Defendants deny the alter ego claim and assert that there was
no official employer-employee relationship between Michael Realty
and plaintiff. As for the Title VII claims in Counts IV - VII
defendants argue that Michael Reality employs fewer than the
statutorily required fifteen employees within the twenty or more
calendar weeks necessary for Title VII jurisdiction, and that
Title VII claims cannot be adjudicated against individuals, but
only against employers, thus Michael Realty, George and Robert
Michael and Nicolas Tanglis must be dismissed as defendants from
Counts IV - VII. Lastly, defendants contend that the pendant state
claims, Counts I - III, must be dismissed against both Citizens
Bank and Michael Reality because a corporation cannot be held
liable for an employee’s actions under Illinois state law unless
such activities were committed in furtherance of a business
objective, which, in this case, they were not.

Plaintiff filed appropriate complaints with the EEOC and the
Tllinois Department of Human Rights, and a right to sue notice was
issued by the EEOC on September 20, 2001. Plaintiff now timely
files this suit in federal court seeking an injunction, damages,
and redress.

Defendants bring this Motion to Dismiss (1) both companies
from the state law claims of Counts I - III, (2) Michael Realty

from the Title VII claims of Counts IV - VII, and lastly (3) Robert


Rogers v. Sugar Tree Products, Inc., 7 F.3d 577 (7th Cir. 1993) in
an age discrimination case, a “single employer theory” may be
predicated upon a showing of 1) interrelated operations; 2) common
management, common directors and boards; 3) centralized control of
labor; and 4) common ownership and financial control. See Sharpe
at *2, citing Rogers at 582-84. The nexus must be more than
negligible, but rather “highly integrated with respect to ownership
and operations.” Sharpe at *3.

Here, when viewing all facts in light of the non-moving party,
the Court finds that the three individual defendants display a
questionable scheme of common ownership between Citizens Bank and
Michael Realty. Their operations pose possible questions of fact
as to the level of integration required under the “single employer
theory.” Therefore, the Court finds that the complaint
sufficiently alleges that Michael Realty is the alter ego of
Citizens Bank and should not be dismissed from the Title VII
complaints of Counts IV - VII at this stage.

Robert Michael, George Michael and Nicholas Tanglis

In plaintiff's response to defendants’ Motion to Dismiss,
plaintiff clarifies that she cited the individual defendants to
demonstrate the companies’ interrelated operations and management
in furtherance of the alter ego argument. Plaintiff agrees that

the individual defendants are not proper defendants to her


allegations which would entitle him to relief. See Conley v.
Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 102 (1957).
State Law Claims

befendants argue that under a theory of respondeat superior
corporate defendants cannot be held liable for the state law claims
of Counts I - III. Citing Hoover v. University of Chicago
Hospitals, 51 I1l.App.3d 263 (1st Dist. 1977) and Rice v. Nova
Biomedical Corp., 38 F.3d 909 (7th Cir. 1997), defendants purport
that corporations can only be held liable for the actions of
employees to the extent that their actions were in furtherance of
a business objective. Here, defendants argue that the alleged
harassment by the individual defendants cannot be attributed in
furtherance of any business objective. Therefore, Citizens Bank
and Michael Realty should be dismissed.

Plaintiff counters that the corporate defendants are proper
due to their liability as supervisors with knowledge to allow,
cause, or potentially cause such tortious actions to occur. Citing
to Meerbrey v. Marshall Field and Co., 139 Ill.2d 455 (1990)
plaintiff argues that the corporate defendants are liable for
intentional torts if the corporate employee is an alter ego of the
business or the corporation itself commits the tort. The Court
agrees. Here the employers so charged were the president and

corporate directors, so that allegations that they would constitute


Michael, George Michael and Nicholas Tanglis, individually, from
the Title VII claims of Counts IV - VII.
DISCUSSION
Standard

A Rule 12(b)(6) Motion to Dismiss tests the procedural
question of whether a plaintiff has properly stated a claim for
which relief may be granted, not the substantive merits of the
lawsuit. See Bills by Bills v. Hommer Consol. Sch. Dist. No. 33-C,
959 F.Supp. 507, 511 (1997) citing Triad Assoc., Inc. v. Chicago
Hous. Auth., 892 F.2d 583, 586 (7th Cir. 1989); Kubistal v. Hirsch
et al, 1999 WL 90625 (N.D. I1l.). Well-pled allegations of a
complaint must be accepted as true, and ambiguities in the
complaint must be construed in favor of the non-moving party. See
Lachmund v. ADM Investor Services, Inc., 191 F.3d 777, 782 (7th
Cir. 1999); Kelley v. Crosfield Catalysts, 135 F.3d 1202, 1205 (7th
Cir. 1998). However, the court is not bound by the plaintiff's
legal characterizations of the facts, nor required to ignore facts
set forth in the complaint that undermine the plaintiff’s claims.
See Kubistal citing Scott v. O’Grady, 975 F.2d 366, 368 (7th Cir.
1992), cert. denied, 508 U.S. 942 (1993). The court can only
properly dismiss a motion for failure to state a claim if it

appears beyond doubt that the plaintiff cannot support the


Supreme Court held that IHRA preempts cases where intentional torts
are based upon allegations of sexual harassment that are
“inextricably linked” to the alleged actions and not an
“independent basis for liability.” See Worth at *4.

