Khazarian v. Gerald Metals, LLC
ORDER granting in part and denying in part 54 Motion to Dismiss. Signed by Judge Victor A. Bolden on 11/9/17. (McDonough, S.)
UNITED STATES DISTRICT COURT
DISTRICT OF CONNECTICUT
No. 3:16-cv-01762 (VAB)
GERALD METALS, LLC, METALS
TRADING CORP., GERALD
HOLDINGS, LLC, CRAIG DEAN, AND
RULING ON DEFENDANTS’ MOTION TO DISMISS
Roxanne Khazarian (“Plaintiff”) filed this lawsuit and brings numerous claims, alleging
that Gerald Metals, LLC, Metals Trading Corp. (“MTC”), Gerald Holdings, LLC, Craig Dean,
and Dan Gamez (together, “Defendants”) discriminated against her based on her age and her sex,
fraudulently misrepresented her compensation, and exceeded their authorization to access her
computer and cell phone by secretly monitoring her work and personal devices. Second Am.
Compl., ECF No. 50.
Defendants now move to dismiss Ms. Khazarian’s claims for fraudulent
misrepresentation (Count Twelve), failure to pay wages (Count Fifteen), computer fraud and
abuse (Counts Sixteen, Seventeen, Eighteen, and Nineteen), invasion of privacy (Count Twenty),
and defamation (Count Twenty-One). Mot. to Dismiss, ECF No. 54.
For the reasons discussed below, Defendants’ motion to dismiss is GRANTED IN
PART AND DENIED IN PART. Defendants’ motion to dismiss is GRANTED as to Counts
Fifteen and Twenty-One, and DENIED as to Counts Twelve, Sixteen, Seventeen, Eighteen,
Nineteen, and Twenty. In addition, the motion to dismiss Counts Sixteen, Seventeen, Eighteen,
and Nineteen as to Dan Gamez in his individual capacity is GRANTED. Ms. Khazarian may
serve an Amended Complaint within twenty-one days of this order, if she wishes to address the
FACTUAL AND PROCEDURAL BACKGROUND
Gerald Metals, LLC, a commodity trading company, is a part of the Gerald Group.
Second Am. Compl. ¶ 14. From January 2008 until she was fired on April 5, 2016, Ms.
Khazarian, an attorney, served as Gerald Metals’s General Counsel. Id. at ¶ 36. She had a
starting salary of $260,000. Id. at ¶ 32.
Ms. Khazarian’s starting salary allegedly resulted in “a substantial reduction” from her
previous salary. Id. at ¶ 33. A Gerald Metals executive, Fabio Calia, allegedly “told her that her
base salary would have to be lower to fit within Gerald Metals’ compensation structure,” but
explained that the reduction would be offset by an annual bonus of 100-150 percent of her base
salary.1 Id. at ¶¶ 33, 75-76.
For her first six months at Gerald Metals, Ms. Khazarian worked on a trial basis; after
that period, she worked as General Counsel and her salary increased to $285,000. Id. at ¶¶ 26,
34. She alleges that her trial period lasted twice as long as other employees’ required trial
periods. Id. at ¶ 27.
The company re-organized in 2010; Gerald Holdings, Inc., became the top company
within the Gerald Group, and Ms. Khazarian became General Counsel for Gerald Holdings, Inc.
There is some confusion about Mr. Calia’s title at Gerald Metals. The Complaint describes him
as the Then-Chief Operating Officer, Second Am. Compl. ¶ 33, and as the Then-Chief Financial
Officer. Id. at ¶ 75. His exact title does not affect the Court’s analysis of this Motion to Dismiss.
Id. at ¶¶ 18, 28. With this new title, she gained new responsibility as the Anti-Corruption
Compliance Officer, but no increase in salary. Id. at ¶ 28. Ms. Khazarian alleges that Gerald
Metals raised the salaries of similarly situated younger, male employees. Id. at ¶ 28.
In November 2011, Ms. Khazarian’s salary increased to $305,000, allegedly only after
she said that she was considering filing claims for age and sex discrimination. Id. at ¶ 35.
Ms. Khazarian also alleges that, on November 21, 2013, as part of her 2013
compensation, she was promised $25,000 in MTC stock. Id. at ¶ 152. She alleges that she was
never provided further notice or information about that stock. Id. at ¶¶ 157-59. She alleges that,
during the eight years that she worked for Defendants, her average annual bonus was $44,000, or
14.8 percent of her annual base salary. Id. at ¶ 77.
Gerald Metals hired Craig Dean as its Chief Executive Officer in January 2013. Id. at ¶
42. Ms. Khazarian claims that, at the beginning of his tenure, Mr. Dean announced “that he
wanted to lower the average age of employees by 15 years, run the company with employees in
their 30’s and 40’s and ‘marginalize’ employees over 50.” Id. at ¶ 43. Mr. Dean allegedly
intended to accomplish this goal by restructuring the Legal Department in Stamford,
Connecticut, and by hiring younger, male employees and freezing or reducing compensation for
older and female employees. Id. at ¶¶ 53-57.
