NOT RECOMMENDED F OR F ULL-TEXT PUBLICATION F ile Nam e: 13a0631n.06 No. 12-5945 UNITED STAT ES COURT OF AP P EALS F OR THE S IXTH CIRCUIT

L ORNA F L EMI

NG, Plaintif f-Appellant ,

v. FL AHERTY & COL L I

NS, I NC., aka F laher

ty & Collins Properties, Defendant-

Appellee

. ) ) ) ) ) ) ) ) ) ) ON APPEAL FR OM T HE UNI TED STATES DI STRI CT COURT FOR T HE EASTERN DI STRI CT OF KE NTUCKY

O P I N I O N

BEF ORE: COL E and COOK, Circ uit J udg es; KATZ , District J udg e. *
COL E, Circuit J udg e. Plaintiff-Appe llant L orna F leming a ppeals the district court’s gra nt of summary judgme nt in favor of Def endant- Appellee Flahe rty & Colli ns I nc. (“F &C” ), a proper ty
manag ement compan

y , o n F le mi n g ’ s claim of wrong ful discharg e. Acc ording to Fleming , F& C fired her from her position as reg ional proper ty manag er for ref

using t o falsify business rec ords in violation of public policy as evidenc ed by Kentucky Revised Statute § 517.050. We aff irm the g rant of summary

judgme nt. I

. F& C, a corporation with its principal place of b u s i n es s i n I ndiana, manag es properties for third-par ty owner s. I n 2003, F& C hired Fleming , an Ohio resident, as a proper ty manag er of a single

The Honora

ble David A. Ka t z , Un ited States District J udg e for the Norther n District of * Ohio, sitti ng by

desig nation.No. 12-5945

Fleming v. Flahe rty & Colli ns, Inc. proper ty and later promoted her to reg ional proper ty manag er, a supervisory role in which Fleming

oversa w sever al proper

ty manag ers from F& C’s Covington, Kentucky off i ce . I n her new role, Fleming repor

ted to g ener al manag er Kristin Quinn who, in turn, repor ted to J ill Meals-H err on, the Vice- President of Property and Asset Manag ement for F& C. Among other proper ties, Fleming was responsible for Trails of West Chester and L akota Pointe, both of which she alleg es wer e “fina ncially distressed.” Fleming claims that “the entire time” she worke d for Quinn, Quinn “[c]onsi stently ” told her
to “advise ” her proper

ty manag ers to “fluff their [occupanc y ] numbers” so that occupa ncy rate s “on
paper ” would rema in above ninety perc ent at all times. Specifica lly , Fleming claims that Quinn told her to instruct her proper ty manag ers to ref

rain fr o m recording when a tenant moved out until a repla ceme nt tenant was found. Fleming claims she did not do this. Fleming d es cr i b es h er

r e la ti o n s h ip w ith Quinn as “[p] rofe ssional, friendly ” and her rela tionship with Meals- H e r r o n a s “ v e r

y g ood” until J uly

2006. Fleming r e c e iv e d s e v e r a l d is c ip li n a r y w arning s throug hout 2006. Meals-H err on testified that her “first real frustra

tion” beg an in Fe bruar

y or March of 2006, afte r a proper ty visit that reve aled “dirtiness” and a separ ate incident in which Fleming alleg edly inadequa tely responde d to a shooting
at one of Fleming ’s proper ties. Meals-H err on claims she wanted to terminate Fleming then, but held off. Among other thi ng s, Meals-He rron a lso testified that Fleming failed to mar ket her proper ties and did not obtain rec eipts for prope rty expenses from her proper ty manag ers in a timely

manner . Both, a ccor ding to Me als-He rron, c ontributed to the low occ upancy rate s in Fleming ’s prope rties:

- 2 -No. 12-5945

Fleming v. Flahe rty & Colli ns, Inc. I f y ou need cash to g o buy supplies to g o turn the uni ts and y ou spend y our m oney and y ou g et three units turne d and now y ou want to turn three more, y ou g ot to turn those rec eipts in so y ou can g et more cash so y ou can turn the next three units. I f y ou don’t turn in the re ceipts, y ou don’t g et ca sh to turn more units. Fleming admits she failed to turn in timely rec eipts on at least one of her proper ties, and that her J uly 25, 2006 disciplinary

war ning f or fa iling to “tie out”—submit— rec eipts was ac cura te. I n J u l y 2 006, Quinn alleg edly asked Fleming why thirty -four tenant applications wer e pending at Trails o f W es t Chester and why the prospec tive tenants wer e not being moved in. Fleming claims she answe red that most of the applicants we re f ailing the tenant scr eening proce ss due to invalid social sec urity numbers. F leming te stified: And [ Quinn] said -- she looked at me a nd said, “You knowwhat y ou need to do to fi x t h at p robl em? ” And I said, “What? ” And she said, “You need to send thos e applicants ov er t o R i ta Chavez at Wil lows of Springda le “which is another sister proper ty ,” and Rita c an provide them with the false documentations neede d to pa ss our scre en criter ia for the I D and Social Security verific ations.” When she said that I g igg led, I kind of laug hed. I ’m like, g et out of here

