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Elena Myers Court v. Loews Philadelphia Hotel, Inc.

United States District Court, E.D. Pennsylvania

December 15, 2017

ELENA MYERS COURT, Plaintiff,
v.
LOEWS PHILADELPHIA HOTEL, INC. et al., Defendants.

          MEMORANDUM

          Gene E.K. Pratter United States District Judge.

         Introduction

         A hotel guest was assaulted by a massage therapist during a massage session at a spa-gym located on the hotel premises. The guest sued both the gym and the hotel. Both the gym and the hotel have filed motions for summary judgment, and the issue of their notice of the therapist's violent history looms largest.

         Because a reasonable jury could find that the gym should have been on notice of - and, arguably, should have taken action on - the therapist's history of sexual assault, the Court denies summary judgment for the gym except as to claims against the gym's owner. But because the guest has provided no cause of action to hold the hotel liable for the torts of the independent-contractor gym, the Court grants summary judgment for the hotel.

         Facts

         In 2014, the Loews Philadelphia Hotel contracted with the 12Fit Gym to operate a spa inside the hotel. 12Fit, in turn, hired Jerome McNeill as a massage therapist, but did so without conducting a criminal background check.

         Mr. McNeill had a checkered past. In 2007, he was arrested and charged with the alleged rape of a minor. The charges were ultimately withdrawn. In 2013, he was convicted of reckless endangerment for fleeing a police officer on a motorcycle. In 2014, shortly before joining 12Fit, Mr. McNeill was fired from his job as a massage therapist at Hand & Stone Spa for sexually assaulting a patron, an accusation as to which he was acquitted in late 2016.

         Before hiring Mr. McNeill, 12Fit did not verify Mr. McNeill's employment history. Nor did 12Fit contact his prior employer Hand & Stone to inquire into why Mr. McNeill no longer worked there. The extent of 12Fit's research on Mr. McNeill was to note that he had a then-valid Pennsylvania massage license.

         On September 14, 2014, Mr. McNeill sexually assaulted Elena Myers Court, a Loews hotel guest, during a massage session. Loews and 12Fit largely ignored Ms. Court's on-site report of what happened. In the weeks that followed, Mr. McNeill sexually assaulted two more women, each of whom reached settlements with Loews.

         Procedural History

         In September 2016, Ms. Court sued two groups of defendants, the “Loews Defendants” associated with the hotel, and the “Gym Defendants” associated with the 12Fit gym and spa. She alleged negligence, negligent hiring, and negligent infliction of emotional distress.[1] The Gym Defendants filed a motion to dismiss in late 2016, which was denied on February 13, 2017. See Court v. Loews Philadelphia Hotel, Inc., No. 16-4848, 2017 WL 569522 (E.D. Pa. Feb. 13, 2017). Now, both groups of defendants have filed motions for summary judgment and presented oral arguments on the motions. Ms. Court opposes both motions.

         For the reasons that follow, the Court denies the Gym Defendants' motion (except as to the counts against 12Fit owner Frank Baer) and grants the Loews Defendants' motion.

         Standard of Review

         A court shall grant a motion for summary judgment “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). An issue is “genuine” if there is a sufficient evidentiary basis on which a reasonable jury could return a verdict for the non-moving party. Kaucher v. Cnty. of Bucks, 455 F.3d 418, 423 (3d Cir. 2006) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986)). A factual dispute is “material” if it might affect the outcome of the case under governing law. Id. (citing Anderson, 477 U.S. at 248). Under Rule 56, the Court must view the evidence presented on the motion in the light most favorable to the non-moving party. See Anderson, 477 U.S. at 255. However, “[u]nsupported assertions, conclusory allegations, or mere suspicions are insufficient to overcome a motion for summary judgment.” Betts v. New Castle Youth Dev. Ctr., 621 F.3d 249, 252 (3d Cir. 2010).

         The movant bears the initial responsibility for informing the Court of the basis for the motion for summary judgment and identifying those portions of the record that demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Where the non-moving party bears the burden of proof on a particular issue, the moving party's initial burden can be met simply by “pointing out to the district court that there is an absence of evidence to support the nonmoving party's case.” Id. at 325. After the moving party has met the initial burden, the non-moving party must set forth specific facts showing that there is a genuinely disputed factual issue for trial by “citing to particular parts of materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations . . ., admissions, interrogatory answers, or other materials” or by “showing that the materials cited do not establish the absence or presence of a genuine dispute.” Fed.R.Civ.P. 56(c).

         Summary judgment is appropriate if the non-moving party fails to rebut by making a factual showing “sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex, 477 U.S. at 322.

         Analysis of Claims Against the Gym Defendants

         The Gym Defendants' primary argument is twofold: they had no notice of the danger posed by Mr. McNeill, and even if they had notice, they were prohibited by Pennsylvania law from acting on it. They use this argument to attack Ms. Court's claims for negligent hiring, negligent retention and supervision, and negligent infliction of emotional distress.

         The Court first rejects this argument in the context of the claim for negligent hiring: a reasonable jury could find that the Gym Defendants should have been on notice, that they could have acted on that notice, and that their failure to do so warrants punitive damages. Second, the Court applies the same reasoning to the claim for negligent retention and supervision. Third, the Court rejects the same notice-based challenge to the claim for negligence infliction of emotional distress, as well as a separate argument based on proximate cause. Fourth, the Court grants summary judgment as to any claims against 12Fit owner Frank Baer individually.