For about four months, starting in late 2015, Ms. Khazarian went on leave from Gerald
Metals, first, to care for a terminally ill elderly parent, and then, to tend to her own health issues.
Id. at ¶ 86. She alleges that Defendants reduced her bonus by nearly one-third, or $30,000, that
year. Id. at ¶ 89.
In January 2016, Ms. Khazarian filed complaints with the Connecticut Commission on
Human Rights and Opportunities (“CHRO”), and with the Equal Employment Opportunity
Commission (“EEOC”). 2 Id. at ¶¶ 6-9. She later received a release of jurisdiction from the
CHRO and a notice of right to sue from the EEOC. Id.
Ms. Khazarian alleges that, before she returned to work from leave, and after she filed
discrimination claims with the CHRO and EEOC, Mr. Dean instructed Gerald Metals’s
Infrastructure Team to monitor Ms. Khazarian’s work and personal electronic communications.
Id. at ¶ 91. She alleges that Dan Gamez, who worked on Gerald Metals’s Infrastructure Team,
began to review her digital activity on January 26, 2016, by monitoring, among other things, her
Internet history, email activity, keystrokes, application activity, user activity, and file tracking.
Id. at ¶¶ 92-93. She claims that another co-worker, who also complained of sex discrimination in
this workplace, was also monitored in retaliation for complaining about age and sex
discrimination at the office. Id. at ¶¶ 96-97. She claims that she never authorized surveillance of
her work or personal devices, and that the surveillance was “willful, wanton and malicious.” Id.
at ¶¶ 105-06. She maintains that Defendants accessed confidential information, including
privileged conversations with her attorney. Id. at ¶ 107.
After being absent from work on February 22, 2016 for two doctor’s appointments, Ms.
Khazarian returned and found that her office desktop and her work cell phone did not work. Id.
at ¶ 119. She claims that her devices continued to malfunction until at least March. Id. at ¶¶ 12023. She alleges that she later discovered that Defendants had used “Stingray” surveillance to
track Ms. Khazarian’s cell phone calls. Id. at ¶ 123.
Two months after Ms. Khazarian raised complaints about Mr. Dean, on March 22, 2016,
he allegedly “engaged in acts of inappropriate and physically offensive and threatening behavior
The Complaint lists both January 26, 2017, Second Am. Compl. ¶ 91, and January 26, 2016, id.
at ¶ 92, for the date that Ms. Khazarian filed her discrimination claims with the CHRO and the
EEOC. Given the rest of the facts, January 26, 2016 appears to be the correct date.
at a business dinner at the home of a Gerald Director”; Mr. Dean allegedly “loudly yelled” at Ms.
Khazarian, pressured her to drink alcohol, and made her physically uncomfortable. Id. at ¶ 127.
Specifically, Mr. Dean “brushed up against her physically rubbing the side of his body against
Ms. Khazarian in a vertical motion and stating very loudly ‘should we have a pre-nuptial
agreement?’” Id. at ¶ 128.
The company placed Ms. Khazarian on administrative leave on March 26, 2016, in part
because she had allegedly been working on “her ‘personal court case’ during work hours.” Id. at
¶ 133. Ms. Khazarian allegedly received a suspicious e-mail in her personal e-mail account
approximately forty minutes before she was placed on leave, which she claims could have come
only from someone with access to the Gerald Metals systems. Id. at ¶ 136. The e-mail requested
that Ms. Khazarian provide company documents to the sender. Id. at ¶ 136. She reported the email to the company’s Infrastructure Team Helpdesk, but never received a response. Id. Ms.
Khazarian alleges that, “at Dean’s request, Gamez arranged to have the suspicious email sent to
Plaintiff’s personal email with Gerald Metals’ confidential documents attached to the email as a
pretext to fabricate a purported basis for her termination.” Id. at ¶ 137.
In anticipation of a meeting with Mr. Dean, on April 1, 2016, Ms. Khazarian sent him a
letter declining to meet in person on April 5 because she “was concerned for her physical wellbeing in his presence,” and, “due to the continued pattern of unlawful discrimination,
harassment, retaliation, and surveillance, Gerald Metals’ actions constituted constructive
discharge,” forcing her to resign. Id. at ¶ 144. Ms. Khazarian received a termination letter on
April 6, 2016, that stated that she would have been terminated in person at the April 5 meeting,
and that her actions had “compromise[d] [her] professional integrity as a lawyer.” Id. at ¶¶ 14546.