. And she looked up at me and she said, “No, I ’m totally serious. How do y ou think we g ot Wil lows of Springda le occupie d? ” Acc ording to Fleming , she replied “I can’ t do that, Kristin,” and never contac ted Rita Chavez

or otherwise attempted to obtain social secur ity numbers for the problematic applicants. After that

conver sation, Quinn repe atedly urg ed her to “move them in,” but neve r ag ain re fer red to “ sending [t he tena nts] any wher e.” Af t er the J uly 2006 conver sation about social secur ity numbers, Fleming alleg es her rela tionship with Quinn deter iorated. Q u in n a ll e g e d ly b e c a

me “ v ery curt” in her corr espondenc e with Fleming , ref

used to offe r profe ssional g uid ance as she had done in the past, hid job-rela ted communications from Fleming, there by undermining her ability to do her job, and g ave her more - 3 -No. 12-5945

Fleming v. Flahe rty & Colli ns, Inc. work with shorter time fra mes. Also in J uly 2006, or slightly ear lier, Meals-H err on took over direc t supervision of F leming. Meals-H err on testified that she ag ain wanted to terminate Fleming in October 2006 for poor perf ormanc e. She had a termination ag ree ment draw n up that was dated October 12, but ultimately did not proce ed with termination at that time. The “fina l straw,” acc ording to Meals-H err on, came in November

2006, when one of F leming’ s proper ties acc umulated appr ox imately $10,000 of late fee s over two y ear s. Fleming claims she did not pay the late fee s beca use there was a “ver

bal” F& C policy not to do so. Quinn and Meals-H err on both deny the exis tence of such a policy , with Quinn clar ify ing that late fee s wer e supposed to be paid only afte r being “re sear ched” to se e if they could be wa ived. Mea ls-Her

ron terminate d Fleming on or about Nove mber 22, 2006. On November 19, 2010, Fleming filed a d i versity action in the district court, claiming
wrong ful discharg e, ag e discrimination, and hostile work environment. Fleming dropped the latter
two claims, an d the district court g rante d F& C’s motion for summary judgme nt on Fleming ’s
wrong ful dischar g e cla im. Fleming appea ls.
I I

. We revie w a g rant of summary judgme nt de novo. Cacev ic v. City of Hazel Park , 226 F.3d 483, 491 (6th Cir. 2000) (citation omitted). Summary judgme nt is war rante d when, viewing the fac ts in the light most favor able to the non -m o v an t , n o re asonable jury could find in her favor

. See Cockrel v . Shelby Cnty. Sc h. Dist. , 270 F.3d 1036, 1048 ( 6th Cir. 2001) (citations omitted). Gene rally , an employ ee in Kentucky is subject to discharg e at-will, see Mitchell v. Univ. of Ky. , 366 S.W .3d 895, 898 (Ky

. 2012) (citation omitted), but an employ ee can sue for wrong ful - 4 -No. 12-5945

Fleming v. Flahe rty & Colli ns, Inc. discharg e under a “nar

row public policy exception.” Nelson Steel Corp. v. McD aniel , 898 S.W .2d 66, 68 (Ky

. 1995) (citations omitted). An em p loy ee’ s discharg e is actionable when it was caused by (1) “the failure or ref

usal to violate a law in the cour se of e mploy ment” or (2) “the employ ee’ s exercise of a rig ht confe rre d by well-e stablished leg islative enac tment.” Id. at 69 (quoting Grzyb v. Evans , 700 S.W .2d 399, 402 (Ky . 1985)). Fleming claims she wa s fired f or re fusing to violate Ky . Rev. Stat. § 517.050, which say s: (1) A person is g uilty of falsify ing business rec ords when, with intent to defr aud, he: (a) Makes or

cause s a fa lse entry to be made in the business rec ords of an e nterprise ; or . . . . (c) Omits to make a true entry in the business rec ords of an enter prise i n v i o l ati on of a duty to do so which he knows to be imposed upon him by law or by the nature of his position; or (d) Prevents the making of a true entry or cause s the omission there of in the business rec ords of a n enter prise. Acc ording to Fleming , F& C wanted her to violate Ky

. Rev. Stat. § 517.050 in two way s, and fired her for ref

using. First, she alleg es F& C direc ted her to “fluff ” occupa ncy rate s by delay

ing the

rec ording of tenants who moved out. Second, she alleg es that F& C direc ted her to ref er prospec tive tenants to provider s of fake social secur ity numbers so that they would be able to “clea

r the tena nt

scre ening proce ss.” Fleming claims that her ref u s al t o v i o l at e the law by following these two direc tives led F& C to terminate her in violation of public policy under K entucky

law. The district court found that Fleming ’s ref usal to misrepre sent the occupa ncy rate s of F& Cmanage d proper

ties did not contribute to the termination decision. The district court based this conclusion on Fleming ’s “unequivoc al[] ” testimony that h er re fu s al to do so did not aff ect her - 5 -No. 12-5945

