Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_08-cv-01909/USCOURTS-azd-2_08-cv-01909-2/pdf.json

Nature of Suit Code: 440
Nature of Suit: Other Civil Rights
Cause of Action: 42:2000e Job Discrimination (Employment)

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WO

NOT FOR PUBLICATION

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

Paula R. Guth, 

Plaintiff, 

vs.

Radha Corporation, an Arizona

corporation dba Best Western Hotel and

Western Casa Grande Suites; Bakul Mehta

and Bavana Mehta, husband and wife, 

Defendants. 

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No. CV-08-1909-PHX-GMS

ORDER

Pending before the Court is Defendants Radha Corporation and Bakul and Bavana

Mehta’s Motion for Summary Judgment. (Dkt. # 73.) For the following reasons, the Court

grants the Motion in part and denies it in part.

BACKGROUND

I. The Parties

Plaintiff is a former breakfast-room hostess at the Best Western Casa Grande Suites

(“Best Western”), a hotel in Casa Grande, Arizona. (Dkt. # 73, Ex. 1 at 2.) Defendant Radha

Corporation (“Radha”) is a California corporation authorized to do business in Arizona. (Id.

at 1.) 

The parties dispute each Defendant’s role in this case. Both parties agree that Radha

owned and operated Best Western from May 2005, when Radha purchased Best Western,

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1

 Some of the captions and briefs provided to the Court refer to the individual

Defendants’ last name “Mehta,” while filings spell the name “Metha.” The Court will spell

the name “Mehta” in this Order.

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until October 2008, when Radha sold Best Western to Pinal Lodging LLC. (Id.) Both parties

also agree that Defendants Bakul and Bavana Mehta (collectively, the “Mehtas”)1

 were

shareholders in, and directors and officers of, Radha, but Defendants further contend that the

Mehtas never held any direct ownership interest in Best Western. (Id. at 1–2.) Plaintiff,

however, also alleges in her Complaint that the Mehtas “dba Best Western . . . [were] the

employer of Plaintiff” and that “Best Western Hotel and Best Western Casa Grande Suites

are sole proprietorships owned by . . . [the Mehtas].” (Dkt. # 36 at 1.) 

II. Factual Background

In April 2007, Radha hired Tim Vorhies (“Vorhies”) as Best Western’s general

manager with responsibility for the hotel’s day-to-day operations. (Dkt. # 73, Ex. 1 at 2.) As

general manager, Vorhies conducted a sexual harassment class for Best Western’s employees

and instituted an anti-sexual-harassment policy that prohibits, among other things,

unwelcome sexual advances and sexual physical conduct. (Id.) 

In August 2007, while Plaintiff was bending over a sink, Raul Neria (“Neria”), a

maintenance employee at the Best Western, pinned Plaintiff down, ran his hands along her,

and put his hands on her. (Dkt. # 73, Ex. 1 at 2.) Plaintiff reported Neria’s actions to Cindy

Isom (“Isom”), Best Western’s head housekeeper, who said she would remedy the situation.

(Id. at 3.) At some point, Vorhies then learned from Isom that Neria was being “overly

friendly” with Plaintiff and other female employees. (Id.) While, with respect to Plaintiff,

the Isom affidavit does not explicitly negate the assertion that Isom told Vorhies that Neria

was being “overly friendly” with Plaintiff, the affidavit also states that Isom continuously

raised other complaints about sexual incidents between Neria and other female employees.

After learning of this, Vorhies initiated an investigation concerning Neria and several

other female employees, determining that Neria’s conduct violated the sexual harassment

policy. (Id. at 2–3.) Vorhies then discussed Plaintiff’s complaint with Mr. Mehta and hired

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2 The record issomewhat unclear asto when these other incidents occurred and when

Isom brought them to Vorhies’s and Mr. Mehta’s attention. It is plausible, however, that at

least some of these incidents occurred prior to the first inappropriate contact between Neria

and Plaintiff in August 2007 and that some occurred after August 2007.