On July 18, 2016, Ms. Khazarian allegedly asked to inspect MTC’s books and records,
believing that she was a shareholder based on the gift of stock that she received in 2013. Id. at ¶¶
152, 155. She allegedly discovered in response that: “(i) her shares had been repurchased and
cancelled by MTC on April 1, 2016, and, therefore, she was no longer a shareholder (ii) and that
this action was taken in accordance with the provisions of a shareholder agreement, an equity
incentive plan and other referenced documents.” Id. at ¶ 156. She also allegedly discovered that
her shares had been repurchased and cancelled four days before Mr. Dean terminated her
Ms. Khazarian allegedly was never notified that her stock had been repurchased and
cancelled, and she claims that when she has requested information about the stockholder
agreement or related documents, MTC has refused to give her information. Id. at ¶ 159. She
alleges that Defendants have, as a result, deprived her of wages and compensation. Id. at ¶ 166.
Ms. Khazarian alleges that Gerald Metals has taken intentionally discriminatory actions
that have caused her “severe emotional trauma, including, but not limited to, severe anxiety,
sleeplessness, breathing difficulties, crying spells, cardiac problems, shortness of breath and
visual problems.” Id. at ¶ 167.
Ms. Khazarian filed this case on October 25, 2016. The Complaint alleges violations of
the Age Discrimination in Employment Act (ADEA), 29 U.S.C. §§ 621 et seq. (Count One); sex
discrimination under Title VII of the Civil Rights Act of 1964 (Count Two); age and sex
discrimination under the Connecticut Fair Employment Practices Act (CFEPA) (Counts Three
and Four); retaliation under the ADEA (Count Five); retaliation under the CFEPA (Count Six);
interference and retaliation under the Family and Medical Leave Act (FMLA), 29 U.S.C. § 2601
et seq. (Counts Seven and Eight); discipline and discrimination in violation of the Pay Equity and
Fairness Act, Conn. Gen. Stat. § 31-40z (Count Nine); breach of contract (Count Ten); negligent
misrepresentation (Count Eleven); fraudulent misrepresentation (Count Twelve); conversion
(Count Thirteen); theft, Conn. Gen. Stat. § 52-564 (Count Fourteen); failure to pay wages under
Connecticut General Statute § 31-72 (Count Fifteen); unauthorized access of a computer system
under Connecticut General Statute §§ 52-570b, 53a-251, 53-451, and 53-452 (Counts Sixteen
and Seventeen); unauthorized access of a computer system under the Federal Computer Fraud
and Abuse Act (CFAA), 18 U.S.C. § 1030, and the Stored Communications Act (SCA), 18
U.S.C. § 2701 et seq. (Counts Eighteen and Nineteen); invasion of privacy (Count Twenty); and
defamation per se (Count Twenty-One). Second Am. Compl. ¶¶ 168-275.
Before filing in this Court, Ms. Khazarian exhausted her administrative remedies. She
filed claims with the CHRO and the EEOC, and received a release of jurisdiction from the
CHRO on July 29, 2016, and a notice of right to sue from the EEOC on October 18, 2016. Id. at
¶ 6. This Court has jurisdiction because the Complaint raises a federal question, 28 U.S.C. §
1332, and the Court has supplemental jurisdiction over the state law claims under 28 U.S.C. §
On August 4, 2017, Defendants moved to dismiss eight counts of the Complaint. Those
counts are: fraudulent misrepresentation (Count Twelve), failure to pay wages (Count Fifteen),
Connecticut computer crimes (Counts Sixteen and Seventeen), federal computer crimes (Counts
Eighteen and Nineteen), invasion of privacy (Count Twenty), and defamation per se (Count
STANDARD OF REVIEW
A complaint must contain a “short and plain statement of the claim showing that the
pleader is entitled to relief.” Fed. R. Civ. P. 8(a). The court must read the complaint liberally, and
will only grant a motion to dismiss if “it is clear that no relief could be granted under any set of
facts that could be proved consistent with the allegations.” Hishon v. King & Spalding, 467 U.S.
69, 73 (1984); see also Phillips v. Girdich, 408 F.3d 124, 128 (2d Cir. 2005) (“All complaints
must be read liberally; dismissal on the pleadings never is warranted unless the plaintiff’s
allegations are doomed to fail under any available legal theory.”).
The plaintiff’s allegations need not be detailed, but “[t]hreadbare recitals of the elements
of a cause of action, supported by mere conclusory statements, do not suffice.” Ashcroft v. Iqbal,
556 U.S. 662, 678 (2009); see also Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). In
evaluating whether a complaint will survive a motion to dismiss, the court will take “all of the
factual allegations in the complaint as true,” but will not accept legal conclusions pleaded as
factual allegations. Iqbal, 556 U.S. at 678. The court will also view the factual allegations in the
light most favorable to the plaintiff. Cohen v. S.A.C. Trading Corp., 711 F.3d 353, 359 (2d Cir.