Fleming v. Flahe rty & Colli ns, Inc. rela tionship with Quinn. On appea l, Fleming does not dispute the district court’s finding reg arding

causa lity

. Given Fleming ’s testimony , we ag ree with the district court that no rea sonable jury could conclude that Fleming ’s dischar g e wa s cause d by her r efusa l to fluff occ upancy rate s. As to Quinn’s second alleged direc tive, reg arding the acquisition of fake social secur ity numbers, the district court found that , ev en if Fleming ’s ref usal to obey was the cause of her termination, ref

err ing prospective tenants to a provider of fake so ci al secur ity numbers would not violate Ky

. Rev. Stat. § 517.050 and there fore could not support a wrong ful discharg e claim under Kentucky law. The district court held that Fleming “fa il[ ed] to explain how” ref err ing prospec tive
tenants to Chavez would have violated Ky

. Rev. Stat. 517.050, which require s “intent to defr aud.” The dist rict court considered that Quinn might have been seeking to defr aud the proper ty owner s, but reje cted that possibili ty beca use the owner s “would have benef itted from the highe r occupa ncy
rate s” that resulted from more tenants passing scre ening

. Fleming alleg es two err ors in the district court’s ha ndling of this iss ue. First, Fleming arg

ues that the district court err ed in finding no intent to defr aud, beca use the
g oal of ref

err ing applicants to Chavez would have been to defr aud the I nterna l Revenue Service

. Acc ording to Fleming , her proper ties’ owner s wer e elig ible for tax credits under 26 U.S.C. § 42 if their tenants met cer

tain income-r elated criter ia, and Quinn was telling Fleming to encour ag e tenants
to falsify such compliance by obtaining inauthentic social secur ity numbers, and there by defr auding
t h e I RS. Even if Quinn direc ted Fleming to brea k fede ral law, that will not support a wr o n gfu l discharg e cla im under Ke ntucky law. See Shrout v . The TFE Grp. , 161 S.W .3d 351, 355 (Ky . Ct. App. 2005) (citation omitted) (holding that a violation of fede ral reg ulations can n o t support a - 6 -No. 12-5945

Fleming v. Flahe rty & Colli ns, Inc. wrong ful discharg e claim under Ken t u ck y l aw); Clark v. Sanofi -Synthe labo, Inc. , 489 F. Supp.2d 759, 771 (W.D. Ky

. 2007) (citations omitted) (“[Kentucky ’s] public policy exception has been found
not to apply to public policy enuncia ted in fede ral law.”)

. Fleming must demonstrate that the reque st require d her to violate a Kentucky statute or constitutional provision. See Shrout , 161 S.W .2d at 355. The only statute she claims t o h ave been required to violate i s Ky

. Rev. Stat. § 517.050, of which “intent to defr aud” is a

nece ssary

element. The distric t co u rt als o did not err in finding that Fleming failed to establish that Quinn’s
reque st require d her to violate Ky

. Rev. Stat. § 517.050. I n Kentucky , the six elements of fra ud are : “a) materia l repre sentation b) which is fa lse c) know n to be fa lse or made rec klessly d) made with inducement to be acte d upon e) acte d in relianc e there on and f) causing injury .” United Parcel Serv. Co. v

. Ricke rt , 996 S.W .2d 464, 468 (Ky . 1999). F leming f ails to de monstrate the first element of i n t en d ed fra

ud. Although Quinn may have asked her to make or encour ag e a misrepre sentat i o n , Fleming does not identify why this mi srepr esenta tion would have bee n material to obtaining § 42
tax cre dits to which proper ty owner s would otherwise not be entitled. Fleming herse lf stated to the d i strict court that “the prog ram does not require that a tenant be a leg al resident o f t h e Un i t ed States

. . . [but ] an owner may elec t to establish such a criter ia as part of its resident selec tion plan,” and she testified that her conce rn was the illega lity of “har boring illega l immigra

nts.” Fur thermore , Fleming waived the arg ument that the I RS was the intended victim of fra ud b y fa i l i n g t o raise it befor e the district cour

t. See B arner v. Pilkington N. Am., Inc. , 399 F.3d 745, 749 (6th Cir. 2005) (“O ur function is to revie w the case prese nted to the district court, rathe r than a better case fashioned afte r a district c ourt’s unfa vorable order .” (quota

tion marks omitted)) - 7 -No. 12-5945

Fleming v. Flahe rty & Colli ns, Inc. Second, Fleming arg ues that, even if there was no intent to defr aud, the district court should have considere d Fleming ’s potential criminal liability for violating Ky

. Rev. Stat. § 517.050. Since Fleming has not established that ref err ing applicants t o Chavez would have led to the violation of Ky

. Rev. Stat. 517.050, it doe s not make sense that she could have had a fea r of prosec ution under that statute. Also, Fleming never made a “fe ar of prosec ution” arg ument befor e the district court, so the district court ca

nnot have e rre d in failing to consider it. See B arner , at 399 F.3d a t 749. I I I

. We affir m the judgme nt of the district court.

- 8 -