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a Spanish translator because Neria speaks little English. (Id.) Using the translator, Vorhies

reminded Neria of the anti-sexual-harassment policy, explained to Neria that there would be

consequences (including firing) if Neria failed to comply, and issued a written warning. (Id.;

Dkt. # 77, Ex. E.) According to Isom, Neria indicated that he would follow the sexual

harassment policy. (Dkt. # 77, Ex. E.)

Despite this meeting, Isom’s affidavit suggests that the harassment continued, at least

with respect to female employees other than Plaintiff. At some point in time, Isom reported

to Vorhiesthat Neria had harassed both her and other female employees.2 (Dkt. # 77, Ex. E.)

For instance, Isom indicated that she told both Vorhies and Mr. Mehta that Neria would make

other female employees feel uncomfortable by stalking them, staring at them, and trying to

touch them. (Id.) Isom further alleged that Neria attempted to kiss her and shoved his penis

into her back. (Id.) After reporting these incidents to management, Isom contends that

neither Vorhies nor Mr. Mehta took any action and that Vorhiestold Isom thatshe “need[ed]

to do things[his] way” so thatshe “can keep [her] job another day.” (Id.) Defendants objects

to Isom’s affidavit as hearsay, but the Court considers the affidavit for purposes of this

Motion only. First, it is not clear from Isom’s affidavit that she knew about harassment only

because other women told her about it; rather, Isom arguably has personal knowledge of the

harassment, meaning she need not rely on other employees’ statements to testify. Second,

to the extent that Defendants contend Isom’s testimony as to what she told Vorhies is

hearsay, the statements are not hearsay because they would be offered not to prove the truth

of the matter asserted (that harassment occurred), but rather to show Vorhies’s knowledge

of claims of harassment. See Stevens v. Moore Bus. Forms, Inc., 18 F.3d 1443, 1449 (9th Cir.

1994) (holding thatstatements admitted to prove a person’s knowledge, as opposed to prove

the truth of the matters asserted, are not hearsay). Isom’s affidavit is not critical to

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3

 Plaintiff initially alleges different dates for the incident, but Plaintiff’s Response

admits the event occurred on April 7, 2008. At this time, the Court need not make a factual

determination of the date of this event. As discussed below, even if this event took place on

April 7, Plaintiff still has still created an issue of fact as to whether a hostile work

environment existed.

4

 Plaintiff made other statements suggesting that she did not immediately inform

Vorhies of the event, but this is an issue of fact. The parties also dispute whether Plaintiff

told Vorhies only that Neria was being “overly friendly” or whether Plaintiff said that Neria

touched her inappropriately.

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determining if Neria created a sexualized environment, but instead the affidavit importantly

demonstrates Defendants’ knowledge of allegations about Neria’s actions and Defendants’

subsequent refusal to investigate or to make corrections.

While a reasonable jury could find that Isom’s affidavit demonstrates that Neria

continued to harass other female employees even after Vorhies instructed him not to do so,

the parties do not dispute that Neria stayed away from Plaintiff from August 2007 until at

least March of 2008. (Dkt. # 73, Ex. 1 at 4.) In the Spring of 2008, Plaintiff began seeing

Neria taking the trash bags from the breakfast area, during which time Plaintiff saw Neria

about two of every five days. (Dkt. # 73, Ex. 1 at 4.) Plaintiff explained that, in mid-to-lateMarch, she told Vorhies that Neria was “getting friendly again” and that she wanted to “get

him out of [her] hair,” but “maybe in a bit stronger terms.” (Id.) Vorhies told Plaintiff he

would take care of it, but it is unclear what action, if any, Vorhies took in response to this

complaint. (Id.)

Later in the Spring of 2008, on what the parties seem to agree is April 7, 2008, Neria

approached Plaintiff from behind, gave her a “bear hug,” bit her on the ear and the neck, and

said that it was his birthday.3

 (Id. at 5–6.) Plaintiff contends that, shortly after the event, she

informed Vorhies, who told Plaintiff that he would take care of it.4

 (Id. at 6.) Vorhies met

with Neria about the event, but Neria had some difficulty comprehending because of the

language barrier. (Id.) To provide better communication, Vorhies apparently attempted to

contact an interpreter, but was unable to locate one. (Id.) While Vorhies attempted to find

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5

 Plaintiff contends that Defendants should be barred from presenting evidence

suggesting that Neria did not touch Plaintiff on April 8 because Defendants allegedly

destroyed the video that shows this incident. While Plaintiff’s allegations, if true, may

warrant an adverse inference in Plaintiff’s favor, no additional sanction is necessary at this

point because Defendants agree with Plaintiff’s account of the facts on this issue.