This case also involves a claim of fraudulent misrepresentation in Count Twelve. As a
result, the heightened pleading standard of Rule 9(b) applies to the allegations related to that
Count. Under that Rule, the plaintiff must state “the circumstances constituting fraud . . . with
particularity.” Fed. R. Civ. P. 9(b). That is, the plaintiff must “‘specify the time, place, speaker,
and content of the alleged misrepresentations,’ ‘explain how the misrepresentations were
fraudulent and plead those events which give rise to a strong inference that the defendant had
an intent to defraud, knowledge of the falsity, or a reckless disregard for the truth.’” Cohen, 711
F.3d at 359 (quoting Caputo v. Pfizer, Inc., 267 F.3d 181, 191 (2d Cir. 2001)). “The requisite
‘strong inference’ of fraud may be established either (a) by alleging facts to show that defendants
had both motive and opportunity to commit fraud, or (b) by alleging facts that constitute strong
circumstantial evidence of conscious misbehavior or recklessness.” Shields v. Citytrust Bancorp,
Inc., 25 F.3d 1124, 1128 (2d Cir. 1994).
Rule 9(b) also states that although fraud must be pled with particularity, the “[m]alice,
intent, knowledge, and other condition of mind of a person may be averred generally.” Fed. R.
Civ. P. 9(b); Wight v. BankAmerica Corp., 219 F.3d 79, 91 (2d Cir. 2000) (“while the ‘actual . . .
fraud alleged must be stated with particularly . . . the requisite intent of the alleged [perpetrator
of the fraud] need not be alleged with great specificity.’” (quoting Chill v. General Elec. Co.,
101 F.3d 263, 267 (2d Cir. 1996)).
A. Fraudulent misrepresentation against Gerald Metals, LLC and Metals
Trading Corp. (Count Twelve).
Ms. Khazarian alleges that Defendants made two related fraudulent statements. First, she
alleges that Gerald Metals fraudulently told her on November 21, 2013, that she had been
granted $25,000 in stock in Metals Trading Corporation. Second Am. Compl. ¶ 152; Opp. to
Mot. to Dismiss 17, ECF No. 61. Second, Ms. Khazarian alleges that, on July 29, 2016, Gary
Lerner, acting on behalf of Gerald Metals, fraudulently told her that her shares had been
repurchased and cancelled on April 1, 2016. Second Am. Compl. ¶¶ 152, 154, 156; Opp. to Mot.
to Dismiss 17.
Ms. Khazarian claims that she was never granted the stocks, and that the stock therefore
was also never cancelled. Second Am. Compl. ¶¶ 156-61; Opp. to Mot. to Dismiss 17. She points
out that she was never provided with notice, voting rights, dividends, or other standard
shareholder rights. Second Am. Compl. ¶¶ 156-61; Opp. to Mot. to Dismiss 17. She alleges that
the two statements were “untrue and known to be untrue by Gerald Metals,” and that the promise
of the stock was intended to induce Ms. Khazarian to continue to work for Gerald Metals, which
Ms. Khazarian did, to her detriment. Second Am. Compl. ¶ 215.
Defendants, on the other hand, argue that these allegations fail to meet the heightened
pleading standard of Rule 9(b). Mot. to Dismiss 6. Defendants argue that the Complaint lacks a
particular allegation of a misrepresentation because it fails to identify “who granted the stock,
what was actually said or otherwise communicated with regard to the stock, the circumstances
surrounding the granting of the stock, or that Gerald Metals and/or Metals Trading Corp. knew
or should have known of any fraudulent misrepresentation.” Id. (citing Cohen, 711 F.3d at 359).
At oral argument, Defendants suggested that, at most, Ms. Khazarian’s allegations support
negligent misrepresentation—not that Defendants intended to defraud her.
In determining whether a plaintiff has pled with sufficient particularity under Rule 9(b),
the Court assumes that the plaintiff’s allegations are true, O’Brien v. Nat’l Property Analyst
Partners, 936 F.2d 674, 676-77 (2d Cir. 1991), and views the alleged facts in total, not in
isolation, Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322-23 (2007). Ms.
Khazarian has alleged that representatives from Gerald Metals twice told her about the status of
stock that she ostensibly owned for several years; she now suspects that those two
representations were fraudulent because she never received official documentation of her
accounts, the stock was cancelled and sold four days before she was fired, and she was never
given an opportunity to exercise rights as a shareholder. Second Am. Compl. ¶¶ 152-56.
Ms. Khazarian has identified a speaker by alleging that representatives from Gerald
Metals told her about this stock. See Loreley Financing (Jersey) No. 3 Ltd. V. Wells Fargo
Securities, LLC, 797 F.3d 160, 171-72 (2d Cir. 2015) (finding that the plaintiff’s allegations that
three Wachovia entities acted together to structure and offer fraudulent securities was sufficient
to “‘inform each defendant of the nature of [its] alleged participation in the fraud.’” (quoting
DiVittorio v. Equidyne Extractive Indus., Inc., 822 F.2d 1242, 1247 (2d Cir. 1987)). She also
specified that the statements were made on specific dates, in conversations about her
remuneration for 2013 and after her firing. Second Am. Compl. ¶¶ 152, 154, 156. By alleging
particular statements that led her to believe that she was entitled to property that she was
allegedly never granted, Ms. Khazarian has pleaded sufficiently specific facts to satisfy the
heightened requirements of Rule 9(b). See Cohen, 711 F.3d at 359 (holding that a plaintiff must
specify “time, place, speaker, and content of the alleged misrepresentations” for sufficient Rule
9(b) pleading (internal quotation marks omitted)).
