2:14-cv-01941-LSC

)

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FILED

 2017 Feb-03 PM 03:30

U.S. DISTRICT COURT

N.D. OF ALABAMA

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interference with prospective economic advantage, unjust enrichment, 

and faithless servant liability. Horton also filed claims under Alabama 

statutes for fraud by misrepresentation of material facts under Ala. Code 

§ 6-5-101, fraud through suppression of material facts under Ala. Code § 

6-5-102, violations of the Alabama Trade Secrets Act (“ATSA”), and

fraudulent deceit under Ala. Code § 6-5-104. For the reasons stated 

below, Ferrari’s Motion for Summary Judgment is due to be denied. 

Horton’s Motion for Summary Judgment is due to be denied in part and 

granted in part. Horton’s Motions to Strike are due to be denied as moot.

I. BACKGROUND

Ferrari was employed by Horton, a company in the business of home 

building, as a land acquisition manager in charge of obtaining the best 

deals and terms for land purchases that he could for Horton. (Ferrari Dep. 

at 40-1, Whitehurst Dep. at 72.) He was neither an officer nor a director 

and did not have the power to bind the company to any contract—all land 

purchases had to be approved by Horton management in Texas. 

(Whitehurst Dep. at 72, 102-03.) All land purchase contracts also had 

due-diligence provisions that allowed Horton to cancel the deals for any 

reason up until the time of closing. (Id. at 103, 127.) Horton sometimes 

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used this provision to “retrade” transactions, or threaten to walk away 

from a deal unless the price was renegotiated. (Id. at 158-59.)

While working for Horton, Ferrari also did the same kind of work for 

D.R. Horton, Inc. (“DHI”), a separate entity. (Whitehurst Dep. at 310-12, 

Gill Dep. at 115.) Horton does not operate in Florida, and DHI does not 

operate in Alabama. (Whitehurst Dep. at 26.) Horton paid Ferrari for his 

work with both Horton and DHI. (Whitehurst Dep. at 310-12.) According 

to Scott Whitehurst (“Whitehurst”), Ferrari’s supervisor at Horton, this 

compensation was “allocat[ed]” between Horton and DHI internally. (Id.)

A. Alleged Conflicts of Interest 

On November 9, 2009, Ferrari received and signed Horton’s Employee 

Personnel Policy Guidelines (“the handbook”), which among other things, 

defined prohibited conflicts of interest. (Ferrari Dep. at 173-75, Ex. 20.) 

The handbook specifically stated:

Employees and their immediate families are not to solicit, accept or 

retain a personal benefit from any . . . individual or organization 

doing or seeking to do business with the Company, or from any other 

individual or organization. In this context, a personal benefit is 

regarded as any type of discount for services performed, gift, 

gratuity, favor, service, loan . . . fee or compensation or anything of 

monetary value.

(Id. at Ex. 20.) 

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On May 20, 2010, Ferrari and/or his wife Kimberly Ferrari 

(“Kimberly”) formed Prince 5 Holdings, LLC (“Prince 5”), and on January 

18, 2011, they formed P6 Holdings, LLC (“P6”). (Kimberly Dep. at Ex. 1 & 

8.) These entities were owned by Ferrari and Kimberly, though exactly 

which one of them formed, owned, and controlled the funds in the 

entities is in dispute. 

Horton alleges that Ferrari involved Brad Zeitlin (“Zeitlin”), a friend 

of Ferrari’s who did not work for Horton, in land deals in Mississippi even 

after Whitehurst specifically directed him not to. However, Ferrari claims 

that Whitehurst told him to get Zeitlin involved in the Mississippi deals,

because Whitehurst was afraid of increased competition in the market if 

Horton’s interest in the properties became public knowledge. (Ferrari 

Dep. at 121-22.) Horton also insists—and Ferrari denies—that Ferrari lied 

to Horton about Zeitlin’s involvement in land deals. However, it is 

undisputed that Ferrari spoke to Zeitlin and Pete Barton (“Barton”), who 

worked with Zeitlin, about possible deals for Horton, discussing 

information about “school district, lot size, building pad size, overall 

location, restrictive covenants for design guidelines for building homes, 

potential price range, [as well as] other terms . . . that would have been 

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relevant, approximate deals, environmental considerations, entitlement,

[and] development considerations.” (Ferrari Dep. at 131-32.) 

Zeitlin conducted business as a member or authorized party through 

a number of LLCs, including Terra Capital Management (“Terra”),

Woodford Advisory, LLC (“Woodford”), New Orchard Advisory, LLC 

(“Orchard”), Nog Development Services, LLC (“Nog”), Einstein Ventures, 

LLC (“Einsten”), and TZMZ Holdings, LLC (“TZMZ”). (Zeitlin Dep. at 7-8, 

24, 59, 60-1.) These entities would “flip” properties to Horton or DHI by

buying the land and then selling it a few hours or days later at a 

substantially higher price. (Cummings Dep. at Ex. A.) Ferrari denies that 

Horton could have purchased these properties at a lower price if Zeitlin 

had not been involved. (Whitehurst at 123, 175.) 

While Ferrari was working at Horton, Zeitlin issued several checks 

amounting to a substantial sum, made payable to Prince 5. (Zeitlin Dep. 

at 38-52.) Zeitlin testified that the funds were intended to reward Ferrari 

for introducing him to Horton by giving him a share in the value of his 

transactions with Horton. Ferrari, however, claims that the funds were 

“gifts” between friends, and denies that they were kickbacks related to 

sales of land by Zeitlin to Horton. (Ferrari Dep. at 74.) 

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P6 also received money from former Horton employee Kenny Smith 

(“Smith”) and Cogent Building Group, allegedly as a “finder’s fee” for 

introducing Smith to Zeitlin, who then allowed Smith to be involved in 

building houses in Destin, Florida. (Smith Dep. at 44-7.) Further, Prince 5 

and P6 sent funds to Zeitlin and Zeitlin-related entities while Ferrari was 

employed at Horton. (Zeitlin Dep. at 97,101, 105.) 

