Dooner v. Keefe, Bruyette & Woods, Inc.
| Decision Date | 17 August 2001 |
| Docket Number | Civ. No. 00CIV572(JGK). |
| Citation | 157 F.Supp.2d 265 |
| Parties | Teresa M. DOONER, Plaintiff, v. KEEFE, BRUYETTE & WOODS, INC., James J. McDermott, Jr. and David Berry, Defendants. |
| Court | U.S. District Court — Southern District of New York |
In this diversity action, which the parties agree is governed by New York law, the plaintiff, Teresa M. Dooner ("Dooner"), alleges that defendants Keefe, Bruyette & Woods, Inc. ("KBW"), KBW's former Chief Executive Officer, James J. McDermott, Jr. ("McDermott"), and her supervisor at KBW, David Berry ("Berry") committed fraud by representing that the planned initial public offering ("IPO") of KBW was a "sure thing" that would make her a "wealthy woman" despite knowing that McDermott was the subject of a federal investigation arising out of his disclosure of confidential inside information to an adult film star. Relying on the alleged representations to her, the plaintiff submitted her resignation to KBW. The KBW IPO was canceled after McDermott revealed that he was under investigation and the plaintiff was not permitted to rescind her resignation.
The plaintiff also brings sex and age discrimination claims pursuant to the New York City Human Rights Law, New York City Administrative Code § 8-107 ("NYCHRL") and the New York State Human Rights Law, N.Y. Executive Law § 296 ("NYHRL") based on alleged harassment, disparate treatment, and retaliation by Berry. The plaintiff also brings various state law claims alleging breach of fiduciary duty, negligence, and breach of contract. The defendants have moved to dismiss pursuant to Fed.R.Civ.P. 12(b)(6). For the reasons stated below, the motion is granted in part and denied in part.
On a motion to dismiss, the allegations in the complaint are accepted as true. See Grandon v. Merrill Lynch & Co., 147 F.3d 184, 188 (2d Cir.1998). In deciding a motion to dismiss, all reasonable inferences must be drawn in the plaintiff's favor. See Gant v. Wallingford Bd. of Educ., 69 F.3d 669, 673 (2d Cir.1995); Cosmas v. Hassett, 886 F.2d 8, 11 (2d Cir.1989). The court's function on a motion to dismiss is "not to weigh the evidence that might be presented at trial but merely to determine whether the complaint itself is legally sufficient." Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.1985). Therefore, the defendants' present motion should only be granted if it appears that the plaintiff can prove no set of facts in support of her claim that would entitle her to relief. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957); Grandon, 147 F.3d at 188; see also Goldman, 754 F.2d at 1065.
In deciding the motion, the court may consider documents referenced in the complaint and documents that are in the plaintiff's possession or that the plaintiff knew of and relied on in bringing suit. See Brass v. American Film Technologies, Inc., 987 F.2d 142, 150 (2d Cir.1993); Cortec Indus., Inc. v. Sum Holding L.P., 949 F.2d 42, 47-48 (2d Cir.1991); I. Meyer Pincus & Assoc., P.C. v. Oppenheimer & Co., Inc., 936 F.2d 759, 762 (2d Cir.1991); Skeete v. IVF America, Inc., 972 F.Supp. 206, 208 (S.D.N.Y.1997).
The Court accepts the following allegations as true for purposes of this motion. The plaintiff began working for KBW as an executive secretary in 1963 and had risen to the level of vice-president in the research department by the time she left KBW in 1999. (Am.Compl. ¶¶ 9-10.) During her time at KBW, the plaintiff received positive performance reviews as well as numerous stock awards. (Am.Compl. ¶ 11.)
While initially her working environment was pleasant, beginning in 1996 the situation changed when Berry became the plaintiff's direct supervisor. (Am. Compl. ¶¶ 12-13.) From the start, Berry consistently abused, harassed, and insulted her solely on the basis of her gender. (Am.Compl. ¶ 13.)
