UNITED STAT ES DIS TRICT COURT F OR THE D ISTRIC T OF CO LU M BIA MONIQUE THOMPSON, P laintif f/ Counter-D efendan t, v. Ci vilAc ti on N o. 08 -1 84 1 ( JD B) F ATHOM CREATIVE, INC., D e fe nd a nt/C o un t e r - P la in t if f.
M EM OR

AN DU M OP IN ION Pla int if f/ Counte r- De fe nd ant M on iqu e Th omp so n ( " Th omp so n" ) f ile d a n a c tio n a g a ins t De fe nd ant/ Counte r- Pla int if f F a tho m Cr e a tiv e , Inc . ( " F a tho m" ), a lle g ingfa ilure to p ay ov e rt ime wag es pursua

nt to the Fair

L abor Standa

rds Act, 29 U.S.C. §§ 201 et seq., the D istrict of Col umb ia Min imum Wa g e Re vis ion Ac t, D .C. Cod e § 3 2- 10 03 , a nd the Di str ic t of

Col umb ia Wage Pay

ment and Collection Act, D.C. Code §§ 32-1302- 3. Thompson further alleg es a f

ailure to provide continuation hea lth care cover ag e under the District of Columbia Hea lth Cont inuation Coverag e Ac t, D.C. Code § 32-731. Fathom filed counterc laims ag ainst Thompson for tortious
conver sion and brea ch of f iduciary duty . Fathom alleg es that Thompson unlawfully conver ted Fathom's funds by

misappropriatingthem for he r own use, misusing her c orporate cr edit car d, ref using to re turn company

proper ty , and fa iling to pay

her por tion of her he alth insurance pr e miums. Counte rc l. ¶

10 5. F a tho m a lso a lle g e s th a t T ho mps on br e a c he d h e r f

idu c iary duty owed to F athom by

these same actions, as we ll as by cre ating false time r ecor ds. I d. ¶ 111. Now bef ore the Court is Thompson's motion to dis miss, or in the alternative, f or summary judgme nt on Fathom' s counterc laims. Thompson argues that F athom has not-2-

established that her

control over

its funds was unlawf

ul and that her

actions fe ll within t he scope of her duties as a f

iduciary to Fathom. See T hompson Reply at 12-16. B eca

use discover

y has
n o to cc u rr ed , s u m m ary

j u d gm en to nt h e c o un t er cl ai m s i s p re m at ure at th i s t i m e, an d T h o mp s o n 's motion will there fore be denie d. BACK GR OUND I n J une 2005, F athom offe red Thompson a position as a part-time B ookkeepe r/ Administrator. Countercl. ¶ 1. A ccor ding to F athom, the offe r included a salary of $35,000 per y ear and an oppor

tunity to join Fathom' s health and de ntal plan; Thompson acc epted the of fer
. I d. ¶¶ 2- 4; see a lso Fathom Ex. C . Fathom ag ree d to pay half of T hompson's monthly premium pay ment for the c ompany ' s health and de ntal plan. Fa thom Ex . C. Thompson alleg es diffe rent terms of e mploy

ment than those outlined by Fathom. See Thompson Mem. at 2. In particula r, Thompson's ve rsion of F athom' s offe r letter c ontains a salar y of $36,500 per

y ear , a def

inition of "pa rt time" a s "twe nty

hours per wee k," a nd an agree ment that Fathom would pay for Thompson's pe rsonal hea lth insurance pr emiums. Thompson Ex . 1. Thompson also claims that F a tho m a g re e d to pa

y fo r a ll o f h e r h e a lthbe ne fi ts whe n s he ini tia lly joi ne d F a tho m' s p lan in 2006, and, later

in her e mploy

ment, for pa

rt of her benef its. Thompson Mem. at 2. Fa t h o mal l ege s t h at T h o mp s o n 's d ai l y j o b re s p o n s i b i l i t i es i n cl u d edm an agi n g Fa th o m 's bank and c redit ac counts, and we re of ten per formed w ithout the ex press a pproval of F athom. Fathom St atement of