Ferrari claims that Horton CEO David Auld (“Auld”) knew about this 

conduct in 2012 and asked Whitehurst to look into it months before 

Ferrari was terminated. (Auld Dep. at 10-1, 26.) Thus, Ferrari claims, 

Horton did not take action based on the reports of misconduct until after 

Ferrari complained to Whitehurst about sexual harassment. However, 

Horton provides testimony that the 2012 investigation did not result in 

any finding of misconduct, and argues that this was because of Ferrari’s 

concealment of his actions. Horton maintains that immediately after 

receiving more reports about Ferrari’s alleged fraud, it initiated an 

investigation, beginning with a meeting between Whitehurst and Horton 

representatives Paula Hunter-Perkins (“Perkins”) and Rachel Dequattro 

(“Dequattro”) on July 9, 2013. (Id. at 45-7, Ex. 2, Dequattro Dep. at 20.) 

Even then, Ferrari, who was present at the meeting, did not disclose the 

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payments from Zeitlin-related entities to Prince 5 and P6. (Ferrari Dep. 

at 94-5.) 

After this meeting, on July 9 or 10, 2013, Ferrari was suspended and 

was subsequently terminated on July 31, 2013, based on a joint decision 

by Whitehurst, Auld, Perkins, and Mike Shetterly, Horton’s attorney. 

(Ferrari Dep. at 206-07.) Horton claims that Ferrari was terminated 

because of “failure to follow clear instruction[,]. . . conflict of 

interest[,]. . . false information provided in an investigation[,]. . . 

refu[sal] to cooperate with investigation[, and] . . . insubordination.” 

(Whitehurst Dec. Ex. D.) However, Ferrari claims that he was never 

informed about “the precise nature of any allegations against him.” (Doc. 

180 at 10-11.) 

B. Alleged Sexual Harassment

Ferrari alleges that he suffered sexual harassment while employed at 

Horton, in the form of the following conduct: 

1) Ferrari received a January 23, 2010 email from Jeff Dequattro—

Dequattro’s then-husband, who was not a Horton employee—which 

contained a picture of Dequattro riding a mechanical bull. (Ferrari 

Dep. at 190-93, Ex. 21.) 

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2) Ferrari received a February 12, 2012 email from Jeff A. Marzello—

one of Ferrari’s subordinates—stating “I also want a blow job from 

Paris Hilton.” (Def. Ex. 22.)

3) Ferrari received a November 27, 2012 email from Dequattro in 

which she said “I will f-----g REMEMBER to do this.” (Id.)

4) Ferrari received a November 28, 2012 email from Dequattro which 

stated “[Aww!] I needed that, my head is about to explode.” This 

email was in response to Ferrari’s email which said “You’re the 

terminator.” (Id.)

5) Ferrari received a December 12, 2012 email and a March 14, 2013 

email from Dequattro in which she said “Love ya.” (Id.)

6) Ferrari received a May 22, 2013 email from Shane H. Ikerman

(“Ikerman”) in which he said “lol B---h.” This email was a reply to 

Ferrari’s email which stated “Neeener neeeener neeeener.” (Id.)

7) Ferrari received a May 30, 2013 email from Dequattro in which she 

called him “dear.” (Id.) 

8) Ferrari received an email from Dequattro with a picture of a man in 

his underwear and a comment about the picture. (Ferrari Dep. at 

114-15.) 

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9) Ferrari received an email from Dequattro with a link to a “Mormon 

sex site or something like that.” (Id.) 

10) Ferrari was subjected to Will Moody’s (“Moody”) “insinuations that 

[Ferrari] was a homosexual, his putting up on [Ferrari’s] cork board 

in [Ferrari’s] office a picture of a little Chihuahua with big testicles 

in order to embarrass [Ferrari] in the company, [Moody’s] pictures 

that he would forward to colleague’s phones . . . that insulted 

[Ferrari] for [his] height.” (Id. at 106.) This incident allegedly 

occurred on March 31, 2012. (Def. Ex. 19 at P0181.) 

11) Ferrari was subjected to conversations in which Dequattro 

“corner[ed] [Ferrari] in [his] office on multiple occasions and . . . 

graphically describe[d] such things as her breast augmentation and 

rub[bed] her body so as to illustrate to [Ferrari] where incisions 

were made, where bruising occurred, what complications she had . 

. . as she was fondling herself to illustrate.” (Ferrari Dep. at 198.) 

At least one of these incidents occurred on July 15, 2010. (Def. Ex. 

19 at P0174.)

12) Ferrari witnessed Auld rubbing Dequattro’s shoulders at a business 

dinner and Dequattro subsequently discussed it with Ferrari, asking

if “it look[ed] like [she] was giving David BJs to get a promotion.” 

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(Ferrari Dep. at 117-18.) Horton provides email evidence that this 

dinner occurred on February 17, 2010. (Whitehurst Dec. Ex. G.)

13) Ferrari witnessed Dequattro’s discussions about “how she taught 

her daughter . . . how to give oral sex replete with hand gestures 

and mouth gestures,” and “her preference for anal sex,” and how 

“it offended her sensibilities that after anal sex [a boyfriend] 

wanted her to give him oral sex.” (Ferrari Dep. at 198-99.) 

14) Ferrari witnessed Dequattro and Cassie Kropp (“Kropp”), who was 

another Horton employee, discussing “the fact that Scott

[Whitehurst] has a small penis, [his wife] does not like to have sex 

with him and he is a one minute wonder.” (Id. at 199.)

15) Ferrari witnessed Ikerman’s recounting of conversations with 

Dequattro about “her need, her want for certain male body parts.” 

(Id. at 199-200.)

16) Ferrari was subjected to Dequattro’s showing him and Whitehurst 

an image of “a broken shower glass where her daughter had broken 

the glass . . . from having sex with her boyfriend,” and Whitehurst 

“trac[ing] the outline of [the daughter’s] backside on the shower 

glass and ma[king] a disgusting comment about it.” (Id. at 200.)

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17) Ferrari was subjected to Kropp’s “touching [him] inappropriately 

with great frequency, lifting [his] shirt, using the nature of the 

cloth of [his] shirt to touch [his] arms, describing discussions . . . 

with . . . Dequattro about [him] in compromised situations,” and 

“cornering [Ferrari] . . . and telling [him] that she wanted to have 

sexual relations with [him] . . . with [his] wife in earshot.” (Id. at 

200-01.)

