Hart v. Connected Wireless

Filing 95

MEMORANDUM DECISION AND ORDER - It is thereforeORDERED that Connected Wireless, Inc., C&C Communications, LLC, and Anthony Morrison are jointly and severally liable for damages to Plaintiff in the amount of $250,379.80. This sum consists of $97,841.30 in back pay, $50,000 in compensatory damages, and $102,538.50 in attorney fees. Signed by Judge Ted Stewart on 11/16/20. (jrj)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF UTAH
RYAN HART,
Plaintiff,

MEMORANDUM DECISION AND
ORDER

v.
CONNECTED WIRELESS, INC., et al.,
Defendants.

Case No. 2:17-CV-186-TS
District Judge Ted Stewart

This matter is before the Court on Plaintiff Ryan Hart’s (“Plaintiff”) Post-Evidentiary
Briefing Re: Damages. For the reasons discussed below, the Court will grant $97,841.30 in back
pay, $50,000 in compensatory damages, and $102,538.50 in attorney’s fees. The Court also finds
C&C Communications, LLC (“C&C”) and Connected Wireless President Anthony Morrison
(“Morrison”) should be held jointly and severally liable for these damages.
I. PROCEDURAL AND FACTUAL BACKGROUND
Plaintiff began work as a sales consultant for Connected Wireless Inc.’s (“Connected
Wireless”) Provo Towne Center store around December 17, 2012. 1 He experienced
discrimination based on his disability—in violation of the Americans with Disabilities Act
(“ADA”), 42 U.S.C. § 12101, et seq—and left employment on March 19, 2013. 2 On August 30,
2013, Plaintiff filed a Charge of Discrimination against Connected Wireless with the Equal
Employment Opportunity Commission (“EEOC”) and Utah Antidiscrimination and Labor

1

Docket No. 37 ¶¶ 13–14; Docket No. 91-12, at 2.

2

See Docket No. 72-1, at 2.

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Division (“UALD”). 3 After undergoing the required administrative process, 4 Plaintiff filed a
complaint against Connected Wireless on January 17, 2017, in the Fourth Judicial District Court
of Utah County. 5 Initially, Connected Wireless participated in the litigation, removing it to
federal court on March 14, 2017, 6 then filing an answer on April 4, 2017. 7 On January 18, 2018,
parties attempted but did not reach settlement. 8 On February 12, 2019, the Court received notice
of Connected Wireless’s bankruptcy filing, which stayed proceedings in this Court. 9 On May 24,
2019, Connected Wireless petitioned to dismiss that bankruptcy case as “error.” 10 On May 28,
2019, the Court received motions for Connected Wireless’s counsel to withdraw 11—appending a
letter from Morrison stating that Connected Wireless had “ceased operations,” that its “corporate
entity has been dissolved by the Utah Division of Corporations and Commercial Code,” and that
it therefore “is unable to continue participating in this matter.” 12 The Court granted those
motions. 13 On July 19, 2019, Plaintiff filed a Motion to Reopen Case, as the automatic stay from
Connected Wireless’s bankruptcy proceedings was lifted July 1, 2019. 14 On September 24, 2019,

3

Id.

4

See Docket No. 2-1, at 23–24 (EEOC Notice of Right to Sue, dated October 19, 2016).

5

Id. at 5, 18.

6

Docket No. 2, at 2.

7

Docket No. 11. Connected Wireless later submitted an Answer to the Amended
Complaint on August 24, 2018. Docket No. 45.
8

See Docket No. 25.

9

See Docket No. 56.

10

See Docket No. 92, at 2.

11

Docket Nos. 64, 65.

12

Docket Nos. 64-1, 65-1.

13

Docket No. 66.

14

See Docket No. 67, at 2; Bankruptcy Case No. 19-20789, Docket No. 23.
2

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this Court ordered Connected Wireless to appoint new counsel within fifteen days. 15 Connected
Wireless ignored that order. On October 24, 2019, Plaintiff filed a Motion for Default
Judgment. 16 Then on October 29, 2019, this Court granted Plaintiff’s Motion to Reopen Case
and entered default judgment against Connected Wireless based on its failures to comply with
Court Orders or participate in this litigation.17
On February 24, 2020, the Court held an evidentiary hearing regarding damages. 18
Connected Wireless did not participate. Plaintiff and his father, Craig Hart, testified concerning
Plaintiff’s mental health history, the trauma Plaintiff experienced from disability discrimination
at Connected Wireless, and the lasting impact of that trauma. 19 According to their accounts,
Plaintiff has suffered from anxiety and depression since adolescence. 20 He was also diagnosed
with ADHD. 21 However, before working for Connected Wireless, Plaintiff was “extremely
motivated” and able to hold down full-time jobs “for years at a time.” 22 This included stressful
jobs at the Sherriff’s Department and at Brent Brown Toyota where he had to make car sales to
earn a commission. 23 Plaintiff testified that at Connected Wireless he was initially “meeting and
surpassing . . . the goals for not only customer satisfaction, but also . . . sales.” 24 Michael

15

Docket No. 76.

16

Docket No. 80.

17

See Docket Nos. 82, 83.

18

See Docket No. 89.

19

See generally Docket No. 91-4.

20

Id. at 34.

21

Id. at 36.

22

Id. at 27, 35.

23

Id. at 30, 35–36.

24

Id. at 18.
3

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Dunning—Plaintiff’s former direct manager at Connected Wireless—verifies this in a signed,
undated statement.
[Plaintiff] became a valuable asset to the company as he mastered the technical side
of our operations and provided excellent customer service. He demonstrated a
natural ability to make customers feel important, supported, and confident in the
services that Connected Wireless provided. I was impressed with how patient and
personable [Plaintiff] was with customers as he helped them work through their
frustrations with service issues. He is a good problem solver. He became eligible
for bonuses after his training period and started earning them because of his good
work. [Plaintiff] was pleasant to work with, and tried hard to get along with other
employees, including one who was quite difficult to manage. He also assured the
store was neat and orderly. I thought that his leadership abilities and people skills
would eventually land him in a management position. 25
However, Plaintiff’s progression at work was interrupted when management began
requiring sales consultants to memorize a verbatim script. 26 Plaintiff worked on the script, with
his father’s help, but could not commit it to memory due to his learning disability. 27 Plaintiff’s
father reports this frustration took an alarming mental toll on Plaintiff. 28 Plaintiff discussed his
need for ADA accommodation five times with individuals in Connected Wireless management—
including Morrison, HR manager Gary Rhay, District Manager Brian Rhay—who is also Gary
Rhay’s son—and Michael Dunning. 29 Plaintiff testified that Brian Rhay “brushed me off.” 30
Michael Dunning reports:
[o]n at least two occasions during February to March 2013 time frame, I heard Brian
brush off [Plaintiff’s] explanation of his disability and make threatening statements
about his employment if he did not memorize the script. [Plaintiff] asked Brian on
those occasions if there was a way he could be exempt from the requirement

25

Docket No. 91-12, at 2.

26

See Docket No. 91-4, at 41.

