Daisley v. Riggs Bank, N.A.

• Decision Date: 31 May 2005
• Docket Number: No. CIV.A. 03-01820HHK.,CIV.A. 03-01820HHK.
• Citation: 372 F.Supp.2d 61
• Parties: Alexander M. DAISLEY, Plaintiff, v. RIGGS BANK, N.A., et al., Defendants.
• Court: U.S. District Court — District of Columbia

372 F.Supp.2d 61

Alexander M. DAISLEY, Plaintiff, v. RIGGS BANK, N.A., et al., Defendants.

No. CIV.A. 03-01820HHK.

United States District Court, District of Columbia.

May 31, 2005.

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Martin F. McMahon, Washington, DC, for Plaintiff.

Stephen W. Robinson, McGuire Woods LLP, McLean, VA, Lydia Kay Griggsby, U.S. Attorney's Office, Washington, DC, for Defendants.

MEMORANDUM OPINION

KENNEDY, District Judge.

Plaintiff, Alexander Daisley, brings this action against Riggs Bank, N.A. ("Riggs") and its officer, Robert Roane (collectively, "bank defendants"), and against the United States Department of Treasury ("Treasury") and its employee, Jack McGuire (collectively, "federal defendants"). Daisley, a former employee of Riggs, was terminated in August 2001. He alleges that McGuire and Roane unlawfully conspired to orchestrate Daisley's termination, and brings additional claims against Roane for malicious intentional interference with employment relationship and for fraud; against both Riggs and Treasury for negligent hiring and supervision; and against Riggs for breach of contract, promissory estoppel, and for an accounting. Before the court are bank defendants' motion to dismiss [# 3], and federal defendants' motion to dismiss or in the alternative for summary judgment [# 10]. Upon consideration of these motions, the oppositions thereto, and the record of this case, the court concludes that federal defendants' motion must be granted, and bank defendants' motion must be granted in part and denied in part.

I. FACTUAL BACKGROUND

Alexander Daisley was employed by Riggs from May 24, 1999 to late August 2001. Compl. ¶¶ 39, 127. In 1988, Riggs had developed Treasury's "cash management application," known as CA$HLINK, id. ¶¶ 15-16, which Riggs operated with Treasury's Financial Management Service ("FMS"). Id. ¶¶ 12, 14. In 1996, Treasury began work on CA$HLINK II, an enhanced version of the original system, id. ¶¶ 13-16, and subsequently sought bids from "all of the major US-based banks" to manage the project. Id. ¶ 12. Daisley then worked for a business and technology consulting company which Riggs hired to assist with its CA$HLINK II bid, id. ¶¶ 10, 12, and during the bidding process he became acquainted with Riggs senior executives, including Timothy Lex, its then-Chief Operating Officer, and David Hoffman, its then-Chief Information Officer. Id. ¶¶ 9, 18-21. Although Riggs "made its initial employment overtures" to Daisley in December 1998, id. ¶ 23, these recruiting efforts intensified upon Treasury's selection of Riggs to run CA$HLINK II in February 1999. Id. ¶¶ 20, 23. Daisley was initially reluctant to leave his previous position and home to work for Riggs, id. ¶¶ 25-26, but Hoffman and Lex assured him he would be guaranteed a "minimum six-year term of employment" as well as an "enhanced compensation package." Id. ¶¶ 26-28. Daisley interviewed with Riggs executives, including Lex, and Hoffman, and the bank's then-Chief Executive Officer, in April 1999. Id. ¶ 31. After this visit, and the signing of the formal legal agreement between Treasury and Riggs for the development and management of CA$HLINK II in early May 1999, id. ¶ 35, Riggs presented Daisley with an offer letter "setting forth some, but not all, of the components of the verbal offers and commitments" Daisley had previously received from Lex and Hoffman. Id. ¶ 36. Daisley signed the offer letter, but "with the understanding that his term of employment was for a minimum of six years" and that he would receive the `enhanced compensation package' he had previously discussed with Lex and Hoffman, id. ¶ 37. He began work at Riggs on May 24, 1999, as Senior Vice President and President of Riggs Enterprise Solutions. Id. ¶ 39. Lex resigned from Riggs that same day, replaced as Chief Operating Officer by Robert Roane. Id. ¶ 40.

Daisley's new position placed him in regular contact with Treasury employees, including Jack McGuire of the FMS division, as Riggs began implementing CA$HLINK II. Id. ¶ 41, 200. In the third quarter of 1999, Treasury issued its first change request. Id. ¶ 41. Daisley expressed concern that the change would force Riggs to bear higher costs than originally called for in its agreement with Treasury. Id. ¶ 44. He therefore negotiated on behalf of Riggs for Treasury to absorb an additional $9,834,420 for the change request. Id. During and after these discussions, the relationship between Riggs and Treasury became strained, "primarily because Defendant Treasury did not want to pay more money to Defendant Riggs for CA $HLINK II Change Requests, even though these changes had been initiated by Defendant Treasury." Id. ¶ 46.