18) Ferrari was subjected to Kropp’s commenting about her sexual 

habits, including “descriptions of her body when she was teaching 

aerobics and what she could do with that body, descriptions . . . of 

her hysterectomy and what it did to her private parts . . . [and] of 

sexual relations she had with someone in a wheelchair.” (Id. at 

201.)

19) Ferrari was subjected to Ikerman’s inappropriate conduct, 

including “telling [Ferrari] that [he] needed to obtain sexual favors 

from [his] wife,” on August 12, 2010, “[m]aking overtly sexual 

movements against female colleagues in [his] presence” on April 

24, 2010, and “showing [Ferrari] emails from his D.R. Horton email 

where he was asking his wife for sexual favors” on May 25, 2011.

(Id., Def. Ex. 19 at P0173, 175, 180.) 

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20) Ferrari witnessed Whitehurst’s vulgar statements during 

management meetings, including explaining a vulgar act, discussing 

gonorrhea, and using frequent profanity with sexual meanings. 

(Ferrari Dep. at 202-03.) At least some of these comments 

occurred at a January 18, 2012 meeting. (Def. Ex. 19. at P0181.) 

21) Ferrari witnessed Whitehurst stating “what HR, there is no HR.” 

(Ferrari Dep. at 202-03.) 

22) Ferrari witnessed discussions by D.R. Horton employees Auld and 

Don Tomnitz (“Tomnitz”) at a business dinner “about how their 

wives would not have sexual relations with them . . . [and] the fact 

that [they] had to have their needs serviced elsewhere.” (Id. at 

196.) Horton presents email evidence that this dinner took place 

February 7 or 8, 2012. (Dequattro Dec. Ex. B.) 

23) Ferrari was subjected to Horton employee Donnie Long’s showing 

him a pornographic video at a Horton event in 2010 or 2011. 

According to Ikerman, when he spoke to Ferrari about the video, 

Ferrari “said that the video was gross, and [] was laughing about it, 

and [] told [him] that [he] needed to go see it.” (Ikerman Dep. at 

22-3.) Ikerman further states that when he asked Ferrari if he was 

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okay, Ferrari said “yes, just remind me not to watch anything on 

Donnie’s phone again.” (Id). 

However, despite this environment, Ferrari admits he never filed a 

report with Horton or DHI’s Human Resources Department, did not call 

the anonymous hotline that Horton provided, did not respond to any of 

the emails with a complaint about their profane content, and did not 

ever tell anyone to stop behaving in such a manner. (Ferrari Dep. at 112-

13.) Instead, he replied to some emails, which he claims were 

“harassing,” with comments such as “ha ha ha” or “LMAO.” (Id. at 112.) 

Further, when Ferrari met with Whitehurst, Perkins and Dequattro on July 

9, 2013, he did not tell Perkins, who was the Vice President of Human 

Resources, about the conduct. (Id. at 108.) 

Yet, Ferrari charges that his colleagues should have known he was 

displeased with the “harassing” conduct because he reacted by “virtually 

wincing, turning and walking away, ignoring the person who was 

speaking, [and] coming back at a later time.” (Id. at 204.) He insists that 

these were some of the “many indications given . . . to illustrate [his] 

discomfort,” and that he “complained verbally” to Dequattro on an 

unspecified date, Ikerman on May 22, 2013, and Whitehurst in FebruaryMay 2013. (Id. at 204, 348-49, Def. Ex. 19 at P0169, Pl. Ex. 4 at 4-6.) 

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On January 27, 2010, Ferrari sent an email to prospective real estate 

developer Nathan Cox (“Cox”) which included insults, profanity, sexual 

references, and a threating reference about “breaking [individuals] like 

[Cox] over [his] knee.” (Id. at 99, Ex. 5.) He also made a comment about 

“cracking Will Moody’s head like a [f-----g] coconut,” and when 

questioned about that e-mail, admitted that “[a] profane word is not 

necessarily adult content which is not necessarily sexual . . . 

harassment.” (Id. at 113.) Ferrari was disciplined for sending this email.

Ferrari filed an EEOC charge of discrimination on January 23, 2014—

almost six months after his termination from Horton on July 31, 2013—

alleging retaliation for his verbal complaints about sexual harassment.

(Doc. 1 Ex. 2.)

II. STANDARD OF REVIEW

Summary judgment is appropriate “if the movant shows that there 

is 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). A fact is 

“material” if it “might affect the outcome of the suit under the governing 

law.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). There is 

a “genuine dispute” as to a material fact “if the evidence is such that a 

reasonable jury could return a verdict for the nonmoving party.” 

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Anderson, 477 U.S. at 248. The trial judge should not weigh the evidence 

but must simply determine whether there are any genuine issues that 

should be resolved at trial. Id. at 249.

In considering a motion for summary judgment, trial courts must 

give deference to the nonmoving party by “considering all of the 

evidence and the inferences it may yield in the light most favorable to 

the nonmoving party.” McGee v. Sentinel Offender Servs., LLC, 719 F.3d 

1236, 1242 (11th Cir. 2013) (citations omitted). In making a motion for 

summary judgment, “the moving party has the burden of either negating 

an essential element of the nonmoving party’s case or showing that there 

is no evidence to prove a fact necessary to the nonmoving party’s case.” 

Id. Although the trial courts must use caution when granting motions for 

summary judgment, “[s]ummary judgment procedure is properly regarded 

not as a disfavored procedural shortcut, but rather as an integral part of 

the Federal Rules as a whole.” Celotex Corp. v. Catrett, 477 U.S. 317, 

327 (1986).