27

Id.; see also Docket No. 91-10, at 2.

28

Docket No. 91-4, at 41.

29

Id. at 18–19.

30

Id. at 19.
4

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because of his disability if he covered the main points of the script in his own words.
Brian told [Plaintiff] he was required to memorize the script like everyone else. 31
On March 14, 2013, Plaintiff emailed Morrison regarding his disability, requesting
accommodation and explaining that Brian Rhay had threatened him with termination if he could
not memorize the script despite his disability.32 Morrison forwarded the email to Gary Rhay the
following day but does not appear to have responded to Plaintiff. 33 On March 18, 2013, Gary
Rhay emailed Plaintiff requesting documentation of his learning disability. 34 On March 19, 2013
at 12:50 p.m., Plaintiff responded with an email attaching a medical letter from clinical
neuropsychologist, Dr. Erin Bigler, Ph. D. 35 Her note, also dated March 19, 2013, states that
Plaintiff “has a long-standing history of learning disability” that “makes it very challenging to
memorize verbatim material.” 36 Dr. Bigler requests “that accommodations be given to him for
information that requires memorization.” 37 Gary Rhay forwarded the email to his son, Brian
Rhay, on March 19, 2013 at 3:17 p.m. 38 Morrison later claimed documentation of Plaintiff’s
disability was “received” only after Plaintiff left his employment. 39 This is not accurate.
However, it is plausible Morrison discovered the medical letter only after Plaintiff left

31

Docket No. 91-12, at 2–3.

32

Docket No. 91-8, at 2–3.

33

Id. at 2.

34

Docket No. 91-9, at 2.

35

Id. Plaintiff’s email states “[a]ttached is the documentation that you are . . . looking
for.” Plaintiff testified that the attachment referred to here was the medical letter from Dr. Bigler.
Docket No. 91-4, at 57; see Docket No. 91-10.
36

Docket No. 91-10, at 2.

37

Id.; see also Docket No. 91-4, at 20–23, 48, 56–57.

38

Docket No. 91-8, at 2.

39

See Docket No. 91-11, at 2 (Morrison email response to Plaintiff’s former counsel,
Dallan Flake).
5

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employment, as Plaintiff emailed it to Gary Rhay at 12:50 p.m. on March 19, 2013, and resigned
sometime later that day. 40
After sending the medical letter to his employer, Plaintiff got a ride with his father to
work. 41 In the car, Plaintiff placed a phone call to Gary Rhay, confiding that he did not want to
“stir the waters” but that he had a child and family and was worried about his job. 42 Gary Rhay
responded that “you’ve already stirred the waters” and hung up on him. 43 Plaintiff was stunned
and feared he would be fired that day at work. 44 He struggled to get out of the car. 45 He arrived
to find Brian Rhay waiting for him. 46 Michael Dunning shared Plaintiff’s perception that Brian
was there “to make good on his prior threats to terminate [Plaintiff’s] employment.” 47 Plaintiff
describes Brian Rhay as a “bully” who “touted himself as the vice president of the company.” 48
In the conversation that immediately followed—which Plaintiff recorded—Brian told Plaintiff:
No one talked to me about [your disability] because it doesn’t matter. Either you
can do the job or you can’t do the job. It’s a right to work state. . . . Your disabilities
and stuff like that don’t matter. Now, I’m sorry, they don’t. You know there’s no
state law protecting you in a right to work state against a memorization disability.
Unless you can prove that disability, and it’s on file with the state. 49

40

Docket No. 91-9, at 2; Docket No. 91-4, at 48 (Craig Hart relaying that Plaintiff
submitted the medical letter prior to termination of his employment).
41

See Docket No. 91-4, at 19.

42

Id.

43

Id.

44

Id. at 49–50 (Plaintiff’s father testified, “[Plaintiff] was stunned . . . . he said, ‘I don’t –
I don’t know if I want to go to work today because when I go in there, I’ll bet I’m going to get
fired’”).
45

Id. at 50.

46

Id. at 27–28, 50.

47

Docket No. 91-12, at 3.

48

Docket No. 91-4, at 27–28.

49

Id. at 28; Docket No. 91-7, at 2.
6

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At the point of this conversation, it is unclear whether Brian Rhay had seen Plaintiff’s medical
letter forwarded to him at 3:17 p.m. that day. 50 In a July 3, 2014 interview with a UALD
investigator, Brian Rhay denied ever having made the above recorded statement. 51
With that, Plaintiff resigned on March 19, 2013, feeling certain he would be fired and
lose his bonus unless he did so. 52 Plaintiff explains that this experience “[m]ade me feel
worthless, like I didn’t matter, that I had no options.” 53 “And when I was told my disability
didn’t matter and – amongst other things by Mr. Rhay, something broke inside of me.” 54 As a
result, Plaintiff lost over twenty pounds within a couple weeks. 55 He experienced significant
depression, visited medical professionals, started new anti-anxiety and anti-depression
medications. 56 He explains, “it rocked my world. And it has affected me in a great way when it
comes to my confidence of holding down a job or getting a job and being treated differently.” 57
Plaintiff experienced severe headaches, chest pains, and insomnia. 58 He started having panic
attacks for the first time, which came when he tried to interview for a new job. 59 When he did
manage to get a new job, Plaintiff reports “I couldn’t handle it,” and it lasted only a couple
weeks. 60 His depression jumped from a manageable 3–4 on the pain scale, before the events at

50

See Docket No. 91-8, at 2.

51

Docket No. 91-14, at 3.

52

Docket No. 91-4, at 49–50; Docket No. 72-1, at 2.

53

Docket No. 91-4, at 29.

54

See id. at 24.

55

Id. at 29.

56

See id.

57

Id. at 30.

58

Id. at 42.

59

Id. at 30–31.

60

Id. at 31, 45.
7

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Connected Wireless, to a 7–9. 61 Plaintiff’s anxiety became “crippling,” and at times he could not
get out of bed for days. 62 He experienced several hospitalizations, “on average about every other
month since this event, for something major,” each “humiliating and costly.” 63 Plaintiff has also
required some 80 to 100 sessions with psychiatrists over the past seven years. 64
II. DISCUSSION
A. DAMAGES
Plaintiff requests $97,841.30 in back pay, 65 $200,000 in compensatory damages for
mental anguish, emotional pain and suffering, and loss of enjoyment of life, 66 $34,236.55 in
medical expenses, 67 $200,000 in punitive damages, 68 and $102,538.50 in attorney fees. 69 Each
category of damages is addressed below.
1. Back Pay
Plaintiff requests $97,841.30 in back pay. 70 The Tenth Circuit has held that for Title VII
damages, which mirror those under the ADA, 71 “[t]ypically, back pay is calculated from the date
of wrongful termination to the end of trial.” 72 However, “[a]n unemployed or underemployed

61

Id. at 32.

62

Id. at 32, 45.

63

Id. at 31, 40.

64

See id. at 24–25.

65

See Docket No. 91, at 4.

66

See id. at 7–8.

67

See id. at 11.

68

See id. at 12.

