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ARPAJIAN v. PROPERTY SOLUTIONS

August 16, 2005.

KERRY ARPAJIAN, Plaintiff,
v.
PROPERTY SOLUTIONS, INC., TIMOTHY DOWNES, and EDWARD GALLAGHER, Defendants.



The opinion of the court was delivered by: JEROME SIMANDLE, District Judge

OPINION

This employment discrimination case comes now before the Court upon Defendants' motion for summary judgment. All discovery has been completed, and the Court is called upon to assess which, if any, of Plaintiff's claims have evidentiary support sufficient to be submitted to a jury at trial. This motion requires the Court to address issues of the statute of limitations under the state and federal statutes governing discrimination in the workplace, as well as the evidentiary standard necessary to maintain a claim of hostile work environment, retaliatory employment action, and punitive damages. For the following reasons, the motion for summary judgment will be denied.

  I. BACKGROUND

  This matter arises out of the employment relationship between Plaintiff, Kerry Arpajian, and Defendants, Property Solutions, Inc., Timothy Downes, and Edward Gallagher. Defendant Property Solutions, Inc. ("Property Solutions") is an environmental and engineering consulting firm headquartered in Moorestown, New Jersey. In March 1999, Property Solutions was owned by two individuals, equally: Theresa Downes and Defendant Edward Gallagher ("Gallagher"). (Deposition of Theresa Downes at 20:24-21:4.) Theresa Downes controlled the accounting and human resources functions, Defendant Gallagher ran the environmental and engineering departments, and Theresa Downes's husband, Defendant Timothy Downes ("Downes"), was in charge of sales and marketing. (Deposition of Edward Gallagher at 17:21-18:1.)

  On April 26, 1999, Plaintiff Kerry Arpajian ("Arpajian"), a Certified Public Accountant, was hired by Defendant Property Solutions in the position of Chief Financial Officer ("CFO"). (Deposition of Kerry Arpajian at 47:20-22; 48:14-17.) The decision to hire Plaintiff was made by then-President, Theresa Downes, to whom Plaintiff directly reported. (Theresa Downes Depo. at 30:13-18.) Plaintiff was in charge of the accounting department and was given responsibility for a variety of human resource functions as well. (Arpajian Depo. at 56:13-25; 53:21-54:2.) Additionally, in or about May of 1999, Plaintiff began to serve on Property Solutions's Board of Directors. (Id. at 52:15-24.)

  Plaintiff alleges that beginning in early 2000, Defendant Timothy Downes started making comments to her of a sexual and inappropriate nature. (Pl.'s Ex. 5.) Plaintiff's first formal complaint of sexual harassment was made following an employee dinner in June of 2000. (Arpajian Depo. at 91:6-21.) At this dinner, Defendant Downes allegedly insisted that Plaintiff be seated next to him, then proceeded to put his arm around her and announce to the waiter and table, which included his wife, that Plaintiff was his "girlfriend." (Id.) Plaintiff complained to Theresa Downes the following day but was told that "no one could control [Defendant Downes]." (Id.)

  In October of 2000, Defendant Downes was admitted to a rehabilitation center for abuse of prescription drugs. (Theresa Downes Depo. at 65:13-16.) According to Theresa Downes, during this time, Defendant Downes was behaving in the workplace "like somebody on drugs." (Id. at 60:21-61:3.) In December of 2000, Defendant Downes was removed from the Board of Directors due to drug abuse. (Id. at 59:10-12.) The following month, Defendant Downes was placed on employment probation due to his substance abuse problem and there was discussion of his possible termination. (Id. at 56:1-20; 58:14-19.)

  In early 2001, Plaintiff, on her own initiative, began preparing an employee handbook for Property Solutions, including a sexual harassment policy. (Arpajian Depo. at 73:8-10.) No such handbook or policy previously existed. (Id.; Theresa Downes Depo. at 77:12-78:1.) At the end of May 2001, the sexual harassment policy created by Plaintiff was distributed to all employees. (Pl.'s Ex. 6.) Each employee was then instructed to complete a sexual harassment training course, which was offered online, by June 30, 2001. (Pl.'s Ex. 7.) Both Theresa Downes and Defendant Downes failed to take the online training course by the required deadline for all employees. (Pl.'s Ex. 8.)

