     Case: 14-10373      Document: 00512845401         Page: 1    Date Filed: 11/21/2014




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT

                                                                           United States Court of Appeals
                                                                                    Fifth Circuit
                                    No. 14-10373                                  FILED
                                  Summary Calendar                        November 21, 2014
                                                                             Lyle W. Cayce
                                                                                  Clerk
MELINDA O. HAMILTON,

                                                 Plaintiff-Appellant,
v.

AVPM CORPORATION; WATERS LANDING APARTMENT,

                                                 Defendants-Appellees.



                   Appeal from the United States District Court
                        for the Northern District of Texas
                              Docket No. 3:13-CV-38


Before SMITH, WIENER, and ELROD, Circuit Judges.
PER CURIAM:*
       Plaintiff-Appellant Melinda Hamilton (“Hamilton”), a former employee
of AVPM Corporation, initiated an action in Texas state court against AVPM
Corporation and Waters Landing Apartment (collectively, “AVPM”), asserting
claims of race and age discrimination in violation of Title VII of the Civil Rights
Act of 1964, 42 U.S.C. § 2000 et seq., and the Age Discrimination in
Employment Act of 1967 (“ADEA”), 29 U.S.C. § 621 et seq. AVPM removed the
case pursuant to 28 U.S.C. §§ 1331 and 1441. The district court later granted


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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AVPM’s summary judgment motion on both of Hamilton’s claims. Hamilton
appeals the district court’s grant of summary judgment on her race
discrimination claim 1 on the grounds that the court overlooked genuine issues
of fact in its summary judgment ruling, and that it mistakenly excluded
relevant evidence. Finding no error, we affirm.


                        I. FACTS AND PROCEEDINGS
      AVPM owns and operates nineteen apartment complexes in the Dallas–
Fort Worth area, including Waters Landing in Fort Worth, Texas. At each
complex, the company employs a property manager, administrative staff, and
maintenance staff; additionally, AVPM employs property supervisors, each
with oversight responsibilities over a group of complexes. Hamilton began
working for AVPM as the assistant property manager at Waters Landing in
April 2010. In January 2011, she was promoted to the position of property
manager of that same complex. Laura Eaton, the property supervisor who
oversaw Waters Landing, was responsible for hiring and promoting Hamilton.
In May 2011, Eaton sought a reduction in the number of apartment complexes
under her jurisdiction, and subsequently, Robert Englard assumed supervisory
duties over Waters Landing and several other AVPM properties in the Fort
Worth area.
      Englard visited Waters Landing soon after to meet with Hamilton and
her staff. During that visit, he commented to Hamilton that everyone in the
grounds crew was African American. Hamilton, who is also African American,
responded by asking if that would be a problem, to which Englard looked
“amazed” but otherwise made no reply.



      1 Hamilton does not appeal the district court’s grant of summary judgment on her age
discrimination claim.
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       As property manager, Hamilton was responsible for maintaining two
lists: (1) vacant apartments that were “ready” for leasing/move-in, and (2)
vacant apartments that she and the maintenance crew needed to “make ready”
for leasing/move-in. These lists were the “bible” of the apartment complex, and
particularly critical when showing vacant units to prospective tenants. During
Hamilton’s tenure as property manager at Waters Landing, the complex had
the highest vacancy rate of any of the nineteen AVPM properties.
       Either during Englard’s initial visit to Waters Landing or one shortly
thereafter, he and Hamilton walked around the apartment complex and visited
several vacant units that were marked as “ready.” However, at least one
“ready” apartment was, in fact, not ready. 2 When Hamilton went on vacation
in June 2011, Englard visited Waters Landing again and found more
inaccuracies in the “ready” and “make ready” lists. Englard decided that he
could no longer trust Hamilton to perform the duties of a property manager,
and he fired her after she returned to work.
       AVPM provided all employees with an employee manual that contained,
inter alia, a description of the company’s internal disciplinary policy, and a
statement that all workers were employed at will, subject to termination at
any time with or without cause or advance notice. The disciplinary policy
defined the types of actions that “may be taken in response” to violations of
AVPM standards, including oral warnings, written warnings, and immediate
termination. Neither Eaton nor Englard had documented any warnings in
Hamilton’s employee record before she was terminated. Both stated that they




