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MARVELLI v. CHAPS COMMUNITY HEALTH CENTER
March 27, 2002
CATHERINE MARVELLI, DENISE MATTOX, M.D., LILLIAN MORALES, SEON MICKLE, AND TANISHA GARDNER, PLAINTIFFS,
CHAPS COMMUNITY HEALTH CENTER, STATEN ISLAND UNIVERSITY HOSPITAL, MUNICIPAL TRAINING CENTER, DUNCAN J. HUIE, AND MARK APPEL, DEFENDANTS.
The opinion of the court was delivered by: Gershon, District Judge.
Plaintiffs Catherine Marvelli, Denise Mattox, Lillian Morales,
Seon Mickle, and Tanisha Gardner bring this action against
defendants CHAPS Community Health Center, Staten Island
University Hospital ("SIUH"), Municipal Training Center
("MTC"),*fn1 Duncan Huie, and Mark Appel alleging 1) unlawful
sexual and racial harassment in violation of 42 U.S.C. § 1981,
the New York Executive Law §§ 296 et seq. ("NYSHRL"), and
Article 8 of the New York City Administrative Code ("NYCHRL");
2) retaliatory termination in violation of 42 U.S.C. § 1981, the
NYSHRL, and the NYCHRL; and 3) assault and battery. A further
claim for intentional infliction of emotional distress has been
Defendants SIUH, CHAPS, and Huie, and separately, Appel, move
for summary judgment pursuant to Fed.R.Civ.P. 56(b) to dismiss
plaintiffs' claims in their entirety. Plaintiffs oppose the
motions for summary judgment and seek to amend the complaint to
add a Title VII claim.
Unless otherwise indicated, the following facts are
1. Mattox and Marvelli's Employment History:
Mark Appel founded CHAPS in January 1998 as an out-patient
healthcare facility, and managed the company for a year.
Originally, there were four employees. There were two doctors,
Dr. Denise Mattox and Dr. Cheryl Brown-Murray, as well as an
Administrator, Karen Bronstein, and a Receptionist, Donna
Samuels. In June 1998, Bronstein resigned and Appel hired Duncan
Huie as CHAPS' Administrator. Huie began working in July 1998,
and Catherine Marvelli began work as an intern shortly
thereafter. On August 3, 1998, Huie hired Marvelli as a billing
assistant. Huie knew Marvelli from Brookdale Hospital, where she
had worked as an intern for Huie. According to Marvelli, Huie
told her that CHAPS is an "Article 28" facility under the New
York Public Health Law, which means that it bills patients at a
flat rate of $146.47, regardless of the services rendered. Other
clinics could charge only between $40 and $60 for the same
services. According to Marvelli, Huie explained to her that
CHAPS agreed with other clinics to bill Medicare under CHAPS'
name for the higher amount, and the two clinics split the
additional revenue. Marvelli Dec. ¶ 4.
In late 1998, Appel negotiated with SIUH for SIUH to acquire
corporate sponsorship over CHAPS for $2.5 million. Pursuant to
the transfer of sponsorship between CHAPS and SIUH dated
December 28, 1998, SIUH became the sole member/sponsor of CHAPS,
effective January 1, 1999. It is undisputed that at all times
CHAPS and SIUH were two "separate entities." They had separate
operations, payrolls, employee handbooks, employment practices
and procedures, offices, locations, and bank accounts. After the
transfer of sponsorship, Appel was no longer affiliated with
either CHAPS or SIUH in any manner.
In February 1999, SIUH appointed James Walsh to be CHAPS'
Executive Director. Walsh claims that he made frequent visits to
CHAPS, but Marvelli claims that he only rarely visited the CHAPS
facility. Walsh Dec. ¶ 5; Marvelli Dec. ¶ 50. Walsh read and
analyzed CHAPS' financial records, payroll records, and other
business related records in February 1999, which showed CHAPS
had a negative cash flow from operating activities in excess of
$400,000.*fn2 Defendants submit an independent auditors'
report with their Reply Memorandum from independent auditor KPMG
dated December 31, 1998 indicating that CHAPS had a negative
cash flow of over $400,000. Walsh believed that this was due, in
part, to a lack of patients using the facility. Walsh Dec. ¶
8.*fn3 On a visit, Walsh noticed that Brown-Murray and Mattox
were not treating many patients and that Marvelli was frequently
absent. According to the payroll, Marvelli worked only an
average of 26 hours a week
for the first quarter of 1999, when she was supposed to be
working at least 35 hours a week. Walsh Depo. 31-34; Walsh Aff.
¶¶ 8-9. Marvelli claims that she:
did take some sick days, but I had no other
attendance problem and Walsh never mentioned this to
me. . . . While Walsh was rarely at CHAPS, it is
possible that I would not have been there on
occasion. This is because, as a result of my
complaints to Appel about Huie, Appel told me that I
could do billing on the weekends and minimize the
amount of time that I had to work with Huie.
Therefore I adjusted my schedule and sometimes worked
on the weekend and took days off during the week.
Based on its deficits and lack of patients, Walsh made the
decision to restructure CHAPS and terminate Brown-Murray,
Mattox, and Marvelli. Walsh Depo. 31-34; Walsh Aff. ¶ 10. In
March 1999, CHAPS contracted with the University Physicians
Group ("UPG"), which is affiliated with SIUH, to run CHAPS.