6

 The parties dispute whether Plaintiff knew Neria no longer worked at Best Western.

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an interpreter, Mr. Mehta also told Neria not to touch any female employees. (Id.)

Defendants do not appear to have taken any other action at this time. 

On April 8, 2008, which was as little as one day after the previous incident, Neria and

Plaintiff were not scheduled to be at the Best Western at the same time because Neria’s

scheduled start-time was one hour after Plaintiff’s scheduled end-time. (Id. at 7.) Neria

apparently arrived early. (Id.) At this point, Neria put Plaintiff into a position where she

could not move, with an erection in her buttocks, and grabbed her breasts. (Id.) Vorhies

observed this on a television monitor, and he immediately called Plaintiff into the breakfast

room to tell her that he would deal with the incident.5

 (Id. at 7–8.) According to Vorhies, he

told Neria to stay away from the female employees for the rest of the day. (Id. at 8.) After

Vorhies separated the two, Plaintiff never interacted with Neria again. (Id. at 9.)

Vorhies contacted Mehta, and the two agreed to call an interpreter to do more

investigation and to monitor Neria. (Id. at 8.) At some point, Plaintiff left and contacted the

police, who eventually discussed the situation with Vorhies and Neria, although the language

barrier again limited conversation. (Id.) In the meantime, Vorhies told Neria to leave the

premises until the next day. The police department and Vorhies continued their investigation

by interviewing Neria with a Spanish-speaking officer and by interviewing thirteen female

employees. (Id. at 9.) On April 11, 2008, three days after the final incident, Vorhies

terminated Neria. (Id.)

Plaintiff contends she was unaware that Neria had been fired,6

 and she quit working

at Best Western on April 22, 2008. Plaintiff explained that she quit because she felt that

management did not correct or stop Neria’s behavior and because she felt threatened. (Dkt.

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# 77 at 14.) After apparently proceeding through her administrative remedies, Plaintiff filed

this lawsuit, alleging violation of Title VII of the Civil Rights Act of 1964 (“Title VII”), 28

U.S.C. § 2000e, et seq.

LEGAL STANDARD

Summary judgment is appropriate if the evidence, viewed in the light most favorable

to the nonmoving party, shows “that there is no genuine issue as to any material fact and that

the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(c). Substantive

law determines which facts are material, and “[o]nly disputes over facts that might affect the

outcome of the suit under the governing law will properly preclude the entry of summary

judgment.” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986); see Jesinger v. Nev.

Fed. Credit Union, 24 F.3d 1127, 1130 (9th Cir. 1994). The moving party “bears the initial

responsibility of informing the district court of the basis for its motion, and identifying those

portions of [the record] which it believes demonstrate the absence of a genuine issue of

material fact.” Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Then, the burden is on

the nonmoving party to establish a genuine issue of material fact. Id. at 322–23. The

nonmoving party “may not rest upon the mere allegations or denials of [the party’s]

pleadings, but . . . must set forth specific facts showing that there is a genuine issue for trial.”

Fed. R. Civ. P. 56(e); see Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,

586-87 (1986). At the same time, because “[c]redibility determinations, the weighing of the

evidence, and the drawing of legitimate inferences from the facts are jury functions, not those

of a judge, . . . [t]he evidence of the nonmovant is to be believed, and all justifiable

inferences are to be drawn in his favor” at the summary judgment stage. Anderson, 477 U.S.

at 255 (citing Adickes v. S.H. Kress & Co., 398 U.S. 144, 158-59 (1970)); Harris v. Itzhaki,

183 F.3d 1043, 1051 (9th Cir. 1999) (“Issues of credibility, including questions of intent,

should be left to the jury.”) (citations omitted). 