       2 There is some dispute in the record as to how many inaccuracies Englard found.
There is also dispute as to whether Eaton found similar inaccuracies when she visited, in the
months before Englard assumed supervisory duties over Waters Landing. However, both
parties agree that Englard discovered at least one error when he accompanied Hamilton on
a walkthrough of the complex.
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had also fired Caucasian property managers without providing written
warnings.
       Hamilton and Eaton had three relevant conversations about AVPM. The
first occurred when Eaton called Hamilton immediately after Eaton was fired
as a property supervisor, and she bemoaned AVPM’s hiring of “bubbly white
little girls” to fill management positions. 3 Eaton was reinstated in her position
three days later. The second and third conversations took place after Robert
Englard fired Hamilton. At that time, Eaton was a property supervisor, but
she no longer oversaw Hamilton or Waters Landing.                          In the second
conversation, Eaton implied that race played a factor in Hamilton’s
termination, noting that AVPM might have been concerned about friction
between Hamilton and the entirely African American grounds crew at Waters
Landing. In the third conversation, Eaton told Hamilton that AVPM had
realized it had fired Hamilton “for no reason,” and asked if the company had
contacted Hamilton about returning to work. 4
       Following her discharge, Hamilton filed this lawsuit, alleging race
discrimination under Title VII and age discrimination under the ADEA.
AVPM filed a motion for summary judgment, and in its reply brief, also lodged
four evidentiary objections to statements used by Hamilton in her opposition
to the motion. The district court sustained all four objections and granted
AVPM’s motion for summary judgment on both counts. Hamilton appeals,
claiming that (1) the court erred in sustaining AVPM’s objections, and (2) an



       3 In her deposition, Hamilton initially implied that this conversation with Eaton
related to Hamilton’s termination, which occurred in June 2011, but she later clarified that
the conversation took place over the phone immediately after Eaton was fired in April 2011.
Regardless of whether the conversation took place in April or June, the record clearly
indicates that Eaton was not an employee of AVPM at the time.
       4 We note that Eaton did not testify directly to any of these statements, and that they

were attributed to her by Hamilton in Hamilton’s deposition.
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issue of fact exists as to whether AVPM’s reason for terminating her is pretext
for race discrimination. We have jurisdiction over Hamilton’s appeal of the
district court’s judgment under 28 U.S.C. §§ 1291 and 1331.


                                     II. ANALYSIS
A.     Standard of Review
       We review de novo the district court’s grant of summary judgment. 5 In
doing so, we consider the record as a whole, without weighing the evidence or
making credibility determinations, and “draw all reasonable inferences in
favor of the nonmoving party.” 6 A party is entitled to summary judgment if
“there is no genuine dispute as to any material fact and the moving party is
entitled to judgment as a matter of law.” 7 A genuine dispute of material fact
exists when the “evidence is such that a reasonable jury could return a verdict
for the nonmoving party.” 8 We review evidentiary rulings for manifest error. 9
Our practice has been first to “review the trial court’s evidentiary rulings,
which define the summary judgment record,” and then to review the “summary
judgment decision de novo.” 10
B.     Evidentiary Rulings
       In its summary judgment opinion, the district court excluded four items
of evidence relied on by Hamilton in her briefing before that court. The first
was a statement made by Robert Englard during his deposition; the other three


       5 Juino v. Livingston Parish Fire Dist. No. 5, 717 F.3d 431, 433 (5th Cir. 2013).
       6 Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 343 (5th Cir. 2007) (quoting
Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150 (2000)).
       7 Royal v. CCC & R Tres Arboles, L.L.C., 736 F.3d 396, 400 (5th Cir. 2013) (citing FED.

R. CIV. P. 56(a)).
       8 Id. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)) (internal

quotation marks omitted).
       9 Berry v. Armstrong Rubber Co., 989 F.2d 822, 824 (5th Cir. 1993).
       10 Christophersen v. Allied-Signal Corp., 939 F.2d 1106, 1109 (5th Cir. 1991),

abrogated on other grounds by Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993).
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were statements allegedly made by Laura Eaton to Hamilton, as repeated by
Hamilton in her own deposition. Hamilton contends that all four statements
were excluded in error.
       1.     Englard’s Deposition Statement
       Hamilton challenges the district court’s exclusion of Robert Englard’s
statement about hypothetical racial bias.                During Englard’s deposition,
Hamilton’s counsel asked about Englard’s earlier comment to Hamilton that
the entire grounds crew at Waters Landing was African American. Although
Englard denied making the comment, he agreed with Hamilton’s counsel that
it was possible for “someone” who heard such a comment to think that the
hypothetical speaker “might” have racial bias. We agree with the district
court: “Englard’s comment about how some unnamed, hypothetical person
might perceive his remark is pure speculation.”
       Under Federal Rules of Evidence 602 and 701, lay testimony must arise
from the witness’s “personal knowledge of the matter” 11 and be “rationally
based on the witness’s perception.” 12 Indeed, the Advisory Committee explains
Rule 701(a) as the “familiar requirement of first-hand knowledge or
observation.” 13 We also require that lay opinion testimony be “helpful to the
jury.” 14
       Nowhere does Englard, as Hamilton contends, assert his own opinion as
to the meaning of the comment or make an admission regarding his own state
of mind when allegedly making it.             His testimony about the hypothetical
“someone” has no basis in his own perceptions, observations, or knowledge.
Furthermore, his opinion as to what “someone” might think is not helpful to



