Korsak v. Honey Dew Assocs., Inc.
| Decision Date | 15 September 2015 |
| Docket Number | C.A. No. PC 13-0105 |
| Court | Superior Court of Rhode Island |
| Parties | MELISSA B. KORSAK, Plaintiff, v. HONEY DEW ASSOCIATES, INC., and BOWEN INVESTMENT, INC. Defendants. |
DECISION
Before the Court for decision is Defendant Honey Dew Associates, Inc.'s (HDA) Motion to Dismiss for Lack of Personal Jurisdiction, pursuant to Super R. Civ. P. 12(b)(6) (Rule 12(b)(6)) and HDA and Bowen Investment, Inc.'s (BII) joint motion for summary judgment, pursuant to Super. R. Civ. P. 56 (Rule 56).
This litigation stems from allegations of workplace harassment and discrimination, alleged to have transpired by Melissa Korsak (Ms. Korsak), against HDA and BII. Ms. Korsak was employed at the Honey Dew Donut shop in North Providence, Rhode Island (Centerdale store) from July 1, 2007 until January 13, 2010. Am. Compl. ¶ 56. Plaintiff contends that John Frigault (Mr. Frigault), as agent of HDA and BII, mistreated, sexually harassed, and discriminated against her while she was employed at the Centerdale store.1 Id. at ¶ 64. Mr.Frigault is the President and owner of Applied Security Technologies (AST).2 Mr. Frigault provided various security services for the Centerdale store.
There are four entities involved in the lawsuit: HDA, BII, R.B Donuts, and Centerdale Donuts, Inc. (CDI). HDA and BII are the only named parties in the instant suit. Notably, HDA, BII, and R.B. Donuts are owned by either Richard Bowen, his brother Robert Bowen, or some combination of the two.3
HDA is the sole and exclusive owner of the Honey Dew Donuts trademark as well as the associated proprietary marks, trade secrets, and methods of operation. Richard Bowen Aff. ¶ 1. HDA licenses the use of the Honey Dew name and on occasion enters into franchise agreements with local franchisees.4 Id. at ¶ 2. Here, HDA entered into a "license agreement with [BII.]" Id. at ¶ 3. The license agreement gave BII "the right to . . . grant franchisees approval to operate Honey Dew Donut shops in Rhode Island." Id. (citing License Agreement).
Pursuant to the License Agreement, BII is the subfranchisor for HDA in Rhode Island. Robert Bowen Dep. 8:14-15. As such, BII is entrusted with establishing and managing the Honey Dew franchises in Rhode Island. BII does not have employees. Id. at 10:23-11:1. Rather, BII owns a management company, R.B. Donuts,5 "that manages the Honey Due [Sic] Donut shops . . . in Rhode Island for . . . BII." Richard Bowen Dep. at 8:8-11. BII's role in the management of each store depends upon whether the store is owned by BII or by an independent third party. If a store is owned by BII, i.e., a company store, then R.B. Donuts "manage[s] the franchise[] on a day-to-day basis[.]" Robert Bowen Dep. 8:21-24. However, if a store is independently owned, like the Centerdale store, R.B. Donuts merely provides logistical "support" and conducts biannual "full" inspections as well as monthly visitations. Id. at 9:21-10:6. Regardless of whether the store is company owned or independently operated, BII ensures that each franchise "maintain[s] Honey Dew's uniformity and high standards[.]" Richard Bowen Dep. 18:20-23.
Patricia Beale6 (Ms. Beale) is an employee of R.B. Donuts. Id. at 10:14-16. Ms. Beale is responsible for "help[ing] run the company stores" and conducting "shop visitations" in Rhode Island. Beale Dep. 13:1-5; 14:7-9, May 28, 2015. Such visitations are designed to "investigat[e] [BII's] franchisees' compliance with HDA standards[.]" Robert Bowen Dep. 19:10-13. Inaddition, "[Ms. Beale] attends weekly or bimonthly meetings at HDA, [where she] gets all the information" regarding HDA's standards." Robert Bowen Dep. 19:14-21.
CDI
The Honey Dew Donut shop in Centerdale is independently owned by CDI. CDI is co-owned by Charles Tsoumakas (Mr. Tsoumakas). CDI obtained the right to operate a Honey Dew Donut franchise by entering into a Franchise Agreement with BII. As part of the Franchise Agreement, CDI pays royalty fees of seven percent of their gross sales to BII.7 See Franchise Agreement 4; Richard Bowen Aff. ¶ 11. The Franchise Agreement describes the relationship between HDA, BII, and CDI as that of independent contractors, and expressly denies any agency relationship. Franchise Agreement 19. Furthermore, the Agreement characterizes HDA's role in the Franchise Agreement as that of a third party beneficiary. Notably, however, HDA and BII reserve the right to inspect and test the premises.8 Id.
