Opinion
22-cv-09467 (ER)
03-29-2024
STEPHEN KOMOREK and API INTERNATIONAL CONSULTING GROUP, INC., Plaintiffs, v. CONFLICT INTERNATIONAL, INC., MICHAEL LaCORTE, and ANDREW MCLAREN, Defendants.
ORDER
EDGARDO RAMOS, U.S.D.J.
Stephen Komorek and his company, API International Consulting Group, Inc., brought this lawsuit against Conflict International, Inc., Michael LaCorte, and Andrew McLaren based on events that began while Komorek was employed by Conflict and continued after his resignation. Plaintiffs allege retaliation under New York state law, libel, and tortious interference with prospective business advantage. Defendants have moved to dismiss for failure to state a claim. LaCorte has also moved to dismiss the claims against him for insufficient service and lack of personal jurisdiction. For the reasons set forth below, Defendants' motion is GRANTED IN PART and DENIED IN PART. Because Plaintiffs have withdrawn the claims against LaCorte, his motion to dismiss is DENIED as moot.
I. BACKGROUND
he following facts are taken from the allegations in the amended complaint, Doc. 40, which the Court accepts as true on this motion. Koch v. Christie 's Int 'IPLC, 699 F.3d 141, 145 (2d Cir. 2012).
A. He Parties
Komorek is an Ohio resident who worked for Conflict from October 9, 2018, until his resignation on February 25, 2022. Doc. 40 ¶¶ 7, 13, 25. API International is an Ohio corporation that was founded by Komorek after he left Conflict. Id. ¶¶ 4, 8, 26.
Conflict is a private corporation, headquartered in New York, that performs private investigative services. Id. ¶¶ 1, 9. Conflict is a wholly owned subsidiary of Conflict International, Ltd. (“Conflict UK”), an entity based in the United Kingdom. Doc. 19.
LaCorte is the president of Conflict. Doc. 40 ¶ 10. According to a declaration submitted by LaCorte, he is a citizen of the United Kingdom and has lived there for the past forty-eight years. Doc. 43-1 ¶ 5. LaCorte is not a United States citizen. Id. ¶ 4. He conducts business in New York on behalf of Conflict but has no independent offices or employees in New York apart from his role at Conflict. Id. ¶¶ 12-13.
McLaren is a Tennessee resident. Doc. 40 ¶ 11. He amended complaint alleges that, “except as otherwise provided, [McLaren] was at all relevant times acting with the assent, for the benefit, and under the control of Conflict.” Id.
B. Komorek's Employment at Conflict
Komorek began working at Conflict in October 2018 and became a formal Conflict employee in April 2019. Id. ¶ 13. While employed at Conflict, Komorek had accounting and administrative responsibilities in addition to his private investigative duties. Id. ¶ 14. In that capacity, he “began to sense that [Conflict's] accounting of their work was being performed contrary to law and regulations.” Id. ¶ 15. Komorek learned that Conflict UK was systematically overbilling its clients by charging for work not performed or inflating the hours necessary for certain tasks. Id. LaCorte pressured Komorek to institute those fraudulent practices at Conflict, but Komorek refused. Id. Nevertheless, Komorek believed that Conflict's accounting practices were illegal in some way, and he disclosed this belief to LaCorte. Id. ¶¶ 15, 48.
Plaintiffs do not identify the specific accounting practices or explain how they were illegal. See generally Doc. 40 ¶¶ 15, 48.
Separately, Komorek learned that Conflict was soliciting and conducting business in states where its private investigators were not licensed, including Florida, California, and Illinois. Id. ¶ 16. Komorek informed LaCorte of his belief that Conflict was engaging in illegal licensing practices but was told that Conflict's business would not change. Id.
Defendants attach to their opposition Exhibit A, Doc. 45-1, which contains emails between Komorek and LaCorte and text messages between Komorek and an unnamed individual. Id. According to Defendants, these communications prove that Komorek's objections to Conflict's accounting practices were directed at a third-party accountant rather than Conflict. Doc. 45 at 7-8. However, the Court does not consider Defendants' Exhibit A on this motion because it is not attached to, incorporated by reference in, or integral to the amended complaint. See United States ex rel. Foreman v. AECOM, 19 F.4th 85, 106 (2d Cir. 2021). It is not even clear that the messages in Defendants' Exhibit A are the same accounting objections referred to in the amended complaint. See Doc. 46 at 14-15.