DISCUSSION

Plaintiff has established a genuine issue of material fact regarding whether Defendants

are liable for creating a hostile work environment. Plaintiff, however, has not established any

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genuine issues sufficient to defeat summary judgment on her constructive discharge and

punitive damages claims. Plaintiff also has not created a genuine issue of fact as to whether

the Mehtas owned Best Western, and thus the Mehtas are not subject to liability.

I. Summary Judgment Is Inappropriate on the Hostile Work Environment Claim.

Title VII prohibits an employer from discriminating based on sex, and this includes

sexual harassment. See 42 U.S.C. § 2000e-2(a)(1) (prohibiting an “employer”from

discriminating based on sex); Meritor Sav. Bank, FSB v. Vinson, 477 U.S. 57, 66 (1986)

(interpreting discrimination to include sexual harassment). Where a plaintiff alleges

“harassment by a co-worker[,] . . . the employer can be held liable only where ‘its own

negligence is a cause of the harassment.’” Swenson v. Potter, 271 F.3d 1184, 1191 (9th Cir.

2001) (quoting Burlington Indus., Inc. v. Ellerth, 524 U.S. 742, 759 (1998)). “Title VII

liability is direct, not derivative: An employer is responsible for its own actions or omissions,

not for the co-worker’s harassing conduct.” Id. at 1191–92. If the employer becomes aware

of sexually-harassing conduct, therefore, an employer is liable only if it “fails to take

corrective action” or “takes inadequate action that emboldens the harasser to continue [his

or her] misconduct.” Id. at 1192; see also Hostetler v. Quality Dining, Inc., 218 F.3d 798,

811 (7th Cir. 2000) (explaining that the employer’s negligence is thus based not on “what

occurred before the employer was put on notice[,] . . . but for the harm that the employer

inflicted on the plaintiff as a result of its inappropriate response”). 

This corrective action must be “‘reasonably calculated to end the harassment[,]’”

which requires two steps. Swenson, 271 F.3d at 1192 (quoting Nichols v. Azteca Rest.

Enters., Inc., 256 F.3d 864, 875 (9th Cir. 2001)). First, the employer must take “temporary

steps to deal with the situation while it determines whether the complaint is justified.” Id.

Second, the employer must take “permanent remedial steps . . . once it has completed its

investigation.” Id. Additionally, “[t]he reasonableness of the remedy depends on [the

employer’s] ability to: (1) ‘stop harassment by the person who engaged in the harassment’

. . . and (2) ‘persuade potential harassers to refrain from unlawful conduct.’” Hardage v. CBS

Broad., Inc., 427 F.3d 1177, 1186 (9th Cir. 2005). In making this determination, the “most

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significant immediate measure an employer can take . . . is to launch a prompt investigation

to determine whether the complaint is justified.” Swenson, 271 F.3d 1184, 1193 (9th Cir.

2001). And to prevent future harassment, an employer must take some sort of action against

the co-worker, which may include discipline or counseling and admonition. Star v. West, 237

F.3d 1036, 1039 (9th Cir. 2001) (discussing that counseling and admonition may be

sufficient if reasonable in the circumstances); Yamaguchi v. U.S. Dep’t of the Air Force, 109

F.3d 1475, 1483 (9th Cir. 1997) (discussing disciplinary action).

In this case, a reasonable jury could conclude that Defendants’ actions were not

reasonably calculated both to deal temporarily with the situations pending investigations and

to permanently prevent such conduct. The Ninth Circuit has noted that the “[l]ack of

adequate discipline [for harassment of other people] might be a relevant consideration in

assessing the employer’s liability once a hostile work environment is shown to exist.”

Brooks v. City of San Mateo, 229 F.3d 917, 925 n. 5 (9th Cir. 2000). First, Defendants’

actions regarding the August 2007 incident were arguably inadequate. Although Vorhies

hired a translator, issued a written warning, and received verification from Neria that sexual

harassment was inappropriate, a reasonable jury could conclude that Vorhies did not

implement a reasonable remedy to stop Neria’s harassment in August 2007. See Hardage,

427 F.3d at 1186. For instance, Vorhies did not formerly discipline Neria, suspend him, or

even require Neria and Plaintiff to work separately. 

