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Wassom v. Wright

United States District Court, D. Utah

October 19, 2017

ANNETTE R. WASSOM, an individual, Plaintiff,
v.
GEORGE HENRY WRIGHT III, an individual, INTELLIGENT WEALTH, LLC, a registered Utah limited liability company, NUDGE, LLC, a registered Utah limited liability company, NEW PEAKS, LLC, a registered Utah limited liability corporation, Defendants.

          Paul M. Warner, Magistrate Judge

          MEMORANDUM DECISION AND ORDER

          Jill N. Parrish, United States District Court Judge

         Before the Court is the IW Parties' Motion to Dismiss First Amended Complaint (ECF No. 23) and Defendant Nudge, LLC's Motion to Dismiss First Amended Complaint (ECF No. 24). For the reasons set forth below, both motions are GRANTED. Plaintiff's complaint is dismissed without prejudice. Plaintiff has twenty-one days from the date of this Order to file an amended complaint.

         I. INTRODUCTION

         This is a Title VII case. Plaintiff Annette R. Wassom filed suit against Defendants George Henry Wright III; Intelligent Wealth, LLC (“IW”); Nudge, LLC; and New Peak, LLC, claiming that she was sexually harassed by Wright. Wassom alleges that she was an employee of IW, Nudge, and New Peak and seeks to hold all three entities liable under Title VII of the Civil Rights Act. Wassom also alleges that IW, Nudge, and New Peak are jointly and severally liable because they were partners in a joint venture, but in the event the Court finds otherwise, Wassom asks the Court to “pierce the corporate veil” of each entity to make them jointly and severally liable. IW and Nudge have moved to dismiss Wassom's Title VII claim and her claim to “pierce the corporate veil.” Wright has moved to dismiss the claims against him on the grounds that such claims are redundant with those alleged against IW, Nudge, and New Peak.

         II. STATEMENT OF FACTS

         The following facts are alleged in Wassom's “First Amended Complaint”:[1]

         Wassom began dating Wright in November 2014. Am. Compl. ¶ 3.1. The relationship involved ongoing sexual activity. Am. Compl. ¶ 3.2. While the relationship was ongoing, Wright hired Wassom to work for him at IW on a part-time temporary basis. Am. Compl. ¶ 3.3. IW markets the products and services of New Peaks. Am. Compl. ¶ 3.4.

         Wright was hired to work at Nudge, an affiliate of New Peak, while he was dating Wassom. Am. Compl. ¶ 3.5. When he was hired by Nudge, Wright closed the offices of IW, sold IW's furniture and equipment, fired most of the IW staff, and headquartered his business activities in the Nudge facility. Am. Compl. ¶ 3.6. At Nudge, Wright worked in furtherance of the business activities of Nudge and New Peaks. Am. Compl. ¶ 3.6. Nudge, New Peak, and IW did not distinguish between themselves in marketing efforts and public events. Am. Compl. ¶ 4.19C. Both Nudge and New Peak have more than fifteen employees. Am. Compl. ¶ 4.4-4.5.

         Wright brought Wassom with him to work at Nudge, and Wassom worked at Nudge for the benefit of Nudge and New Peaks. Am. Compl. ¶ 3.7. In July 2015, Wassom began working full-time at Nudge as an executive assistant to Wright and two other Nudge officers, David McCoy and Tammy Castro. Am. Compl. ¶ 3.8. Wassom was promised a salary of $750.00 per week and told that she needed to be in the office for work activities. Am. Compl. ¶ 3.9. Wassom was told, presumably by a Nudge employee, that other employees had been fired for not coming into the office for work. Am. Compl. ¶ 3.10.

         During the course of her employment, Nudge set Wassom's work hours, required her to track her time, and directed and supervised her work performance. Am. Compl. ¶ 3.11-3.13. Nudge supplied Wassom with equipment and office supplies, and Wassom did not purchase any supplies for work-related use. Am. Compl. ¶ 3.15-3.16. During the course of Wassom's employment, Nudge and New Peaks were partners in numerous ventures and both companies used Wassom's services in furtherance of those ventures. Am. Compl. ¶ 3.20. IW, Nudge, and New Peak all held Wassom out as their employee when she dealt with others while planning public events. Am. Compl. ¶ 4.19D.