Materia l Fac ts in Dispute ("SOF ") ¶¶ 5- 11. Thompson was also issued a corpor ate Ame rica

n Ex press c ard f

or which F athom paid the bill. Countercl. ¶¶ 10- 11. Fathom further argues that only

when F athom president Dr ew Mitche ll's c onfidenc e in Thompson had started to dete riorate did he re quire Thompson to seek his a pproval be fore signingany chec ks.-3-

Fathom SOF ¶ 12. Thompson, on the other ha nd, claims that she had dif fer ent job responsibilities that did not i nclude a financ ial manag ement role . Thompson Mem. at 2. She
a lso c la ims that sh e c on du c te d e ve ry tr ans a c tio n, fi na

nc ia l or oth e rw ise , und e r t

he e xpre ss
a uth or izatio n o f M itc he ll, ob ta ine d thro ug h o ne -o n- on e we e kly me e tin g s. I d. a t 3- 4. Mit c he ll de nie s th e se re g ula

r w e e kly me e tin g s o c c ur

re d e xce pt n e ar t

he e nd of Th omp so n' s e mpl oy

me nt, when Mitche ll requested to mee t with Thompson because of his conce rns about her work. Fathom SOF ¶ 8. F a tho m f ur the r a lle g e s th a t du

ri nghe r e mpl oy

me nt, Th omp so n d id n ot c on fo rm wi th Fathom's timekee ping pr ocedur es, and that the unauthorized time rec ords she did kee p
c on tr a dic te d F a tho m' s o wn re c or ds . Se e Counte rc l. ¶ ¶ 1 2- 29 . T ho mps on

c ounte rs that Mi tc he ll authorized all of her

nonconfor

ming timekee ping pr ocedur es, and that some irregularities ca n be explained by

technica l difficulties with Fathom's timekee ping da tabase . Thompson Mem. at 4. I nitially , Fathom ag ree d to pay Thompson by

chec k direc tly

from F athom' s acc ount. F a tho m SO F ¶ 1 7. At

so me po int

duri nghe r t e nure a t F a tho m, T ho mps on be g an p ayinghe rs e lf throug h wire tra

nsfer s into her own bank a ccounts. Counterc l. ¶¶ 34-35. F athom alleg es that despite two pay

raises in January

2007 and Apr il 2007, Thompson overpaid her self by over $30,000 during her time at the company . See id. ¶¶ 36- 54. Fathom also asserts that Thompson op e ne d a n una uth or ize d " Pay

Pa l" a c c ount i n F a tho m' s n ame to s e nd and re c e ive e le c tr on ic pay ments throug h the Interne t. I d. ¶¶ 58- 62. Fathom claims that Thompson diverted company funds into her own ba

nk acc ount via this unauthorized Pay Pal acc ount. I d. ¶¶ 63- 67. Thompson, on the other ha nd, argues that any

transfe rs she made wer e expressly authorized by Mitchell and that, despite these transfe rs, Fathom sti ll owes her unpa id overtime wa g es. See-4-

Thompson Mem. at 4-6. Thompson offe rs evidenc e of F athom' s approva l of one such tr ansfe r outside of Fathom's January and Apr il 2007 pay

raises ma de to compensate Thompson for "ove rag es." Thompson Ex . 32. I n Se pte mbe r 2 00 7, F a tho m f un de d a tw o- da y c omp any re tr e a t at th e Ritz C arl ton ho te l in San J uan, Puerto Rico. Counterc l. ¶¶ 68-69. F athom claims that Thompson char g ed the total cost of her

own six -nig ht stay

on her c orporate Amer ican Express ca rd, as we ll as the stay

of her friend, K ristal Shipp, and the extended stay of two other F athom employ ees. I d. ¶¶ 73- 85. Fathom was neve r re imbursed for the se cha rg es. I d. ¶ 86. Thompson argues that the c harg es
wer e ac cidental a

nd that she believe d she had f ix ed the situation by

callingthe Ritz Carlton and aler ting them of

the er ror. See Thompson Mem. at 6-7. Finally , Fathom argues that duringher te nure at the company , Thompson made unauthorized purcha ses at the Apple Store with her c orporate Amer ican Express ca rd, and ne ver reimburse d Fathom for these pur chase s. Countercl. ¶¶ 87-92. F athom additionally claims that when he r re lationship with t he compa ny ended in Ma

rch 2008, Thompson re fused to re turn Fathom's laptop a

nd other c ompany

proper ty , despite F athom' s repe ated r equests. I d. ¶ 98. Thompson ag ain ar g ues that all of the pur chase s, and her owner ship of the laptop, wer e authorized by