More importantly, even after August 2007, Plaintiff, through Isom’s affidavit,

admissibly asserts that Vorhies was aware that Neria continued to harass other female

employees. According to Isom, Vorhies took no action to control Neria or even to remind

him of the sexual harassment policy; rather, Vorhies allegedly told Isom that she “need[ed]

to do things [his] way” so that she “can keep [her] job another day.” (Dkt. # 77, Ex. E). A

reasonable jury could conclude that Vorhies’s failure to discipline Neria regarding these

complaints emboldened Neria to continue the harassment of other women, and ultimately,

of Plaintiff. See Swenson, 271 F.3d at 1192 (holding that an employer is liable for

“embolden[ing] a harasser); Brooks, 229 F.3d at 925 n. 5 (noting that the lack of discipline

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7

 Defendants offer testimony from two of the female employees that Isom alleges were

harassed; these women imply that Defendants appropriately prevented future acts of

harassment against them. This testimony, however, does not address every allegation that

Isom includes and, in any event, is a factual dispute inappropriate for resolution upon a

motion for summary judgment. 

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for other incidents of harassment is a “relevant consideration in assessing the employer’s

liability”).7

Moreover, Defendants’ actions in Spring 2008 were arguably inadequate. In March

2008, Plaintiff contends that she told Vorhies that Neria was “getting friendly again” after

Plaintiff saw Neria two of every five days in the breakfast area. Although Vorhies said he

would deal with the complaint, Vorhies apparently did nothing. On or about April 7, 2008,

Neria bear hugged Plaintiff and bit her neck and ear, saying it was his birthday. Arguably,

because over seven months had passed since the last time Neria touched Plaintiff, it is

reasonable that Defendants would not have expected such an event to occur. This ignores,

however, the numerous other examples of Neria inappropriately contacting women and of

Vorhies ignoring the complaints to the point where Neria was arguably emboldened to

continue his actions. 

Furthermore, Defendants’ actions after the bear hug incident were arguably not

reasonably calculated to prevent future harassment. To be sure, both Vorhies and Mr. Mehta

attempted to instruct Neria not to touch female employees, although this task was made more

difficult by the language barrier and the inability to obtain an interpreter. However, even in

light of the seriousness of two physical encounters with Plaintiff and numerous encounters

with other employees, neither Vorhies nor Mr. Mehta took additional measures to prevent

Neria’s contact with Plaintiff. Simply instructing Neria not to touch female employees and

relying on a one-hour difference in Neria’s and Plaintiff’s scheduled shifts was arguably

insufficient, especially given that Neria had previously demonstrated his unwillingness to

follow the sexual harassment policy. 

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II. Summary Judgment Is Appropriate on the Constructive Discharge Claim.

Constructive discharge exists if “working conditions [are] so intolerable that a

reasonable person would have felt compelled to resign.” Pa. State Police v. Suders, 542 U.S.

129, 147 (2004); see also Steiner v. Showboat Operating Co., 25 F.3d 1459, 1465 (9th Cir.

1994) (requiring a showing that “a reasonable person in [her] position would have felt that

[she] was forced to quit because of intolerable and discriminatory working conditions”)

(internal quotations omitted). It involves “something more” than normal harassment, and

constructive discharge does not lie “[u]nless conditions are beyond ‘ordinary’

discrimination[.]” Suders, 542 U.S. at 142 (quoting Perry v. Harris Chernin, Inc., 126 F.3d

1010, 1015 (7th Cir. 1997)). In general, a constructive discharge claim generally does not

lie if the alleged harasser has been fired prior to the plaintiff’s resignation because the

conditions “must be intolerable at the time of the employee’s resignation.” See Steiner, 25

F.3d at 1465 (internal quotations and alterations omitted). In Steiner, the plaintiff’s

constructive discharge claim failed because the alleged harasser had been fired two-and-ahalf months before the plaintiff resigned, meaning the harassment did not exist at the time

of plaintiff’s resignation. 25 F.3d at 1465

Similarly, notwithstanding the fact that Neria’s actions were extreme, Plaintiff cannot

maintain a constructive discharge claim because Neria had been fired nearly two weeks

before she quit working at Best Western. Plaintiff’s working conditions could not have been

intolerable at the time of her resignation because Neria was no longer working with her.