At a December 2021 Christmas party with Conflict employees, LaCorte yelled at Komorek to humiliate him. Id. ¶ 17. Hat prompted Komorek to threaten to quit the next day. Id. ¶ 18.
On February 24, 2022, McLaren contacted Trudy Jacobson, a Conflict client for whom Komorek was providing private investigative services. Id. ¶ 19. McLaren told Jacobson that Komorek was a thief and an embezzler and that she should fire him. Id. Komorek reported this issue to LaCorte, who did nothing to resolve it. Id. ¶ 21.
On February 25, 2022, a Conflict director and an employee both voiced concerns about Conflict's accounting practices during a staff meeting. Id. ¶¶ 22-23. LaCorte refused to make changes, and he blamed Komorek for persisting with his accounting concerns. Id. ¶ 24. Hat same day, Komorek resigned from Conflict. Id. ¶ 25.
Shortly thereafter, Komorek and his business partner Patrick Welsh-another former Conflict employee-founded their own private investigation company, API International. Id. ¶¶ 26-27; see also Doc. 46 at 20 n.3. Jacobson soon began using API International instead of Conflict for her private investigative needs. Doc. 40 ¶ 29. Plaintiffs allege that this caused Defendants to retaliate against Komorek and API International. Id. ¶ 28. On April 1, 2022, McLaren sent Jacobson an email that included the following message (the “April Statement”):
You have been told third party misinformation. he truth of the matter is I politely asked [] Komorek to pay me the money he owes me from [a] 10% commission and he refused. I then decided to end my business relationship and friendship with him since he did not keep his word. . . . Integrity and loyalty is everything to me. . . . Sometimes it takes years and some soul searching to realize who is lying and who is telling the truth. I wish you success and happiness and I have faith you will eventually figure out who is lying and who is telling the truth.Id. ¶ 30 (second alteration in original). Later that month, Conflict sought and obtained confidential medical records from Komorek's time serving in the United States Armed Forces. Id. ¶¶ 31-33.
On May 8, 2022, McLaren contacted Kyle Reyes, an executive at an industry publication known as Law Enforcement Today. Id. ¶ 34. McLaren sent Reyes a report that accused Komorek of “fabricating his resume and being a con” (the “May Statement”). Id.
Plaintiffs attach to the amended complaint Exhibit A, Doc. 40-1, which they claim is evidence of the May Statement. Doc. 40 ¶ 34. Plaintiffs' Exhibit A shows an email to Jacobson and another recipient on August 9, 2022, attaching a report about Komorek's purported lies regarding his military service and credentials. Doc. 40-1. he exhibit also includes a message from McLaren that appears to be cut off, which states: “his article is complete B.S. he false information comes from and is ghost . . . .” Id. It is not clear what Plaintiffs' Exhibit A purports to prove with respect to the May Statement. Ultimately, the Court finds that the exhibit neither supports nor contradicts Plaintiffs' allegation that McLaren sent Reyes a report accusing Komorek of fabricating his resume. Doc. 40 ¶ 34.
In the summer of 2022, LaCorte learned that API International was discussing a potential merger with Global Pursuit Investigations and its owner, Logan Clarke. Id. ¶¶ 35-36, 100-01. LaCorte, Komorek, and Clarke were all members of the World Association of Detectives (WAD), a powerful organization in the private investigations industry. Id. ¶¶ 37, 101. He WAD's bylaws set forth quasi-judicial procedures to police its members. Doc. 35 at 3.
On June 23, 2022, in accordance with the WAD's bylaws, LaCorte and three other WAD members filed a complaint against Komorek (the “WAD Complaint”). Id. ¶ 37. He WAD Complaint alleges that: (1) Komorek failed to disclose to Conflict that he was a defendant in a civil lawsuit prior to his employment with Conflict; (2) Komorek jeopardized his colleagues' safety during an investigation at Conflict; (3) Komorek exhibited conduct in the workplace unbefitting a member of the WAD; (4) Komorek violated his fiduciary duties and ethical obligations to Conflict by founding API International prior to his resignation; (5) Komorek violated ethical rules by damaging Conflict's property; and (6) Komorek may have violated the licensing requirements for WAD membership. Doc. 35 at 3-7; Doc. 40 ¶¶ 38-42.
Defendants have filed the WAD Complaint under seal, Doc. 35, along with other documents including Komorek's response, LaCorte's reply, and an email summarizing the WAD's decision, Doc. 35-1. He Court finds that the WAD Complaint and the WAD's decision are incorporated by reference in the amended complaint, which repeatedly references the allegations made in the WAD Complaint and the determinations made by the WAD. Doc. 40 ¶¶ 38-42.