  In July of 2001, Theresa Downes and Defendant Downes began the process of obtaining a divorce. (Theresa Downes Depo. at 84:15-19.) Realizing that the divorce could result in ownership change, Plaintiff made a request at that time to be provided with an employment agreement. (Arpajian Depo. at 184:4-9.) Plaintiff maintains that the following day, Defendant Downes called her into his office and proceeded to tell Plaintiff that her job would be protected if she was "nice" to him, elaborating that he would not have a problem signing an employment agreement if she "got on [her] knees and under his desk." (Id. at 184:12-20.) Plaintiff interpreted this comment as a request by Defendant Downes to perform oral sex on him. (Arpajian Affidavit at ¶ 7.) Defendant Gallagher and Theresa Downes have acknowledged that this statement could be interpreted as a request for oral sex. (Gallagher Depo. at 132:2-6; Theresa Downes Depo. at 71:22-72:10.) Within days, Plaintiff received an email indicating that Property Solutions was denying her request for an employment agreement. (Arpajian Depo. at 185:8-10.)

  Plaintiff maintains that she went to both Theresa Downes and Defendant Gallagher and complained of Defendant Downes's conduct, with specific reference to the "under the desk" comment. (Id. at 186:18-19.) Despite these complaints, and Plaintiff's previous complaint, there was no action taken against Defendant Downes. (Arpajian Aff. at ¶ 5.)

  In addition to the specific events precipitating Plaintiff's complaints, Plaintiff also alleges the following comments or conduct directed at Plaintiff by Defendant Downes: (1) ordering Plaintiff to "take one for the team," meaning to have sex with a client to get business; (2) telling Plaintiff that he wanted to "do" certain female employees; (3) introducing Plaintiff at a work convention as his "hot CFO, who dates clients"; (4) running his hand up Plaintiff's thigh at a company party when she was bending over to pick up ice off the floor, in front of her boyfriend and colleagues; (5) advising Plaintiff that one of the company's clients had told him that he should be "getting some" from her (meaning having sex with her because he was Plaintiff's employer); (6) telling Plaintiff on repeated occasions of his desire for sex while traveling for work; (7) telling Plaintiff that he would "play with himself" in hotel rooms while traveling and watching "dirty movies"; (8) telling Plaintiff that he loved to watch naked women on beaches; (9) inquiring into Plaintiff's personal life; (10) telling Plaintiff that a colleague was having sex with clients "and still not getting the business"; (11) describing how women would "hit on him" and how they "wanted" him; (12) putting his arm around Plaintiff while visibly intoxicated at the company Christmas party and saying that he loved Plaintiff's skirt; (13) telling Plaintiff at work that she was "showing a lot of leg"; and (14) totally disregarding his own impropriety towards a female employee who had alleged sexual harassment against him. (Pl.'s Ex. 5.)

  In late 2001, another female subordinate of Defendant Downes, Suzanne Gibson, came to Plaintiff with a complaint. (Arpajian Depo. at 93:17-25.) Ms. Gibson claimed that Defendant Downes was asking too many questions about her personal life and requiring that she spend an inordinate amount of time with him over the weekends. (Id.)

  On October 24, 2001, Defendant Downes attended a conference in Chicago with two of his female subordinates, Ms. Gibson and Michelle Vidovich. (Pl.'s Ex. 9.) Two days later, on October 26, 2001, Plaintiff and Theresa Downes were both contacted by Ms. Vidovich, who complained of inappropriate conduct by Defendant Downes at the conference. (Arpajian Aff. at ¶ 8; Theresa Downes Depo. at 82:18-24.) Ms. Gibson also made additional allegations of inappropriate conduct by Defendant Downes at the Chicago conference. (Arpajian Depo. at 95:15-97:3.)

  Immediately following receipt of Ms. Vidovich's complaint, Theresa Downes advised Defendant Gallagher of the allegations and spoke with her attorney. (Theresa Downes Depo. at 83:23-84:4.) Defendant Downes was then advised of Ms. Vidovich's complaints and specifically ordered to cease any conduct with her. (Gallagher Depo. at 190:7-10.) However, Defendant Downes not only continued to contact Ms. Vidovich, but also allegedly threatened her and actively retaliated against her. (Id. at 190:11-191:16.) Specifically, Defendant Downes threatened to "take appropriate action" against Ms. Vidovich and take away her corporate credit card. (Id. at 190:11-191:16; Pl.'s Ex. 11.) Despite this, Defendants Gallagher and Property Solutions decided that Defendant Downes should be given a second chance rather than terminated. (Gallagher Depo. at 191:18-20; 195:2-16.)

