UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

SUSAN PREISLER,
Plaintiff-Appellant,

and

NELSON BERRIOS,
Plaintiff,

v.

HOSPITALITY INTERNATIONAL,
INCORPORATED, a Georgia
                                                               No. 96-1435
Corporation, a/k/a Scottish Inns;
BAN INN, INCORPORATED, a North
Carolina Corporation,
Defendants-Appellees,

and

ABC COMPANIES; JANE OR JOHN
DOES, 1 through 10,
Defendants.

Appeal from the United States District Court
for the Eastern District of North Carolina, at Raleigh.
W. Earl Britt, District Judge.
(CA-94-958-5-BR(1))

Argued: December 2, 1996

Decided: January 30, 1997

Before WILKINSON, Chief Judge, ERVIN, Circuit Judge, and
DAVIS, United States District Judge for the
District of Maryland, sitting by designation.

_________________________________________________________________
Affirmed by unpublished per curiam opinion.

_________________________________________________________________

COUNSEL

ARGUED: Michael S. Kimm, Hackensack, New Jersey, for Appel-
lant. Phillip J. Anthony, PATTERSON, DILTHEY, CLAY & BRY-
SON, Raleigh, North Carolina, for Appellee Ban Inn; Andrew Albert
Vanore, III, YATES, MCLAMB & WEYHER, Raleigh, North Caro-
lina, for Appellee Hospitality International. ON BRIEF: Philip S.
Adkins, EAGEN, EAGEN & ADKINS, Durham, North Carolina, for
Appellant. Grayson L. Reeves, Jr., PATTERSON, DILTHEY, CLAY
& BRYSON, Raleigh, North Carolina, for Appellee Ban Inn.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See
Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Hotel guests Susan Preisler and Nelson Berrios sued hotel operator
Ban Inn and hotel franchisor Hospitality International for invasion of
privacy and infliction of emotional distress. The district court granted
summary judgment to Ban Inn and Hospitality International. Preisler
appeals. Because the evidence shows that the defendants neither knew
of nor ratified the alleged tortious acts by hotel employees, we affirm
the judgment of the district court.

I.

On November 29, 1992, Preisler and Berrios checked into the Scot-
tish Inn at Exit 15 on Interstate 95 in North Carolina. They were
assigned room 142. Both Preisler and Berrios showered while in their
room that night. They claim that during the stay they were startled by
noises coming from the wall in the bathroom, on which a large vanity

                    2
mirror was positioned. They further allege that they discovered two
separate "peeping tom" holes scraped into the mirror, behind which
was a utility hallway accessible to all hotel employees. The president
of Ban Inn, who manages the Scottish Inn hotel where Preisler and
Berrios stayed, contends that he can find no evidence that peeping
tom holes ever existed. He points out that two walls and several
inches of fiberglass insulation separate the utility hallway from the
bathroom in room 142, and none have holes or patch marks.

Preisler and Berrios brought suit against Ban Inn, the franchisee
that operated that particular Scottish Inn, and against Hospitality
International, the franchisor of the Scottish Inn chain. When Preisler
and Berrios failed to provide discovery in a timely manner, the magis-
trate judge recommended that defendants' motion for sanctions be
allowed. The district court adopted the magistrate's recommendation,
dismissing Berrios' claim for discovery violations, assessing $200 in
costs against Preisler, and then granting summary judgment in favor
of Ban Inn and Hospitality International. Only Preisler appeals.

II.

A.

Preisler argues that the district court erred in granting summary
judgment to Ban Inn and Hospitality International. She asserts that the
two companies are responsible for the invasion of privacy and inflic-
tion of emotional distress that she suffered. Preisler's complaint
pleads no claim of premises liability or other breach of duty owed
directly to her by defendants. We therefore move directly into an
analysis of whether Ban Inn and Hospitality International are vicari-
ously liable, under respondeat superior, for torts allegedly committed
by the hotel employees in this case.