On May 13, 1996, the plaintiff filed a memorandum detailing Berry's abusive behavior, which included using sexually explicit terms in addressing the plaintiff, assigning the plaintiff duties normally reserved for lower level employees, treating the plaintiff like a secretary, and using pejorative derivations of the plaintiff's first name in addressing her. (Am.Compl. ¶ 15.) The behavior was pervasive and interfered with the plaintiff's ability to perform her duties. (Am.Compl. ¶ 16.) Berry did not direct such harassment at any male employees. (Am.Compl. ¶ 17.) Before submitting the memorandum, the plaintiff spoke to the Chairman of KBW, Charles Lott ("Lott"). (Am.Compl. ¶ 18.) Lott set up a meeting with the plaintiff and Berry and demanded that Berry explain his actions. (Am.Compl. ¶ 19.) The plaintiff tried to resolve the issue amicably by accepting Berry's apology. (Am. Compl. ¶ 20.)
However, Berry's harassment did not stop and by the middle of 1997 his behavior re-intensified to the point where the plaintiff wanted to resign. (Am. Compl. ¶ 21.) Berry treated similarly situated male employees more favorably than he treated the plaintiff. (Am.Compl. ¶ 22.) Berry refused to complete reviews of the plaintiff's performance, gave her demeaning tasks, and generally reduced her authority within the department. (Am. Compl. ¶ 22.)
The plaintiff alleges that the only reason she stayed at KBW was because McDermott, who was then the Chief Executive Officer of KBW, assured her that the situation would improve and that it would be worth her while to stay. (Am.Compl. ¶¶ 7, 23.) In 1998, Dooner first learned that KBW was planning an IPO for later that year. (Am.Compl. ¶ 24.) Throughout 1998, Berry's behavior continued although it became more invidious in response to rebukes for his conduct by senior management as a result of the plaintiff's complaints. (Am.Compl. ¶¶ 25-26.) Berry refused to recognize the plaintiff's position in the company, undermined her authority, denied her feedback, held her to different standards of review than her male counterparts, and verbally chastised her in front of her peers. (Am.Compl. ¶¶ 25, 37-39.) Berry did not complete an annual review for the plaintiff, which made her ineligible for promotion or salary increases from 1998 to the end of her tenure, and did not recommend her for a bonus. (Am. Compl.¶¶ 27-28, 30, 32.) In contrast, Berry made bonus recommendations, completed reviews, and supervised the male employees who reported to him. (Am. Compl. ¶¶ 32-34.)
The Board was aware of Berry's behavior and read the plaintiff's 1996 memorandum detailing Berry's conduct. (Am. Compl. ¶ 29.) On a number of occasions in 1998, the plaintiff complained about Berry's harassment to McDermott and contemplated resigning. (Am.Compl. ¶¶ 35-36.)
By early 1999, the plaintiff was on the verge of leaving KBW but McDermott again persuaded her that it would be "worth her while" to stay. (Am. Compl. ¶ 42.) McDermott also promised her that the problems with Berry would be resolved after the IPO because Berry would be replaced. (Am.Compl. ¶ 43.) McDermott said that the Board was interviewing people to replace Berry but that a high-level termination could only occur after the IPO. (Am. Compl. ¶¶ 43-44.)
Early in 1999, KBW reinstated plans for a stock IPO scheduled for May 13, 1999. (Am.Compl. ¶¶ 45, 63.) KBW had scuttled a prior IPO attempt in October 1998, but the 1999 IPO was presented as a "sure thing" to the plaintiff and stock holders of KBW. (Am.Compl. ¶ 46.) The plaintiff alleges that McDermott specified the precise nature of her potential gain. (Am. Compl. ¶ 47.) McDermott told her that her 13,380 shares would become 224,861 shares after the IPO and that the shares would be worth between 17 and 19 dollars. (Am. Compl. ¶¶ 48-50.) While the Board and McDermott originally stated that the offering would be priced at between three and four times book value, the prospectus, which came out in early 1999, indicated that the offering would be priced at one and one-half times book value. (Am. Compl. ¶¶ 51-52.) The plaintiff alleges that the pricing was lowered so that the IPO would move quickly. (Am.Compl. ¶ 54.)