Fathom. See Thompson Mem. at 7-8. On Oc tob e r 2 7, 20 08 , T ho mps on fi le d a fo ur -c la im c omp la int

se e kin g un

pa id o ve rt ime wag es and c laiming f

ailure to c ontinue health insuranc e cove rag e pursua nt to the Fair

L abor Standards Ac t and other D .C. wag e and hour s laws. See Compl. ¶¶ 40-64. With its J anuar y 30, 2009 answe r, F athom filed a two- count counter claim ag ainst Thompson. Count one alleg es that Thompson conver

ted Fathom's prope rty

by (i) pay ing he rself more than what wa s approve d by-5-

Fathom; (ii) failing to pa

y her por tion of her he alth insurance premiums; (iii) misappropriating money from F athom' s Pay

Pal acc ount to her per sonal bank a ccount; (iv) making una uthorized char g es and pur chase s on her c orporate Amer ican Express ca rd without reimbursingFathom for the same; a

nd (v) f ailing to r eturn c ompany

proper ty upon her te rmination. Countercl. ¶ 105. Count two alleg es that Thompson brea ched he r fiducia ry duty to Fathom throug h most of the actions alleg ed in count one, a s well as by cre ating false time r ecor ds. I d. ¶ 111. Now bef ore the Court is Thompson's motion to dis miss, or in the alternative, f or
summa ry jud g me nt o n th e c ounte rc la ims . T ho mps on argue s th a t F a tho m' s c on ve rs ion c la im sh ou ld b e dis mis se d b e c a us e (i ) s he la c ke d th e int e nt r e qu ir e d f or c on ve rs ion , e sp e c ia lly

in
re g ard s to the c or

po rate Am e ri c an E xpre ss c ha rg e s at th e Ritz C arl ton , ( ii) sh e wa s e xplic itl y
a uth or ize d to make pa

y me nts to h e rs e lf

fr om F a tho m' s b ank

a c c ount o r P ay

Pa l a c c ount a

nd to make pur chase s at the Apple Store, a nd (iii) she paid he r hea lth insurance pr emiums and retur ned
c o mp an y p r o p e rt y c o n s i s t e n tw i t hF a t h o m ' s a u th o r i z a t i o n . T h o mp s o nM e m . a t1 0
. F i n a l l y, Thompson argues that the bre ach of fiduciar y duty claim also fa ils because , althoug h she owe d a fiduciar y duty to Fathom as a

n employ ee, she did not breac h this duty , as Mitchell authorized and was on notice of all her

actions. Thompson Reply at 15-16. STA ND AR

D O F RE VI EW Th omp so n h a s mo ve d to dis mis s F a tho m' s c ounte rc la ims un de r F e de ra l Ru le of Civ il Procedur e 12(b) (6) or , in the alternative, for summary judgme nt. When, on a Rule 12(b)(6) motion, "matters outside the ple ading s are prese nted to and not excluded by the cour t, the motion must be treate d as one f

or summary

judgme nt under Rule 56. All par ties must be give n a
re a so na ble op po rt

un ity to p re se nt a ll the mate ri a l th a t is pe rt ine nt t o th e mot ion ." F e d. R. C iv. P.Th omp so n' s me mor and um i n s up po rt

of he r m oti on

is a c c omp anie d b y

he r a ff ida vit , 1 which itself is supported by 25 exhibi ts. Her r eply

includes an a dditional ten exhi bits. Fathom argues that the Court should decline to c onsider Thompson' s motion for summary judgme nt and lim it i ts r e vie w t o th e fa c ts a lle g e d in F a tho m' s c ounte rc la ims , p ur su ant t o Ru le 12 (b )( 6) , b e c a us e some of the e x hibits accompany ing T hompson's a ffidavit constitute unauthe nticated he arsa y . See Fathom Opp'n at 6-7. For the purposes of