       11 FED. R. EVID. 602.
       12 FED. R. EVID. 701(a).
       13 FED. R. EVID. 701 advisory committee’s note.
       14 United States v. Ebron, 683 F.3d 105, 137 (5th Cir. 2012).

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the factfinder. The relevant issue is whether Englard acted with racial bias,
not whether “someone” else might think him to be racist. Englard’s speculation
as to that hypothetical listener’s state of mind is irrelevant and unhelpful. We
conclude that the district court made no manifest error in excluding this
testimony.
      2.     Hamilton’s     Deposition      Testimony       About       Eaton’s
Statements
      Hamilton also challenges the district court’s exclusion of three
statements, made during her own deposition, that she attributed to Laura
Eaton, her former manager at AVPM. The first statement allegedly occurred
immediately after Eaton had been fired from AVPM. According to Hamilton,
Eaton lamented the difficulty of “get[ting] another job at [their] age” and
faulted AVPM for hiring “bubbly white little girls.” Eaton’s second statement
also occurred during a conversation between Hamilton and Eaton, this time
after Hamilton’s termination. In it, Eaton implied that Hamilton’s termination
was motivated by race—specifically, that AVPM had concerns about the
African American grounds crew at Waters Landing, who “couldn’t intimidate
[Hamilton] like they’re used to doing with other women that don’t speak up.”
Eaton’s third statement occurred a few days after Hamilton’s termination,
when Eaton called to tell her that the company discovered it had fired her “for
no reason.” According to Hamilton, Eaton then asked if AVPM had contacted
Hamilton about returning to work.       The district court excluded all three
statements as inadmissible hearsay. It also excluded the first two statements
as speculation and the third for lack of foundation.




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       Hamilton claims that Eaton’s statements are not hearsay as provided in
Federal Rule of Evidence 801(d)(2)(D). 15 However, “[u]nder our general rule,
arguments not raised before the district court are waived and will not be
considered on appeal unless the party can demonstrate ‘extraordinary
circumstances.’” 16     We find extraordinary circumstances when “the issue
involved is a pure question of law and a miscarriage of justice would result
from our failure to consider it.” 17         Hamilton failed to respond to AVPM’s
objections before the district court and makes no argument before us as to
extraordinary circumstances, thus waiving this theory on appeal. 18
C.     Summary Judgment
       1.     Title VII Framework
       We evaluate Title VII race discrimination cases using a modified
McDonnell-Douglas approach. 19 Hamilton must first establish a prima facie
case of discrimination. The burden of production then shifts to AVPM to
articulate a legitimate, nondiscriminatory reason for her discharge. If it does



       15  As Hamilton referenced each of the excluded statements in her briefing to this
Court, we do not address AVPM’s contention that she failed to appeal the district court’s
rulings on two of the three statements, assuming instead that she appeals every adverse
evidentiary ruling.
        16 State Indus. Prods. Corp. v. Beta Tech. Inc., 575 F.3d 450, 456 (5th Cir. 2009).
        17 Id.
        18 Moreover, even if we were to consider Rule 801(d)(2)(D), it would not help Hamilton

here. It excludes from the hearsay rule only those statements offered against an opposing
party that were “made by the party’s agent or employee on a matter within the scope of that
relationship and while it existed.” FED. R. EVID. 801(d)(2)(D) (emphasis supplied). The record
is clear: Eaton was not an employee of AVPM at the time she allegedly spoke about “bubbly
white little girls,” and so her first statement is not admissible under Rule 801(d)(2)(D). As
for Eaton’s second and third statements, Hamilton has not laid a proper foundation for
admitting them. Even if, as Hamilton asserts, Eaton “was familiar with the circumstances
regarding Hamilton’s termination,” it is undisputed that Eaton was not her supervisor at
that time. Hamilton has offered no evidence to suggest that Eaton played any role in the
termination decision or that the decision fell within the scope of Eaton’s employment with
AVPM. The possibility of reinstating Hamilton likewise remained outside Eaton’s purview.
Thus, Eaton’s second and third statements are not admissible under Rule 801(d)(2)(D).
        19 E.g., Vaughn v. Woodforest Bank, 665 F.3d 632, 636 (5th Cir. 2011).