Because the events at issue occurred in North Carolina, we look to
North Carolina law to determine the rules of liability. In that state,

          a principal will be held liable for its agent's wrongful act
          under the doctrine of respondeat superior when the agent's
          act is (1) expressly authorized by the principal; (2) commit-

                     3
          ted within the scope of the agent's employment and in fur-
          therance of the principal's business--when the act comes
          within his implied authority; or (3) ratified by the principal.

B.B. Walker Co. v. Burns Int'l Sec. Servs., Inc. , 424 S.E.2d 172, 174
(N.C. Ct. App.), review denied, 429 S.E.2d 552 (N.C. 1993). Neither
of the first two circumstances -- express authorization or scope of
employment and furtherance of business -- are at issue in this case.
If Ban Inn and Hospitality International are to be liable, then, it must
be because they ratified the alleged peeping activities of the employ-
ees. In order to ratify an agent's action, a corporation must have
actual knowledge of the behavior. Carolina Equip. & Parts Co. v.
Anders, 144 S.E.2d 252, 258 (N.C. 1965) ("A principal who acted
without actual knowledge of the material facts will not be held to
have ratified an unauthorized act of his agent even though he failed
to exercise due diligence which would have revealed the truth.").

Preisler offers no evidence that either Ban Inn or Hospitality Inter-
national had actual knowledge of any alleged peeping tom activities
occurring at the Scottish Inn hotel.* She merely makes a bald allega-
tion that "defendants Hospitality International and Scottish Inns knew
or should have known or would have discovered by reasonable
inspection of the relevant premises that such Peeping Tom holes
existed in room 142 of the hotel." This is insufficient to counter the
affidavits sworn by the president of Ban Inn and the vice president of
Hospitality International stating that neither company knew of or rati-
fied any peeping tom activities in the hotel on November 29, 1992 or
at any other time.
_________________________________________________________________
*Preisler attempts to find evidence of actual knowledge by urging a
"negative inference" from the fact that no inspection report from Hospi-
tality International can be found for 1992. She implies that an inspection
of the Scottish Inn in question took place in 1992 but that the report has
been purposely lost or destroyed because it indicated knowledge of the
peepholes. Her reliance on the lack of a report, however, is misplaced.
Hospitality International made "periodic reports" each of which referred
to the previous inspection. Two inspections were made in 1991. The next
report in sequence was written in March 1993, and it specifically refer-
enced the previous report made in 1991. There is no evidence that Hospi-
tality International made an inspection in 1992, and ample evidence that
it did not.

                    4
B.

Preisler further argues that the district court abused its discretion
in imposing a $200 sanction against her for discovery delays, under
Fed. R. Civ. P. 37(a)(4). She claims that the court failed to consider
her mitigating circumstances, that it imposed a sanction that was more
than was necessary to deter future violations, and that it imposed
sanctions for expenses related to a hearing which covered matters
other than the sanction motion.

We find that the district court was well within its discretion in
imposing a $200 sanction on Preisler. The defendants served Berrios
and Preisler with written discovery requests on July 17, 1995, with
reponses due by August 21, 1995. On September 18, after contacting
Berrios and Preisler's attorney to try to obtain responses to the dis-
covery request, defendants filed a Motion to Dismiss or Compel and
Motion to Recover Expenses. The magistrate judge granted the
Motion to Compel. Rule 37(a)(4) requires that,

          the court shall, after affording an opportunity to be heard,
          require the party . . . whose conduct necessitated the motion
          . . . to pay the moving party the reasonable expenses
          incurred in making the motion, including attorneys' fees,
          unless the court finds that the motion was filed without the
          movant's first making a good faith effort to obtain the dis-
          closure of discovery without court action, . . . or that other
          circumstances make an award of expenses unjust.

At the magistrate judge's request, the defendants prepared an affidavit
showing that the expenses associated with the Motion to Compel
amounted to $1,208. The magistrate judge recommended that Preisler
be required to pay half of the total -- $604. The district court imposed
only a $200 sanction. The court was well within its discretion to
require Preisler to pay this amount.

III.

For the foregoing reasons, we affirm the judgment of the district
court.

AFFIRMED

                    5