III. DISCUSSION

A. Horton’s Standing to Bring Counterclaims

As an initial matter, Ferrari moved for summary judgment on all 

claims based on deals for land in Florida, alleging that Horton “is not the 

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proper party, has no standing, and cannot state a cause of action as to 

Florida transactions” because Horton “is legally prohibited from 

disregarding the corporate existence of DHI and treating DHI’s purported 

damages as its own.” (Doc. 173 at 7.) Ferrari bases this argument on the 

undisputed fact that Horton did not operate in Florida and that Horton 

and DHI allocated Ferrari’s compensation internally. According to Ferrari, 

since Horton did not operate in Florida, he is liable only to DHI for his 

actions related to land in Florida. However, Ferrari does not dispute that 

he received all his compensation from Horton and was employed solely by 

Horton, even while he was involved in the Florida transactions. Horton 

alleges that Ferrari is liable for conduct that violated the duties of the 

employment contract he had with Horton even if some of the damages 

were suffered by DHI, a separate entity. 

Whether a party has standing is a procedural question, which will be 

answered by referencing federal law. See E.F. Hutton & Co., Inc. v.

Hadley, 901 F.2d 979, 984 (11th Cir. 1990). In order to have standing to 

bring a claim in federal court, a plaintiff must show that (1) it suffered an 

injury in fact (2) the injury is traceable to the challenged conduct of the 

defendant and (3) the injury will likely be redressed by a favorable ruling. 

Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992). The Court is 

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concerned that Horton may not have standing to recover some of the 

damages it seems to claim. However, Horton does have standing to assert 

that Ferrari breached his employment contract, because such a breach 

would injure Horton. Neither party cited the Court to law or facts that 

would sufficiently demonstrate which of Horton’s claims are due to be 

dismissed at this stage based on the lack of standing. Therefore, viewed 

in the light most favorable to the non-movant, this issue must be 

determined at trial. Summary judgment based on a lack of standing is due 

to be denied. 

B. Horton’s Counterclaim Damages

Ferrari moved for summary judgment based on his contention that 

Horton has failed to sufficiently prove damages for its counterclaims. This

argument appears to be based on Horton not presenting evidence of a 

calculation of the amount of damages. However, under Alabama law, 

Horton does not need to provide evidence of a specific amount of 

damages in order to survive summary judgment. Instead, Horton simply 

needs to “establish the existence of damages as a result of the alleged 

breach.” Jones v. Hamilton, 53 So. 3d 134, 142 (Ala. Civ. App. 2010). 

Horton does provide evidence of the sources of the purported damages, 

including the pay Ferrari received while employed at Horton, the alleged 

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kickbacks Ferrari received from Zeitlin, and the increased cost that 

Horton incurred from Zeitlin’s involvement in land deals. Viewed in the 

light most favorable to the non-movant, the fact that there were 

damages has been shown, and the question of the amount of such 

damages is for the jury. Summary judgment is not due to be granted on 

this issue. 

C. Horton’s Counter Claim for Breach of Fiduciary Duty and the 

Duty of Loyalty 

Horton and Ferrari both moved for summary judgment on Horton’s 

counterclaim against Ferrari for breach of fiduciary duty and breach of 

the duty of loyalty. Ferrari argues that Horton cannot bring a state law 

claim for breach of fiduciary duties because such claims are preempted 

by the ATSA. The Alabama Supreme Court has held that “the legislature 

intended for the [ATSA] to replace common law tort remedies for the 

misappropriation of trade secrets.” Allied Supply Co. v. Brown, 585 So.

2d 33, 37 (Ala. 1991). Yet, Horton’s claims are not solely based on 

“misappropriation of trade secrets.” Horton also alleges that Ferrari took 

money from Zeitlin in exchange for giving him priority on deals, that 

Ferrari lied to Horton, that Ferrari refused to cooperate in Horton’s 

investigation of his conduct, that Ferrari personally invested in land deals 

with Zeitlin, and that Ferrari was disloyal to Horton in other ways. 

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Therefore, while some of Horton’s claim for breach of the duty of loyalty

may be preempted, it is not entirely preempted by the ATSA.

In order to prove breach of fiduciary duty under Alabama state law, 

a plaintiff must show “(1) the existence of a fiduciary duty between the 

parties; (2) the breach of that duty; and (3) damages suffered as a result 

of the breach.” Regions Bank v. Lowrey, 101 So. 3d 210, 219 (Ala. 2012). 

An agent owes his principal the duty “to act, in all circumstances, with 

due regard for the interests of its principal, and to act with the utmost 

good faith and loyalty.” Allied Supply Co., 585 So. 2d at 37. Ferrari, as 

Horton’s employee with the above described responsibilities, was its 

agent. See Sawyer v. Chevron U.S.A., Inc., 421 So. 2d 1263, 1264 (Ala. 

1982). 

Horton points to payments from Zeitlin to the Ferrari entities to 

bolster its claims that Ferrari violated this duty by “providing Zeitlin with 

preferential treatment in exchange for kickbacks.” (Doc. 163 at 29.) 

However, Ferrari denies these allegations, proffering—among other 

evidence—Zeitlin’s testimony that the payments were not tied to 

particular transactions, his own testimony that Whitehurst directed him 

to involve Zeitlin in transactions, and the fact that he did not have the 

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authority to give anyone such treatment. There being disputed issues of 

fact, summary judgment as to this claim is due to be denied. 

D. Horton’s Faithless Servant Counterclaim

Horton and Ferrari both move for summary judgment on Horton’s 

faithless servant counterclaim against Ferrari. Alabama’s faithless servant 

doctrine “precludes an employee from receiving compensation for 

conduct that is disloyal to the employer or in violation of the employee’s 

employment contract.” Edwards v. Allied Home Mortg. Capital Corp., 

962 So. 2d 194, 209 (Ala. 2007). In Edwards, the court held that if the 

employee was found to have violated his duty of loyalty to his employer, 

he would also be found to be a faithless servant. Id. at 210-11. Here, as 

explained above, Ferrari’s breach of the duty of loyalty is a question for 

the jury. Though faithless servant claims can also be brought for conduct 

that violates an employment contract, Horton does not argue that Ferrari 

incurred faithless servant liability by violating his employment contract. 

See Id. at 209. Horton does allege that Ferrari’s conduct breached the 

rules set forth in the handbook, but does not present any evidence that in 

doing so, Ferrari violated his contract. However, because a reasonable

jury could find either that Ferrari was a faithless servant or was not a 

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faithless servant, the question is for the jury to determine, and summary 

judgment on this claim is due to be denied. 

