Court Opinion

ID: 4305445
Source: CourtListenerOpinion
Date Created: 2018-08-20 19:01:03.661756+00
Date Added: 2024-06-11T14:35:23.182543
License: Public Domain

UNITED STATES DISTRICT COURT
                   FOR THE DISTRICT OF COLUMBIA
________________________________
                                 )
VOX MEDIA, INC.,                 )
                                 )
               Plaintiff,        )
                                 )
          v.                     ) Civil Action No. 17-666 (EGS)
                                 )
GRAIG MANSFIELD,                 )
                                 )
               Defendant.        )
________________________________)

                      MEMORANDUM OPINION AND ORDER

       Plaintiff Vox Media, Inc. (“Vox”) brings suit against its

former employee Defendant Graig Mansfield for allegedly

defrauding the company by taking over $200,000 of its assets for

his own use. Vox’s complaint includes four counts against Mr.

Mansfield for (1) fraud; (2) fraudulent concealment; (3)

conversion; and (4) unjust enrichment. Pending before the Court

is Mr. Mansfield’s motion to dismiss Vox’s complaint. See Def.’s

Mot., ECF No. 14. Upon consideration of the motion, the response

and reply thereto, and the relevant law, Mr. Mansfield’s motion

to dismiss is DENIED.

  I.     Background

    Vox is a digital media company organized under Delaware law

with its principal place of business in the District of

Columbia. Compl., ECF No. 1 ¶ 2. Vox creates and distributes

news content online “covering sports, culture, technology, and

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politics, among other subjects.” Id. In August 2012, Vox hired

Mr. Mansfield to work as its “Procurement Manager” within the

finance and accounting department. Id. ¶¶ 8, 9. Mr. Mansfield

worked in that position for three years, until he left Vox in

June 2015 and moved to Atlanta, Georgia, where he currently

resides. Id. ¶¶ 3, 8, 21. As Procurement Manager, Mr. Mansfield

“coordinat[ed] procurement methods; manag[ed] data from company

cards, expense reports, and corporate accounts for budget

reporting; and monitor[ed] spend[ing] levels.” Id. ¶ 9. Mr.

Mansfield also managed Vox’s corporate credit card account and

its various frequent-flier and travel reward accounts. Id. ¶¶

10, 15. Upon joining Vox, Mr. Mansfield “acknowledged and agreed

to abide by” Vox’s “Employee Handbook.” Id. ¶ 11. In so doing,

he “agreed to ‘serve the Company faithfully and use [his] best

efforts to promote its interests.’” Id. He also agreed he would

not damage, destroy, or steal company property. Id.

    Vox applied for its corporate credit card in May 2012. Id. ¶

13. The credit card had a “rewards program” under which a

customer earned “points” based on the customer’s spending. Id.

¶¶ 13, 16. The customer could use the points to purchase travel

or merchandise or simply convert the points to cash or cash-

equivalent bonus cards. Id. ¶ 16. A corporate customer could

choose to enroll the company itself in the rewards program or

allow individual employees to earn the points. Id. ¶ 13. Vox

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chose to enroll the company itself; therefore, “all points

accrued from company [credit] cards under the rewards program

would be for Vox Media’s use.” Id. Likewise, Vox enrolled itself

in travel reward accounts that operated similarly. Id. ¶¶ 15,

16. The company did not authorize individuals to redeem or

transfer the company’s travel or credit card points for personal

use. Id. ¶¶ 13, 14. During Mr. Mansfield’s tenure, Vox had not

dedicated a specific use for the rewards points; it was

“deliberating” and put the points “aside until the company had

determined a use for them.” Id. ¶ 18.

    Vox alleges that Mr. Mansfield “betrayed the company” by

“secretly stealing from it throughout his employment, and even

afterwards.” Id. ¶ 19. According to Vox, Mr. Mansfield

“repeatedly use[d] his control over the corporate credit card

and travel accounts to transfer cash . . . or reward points . .

. to his personal accounts.” Id. For example, Mr. Mansfield

allegedly converted rewards points to cash-equivalent gift cards

and instructed the merchants to send the gift cards to his

personal address. Id. He also allegedly used the rewards points

to purchase luxury goods—including a watch worth over $1,700—

which he also sent to his personal address. Id. ¶¶ 19, 22. Mr.

Mansfield also allegedly bought himself airline tickets using

Vox’s frequent-flier points. Id. ¶ 19.

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    According to Vox, Mr. Mansfield “continued this theft long

after he left his position” in June 2015. Id. ¶ 22. He allegedly

continued using Vox’s points until at least February 2016. Id.

