Thompson v. FATHOM CREATIVE, INC.

Citations: 626 F. Supp. 2d 48; 2009 U.S. Dist. LEXIS 51126; 2009 WL 1703230Docket: Civil Action 08-1841 (JDB)

Court: District Court, District of Columbia; June 18, 2009; Federal District Court

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Monique Thompson filed a lawsuit against Fathom Creative, Inc. for failing to pay overtime wages under the Fair Labor Standards Act, the District of Columbia Minimum Wage Revision Act, and the District of Columbia Wage Payment and Collection Act. She also claimed Fathom did not provide required health care coverage under the District of Columbia Health Continuation Coverage Act. In response, Fathom counterclaimed for tortious conversion and breach of fiduciary duty, alleging that Thompson misappropriated company funds, misused her corporate credit card, refused to return company property, and failed to pay her share of health insurance premiums. Fathom accused her of creating false time records as part of her breach of fiduciary duty.

Thompson moved to dismiss or seek summary judgment on Fathom’s counterclaims, arguing that her handling of the funds was lawful and within her fiduciary duties. The court found that without completed discovery, summary judgment on the counterclaims was premature and denied Thompson's motion. 

Thompson was hired as a part-time Bookkeeper/Administrator in June 2005, with varying accounts of her employment terms, including salary and health benefits. Fathom stated that Thompson's responsibilities involved managing financial accounts, often without prior approval, while Thompson contended that her duties did not include financial management and that she had authorization for all transactions. Disputes arose regarding the consistency of her timekeeping with Fathom's records, with Fathom asserting that her time records were unauthorized and contradictory.

Thompson counters allegations from Fathom regarding her timekeeping and financial practices, asserting that she was authorized by Mitchell for all nonconforming procedures and that some discrepancies stem from technical issues with Fathom's timekeeping database. Initially, Thompson was paid via check from Fathom's account, but later began wire transferring payments to herself. Fathom claims Thompson overpaid herself by over $30,000, despite receiving two raises in early 2007, and opened an unauthorized PayPal account in Fathom’s name to divert funds into her own accounts. Thompson contends that all transfers were authorized and that Fathom owes her unpaid overtime wages. 

Fathom also alleges Thompson mischarged expenses related to a company retreat, claiming she used her corporate American Express card for personal stays and never reimbursed the company. Thompson argues these charges were accidental and that she attempted to rectify the situation. Additionally, Fathom states that Thompson made unauthorized Apple Store purchases with her corporate card and failed to return company property after her termination. 

In response to these counterclaims, Thompson filed a complaint seeking unpaid overtime and health insurance coverage, to which Fathom counterclaimed for conversion and breach of fiduciary duty based on her alleged misappropriations and false time records. Thompson has moved to dismiss or seek summary judgment on these counterclaims, arguing she lacked intent for conversion, was authorized for all transactions and charges, and complied with Fathom's policies regarding her health insurance premiums and return of property.

Thompson contends that the breach of fiduciary duty claim fails because, while she owed a fiduciary duty to Fathom as an employee, her actions were authorized and known to Mitchell, negating any breach. She has moved to dismiss Fathom's counterclaims under Federal Rule of Civil Procedure 12(b)(6) or, alternatively, for summary judgment. Since Thompson submitted materials outside the pleadings, the court must treat the motion as one for summary judgment under Rule 56, which requires that all parties have an opportunity to present relevant materials. Summary judgment is permissible when there is no genuine issue of material fact, and the moving party must initially show the absence of such a dispute. The court must view the non-movant’s evidence favorably, but the non-movant must provide more than a trivial amount of evidence to oppose the motion. Thompson's reliance on external documents has converted her dismissal motion to a summary judgment motion, which is typically disfavored when made before discovery. However, Thompson asserts that the evidence, primarily consisting of Fathom's business documents, is adequate for the court to rule in her favor even before discovery. The court must determine if the current record is sufficient to grant summary judgment on Fathom's counterclaims at this early stage.

Fathom has engaged in its own document discovery and claims it requires additional time to conduct further discovery, particularly third-party discovery, to adequately address the material facts supporting Thompson's motion for summary judgment. Fathom asserts that the current record is insufficient, with unresolved genuine issues of material fact, as neither party has deposed the other. Key disputes involve whether funds transferred into Thompson's personal account and her use of a corporate credit card were authorized by Mitchell, and whether Thompson's pay raises were similarly approved. Thompson claims she was authorized to manage her pay and timekeeping methods, while Mitchell denies these assertions. The court emphasizes that, on summary judgment, all reasonable inferences must favor the nonmoving party, and inadequate discovery typically precludes summary judgment. Consequently, Fathom has provided enough evidence to oppose summary judgment on its conversion and breach of fiduciary duty claims at this stage of the proceedings.

Summary judgment on Fathom's counterclaims is deemed premature due to unresolved genuine issues of material fact. Consequently, Thompson's motion for summary judgment will be denied without prejudice, allowing either party to file a new motion after discovery concludes. Thompson's supporting memorandum includes her affidavit and 35 exhibits, but Fathom argues that some exhibits are unauthenticated hearsay and requests the Court to limit its review to Fathom's counterclaims as per Rule 12(b)(6). Although some parts of Thompson's submission may not meet the requirements of Rule 56, the Court will disregard the non-compliant portions but does not find the entire submission inadmissible. Regarding the need for additional discovery, Thompson asserts that Fathom has not filed a Rule 56(f) affidavit indicating it intends to conduct valuable discovery. Nevertheless, the Court recognizes that other documents, including Fathom's opposing motion and attached declaration, suffice to demonstrate the necessity for further discovery, particularly since no discovery has occurred yet.