69

See id. at 25.

70

See id. at 4.

71

See 42 U.S.C.A. § 12117(a). (providing that enforcement “powers, remedies, and
procedures” under the ADA mirror those under Title VII of the Civil Rights Act).
72

Zisumbo v. Ogden Reg’l Med. Ctr., 801 F.3d 1185, 1203 (10th Cir. 2015).
8

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claimant, like all other Title VII claimants, is subject to the statutory duty to minimize damages,”
which “requires the claimant to use reasonable diligence in finding other suitable
employment.” 73 Indeed, “[a]lthough the unemployed or underemployed claimant need not go
into another line of work, accept a demotion, or take a demeaning position, he forfeits his right to
backpay if he refuses a job substantially equivalent to the one he was denied.” 74
Plaintiff presents evidence that he used reasonable diligence to find other suitable
employment. 75 With the help of his supportive family and therapist, he fought through panic
attacks to attend job interviews and obtained employment but was unable to maintain it due to
mental health. 76 No evidence has been presented that Plaintiff was offered and refused
“substantially equivalent” work.
Plaintiff arrives at the sum of $97,841.30 through the following calculation: his base
salary while at Connected Wireless was $3,359.46 for 443.51 hours worked. 77 Plaintiff also
received commissions of $878.40, bringing gross earnings up to $4,339.36. 78 This amounts to a
roughly $9.78 per-hour wage. Plaintiff calculates that—based on an expectation to work 40
hours per week and an average of 50 work weeks per calendar year—he likely would have
worked an average of 2,000 hours per year, equaling earnings of $19,568.26 per year. 79 Plaintiff

73

Ford Motor Co. v. EEOC, 458 U.S. 219, 231 (1982).

74

Id. at 231–32 (internal citations omitted).

75

See Docket No. 91-4, at 30–31.

76

See id.

77

See Docket No. 91-3, at 2; Docket No. 91, at 6 n.1 (noting that Plaintiff calculates he
worked 443.51 total hours based on a 40-hour-per week estimation where payroll records did not
indicate specific hours).
78

See Docket No. 91-3, at 2.

79

See Docket No. 91, at 6.
9

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requests back pay for five years. 80 His constructive termination fell in March 2013, 81 and this
Court entered default judgment for Plaintiff on October 29, 2019 82—nearly 6.5 years later.
However, Plaintiff offers $97,841.30 covering five years as a “reasonable and conservative
estimate” that “does not consider increases in bonuses, commissions, pay raises, or promotions
that [Plaintiff] would likely have received.” 83
There is no need to deduct Social Security income from backpay here since Plaintiff did
not start receiving those benefits until April 2018—more than five years after his constructive
discharge. There is also no need to bookend backpay in 2015, when Connected Wireless claimed
it went out of business. 84 As will be discussed in more detail below, Plaintiff has provided
evidence that Connected Wireless remains operational, 85 and therefore accrual of backpay after
2015 is appropriate.
The Court finds that Plaintiff exercised reasonable diligence to mitigate his damages and
that an award of $97,841.30 in back pay to cover five years from March 2013 to March 2018 is
reasonable.

80

See id. at 7.

81

See Docket No. 72-1, at 2 (Plaintiff’s Charge of Discrimination, attesting to
constructive termination on March 19, 2013, filed with UALD and EEOC).
82

Docket No. 83.

83

See Docket No. 91, at 6–7.

84

See e.g., Docket No. 92-2, at 3 (letter from Connected Wireless counsel representing
that the company “sold all of its assets in March 2015 and is no longer a registered business”).
85

Docket Nos. 91-5, 92-12, 91-4, at 9–10 (providing commercial listings, screenshots,
and searches revealing ongoing store operations for Connected Wireless and testimony from
Plaintiff that he physically visited the Connected Wireless store in Valley Fair Mall and
confirmed with employees that it was “a Connected Wireless store” within two months prior to
the February 24, 2020 evidentiary hearing).
10

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2. Compensatory Damages
Plaintiff seeks $200,000 in compensatory damages. 86 Under the ADA, compensatory
damages are capped depending on the size of the discriminating company. 87
The sum of the amount of compensatory damages awarded under this section for
future pecuniary losses, emotional pain, suffering, inconvenience, mental anguish,
loss of enjoyment of life, and other nonpecuniary losses, and the amount of punitive
damages awarded under this section, shall not exceed, for each complaining party
(A) in the case of a respondent who has more than 14 and fewer than 101 employees
in each of 20 or more calendar weeks in the current or preceding calendar year,
$50,000;
(B) in the case of a respondent who has more than 100 and fewer than 201
employees in each of 20 or more calendar weeks in the current or preceding
calendar year, $100,000; and
(C) in the case of a respondent who has more than 200 and fewer than 501
employees in each of 20 or more calendar weeks in the current or preceding
calendar year, $200,000; and
(D) in the case of a respondent who has more than 500 employees in each of 20 or
more calendar weeks in the current or preceding calendar year, $300,000. 88
The statute provides, and courts have reiterated, that the relevant cap applies to the combined
total for both compensatory and punitive damages. 89 It does not, however, include back pay. 90 In

86

Docket No. 91, at 7–8.

87

42 U.S.C.A. § 1981a(b)(3).

88

Id.

89

Id.; see also Hogan v. Bangor & Aroostook R.R. Co., 61 F.3d 1034, 1037 (1st Cir.
1995) (upholding the district court’s reading of 42 U.S.C.A. § 1981a(b)(3) as indicating a cap on
damages for the combined sum of compensatory and punitive damages, noting “[t]he statute is
clear on its face that the sum of compensatory damages (including its various components) and
punitive damages shall not exceed [the relevant statutory cap]”).
90

See 42 U.S.C.A. § 1981a(b)(2).
11

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addition, courts analyzing the issue have interpreted “current” to indicate the timeframe when the
discrimination occurred—not when judgment was rendered. 91
In his Amended Complaint, Plaintiff states that around the time of the discrimination,
there were over fifty employees in Connected Wireless’s Provo and Orem stores. 92 Connected
Wireless did not dispute this number. 93 Given the evidence before the Court concerning
Connected Wireless’s size around March 2013, Connected Wireless falls in the range of “more
than 14 and fewer than 101 employees,” with a statutory cap of $50,000 for compensatory and
punitive damages. 94 Plaintiff’s argument that the statutory cap should be higher lacks sufficient
evidentiary support.
Compensatory damages under the ADA are available only upon a showing of intentional
discrimination. 95 As summarized above, the record reflects that Plaintiff disclosed his disability
and need for accommodation to several members of management at Connected Wireless and

91

See e.g., Hernandez-Miranda v. Empresas Diaz Masso, Inc., 651 F.3d 167, 170 (1st
Cir. 2011) (“We interpret the statutory phrase ‘current’ calendar year in § 1981a(b)(3) to refer to
the time period of the discrimination.”); Depaoli v. Vacation Sales Assocs., L.L.C., 489 F.3d 615,
621–22 (4th Cir. 2007) (upholding district court’s interpretation that the “current or preceding
calendar year” language in § 1981a(b)(3) refers to the year when the legal violation was
committed); Vance v. Union Planters Corp., 279 F.3d 295, 297 (5th Cir. 2002) (noting that in the
Title VII context, “[f]or purposes of this statute, we have held that the ‘current year’ refers to the
year in which the discriminatory act took place, not the year of judgment”) (citation omitted).
92

See Docket No. 37 ¶ 19.