Under the agreement, UPG would operate the entire CHAPS
operation. Walsh concluded that UPG would provide a better
opportunity for UPG to create a positive cash flow because UPG
physicians had their own patient base. SIUH had used UPG with
success on previous occasions for other out-patient facilities.
Walsh Depo. 18, 31; Walsh Aff. ¶ 11. Walsh testified as follows:
Q Why did you determine that they [Mattox and
Marvelli] should be terminated?
A It was a business decision. The two or three weeks
that I spent there, I noticed a lack of patients,
and the time that the doctors were doing nothing
because of the lack of patients.
I then looked at the revenue that were being
generated there, and the actual costs of the
doctors and Ms. Marvelli, and I decided that we
should go in a different direction.
Q What was the direction that you decided to go in?
A At that time, we were looking at various options,
and the one that we finally went with was an interim
step through University Physicians Group.
Q What was the reason for terminating Catherine
A We were deciding to go in a different direction,
and I felt that it was better to everybody during
this reconstruction — let's go start with a fresh
Q What was the new direction with respect to
effecting Ms. Marvelli's employment?
A I just felt that besides her sporadic attendance
when I was there, that she was entrenched with the
same model, the same concept that was already there.
The culture was there and the model. I felt a new
team was the right decision.
Q What was the culture and concept that you were
A They seemed to be very satisfied with no patients.
They didn't seem to be upset that the business was
not there, that it was okay.
Walsh Depo. 31-33. It is undisputed that neither Huie nor Appel
were involved in any manner with Walsh's decision to contract
with UPG and terminate Mattox and Marvelli. Walsh Aff. ¶ 14, 31,
Walsh terminated Brown-Murray, Mattox, Marvelli at a meeting
on March 16, 1999. Mattox testified that the following exchange
occurred at the meeting:
Q What did Mr. Walsh say to you?
Q Did he inform you that Chaps was running at a
deficit or at a loss?
Q What else did he tell you?
A He said they just couldn't keep doing that, that
he had analyzed the situation since he had been
Administrator and he looked into it and he just
really couldn't — he couldn't be responsible for
continuing an operation that was hemorrhaging
financially to such an extent, so that he was going
to close Chaps and restructure it so that it would
be — so I guess it would be more cost-effective or
Q Did he inform you that he was going to attempt to
restructure Chaps to have it run not at a deficit?
A He said the reason that he was closing it was
because it was running at such a tremendous loss and
it needed to be restructured.
Mattox Depo. 194-95. In an affidavit, Marvelli states that Walsh
told her how CHAPS was going to expand and make a lot of money,
and that he "never said anything" about CHAPS losing money.
However, later in the affidavit, and at her deposition, Marvelli
claims that, at the March 16, 1999 meeting, Walsh said
"something about the place was hemorrhaging financially and
because of the financial costs, he would have to let me go and
restructure CHAPS or something like that." Marvelli Depo. 23;
Marvelli Dec. ¶¶ 54, 56.
According to a Personnel Policy and Procedure that Appel
instituted in 1997:
Employment with the C.H.A.P.S. Community Health
Center is not for any stated period and can be
terminated by either party at any time.
Management and/or the Board at its sole discretion
may terminate employment due to changes in staffing
patterns, reduction in work force or for budgetary or
other economic reasons. Employees will be given as
much notice as possible.
1.1b Reorganization and Restructure
* If the results of reorganization or restructure of
the C.H.A.P.S. Community Health Center causes the
elimination of certain jobs, those employees affected
will be given at least one month's notice. Exception
to this would be if funds are suddenly fund [sic]
thereby not allowing such notice.
2. Huie's Alleged Harassment of Mattox and Marvelli
Shortly after beginning work, Marvelli claims that Huie made
"low level off color remarks" such as saying he did not notice
any panty lines and asking whether Marvelli was wearing a thong.
However, she claims that his comments began to become more
severe beginning in September 1998. She claims that he
constantly commented about women's shoes, and at one point took
a picture of Mattox's feet. He also started to talk a lot about
his personal life, particularly the fact that he dated a lot of
strippers. Marvelli Dec. ¶¶ 11-12. Huie spoke "about how he dated
a stripper with big breasts and that it stunk, her breasts stunk
from underneath." Marvelli Depo. 69. He said that Marvelli would
not have that problem because she has small breasts. When
Marvelli asked Huie to stop, he said "you're a part of the iddy
bitty titty community and that's why you don't want to talk
about it." Marvelli Dec. 27. According to Marvelli, Huie would
also ask Marvelli "[a]fter you take a shit, do you look in the
toilet bowl before you
flush?" Marvelli Depo. 107. Marvelli testified that she found
this sexually offensive. Marvelli Depo. 107.
In October 1998, Huie told a patient that Marvelli was a
transvestite. Marvelli Depo. 62, 75-76. Following this incident,
Huie would make daily jokes about Marvelli being a transvestite
to her and the patients. Marvelli claims she asked Huie to stop,
but he ignored her. Marvelli notified Appel about this incident.
While she testified that she did not recall the exact date of
the complaint to Appel, she testified as follows:
Q As you sit here today, are you sure that you
reported this incident to Mr. Appel ...