Treasury issued no fewer than twelve additional change requests for CA$HLINK II during the rest of Daisley's tenure with Riggs. Id. ¶¶ 69, 81-82, 89-90, 103. Upon each of these change requests, the relationship between Treasury and Riggs became increasingly antagonistic because of Treasury's resistance to paying for the related cost overruns. Id. ¶¶ 75, 93, 106. McGuire, for instance, told Daisley that "other banks worked for Treasury for free" and that he "did not understand why Riggs Bank would not do the same." Id. ¶ 113.

Daisley, however, successfully negotiated for Treasury to pay additional money for ten of the change requests. Id. ¶¶ 69, 81-82, 89-90. As a "direct result of [Daisley's] negotiations," Treasury's total costs for CA$HLINK II increased nearly $14,000,000 over its original commitment to Riggs. Id. ¶ 109. Daisley thus became the "proverbial `thorn in the side' of Defendant Treasury" because he "resisted numerous efforts" by his Treasury counterparts to have Riggs bear costs for which Treasury had failed to budget. Id. ¶ 134.

Roane, on the other hand, took a more "conciliatory" approach towards Treasury. Id. ¶ 109. Because he had difficulty understanding the technical aspects of CA$HLINK II, Treasury staff easily "outmaneuvered" him, id. ¶¶ 52, 71, 110, and he acceded to Treasury's requests, even when the department refused to pay for its own change orders. Id. ¶¶ 103, 106, 108. Roane's approach established a "precedent" that Treasury personnel should try to "work around" Daisley in order to "achieve Defendant Treasury's aims." Id. ¶ 71.

Roane also came to resent both Daisley's technical expertise, id. ¶ 145-46, and his financial compensation from Riggs. Id. ¶ 71. As a result, Roane began to undermine Daisley's position with Treasury and sought to convince "representatives at Defendant Treasury that [Daisley] had to go." Id. ¶¶ 71, 74, 108, 122.

The "internal situation" at Treasury also presented difficulties for Daisley. Id. ¶ 111. Treasury lacked a sufficient number of employees with the technical skills necessary to manage CA$HLINK II, id., forcing Daisley to deal with "incompetent and malicious officials at Defendant Treasury" such as McGuire and his supervisor, Ken Carfine. Id. ¶¶ 91, 207. As CA$HLINK II exceeded Treasury's budget, McGuire and other Treasury personnel became increasingly combative and "consistently challenged" Daisley. Id. ¶¶ 109-10, 115.

The department's budget woes led Treasury, with "input and prodding" from McGuire and Roane, to seek a "scapegoat" in Daisley. Id. ¶ 116. McGuire, like Roane, came to dislike Daisley and resent his technical skills. Id. ¶ 145-46. McGuire's technical inadequacies and failure to properly allocate funding led him to place the blame for CA$HLINK II problems outside of Treasury and with Daisley in particular. Id. ¶¶ 45, 112, 122, 145.

On July 27, 2001, following a dispute over CASHLINK II intellectual property ownership, Treasury demanded that Riggs remove Daisley from CA$HLINK II. Id. ¶¶ 120-22. Riggs' Chief Executive Officer, however, indicated that he would not take action regarding Daisley until after a CA$HLINK II business meeting between Riggs and Treasury then planned for September 12, 2001 ("FMS Summit"). Id. ¶ 125.

McGuire and Roane agreed to attack Daisley's performance at the FMS Summit. Id. ¶¶ 149-51. They arranged to advance the date of the FMS Summit to August 19, 2001, when Daisley was on vacation and could not be present to defend himself. Id. ¶ 148. They further agreed that McGuire would "take the lead" at the summit in criticizing Daisley. Id. ¶ 149. When Daisley returned from vacation, Roane advised him on August 30, 2001 that the FMS Summit had gone forward without him and had resulted in his "forced separation" from Riggs. Id. ¶ 128. This suit followed.

II. ANALYSIS

A. Legal Standard

A motion to dismiss for lack of subject matter jurisdiction under Fed.R.Civ.P. 12(b)(1) should not be granted "unless plaintiffs can prove no set of facts in support of their claim that would entitle them to relief." Kowal v. MCI Communications Corp., 16 F.3d 1271, 1276 (D.C.Cir.1994) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957)). In ruling on a motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the court should construe the plaintiff's complaint liberally, giving him the benefit of all favorable inferences that can be drawn from the alleged facts. EEOC v. St. Francis Xavier Parochial Sch., 117 F.3d 621, 624 (D.C.Cir.1997). Nonetheless, the plaintiff bears the burden of establishing the court's subject matter jurisdiction. Pitney Bowes, Inc. v. United States Postal Serv., 27 F.Supp.2d 15, 19 (D.D.C.1998). Additionally, a court may consider such materials outside the pleadings as it deems appropriate to resolve the question of whether it has jurisdiction to hear the case. See, e.g., Herbert v. Nat'l Acad. of Sciences, 974 F.2d 192, 197 (D.C.Cir.1992); Haase v. Sessions, 835 F.2d 902, 906 (D.C.Cir.1987).

In deciding a motion to dismiss for failure to state a claim under Fed.R.Civ.P. 12(b)(6), the court must construe the complaint in the light most favorable to the plaintiff and accept as true all reasonable inferences drawn from...