Unlike the specificity requirements of alleging the time, place, speaker, and content of
alleged misrepresentations, Rule 9(b) permits a plaintiff to allege the defendant’s state of mind
more generally. Fed. R. Civ. P. 9(b); see Shields, 25 F.3d at 1128 (holding that the plaintiff may
plead defendant’s state of mind by averring generally “facts to show that defendants had both
motive and opportunity to commit fraud”). Here, Ms. Khazarian has alleged motive and
opportunity by alleging that Defendants’ actions were “willful and intentional,” and that
Defendants intended to persuade Ms. Khazarian to work for Defendants for a lower salary than
she might earn elsewhere. Second Am. Compl. ¶¶ 35, 167.
Defendants argue that, like the defendants in Cohen, they did not know when they spoke
that their statements were untrue. 711 F.3d at 359. In Cohen, the plaintiff sued her ex-husband
over representations that he made during their divorce. Id. at 356. Relevant to this case is one
alleged misrepresentation: in 1986, the defendant had told the plaintiff that the entire value of a
real estate investment had been lost. Id. at 356-57. That was true as far as the defendant knew at
the time, but, within a year, nearly two-thirds of the investment had been returned. Id. at 357.
The plaintiff alleged that the defendant had defrauded her by representing that the entire value of
a real estate investment had been lost, but the court dismissed the count because the plaintiff had
failed to allege that the defendant “knew or had reason to know at the time that [a third party]
would repay approximately 63% of the investment months later in 1987.” Id. at 359.
This case, taking the facts in the light most favorable to Ms. Khazarian, is different from
Cohen. The Complaint alleges that Defendants defrauded Ms. Khazarian first by telling her that
she owned stock in MTC, while never intending to purchase stock on her behalf, and second by
falsely telling her that the stock had been repurchased and sold. Second Am. Compl. ¶ 152.
Those pleadings allege with sufficient particularity that Defendants defrauded Ms. Khazarian.
Therefore, Defendants’ motion to dismiss Count Twelve is denied.
B. Failure to pay wages against Gerald Metals, LLC and Craig F. Dean (Count
Ms. Khazarian alleges that she was promised $25,000 in MTC stock as a nondiscretionary bonus as part of her compensation for 2013. Second Am. Compl. ¶ 152. She brings
Count Fifteen as a civil action to collect wages under Connecticut General Statute § 31-72. Id. at
¶¶ 228-36. Defendants argue that Ms. Khazarian has no cause of action under this statute because
her bonus was discretionary, and therefore is not a wage. Mot. to Dismiss 7-8. Defendants argue
that they granted Ms. Khazarian stock, as promised, and lawfully cancelled it when she was
terminated. Id. at 8.
Connecticut law defines “wages” as “compensation for labor or services rendered by an
employee, whether the amount is determined on a time, task, piece, commission, or other basis of
calculation.” Conn. Gen. Stat. § 31-71a. The Connecticut Supreme Court has noted that this
language is ambiguous: “[a] bonus, even if discretionary or not specifically tied to identifiable
extra work performed by an employee, could be considered ‘compensation for labor or services
rendered’ by that employee; it similarly is reasonable to read that language as linked expressly to
identifiable extra work or services performed by a particular employee.” Weems v. Citigroup,
Inc., 289 Conn. 769, 779 (2008). The court concluded that, where bonuses were tied to
“subjective factors . . . not entirely predictable or within the control of the specific employee,”
bonuses are not wages under § 31-71a(3). Weems, 289 Conn. at 357; see also Ziotas v. Reardon
Law Firm, P.C., 296 Conn. 579, 589 (2010) (finding a bonus is not a wage where payment of a
bonus was contractually required, but the amount of the bonus was discretionary); Association
Resources, Inc. v. Wall, 298 Conn. 145, 173 (2010) (finding a bonus is a wage where payment of
the bonus was contractually required and amount of the bonus was not discretionary).
Relying on Connecticut Supreme Court decision, courts in this District Court have
applied a three-part test: a bonus is a wage where (1) the award is non-discretionary; (2) the
amount of the award is non-discretionary; and (3) the amount of the award is dependent on the
employee’s performance. See Datto, Inc. v. Braband, 856 F. Supp. 2d 354, 371 (D. Conn. 2012).
Ms. Khazarian argues that, even if her bonus had been discretionary before it was issued, it
became non-discretionary once it was issued. Opp. To Mot. to Dismiss 22.
Ms. Khazarian, however, must establish that her bonus was non-discretionary and that
Defendants were contractually bound to (1) pay her a bonus of (2) a certain amount (3)
calculated according to a performance-based formula. See Datto, Inc., 856 F. Supp. 2d at 371.
