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Patrick v. 3D Holdings, LLC

United States District Court, D. Hawaii

March 18, 2014

3D HOLDINGS, LLC, dba KAUAI ATHLETIC CLUB; et al., Defendants.




In this sexual harassment and employment discrimination action, Plaintiff Shannon Patrick ("Plaintiff" or "Patrick") alleges that she was sexually assaulted and harassed by a co-worker while both were working at Kauai Athletic Club ("KAC"), a fitness center located on Kauai. See Doc. No. 1, Compl. ¶ 13. Patrick further alleges that, after she reported the incident to her supervisor, she was terminated and not re-hired in retaliation for such reporting. Id. ¶¶ 14, 43. Accordingly, Patrick filed this action on November 21, 2013, alleging numerous state and federal claims against Defendants 3D Holdings LLC ("3DH") and Good to Go Living, Inc. ("GTGL") (both allegedly doing business as KAC); and Ken Maurice Lardizabal ("Lardizabal"), after exhausting administrative remedies before the Hawaii Civil Rights Commission ("HCRC") and/or the Equal Employment Opportunity Commission ("EEOC"). See id. ¶¶ 8, 9.

Currently before the court is (1) 3DH's Motion for Partial Dismissal, filed December 30, 2013, Doc. No. 5 (joined by GTGL, Doc. No. 16); and (2) GTGL's Motion for Summary Judgment, filed on January 27, 2014, Doc. No. 13. Based on the following, the court GRANTS Defendants' Motions in part and DENIES them in part.


A. Factual Background

The court assumes the Complaint's well-pleaded factual allegations are true for purposes of 3DH's Motion for Partial Dismissal brought under Federal Rule of Civil Procedure 12(b)(6). See, e.g., Moss v. U.S. Secret Serv., 572 F.3d 962, 970 (9th Cir. 2009). And in considering GTGL's Motion for Summary Judgment under Federal Rule of Civil Procedure 56, the court views the evidence in the light most favorable to Plaintiff, the non-moving party. See, e.g., Sullivan v. Oracle Corp., 662 F.3d 1265, 1270 (9th Cir. 2011). Applying those standards, the court sets forth the following factual background.

1. The December 19, 2011 Incident at KAC

Patrick began working at KAC in 2004, and left in 2005. Doc. No. 14, GTGL's Concise Statement of Facts ("CSF") ¶ 3; Doc. No. 24, Pl.'s CSF ¶ 1.[1] The Complaint alleges that KAC was, at all relevant times, "owned, operated, and/or maintained by 3DH and or/GTGL, " Doc. No. 1, Compl. ¶ 10, although evidence now indicates that KAC changed ownership - apparently from 3DH to GTGL - precisely during relevant time periods, as discussed further below. See Doc. No. 14-3, GTGL Ex. A (Dec. 28, 2011 Asset Purchase Agreement between KAC, LLC and GTGL).[2] In 2009, 3DH re-hired Patrick as a front desk representative and clerk at KAC. Doc. No. 24, Pl.'s CSF ¶ 3. In December 2011, Lardizabal started working as a part-time employee at KAC. Id. ¶ 5. At that time, KAC employed four full-time employees (including Patrick) and "numerous" part-time employees such as Lardizabal. Id. ¶¶ 7, 29; Doc. No. 24-1, Pl.'s Decl. ¶ 35. KAC had a program that provided free club memberships to people if they agreed to work at least two part-time shifts per week. Many of the club members took advantage of this program, including Lardizabal. Doc. No. 24, Pl.'s CSF ¶ 7.

On December 19, 2011, Patrick was working at the front desk area of KAC. Doc. No. 24-1, Pl.'s Decl. ¶ 13. Lardizabal came to work late, appearing to be intoxicated. Id. ¶ 14. Lardizabal is over six feet tall, weighs over 200 pounds, and is a former power lifter and mixed martial arts fighter. Id. ¶ 15. Patrick was at the front desk, when Lardizabal "repeatedly came up from behind, and pinned [Patrick] against the counter." Id. ¶ 18. Patrick attests that Lardizabal alternately reached into her clothes, and groped her buttocks, breasts, and digitally penetrated her vagina. Id. Patrick attempted to resist, but could not get Lardizabal off - he did not stop until the new staff started coming for the next work shift. Id. ¶¶ 19-20.[3]

On December 21, 2011, Patrick reported the incident by email to her immediate supervisor, KAC general manager Phyllis Stanwood ("Stanwood"), and asked for a meeting. Doc. No. 14, GTGL CSF ¶ 7; Doc. No. 24-1, Pl.'s Decl. ¶¶ 8, 24. On December 22, 2011, after a brief meeting with Patrick in Stanwood's car, Stanwood placed Patrick on a paid leave of absence. Doc. No. 24-1, Pl.'s Decl. ¶ 28. Stanwood said that the leave was authorized by "the owner of KAC, David Carswell, " id., who "was aware of [her] complaint of the sexual assault and the trauma and stress [she] was going through." Id. ¶ 29. Stanwood, however, did not conduct an investigation of the sexual assault incident, id. ¶ 30, and "became increasingly negative and hostile" with Patrick. Id. ¶¶ 31, 38. "Stanwood discouraged [Patrick] from returning to work and tried to get rid of [her], because of [her] complaint of the sexual assault." Id. ¶ 43.