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so, Hamilton must then show either that the proffered reason is pretext for
discrimination or that AVPM acted with mixed motives, one of which was
discriminatory. Hamilton has not argued before this court or the district court
that AVPM acted with mixed motives. Thus, to avoid summary judgment,
Hamilton must produce “substantial evidence” that the proffered legitimate,
nondiscriminatory reason articulated by AVPM is false or unworthy of
credence, and therefore pretext for discrimination. 20
      2.    Legitimate, Nondiscriminatory Reason
      On appeal, AVPM does not dispute that Hamilton has established a
prima facie case of race discrimination. 21 We therefore start with the second
step of the McDonnell-Douglas framework and consider if AVPM has
articulated a legitimate, nondiscriminatory reason for terminating Hamilton’s
employment.
      AVPM contends that they discharged Hamilton because she “repeatedly
list[ed] apartments as ready to lease when in fact they were not ready.” As a
result, Robert Englard no longer trusted her to do her job effectively. Hamilton
contends that this reason is not legitimate because AVPM did not follow its
internal disciplinary policy. According to Hamilton, only employees guilty of a
“serious” violation would be terminated without documented warning, and the
policy’s list of serious violations did not include Hamilton’s alleged
transgressions. Thus, Hamilton reasons, because “the guidelines demonstrate
what the employer thought was a legitimate non-discriminatory reason for
termination,” any reason not listed must by definition be illegitimate.
      Hamilton’s reasoning is flawed. She does not dispute that she was an
employee at will, subject to dismissal for any reason not statutorily prohibited.


      20 Laxton v. Gap Inc., 333 F.3d 572, 578 (5th Cir. 2003).
      21  In its summary judgment motion, AVPM assumed arguendo that Hamilton could
establish a prima facie case of race discrimination.
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Indeed, she concedes that AVPM’s guidelines do not constrain its discretion to
make employment decisions: She could be terminated for “good cause, or bad
cause, or no cause at all.” 22 Furthermore, even if we accepted Hamilton’s
premise, she does not—and indeed, cannot—contend that the list in the
employee manual is exclusive. In fact, the manual defines serious violations
as “drug policy violation, sexual harassment . . . destruction of company
property, etc.” 23 That et cetera contains a multitude of sins. An employer’s
belief that she repeatedly failed to perform a critical job function, even if
erroneous, would nonetheless justify her immediate termination under this
provision. Because Englard’s dissatisfaction with Hamilton’s job performance
would have been a legitimate, nondiscriminatory reason for discharging her,
we affirm the district court’s determination that AVPM satisfied its burden of
production.
      3.      Pretext
      Accordingly, we now turn to the third step of the McDonnell-Douglas
framework and consider whether there is a genuine dispute of material fact
that AVPM’s reason for terminating Hamilton was pretext. 24                Hamilton
contends that (1) AVPM’s failure to follow its internal disciplinary policy when
terminating Hamilton, (2) AVPM’s inconsistent explanations for Hamilton’s
termination, (3) AVPM’s desire to reinstate Hamilton after realizing that her
discharge was for no good reason, and (4) Englard’s comment about the
grounds crew being African American, all demonstrate that the company’s
proffered reason is pretextual.




      22 Fla. Corp. v. N.L.R.B., 587 F.2d 735, 745 (5th Cir. 1979).
      23 Emphasis supplied.
      24 Hamilton does not claim that AVPM acted with mixed motives.

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       a.     Disciplinary Policy
       First, Hamilton claims that AVPM failed to follow its internal
disciplinary policy when terminating her, and that this failure demonstrates
the pretextual nature of the termination. Although an “employer’s failure to
follow its own policies may be probative of discriminatory intent,” 25 we require
discharged employees in discrimination cases to show, in addition, that they
were treated differently from non-minority employees. 26 We insist on this
additional evidence because “Title VII does not protect employees from the
arbitrary employment practices of their employer, only their discriminatory
impact.” 27 Hamilton offers no evidence suggesting that AVPM followed the
internal disciplinary policy with non–African American employees and
deviated from it in her case only.            In fact, Englard stated that he also
terminated three Caucasian property managers at AVPM-owned complexes for
performance issues, none of whom received a written warning. Eaton testified
to similar effect as to property managers under her supervision. Accordingly,
AVPM’s failure to follow its internal disciplinary policy does not create a
factual issue as to the falsity of its proffered reason for discharging Hamilton. 28
       b.     Inconsistent Explanations
       Second,     Hamilton      insists    that    AVPM       submitted      inconsistent
explanations for terminating her, and that the district court erred in finding
no evidence of pretext in this inconsistency. At various points, AVPM gave
three reasons for firing Hamilton: (1) inaccuracy in listing apartments as


