Court Opinion

ID: 2995893
Source: CourtListenerOpinion
Date Created: 2015-09-24 19:23:14.83403+00
Date Added: 2024-06-11T15:02:36.850198
License: Public Domain

In the
 United States Court of Appeals
                  For the Seventh Circuit
                          ____________

No. 01-2876
KERRY STINNETT,
                                               Plaintiff-Appellant,
                                 v.

IRON WORKS GYM/EXECUTIVE HEALTH SPA, INCORPORATED,
                                              Defendant-Appellee.
                          ____________
            Appeal from the United States District Court
       for the Northern District of Illinois, Western Division.
           No. 98 C 50171—Philip G. Reinhard, Judge.
                          ____________
  ARGUED FEBRUARY 22, 2002—DECIDED AUGUST 26, 2002
                   ____________

  Before POSNER, KANNE and ROVNER, Circuit Judges.
   ROVNER, Circuit Judge. The law allowing victims of
sexual harassment to sue their employers applies only to
those businesses with fifteen or more employees for each
working day in each of twenty or more calendar weeks
in the current or preceding calendar year. See 42 U.S.C.
§ 2000e(b). In order to proceed in his sexual harassment
claim, Kerry Stinnett was thus required to show that his
employer, Iron Works Gym/Executive Health Spa, Incor-
porated (collectively “Executive Health”), employed at least
fifteen persons during 1995, 1996 or 1997. This proved to
be an insurmountable task for Stinnett, however, because
2                                               No. 01-2876

the Executive Health Spa was a house of prostitution and
criminal enterprises rarely keep accurate personnel or
payroll records. The district court granted summary judg-
ment in favor of the employer because Stinnett had inade-
quate evidence to show the number of employees at Execu-
tive Health at the relevant time. We affirm.

                             I.
   We construe the facts in a light most favorable to Stin-
nett, the party opposing summary judgment. Smith v. City
of Chicago, 242 F.3d 737, 742 (7th Cir. 2001). Kerry
Stinnett was employed as the manager of the Iron Works
Gym (the “Gym”) from June 1996 through July 1997. The
Gym employed nine persons including Stinnett. The Gym,
which was a sole proprietorship, was wholly owned by the
Executive Health Spa (the “Spa”), another business down
the street from the Gym. The Spa was incorporated and its
sole shareholder was Stinnett’s boss, Kathy Andrews. For
reasons we will discuss below, the district court counted the
Gym and Spa as a single entity when determining the
number of employees. The Gym, so far as the record shows,
was actually a gym. The Spa, however, was a house of pros-
titution providing sexual services to its patrons under the
guise of “massage.” Not surprisingly, the Spa’s payroll
records are somewhat sketchy and show that the Spa never
employed enough workers to meet the minimum require-
ment of fifteen, even if the Spa and Gym are counted to-
gether and even if the “spa attendants” (a creative euphe-
mism for prostitutes) are counted as employees.
  In order to meet the minimum requirements of section
2000e(b), Stinnett sought to demonstrate that Executive
Health had fifteen or more employees for each working day
in 20 or more calendar weeks in the current or preceding
calendar year. For Stinnett’s claim, this required him to
show that Executive Health had fifteen or more employees
No. 01-2876                                                3

in 1995, 1996 or 1997. Posed with the rather difficult prob-
lem of proving the number of employees in a business that
has much to hide, Stinnett offered the following evidence in
support of his claim that the Spa, in combination with the
Gym, employed fifteen or more persons: (1) the deposition
of Carrie Lee, a former spa attendant; (2) the transcript of
a 1999 conversation between Kathy Andrews and a pro-
spective employee taped during an undercover criminal
investigation of the Spa; (3) the affidavit of Kerry Stinnett
himself; and (4) the defendants’ answers to interrogatories,
Local Rule 56.1 statement, and Andrews’ affidavit. On the
motion of Executive Health, the court struck the first three
categories of evidence that Stinnett offered to demonstrate
an adequate number of employees at Executive Health. The
court struck the deposition of Lee because her personal
knowledge of the workings of the Spa ended in 1993,
substantially prior to the events alleged in the lawsuit. The
court struck the transcript of the conversation taped during
the criminal investigation because it referred only to the
number of persons working at the Spa in 1999, significantly
after the relevant time frame. Because Stinnett’s later-
written affidavit conflicted with his deposition testimony,
the district court struck the paragraphs relating to the
number of employees. After reviewing the remaining evi-
dence, the court found that Stinnett had no admissible
evidence in the record to support the claim that Executive
Health employed the requisite number of workers, and the
court therefore granted summary judgment in favor of
Executive Health. Stinnett appeals.

