Johns v. Harborage I6/25/2002
Appellants Jillian's Entertainment Corporation and its wholly owned subsidiary, Jillian's Gator's of Minneapolis, Inc., (Jillian's) appeal from the district court's grant of summary judgment to respondent Lori Johns, ruling that Jillian's is the successor corporation of Johns's former employer, Harborage I, Ltd., and is liable to Johns for judgments entered against Harborage I for damages and attorney fees for Johns's Title VII and Minnesota Human Rights Act claims of sex discrimination. Because we determine that, as a matter of law, Jillian's is not Harborage I's successor, we reverse.
FACTS
Respondent Lori Johns was a server, hostess and cashier at Gators Bar and Grill at the Mall of America from January to March 25, 1993. Harborage, Inc. provided the employees for Gators, and Harborage I managed Gators, as well as several other bars at the Mall of America. In June 1995, Johns sued Harborage, Inc. for employment discrimination under Title VII of the Civil Rights Act of 1964 and the Minnesota Human Rights Act. Confusion over which corporation was actually Johns's employer for purposes of her discrimination claims was resolved when the district court determined that Harborage, Inc. (which filed bankruptcy during the lawsuit) and Harborage I were a single integrated enterprise, each of which could be considered Johns's employer for purposes of the lawsuit. Johns amended her complaint to add FPM, Ltd. as a defendant. FPM, Ltd. was the lessee of the Gators's premises and held the liquor license for the premises.
After a bench trial, the district court issued findings of fact, conclusions of law and an order for judgment on September 8, 1997, finding that Harborage I, as employer, subjected Johns to a hostile work environment based on her sex. The district court awarded damages, including punitive damages and attorney fees, to Johns against Harborage I and dismissed all of Johns's claims against FPM, Ltd.
Before the district court judgments were entered, Jillian's entered into an Asset Purchase Agreement (APA) with FPM Ltd. (d/b/a Gators), and various other entities, to purchase the assets of Gators and two other bars, the Minnesota Original Sports Bar and Knuckleheads at the Mall of America, Ltd. Neither Harborage I nor Harborage, Inc. was a party to the APA, but the selling entities share the same mailing address and offices and have common officers with Harborage, Inc. and Harborage I.
In February 1998, Harborage I appealed the district court's judgments. On May 12, 1998, the APA closed. Pursuant to the APA, Jillian's agreed to assume certain of the seller's liabilities and the sellers retained certain liabilities. The assumed liabilities are defined in the APA as "the Seller's payables up to an amount equal to the saleable inventory * * * of the Business at the Initial Closing Date * * * plus accrued vacation benefits up to [a specified limit]." Retained liabilities are defined in the APA as "all liabilities and obligations, absolute or contingent, known or unknown, due or to become due, now existing or hereafter incurred, of Seller and the Partnerships other than the Assumed Liabilities." On the closing date, Jillian's entered into a Transition Services Agreement with Harborage I pursuant to which Harborage I agreed to continue to provide the same administrative and labor services it previously provided to Gators until identified employees of Harborage I became Jillian's employees.
On November 17, 1998, this court affirmed the district court's decision, except as to punitive damages. On January 13, 1999, we awarded Johns $12,500 in attorney fees and expenses incurred on appeal. Judgment in this amount was entered against Harborag
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