93

See Docket No. 45 ¶ 19.

94

42 U.S.C.A. § 1981a(b)(3).

95

See 42 U.S.C.A. § 1981a(a)(1) (“In an action brought by a complaining party under
section 706 or 717 of the Civil Rights Act of 1964 [42 U.S.C. 2000e-5, 2000e-16] against a
respondent who engaged in unlawful intentional discrimination . . . the complaining party may
recover compensatory and punitive damages . . .”); Hans v. Bd. of Shawnee Cty. Comm’rs, 775
F. App’x 953, 956 (10th Cir. 2019) (reviewing and agreeing with other circuit holdings that
plaintiff can recover compensatory damages only after establishing intentional discrimination).
12

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eventually provided documentation of his disability from a medical professional. 96 However, far
from working to accommodate him, Connected Wireless’s management treated Plaintiff with a
hostility that has profoundly impacted his physical and mental wellbeing for years since. 97 The
Court finds Plaintiff has met his burden of establishing that Connected Wireless intentionally
discriminated against him based on his disability.
a. Emotional Distress / Pain & Suffering
Plaintiff requests $200,000 in damages related to mental anguish, emotional pain and
suffering, and loss of enjoyment of life, 98 which fall under compensatory damages. 99 As noted
above, the applicable statutory maximum for compensatory and punitive damages here is
$50,000.
According to the Third Circuit, “[t]o recover emotional damages a plaintiff must show ‘a
reasonable probability rather than a mere possibility that damages due to emotional distress were
in fact incurred [as a result of an unlawful act].’” 100 Testimony from Plaintiff and his father
establish a reasonable probability that Plaintiff’s emotional distress stemmed from Connected
Wireless’s unlawful discrimination. Plaintiff and his father testified at length about the anguish
Plaintiff experienced in the aftermath of requesting accommodation at Connected Wireless.
Plaintiff testified that he felt “worthless, like I didn’t matter, that I had no options,” and this

96

See Docket No. 91-4, at 18–23, 48, 56–57; Docket No. 91-10, at 2.

97

See e.g., Docket No. 91-4, at 19, 25, 27–28.

98

Docket No. 91, at 7–8.

99

See e.g., Tyler v. City of Manhattan, 118 F.3d 1400, 1402–03 (10th Cir. 1997) (treating
“emotional distress” under the ADA as a claim for compensatory damages).
100

Gagliardo v. Connaught Labs., Inc., 311 F.3d 565, 573 (3d Cir. 2002) (quoting Spence
v. Bd. of Educ., 806 F.2d 1198, 1201 (3d Cir. 1986)) (second alteration in original).
13

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caused a great deal of depression. 101 Craig Hart testified about his son’s painful mental
decompensation after departing Connected Wireless, including “escalation of all of the really
serious psychiatric and medical conditions, the psychosomatic conditions that he experienced
that were not present before Connected Wireless.” 102 Regarding the connection between this
emotional distress and Connected Wireless’s conduct, Plaintiff testified that his depression and
anguish stemmed from his experience at Connected Wireless, particularly his conversation with
Brian Rhay. 103 Plaintiff is a credible authority on the genesis of his heightened depression,
anxiety, and pain. His testimony clearly ties this suffering to the preceding interactions at
Connected Wireless. The Court finds Plaintiff has met his burden of establishing a reasonable
probability that his emotional distress resulted from Connected Wireless’s unlawful
discrimination. In addition, Plaintiff’s father testified that $200,000 was a reasonable sum to
compensate the emotional trauma his son had experienced. 104 The Court finds this testimony
provides, at the very least, a basis for awarding the statutory cap of $50,000 in compensatory
damages.
b. Medical Expenses
Plaintiff requests “$34,236.55 in medical expenses that are causally related to Connected
Wireless’s discriminatory acts.” 105 Medical expenses fall under compensatory damages, which
include “future pecuniary losses.” 106 EEOC guidance specifies that “out-of-pocket expenses

101

Docket No. 91-4, at 29.

102

Id. at 40.

103

See e.g., id. at 31.

104

Id. at 50–51.

105

Docket No. 91, at 11.

106

42 U.S.C.A. § 1981a(b)(3).
14

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caused by the discrimination (such as . . . medical expenses)” fall under compensatory
damages. 107 As the Court has granted the $50,000 statutory maximum for compensatory
damages, it cannot grant additional medical expenses. However, these medical expenses provide
further support for awarding the statutory maximum amount.
3. Punitive Damages
The Court has granted the $50,000 statutory maximum for combined compensatory and
punitive damages. As such, Plaintiff is not eligible for further punitive damages. 108 Even if this
were not the case, however, the Court is not convinced Plaintiff has cleared his evidentiary
hurdle.
4. Attorney Fees
Plaintiff seeks $102,538.50 in attorney fees. 109 The ADA provides that “[i]n any action . .
. commenced pursuant to this chapter, the court . . . in its discretion, may allow the prevailing
party . . . a reasonable attorney’s fee, including litigation expenses, and costs.” 110 Concerning
ADA plaintiffs, the Tenth Circuit has instructed that “[t]he primary principle which we must
apply is that a ‘prevailing plaintiff should ordinarily recover an attorney’s fee unless special

107

See e.g., Remedies for Employment Discrimination, EEOC (“Compensatory damages
pay victims for out-of-pocket expenses caused by the discrimination (such as costs associated
with a job search or medical expenses) and compensate them for any emotional harm suffered
(such as mental anguish, inconvenience, or loss of enjoyment of life).”).
https://www.eeoc.gov/remedies-employment-discrimination (last visited Oct. 9, 2020); see also
Marinelli v. Potter, 661 F. Supp. 2d 69, 83 (D. Mass. 2009) (finding that medical expenses are
generally included in the category of compensatory damages for Age Discrimination in
Employment Act purposes).
108

See 42 U.S.C.A. § 1981a(b)(3).

109

Docket No. 91, at 25.

110

42 U.S.C.A § 12205.
15

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circumstances would render such an award unjust.’” 111 No such circumstances have been
presented, nor are any apparent, here. Plaintiff is the prevailing party because the Court granted
him default judgment as to Connected Wireless on October 29, 2019. 112
The “fee the trial court establishes must be reasonable,” 113 and “the most useful starting
point for determining the amount of a reasonable fee is the number of hours reasonably expended
on the litigation multiplied by a reasonable hourly rate.” 114 “The party seeking an award of fees
should submit evidence supporting the hours worked and rates claimed.” 115
As evidence for requested attorney fees, Plaintiff provides documentation from his
current attorneys at Sumsion Business Law and his previous attorney Dallan Flake. 116 Sumsion
Business Law attorney Cameron Christensen provides an affidavit, appending invoices for
$90,538.50 in legal fees with hourly rates ranging from $90 to $345 depending on the
attorney. 117 Dallan Flake’s affidavit attests to an hourly rate of $250 multiplied by 48 hours of
work, totaling $12,000 in legal fees. 118 The Court finds these fees reasonable and will award the
combined total of $102,538.5 in attorney fees.