In the case at bar, while plaintiff’s allegations of verbal
harassment are “inextricably linked” to her two civil rights
claims, i.e., would not be a tort but for the IHRA, however, her
claims of physical harassment constitute an independent basis for
liability, i.e., assault and battery. Maksimovic v. Tsogalis et
al., 687 N.E.2d 21 (Ill. 1997). Thus, plaintiff has stated an
independent basis for tort liability, and therefore her state law
claims in Counts I and III are not preempted by IHRA and stand
against the defendants.

Michael Realty

Defendants argue that Michael Realty is not a proper defendant
to plaintiff's Title VII suit, in that it is not an alter ego of
Citizens Bank, nor does it meet the statutory standard of fifteen
or more employees for each working day within the past twenty weeks
of the calendar year. See 42 U.S.C. § 2000e (b). Sharpe v.
Jefferson Distributing Co., 1996 WL 31177 (N.D. I11.) held that two
nominally separate businesses may be considered a single entity if
they are sufficiently related - the “single employer theory” of

liability. Id. at *2. Citing the Seventh Circuit analysis of


«_ Minute Oreir Form (06/97)

United States District Court, Northern District of Minois

Name of Assigned Judg i Sitting Judge if Oth
or Magistrate Judge Harry D. Leinenweber than Assigned Judge
CASE NUMBER 01 C 8720 DATE 5/15/2002
CASE Jennifer Farfaras vs. Citizens Bank & Trust Co., et al
TITLE

[In the following box (a) indicate the party filing the motion, .g., plaintiff, defendant, 3rd party ptaintif?, and (b) state briefly the nature
of the motion being presented.)

MOTION:

DOCKET ENTRY:

qd) Qa Filed motion of [ use listing in “Motion” box above.]

(2) im) Brief in support of motion due

(3) o Answer brief to motion due___. Reply to answer brief due.

(4) oO Ruling/Hearing ons setfor_— at.

(5) | Status hearing set for 14 Jun. 02 at 9:00 A.M..

(6) im) Pretrial conference[held/continued to] [set for/re-set for]on__setfor__ ss at_
(7) oO Trial[set for/re-set for] on __at

(8) oO (Bench/Jury trial] [Hearing] held/continued to___at

(9) oO This case is dismissed [with/without] prejudice and without costs[by/agreement/pursuant to]

OFRCP4(m) General Rule21 OFRCP41(a)(1) OC FRCP41(a)(2).

a0) of [Other docket entry] ENTER MEMORANDUM OPINION AND ORDER: Defendants’ Motion
to Dismiss the defendant corporations is denied. Defendants’ Motion to Dismiss the Title VII claims
alleged in Counts IV - VII against Michael Realty is denied. The Motion to Dismiss Defendants Robert
Michael, George Michael and Nicholas Tanglis, individually, is granted with regard to the Title VII claims
in Counts IV - VIL.

(il) @ [For further detail see order attached to the original minute order.]

Document
Number

No notices required, advised in open court.

No notices required.
enous q umber of notices,

Hay 1.6 20

date docketed

SB

Notices mailed by judge’s staff.

Notified counsel by telephone.

v Docketing to mail notices.

Mail AO 450 form.

[qed barron cog

Copy to judge/magistrate judge.

date mailed notice

courtroom yee ty at
wap deputy’s
initials

Date/time received in 7
contrat Clerk’s Office mailing deputy initials



Title VII claims in Counts IV - VII, but rather identifies each
defendant’s actions to allege the overarching liability of the two
companies to her sexual harassment claims. Plaintiff’s Response to
Def. Motion to Dismiss, pp. 1-13.

The Court agrees to plaintiff’s voluntary dismissal of the
individual defendants, and are therefore dismissed from the
Title VII claims of Counts IV - VII. See Alverio v. Sam’s
Warehouse Club, 9 F.Supp.2d 955, 961 (1998), FED. R. Civ. P. 41(a).

CONCLUSION

Therefore, for the foregoing reasons, Defendants’ Motion to
Dismiss the defendant corporations is denied. Defendants’ Motion
to Dismiss the Title VII claims alleged in Counts IV - VII against

iss Qefendants Robert

Michael Realty is denied. The Motion to Di

Michael, George Michael and Nicholas Tanglis, jndividually, is

granted with regard to the Title VYI claims in founts IV - VII.

IT IS SO ORDERED.

oo

rry D. YAMenweber, Judge
United States District Court

Date: jad. VOW Lee

-10-


alter egos in business entities of this size are sufficient, at
least at this stage of the proceedings, to state a cause of action.