Even if she could show that her bonus was part of her contract, she has not alleged that the
amount was fixed going forward or tied to her performance. Compare with Wall, 298 Conn. at
175 (employee’s bonus based on established performance-based formula).
The question here is not whether Defendants must keep their promise—Ms. Khazarian
may have a good argument for theft, breach of contract, or fraudulent misrepresentation, based
on her allegations that Defendants promised but never delivered her a bonus. Those questions
will be answered as necessary at a later point in this litigation. To establish that her bonus was a
form of wages, Ms. Khazarian must establish that its payment and amount were nondiscretionary and performance-based. See Wall, 298 Conn. at 175. Ms. Khazarian has failed to
do so; the Complaint suggests that the $25,000 grant of stock was a one-time grant, and she fails
to establish that the amount was determined according to an objective formula tied to her
performance. Second Am. Compl. ¶ 152; see Datto, Inc., 856 F. Supp. 2d at 371. As a result, Ms.
Khazarian has failed to establish that her bonus was a wage.3
Defendants’ motion to dismiss Count Fifteen is granted.
C. Connecticut and Federal Computer Crimes (Counts Sixteen, Seventeen,
Eighteen, and Nineteen).
Counts Sixteen, Seventeen, Eighteen, and Nineteen all relate to Ms. Khazarian’s
allegations that Defendants accessed and monitored her computer and cell phone without her
authorization. Second Am. Compl. ¶¶ 90-101. Ms. Khazarian argues that Defendants monitored
her “work-related and personal electronic communications, tools, computers and telephones.”
Opp. to Mot. to Dismiss 4 (citing Second Am. Compl. ¶ 91).
Ms. Khazarian brings Count Sixteen under the Connecticut Computer Crimes Act, Conn.
Gen. Stat. §§ 52-570(b) and 53a-251 (Unauthorized access to a computer system), and Count
Seventeen under Conn. Gen. Stat. §§ 53-541 and 53-542 (Computer crimes). Ms. Khazarian
brings Count Eighteen under the federal Computer Fraud and Abuse Act, 18 U.S.C. § 1030, and
Although Ms. Khazarian also alleges that her colleagues were paid significantly higher bonuses
than she was, this discrepancy suggests only that the payment of bonuses was discretionary.
Count Nineteen under the federal Stored Communications Act, 18 U.S.C. § 2701, et seq. The
first three Counts each allege that Defendants intentionally accessed, without authorization, Ms.
Khazarian computer and cell phone. Count Nineteen asserts that Defendants intentionally
accessed, without authorization, a facility where Ms. Khazarian’s electronic service provider
stored information, including wire or electronic communications. Under all four claims, Ms.
Khazarian alleges that the information Defendants accessed included, among other private
conversations, confidential communications between Ms. Khazarian and her attorney.
Defendants consider these Counts collectively and assert that each should be dismissed
because Defendants owned the devices at issue; as a result, Defendants argue that they had
authorization to access the devices and the information on them. Mot. to Dismiss 9 (“It is
axiomatic that a business or entity that owns an electronic device is authorized to access that
device.”). Defendants also argue that, on Counts Sixteen, Seventeen, Eighteen, and Nineteen,
Mr. Dean and Mr. Gamez individually lacked the requisite intent to commit a computer crime,
and that Mr. Gamez was acting within the scope of his employment.
At this stage of the case, at least, these claims can proceed as to all Defendants except for
1. Connecticut Claims
In Connecticut, an employer may monitor an employee’s communications “by any means
other than direct observation, including the use of a computer, telephone, wire, radio, camera . .
.” as long as the employer provides the employee with prior notice. Conn. Gen. Stat. § 31-48d(3).
If the employer has reason to believe that employees are violating the law, violating the legal
rights of the employer or other employees, or creating a hostile work environment, and
“electronic monitoring may produce evidence of this misconduct, however, the employer may
conduct monitoring without giving prior notice.” Id. at 31-48d(a)(2).
The viability of these state law claims rests on whether Defendants monitored Ms.
Khazarian’s work devices or personal devices and whether, even if Defendants accessed only her
work devices, she was notified. See Conn. Gen. Stat. § 31-48d(3). In her Opposition to the
Motion to Dismiss, Ms. Khazarian states that “[i]n March, 2016, the Plaintiff worked with tech
support from Yahoo, Apple, and Verizon and others and was told that her entire home network
had been hacked recently – with phone calls being listened in on and her personal passwordprotected emails and entire home network accessed and compromised.” Opp. to Mot. to Dismiss
9 (citing Second Am. Compl. ¶ 124). The Complaint itself is more vague; it alleges that
Defendants conducted “electronic surveillance of her work-related and personal electronic
communications,” Second Am. Compl. ¶ 104, and that Defendants intercepted her personal
communications, id. at ¶ 107.
Nevertheless, viewing the facts favorably to Ms. Khazarian, she has raised an inference
that Defendants accessed her personal digital information, apart from work, thus alleging a set of
facts upon which relief could be granted. Defendants’ motion to dismiss as to Counts Sixteen and
Seventeen therefore is denied.
