Judge seals documents in sexual harassment lawsuit against ...

BIRMINGHAM, Alabama -- Documents placed under seal today by a federal judge in a sexual harassment case against Birmingham Health Care and its former CEO Jonathan Dunning purport to show Dunning lending his former employer $1.3 million at 10 percent interest.

According to the documents, among about a dozen ordered sealed, the money was used in 2011 to help BHC to pay its bills, which included more than $600,000 owed to Dunning's companies for rent and other services.

In asking that the documents be thrown out, lawyers for Dunning and BHC on Friday called them "inadmissible, irrelevant, impertinent, and confidential/proprietary."

Today, U.S. Magistrate Judge John E. Ott ordered the documents sealed pending a response from former BHC employee Sharon Waltz who filed the sexual harassment suit.

"None of these documents has been properly authenticated and some of them constitute hearsay," said the court filing by Ken Dowdy, representing Birmingham Health Care, and Carter Dukes, representing Dunning.

Waltz filed suit against Dunning and BHC on Feb. 14, alleging Dunning forced her to have sex with him on the condition of keeping her job. Waltz worked for Dunning at BHC until about 2009 as a grant writer and continued to work for Dunning at Synergy Medical Solutions, one of Dunning's companies, until last year. Dunning was CEO of BHC for about a decade until 2008.

The fight over these recently filed documents came out of a series of legal exchanges which started when Dunning and BHC filed a motion to have the lawsuit dismissed.

In that court filing April 10, Dunning and BHC said that the allegations filed under Title VII, the Civil Rights Act, of 1964, don't apply to individuals, thus Dunning cannot be held liable.

The filing also contended that BHC was not named in the original Equal Employment Opportunity Commission complaint - that only Dunning and the Synergy Medical Solution were named. To be sued, BHC would have to have been named in the EEOC complaint, BHC argued.

Waltz responded April 25 that she did name BHC in the EEOC filing, and that Synergy, Dunning and BHC are so inter-connected as to be one entity anyway.

In support of that April 25 contention that Synergy, BHC and Dunning "are one and the same," Waltz attorney Bill Bright entered nearly two dozen exhibits, including contracts, state incorporation records and rental agreements, among other items.

Among the documents was an unsigned agreement for a promissory note, setting up a line of credit, with Dunning as the lender and BHC as the borrower of $1.3 million.? According to the promissory note dated February, 2011, the money would have to be repaid with interest on Dec. 31, 2012.

"In essence, Dunning was now personally paying for BHC and controlling BHC for his pleasure," Waltz's filing said, regarding the promissory note and line of credit.

A related document, also under seal, is an accounting by the BHC chief financial officer of more than 100 bills paid, at least in part, by a line of credit, according to the Waltz filing. The initial page of that document is titled "Recap of Line of Credit" and contains a line item "BHC deposits transferred to credit lines" for $1,273,384.40.

A page in this document marked "What BHC Owes" lists $480,000 in unpaid rent for space in two buildings owned by a Dunning company. BHC rents space at the South Plaza for $30,000 per month; and rents space at North Plaza or Norwood (where Synergy is headquartered) for $18,000 per month, according to the document. The document also lists about $200,000 in other bills from companies owned by Dunning.

Dunning and BHC argue that Waltz's attempt to connect Synergy and BHC falls out of the scope of the original complaint, in which she "does not even mention Synergy, much less allege a relationship between BHC and Synergy."

"Because the complaint does not plausibly allege any relationship between BHC and Synergy, there is no factual basis upon which this court can excuse plaintiff's failure to exhaust administrative remedies against BHC," it stated.

Source: http://blog.al.com/spotnews/2013/05/judge_seals_documents_in_sexua.html

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