Plaintiff contends that she was unaware of Neria’s termination, but Plaintiff does not explain

how this is relevant. Even if she did not know that Neria had been fired, Plaintiff fails to

demonstrate how her working conditions continued to be intolerable even after her harasser

was no longer with Best Western. While Plaintiff may have still been upset over the

Defendants’ inability to prevent Neria’s actions, Plaintiff cannot show intolerable conditions

at the time of her resignation.

/ / /

/ / /

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III. Plaintiff May Not Seek Punitive Damages.

To recover punitive damages under Title VII, Plaintiff must demonstrate that

Defendants acted with “malice or reckless indifference.” 42 U.S.C. § 1981a(b)(1); see also

Kolstad v. Am. Dental Ass’n, 527 U.S. 526, 540 (1999). This requires “a showing beyond

the threshold level of intent required for compensatory liability.” Ngo v. Reno Hilton Resort

Corp., 140 F.3d 1299, 1304 (9th Cir. 1998). Although an employer may be liable for

punitive damages where the employer “discriminate[s] in the face of a perceived risk that its

actions will violate federal law[,]” an employer does not act with reckless indifference where

it undertakes “good faith efforts at Title VII compliance.” Kolstad, 527 U.S. at 536, 544. In

the sexual harassment context, a plaintiff may demonstrate reckless indifference, for

example, “where the employer completely failed to address repeated complaints of pervasive

sexual harassment.” EEOC v. Wal-Mart Stores, Inc., 156 F.3d 989, 993 (9th Cir. 1998)

(citing Harris v. L & L Wings, Inc., 132 F.3d 978, 982 (4th Cir. 1997)). In this case, a

reasonable jury could not conclude that Defendants acted with reckless indifference.

Although, as discussed supra in Section I, Defendants could have taken more effective action

to prevent Neria from harassing Plaintiff, Defendants did not completely fail to address the

complaints. To the contrary, Defendants undertook good faith efforts at compliance with

Title VII. Vorhies and Mr. Mehta reminded Neria of the sexual harassment policy, gave him

a written warning, and instructed him not to touch any female employees. Vorhies and Mr.

Mehta later investigated both the biting incident and the final incident on April 8. After the

final incident, Vorhies also coordinated with the police to investigate and fired Neria within

three days. These actions may not be sufficient to grant summary judgment on a hostile work

environment claim, but they do make summary judgment appropriate regarding punitive

damages.

IV. The Individual Defendants Are Not Liable. 

Title VII does not impose liability on individuals who are not themselves

“employers.” See 42 U.S.C. § 2000e(b) (establishing Title VII liability against “employers”);

Miller v. Maxwell’s Intern. Inc., 991 F.2d 583, 587–88 (9th Cir. 1993) (“[I]ndividual

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defendants cannot be held liable under Title VII . . . There is no reason to stretch the liability

of individual employees beyond the respondeat superior principle intended by Congress.”).

Furthermore, under Arizona law, the “corporate structure is a separate legal entity which has

the legitimate purpose of insulating individuals from personal liability for acts done on behalf

of the corporation.” Malisewski v. Singer, 123 Ariz. 195, 196, 598 P.2d 1014, 1015 (1979).

Summary judgment is appropriate on all claims against the Mehtas in their individual

capacities because the Mehtas were merely shareholders and employees of Radha, which

owned Best Western.

The parties dispute the Mehtas role in managing Best Western. Plaintiff contends the

Mehtas operated Best Western as a sole proprietorship. In contrast, Defendants assert (and

Plaintiff admits) that Radha owned Best Western, and that the Mehtas were employees and

shareholders of Radha who operated Best Western. Plaintiff presents evidence that

purportedly demonstrates that the Mehtas owned Best Western, but this evidence does not

create a genuine issue of fact. 

