Doe v. Massage Envy Franchising, LLC ( 2021 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
JANE DOE (a fictitious name),
Plaintiff,
7 C.A. No. $20C-05-025 RFS
MASSAGE ENVY FRANCHISING,
LLC
and
DDW ENTERPRISES, LLC
and
SAVAD, LLC D/B/A
MASSAGE ENVY CHRISTIANA
and
ALICIA NORRIS
and
HAND AND STONE FRANCHISE
CORPORATION
and
GWS VENTURES, INC.
and
JD WELLNESS, LLC
and
GERALD L’ HEUREUX,
Defendants.
ORDER
Submitted: 12/10/2020
Decided: 1/7/2021
Philip T. Edwards, Esq., 1011 Centre Rd., Suite 210 Wilmington, DE 19805 and V. Paul
Bucci, II, Esq. and M. Stewart Ryan, Esq., 1435 Walnut Street, Suite 700 Philadelphia, PA
19102, Attorneys for Plaintiff.
Maria R. Granaudo Gesty, Esq., Delaware Corporate Center I, 1 Righter Parkway, Suite
130, Wilmington, DE 19803, Attorney for Defendant, Hand and Stone Franchise Corporation.
I. INTRODUCTION
Before the Court is Hand and Stone Franchise Corporation’s (“Hand and Stone”) Motion
to Dismiss Plaintiffs Second Cause of Action: Vicarious Liability. For the reasons that follow,
Hand and Stone’s Motion to Dismiss is DENIED.
Il. FACTUAL AND PROCEDURAL HISTORY
On or about June 30, 2018, Jane Doe (“Plaintiff”) checked into Massage Envy —
Christiana location for a massage. Plaintiff alleges she was sexually assaulted by Christopher
Dorman (“Dorman”), an employee at Massage Envy, giving rise to Plaintiff bringing numerous
claims against multiple defendants before the Court.
Prior to working at Massage Envy, Dorman was an employee of a Hand and Stone
franchisee location owned and operated by JD Wellness, LLC (the “Franchisee”).! Plaintiff
alleges Dorman had several complaints for inappropriate sexual touching when he was an
employee of the Franchisee; however, Dorman continued to maintain his massage therapy
license. These allegations did not involve Plaintiff.
On May 21, 2020, Plaintiff filed her complaint in this Court seeking damages arising out
of the alleged sexual assault. Plaintiff brought multiple claims against Hand and Stone: (1)
Vicarious Liability; (2) Negligence; (3) Failure to Rescue; (4) Breach of Duty to Warn; (5)
Fraudulent Concealment; (6) Negligence Per Se; and (7) Negligent Infliction of Emotional
' JD Wellness, LLC was previously named in the suit as JDY Ventures, LLC d/b/a Hand and Spa.
2
Distress. Plaintiff contends Hand and Stone should be liable for Dorman’s actions for their
failure to report Dorman’s behavior while an employee at the Franchisee.”
Hand and Stone moves to dismiss Plaintiff's cause of action for vicarious liability,
arguing there is no legally cognizable theory under which Hand and Stone could be vicariously
liable for the intentional acts of Dorman.
Ill. DISCUSSION
Superior Court Civil Rule 12(b)(6) provides that a defendant may bring a motion to
dismiss if the claimant fails to state a claim upon which relief can be granted.3 “Dismissal is
limited to those cases in which the Court determines ‘with reasonable certainty that, under any
set of facts that could be proven to support the claims asserted, the plaintiff would not be entitled
to relief.’
Plaintiff alleges instances of sexual assault occurring at Hand and Stone franchise
locations, the Franchisee, are reported to Hand and Stone.° Plaintiff contends Hand and Stone
and its franchisees have failed to report sexual assault, allowing abusive therapists to maintain
their massage therapy license and have unfettered access to women who are in “extremely
vulnerable positions.’”®
Plaintiff points to Hand and Stone’s franchise agreement, claiming Hand and Stone
formulates all policies and procedures that its franchisees are required to follow, including, but
not limited to those relating to the prevention, investigation, reporting and handling of sexual
assault allegations.’ Further, Plaintiff pleads franchisees are regularly trained by Hand and Stone,
* Dorman was not an employee of Hand and Stone at the time of Plaintiff's alleged assault.
3 Super. Ct. Civ. R. 12.
“Markow v. Synageva Biopharma Corp., 2016 WL 1613419, at *4 (Del. Super. Ct. Mar. 3, 2016) (citing Fumari v.
Wallpang, Inc., 2014 WL 1678419, at *3 (Del.Super. Apr. 16, 2014)).
> PI.’s Comp.
° Id. at { 76.
1 Id. at ¥ 78.
or its agents, on how to comply with said policies and procedures.® Plaintiff also alleges Hand
and Stone supervises its franchisees to ensure compliance with Hand and Stone policies and
procedures in the day-to-day operations.’
Hand and Stone argues Plaintiff has not alleged that Hand and Stone had the right to
directly and/or indirectly control Dorman’s day-to-day job responsibilities. Further, Dorman was
not an employee of Hand and Stone at the time of assault alleged in the complaint.