111

Roe v. Cheyenne Mountain Conference Resort, Inc. 124 F.3d 1221, 1232 (10th Cir.
1997) (quoting Hensley v. Eckerhart, 461 U.S. 424, 429 (1983)).
112

Docket No. 83.

113

Brown v. Phillips Petroleum Co., 838 F.2d 451, 453 (10th Cir. 1988).

114

Id. (quoting Hensley, 461 U.S. at 434).

115

Hensley, 461 U.S. at 433.

116

Docket No. 92-6, at 2–3; Docket No 94-2.

117

Docket No. 92-6, at 2–17.

118

Docket No. 94-2, at 3.
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B. ENTITIES AND INDIVIDUALS LIABLE FOR DAMAGES
Plaintiff argues Connected Wireless, C&C, and Morrison should be held jointly and
severally liable for damages. 119 “On motion or on its own, the court may at any time, on just
terms, add or drop a party,” 120 “even after judgment has been rendered.” 121 Plaintiff was not
previously aware of C&C’s identity as a successor company but nonetheless asserted claims
against it in the Amended Complaint as “Does 1–10.” 122 In addition, “[i]f an alter-ego claim is
asserted in conjunction with the underlying federal cause of action, the latter may provide the
basis for ancillary jurisdiction over the alter-ego claim.” 123 Therefore, although C&C and
Morrison have not been formally joined to this action, the Court may appropriately name them in
the judgment through its ancillary jurisdiction, 124 which includes “the power to conduct
proceedings necessary to protect and give effect to its judgments.” 125 The applicable theories of
liability are discussed below.

119

See Docket No. 91, at 27–40.

120

Fed. R. Civ. P. 21.

121

Newman–Green, Inc. v. Alfonzo–Larrain, 490 U.S. 826, 832 (1989).

122

See Docket No. 37 ¶ 5 (“Upon information and belief, Defendants Does 1–10 are
individuals or corporations that purchased the assets used in Connected Wireless.”).
123

Ellis v. All Steel Constr., Inc., 389 F.3d 1031, 1033 (10th Cir. 2004).

124

See id. (providing that “[i]t is only when an alter-ego claim is asserted in a separate
judgment-enforcement proceeding that Peacock requires an independent basis for federal
jurisdiction”); Privacy–Assured Inc. v. AccessData Corp., Ltd., No. 2:14-cv-722-CW, 2017 WL
2963435, at *2 (D. Utah July 11, 2017) (unpublished) (outlining what a plaintiff must show to
establish a court has subject matter jurisdiction to add a judgment debtor under an alter ego
theory of liability).
125

Sandlin v. Corp. Interiors Inc., 972 F.2d 1212, 1216 (10th Cir. 1992).
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1. C&C is Liable as Connected Wireless’s Successor
“The general rule is that where one corporation sells or otherwise transfers all of its assets
to another corporation, the latter is not liable for the debts and liabilities of the transferor.” 126
There are, however, four recognized exceptions:
(1) Where the purchaser expressly or impliedly agrees to assume such debts; (2)
where the transaction amounts to a consolidation or merger of the corporations; (3)
where the purchasing corporation is merely a continuation of the selling
corporations; and (4) where the transaction is entered into fraudulently in order to
escape liability for such debts. 127
Courts have found exceptions (2) and (3) to be so similar, they warrant consideration as a single
exception. 128 The Tenth Circuit, for example, does not distinguish between them in Trujillo v.
Longhorn Manufacturing Co. 129
Plaintiff argues each exception applies. The Court finds C&C is liable under combined
exceptions (2) and (3) as well as exception (4).
a. There is “substantial continuity” of identity to hold C&C liable.
The “de facto consolidation or merger” and “mere continuation” theories of successor
liability—exceptions (2) and (3)—have been broadened by the concept of “substantial
continuity” developed in a string of Supreme Court labor relations cases. 130 Plaintiff argues that

126

Sheedy v. BSB Properties, LC, No. 2:13-cv-290-JNP, 2016 WL 10537388, at *2 (D.
Utah Jan. 27, 2016) (unpublished) (quoting R.J. Enstrom Corp. v. Interceptor Corp., 555 F.2d
277, 281 (10th Cir. 1977)).
127

Trujillo v. Longhorn Mfg. Co., Inc., 694 F.2d 221, 224 (10th Cir. 1982) (quoting W.
Tex. Ref. & Dev. Co. v. Comm’r of Internal Revenue, 68 F.2d 77, 81 (10th Cir. 1933)).
128

See e.g., Cargo Partner AG v. Albatrans, Inc., 352 F.3d 41, 45 n. 3 (2d Cir. 2003)
(“Some courts have observed that the mere-continuation and de-facto-merger doctrines are so
similar that they may be considered a single exception.”) (collecting cases).)
129

Trujillo, 694 F.2d at 223–25.

130

See United States v. Mexico Feed & Seed Co., Inc., 980 F.2d 478, 487–88 (8th Cir.
1992) (Noting that “[t]he ‘substantial continuity’ test originated with a line of Supreme Court
labor relations cases” finding that, in certain situations, a purchasing corporation “may be
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C&C should be held liable under the theory that it shares “substantial continuity” of identity with
Connected Wireless. To analyze such liability, the Tenth Circuit has adopted the MacMillan
factors, 131 which include:
1) whether the successor company had notice of the charge, 2) the ability of the
predecessor to provide relief, 3) whether there has been a substantial continuity of
business operations, 4) whether the new employer uses the same plant, 5) whether
he uses the same or substantially the same work force, 6) whether he uses the same
or substantially the same supervisory personnel, 7) whether the same jobs exist
under substantially the same working conditions, 8) whether he uses the same
machinery, equipment and methods of production and 9) whether he produces the
same product. 132
The Tenth Circuit has not articulated an approach for weighing the above factors, noting
that “the ‘nature and extent of [successor] liability is subject to no formula, but must be
determined upon the facts and circumstances of each case.’” 133 In Trujillo, however, the court
upheld a district court’s finding that a corporation was a mere or substantial continuation of the
selling corporation based on the MacMillan factors and drawing from the reasoning of Brown v.
Evening News Association. 134 In Brown, the Eastern District of Michigan explained:
No one of these factors is controlling; the court must look at all of them along with
any others that present themselves in the case before it, and it must make its decision
by balancing the interests of the plaintiff and the national policy of abhorrence
toward employment discrimination against the interest of the successor . . . 135
considered in privity with its predecessor for purposes of [unfair labor practices]’”) (quoting
Golden State Bottling, Co., Inc. v. NLRB, 414 U.S. 168, 180 (1973)).
131

Trujillo, 694 F.2d at 225 (“The reasoning of the Sixth Circuit is convincing and we
endorse the application of the MacMillan factors in analyzing a successor corporation’s liability
under Title VII.”); see also 42 U.S.C.A. § 12117(a).
132

EEOC v. MacMillan Bloedel Containers, Inc., 503 F.2d 1086, 1094 (10th Cir. 1974)
(collecting cases).
133
Trujillo, 694 F.2d at 225 (quoting MacMillan, 503 F.2d at 1092) (alteration in
original).
134

See id. at 224; Brown v. Evening News Ass’n, 473 F. Supp. 1242, 1245 (E.D. Mich.