The Illinois Human Rights Act, 775 Inn. Comp. Strat. 5/8-101 et
seq. (“IHRA”) also controls tort liability of employees’ claims for
civil rights violations of Illinois state law. See Hillard v.
Denny’s Inc., 2002 WL 338853 *2 (S.D. Ill); Worth v. Tyer, 1997 WL
570762 (N.D. Ill.). Specifically, § 8-111(C) of IHRA states that
“[e]xcept as otherwise provided by law, no court of this state
shall have jurisdiction over the subject of an alleged civil rights
violation other than as set forth in [the] Act.” In addition, § 2-
102(D) of IHRA proclaims that it is a “civil rights violation” for
“any employer, employee, agent of any employer, employment agency
er labor organization to engage in sexual harassment,” which
includes “any unwelcome sexual advances or requests for sexual
favors or any contact of a sexual nature when such conduct has the
purpose ox effect of substantially interfering with an individual’s
work performance or creating [an] intimidating, hostile or
offensive work environment.” See Worth at *2.

The Illinois Supreme Court in Geise v. Phoenix Co. of Chicago,
Inc., 639 N.E.2d 1273 (1994) established the preemption standard of
“inextricably linked” tort liability. Geise held that if the tort
liability springs from the civil rights violations, an “independent

basis for liability” cannot be argued. Therefore, the Illinois


both companies expressly authorized such actions because they knew
or should have known with a high probability that such conduct
would cause plaintiff severe emotional distress. Furthermore,
plaintiff alleges that both companies are alter egos of one another
because they intermingle board members, officers and employees.
Plaintiff, herself, for example alleges she was employed as a
personal banker for Citizens Bank, but also worked for Michael
Realty, which was located across the street from the bank.

In September 1999, plaintiff requested a copy of the employee
handbook and complained of defendants’ behavior to Ken Meyer, Vice
President of Operations and Human Resources of the Bank. Nothing
came of plaintiff's complaints. Plaintiff continued to request a
copy of the handbook and again complained of the defendants’
behavior to Meyer in April 2000. On October 20, 2000, plaintiff
alleges that Tanglis called her into his office and simply
terminated her without any further explanation than, “[they] were
not working out,” even after plaintiff’s supervisor asked for the
reason of her dismissal. Plaintiff alleges that other males or
non-Greek employees were not subject to such harassment or
discriminatory conduct. In addition, defendants replaced plaintiff
with an individual substantially less qualified and with less

experience.


(“Michael Realty”); and individuals Nicholas Tanglis, Citizens
Bank’s president; George Michael, its director; and Robert Michael,
Michael Realty’s director. All three individual defendants are
alleged to be members of the boards of directors and officers of
both companies.

Specifically plaintiff's complaint consists of the following
seven counts: state law claims of (I) battery, (II) intentional
infliction of emotional distress, and (III) assault; and Title VII
claims of (IV) sex discrimination, (V) sexual harassment, (VI)
national origin discrimination and (VII) retaliation.

BACKGROUND FACTS

Plaintiff, a female of Greek national origin, was an employee
of Citizens Bank from November 13, 1999 until her termination on
October 20, 2000. On a daily or routine basis, plaintiff alleges
that George Michael, Robert Michael and Nicholas Tanglis
intentionally sexually harassed her both verbally and physically.
Examples of such actions included improper fondling, disparaging
remarks about her marital status or Greek nationality, and lewd
sexual propositions. All actions occurred without plaintiff's
consent and created a hostile work environment for her. Most
importantly, plaintiff alleges that the two corporations condoned
the individual’s actions by negligently failing to take appropriate

steps to halt the persistent behavior. Plaintiff contends that


IN THE UNITED sTaTESs prsTaicr court BIL ED
FOR THE NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION IMAY 15 sayy,
JENNIFER FARFARAS, Se IS Leino
Plaintiff,
v. Case No. 01 C 8720
CITIZENS BANK & TRUST CO. OF Hon. Harry D. Leinenweber

CHICAGO, a corporation;
MICHAEL REALTY & ASSOCIATES,
INC., an Illinois corporation;
ROBERT MICHAEL; GEORGE
MICHAEL; and NICHOLAS TANGLIS,

Defendants. DOeKere»

Yay ql

6 002

MEMORANDUM OPINION AND ORDER

INTRODUCTION

Pending before the Court is defendants’ Motion to Dismiss
certain of plaintiff’s claims for violations of Title VII of the
Civil Rights Act of 1964, 42 U.S.C. §§ 2000e et seq. as amended by
the Civil Rights Act of 1991, and plaintiff’s common law claims of
battery, intentional infliction of emotional distress, and assault.
The plaintiff, Jennifer Farfaras (“Farfaras”), alleges that
jurisdiction by this Court is proper based on federal question for
her Title VII claims, 28 U.S.C. § 1331, and supplemental
jurisdiction for her pendant state law claims, 28 U.S.C. § 1367.
The defendants include two companies, Citizens Bank & Trust Co. of

Chicago (“Citizens Bank”) and Michael Realty & Associates, Inc.