From March 2013 through at least February 2016, Mr. Mansfield

allegedly stole over $210,000 worth of Vox’s assets. Id. ¶¶ 28,

30. Vox discovered Mr. Mansfield’s alleged scheme in April 2016

and filed its complaint on April 14, 2017. See id. ¶ 26-29.

  II.   Standard of Review

     A motion to dismiss pursuant to Federal Rule of Civil

Procedure 12(b)(6) tests the legal sufficiency of a complaint.

Browning v. Clinton, 292 F.3d 235, 242 (D.C. Cir. 2002). A

complaint must contain “a short and plain statement of the claim

showing that the pleader is entitled to relief, in order to give

the defendant fair notice of what the . . . claim is and the

grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550

U.S. 544, 555 (2007) (quotations and citations omitted).

     Despite this liberal pleading standard, to survive a motion

to dismiss, a complaint “must contain sufficient factual matter,

accepted as true, to state a claim to relief that is plausible

on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

(internal quotations and citations omitted). A claim is facially

plausible when the facts pled in the complaint allow the court

to “draw the reasonable inference that the defendant is liable

for the misconduct alleged.” Id. The standard does not amount to

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a “probability requirement,” but it does require more than a

“sheer possibility that a defendant has acted unlawfully.” Id.

     “[W]hen ruling on a defendant’s motion to dismiss [pursuant

to Rule 12(b)(6)], a judge must accept as true all of the

factual allegations contained in the complaint.” Atherton v.

D.C. Office of the Mayor, 567 F.3d 672, 681 (D.C. Cir. 2009)

(internal quotations and citations omitted). In addition, the

court must give the plaintiff the “benefit of all inferences

that can be derived from the facts alleged.” Kowal v. MCI

Commc’ns Corp., 16 F.3d 1271, 1276 (D.C. Cir. 1994). Even so,

“[t]hreadbare recitals of the elements of a cause of action,

supported by mere conclusory statements” are not sufficient to

state a claim. Iqbal, 556 U.S. at 678.

  III. Analysis

     Mr. Mansfield moves to dismiss Vox’s complaint pursuant to

Federal Rule of Civil Procedure 12(b)(6). See Def.’s Mot., ECF

No. 14. He makes two arguments: (1) Vox’s complaint is time-

barred; and (2) Vox has not sufficiently pled fraudulent

concealment. See id. The Court considers each argument in turn.

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    A. It is Premature to Dismiss Vox’s Complaint as Untimely

      Mr. Mansfield argues that the Court should dismiss Vox’s

complaint as untimely. See Def.’s Mot., ECF No. 14 at 7. 1 He

contends that, under District of Columbia law, the statute of

limitations for fraud, conversion, and unjust enrichment is

three years. See id. According to Mr. Mansfield, Vox’s injury

“accrued in March 2013,” the date that he allegedly “began to

redeem [credit card] and travel rewards for his personal benefit

and without the company’s permission.” Id. Thus, Vox should have

filed its complaint by March 2016. Because Vox did not file its

complaint until April 14, 2017, Mr. Mansfield argues that its

complaint must be dismissed. See id. Vox responds that its

complaint is not conclusively time-barred because the statute of

limitations is tolled by the doctrine of fraudulent concealment.

See Pl.’s Opp’n, ECF No. 16 at 6-8.

       Federal Rule of Civil Procedure 12(b)(6) “is the vehicle

for asserting the affirmative defense of statutory time

limitation.” Peart v. Latham & Watkins LLP, 985 F. Supp. 2d 72,

80 (D.D.C. 2013). “[B]ecause statute of limitations issues often

depend on contested questions of fact, dismissal is appropriate

only if the complaint on its face is conclusively time-barred.”

1 When citing electronic filings throughout this Opinion, the
Court cites to the ECF page number, not the page number of the
filed document.
                                 6
Bregman v. Perles, 747 F.3d 873, 875-76 (D.C. Cir. 2014)

(quoting de Csepel v. Republic of Hungary, 714 F.3d 591, 603

(D.C. Cir. 2013)). A court should therefore “‘hesitate to

dismiss a complaint on statute of limitations grounds’” unless

the defendant has met his “heavy burden” to show that the

complaint is conclusively time-barred. Feld Ent., Inc. v. Am.

Soc’y for the Prevention of Cruelty to Animals, 873 F. Supp. 2d

288, 308 (D.D.C. 2012) (quoting DePippo v. Chertoff, 453 F.

Supp. 2d 30, 33 (D.D.C. 2006)).