                             II.
  We review the district court’s grant of summary judgment
de novo, construing all facts and drawing all inferences
from the record in the light most favorable to the non-
moving party. Fed. R. Civ. Pro. 56(c); Smith, 242 F.3d at
4                                                No. 01-2876

742. In granting summary judgment, the court may con-
sider any evidence that would be admissible at trial. Smith,
242 F.3d at 741. The evidence need not be admissible in
form (for example, affidavits are not normally admissible at
trial), but it must be admissible in content. Winskunas v.
Birnbaum, 23 F.3d 1264, 1267-68 (7th Cir. 1994). Here, the
district court struck the evidence not because of its form but
because of its content. In order to determine whether the
court properly granted summary judgment, we must first
consider whether the court erred in granting Executive
Health’s motion to strike the evidence which Stinnett
sought to use to prove the requisite number of employees.
We review the district court’s grant of a motion to strike for
abuse of discretion. Winfrey v. City of Chicago, 259 F.3d
610, 618-19 (7th Cir. 2001). The parties agree that the rel-
evant time period for determining whether Executive
Health was an employer subject to the discrimination law
was 1995, 1996 or 1997.
  Executive Health does not contest the district court’s
conclusion that the Spa and the Gym should be treated as
a single entity for the purposes of determining the number
of employees. See Papa v. Katy Indus., Inc., 166 F.3d 937,
940-41 (7th Cir. 1999), cert. denied, 528 U.S. 1019 (1999)
(setting forth the factors for determining whether to count
together the employees of affiliated corporations for the
purposes of section 2000e); Moriarty v. Svec, 164 F.3d 323,
336 (7th Cir. 1998) (Manion, J., concurring) (noting that a
sole proprietorship has no legal identity separate from the
entity that owns it). The district court found that the Gym,
as a sole proprietorship, had no legal identity separate from
the Spa, a corporation which wholly owned the Gym. We
will therefore analyze the evidence as if the Spa and the
Gym are a single legal entity and will count their employ-
ees together in determining if the standard set by section
2000e is met.
No. 01-2876                                                5

  We begin with the deposition of Carrie Lee, one of the spa
attendants. Lee had considerable difficulty recalling the
dates of her employment at the Spa in part because she quit
once and was terminated twice. Ultimately, though, she
testified that she last worked at the Spa in 1993. She stated
that when she left the Spa for the final time in 1993, there
were approximately 20 to 23 women working there. She
stated that approximately 10 women worked each of two
shifts and that another woman answered phones. Although
she also stated that an equal number of women worked at
the Spa in 1996 and 1997, she clarified that she had no
personal knowledge of this fact and based it on the com-
plaints of a friend who worked at the Spa at that time, and
who was annoyed that she had to work with so many other
women. Because Lee’s personal knowledge ended in 1993,
two years before the relevant time, the district court struck
Lee’s deposition (and presumably would have struck her
testimony at trial) because her personal knowledge of the
number of workers ended in 1993.
  The district court similarly struck the transcript of an
audiotape made during a criminal investigation of the Spa
in 1999. A woman named Tammy Strawberry, cooperating
with local authorities, wore a wire into a meeting with
Kathy Andrews. The ostensible purpose of the meeting was
that Strawberry was applying for a job as a spa attendant
at the Executive Health Spa. In the course of the conversa-
tion, Andrews volunteered that “We have what, 25, 30
people that work here.” R.40, Transcript at 15. The conver-
sation took place on September 2, 1999, approximately a
year and a half after Stinnett terminated his employment
at the Gym. The district court struck the transcript because
the conversation occurred in 1999 and was not relevant to
how many employees worked at Executive Health during
1995, 1996 or 1997. Under the district court’s ruling, both
the Lee deposition and the Strawberry transcript described
the number of employees at times that were too remote to
6                                               No. 01-2876

