United States District Court, C.D. California
ORDER DENYING DEFENDANT’S MOTION TO DISMISS OR,
IN THE ALTERNATIVE, MOTION FOR SUMMARY JUDGMENT 
D. WRIGHT, II UNITED STATES DISTRICT JUDGE
a whistleblower-retaliation action. Plaintiffs Valerie Penate
and Rhonda Hamilton allege that their employer, Defendant
Wyndham Worldwide Operations, Inc., wrongfully discharged
them for complaining about unlawful sales practices within
the company. Defendant moves to dismiss the complaint, or in
the alternative, for summary judgment based on the fact that
it did not employ Plaintiffs. For the reasons discussed
below, the Court DENIES the Motion.
allegedly employed Plaintiff Valerie Penate as a program
support specialist between April 2013 and October 2014.
(First Am. Compl. ¶ 9, ECF No. 15.) During this time,
Penate was told to treat certain customers more favorably
than other customers, and that she “reasonably believed
[this] to be a fraudulent and illegal sales practice.”
(Id. ¶ 10.) Penate relayed this belief to her
supervisor, and refused to engage in the practice.
(Id.) Penate was later terminated, allegedly based
on her reporting this illegal activity to her supervisor.
(Id. ¶ 11.)
allegedly also employed Plaintiff Rhonda Hamilton as a
frontline member services representative between February
2010 and November 2012. (Id. ¶ 12.) Hamilton
learned that Defendant was directing its employees to use
fraudulent and deceptive sales tactics to sell timeshares to
customers, including misrepresenting the costs and benefits
of timeshare ownership. (Id. ¶ 13.) Employees
who used these tactics were treated (and compensated) better
than those who did not. (Id. ¶ 14.) After
Hamilton complained to her supervisor about both the illegal
sales tactics and the disparate treatment and compensation,
she was suspended. (Id. ¶¶ 14-17.)
Hamilton then sent a letter to Defendant complaining that her
suspension was retaliatory. (Id. ¶ 18.)
Defendant failed to respond, and Hamilton alleges that she
was “constructively terminated” from her job
thereafter. (Id. ¶¶ 18-19.)
November 28, 2015, Plaintiffs filed their Complaint. (ECF No.
1.) On March 30, 2016, Plaintiffs filed a First Amended
Complaint (“FAC”), in which they assert three
claims against Defendant: (1) violation of the Dodd-Frank
Act; (2) fraud; and (3) negligent hiring, supervision, and
retention. (ECF No. 15.) Shortly before appearing in the
case, Defendant informed Plaintiffs’ counsel that it
was not Plaintiffs’ employer, and that the entity that
employed Plaintiffs was Wyndham Vacation Ownership. (Kapur
Decl. ¶¶ 3-7, ECF No. 20-2.) Despite this fact,
Plaintiffs’ counsel refused to dismiss Defendant.
(Id.) On May 11, 2016, Defendant filed the instant
Motion. (ECF No. 20.) Plaintiffs timely opposed, and
Defendant timely replied. (ECF Nos. 25, 26.) That Motion is
now before the Court for consideration.
may dismiss a complaint under Rule 12(b)(6) for lack of a
cognizable legal theory or insufficient facts pleaded to
support an otherwise cognizable legal theory. Balistreri
v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th
Cir. 1990). To survive a dismissal motion, a complaint need
only satisfy the minimal notice pleading requirements of Rule
8(a)(2)-a short and plain statement of the claim. Porter
v. Jones, 319 F.3d 483, 494 (9th Cir. 2003). In making
this determination, however, the court’s review is
limited to the pleadings, any documents incorporated by
reference in the complaint, and any matters of which the
Court may take judicial notice. Lee v. City of L.A.,
250 F.3d 668, 688-89 (9th Cir. 2001).
on a motion under Rule 12(b)(6) or 12(c), matters outside the
pleadings are presented to and not excluded by the court, the
motion must be treated as one for summary judgment under Rule
56.” Fed.R.Civ.P. 12(d). In general, submitting a
declaration in support of a motion under Rule 12(b)(6) will
trigger this rule. Anderson v. Angelone, 86 F.3d
932, 934 (9th Cir. 1996); see also, e.g., Cycle
Barn, Inc. v. Arctic Cat Sales Inc., 701 F.Supp.2d 1197,
1203 (W.D. Wash. 2010); Chung v. Strategic Decisions
Grp., No. CIV.08-1480-ST, 2009 WL 1117492, at *2 (D. Or.
Apr. 23, 2009).
judgment should be granted if there is no genuine dispute as
to any material fact and the moving party is entitled to
judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving
party bears the initial burden of establishing the absence of
a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323-24 (1986). Once the moving
party has met its burden, the nonmoving party must go beyond
the pleadings and identify specific facts through admissible
evidence that show a genuine dispute for trial. Id.;
disputed fact is “material” where the resolution
of that fact might affect the outcome of the suit under the
governing law. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 248 (1968). Conclusory or speculative testimony in
affidavits and moving papers is insufficient to raise genuine
issues of fact and defeat summary judgment.
Thornhill’s Publ’g Co. v. GTE Corp., 594
F.2d 730, 738 (9th Cir. 1979). Moreover, there must be more
than a mere scintilla of contradictory evidence. Addisu
v. Fred Meyer, 198 F.3d 1130, 1134 (9th Cir. 2000).
Where the moving and nonmoving parties’ versions of
events differ, courts are required to view the facts and draw
reasonable inferences in the light most favorable to the
nonmoving party. Scott v. Harris, 550 U.S. 372, 378
(2007). A court may not weigh conflicting evidence or make
credibility determinations. Soremekun v. Thrifty Payless,
Inc., 509 F.3d 978, 984 (9th Cir. 2007).
entire Motion rests on the declaration of an employee stating
that Defendant did not employ either Penate or Hamilton. (Lee
Decl. ¶¶ 3-4; Mot. 4.) Despite Defendant’s
unsupported arguments to the contrary (Mot. 4 n.1), the Court
clearly cannot consider such a declaration on a motion to
dismiss, e.g., Anderson, 86 F.3d at 934;
Cycle Barn, Inc., 701 F.Supp.2d at 1203;
Chung, 2009 WL 1117492, at *2, and thus ...