summary judgme nt, affidavits "must be made on persona l knowledg e, set out fa cts that would be a dmissibl e in evidenc e, and showthat the af fiant is competent to testify

on the matters state d." F ed. R. Civ. P. 56(e). Althoug h parts of Thompson's submission may not conform to the r equire ments of Rule 56, the Court does not at this ti me find that the doc uments are , as a whole, inadmissible. For pr esent purpose s, the Court will sim ply

disreg ard the non-complying por tions of Thompson's a ffidavit. See Williams v. Dodar o, 576 F. Supp. 2d 72, 77 n.2 (D.D .C. 2008). -6- 12(d). B eca

use Thompson submitted matters outside the pleading s, the Court must treat Th omp so n' s mo tio n a s o ne fo r s umm ary jud g me nt. 1 Summary judgme nt is appropriate when the ple ading s and the e vidence demonstrate that

" the re is n o g e nu ine iss ue a s to any mate ri a l f

a c t and that th e mov ant i s e nti tle d to jud g me nt a s a matter of la

w." Fe d. R. Civ. P . 56(c) . The pa rty seekingsummary

judgme nt bear s the initial responsibility

of demonstrating the a

bsence of a g enuine dispute of material fa ct. See Celotex Cor p. v. Catr e tt, 47 7 U .S. 31 7, 32 3 ( 19 86 ). Th e mov ingpa rt y may su c c e ssf ull y su pp or t it s motion by

identifying those portions of " the pleading s, the discover y and disclosure materia ls on file, and a ny aff idavits" that it believe s demonstrate the absenc e of a g enuine issue of

materia l fac t. Fed. R. Civ. P. 56(c); see Celotex , 477 U.S. at 323. I n deter mining whe ther ther e exists a ge nuine issue of mate rial fa ct suffic ient to prec lude
summa ry jud g me nt, the c ourt

mus t r e g ard

the no n- mov ant' s st a te me nts a s tr ue and a c c e pt a ll
e v i d e n c e an d

m ak e a l l i n f

e r e n c e s i nt h e n o n - m o v an t ' s f av o r . S e e A n d e r s o nv . L i b e rty L o b b y, I nc., 477 U.S. 242, 255 (1986). Anon-moving party , howeve r, must establish more than the

" me re e xiste nc e of

a sc int ill a of e vid e nc e " in s up po rt

of its po sit ion . I d. a t 25 2. B y po int ingto-7-

the abse nce of

evidenc e prof

fer ed by the non-movingparty , a moving party may succe ed on summary judgme nt. Celotex , 477 U.S. at 322. "I f the e vidence is merely colora ble, or is not signific antly

probative, summar

y judgme nt may

be g rante d." Anderson, 477 U.S. at 249- 50 (citations omitted). Summary judgme nt is appropriate if the non-movant f ails to offer

"e vidence on which the jury

could re asonably

find for the [non-movant] ." I d. at 252. DI SCU SSIO N By relying on nume rous documents outside of the pleading s, Thompson has conver ted her motion to dismis s into a motion for summary judgme nt. Pursuant to Rul e 12(d) , if a motion to d ism iss un de r R

ule 12 (b )( 6) is c on ve rt e d to a mot ion fo r s umm ary

jud g me nt, " a ll p art ie s mu st be g iven a r easona

ble opportunity

to present a ll the material that is per tinent" to the motion for summary judgme nt. "Pre -discover y summary judgme nt motions are usually premature a

nd hence dis fa vo re d. " B ourb e a

u v . Joh natha

n Wo od ne r C o. , 6 00 F . Su

pp . 2 d 1 , 3 (D .D .C. 20 09 ); se e a lso Celotex , 477 U.S. at 322 (summary judgme nt is normally

appropr iate af

ter " adequate time for discovery ") ; Tabb v. District of Columbia, 477 F. Supp. 2d 185, 188 n.1 (D.D .C. 2008) (noting that a pre -discover

y summary judgme nt motion "usually is a disfavore d prac tice" ). In this case, Th omp so n' s mo tio n f