  In connection with Ms. Vidovich's complaint, Defendant Property Solutions hired an investigator, Pamela Perry, to investigate the allegations and produce a report ("Vidovich Report"). (Pl.'s Ex. 12.) Although Plaintiff's prior complaint of sexual harassment is acknowledged in the Vidovich Report, as well as the fact that she had received the initial complaint from Ms. Vidovich, Plaintiff was never interviewed as part of the investigation. (Id. at 1-3, 5; Arpajian Aff. at ¶ 10.) Without explanation, the report claims Plaintiff was "unavailable" to be interviewed. (Pl.'s Ex. 12 at 3; Arpajian Aff. at ¶ 11.)

  At the conclusion of the investigation of Ms. Vidovich's claims, no immediate action was taken against Defendant Downes. The only discipline that Defendant Downes received was probation, which was not implemented until February of 2002, approximately five months after Ms. Vidovich came forward. (Pl.'s Ex. 14.)

  Following Ms. Vidovich's complaint in October of 2001, Defendant Downes engaged in additional harassing conduct towards Plaintiff including (1) calling Plaintiff and leaving her incoherent messages, claiming that he loved her; (2) making comments to Plaintiff related to woman hitting on him and wanting to have sex with him; (3) telling Plaintiff that once he acquired ownership of the company, he would get rid of anyone who wasn't "nice" to him, which he had previously explained meant immediately getting under his desk; and (4) talking to Plaintiff about Ms. Vidovich's harassment allegations. (Arpajian Depo. at 189:19-25; 190:5-21; 222:1-13; 226:1-18.) Plaintiff also claims to have observed sexist behavior by Defendant Gallagher including sending Plaintiff emails which contained jokes about women, making derogatory comments about the traditional role of women, referring to Theresa Downes as "waddling" and "fat," and exhibiting little respect for female engineers and denying them job opportunities. (Id. at 70:9-21; 259:7-25; 260:1-6; 263:6-24.)

  Following her first complaint of sexual harassment in June of 2000, Plaintiff alleges that she began experiencing retaliatory and discriminatory conduct. In February of 2001, Plaintiff was advised by Theresa Downes that she would not be permitted to attend the annual West Coast Mortgage Bankers' National Association Conference which she had attended the previous year. (Arpajian Depo. at 159:17-160:6.) Moreover, in the months following Plaintiff's second complaint in July 2001, Plaintiff alleges that Theresa Downes became increasingly hostile toward her. For example, Theresa Downes admitted that she went through Plaintiff's mail and questioned her on the contents before Plaintiff had the opportunity to read the mail herself. (Id. at 145:14-16; Theresa Downes Depo. at 153:106.) Theresa Downes also began going directly to Plaintiff's staff with questions and would either ignore Plaintiff entirely or act in a confrontational manner on various issues. (Arpajian Depo. at 145:17-21.)

  On February 27, 2003, Theresa Downes and Defendant Downes were divorced and Theresa Downes departed Property Solutions, selling her shares to Defendant Gallagher and Defendant Downes, thereby making the two 50/50 owners of the company. (Gallagher Depo. at 29:6-13.) At that time, Defendant Gallagher was elevated to the position of President. (Deposition of Timothy Downes at 26:18-23.) Defendant Gallagher retained his prior responsibilities as head of the environmental and engineering departments and also assumed direct control over the departments formerly run by Theresa Downes, namely the accounting and human resources departments. (Gallagher Depo. at 64:10-13.) Thus, Plaintiff began reporting to Defendant Gallagher at that time. (Id. at 65:17-24.) Defendant Downes assumed the role of Vice President responsible for sales and marketing. (Timothy Downes Depo. at 26:5-7.)

  After February 2003, Defendants Gallagher and Downes allegedly began to focus on systematically diminishing Plaintiff's role at Property Solutions. (Id. at 258:25-259:5.) Plaintiff was no longer invited to attend certain senior engineering meetings she had previously attended and her input was no longer sought in connection with issues that fell within her purview. (Id. at 149:24-151:3; 153:7-14.) In those meetings with Defendants Gallagher and Downes that Plaintiff was ...


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