       25 Richardson v. Monitronics Int’l, Inc., 434 F.3d 327, 336 (5th Cir. 2005).
       26 Turner v. Baylor Richardson Med. Ctr., 476 F.3d 337, 346 (5th Cir. 2007).
       27 Id. (quoting Upshaw v. Dall. Heart Grp., 961 F. Supp. 997, 1002 (N.D. Tex. 1997)).
       28 We also note in passing that Hamilton admits to at least one instance of inaccurate

recordkeeping, and Englard discovered several additional errors while she was on vacation.
Thus, even though AVPM may not have officially documented its dissatisfaction with
Hamilton, the record supports its proffered legitimate, nondiscriminatory reason for
discharging her.
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“ready,” (2) inability to do the job, and (3) lack of trust to do the job. Although
Hamilton is correct that inconsistency could suggest pretext, 29 no such
inconsistency exists here.         The district court aptly characterized these
explanations as different only as to their level of generality. At the highest
level, AVPM did not trust Hamilton to do the job of property manager. On a
lower level, Englard distrusted her because he believed that she was unable to
do the job correctly. And at the lowest level of generality, the reason he thought
her incapable was her failure to keep accurate “ready” and “make ready” lists.
There is no inconsistency, and thus no evidence of pretext, in AVPM’s proffered
legitimate, nondiscriminatory reason for terminating Hamilton.
       c.     Reinstatement
       Third, Hamilton relies on Eaton’s statement that Hamilton was fired for
“no reason” and may be asked back to AVPM as evidence undermining AVPM’s
stated reason for terminating her. However, the only basis for this assertion
is inadmissible hearsay, as explained above. Thus, we do not consider it when
reviewing a grant of summary judgment. 30
       d.     Englard’s Comment
       Finally, Hamilton contends that Englard’s comment about the race of the
grounds crew at Waters Landing is evidence of racial bias. In her deposition
testimony, Hamilton claimed that Englard had, when he first visited the
Waters Landing apartment complex, observed to her that the entire grounds
crew was African American. 31 Although Englard denies the exchange took
place, we make all reasonable inferences in favor of the nonmovant when
reviewing a grant of summary judgment.


       29See Nichols v. Lewis Grocer, 138 F.3d 563, 568 (5th Cir. 1998).
       30Bellard v. Gautreaux, 675 F.3d 454, 460 (5th Cir. 2012) (“[O]n a motion for summary
judgment, the evidence proffered by the plaintiff to satisfy his burden of proof must be
competent and admissible at trial.”).
      31 It appears from the record that this observation was factually correct.

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      Because Hamilton has failed to produce substantial evidence of pretext,
we apply this court’s “stray remarks” doctrine to Englard’s comment. 32 A
remark is evidence of discrimination if it is (1) related to the protected class of
which the plaintiff is a member, (2) proximate in time to the adverse
employment action, (3) made by an individual with authority over that action,
and (4) related to that action. 33 “Comments that do not meet these criteria are
considered ‘stray remarks’ and, standing alone, are insufficient to defeat
summary judgment.” 34
      Englard’s comment satisfies the first three elements of the stray-
remarks test: (1) it relates to Hamilton’s race, as she and the grounds crew are
all African American, (2) it occurred shortly before she was fired, and (3) it was
made by Englard, who both parties agree was the primary decisionmaker
behind Hamilton’s discharge. However, there is no evidence that Englard’s
observation about the race of the grounds crew was related to the decision to
terminate Hamilton. Thus, Englard’s comment is insufficient to raise an issue
of fact as to whether AVPM’s stated reason for terminating Hamilton was
pretext for race discrimination.


                                III. CONCLUSION
      Hamilton fails to point to sufficient summary judgment evidence to
create a genuine issue of material fact as to whether AVPM’s proffered reason
for terminating her was pretext for race discrimination.               Thus, AVPM is
entitled to summary judgment as a matter of law. The district court’s grant of
AVPM’s motion for summary judgment is AFFIRMED.




      32 See Auguster v. Vermilion Parish Sch. Bd., 249 F.3d 400, 404–05 (5th Cir. 2001).
      33 Rubinstein v. Adm’rs of Tulane Educ. Fund, 218 F.3d 392, 400–01 (5th Cir. 2000).
      34 Jackson v. Cal-W. Packaging Corp., 602 F.3d 374, 380 (5th Cir. 2010).

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