E. Horton’s Unjust Enrichment Counterclaim

Horton and Ferrari moved for summary judgment on Horton’s 

counterclaims for unjust enrichment against Ferrari. In order to prevail 

on a claim for unjust enrichment, Horton must show that “[Ferrari] holds 

money, which, in equity and good conscience, belongs to [Horton] or 

holds money which was improperly paid to [Ferrari] because of mistake or 

fraud.” Hancock-Hazlett Gen. Constr. Co. v. Trane Co., 499 So. 2d 1385, 

1387 (Ala. 1986). Horton alleges that Ferrari is liable under a theory of 

unjust enrichment because Ferrari received compensation from Zeitlin for 

deceiving Horton and involving Zeitlin in land deals. However, Ferrari and 

Zeitlin both deny that the funds Ferrari received from Zeitlin were

related to any preferential treatment, and Ferrari testifies that Zeitlin 

never made those statements, that Ferrari only did what Whitehurst 

commanded, and that Ferrari did not have the authority to give Zeitlin 

preferential treatment. A reasonable jury could find that Ferrari was not 

unjustly enriched at Horton’s expense. Therefore, summary judgment as 

to Horton’s claim for unjust enrichment is due to be denied. 

F. Horton’s Counterclaim Under the ATSA

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Ferrari moved for summary judgment on Horton’s claim against Ferrari 

under the ATSA. The ATSA “provides for the recovery of ‘actual damages’ 

suffered as a result of a ‘misappropriation’ of a trade secret.” Systrends, 

Inc. v. Grp. 8760, LLC., 959 So. 2d 1052, 1065 (Ala. 2006) (quoting Ala. 

Code § 8-27-4). Misappropriation has occurred if:

(1) That person discovered the trade secret by improper 

means; (2) That person’s disclosure or use constitutes a 

breach of confidence reposed in that person by the other; 

(3) That person learned the trade secret from a third 

person, and knew or should have known that (i) the 

information was a trade secret and (ii) that the trade secret 

had been appropriated under circumstances which violate 

the provisions of (1) or (2), above; or (4) That person 

learned the information and knew or should have known that 

it was a trade secret and that its disclosure was made to 

that person by mistake.” 

Ala. Code § 8-27-3. The trade secrets that Horton alleges Ferrari shared 

with Zeitlin are the targets for land purchases and their prices. Ferrari 

does not dispute that he shared some of this information with Zeitlin. 

However, he provides evidence that Horton directed him to do so, 

because it wanted to have Zeitlin purchase land for Horton quietly. If 

Horton directed Ferrari to share the information, there would be no 

misappropriation. Ferrari would have learned about the information from 

proper means and would not have breached Horton’s confidence in 

disclosing it. Because a reasonable jury could find that Ferrari shared 

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information at Horton’s direction, summary judgment as to Horton’s ATSA 

claim is due to be denied. 

G. Ferrari’s Claim for Title VII Retaliation

Horton moved for summary judgment on Ferrari’s claim against Horton 

for Title VII retaliation. The Eleventh Circuit analyzes Title VII retaliation 

claims usings the burden-shifting scheme first established in McDonnell 

Douglas Corp. v. Green, 411 U.S. 792 (1973). Brown v. Ala. Dep’t of 

Transp., 597 F.3d 1160, 1181 (11th Cir. 2010). If a plaintiff makes out a 

prima facie case of retaliation, the burden shifts to the defendant to 

produce evidence of a “legitimate, nondiscriminatory reason[]” for its 

actions. Jones v. Gerwens, 874 F.2d 1534, 1540 (11th Cir. 1989). If the 

defendant produces evidence of a legitimate reason, “the burden shifts 

back to the plaintiff to discredit the proffered nondiscriminatory reasons 

by showing that they are pretextual.” Id. The plaintiff’s burden to 

establish pretext applies to all of the defendant’s proffered reasons. 

Chapman v. AI Transp., 229 F.3d 1012, 1024 (11th Cir. 2000). Thus, when 

a defendant proffers more than one reason, a plaintiff fails to meet this 

prong if he does not establish pretext as to each of those reasons. Id.

In order to establish “[a] prima facie case of retaliation under Title VII 

. . . the plaintiff [must] show that: (1) [he] engaged in an activity 

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protected under Title VII; (2) [he] suffered an adverse employment 

action; and (3) there was a causal connection between the protected 

activity and the adverse employment action.” Crawford v. Carroll, 529 

F.3d 961, 970 (11th Cir. 2008). Under Title VII, “an employer may not 

retaliate against an employee because the employee ‘has opposed any 

practice made an unlawful employment practice by this subchapter.’” 

E.E.O.C. v. Total Sys. Servs., Inc., 221 F.3d 1171, 1174 (11th Cir. 2000) 

(quoting 42 U.S.C. § 2000e-3(a)). This opposition does not have to be a 

“formal complaint,” but must “explicitly or implicitly communicate [ ] a 

belief that the practice constitutes unlawful employment discrimination.” 

Furcron v. Mail Ctrs. Plus, LLC, 843 F.3d 1295, 1311 (11th Cir. 2016) 

(quoting EEOC Compl. Man. (CCH) § 8-11-B(2) (2006)). Here, Ferrari 

claims that he made an “internal complaint[] of sexual harassment to 

superiors,” which is sufficient to constitute protected activity for a prima 

facie case of retaliation. Pipkins v. City of Temple Terrace, Fla., 267 

F.3d 1197, 1201 (11th Cir. 2001). Further, Ferrari was terminated, which 

is an adverse employment action. See Crawford, 29 F.3d at 970.

The causal connection between the protected activity and the adverse 

employment action requires “but-for causation.” Univ. of Tex. Sw. Med. 

Ctr. v. Nassar, 133 S. Ct. 2517, 2533 (2013). This burden can typically “be 

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met by showing close temporal proximity between the statutorily 

protected activity and the adverse employment action.” Thomas v. 

Cooper Lighting, Inc., 506 F.3d 1361, 1364 (11th Cir. 2007). However, 

“mere temporal proximity, without more, must be ‘very close.’” Id. 

