Karanik v. Cape Fear Acad., Inc.

• Decision Date: 17 June 2022
• Docket Number: 7:21-CV-169-D
• Parties: Elizabeth KARANIK, Charlotte Karanik, by her parents and next friends, John Karanik and Kimberly Karanik, and Natalie Pressley, Plaintiffs, v. CAPE FEAR ACADEMY, INC., Defendant.
• Court: U.S. District Court — Eastern District of North Carolina

608 F.Supp.3d 268

Elizabeth KARANIK, Charlotte Karanik, by her parents and next friends, John Karanik and Kimberly Karanik, and Natalie Pressley, Plaintiffs,

v.CAPE FEAR ACADEMY, INC., Defendant.

No. 7:21-CV-169-D

United States District Court, E.D. North Carolina, Southern Division.

Signed June 17, 2022

Gary K. Shipman, Shipman & Associates, LLP, Wilmington, NC, for Plaintiffs Elizabeth Karanik, Charlotte Karanik, Natalie Pressley.

Kimberly Karanik, Pro Se.

Patrick Melton Mincey, Zachary C. Bolitho, Vincent Eisinger, Cranfill Sumner & Hartzog LLP, Raleigh, NC, Stephen Jenkins Bell, Cranfill Sumner & Hartzog LLP, Wilmington, NC, for Defendant.

ORDER

JAMES C. DEVER III, United States District Judge On December 27, 2021, Elizabeth Karanik ("Elizabeth"), Charlotte Karanik ("Charlotte") by and through her parents John and Kimberly Karanik ("John" and "Kimberly," respectively), and Natalie Pressley ("Natalie") (collectively, "plaintiffs") filed an amended complaint against Cape Fear Academy, Inc. ("CFA" or "defendant") alleging sex discrimination and retaliation in violation of Title IX, 20 U.S.C. §§ 1681, et seq., intentional infliction of emotional distress ("IIED"), negligent infliction of emotional distress ("NIED"), breach of contract, and violations of the covenant of good faith and fair dealing [D.E. 20]. On January 10, 2022, CFA moved to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6) and filed a memorandum in support [D.E. 22, 23]. On January 31, 2022, plaintiffs responded in opposition [D.E. 24]. On February 14, 2022, CFA replied [D.E. 25]. As explained below, the court grants in part and denies in part defendant's motion to dismiss.

I.

Plaintiffs’ allegations concern two sets of facts. The first set of facts concerns plaintiffs’ experiences at CFA during the 2020-21 academic year and the summer of 2021. The second set of facts concerns CFA seeking and obtaining a loan through the Paycheck Protection Program ("PPP"), which the Small Business Administration ("SBA") administers under the CARES Act, Pub. L. No. 116-136, § 1102, 134 Stat. 281, 286 (2020) (codified at 15 U.S.C. § 636 ).

A.

During the 2020-21 academic year, Elizabeth, Charlotte, and Natalie were high-school students at CFA, a private school in Wilmington, North Carolina, that is organized as a non-profit corporation under North Carolina law. See Am. Compl. [D.E. 20] ¶¶ 1–3, 5, 10. Elizabeth and Natalie were seniors, and Charlotte was a sophomore. See id. ¶ 38. Students attend CFA pursuant to enrollment contracts between the school and the students’ parents or guardian. See id. ¶¶ 47, 50. During the 2020–21 academic year, Natalie enrolled in an Advanced Placement ("AP") Literature course. See id. ¶ 62. Plaintiffs allege that throughout the school year, during the AP Literature class, male students made dismissive, inappropriate, or offensive remarks and jokes about women, sexual assault on women, and violence toward women. See, e.g., id. ¶¶ 63–65, 69, 77, 88, 91–96. They allegedly did so despite knowing Natalie was sexually assaulted while attending a boarding school, suffered from post-traumatic stress disorder

, and risked experiencing serious emotional responses to materials in the course that depicted violence or sexual assault toward women. See

id. ¶¶ 42–44, 69. Plaintiffs allege that after some time, this group of male students in Natalie's AP Literature class continued making offensive remarks and jokes in part because they "had become quite aware of the things that they could do or say to create a reaction from Natalie." Id. ¶ 81. The male students’ behavior made Natalie dread attending class and caused emotional distress, including panic attacks. See id. ¶¶ 74, 81, 89, 97. Natalie also attended counseling due to the negative effects the male students’ behavior had on her. See id. ¶ 90.