2. Federal Claims
Count Eighteen alleges that Defendants violated 18 U.S.C. § 1030a by knowingly
accessing Ms. Khazarian’s computer without authorization. Second Am. Compl. ¶ 254.
Defendants argue that this Count must be dismissed because Defendants had permission to
access Ms. Khazarian’s devices, since the devices belonged to Defendants. Mot. to Dismiss 1516. Under United States v. Valle, accessing a computer “without authorization” usually refers to
“a scenario where a user lacks permission to access the computer at all,” and “exceeds authorized
access” usually means accessing “an area of the computer to which [the user’s] authorization
does not extend.” 807 F.3d 508, 524 (2d Cir. 2015). This decision also discusses the origins of
the Computer Fraud and Abuse Act: to address hacking and electronic trespassing. Id.
In Count Nineteen, Ms. Khazarian alleges that Defendants violated the Stored
Communications Act, 18 U.S.C. § 2701, by intentionally accessing, without authorization, “a
facility through which an electronic communication service is provided.” Second Am. Compl. ¶
262. Ms. Khazarian alleges that Defendants “obtained access to a wire or electronic
communication while it was in electronic storage,” and accessed “multiple privileged
communications between the Plaintiff and her attorney with some of those communications
containing legal strategy and analysis related to the pending dispute between Plaintiff and
Defendants.” Second Am. Compl. ¶¶ 265-66. Again, Defendants’ defense depends on whether
Defendants accessed Ms. Khazarian’s personal data without authorization, Mot. to Dismiss 13,
and whether Defendants did so, even though such a search was unrelated her work computer.
At this stage of the case, Ms. Khazarian has alleged facts sufficient to infer that
Defendants may have accessed information unrelated to her work computer. Defendants’ motion
to dismiss as to Counts Eighteen and Nineteen therefore is denied.
3. Dismissal as to Mr. Dean and Mr. Gamez
Defendants seek dismissal of Counts Sixteen, Seventeen, Eighteen, and Nineteen as to
Mr. Dean and Mr. Gamez, arguing that both acted within the scope of their employment when
they accessed Ms. Khazarian’s computer. Mot. to Dismiss 2; Reply to Opp. to Mot. to Dismiss 8,
ECF No. 62. Defendants argue that Mr. Gamez should not face individual civil liability because
he acted only at the direction of his employer. Id. The Court agrees.
If Mr. Gamez accessed Ms. Khazarian’s computer system, he acted only in the scope of
his employment. See Mathiessen v. Vanech, 266 Conn. 822, 839-40 (2003) (explaining that,
under the doctrine of respondeat superior, an employer is liable for employee’s tortious conduct
done during the course of employment); Douglass v. Peck & Lines Co., 89 Conn. 622, 622
(1915) (distinguishing an employee who acts as employer’s agent “under the control or direction
of” an employer from employee who acts outside of authorization); see also University Sports
Pub. Co. v. Playmakers Media Co., 725 F. Supp. 2d 378, 285 (S.D.N.Y. 2010) (dismissing claim
against computer systems administrator who downloaded information from a database where
“[c]opying or downloading information may not have been within the scope of [his] typical
duties,” but did not exceed authorization). Therefore, as to Mr. Gamez, Defendants’ Motion to
Dismiss is granted.
As to Mr. Dean, on the other hand, the motion to dismiss is denied because, as CEO, Mr.
Dean was a decision-maker; the Complaint sufficiently alleges that Mr. Dean exceeded his
authorization to access Ms. Khazarian’s computer. Therefore, her Complaint survives the motion
to dismiss as to him.
D. Invasion of privacy against Gerald Metals, Gerald Holdings, Craig F. Dean,
and Dan Gamez (Count Twenty).
Ms. Khazarian alleges that Defendants “[i]ntentionally intruded upon the solitude and
seclusion of the Plaintiff’s private affairs and career upon a manner that would be highly
offensive to a reasonable person.” Second Am. Compl. ¶ 269. Defendants argue that this claim
must be dismissed because “1) it fails to allege any intrusion of Plaintiff’s private affairs, and 2)
it does not allege that Plaintiff had a reasonable expectation of privacy with regard to the
workplace or electronic devices in the workplace and/or owned by Gerald Metals.” Mot. to
In Connecticut, a plaintiff may establish an invasion of privacy by showing that an
“unreasonable intrusion upon the seclusion of another” has occurred. Goodrich v. Waterbury
Republican-American, Inc., 188 Conn. 107, 127 (1982). To constitute a tort, the intrusion must
be “highly offensive to a reasonable person.” Caro v. Weintraub, 618 F.3d 94, 100 (2d Cir.
