Sullivan v. Wyndham Hotels & Resorts
21-7003
| 10th Cir. | Dec 8, 2021Background:
- Plaintiff Shelby Sullivan worked at a Days Inn franchised by Wyndham and operated by franchisee Manav Investments (owner: Rupam Gandhi).
- In January 2019 at a franchisor inspection, Gandhi allegedly groped Sullivan; a Wyndham representative, John Castro, witnessed the incident.
- Sullivan reported the incident to Castro, who told her she should not have “acted so friendly.” Castro did not tell her how Wyndham could or could not discipline Gandhi.
- Sullivan returned to work; Gandhi allegedly continued to harass her and she later quit. She sued asserting Title VII and state-law claims; only the pendent negligent misrepresentation claim remained on appeal.
- The district court dismissed the negligent misrepresentation claim under Oklahoma law; the Tenth Circuit reviewed de novo and summarily affirmed.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Wyndham (franchisor) owed a duty to a franchisee’s employee to provide accurate factual/legal information or to direct her to who could help | Wyndham (through Castro) undertook a duty to inform Sullivan who could address Gandhi’s conduct or to disclose that it lacked control; she reasonably relied on Castro’s statements | No such duty arises from the franchisor–franchisee relationship; Wyndham had no legal obligation to protect or discipline Gandhi | Court: No duty as a matter of law; Sullivan failed to allege facts establishing the asserted duty under Oklahoma law |
| Whether Castro’s statement was a material misrepresentation that Sullivan reasonably relied upon to her detriment | Castro’s comment that she acted “too friendly” was a misrepresentation causing Sullivan to return and suffer further assault | Castro’s remark was opinion—ill-advised but not a factual/material misrepresentation; reliance was not reasonable under the circumstances | Court: Statement was not an actionable material misrepresentation of fact; negligent misrepresentation claim fails |
Key Cases Cited
- VDARE Found. v. City of Colorado Springs, 11 F.4th 1151 (10th Cir. 2021) (standard of review for Rule 12(b)(6) dismissal cited)
- Bray v. St. John Health Sys., Inc., 187 P.3d 721 (Okla. 2008) (duty is the threshold question in negligence actions)
- MSA Tubular Prod. Inc. v. First Bank & Trust Co., 869 F.2d 1422 (10th Cir. 1989) (one who speaks when under no duty to do so must speak truthfully; negligent misrepresentation requires material factual misstatement and reasonable reliance)