be relevant to the number of employees during 1995, 1996
and 1997.
   Stinnett argues that if there were 20 employees before the
relevant time and 20 employees after the relevant time, the
court must infer that there were at least 15 employees
during the relevant time. But we cannot find that the dis-
trict court abused its discretion in striking these materials
from the record on the ground that they were too remote in
time to be relevant. The court was not obliged to stretch
this far to infer the requisite number of employees. See
Horwitz v. Board of Educ. of Avoca School Dist. 37, 260 F.3d
602, 619 (7th Cir. 2001) (protected speech occurring eight-
een months before termination is too remote in time to raise
inference that termination was related to speech); Alverio
v. Sam’s Warehouse Club, Inc., 253 F.3d 933, 943 (7th Cir.
2001) (court need not infer that termination was retaliatory
when allegedly triggering event occurred eighteen months
prior to termination); Robin v. Espo Engineering Co., 200
F.3d 1081, 1089 (7th Cir. 2000) (discriminatory comments
made two years prior to termination too remote in time to
give rise to inference that termination was due to discrimi-
nation). Perhaps if Stinnett produced evidence that the
number of employees remained fairly constant over time, or
if he possessed evidence regarding the number of employees
closer in time to the relevant events, the court would have
been obliged to find the before-and-after numbers relevant.
But evidence of the number of employees two years before
or eighteen months after the relevant time is too remote to
give rise to an inference regarding the number of employees
at the relevant time. This conclusion is bolstered by evi-
dence demonstrating that many of the women working for
the Spa, including Carrie Lee, had volatile employment his-
tories marked by frequent departures. The number and
identity of workers appears to have been in flux throughout
the relevant time period. In those circumstances, we find
No. 01-2876                                                7

the district court did not abuse its discretion in striking
Lee’s deposition and the Strawberry transcript.
  The court also struck paragraphs nine and eleven of
Stinnett’s affidavit because they lacked foundation and
because they conflicted with his deposition testimony. The
district court has great discretion in deciding whether to
allow a party to change damaging deposition testimony with
a supplemental affidavit. Maldonado v. U.S. Bank, 186 F.3d
759, 769 (7th Cir. 1999). “Courts generally ignore attempts
to patch-up potentially damaging deposition testimony with
a supplemental affidavit unless the party offers a suitable
explanation—e.g., confusion, mistake or lapse in memory—
for the discrepancy.” Id. The stricken paragraphs describe,
among other things, the number of spa attendants working
each of three shifts at the Spa, with a total number of 20 to
25 women plus an additional staff of five other employees.
The court noted first that Stinnett had no personal knowl-
edge of the number of workers at the Spa before he came to
work at the Gym in July 1996. Between July 1996 and July
1997, when Stinnett was working at the Gym, he visited the
Spa only once a week to deliver the receipts from the Gym.
He occasionally performed an odd job at the Spa but spent
very little time there by his own admission. In part because
he had no basis for his knowledge of the number of employ-
ees, the court struck these paragraphs from the affidavit.
  Stinnett initially testified in his deposition that Andrews
employed 25 to 30 women at the Spa. Stinnett Dep. at 152.
When cross-examined on whether these women were full-
time or part-time employees, Stinnett replied, “I don’t know
how those girls worked.” Stinnett Dep. at 162. He clarified,
“All I know is that somebody I knew worked there. If Kathy
[Andrews] paid them or if the men paid them, who paid
them, I don’t know.” Stinnett Dep. at 162. He testified that
he did not spend much time at the Spa because Andrews
did not want him there. Stinnett Dep. at 163. He testified
that Andrews controlled the way the spa attendants
8                                                No. 01-2876