         I. Negligent Hiring

         In Pennsylvania, a negligent hiring claim requires a plaintiff to show the usual elements of negligence: duty, breach, causation, and damages. Belmont v. MB Inv. Partners, Inc., 708 F.3d 470, 487-88 (3d Cir. 2013) (citing Brezenski v. World Truck Transfer, Inc., 755 A.2d 36, 42 (Pa. Super. Ct. 2000)). In addition, a plaintiff must demonstrate that the employer was on notice of the employee's propensity for violence and created a situation where the employee could harm someone. Coath v. Jones, 419 A.2d 1249, 1250 (Pa. Super. Ct. 1980); see also Rios v. Marv Loves 1, No. 13-1619, 2015 WL 5161314, at *13 (E.D. Pa. Sept. 2, 2015). The notice requirement relates to the usual elements of negligence in two ways: (1) but for the defendant's breach of the duty of reasonable care, the defendant would have known about the employee's dangerousness, and (2) the failure to know of (and act on) the dangerousness caused the plaintiff's injury.

         Two incidents from Mr. McNeill's past would have put the Gym Defendants on notice of his propensity for sexual violence: his 2007 arrest for molesting a minor and his 2014 firing from his previous employer (Hand & Stone) for allegedly sexually assaulting a client.

         The Gym Defendants' only two avenues for discovering these prior incidents were for the Gym Defendants to have checked Mr. McNeill's criminal records and asked Hand & Stone why Mr. McNeill was fired. It is undisputed that the Gym Defendants did not do so and did not otherwise verify Mr. McNeill's criminal or employment history. Thus, the issue here turns on whether the Gym Defendants should have been obliged to perform such verification, and, had they done so, would have learned (and been legally able to act on) any material information. For the reasons that follow, the Court holds that (A) the Gym Defendants breached their duty to conduct a reasonable investigation; (B) that breach caused Ms. Court's injuries; and (C) Ms. Court's damages may include punitive damages.

         A. Relying only on Mr. McNeill's massage license did not satisfy the Gym Defendants' duty of reasonable care as a matter of law.

         As an initial matter, the Gym Defendants argue that they did not breach any duty of care. They point out that they relied on Mr. McNeill's massage license in hiring him. As the Court explained in February, this reliance does not satisfy their duty of reasonable investigation as a matter of law:

The Gym Defendants argue that they satisfied any duty owed to Ms. Court because they justifiably relied on Mr. McNeill's massage therapy license, which was in good standing at the time the Gym Defendants hired Mr. McNeill. The Gym Defendants assert that the Commonwealth of Pennsylvania regulates massage therapists and that Mr. McNeill's massage license indicated that he was of “good moral character.” See 63 P.S. §§ 627.5(a)(1), 627.5(b)(2). This argument is unavailing. Pennsylvania's massage therapy licensing board relies on massage therapists to self-report “the filing of formal criminal charges.” 49 Pa. Code § 20.31(d)(2). The Court is not convinced that, as a matter of law, an employer's duty to conduct a pre-employment investigation is met solely by relying on a license subject to self-reporting requirements. Furthermore, the Court is not prepared to acknowledge a safe harbor from negligent hiring and/or supervision actions for employers that rely on a prospective employee's professional license. The Gym Defendants have provided no case law to support such a proposition.

Court, 2017 WL 569522, at *5. What is more, 12Fit owner Frank Baer now admits that it was a mistake to rely on the license alone. Plf. Statement of Facts ¶¶ 81-82. A reasonable jury could find that the Gym Defendants breached their duty of reasonable care in investigating Mr. McNeill before hiring him.

         B. A reasonable jury could find that breaching the duty of reasonable investigation caused Ms. Court's injuries.

         As described above, Mr. McNeill was arrested and charged (but not convicted) of raping a minor in 2007. A reasonable jury could conclude that the Gym Defendants' failure in 2014 to check Mr. McNeill's criminal history fell below the standard of care in hiring. Had the Gym Defendants checked Mr. McNeill's criminal background, they would have been on notice of Mr. McNeill's violent past.

         The Gym Defendants argue that their failure to run a background check was not a but-for cause of Ms. Court's injuries. Put differently, they argue that, even if they had satisfied their duty of reasonable care and learned of the 2007 arrest, they still would have hired Mr. McNeill anyway. They contend that even if an adequate background check would have put them on notice of Mr. McNeill's past, they could not have acted on that notice. The Gym Defendants arrive at this unusually candid conclusion by reasoning that they were legally obligated not to consider the 2007 arrest because of the Criminal History Records and Information Act. The CHRIA provides, in pertinent part:

(a) General rule. - Whenever an employer is in receipt of information which is part of an employment applicant's criminal history record information file, it may use that information for the purpose of deciding whether or not to hire the applicant, only in accordance with this section.
(b) Use of information. - Felony and misdemeanor convictions may be considered by the employer only to the extent to which they relate to the applicant's suitability for employment in the position for which he has applied.

18 Pa. C.S. § 9125. “Criminal history record information” includes arrests. Id. § 9102. In other words, potential employers may only use information about an applicant's convictions, and only those convictions that relate to the applicant's fitness for the particular position. See Foxworth v. Pa. State Police, 228 F. App'x 151, 154-55 (3d Cir. 2007).

         As an initial matter, the Gym Defendants here concede that they can identify only cases in which the CHRIA is a sword - imposing liability on a prospective employer for considering a prospective employee's criminal history. They cannot identify any cases that present the fact pattern here, in which an employer seeks to use the CHRIA as a shield - protecting the employer from liability to a third-party victim.

         Still, the Gym Defendants argue that the CHRIA would have made it illegal for them to consider Mr. McNeill's 2007 arrest in making their hiring decision. But the staff that hired Mr. McNeill testified in their depositions in this case that they would not have hired him had they known about his past. This does not necessarily amount to an admission that they would have violated CHRIA.

         Instead, a reasonable jury could conclude that running a criminal background check would have uncovered the 2007 arrest, and could then infer that this discovery should have touched off a further investigation. Furthermore, the jury could conclude that the investigation would have potentially yielded three ...


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