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Cauvel v. Schwan Home Services

January 9, 2009


The opinion of the court was delivered by: Chief Magistrate Judge Susan Paradise Baxter



A. Relevant Procedural and Factual History

On or about March 28, 2008, Plaintiff David Cauvel, a resident of Erie County, Pennsylvania, commenced this wrongful discharge action by filing a complaint in the Court of Common Pleas of Allegheny County, Pennsylvania, against his former employer, Defendant Schwan Home Services, Inc. ("Schwan"), a Minnesota corporation in the business of producing, selling, and distributing frozen food products. [Document # 1, Exhibit 1]. The action was removed to this Court by Schwan on May 5, 2008, pursuant to 28 U.S.C. § 1441(a), based on diversity of citizenship under 28 U.S.C. § 1332. [Document # 1]. Both parties have consented to the jurisdiction of the Chief Magistrate Judge.

In his Complaint, Plaintiff alleges that he was employed as the Location General Manager of Schwan's Erie, Pennsylvania, operations. (Complaint at ¶¶ 3, 4). Plaintiff alleges that, at some point during his employment with Schwan, he alerted his supervisors that he discovered certain delivery truck drivers had been depositing money obtained from their delivery routes one or two days after the money was received, in violation of company policy. (Id. at ¶¶ 5-7). On October 17 and 18, 2007, after an internal investigation determined that money was missing from certain drivers' deposits, Plaintiff was instructed by Schwan supervisors to report to the Pennsylvania State Police Barracks on October 26, 2007, to submit to a polygraph test. (Id. at ¶¶ 8-10). On October 25, 2007, Plaintiff informed one of the supervisors that he would not take a polygraph test. (Id. at ¶ 11). Plaintiff was subsequently suspended from his job on October 31, 2007, and was ultimately terminated from his position as Location General Manager on November 30, 2007. (Id. at ¶¶ 12-13). At the time of his termination, Plaintiff was informed that he could continue working for Schwan if he agreed to relocate to Westmoreland, New York, for decreased pay, or he could apply for a lower paying position as route sales person at any depot other than Erie. (Id. at ¶ 14). Plaintiff refused both of these options on December 4, 2007, and this action ensued. (Id. at ¶ 15).

Plaintiff claims that Schwan's adverse employment actions were wrongfully taken in retaliation for his refusal to submit to a polygraph test. As a result, Plaintiff seeks to recover compensatory and punitive damages.

On May 23, 2008, Schwan filed an Answer, Affirmative Defenses and Counterclaim in response to Plaintiff's Complaint. [Document # 4]. The Counterclaim contains two Counts: breach of fiduciary duty and conversion. In support of these claims, Schwan alleges that, beginning in approximately April 2007 and continuing in August 2007, its Erie location, under Plaintiff's management, began to experience recurring problems with bank deposits being made late and containing insufficient funds. (Document # 4, Counterclaim, at ¶¶ 14, 15). In addition, Schwan claims that during 2007 the Erie location was also experiencing problems with property theft. (Id. at ¶ 16). As a result, Schwan contends that it conducted an internal investigation, which discovered over $50,000.00 in missing deposits, plus thousands of dollars in stolen property. (Id. at ¶ 17). Schwan alleges that it reported the missing funds and property to the Pennsylvania State Police Department, which then began its own investigation. (Id. at ¶ 18). According to Schwan, it was determined that Plaintiff "was in violation of company policy regarding banking and loss prevention policies and was not properly managing his employees." (Id. at ¶ 19). Schwan alleges that at various times during 2007 route managers dropped off their bank deposit bags in Plaintiff's office and that Plaintiff had direct access to the cash contained in the deposit bags. (Id. at ¶¶ 24-25). As a result, Schwan claims that Plaintiff "either condoned and/or participated in the violation of corporate policy, which resulted in the loss of property." (Id. at ¶ 26).

With specific regard to its breach of fiduciary duty claim, Schwan contends that:

31. [Plaintiff], as a trusted employee of Schwan's, owed a fiduciary duty to Schwan's to act in the best interest of Schwan's.

32. Upon information and belief, [Plaintiff] misappropriated and used for his own purposes and/or knowing [sic] allowed third-party employees to misappropriate funds for their own use, funds which were to be used solely in connection with [Plaintiff's] work for Schwan's, thereby breaching his fiduciary duty to Schwan's.

33. As a direct and proximate result of [Plaintiff's] actions, as set forth above, Schwan's suffered damages in an amount in excess of $50,000.00.

(Id. at ¶¶ 31-33).

With specific regard to its conversion claim, Schwan alleges that:

36. The damages of Schwan's as aforesaid were directly and proximately caused by the negligent, willful and wanton actions of ...

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