worked, but admitted he was relying not on what he per-
sonally heard or observed but rather on what he was told.
Stinnett Dep. at 163-64. When asked again to clarify how
the spa attendants were paid, he stated, “They were paid by
the men that came in there for the service.” Stinnett Dep.
at 164. But he also testified that Andrews paid them as
well, and that the spa attendants paid Andrews rent for
using rooms at her facility to conduct their business. Stin-
nett Dep. at 164-66. Stinnett was unable to explain why
Andrews was paying women who were paying her to rent
rooms. Ultimately, he concluded, “How she runs her little
business, that’s her business. It has made her a wealthy
woman.” Stinnett Dep. at 166.
  More than a year after giving this erratic testimony, in
the face of a motion for summary judgment, Stinnett’s con-
fusion apparently cleared up. He stated definitively in his
affidavit the number of women working each shift, that
they were paid cash by Andrews, and that the minimum
number of employees at the Spa never dropped below fif-
teen during the time he was working for the Gym. Having
previously testified that he had no idea how the women
were paid, in his affidavit Stinnett stated that he knew that
Andrews paid them cash because she told him she did.
Stinnett has never explained the discrepancies between his
deposition testimony and his affidavit. The district court did
not err in striking those portions of Stinnett’s affidavit that
conflicted with his prior deposition testimony. See Cowan v.
Prudential Ins. Co. of America, 141 F.3d 751, 756 (7th Cir.
1998) (parties may not defeat summary judgment by cre-
ating sham issues of fact with affidavits that contradict
their prior depositions); Bank of Illinois v. Allied Signal
Safety Restraint Systems, 75 F.3d 1162, 1168-70 (7th Cir.
1996) (same); Adelman-Tremblay v. Jewel Companies, Inc.,
859 F.2d 517, 520 (7th Cir. 1988) (same). Any references to
the number of employees or how they were paid were
properly excluded because Stinnett gave conflicting evi-
No. 01-2876                                                 9

dence and then claimed ignorance of the inner workings of
the Spa at his deposition.
   The remaining evidence regarding the number of employ-
ees at Executive Health during the relevant time demon-
strates that there were fewer than fifteen employees.
Stinnett cites the defendants’ Local Rule 56.1 statement,
Kathy Andrews’ affidavit and the defendants’ answers to
interrogatories as evidence supporting his claim that there
were fifteen employees. He maintains that if the spa
attendants are counted as employees rather than independ-
ent contractors, Executive Health had well in excess of
fifteen employees. Executive Health, of course, maintains
that the spa attendants were independent contractors, but
argues in the alternative that even if they are counted as
employees, they do not raise the total number of employees
to fifteen for the relevant time period. Executive Health is
the subject of a criminal investigation and it is not surpris-
ing that it seeks to distance itself from the spa attendants,
as any criminal enterprise would seek to distance itself
from the front lines of criminal activity. This quandary over
the proper status of the spa attendants turns out to be a red
herring, though. We have carefully reviewed all of the
evidence on which Stinnett relies and none of it shows that
there were more than fourteen employees for each working
day in each of twenty or more calendar weeks in the rel-
evant calendar years, even if spa attendants are counted as
employees rather than independent contractors.
  That brings us finally to the ultimate question of whether
the district court properly granted summary judgment in
favor of Executive Health. Without any admissible evidence
showing the requisite number of employees, Stinnett cannot
maintain his sexual harassment claim. The court was there-
fore correct to grant judgment in favor of the employer.
                                                  AFFIRMED.
10                                       No. 01-2876

A true Copy:
      Teste:

                   ________________________________
                   Clerk of the United States Court of
                     Appeals for the Seventh Circuit

               USCA-97-C-006—8-26-02