or summa ry jud g me nt w a s f

ile d p ri or to d isc ov e ry . T he on ly

ava ila ble te sti mon ia l e vid e nc e re g ard ingthe fa c ts o f t he c a se is i n th e fo rm

of de c lara tio ns and a ff ida vit s by Thompson, Mitchell, and one witness. The question, then, is whether the re cord nowbefor e the Court is s uf fi c ie nt t o w arr ant s umm ary jud g me nt o n F a tho m' s c ounte rc la ims a t th is e arl y sta g e in t he pr oc e e din g s. Acc ording to Thompson, the rec ord is sufficie ntly complete f

or the Court to rule in her fa vo r. Th omp so n Re ply

a t 11 . Sh e argue s th a t pr e -d isc ov e ry summa ry jud g me nt i s a

pp ro pr iateThompson contends that the Court nee d not order a dditional discovery beca use F athom 2 ha s n ot f ile d a n a ff ida vit purs ua nt t o Ru le 56 (f

) s ho wi ngtha

t it is " c on du c tin g , o r i nte nd s to conduct va luable discove ry ." T hompson Reply at 12. Thompson is corre ct that Fa thom did not file a Rule 56( f) a ffidavit in re sponse to Thompson's motion. But other documents, including opposing motions, may

suffice "to a lert the district cour t of the nee d for f

urther disc overy " a

nd there fore serve as the " functional e quivalent of a n aff idavit." F irst Chicag o Int'l v. United Exc ha ng e Co. , 8 36 F .2 d 1 37 5, 13 80 (D .C. Cir . 1 98 8) ; se e a lso El lio tt v . F e d. B ur e a u o f P ri so ns , Civ.A.No. 04-1702, 2006 WL3826930 at *14-15 (D .D.C. Dec . 27, 2006). In light of the fac t that no discovery

has take n place , Fathom's opposingmotion and Mitchell's attached de clar ation are sufficie nt to show the need f or fur ther discove ry

at this tim e. See F irst Chicag o Int'l, 836 F.2d at 1380. -8- in this case bec ause the evidenc e she ha s produce d is comprised mostly of F athom' s own business documents or those of Fathom's third par

ty vendors. I d. She adds that F athom has alre ady conducte d some " discovery " of its own documents, and has ha d ample time to compar e its own d oc ume nts wi th t ho se su bmi tte d b y

Th omp so n. I d. F a tho m r e sp on ds that " in o rd e r t o
a de qu a te ly

and tho ro ug hly

a dd re ss a ll o f t

he mate ri a l f

a c ts u po n w hic h T ho mps on

re lie s in support of her

motion for summary

judgme nt – particular ly

the fa cts ref

lected in the va

rious thi rd -p art y do c ume nts a tta c he d to Th omp so n' s me mor and um – F a tho m r e qu ir e s su ff

ic ie nt t ime to conduct discove ry , espec ially third-par ty discovery ." F athom Opp' n at 6. Fa thom outli nes specific needs f

or discover

y in its opposi tion brief and Mitche ll's attached de clar ation, including the nee d for discove ry

outside of its own business documents. See id. at 9; Mitchell Dec l. ¶¶ 19, 23, 35-36. The Court has r eviewe d the af fidavits, decla

rations, and e x hibits subm itted by the 2 p ar t i es an d

agr ee s wi t hFa t h o mt h at t h e r ec o rdas i ts t an d s i s l ac k i n g. Given the pa

ucity of the re cord, g enuine issues of material fa ct re main to be re solved. Neither party has depose d the other. F or many of the a lleg ed instance s of conve rsion and bre ach of fiducia ry duty , the Court is left with only the competingaff

idavit and dec laration of Thompson
and Mit c he ll. Th e fa c tua l di sp ute s th a t ari se are mate ri a l. F or e xamp le , to e sta

bli shits-9-

conver sion counterc laim, Fathom must demonstrate the "unla wful exercise of owne rship, dominion or control over [Fathom's] personal pr operty . . . in denial or re pudiation of [F a tho m' s] rig hts" to such pr operty . Fur ash & Co. v. McClave, 130 F . Supp. 2d 48, 58 (D.D.C. 2001). B ut there is considera