         During the course of Wassom's employment, Wright made repeated sexual demands of Wassom during work hours. Am. Compl. ¶ 3.23. When Wassom spurned Wright's advances, he would pressure her, indicating that he was the boss and that she would still be paid for her time. Am. Compl. ¶ 3.24. Wright flirted with Wassom and made sexual comments on a daily basis. Am. Compl. ¶ 3.25. Wright made sexual demands of Wassom about four times per week during business hours. Am. Compl. ¶ 3.26. Wassom felt that engaging in sexual activity with Wright was a condition of her employment and that she could not refuse him. Am. Compl. ¶ 3.30.

         During their relationship, Wright and Wassom frequently argued about Wassom's reluctance to engage in sexual activity during work hours. Am. Compl. ¶ 3.32-3.33. After these arguments, Wright used his position as Wassom's supervisor to give her additional work. Am. Compl. ¶ 3.33. Wright often implied that Wassom would advance in the business so long as she continued with their relationship. Am. Compl. ¶ 3.34.

         Wassom was told, during the course of her employment, that Nudge and New Peak reimbursed Wright for her salary. Am. Compl. ¶ 3.35. Wassom was also told that she was working for the “joint venture” undertaken by Nudge and New Peak. Am. Compl. ¶ 3.35.

         On or around November 3, 2015, after numerous sexual demands, Wassom told Wright that she felt like she was being raped and that she wanted to end their relationship. Am. Compl. ¶ 3.36. On or around November 10, 2015, Wassom again told Wright that she wanted to end their relationship. Am. Compl. ¶ 3.37. The next day, David McCoy, a Nudge officer, fired Wassom. Am. Compl. ¶ 3.38.

         The day after she was fired, Wassom confronted Wright about her termination. Am. Compl. ¶ 3.39. Wright told Wassom, “Of course the business and personal go together. How could they not?” Am. Compl. ¶ 3.40.

         III. DISCUSSION

         Nudge has moved to dismiss Wassom's claims against it on the grounds that it was not her employer for the purposes of Title VII and that she has not alleged sexual harassment. Wright has moved to dismiss Wassom's claims against him on the grounds that he cannot be held liable under Title VII because he was Wassom's supervisor. And IW has moved to dismiss Wassom's claims against it on the grounds that it does not meet Title VII's fifteen-employee requirement. Finally, IW and Nudge both contend that Wassom's claim to “pierce the corporate veil” is improper. The parties' arguments are addressed below.

         A. Motion Standard

         Under Federal Rule of Civil Procedure 12(b)(6), a defendant may move to dismiss a claim when the plaintiff fails to state a claim upon which relief can be granted. The Court's function on a Rule 12(b)(6) motion is not to weigh potential evidence that the parties may present at trial but to “assess whether the plaintiff's complaint alone is legally sufficient to state a claim for which relief may be granted.” Dubbs v. Head Start, Inc., 336 F.3d 1194, 1201 (10th Cir. 2003) (quoting Sutton v. Utah State Sch. for the Deaf & Blind, 173 F.3d 1226, 1236 (10th Cir. 1999)).

         “A court reviewing the sufficiency of a complaint presumes all of plaintiff's factual allegations are true and construes them in the light most favorable to the plaintiff.” Hall v. Bellmon, 935 F.2d 1106, 1108 (10th Cir. 1991). “To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility, in the context of a motion to dismiss, means that the plaintiff has alleged facts that allow “the court to draw [a] reasonable inference that the defendant is liable for the misconduct alleged.” Id.

         The Iqbal evaluation is a two-step analysis. First, the court identifies “the allegations in the complaint that are not entitled to the assumption of truth, ” which includes allegations that are legal conclusions, bare assertions, or merely conclusory. Id. at 679-81. Second, the court considers the factual allegations that are entitled to the assumption of truth “to determine if they plausibly suggest an entitlement to relief.” Id. at 681. If the allegations state a plausible claim for relief, the plaintiff's claim survives the motion to ...


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