United States District Court, N.D. Alabama, Southern Division
DAVID PROCTOR UNITED STATES DISTRICT JUDGE
case is before the court on (1) CHC Companies, LLC's
(“CHC”) and Correct Care Solutions, LLC's
(“CCS”) Motion for Summary Judgment (Doc. # 176),
and (2) CHC's and CCS's Motion to Strike
Plaintiffs' Exhibits and Supplemental Briefing (Doc. #
205). Both Motions have been fully briefed. (Docs. # 194,
206, and Docs # 208, 209). The Motions are related, and the
court will first address the Motion to Strike.
The Motion to Strike
CCS move the court to strike Exhibits 19 and 20 (Docs. #
195-21 and 195-22) to Plaintiffs' Response in Opposition
to CHC's and CCS's Motion for Summary Judgment. (Doc.
# 194). They argue that the exhibits are a transparent
attempt to evade the court's page limitation for summary
judgment briefs. (Doc. # 205). They also argue that neither
document is properly an “exhibit” because they do
not constitute evidence. (Id.).
respond that the exhibits were an attempt to simplify the
presentation of issues to the court due to its expressed
concern over matters of efficiency in this series of similar
cases. (Doc. # 108 at 1-2). They state that they filed
Exhibits 19 and 20 in exhibit form, rather than as part of
their brief, because they expect to file the same exhibits in
other related cases, thereby reducing the ongoing burden on
the court. (Id.).
reply notes that Plaintiffs' opposition to the Motion to
Strike (Doc. # 208) concedes those “exhibits”
contain additional facts and argument. (Doc. # 209).
court has examined Exhibits 19 and 20 and agrees with
Defendants that neither document constitutes Rule 56
evidence. Rather, the documents consist of additional
briefing and argument. The court will certainly not consider
them as evidence, and sees no need for them to be refiled.
When the court envisioned that materials from this or other
cases are to be used to promote efficiency, the court
contemplated that evidence and the court's
opinions and orders would be applied in multiple cases. That
being said, the court is fully capable of disregarding
irrelevant or improper information contained in the record on
summary judgment. Accordingly, the Motion to Strike is due to
be denied as moot.
The Rule 56 Evidence and the Undisputed Facts
The Defendants' Corporate Relationship
a wholly owned subsidiary of Correctional Healthcare Holding
Company, Inc. (Doc. # 44; Doc. # 180-45). Among other
companies, CHC wholly owns Judicial Correction Services, Inc.
(“JCS”) and Correctional Healthcare Companies,
Inc. (Id.). CHC provides administrative and
employment services for its subsidiaries. (Id.).
a wholly owned subsidiary of CCS Intermediate Holdings, LLC,
which also owns a parent company of CHC and, in turn, JCS.
(Doc. # 45; Doc. # 180-45). CCS is not a parent to either CHC
or JCS. (Id.).
September 30, 2011, CHC, Judicial Merger Sub, Inc.
(“Merger Sub”), JCS, and Jarrett Gorlin entered
into an Agreement and Plan of Merger. (Doc. # 180-27 at
2-61). Under the Merger Agreement, CHC was designated the
“Purchaser.” (Doc. # 180-27 at 9). “Merger
Sub” was defined as a wholly owned subsidiary of CHC.
(Id.). The “Company” was defined as JCS.
to the Agreement, a “Reverse Subsidiary Merger”
was consummated. (Doc. # 180-27). That is, CHC's
subsidiary, Merger Sub, was merged into JCS. (Doc. # 180-27
at 10). The Agreement provides that, upon the merger,
“the separate existence of Merger Sub shall cease, and
the Company [JCS] shall be the surviving corporation
(“the Surviving Corporation”). (Id.;
see also Doc. # 180-28 at 33 (noting that under the
Merger Agreement, Merger Sub and JCS merged, and JCS was the
resulting surviving corporation)). The Certificate of Merger
also defines the JCS as the “Surviving Corporation,
” and notes that it “will continue its existence
as said surviving corporation under its present name …
.” (Doc. # 180-28). The Agreement further provides
that, “[f]rom and after the Effective Time [of the
merger], the Surviving Corporation [JCS] shall succeed to all
assets, rights, privileges, powers and franchises of, and be
subject to all of the liabilities, restriction, disabilities
and duties of, the Company and Merger Sub, all as provided
under the Delaware Act.” (Id.).
merger agreement required certain JCS executives to resign
from JCS. (See Doc. # 180-27 at 17). It also required those
executives to enter into employment agreements and
non-compete agreements. (Doc. # 180-27 at 45). Under the form
Employment Agreement, the former JCS executives became
employed by CHC, but the agreement defined their
responsibilities as to “serve the Company and its
Affiliates.” (Doc. # 180-28 at 18). The “Position
with the Company” section of the Agreement contains
language indicating that, “for so long as JCS
constitutes a wholly-owned subsidiary of the Company,
Executive shall serve as the, and shall report to .”
(Id.). The following ten employees were required to
execute these employment agreements with CHC: Robert
McMichael, Jarrett Gorlin, Dennis Sanders, Dennis Moon,
Charlie Farrahar, Steve Pelts, Kevin Eagan, Ronda Cole, Beth
Ivey, and Dennis Kirklin. (Doc. # 180-28 at 4). The other JCS
employees were not employed by CHC. (Doc. # 180-29 at 35-36).
form Non-Competition and Non-Solicitation Agreement presented
to the ten executives recites that the agreement is made
“by and among” CHC, JCS, and the former
stockholder of JCS. (Doc. # ...