2. The Transfer of Ownership of KAC

Meanwhile, plans were underway to sell KAC to GTGL. On December 22, 2011, Stanwood emailed KAC staff announcing a mandatory staff meeting on December 28, 2011. Id. ¶ 32. Patrick notified Stanwood that she planned to attend the meeting, but Stanwood instructed her not to attend. Id. ¶ 39. On December 29, 2011, Stanwood sent an email to all KAC employees announcing the sale of KAC to GTGL.[4] Id. ¶ 33. Employees were notified that they would continue as "employees of 3D Holdings dba [KAC]" and that Stanwood would "remain as General Manager for the month of January [2012]." Doc. No. 24-3, Pl.'s Ex. 2 at 2. Stanwood's notice stated that "all employees will be released effective January 31[, 2012] and will have the opportunity to re-apply for new functions and positions." Id. She told them that "[c]urrent KAC employees will be given first access to the job postings[.]" Id. Stanwood "was in charge of transitioning the employees and the entire club operation from KAC to GTGL, " Doc. No. 24-1, Pl.'s Decl. ¶ 37, and remained as KAC's general manager after the sale to GTGL. Id. ¶ 36; Doc. No. 24-4, Pl.'s Ex. 3.

Patrick attests that "Stanwood let all KAC employees submit their employment applications to reapply with GTGL, except [her]." Doc. No. 24-1, Patrick Decl. ¶ 46. "[Stanwood] discouraged [Patrick] from submitting [her] application, " id. ¶ 47, and "kept refusing [her] application until [Patrick] insisted [her] application be accepted via hand-delivery on January 23, 2012." Id. ¶ 49; Doc. No. 25, Pl.'s Suppl. Decl. ¶ 49. Patrick heard from coworkers that GTGL assured them "that the application process was a mere formality and... GTGL intended to retain all KAC employees." Id. ¶ 44. But Patrick was denied an interview with GTGL, in contrast to all other KAC employees who received interviews. Id. ¶ 50.[5]

Patrick was not hired (or re-hired) by GTGL. Indeed, GTGL contends that "[a]t no time did Plaintiff apply for employment with GTGL." Doc. No. 14, GTGL CSF ¶ 11. Patrick, however, attests that "Stanwood terminated [her] employment and refused to re-hire [her] for GTGL, " Doc. No. 24-1, Pl.'s Decl. ¶ 53, giving her "the excuse that GTGL was unable to hire [her] because they were downsizing." Id. ¶ 54. She declares that "[a]ll full-time KAC employees were hired by GTGL except [her], although [she] was qualified and had timely submitted [her] job application and resume." Id. ¶ 52. As support for her contention that she was qualified, Patrick points to a March 19, 2012 letter of recommendation that Stanwood wrote for Patrick - the letter, among other praise, describes Patrick as "highly capable, " "always willing to take on more, " "a great self-starter, " with "excellent customer service skills." Doc. No. 24-4, Pl.'s Ex. 3. The letter states that "[i]n February of 2012, [KAC] was sold to new owners, and our workforce was downsized, so we unfortunately had to release [Patrick] from employment." Id.

B. Procedural Background

On June 14, 2012, Patrick filed a charge of discrimination with the HCRC. Doc. No. 14-6, GTGL Ex. D. Patrick's charge indicated she intended her charge to be "dual filed, " by checking the box stating "I want this charge filed with both the EEOC and the [HCRC]." Id. On July 29, 2013, the HCRC issued Patrick a Right to Sue letter, and on August 26, 2013, the EEOC issued a Right to Sue Letter. Doc. No. 1, Compl. ¶¶ 8, 9. Patrick then filed this action on November 21, 2013, Doc. No. 1, alleging the following fourteen Counts of federal and state law violations against Defendants:

Count I - Sexual Harassment (Title VII and HRS § 378-2) (against 3DH and GTGL);
Count II - "Hostile and/or Sexually Hostile Work Environment" (Title VII and HRS § 378-2) (against 3DH and GTGL);
Count III - Sexual Discrimination (Title VII) (against 3DH and GTGL);
Count IV - Retaliation (Title VII and HRS § 378-2) (against 3DH and GTGL);
Count V - Wrongful Discharge in Violation of Public Policy (against 3DH and GTGL);
Count VI - Sexual Assault and Battery (against all Defendants);
Count VII - Assault and Battery (against all Defendants);
Count VIII - Wrongful Imprisonment (against all Defendants);
Count IX - Negligent Hiring, Retention and/or Supervision (against 3DH and GTGL);
Count X - Intentional Infliction of Emotional Distress (against all Defendants);
Count XI - Negligent Infliction of Emotional Distress (against all Defendants);
Count XII - Negligence (against all Defendants);
Count XIII - Gross Negligence (against all Defendants); and
Count XIV - Willful and Wanton Misconduct (against all Defendants).

See Doc. No. 1, Compl. at 8 to 22.

On December 20, 2013, 3DH filed its Motion for Partial Dismissal. Doc. No. 5. On January 27, 2014, GTGL filed its Motion for Summary Judgment, Doc. No. 13, and filed a joinder in 3DH's Motion. Doc. No. 16. On February 10, 2014, 3DH filed a Statement of No Position on GTGL's Motion for Summary Judgment. Doc. No. 21. Plaintiff filed Oppositions to both Motions on February 10, 2014, Doc. Nos. 22, 23, and Replies were filed on February 14, 2014. Doc. Nos. 29, 31. (The record reflects that Lardizabal has counsel, but he has not filed positions on either Motion.) The court heard the Motions on March 3, 2014.


A. Rule 12(b)(6) Motion ...

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