(quoting Brungart v. BellSouth Telecomm., Inc., 231 F.3d 791, 798–99 

(11th Cir. 2000)). Here, Ferrari testifies that he verbally complained to 

Whitehurst about the alleged sexual harassment from February to May of 

2013. He was suspended on July 9 or 10, 2013 and terminated on July 31, 

2013. Therefore, Ferrari was terminated about two months after his last 

complaint to Whitehurst about sexual harassment. 

The Eleventh Circuit has ruled that a one-month gap is sufficiently 

close to establish causation by itself, but a three month period is not.

Higdon v. Jackson, 393 F.3d 1211, 1221 (11th Cir. 2004); Donnellon v. 

Fruehauf Corp., 794 F.2d 598, 601 (11th Cir. 1986) (period of one month 

between protected activity and adverse employment action is enough to 

show causation). However, Ferrari has also provided evidence that Horton 

had received complaints about the very same conduct made the basis of 

his termination as early as 2012, but did not act on such complaints until 

after Ferrari complained about sexual harassment. Therefore, the Court 

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will assume, arguendo, that Ferrari has established a causal connection 

and thus a prima facie case of retaliation. 

The burden then shifts to the defendant to produce evidence of a 

“legitimate, nondiscriminatory reason[]” for its actions. Brown v. Ala. 

Dep’t of Transp., 597 F.3d 1160, 1181 (11th Cir. 2010); Jones v. Gerwens, 

874 F.2d 1534, 1540 (11th Cir. 1989). However, the burden does not 

require “[t]he defendant . . . [to] persuade the court that it was actually 

motivated by the proffered reasons.” Texas Dep’t of Cmty. Affairs v. 

Burdine, 450 U.S. 248, 254 (1981). Instead, “[i]t is sufficient if the 

defendant's evidence raises a genuine issue of fact as to whether it 

discriminated against the plaintiff.” Id. Here, Horton alleges it

terminated Ferrari for “failure to follow clear instruction[,]. . . conflict 

of interest[,]. . . false information provided in an investigation[,]. . . 

refu[sal] to cooperate with investigation[, and] . . . insubordination.” 

(Whitehurst Dec. Ex. D.) 

Therefore, “the burden shifts back to the plaintiff to discredit the 

proffered nondiscriminatory reasons by showing that they are 

pretextual.” Standard v. A.B.E.L. Servs., 161 F.3d 1318, 1331 (11th Cir. 

1998). An employee can do this “either directly by persuading the court 

that a [retaliatory] reason more likely motivated the employer or 

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indirectly by showing that the employer’s proffered explanation is 

unworthy of credence.” Burdine, 450 U.S. at 256. However, “[p]rovided 

that the proffered reason is one that might motivate a reasonable 

employer, an employee must meet that reason head on, and rebut it, and 

that employee cannot succeed by simply quarreling with the wisdom of 

that reason.” Chapman, 229 F.3d at 1030.

Therefore, if “a plaintiff chooses to attack the veracity of the 

employer’s proffered reason, ‘[the] inquiry is limited to whether the 

employer gave an honest explanation of its behavior.’” Kragor v. Takeda 

Pharm. Am., Inc., 702 F.3d 1304, 1310-11 (11th Cir. 2012) (quoting Elrod 

v. Sears, Roebuck & Co., 939 F.2d 1466, 1470 (11th Cir. 1991)). Further, 

“[t]he district court must . . . determine whether the plaintiff has cast 

sufficient doubt on the defendant’s proffered nondiscriminatory reasons 

to permit a reasonable factfinder to conclude that the employer’s 

proffered ‘legitimate reasons were not what actually motivated its 

conduct.’” Combs v. Plantation Patterns, 106 F.3d 1516, 1538 (11th Cir. 

1997) (quoting Cooper-Houston v. S. Ry. Co., 37 F.3d 603, 605 (11th Cir. 

1994)).

Ferrari alleges that Horton’s failure to inform him about the exact 

reason for his termination and the results of its internal investigation is 

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evidence of pretext. He also alleges that Horton’s reasons for termination 

were impermissibly vague and show pretext because Horton failed to 

explain which of Ferrari’s conduct fits into the categories of “failure to 

follow clear instruction, conflict of interest, false information provided in 

an investigation, refusal to cooperate with an investigation, and 

insubordination.” (Doc. 180 at 12-13.) See Stamey v. S. Bell Tel. & Tel. 

Co., 859 F.2d 855, 862 (11th Cir. 1988) (“vague” reasons are not enough 

to rebut prima facie case).

Lastly, Ferrari alleges that pretext is shown by the timing of Ferrari’s 

termination, because, according to Ferrari, Horton had received 

complaints about Ferrari’s alleged conflicts of interest as early as 2012, 

but did not choose to act upon the complaints until after Ferrari 

complained about sexual harassment. Horton explains that it did 

investigate these complaints, but took no action against Ferrari until July 

2013 because it was unable to find any evidence of Ferrari’s misconduct 

until it conducted an investigation in June and July 2013. A reasonable 

jury could conclude that Horton failed to investigate these complaints

rigorously at an earlier date because Horton was not truly concerned 

about them. See Hinson v. Clinch Cnty., Ga. Bd. of Educ., 231 F.3d 821, 

831 (11th Cir. 2000). Therefore, viewed in the light most favorable to 

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Ferrari, the facts alleged “could allow a jury to find by preponderance of 

the evidence that [he] has established pretext.” Hairston v. Gainesville 

Sun Pub. Co., 9 F.3d 913, 921 (11th Cir. 1993). Summary judgment as to 

Ferrari’s Title VII retaliation claims is due to be denied.