2010). In Caro, the Second Circuit considered whether a brother’s surreptitious recording of his
siblings’ conversation about their mother’s will would constitute an invasion of privacy. Id. at
96. The court explained that the interception of the conversation on the recording device
constituted a tort: “[n]othing more is required after the interception is made for liability to attach
based on this tort. All that is required is that the tortfeasor intended to commit the act that was
the basis for the invasion – as Caro alleges here, setting up the iPhone and hitting ‘record.’” Id. at
Ms. Khazarian argues that the following allegations establish an unreasonable intrusion
upon her seclusion: Defendants’ surveillance of her electronic devices, including by installing
software to monitor her communications, Second Am. Compl. ¶¶ 93, 101; recording her
telephone calls, id. at ¶¶ 98, 99, 101; intercepting emails between Ms. Khazarian and her
attorney, and Ms. Khazarian and her doctor, and taking screen shots of the messages, id. at ¶¶
110, 125, 126; accessing her home computer and mobile phone, id. at ¶ 124; sending fake
messages to her email account, id. at ¶¶ 136, 137; and obtaining photographs from her personal
devices, id. at ¶ 149.
While some of these allegations may relate to work activities or electronic devices
provided by her employer, some of these allegations relate to personal activities, outside of work.
At this stage of the case, these allegations support Ms. Khazarian’s claim that Defendants
unreasonably intruded upon her seclusion in a way that a reasonable person would find highly
offensive. See Goodrich, 188 Conn. at 127; Brown-Criscuolo v. Wolfe, 601 F. Supp. 2d 441, 450
(D. Conn 2009) (finding that school superintendent who read teacher’s email while teacher was
on leave had invaded privacy). Defendants’ motion to dismiss Count Twenty therefore is denied.
E. Defamation per se against Craig F. Dean, Gerald Metals, and Gerald
Holdings (Count Twenty-One).
Finally, Ms. Khazarian alleges that Defendants defamed her by stating in her termination
letter that she had behaved in a way that “compromise[d her] professional integrity as a lawyer.”
Second Am. Compl. ¶ 272. Ms. Khazarian alleges that Defendants’ statement is untrue and that it
“accused the Plaintiff of improper conduct and integrity in her profession.” Id. at ¶¶ 272-74.
Defendants argue that Count Twenty-One must be dismissed because (1) the letter states
an opinion of Ms. Khazarian’s work performance, not a defamatory statement, and (2) because
the Complaint fails to allege publication. Mot. to Dismiss 19. Ms. Khazarian responds that the
Complaint sufficiently alleged that Defendants had made a defamatory statement, but concedes
that she did not plead the element of publication and requests leave to replead that element. Opp.
to Mot. to Dismiss 50.
Connecticut law requires that the plaintiff establish the following elements for a prima
facie claim of defamation per se: “(1) the defendant published a defamatory statement; (2) the
defamatory statement identified the plaintiff to a third person; (3) the defamatory statement was
published to a third person; and (4) the plaintiff’s reputation suffered injury as a result of the
statement.” Cweklinsky v. Mobil Chem. Co., 267 Conn. 210, 217 (2004). “‘[W]riting which tends
to disparage a person in the way of his office, profession or trade’ is defamatory per se and does
not require proof of special damages.” Capuano v. Island Computer Products, Inc., 382 F. Supp.
2d 326, 343 (D. Conn. 2005) (quoting Davis v. Ross, 754 F. 2d 80, 82 (2d Cir. 1985)). Typically,
“no action for defamation exists if the defendant publishes the defamatory statements to only the
plaintiff, and the plaintiff subsequently disseminates the statements to a third person.”
Cweklinsky, 267 Conn. at 217; see also Capuno, 382 F. Supp. 2d at 343 (finding defamation
claim failed where plaintiff identified no “evidence in the record that defendants published
Ms. Khazarian has not alleged that Defendants published the letter to a third party, an
essential element of a defamation per se claim. The Complaint states that Defendants wrote a
defamatory letter that identified Ms. Khazarian and disparaged her professional reputation, but it
fails to allege that Defendants published the letter to a third party. See Opp. to Mot. to Dismiss
52 (“The Plaintiff admittedly did not identify the individuals to whom the termination letter was
provided.”). Defendants’ motion to dismiss Count Twenty-One therefore is granted. The Court,
however, grants Ms. Khazarian leave to address this dismissed Count.
For all of the foregoing reasons, Defendants’ Motion to Dismiss is GRANTED IN
PART AND DENIED IN PART. Defendants’ Motion to Dismiss is GRANTED as to Counts
Fifteen and Twenty-One, and DENIED as to Counts Twelve, Sixteen, Seventeen, Eighteen,
Nineteen, and Twenty. In addition, the Motion to Dismiss Counts Sixteen, Seventeen, Eighteen,
and Nineteen as to Dan Gamez in his individual capacity is GRANTED. Plaintiff may serve an
Amended Complaint within fourteen days of this order, to the extent that Plaintiff wishes to
address the dismissed claims.
SO ORDERED at Bridgeport, Connecticut, this 9th day of November 2017.
/s/ Victor A. Bolden
Victor A. Bolden
United States District Judge
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