135

Evening News Ass’n, 473 F. Supp. at 1245.

1979).

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In addition, the Brown court noted that “[f]actors (4) through (9) are best considered sub-parts of
factor (3). They have been appropriately termed the ‘sameness’ factors.” 136
1) Factor 1: whether the successor company had notice of the charge
The Court lacks definitive information regarding this factor. Plaintiff contends C&C
“either knew, or should have known, that the charge of discrimination was filed” based on
circumstantial evidence because the 2013 charge date came long before the 2015 date when
C&C purchased Connected Wireless. 137 Certainly Connected Wireless was well aware of
Plaintiff’s case before transferring assets to C&C, as a UALD investigator interviewed District
Manager Brian Rhay regarding the matter on July 3, 2014. 138 C&C’s due diligence process
would likely have revealed Plaintiff’s charge. However, the Court cannot fully ascertain what
information C&C had in 2015 based on the one-line Bill of Sale in evidence. 139 The Bill of Sale
references further details in the Purchase Agreement. 140 However, even the document Plaintiff
references as the “Purchase Agreement” 141 does not shed any light on whether C&C had notice
of Plaintiff’s charge of discrimination.

136

Id.

137

Docket No. 91, at 30–31. Plaintiff’s original Charge of Discrimination against
Connected Wireless was dated August 30, 2013, and the Bill of Sale conveying Connected
Wireless’s assets to C&C was effective March 1, 2015. Docket No. 72-1, at 2; Docket No. 92-7,
at 2.
138

Docket No. 91-14.

139

See Docket No. 92-7, at 2.

140

See id.

141

This document—Docket No. 92-8, at 2–3—describes the transfer and sale of
Connected Wireless assets to C&C. While it meets the description of a purchase agreement, it
defines itself as the “Assignment Agreement,” and it is not clear whether this is the document
referenced in the Bill of Sale.
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2) Factor 2: whether Connected Wireless can provide relief
This factor weighs for holding C&C liable. Addressing this factor, the MacMillan court
explained, “[t]he primary concern . . . is to provide the discriminatee with full relief.” 142
Therefore, the court in Brown found that “the job of the court is to determine whether the new
employer is necessary, in the factual situation that is presented, to the formation of a ‘realistic
remedy’ for the discriminatee.” 143 In Trujillo, the Tenth Circuit found a successor corporation
liable even though the original corporation—where the discrimination occurred—remained
viable and recently sold assets for a hefty sum. 144 The court reasoned that it was not presented
with information concerning the original corporation’s liabilities and ability to fully pay the
judgment. 145 With the goal of providing the most complete relief possible, therefore, the court
held the successor corporation liable. 146 The same is true here, to an even greater degree.
Information before the Court regarding Connected Wireless’s solvency suggests Connected
Wireless cannot provide complete relief to Plaintiff. 147 “Failure to hold a successor employer
liable for the discriminatory practices of its predecessor could emasculate the relief provisions of

142

MacMillan, 503 F.2d at 1092.

143

Evening News Ass’n, 473 F. Supp. at 1247.

144

Trujillo, 694 F.2d at 225 (noting that the judgment amount was only four percent of
the $425,000 price for which the original company recently sold assets).
145

Id.

146

Id.

147

See e.g., Docket No. 71-1 (correspondence between Connected Wireless President
Morrison and Plaintiff, in which Mr. Morrison describes Connected Wireless as “a defunct
company”); Docket Nos. 64-1, 65-1 (Motions to withdraw as attorney, noting that Connected
Wireless “has ceased operations and its corporate entity has been dissolved by the Utah Division
of Corporations and Commercial Code”).
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Title VII [or the ADA] by leaving the discriminatee without a remedy or with an incomplete
remedy.” 148 Therefore, this factor strongly favors holding C&C liable.
3) Factors 3–9: whether there is adequate “sameness” between Connected
Wireless and C&C
These factors also weigh for C&C liability. There is evidence before the Court of
substantial continuity of business operations from Connected Wireless to C&C. Plaintiff testified
that he physically visited the Connected Wireless store at Valley Fair Mall in West Valley City,
Utah within two months before the February 24, 2020 hearing. 149 He asked employees “[i]s this
a Connected Wireless store?” and was told “yes.” 150 The Connected Wireless store at the Provo
Towne Centre continued operations as a C&C store 151 after Connected Wireless supposedly
“ceased all operations in approximately 2015.” 152 LinkedIn profiles for employees show that
several of them—including supervisory personnel like Morrison and HR Manager Gary Rhay—
represent that they currently work for Connected Wireless or that they worked there long after
2015. 153 This does not appear to be a matter of negligent updating. For example, one employee
lists job updates as recently as 2019, and he documents his Connected Wireless employment as
continuing until May 2016—well after the company allegedly closed shop in 2015. 154 These
profiles also show that at least one employee transitioned from being a District Manager at

148

MacMillan, 503 F.2d at 1091.

149

Docket No. 91-4, at 9–10.

150

Id.

151

See Docket No. 92-12, at 2–4.

152

Bankruptcy Case No. 19-20789, Docket No. 14, at 1–2.

153

See Docket No. 92-13, at 2–11 (Profiles for Morrison, Gary Rhay, and multiple other
staff members list employment with Connected Wireless continuing to the present. Others list it
ending sometime after 2015).
154

Id. at 7.
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Connected Wireless in Tulsa, Oklahoma until February 2015 to being a District Manager at C&C
also in Tulsa in March 2015. 155 This employee’s transition without pause from Connected
Wireless to C&C suggests that not only did both positions carry the same title, their substance
was likely very similar. Further, C&C began business at Connected Wireless’s old store
locations after taking over Connected Wireless’s Authorized Representative Agreement with
Sprint in April 2015 to sell Sprint products and services. 156 This shows C&C sells the same
products and services as Connected Wireless did. These collective facts point to a continuation
of the same business with a different name. Therefore, the Court finds that the sale of assets from
Connected Wireless to C&C, and the subsequent continuation of business operations, establishes
substantial continuity of identity. As the Tenth Circuit found in Trujillo, this is a case where
“‘the equities . . . favor successor liability because it is the successor who has benefited from the
discriminatory employment practices of its predecessor.’” 157
b. Connected Wireless fraudulently transferred assets to C&C to avoid liability, and
C&C should be held liable.
Exception (4) also provides a basis for holding C&C liable. There is evidence before the
Court that the transfer of assets from Connected Wireless to C&C was fraudulently done to avoid
liability. As Connected Wireless chose not to participate in this litigation, the Court is presented
with no contrary evidence. Still, the Court must assess whether Plaintiff’s evidence shows by a
preponderance of the evidence that Connected Wireless fraudulently transferred assets to
C&C.158

155

Id. at 10–11.