H. Ferrari’s Claim for Intentional Infliction of Emotional 

Distress/Outrage 

Ferrari claims intentional infliction of emotional distress/outrage 

based on the alleged sexual harassment that he suffered. Horton moved 

for summary judgment on this claim. In Alabama, the torts of intentional 

infliction of emotional distress and outrage are synonymous. Ex parte 

Crawford & Co., 693 So. 2d 458, 460 (Ala. 1997). To bring a successful 

action for outrage, a “plaintiff must prove (1) that the defendant’s 

conduct was intentional or reckless; (2) that it was extreme and 

outrageous; and (3) that it caused emotional distress so severe that no 

reasonable person could be expected to endure it.” Id. The tort is limited 

to particularly serious situations, including “egregious sexual 

harassment.” Little v. Robinson, 72 So. 3d 1168, 1172 (Ala. 2011). It does 

not permit actions for “mere insults, indignities, threats, annoyances, 

petty oppressions, or other trivialities.” Ex parte Bole, 103 So. 3d 40, 52 

(Ala. 2012). 

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The statutory period of limitation for the tort of outrage is two years. 

Cont’l Cas. Ins. Co. v. McDonald, 567 So. 2d 1208, 1215 (Ala. 1990). 

Ferrari argues that the conduct was a “continuing violation” and that the 

Court should adopt a “hostile work environment” theory from Title VII 

jurisprudence, which would allow all of the conduct to be considered as 

one action for limitations purposes. (Doc. 180 at 21-22.) However, Ferrari 

provides no support for such an adoption in Alabama case law. Further, a 

“continuing tort” argument in a similar case has already been made 

before the Alabama Supreme Court, which rejected the argument and 

held that an action for conduct outside of the two-year limitations period 

was time-barred. Mardis v. Robbins Tire & Rubber Co., 669 So. 2d 885, 

888 (Ala. 1995). Ferrari filed the instant action on October 10, 2014. 

Therefore, any claims arising from actions that took place before October 

10, 2012 are time-barred and will not be considered by the Court. 

Ferrari’s own electronic journal places most of the conduct as 

occurring before October 2012. The allegedly harassing events that 

occurred after that date are the following: 

1) Ferrari received a November 27, 2012 email from Dequattro in 

which she said “I will f-----g REMEMBER to do this.” (Id.)

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2) Ferrari received a November 28, 2012 email from Dequattro which 

stated “[Aww!] I needed that, my head is about to explode.” This 

email was in response to Ferrari’s email which said “You’re the 

terminator.” (Id.)

3) Ferrari received a December 12, 2012 email and a March 14, 2013 

email from Dequattro in which she said “Love ya.” (Id.)

4) Ferrari received a May 22, 2013 email from Shane H. Ikerman 

(“Ikerman”) in which he said “lol B---h.” This email was a reply to 

Ferrari’s email which stated “Neeener neeeener neeeener.” (Id.)

5) Ferrari received a May 30, 2013 email from Dequattro in which she 

called him “dear.” (Id.) 

Ferrari does not provide a date for the following allegedly harassing 

events: 

1) Ferrari received an email from Dequattro with a picture of a man in 

his underwear and a comment about the picture. (Ferrari Dep. at 

114-15.) 

2) Ferrari received an email from Dequattro with a link to a “Mormon 

sex site or something like that.” (Id.) 

3) Ferrari witnessed Dequattro’s discussions about “how she taught 

her daughter . . . how to give oral sex replete with hand gestures 

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and mouth gestures,” and “her preference for anal sex,” and how 

“it offended her sensibilities that after anal sex [a boyfriend] 

wanted her to give him oral sex.” (Ferrari Dep. at 198-99.) 

4) Ferrari witnessed Dequattro and Kropp discussing “the fact that 

Scott [Whitehurst] has a small penis, [his wife] does not like to 

have sex with him and he is a one minute wonder.” (Id. at 199.)

5) Ferrari witnessed Ikerman’s recounting of conversations with 

Dequattro about “her need, her want for certain male body parts.” 

(Id. at 199-200.)

6) Ferrari was subjected to Dequattro’s showing him and Whitehurst 

an image of “a broken shower glass where her daughter had broken 

the glass . . . from having sex with her boyfriend,” and Whitehurst 

“trac[ing] the outline of [the daughter’s] backside on the shower 

glass and ma[king] a disgusting comment about it.” (Id. at 200.)

7) Ferrari was subjected to Kropp’s “touching [him] inappropriately 

with great frequency, lifting [his] shirt, using the nature of the 

cloth of [his] shirt to touch [his] arms, describing discussions . . . 

with . . . Dequattro about [him] in compromised situations,” and 

“cornering [Ferrari] . . . and telling [him] that she wanted to have 

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sexual relations with [him] . . . with [his] wife in earshot.” (Id. at 

200-01.)

8) Ferrari was subjected to Kropp’s commenting about her sexual 

habits, including “descriptions of her body when she was teaching 

aerobics and what she could do with that body, descriptions . . . of 

her hysterectomy and what it did to her private parts . . . [and] of 

sexual relations she had with someone in a wheelchair.” (Id. at 

201.)

9) Ferrari witnessed Whitehurst’s stating “what HR, there is no HR.” 

(Ferrari Dep. at 202-03.) 

Ferrari also alleges that there were other propositions and inappropriate 

emails similar to those described above.

None of the above instances, taken singly or together, amount to 

cognizable outrage under Alabama law. Solicitations for an extra-marital 

affair, such as those Kropp purportedly directed at Ferrari, “do not

constitute outrageous conduct.” Perkins v. Dean, 570 So. 2d 1217, 1219 

(Ala. 1990). Yet, the Alabama Supreme Court held that victims of sexual 

assault have cognizable claims for the tort of outrage. Harrelson v. R.J., 

882 So. 2d 317, 321 (Ala. 2003). A plaintiff could also make out a claim 

for outrage when her supervisor made sexual comments to her and then 

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“grabbed her by the wrist, pulled her into his lap, and began rubbing her 

tights.” Machen v. Childersburg Bancorporation, Inc., 761 So. 2d 981, 983 

(Ala. 1999). In Busby v. Truswal Systems Corp., the court allowed a claim 

for outrage when the plaintiffs showed that the defendant had made 

sexual comments to the plaintiffs, tried to follow one of the plaintiffs

into the restroom, stared at a plaintiff’s genitals, and “put his arm 

around the plaintiffs, grabbed their arms, and stroked their necks.” 551 

So. 2d 322, 324 (Ala. 1989). In Henry v. Georgia-Pacific Corp., an 

employer required the plaintiff to continue to attend counseling sessions 

after a counselor made sexual comments during sessions and once asked 

the plaintiff to take off her shirt. 730 So. 2d 119 (Ala. 1998). The 

Alabama Supreme Court held that “[a] jury could reasonably determine 

that [the defendants’] conduct was outrageous” because “[the 

employer], with prior knowledge, required [the plaintiff] to continue 

counseling sessions at which improper sexual conduct was occurring.” Id. 

at 121.