First, Plaintiff offers a sales agreement selling Best Western to Randolph Tenney

(“Tenney”). (Dkt. # 77, Ex. A.) The sales agreement is signed only by Mr. Mehta and by

Tenney and does not mention Radha. (Id.) Plaintiff likewise offers deposition testimony

from Mr. Mehta stating that he sold the business to Tenney. (Dkt. # 77, Ex. B.) The mere

fact that a sales agreement included Mr. Mehta’s signature, however, does not necessarily

indicate Mr. Mehta’s ownership. Mr. Mehta clarified that “when the Best Western . . . was

sold” that it was “sold . . . [b]y Radha Corporation” and “[n]ot by [the Mehtas] directly.”

(Dkt. # 79, Ex. 1.) Mr. Mehta further explained that he “never had any direct ownership

whatsoever in the Best Western Casa Grande.” (Id.) The reason the sales agreement bore Mr.

Mehta’s individual signature is because Mr. Mehta was acting “as a party or director of

Radha Corporation.” (Id.) Plaintiff offers no testimony to the contrary, and a reasonable jury

could not conclude that the sales agreement establishes that the Mehtas had an ownership

interest in Best Western. 

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Additionally, Plaintiff offers other evidence to show that the Mehtas, as opposed to

Radha, owned Best Western. For instance, Plaintiff offers one of her pay stubs that lists

“Best Western Casa Grande,” rather than Radha, in the heading. The pay stub, however, says

nothing about the Mehtas’ ownership interest in Best Western. Likewise, Plaintiff presents

Mr. Mehta’s testimony that all employment documents listed Best Western as the employer,

but this testimony says nothing about the Mehtas’ purported ownership in Best Western.

(Dkt. # 77, Ex. C, D.) Rather, Mr. Mehta’s explanation that Radha owned Best Western

remains uncontroverted.

Furthermore, Plaintiff and Vorhies both testified that the Mehtas had told them that

Best Western was their employer and that the Mehtas owned Best Western. Whatever

Plaintiff may have thought or even whatever the Mehtas had said does not create a genuine

issue of fact as to whether the Mehtas owned Best Western.

Most importantly, notwithstanding the evidence Plaintiff offers, Plaintiff has made a

judicial admission that Radha owns Best Western. “Plaintiffs are bound by all factual

assertions in the complaint because such assertions constitute judicial admissions.” Strategic

Diversity, Inc. v. Alchemix Corp., 2010 WL 94122 at *1 (D. Ariz. Jan. 5, 2010) (quoting

Nat’l Coal. Gov’t of Union of Burma v. Unocal, Inc., 176 F.R.D. 329, 338 (C.D. Cal. 1997)).

Here, Plaintiff’s Complaint admits that “[a]t all times relevant Radha Corporation was the

employer of Plaintiff and owned the Best Western Hotel that employed Plaintiff.” Plaintiff’s

statement of facts in response to this Motion further admits that “[the Mehtas] are

shareholders in, and directors and officers of, Radha.” (Dkt. # 36 at 1.) By definition, the

Mehtas cannot own Best Western as a sole proprietorship if Radha owns Best Western. “[A]

sole proprietorship . . . does not have a separate legal existence from the individual business

owner. Miller v. Hehlen, 209 Ariz. 462, 468, 104 P.3d 193, 199 (Ct. App. 2005). Therefore,

for Best Western to be a sole proprietorship, as Plaintiff asserts, then Best Western would be

indistinguishable from its owner; Plaintiff admits, however, that Radha is Best Western’s

owner. In fact, Plaintiff does not raise any genuine issues regarding whether Radha existed

as an entity or whether Radha owned Best Western for any relevant period of time. Because

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Plaintiff has admitted that Radha is the true owner and employer, Plaintiff’s evidence to the

contrary is inapposite, and the Mehtas are not individually liable in this case. 

IT IS THEREFORE ORDERED that Defendants’ Motion for Summary Judgment

(Dkt. # 73) is granted in part and denied in part. 

IT IS FURTHER ORDERED directing the Clerk of the Court terminate Bakul

Mehta and Bavana Mehta as parties in this matter.

DATED this 9th day of March, 2010.

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