156

Docket No. 92-8, 4–75.

157

Trujillo, 694 F.2d at 225 (quoting MacMillan, 503 F.2d at 1092).

158

The operative 2015 version of the statute does not specify the burden. However, in
2017, the Utah Uniform Fraudulent Transfer Act was renamed the Uniform Voidable
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This analysis under Utah’s Uniform Fraudulent Transfer Act (“UFTA”) provides that:
A transfer made or obligation incurred by a debtor is fraudulent as to a creditor,
whether the creditor’s claim arose before or after the transfer was made or the
obligation was incurred, if the debtor made the transfer or incurred the obligation .
. . with actual intent to hinder, delay, or defraud any creditor of the debtor . . . 159
The statute provides that a court analyzing whether a debtor had “actual intent” to hinder, delay,
or defraud any creditor may consider the following non-exhaustive factors:
To determine “actual intent” under Subsection (1)(a), consideration may be given,
among other factors, to whether:
(a) the transfer or obligation was to an insider;
(b) the debtor retained possession or control of the property transferred after the
transfer;
(c) the transfer or obligation was disclosed or concealed;
(d) before the transfer was made or obligation was incurred, the debtor had been
sued or threatened with suit;
(e) the transfer was of substantially all the debtor’s assets;
(f) the debtor absconded;
(g) the debtor removed or concealed assets;
(h) the value of the consideration received by the debtor was reasonably
equivalent to the value of the asset transferred or the amount of the obligation
incurred;
(i) the debtor was insolvent or became insolvent shortly after the transfer was
made or the obligation was incurred;
(j) the transfer occurred shortly before or shortly after a substantial debt was
incurred; and
(k) the debtor transferred the essential assets of the business to a lienor who
transferred the assets to an insider of the debtor. 160
As to these factors, the Court has the following information:

Transactions Act, amended, and renumbered to Utah Code Ann. § 25-6-101 et seq. This updated
statute specifies that “[a] creditor making a claim for relief under Subsection (1) has the burden
of proving the elements of the claim for relief by a preponderance of the evidence.” Utah Code
Ann. § 25-6-202(3).
159

Utah Code Ann. § 25-6-5(1) (2015).

160

Id. at § 25-6-5(2) (2015).
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(d) Notice: Connected Wireless was on notice of Plaintiff’s potential suit at least by July 3, 2014,
when a UALD investigator interviewed Brian Rhay. 161 This was before the March 1, 2015 asset
transfer. 162
(e) Substantially All Assets: The Bill of Sale transferring assets from Connected Wireless to
C&C specifies that it covers “all Assets of Connected Wireless.” 163 Counsel for Connected
Wireless wrote to Plaintiff on November 1, 2017, stating, “[e]ven if this case goes to trial and
[Plaintiff] prevails, he will not be able to recover any damages from Connected Wireless. The
company sold all of its assets in March 2015 and is no longer a registered business.” 164
(i) Insolvency: Connected Wireless has claimed multiple times to be insolvent after transferring
assets to C&C. It represented on November 1, 2017, that it had no more assets. 165 Connected
Wireless’s February 2019 bankruptcy petition claimed it had no “cash or cash equivalents,” 166
and Morrison represented again on August 12, 2019, that it was a “defunct company.” 167
(j) Timing: Morrison signed a March 1, 2015 Bill of Sale on Connected Wireless’s behalf with
C&C eleven days after Connected Wireless received a letter from the UALD indicating that the
EEOC requested transfer of the discrimination investigation to their office. 168 Connected

161

See Docket No. 91-14.

162

See Docket No. 92-7, at 2.

163

Id. (“Connected Wireless . . . hereby sells, transfers and conveys to C&C . . . all
Assets of Connected Wireless . . . as described in more detail in the Purchase Agreement.”).
164

Docket No. 92-2, at 3 (Letter from Connected Wireless counsel to Plaintiff, dated
November 1, 2017, stating Connected Wireless sold all assets in March 2015).
165

See id.

166

Docket No. 91-15, at 6.

167

Docket No. 71-1, at 2 (email correspondence from Morrison to Plaintiff’s counsel).

168

See Docket No. 92-7, at 2 (Bill of Sale, dated March 1, 2015); Docket No. 92-14, at 2
(Letter from UALD to Brian Rhay at Connected Wireless, dated February 18, 2015).
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Wireless was previously aware of the discrimination charge, 169 and its conduct supports
Plaintiff’s assertion that Connected Wireless quickly sold assets after seeing the legal case
escalate.
The Court finds the evidence available under these factors shows subversive motive. The
UFTA requires only that a debtor have intent to hinder or delay, not necessarily intent to defraud.
“This distinction is important because while fraud requires an intention to deceive a party,
hindrance or delay simply require an intention to put off payment.” 170 The evidence above
establishes, by a preponderance of the evidence, that Connected Wireless’s 2015 transfer of
assets was conducted with intent to put off payment.
It appears this subversive intent continued after the 2015 asset transfer. As noted
previously, on November 1, 2017, Connected Wireless’s counsel Leisel Stevens wrote to
Plaintiff claiming Connected Wireless had sold all assets. 171 The 2019 bankruptcy petition
asserts that Connected Wireless’s 2017 gross revenue was only $39,000. 172 However, the trustee
in Connected Wireless’s later bankruptcy proceedings indicated that “2017 tax returns show over

169

See Docket No. 91-14 (documenting the UALD’s July 3, 2014 interview with Brian
Rhay regarding the discriminatory conduct).
170

In re Black Iron, LLC, 609 B.R. 390, 408 (Bankr. D. Utah 2019). See Uniform
Voidable Transactions Act § 4 cmt. 8 (Nat’l Conference of Comm’rs on Unif. State Laws, 2016)
(“Fraud is not a necessary element of a claim for relief under any of those provisions. By its
terms, § 4(a)(1) applies to a transaction that ‘hinders’ or ‘delays’ a creditor, even if it does not
‘defraud’ the creditor. See, e.g., Shapiro v. Wilgus, 287 U.S. 348, 354 (1932); Means v. Dowd,
128 U.S. 273, 288–89 (1888); Consove v. Cohen (In re Roco Corp.), 701 F.2d 978, 984 (1st Cir.
1983); Empire Lighting Fixture Co. v. Practical Lighting Fixture Co., 20 F.2d 295, 297 (2d Cir.
1927); Lippe v. Bairnco Corp., 249 F. Supp. 2d 357, 374 (S.D.N.Y. 2003). “Hinder, delay, or
defraud” is best considered to be a single term of art describing a transaction that unacceptably
contravenes norms of creditors’ rights. Such a transaction need not bear any resemblance to
common-law fraud.”).
171

Docket No. 92-2, at 3.