ble dispute as to whethe r the funds tra nsfer red into Thompson' s persona l
acc ount, her c orporate cr edit car d char g es, and he r possession of F athom' s computer we re
un lawf ul o r a uth or ize d. F or

ins tanc e , T ho mps on

argue s Mi tc he ll w a s p ut o n n oti c e of a ll tr ans a c tio ns duri ngthe ir

we e kly me e tin g s, Th omp so n A ff . ¶ 5, wh ile Mit c he ll c on te nd s th a t th e se meeting s did not occur until he bec ame c oncer ned about Thompson' s job perfor mance duringher last y ear at Fathom, Mit chell De cl. ¶ 10. Similarly , Thompson alleg es that in Marc h 2007, Mit c he ll a

uth or ize d h e r t o p ay

he rs e lf $1 00 0 p e r w e e k at th e ir

re g ula r w e e kly me e tin g s, Th omp so n A ff

. ¶ ¶ 2 4- 25 , a pa y ra ise Mit c he ll d e nie s a

uth or izin g , M itc he ll D e c l. ¶ 22 . Wh ile Thompson presents some e vidence as to one pa y raise outside of

those admitted by

Fathom, the
rec ord Thompson prese nts as a whole c ontains litt le detail esta blishing any

expli cit authorization by Mitchell for the spe cific f unds or prope rty

she asse rts she lawf

ully controlled. See , e.g ., Thompson Ex . 32 (a June 2007 email from Mitche ll noting that Thompson should let him know how much she w ould increa se her pay to compensate for he r additional hours, but without sp e c if yingthe e xac t amou

nt o r M itc he ll' s a

pp ro va l of

that amou

nt) . Asim ila

r a na ly sis a pp lie s to Fathom's bre ach of

fiduciar y duty counter claim, which turns on the sa me authorization issues as the conve rsion counter claim, as we ll as whether Thompson complied with Fathom' s timekeeping pr oc e dure s. Com

pa re Th omp so n A ff

. ¶ ¶ 1 3- 14 (c la imi ngtha

t Mi tc he ll a

uth or ize d T ho mps on

to ke e p tr a c k o f h e r h ours in E xce l sp re a ds he e ts) , w ithMit c he ll D e c l. ¶ ¶ 1 5- 17 (d e nyingMit c he ll authorized Thompson to use any timekeepingmethods other than F athom' s own timekeeping-10-

databa se). On summary

judgme nt, all rea sonable infe renc es must be dra wn in favor

of the nonmoving pa

rty . See Ande rson, 477 U.S. at 255. Without adequate discover y , summary

judgme nt is usually not appropriate, eve n when a non-movant re lies on only an af fidavit to prese nt ge nuine issues of mater ial fac t. Homes-Mar tin v. L eavitt, 569 F. Supp. 2d 184, 208 (D .D.C. 2008); see also 3D Global Solutions, I nc., v. MVM, I nc., 552 F . Supp. 2d 1, 6 n.2 (D.D.C. 2008) (noting that " a no n- mov ant' s a ff

ida vit may su ff ic e to d e fe a t a

summa ry jud g me nt m oti on

if the pa rt ie s'
sw or n s tate me nts are mate ri a lly dif fe re nt. " ). Con se qu e ntl y , d ra wi nga ll r e a so na

ble inf e re nc e s in F a tho m' s f

avo r, F a tho m ha s p re se nte d s uf fi c ie nt e vid e nc e to d e fe a t summa ry jud g me nt a g a ins t it s
conver sion and brea ch of f iduciary duty counter claims at this ear ly stag e of the proce eding s. CO NC LU SION Summary judgme nt on Fathom' s counterc laims is premature at this poi nt of the p r o c e e d i n g s b e c a

u s e g e nu i n e i s s u e s o f

m a t e r i a l f

a c tr e m a i nt o b e r e s o l v e d
. A c c o r d i n g l y, Thompson's summar

y judgme nt motion wil l be denied w ithout prejudice. At the c lose of discovery , either pa

rty may file a ne w motion for summary judgme nt. A separ ate or der ha s been i s s u e d t o d ay. SO ORDERED.

/ s / J OHN D. B ATES Un i t edS t at es Di s tri ct J u d ge Dated: June 18, 2009