Viewing the evidence in the light most favorable to the non-movant, 

Ferrari fails to allege any conduct that amounts to the severity required 

to make out a claim for outrage. Thus, summary judgment is due to be 

granted in Horton’s favor as to Ferrari’s claim for outrage. 

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I. Ferrari’s Claim for Invasion of Privacy 

Horton moves for summary judgment on Ferrari’s state law claim for 

invasion of privacy. In order to establish a “claim alleging invasion of 

privacy relating to sexual harassment, a plaintiff must show: (1) that the 

matters intruded into are of a private nature; and (2) that the intrusion 

would be so offensive or objectionable that a reasonable person 

subjected to it would experience outrage, mental suffering, shame, or 

humiliation.” Ex parte Atmore Cmty. Hosp., 719 So. 2d 1190, 1195 (Ala. 

1998). “Extensive inquiries into one’s sex life . . . may constitute an 

invasion of privacy.” Id. at 1194.

However, the Alabama Supreme Court has only found viable claims for 

invasion of privacy based on sexual harassment in a few cases. The facts 

in these cases involved egregious sexual conduct. In Atmore Community 

Hospital, the defendant made sexual comments, “asked [the plaintiff] to 

meet him outside of work hours for other than business purposes,” and 

“looked up her skirt.” 719 So. 2d at 1195. In Phillips v. Smalley 

Maintenance Services, Inc., the plaintiff testified that the defendant 

inquired into her sexual relationship with her husband, asked her for oral 

sex repeatedly, and “struck her across the buttocks with his hand.” 435

So.2d 705, 711 (Ala. 1983). In Busby, a supervisor made various lewd 

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comments and gestures about the plaintiffs, “acted as if he was going to 

pinch one plaintiff’s breasts with a pair of pliers and with his hands,” 

tried to enter the restroom with plaintiffs, followed the plaintiffs, and 

“put his arm around the plaintiffs, grabbed their arms, and stroked their 

necks.” Busby, 551 So. 2d at 324.

Ferrari has not shown the existence of facts that are severe enough to 

make out a claim for invasion of privacy. Most of Ferrari’s allegations 

involve sexual comments, often about other individuals, and none of the 

sexual gestures involved Ferrari’s body. Ferrari does allege that 

comments were made about his sex life and that Kropp touched his arms 

and lifted his shirt. However, unlike Busby—where the incident of armtouching was accompanied by other touches, sexual comments about the 

plaintiffs, following the plaintiffs, and threatening gestures—Ferrari does 

not present evidence of other egregious conduct directed at his person. 

Therefore, viewing the evidence in the light most favorable to the nonmovant, Ferrari has failed to establish that Horton’s conduct was

“offensive or objectionable” enough “that a reasonable person subjected 

to it would experience outrage.” Atmore Cmty. Hosp., 719 So. 2d at

1195. Summary judgment in Horton’s favor is due to be granted on 

Ferrari’s claim for invasion of privacy.

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J. Ferrari’s Claim for Negligent and Wanton Supervision, Hiring 

and Retention 

Horton moved for summary judgment on Ferrari’s claim against 

Horton for negligent and wanton supervision, hiring, and retention. In 

order to state this claim, a plaintiff must show “by affirmative proof that 

[a servant’s] incompetency was actually known by the master, or that 

had he exercised due and proper diligence, he would have learned that 

which would charge him in the law with such knowledge.” Armstrong Bus. 

Servs., Inc. v. AmSouth Bank, 817 So. 2d 665, 682 (Ala. 2001); see Jones 

Exp., Inc. v. Jackson, 86 So. 3d 298, 305 (Ala. 2010). Here, Ferrari alleges

that Horton knew about the allegedly harassing conduct through various 

“verbal” reports that Ferrari made to management. However, Ferrari

must also show “that the allegedly incompetent employee committed . . . 

[a] tort.” Jones Exp., 86 So. 3d at 304 (quoting Thrasher v. Ivan Leonard 

Chevrolet, Inc., 195 F. Supp. 2d 1314, 1320 (N.D. Ala. 2002)). As 

discussed above, Ferrari cannot show that Horton’s employees committed 

the torts of outrage or invasion of privacy. Ferrari also has not argued or 

provided any evidence that Horton’s employees committed another 

underlying tort. Therefore, viewing the evidence in the light most 

favorable to the non-movant, Ferrari cannot make out a claim for 

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negligent or wanton supervision, hiring, and retention. Summary 

judgment in Horton’s favor is due to be granted as to this claim. 

IV. CONCLUSION

For the reasons stated above, Ferrari’s motion for summary judgment 

is due to be DENIED.2 Horton’s motion for summary judgment is due to be 

GRANTED in part and DENIED in part. Summary judgment is due to be 

granted in Horton’s favor as to Ferrari’s claims for outrage, invasion of 

privacy, and negligent or wanton supervision, hiring and retention. 

Summary judgment as to all other claims is due to be denied. Further, 

Horton’s Motions to Strike (Doc. 188 and 190) are DENIED AS MOOT. A 

separate order consistent with this opinion will be entered. 

DONE and ORDERED this 3rd day of February 2017.

_____________________________

L. Scott Coogler

United States District Judge

186291

 

2 Ferrari moved for summary judgment on all of Horton’s counterclaims against him. 

However, he failed to mention Horton’s claims for fraud through misrepresentation of 

material fact under Ala. Code § 6-5-101, fraud through suppression of material facts

under Ala. Code § 6-5-102, fraudulent deceit under Ala. Code § 6-5-104, and 

intentional interference with prospective economic advantage. Therefore, the Court 

will interpret Ferrari’s motion as not moving for summary judgment on those claims. 

As such, those counterclaims will proceed to trial. 

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