172

Docket No. 91-15, at 24.
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$871,271.00 in gross business income.” 173 Less than one month after Plaintiff and Connected
Wireless held an unsuccessful settlement conference on January 18, 2018, 174 Morrison signed an
Application for Reinstatement for Connected Wireless on February 12, 2018. 175 About one
month after that, Morrison instructed Leisel Stevens to withdraw as counsel on March 14, 2018,
claiming Connected Wireless “lacks the necessary resources to pay for Counsel’s ongoing legal
services in connection with this case.” 176
On February 12, 2019, Morrison executed a voluntary petition for Connected Wireless’s
bankruptcy, 177 staying proceedings in this Court. 178 During bankruptcy proceedings, the trustee
learned Morrison transferred significant assets from Connected Wireless for his own use, and the
trustee requested documentation from Morrison. 179 Without providing that documentation,
Morrison filed a petition to voluntarily dismiss the bankruptcy case on May 24, 2019. 180 He did
so through his attorneys W. Earl Webster and James E. Harward—claiming “the filing of a
Chapter 7 bankruptcy petition was an error” and that “as of the date of this petition, Debtor owes
no debts to any creditors.” 181 That same day, Morrison signed a notice of termination of counsel
directing his attorneys Webster and Harward to withdraw from representation. 182 On August 12,

173

Docket No. 92-1, at 2.

174

See Docket No. 25 (Settlement Conference Report).

175

Docket No. 92-3, at 3.

176

Docket No. 26.

177

Docket No. 91-15, at 5.

178

See Docket No. 56.

179

See Docket No. 92-1, at 2–3.

180

Docket No. 92, at 2–3.

181

Id.; Docket No. 92-1, at 3 (“As of the date of the debtor’s petition to dismiss and this
objection, the debtor has failed to produce any information or documents or matters requested in
writing except for certain documents related to the ADA litigation.”).
182

Docket Nos. 64-1, 65-1.
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2019, Morrison emailed Plaintiff’s counsel claiming “Connected Wireless is a defunct
company,” and therefore, “mediation would be a waste of everyone’s time.” 183 Neither Plaintiff
nor the Court has since heard from Connected Wireless.
The Court finds that Connected Wireless had actual intent to hinder or delay Plaintiff
from obtaining relief. Under the UFTA, this renders the asset transfer from Connected Wireless
to C&C fraudulent. Therefore, exception (4) to the general rule regarding successor corporations
applies, 184 and Connected Wireless’s liability can be imputed to C&C under this theory.
c. There is insufficient evidence to establish that C&C explicitly or impliedly agreed to
assume Connected Wireless’s debts.
Regarding exception (1), Plaintiff argues C&C is liable for damages in the present case
because it expressly agreed to take on Connected Wireless’s liabilities. 185 The Court is not
convinced this theory of liability applies. Plaintiff points to the Assignment, Assumption and
Consent Agreement, made between Connected Wireless, C&C, and Sprint. 186 This agreement
assigns “assets and liabilities of Connected Wireless arising from or in connection with the [July
9, 2014] [Authorized Representative] Agreement” between Connected Wireless and Sprint to
C&C as of April 1, 2015. 187 It does not saddle C&C with liabilities arising before July 9, 2014,
when the original AR Agreement became effective. 188 The discriminatory conduct at issue

183

Docket No. 71-1, at 2.

184

See Trujillo, 694 F.2d at 224.

185

Docket No. 91, at 28–29.

186

Docket No. 92-8, at 2.

187

Id. (defining “Effective Date” as April 1, 2015).

188

See id.at 4, 24 (defining “Effective Date” as “the date the last Party signs this
Agreement.” Connected Wireless’ representative signed on July 7, 2014, and Sprint Solutions’
representative signed on July 9, 2014.).
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occurred around March 19, 2013, when Plaintiff was constructively terminated from
employment with Connected Wireless. 189
Nonetheless, the Court has found C&C liable under both the “substantial continuity” and
fraudulent transfer theories of successor liability.
2. Morrison is Individually Liable as Connected Wireless’s Alter Ego
According to Utah’s alter ego doctrine,
the trial court may “disregard the corporate entity” and hold an individual liable
if: (1) there is “such unity of interest and ownership that the separate personalities
of the corporation and the individual no longer exist, viz., the corporation is, in
fact, the alter ego of one or a few individuals;” and (2) “the observance of the
corporate form would sanction a fraud, promote injustice, or an inequitable result
would follow.” 190
Plaintiff points to Connected Wireless’s February 2019 bankruptcy petition as evidence for the
“unity” requirement above. 191 It lists Morrison as President and shareholder, holding a 100%
interest in the debtor company, Connected Wireless. 192 This suggests his interests are fully
aligned with those of the corporation. Further, the trustee in Connected Wireless’s bankruptcy
proceedings indicated:
It is believed that the debtor entity [Connected Wireless] has continued to incur
debt and made transfers and incurred debt in funding the operations of HAM
Enterprises, the construction company of Anthony J. [Morrison], the principal of
the debtor. So far the Trustee has learned of the transfer of no less than $17,000.00
of American Express credit incurred by the debtor and transferred to Mr. [Morrison]
or HAM Enterprises.
The Trustee also learned of transfers of real property, including sale of the Highland
Drive property and a home. The Trustee has requested copies of the closing
statements for those sales, as well as made written request for financial account
statements from January 1, 2016 to March 5, 2019, identification of all transfers in
189

Docket No. 72-1, at 2.

190

Macris & Assoc., Inc. v. Neways, Inc., 60 P.3d 1176, 1181, 2002 UT App 406, ¶ 21
(quoting Norman v. Murray First Thrift & Loan Co., 596 P.2d 1028, 1030 (Utah 1979)).
191
Docket No. 91-15.
192

Id. at 34.
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the last four years, copies of the ADA litigation pleadings and claims against the
debtor, and turnover of $17,861.00. As of the date of the debtor’s petition to dismiss
and this objection, the debtor has failed to produce any information or documents
or matters requested in writing except for certain documents related to the ADA
litigation.193
The Court has uncontested evidence that Morrison held a 100% interest in Connected
Wireless as of February 2019 and that he used corporate assets for his personal gain, including
funding his construction company, HAM Enterprises. 194 Observing the corporate form in this
situation would “sanction a fraud, promote injustice, or an inequitable result would follow.” 195
Therefore, the corporate entity must be disregarded and Morrison held personally liable.
III. CONCLUSION
It is therefore
ORDERED that Connected Wireless, Inc., C&C Communications, LLC, and Anthony
Morrison are jointly and severally liable for damages to Plaintiff in the amount of $250,379.80.
This sum consists of $97,841.30 in back pay, $50,000 in compensatory damages, and
$102,538.50 in attorney fees.
DATED this 16th day of November 2020.

BY THE COURT:

Ted Stewart
United States District Judge

193

Docket No. 92-1, at 3. Trustee erroneously refers to Morrison as “Anthony J. Morris.”

194

Docket No. 91-15, at 34; Docket No. 92-1, at 3.

195

Macris, 60 P.3d at 1181.
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