     Vox does not dispute that its claims are governed by the

District of Columbia’s three-year statute of limitations

pursuant to D.C. Code § 12-301(8). See generally Pl.’s Opp’n,

ECF No. 16. While a claim generally accrues under District of

Columbia law “‘when the plaintiff has knowledge of (or by the

exercise of reasonable diligence should have knowledge of) (1)

the existence of the injury, (2) its cause in fact, and (3) some

evidence of wrongdoing,’” fraudulent concealment “tolls the

running of the statute of limitations.” Firestone v. Firestone,

76 F.3d 1205, 1209 (D.C. Cir. 1996)(quoting Knight v.

Furlow, 553 A.2d 1232, 1234 (D.C. 1989)). To plead fraudulent

concealment, a plaintiff must allege “(1) that defendants

engaged in a course of conduct designed to conceal evidence of

their alleged wrong-doing and that (2) the plaintiffs were not

on actual or constructive notice of that evidence, despite (3)

                                  7
their exercise of diligence.” Id. (quotations and citations

omitted). While fraudulent concealment “generally . . . requires

that the defendant made an affirmative misrepresentation tending

to prevent discovery of the wrong doing,” a “failure to disclose

by one who has a duty to do so—such as someone standing in a

fiduciary or confidential relationship—can also establish

fraudulent concealment.” Id.

     Whether Mr. Mansfield fraudulently concealed his alleged

fraud and conversion is a “contested question[] of fact,”

precluding dismissal at the pleadings stage. Bregman, 747 F.3d

at 875-76. Indeed, the Court finds that Vox has adequately pled

that: (1) Mr. Mansfield affirmatively concealed his actions to

prevent discovery; and/or (2) that he had a fiduciary duty to

disclose his alleged theft and failed to do so.

     Specifically, Vox alleges that Mr. Mansfield gave only

himself access to Vox’s rewards accounts, plausibly in an

attempt to avoid detection. Compl., ECF No. 1 ¶¶ 17, 29

(“Mansfield had set himself up as Vox Media’s only contact with

the travel provider and used that control over the accounts to

cash in for his own personal benefit.”). Because Mr. Mansfield

was the only employee with access to the accounts, see id., it

is also plausible that Vox did not have notice of his behavior,

despite its asserted diligence in ensuring that its employees

did not steal any company property, see id. ¶ 11 (alleging

                                8
company policies against theft). Vox also alleges that Mr.

Mansfield downplayed the benefits that the company earned via

the rewards programs, describing the benefits as “not very

good.” Id. ¶ 17. Construed in the light most favorable to Vox,

the Court must infer that Mr. Mansfield minimized Vox’s benefits

in an attempt to conceal his alleged theft. Additionally, Vox

alleges that Mr. Mansfield sent the stolen gift cards and luxury

items to his home address, rather than his work address. Id. ¶

19. Again, the Court may infer that he did so in order to

conceal his activities from his employer.

     Mr. Mansfield contends that these alleged concealments

cannot meet the standard for fraudulent concealment as a matter

of law. See Def.’s Reply, ECF No. 17 at 2-3. In so arguing, he

compares the alleged misrepresentations to those at issue in

Riddell v. Riddell Washington Corp., and concludes that his

alleged deception cannot meet the Riddell “standard.” See id.

(discussing 866 F.2d 1480, 1491 (D.C. Cir. 1989)). In Riddell,

the Court of Appeals for the District of Columbia Circuit (“D.C.

Circuit”) concluded that a jury could find that the defendants

had affirmatively concealed their wrongdoing when they lied to

the plaintiff about an appraisal. 866 F.2d at 1492. In so

concluding, the D.C. Circuit held that a defendant’s affirmative

deception may be “as simple as a single lie.” Id. (quotations

omitted). It did not create a “standard for concealment,” as Mr.

                                9
Mansfield seems to suggest. See Def.’s Reply, ECF No. 17 at 3.

Mr. Mansfield’s reliance on Riddell is also misplaced because

the D.C. Circuit reached its conclusion at the summary judgment

stage with the benefit of discovery. See id.

     What’s more, Vox has also alleged sufficient facts to

suggest that Mr. Mansfield was in a fiduciary relationship with

the company. As such, Mr. Mansfield may have fraudulently

concealed his theft by merely failing to disclose it to Vox. See

Firestone, 76 F.3d at 1209. For example, Vox alleges that Mr.

Mansfield was “entrusted with the management of corporate

assets,” Compl., ECF No. 1 ¶ 1, and had “a special duty of

care,” id. ¶ 23, yet “never disclosed” his actions to the

company, id. ¶ 20. Vox also alleges that Mr. Mansfield had a

duty to “serve the company faithfully” and not steal “any

company property” pursuant to its policies. Id. ¶ 11.