Mr. Frigault's relationship with HDA, BII, R.B. Donuts, and CDI is both complex and multifaceted. HDA previously retained Mr. Frigault to perform "secret shopper"9 operations at all of its stores, and it recommended Mr. Frigault's services to all of the Rhode Island franchises. Richard Bowen Dep. 28:2-17; 33:8-18. Similarly, R.B. Donuts, on behalf of BII, hired Mr. Frigault to perform "secret shopper" operations at all of its stores, including the Centerdale store. Robert Bowen 16:3-4; 58:6-13; 65:10-17; 108:23-25. Furthermore, he was given the authority to conduct "mini visitations"10 and "tape reviews"11 at all of BII's company stores. Id. at 98:16-25; 104:12-22; 105:18-22; Beale Dep. 36:3-37:15; 38:18-23. Finally, CDI hired Mr. Frigault to perform "tape reviews," Rhode Island Commission for Human Rights (RICHR) Hr'g Tr. 21:4-7; 24:11-17; 44:1-13, Mar. 16, 2012, and "mini reviews," id. at 44:18-24; 58:2-4, of the Centerdale store.
Defendant HDA argues that the case should be dismissed because the minimum contacts necessary to establish personal jurisdiction are lacking. In support, Defendant argues that Plaintiff cannot establish general personal jurisdiction because HDA is a Massachusetts corporation with a principal place of business at 2 Taunton Street in Plainville, Massachusetts. Furthermore, as to specific personal jurisdiction, HDA attacks the credibility of the Plaintiff's assertion that Mr. Frigault was an agent of HDA and that HDA exerted control over the day-to-day business and employment matters at CDI's Centerdale store. Thereby, HDA argues that its contacts with the forum are insufficient to establish specific personal jurisdiction.
In response, Plaintiff argues that the exercise of specific personal jurisdiction over HDA is appropriate because HDA, through BII and R.B. Donuts, had an agency relationship with Mr. Frigault. In addition, Plaintiff contends that the Court can exercise general personal jurisdiction over the Defendant because 1) HDA has a direct franchise relationship with the two stores in Cumberland and Lincoln; 2) HDA licenses the right to franchise additional Honey Dew Donuts stores in Rhode Island to BII; and 3) HDA buys advertising in Rhode Island with the proceeds of royalties collected from Rhode Island franchises.
Defendants HDA and BII have brought a joint motion for summary judgment. Defendants contend that this Court should grant summary judgment in their favor because: 1) theRICRA only reaches "intentional discrimination," and thus all of Plaintiff's claims that are premised on the Defendants' vicarious liability for Mr. Frigault's alleged acts must be dismissed; 2) Plaintiff cannot demonstrate the Defendants' are vicariously liable under RICRA for the alleged actions of Mr. Frigault because no agency relationship existed between him and the Defendants; 3) when Plaintiff signed the Workers' Compensation Release, she signed a binding release and waiver of claims that precludes her from bringing the present action; and 4) Plaintiff cannot establish a prima facie case of quid pro quo harassment, hostile work environment sexual harassment, or sex discrimination.
In response, Plaintiff contends that Mr. Frigault was the apparent agent of HDA and BII when he sexually harassed her. Moreover, Plaintiff argues that despite the fact that Honey Dew Donuts cuts its business into multiple corporate entities, there is only one Honey Dew Donuts. As such, the Plaintiff contends that during the time when she was allegedly sexually harassed, she believed that Mr. Frigault was either an agent or employee of Honey Dew Donuts. Furthermore, Plaintiff posits that she can establish a prima facie case as to each of her causes of action.
"It is well established that to withstand a defendant's Rule 12(b)(2) motion to dismiss a complaint for lack of in personam jurisdiction, a plaintiff must allege sufficient facts to make out a prima facie case of jurisdiction." Cerberus Partners, L.P. v. Gadsby & Hannah, LLP, 836 A.2d 1113, 1118 (R.I. 2003) (citing Ben's Marine Sales v. Sleek Craft Boats, 502 A.2d 808, 809 (R.I.1985)). "To establish a prima facie showing of personal jurisdiction in Rhode Island, a plaintiff's allegations must satisfy the demands of Rhode Island's long-arm statute, [G.L. 1956] § 9-5-33"12 and comport with the requirements of constitutional due process. Cassidy v. Lonquist Mgmt. Co., LLC, 920 A.2d 228, 232 (R.I. 2007) (citing Rose v. Firstar Bank, 819 A.2d 1247, 1249 (R.I. 2003)).
Rhode Island's "long-arm" statute provides in pertinent part that "[e]very foreign corporation . . . that shall have the necessary minimum contacts with the state of Rhode Island, shall be subject to the jurisdiction of the state of Rhode Island . . . in every case not contrary to the provisions of the constitution or laws of the United States."13 Sec. 9-5-33(a). "This language has been interpreted to mean that Rhode Island courts may exercise jurisdiction over foreign defendants within the parameters set forth by the United States Constitution." McKenney v. Kenyon Piece Dye Works, Inc., 582 A.2d 107, 108 (R.I. 1990). As such, "the statutory inquiry necessarily merges with the constitutional inquiry, and the two inquiries essentially becomeone.'" Nucor Corp. v. Bell, 482 F. Supp. 2d 714, 721 (D.S.C. 2007) (quoting ESAB Group,...
To continue reading
Request your trial