Based on the representations and discussions with McDermott where he informed her that the IPO "was a done deal", the plaintiff decided to retire from KBW after the completion of the IPO. (Am.Compl. ¶ 55.) The plaintiff alleges that McDermott knew that the IPO would not occur when he made these representations to the plaintiff. (Am.Compl. ¶ 56.) The plaintiff bases this claim on McDermott's knowledge of his relationship with Kathryn Gannon a/k/a Marilyn Star ("Gannon"), an adult film star with whom he allegedly shared inside information. (Am. Compl. ¶ 57.) McDermott also did not reveal that he was under investigation by the Securities and Exchange Commission ("SEC") and the United States Attorney's Office. (Am.Compl. ¶ 57.) The plaintiff also claims that several of the Board members of KBW knew of McDermott's relationship with Gannon but did nothing. (Am.Compl. ¶ 58.)
The plaintiff decided she would resign after the IPO to avoid the continued harassment by Berry. (Am.Compl. ¶ 59.) She also decided to contribute her shares in order to help the company by adding her stock to the IPO amount and to obtain funds to buy a retirement home in Florida. (Am.Compl. ¶ 59.) The plaintiff alleges that McDermott was motivated to commit fraud because he did not want the plaintiff to leave KBW and file a lawsuit against KBW and Berry and also wanted her to relinquish her shares. (Am.Compl. ¶ 59.) The plaintiff alleges that the KBW board knew about her reliance on the IPO and her reliance on the representations concerning the IPO made by McDermott and Lott. (Am.Compl. ¶ 60.)
On April 28, 1999, Dooner confirmed her intention to resign and tender her shares for the IPO in writing and designated May 27, 1999 as her final day. (Am. Compl. ¶ 64.) Before she...
To continue reading
Request your trial
-
Ellington Credit Fund, Ltd. v. Select Portfolio Servicing, Inc.
...which cannot support a fraud claim, or actionable misrepresentations of present existing fact. See Dooner v. Keefe, Bruyette & Woods, Inc., 157 F.Supp.2d 265, 278 (S.D.N.Y.2001). 18. Although the claim's heading states that it is alleged against all Defendants, the text below does not menti......
-
Douyon v. N.Y. Med. Health Care, P.C.
...claim where plaintiff did not allege personal injury or property damage, but only economic losses); Dooner v. Keefe Bruyette & Woods, Inc., 157 F.Supp.2d 265, 285–86 (S.D.N.Y.2001). 13. This claim has been dismissed for the reasons set forth in Section III.C., supra. 14. On reply, Defendant......
-
Hanig v. Yorktown Cent. School Dist.
...(applying ADA analysis to plaintiff's retaliation claims under both the ADA and the NYHRL); see also Dooner v. Keefe, Bruyette & Woods, Inc., 157 F.Supp.2d 265, 283 (S.D.N.Y.2001). Accordingly, defendant's motion to dismiss under Rule 12(b)(6) is also granted with regard to plaintiff's reta......
-
Cooney v. Consolidated Edison
...530 U.S. at 148-49, 120 S.Ct. 2097); accord Schnabel v. Abramson, 232 F.3d 83, 90-91 (2d Cir.2000); Dooner v. Keefe, Bruyette & Woods, Inc., 157 F.Supp.2d 265, 282-83 (S.D.N.Y.2001); Alleyne v. Four Seasons Hotel, No. 99 Civ. 3432, 2001 WL 135770, at *10 (S.D.N.Y. Feb.15, 2001), aff'd, 25 F......