     Mr. Mansfield contends that he was not a fiduciary because

he had a “relatively low-level position” and “was not an officer

or director, or even the head of a department.” Def.’s Mot., ECF

No. 14 at 8. Whether Mr. Mansfield was indeed a fiduciary is

“contested question[] of fact” that the Court may not resolve at

this stage of the proceedings. Feld Ent., Inc., 873 F. Supp. 2d

at 308. "District of Columbia law has deliberately left the

definition of 'fiduciary relationship' flexible.” Kemp v.

Eiland, 139 F. Supp. 3d 329, 343 (D.D.C. 2015)(citations

                               10
omitted)(analyzing a breach of fiduciary duty claim). As such,

determining whether a fiduciary relationship exists is “a fact-

intensive question, and the fact-finder must consider ‘the

nature of the relationship, the promises made, the type of

services or advice given and the legitimate expectations of the

parties.’” Millennium Square Residential Ass’n v. 2200 M Street

LLC, 952 F. Supp. 2d 234, 248-49 (D.D.C. 2013)(quoting

Firestone, 76 F.3d at 1211) (emphasis added). Given Mr.

Mansfield’s alleged control over Vox’s credit card and travel

accounts and its alleged expectation that he would serve the

company faithfully, it is plausible that Mr. Mansfield had a

fiduciary relationship with Vox. See, e.g., id. ¶¶ 11, 29.

     Therefore, the Court cannot conclude, at this stage of the

proceedings, that Vox’s complaint is conclusively time-barred.

  B. Vox Sufficiently Pled Fraudulent Concealment

     Relatedly, Mr. Mansfield argues that Vox failed to plead

“any element[]” of fraudulent concealment. Def.’s Mot., ECF No.

14 at 8. As discussed, the Court finds that Vox pled facts

sufficient to infer that Mr. Mansfield concealed his alleged

theft and that Vox had no notice of the concealment, despite its

due diligence. See Firestone, 76 F.3d at 1209 (discussing the

elements of fraudulent concealment).

     Still, Mr. Mansfield argues that the Vox has not pled

fraudulent concealment because it has not “establish[ed] that

                               11
[Vox] used due diligence in trying to uncover the facts.” Def.’s

Mot., ECF No. 14 at 8. Mr. Mansfield contends that Vox exercised

“no oversight” and failed to allege any steps its employees took

to supervise Mr. Mansfield, request access to the rewards

accounts, or review the accounts. Id. at 8-9. Vox responds by

arguing that the Court may not infer a lack of diligence on a

motion to dismiss. Pl.’s Opp’n, ECF No. 16 at 11.

     Once a plaintiff pleads “fraudulent concealment,” a

defendant may “assert a defense based on the plaintiff’s lack of

due diligence.” Firestone, 76 F.3d at 1209 (quotations omitted).

To determine whether a plaintiff exercised due diligence in

uncovering a cause of action, a court must make “a fact-specific

judgment in each case as to what the court expects a reasonable

plaintiff to do in uncovering the elements of his claim.” United

States ex rel. Miller v. Bill Harbert Int'l Constr., Inc., 505

F. Supp. 2d 1, 13 (D.D.C. 2007)(quotations omitted). A court

must measure “the plaintiff's efforts to uncover his cause of

action against what a reasonable person would have done in his

situation given the same information.” Id. (quoting Richards v.

Mileski, 622 F.2d 65, 71 (D.C. Cir. 1981)).

     At this stage, the Court cannot determine whether Vox’s

efforts were reasonable, as assessing Vox’s diligence requires

the Court to make a “fact-specific judgment.” Id. As previously

discussed, Vox alleges that it could not discover Mr.

                               12
Mansfield’s alleged theft because he was the only employee with

access to the rewards accounts. See, e.g., Compl., ECF No. 1 ¶

29. Whether it was reasonable for Mr. Mansfield to have such

unlimited access, in light of his promise to faithfully serve

the company and not steal its property, see id. ¶ 11, is a

contested issue of fact that the Court may not resolve without

the benefit of discovery.

IV. Conclusion and Order

     Accordingly, for the reasons set forth in this Memorandum

Opinion, Mr. Mansfield’s motion to dismiss Vox’s complaint is

DENIED. Mr. Mansfield is directed to file his answer to Vox’s

complaint by no later than September 10, 2018.

     SO ORDERED.

Signed:   Emmet G. Sullivan
          United States District Judge
          August 20, 2018

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