Whether Hand and Stone can be liable for the acts of Dorman, an employee of the
Franchisee, depends on if an agency relationship exists between Dorman and Hand and Stone.
“Under Delaware law, a ‘franchisor may be held to have an actual agency relationship with its
franchisee when the former controls, or has the right to control the latter's business.’”!° “Where a
franchise agreement exists and it goes ‘beyond the stage of setting standards, and allocates to the
franchisor the right to exercise control over the daily operations of the franchise, an agency
relationship exists.’”!!
At the motion to dismiss stage, the threshold Plaintiff must meet is low.'? In the
complaint, Plaintiff pleads Hand and Stone had a role in the daily operations of the Franchisee. If
discovery proves Hand and Stone had control over the Franchisee, an agency relationship may be
found.
Although the Court finds it possible for an agency relationship to exist between Hand and
Stone and the Franchisee and its employees, the acts pleaded in the complaint took place when
Dorman was no longer an employee of the Franchisee. Plaintiff argues Hand and Stone can be
8 Id.° Id."° Cumpston v. McShane, 2009 WL 1566484, at *3 (Del. Super. Ct. June 4, 2009) (citing Billops v. Magness Const.
Co., 391 A.2d 196, 197 (Del. 1978)).
ql ld.
"2 Johnson v. Preferred Prof'l Ins. Co.,91 A.3d 994, 1013 (Del. Super. Ct. 2014).
4
vicariously liable because they failed to report Dorman and then recommended him for
employment at Massage Envy — Christiana, ratifying Dorman’s conduct.
Plaintiff points to the Restatement (Third) of Agency in support of the contention Hand
and Stone ratified Dorman’s conduct. “A person ratifies an act by ‘manifesting assent that the act
shall affect the person's legal relations’ or by engaging in ‘conduct that justifies a reasonable
assumption that the person so consents.’”! Plaintiff argues Hand and Stone ratified Dorman’s
conduct and any foreseeable sexual assault by Dorman.
Plaintiff pleads Hand and Stone recommended Dorman for employment at Massage
Envy — the establishment Plaintiff was allegedly sexually assaulted at — even though Hand and
Stone was aware of Dorman’s misconduct. Plaintiff pleads the following:
Prior to the assault alleged above, upon information and belief, Defendants Hand
and Stone and/or Hand and Spa knew, had reason to know, or were otherwise on
notice of the unlawful sexual conduct of Dorman. Defendants Hand and Stone
and Hand and Spa failed to take reasonable steps and failed to implement
reasonable safeguards to avoid acts of unlawful sexual conduct in the future by
Dorman, including, but not limited to, choosing not to report Dorman to
authorities after knowing he was a danger to female customers and/or
recommending Dorman for employment with MEF and/or ME Christiana. '4
Further, Plaintiff pleads,
Through their failure to timely reprimand and sanction the acts referenced herein,
and for all of the other reasons set forth in this Complaint including, without
limitation, its failure to take the steps necessary to prevent the occurrence of such
reprehensible acts, Defendants ratified said actions and, accordingly, are
vicariously liable for the actions of Dorman.!5
' Vichi v. Koninklijke Philips Elecs., N.V., 85 A.3d 725, 802 (Del. Ch. 2014) (citing Restatement (Third) of Agency
§ 4.01(2)).
‘4 PI.’s Comp. at J 132.
'S Id at] 134.
Moreover, the Standards of Professional Conduct under the Board of Massage and
Bodywork, a regulated profession, provides:
Any licensee who has knowledge that another licensee has violated the Standards
of Professional Conduct set forth in section 11.0, or any other Board law, Rule or
Regulation, shall present that information by complaint to the Division of
Professional Regulation for investigation. '°
Taking Plaintiff's allegations as true, the Court finds Plaintiff sufficiently pleads
averments to survive a motion to dismiss. Hand and Stone had a duty to report violations to the
appropriate authority. Not only does Plaintiff plead Hand and Stone failed to report Dorman’s
conduct, Plaintiff further pleads Hand and Stone recommended Dorman for employment at
Massage Envy. Based on the allegations in the complaint, Hand and Stone’s acquiescence could
be reasonably assumed to be consenting to Dorman’s actions and ratifying Dorman’s conduct.
“When considering a motion to dismiss, the Court must read the complaint generously,
accept all of the well-plead allegations contained therein as true, and draw all reasonable
inferences in a light most favorable to the non-moving party.”!” “[W]hen deciding a motion to
dismiss, the Court will not adjudicate contested issues of fact on a motion to dismiss, nor will it
deem a pleading inadequate under Rule 12(b)(6) simply because a defendant presents facts that
appear to contradict those plead by the plaintiff.”'’ Therefore, at this stage, and prior to
discovery, the Court finds Plaintiff sufficiently pleaded facts to support the claim set forth
against Hand and Stone.
'® Code Del. Regs. 5300-11.3.
'7 Doe 30's Mother v. Bradley, 58 A.3d 429, 443 (Del. Super. Ct. 2012).
18 ld.
V. CONCLUSION
Considering the foregoing, Defendant’s Motion to Dismiss is DENIED.
IT IS SO ORDERED. LL, WIE
(
RicKard F. Stokes, Judge