During the Fall 2020 semester, Natalie attempted to discuss her concerns about the male students’ behavior during AP Literature class sessions with faculty and administrators at CFA with almost no success. Natalie's AP Literature teacher suggested Natalie talk to CFA's counselor and AP Psychology teacher, Tobi Ragon("Ragon"). See id. ¶ 66. Natalie discussed her concerns several times with Ragon, who "left Natalie with the impression" Ragon had no authority to address Natalie's concerns. Id. ¶¶ 69–71, 86, 97. Ragon instead encouraged Natalie to "do a better job ‘advocating for herself’ " in class and to "take it upon herself" to "use her own ‘pain’ and challenge the male students in the class." Id. ¶ 69. Even though "Natalie was fully capable of reading and analyzing the material," CFA's other attempted solution was to have Natalie self-study different reading materials than the rest of the students in the AP Literature course for two weeks rather than participate with the rest of the class. Id. ¶ 81; see id. ¶ 78.

At the beginning of the Spring 2021 semester, the school reassigned Natalie into a new statistics class with some of the same male students involved in the AP Literature class harassment. See id. ¶ 84. Natalie was the only female student in that statistics class. See id. Natalie told Ragon she was uncomfortable with the new statistics class but the school refused to allow her to transfer to a different statistics class, and Ragon told Natalie that receiving accommodations would hurt Natalie over time because the "real world doesn't accommodate mental illness." Id. ¶ 86. After several days of the new class and another conversation with Ragon, CFA allowed Natalie to attend her statistics class via Zoom. See id. ¶ 87. The male students in the AP Literature class continued with the same behavior in the Spring 2021 semester. See id. ¶ 88.

In the Spring 2021 semester, Natalie went to Ragon again after she had a panic attack in class after an AP Literature class discussion in which the male students joked about rape. See id. ¶¶ 90–97. Ragon also had individual and group conversations with Natalie, other female students, and some male students who told Ragon about experiences they had at CFA similar to those Natalie had experienced. See id. ¶¶ 98–100. Ragon again "left the impression" she had no authority to do anything about the male students’ conduct but suggested talking to Jamison Fee ("Fee"), CFA's dean of students. See id. ¶ 100.

Over the span of a week, Elizabeth and other students took concerns about "sexual harassment and unwelcome conduct" by "certain male students" to Fee in meetings and via email. Id. ¶¶ 101–05. Fee asked Elizabeth to provide specific examples of misconduct. See id. ¶ 102. In an email, Elizabeth recounted to Fee that her former boyfriend called her a "hoe" and a "slut" and that other male students had asked her or encouraged her to have sex with another CFA student. Id. Fee never met with Natalie, even though she attempted to meet with him several times to discuss her experiences in the AP Literature class. See id. ¶ 106. Plaintiffs allege that based on their meetings with Fee, they and other students "were assured and therefore reasonably believed that CFA would undertake an investigation into these male students’ conduct, and appropriate action would be taken." Id. ¶ 104. Besides asking students to send Fee information and evidence to support their concerns, plaintiffs do not know whether CFA conducted an investigation. See id. ¶ 105; cf. id. ¶ 113.

In May 2021, CFA administrators announced the student graduation speakers. The CFA administration chose some of the male students that Natalie, Elizabeth, and others had alleged engaged in sexual harassment or unwelcome conduct toward them to be graduation speakers. See id. ¶ 107. Natalie, Elizabeth, and other students objected to these male students speaking at graduation and voiced their concerns to CFA faculty members. See id. ¶ 108. When the school took no action, Natalie, Elizabeth, and other students proposed to Ragon the idea of a petition to have the objectionable graduation speakers removed. Ragon "endorsed" the idea, and a different faculty member said a petition was a "smart" idea. Id. ¶ 114. Thereafter, more than 20 students collaborated to write a petition, which Elizabeth posted online at Change.org. See id. ¶¶ 116–17. The posted petition stated:

The senior class feels that those chosen to speak at graduation and commencement do not accurately represent the class of 2021. The senior class feels [certain identified male students] do not deserve speaking roles in these events. The group feels these students have caused harm to fellow CFA students and would be setting a bad example for our school community. The class feels the speakers chosen for these events should be people who care about their fellow peers and be people who support their classmates. The class would like to remove their speaking roles and replace them with either elected peers or teachers. We ask that they be removed from these roles or step down from them knowing their classmates will not respect their speeches due to their own lack of respect in the CFA community.

Id. ¶ 117. The petition garnered 27 student signatures before the CFA administration had the petition taken down a few hours later. See id. ¶¶ 118, 120. Charlotte was among the students who signed the petition. See id. ¶¶ 118–19.

In response to the petition, Fee met with Elizabeth. See id. ¶¶ 121-26. During the meeting, Elizabeth recounted to Fee the events leading to the petition. See id. ¶¶ 122–24. Elizabeth refused to tell Fee who collaborated with her to write the petition. See id. ¶¶ 125, 130. Fee told Elizabeth that because she posted the petition, she would have to "take the rap for it" and that the petition constituted "reckless endangerment [and] false accusations." Id. ¶¶ 126, 129. Natalie and other students also attempted to meet with Fee about the petition, but he refused to meet with them. See id. ¶¶ 131, 134. Fee told Elizabeth's parents she would appear before CFA's Honor Council, stating that...