On August 2, 2022, the merger discussions between Global Pursuit and API International ended because of “the commotion . . . from several people in WAD.” Doc. 40 ¶ 102.
He next day, August 3, 2022, McLaren contacted Welsh-Komorek's partner- on LinkedIn (the “First August Statement”). Id. ¶ 43. He wrote:
[Komorek] is a pathological Liar[.] I have his military records he is a complete fraud[.] I tried to take [the] high road but his non stop harassment and slander needs to be addressed[.]Id. Moments later, McLaren sent Welsh a report that contained “further false and defamatory claims” about Komorek (the “Second August Statement”). Id. ¶ 44. And later that day, McLaren messaged Welsh again (the “Hird August Statement”), stating:
Discharged from the National Guard as medically unfit for service, but that also covers behavioral discharges. [I]t is reported he was found to be a habitual liar. No personally earned awards. Education all correspondence courses. Not a military intelligence soldier as claimed[.] Not special forces as claimed[.] Not assigned to special operations as claimed[.] No college[.] No security clearance, records show he was denied a clearance.Id. ¶ 45.
Plaintiffs again reference Plaintiffs' Exhibit A as evidence of the Second August Statement. Doc. 40 ¶ 44. Here too, the exhibit neither supports nor contradicts the assertion that McLaren sent a report to Welsh that made false and defamatory claims against Komorek. Hus, the Court once again accepts the allegation as true without relying on Plaintiffs' Exhibit A.
On August 23, 2022, the WAD rendered its decision regarding Komorek. Doc. 35-1 at 89-90. Although Komorek alleges that each of the claims against him “remained pending for nearly two months until [they were] rejected and dismissed,” Doc. 40 ¶¶ 3842, the WAD ultimately decided to reprimand Komorek and suspend him from holding office for five years, Doc. 35-1 at 90.
C. Procedural History
Komorek filed this action on November 4, 2022, alleging a violation of New York Labor Law (“NYLL”) § 740, five counts of libel against Conflict and McLaren, and tortious interference with prospective business advantage against Conflict and LaCorte. Doc. 1. On January 27, 2023, summons was issued by registered mail to LaCorte's last known address in the United Kingdom. Doc. 29. On February 9, Conflict and McLaren moved to dismiss the complaint for failure to state a claim pursuant to Federal Rule of Civil Procedure 12(b)(6). Doc. 30. On February 28, Komorek filed an amended complaint alleging the same claims. Doc. 40. He Court therefore denied the pending motion to dismiss as moot. Doc. 41.
On March 27, LaCorte moved to dismiss Komorek's claims against him for insufficient service of process pursuant to Rule 12(b)(5) and for lack of personal jurisdiction pursuant to Rule 12(b)(2). Doc. 42. On March 28, all Defendants moved to dismiss the amended complaint in its entirety for failure to state a claim pursuant to Rule 12(b)(6). Doc. 44.
On April 19, Plaintiffs filed an opposition to Defendants' motion. Doc. 46. In their brief, Plaintiffs withdrew the claims brought against LaCorte in his personal capacity. Id. at 31.
II. LEGAL STANDARD
In considering a motion to dismiss pursuant to Rule 12(b)(6), a court accepts all factual allegations in the complaint as true and draws all reasonable inferences in the plaintiff's favor. Koch, 699 F.3d at 145. 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). he purpose of Rule 12(b)(6) “is to test, in a streamlined fashion, the formal sufficiency of the plaintiff's statement of a claim for relief without resolving a contest regarding its substantive merits.” Halebian v. Berv, 644 F.3d 122, 130 (2d Cir. 2011) (citation omitted).
“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.'” Iqbal, 556 U.S. at 678 (quoting BellAtl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. his standard “is not akin to a ‘probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). To state a plausible claim, the plaintiff must “‘raise a reasonable expectation that discovery will reveal evidence' of the wrongdoing alleged, ‘even if it strikes a savvy judge that actual proof of those facts is improbable.'” Citizens United v. Schneiderman, 882 F.3d 374, 380 (2d Cir. 2018) (quoting Twombly, 550 U.S. at 556). If the plaintiff has not “nudged [the] claims across the line from conceivable to plausible, [the] complaint must be dismissed.” Twombly, 550 U.S. at 570.
III. DISCUSSION
A. Retaliation Under NYLL § 740
NYLL § 740 was amended on January 26, 2022, “to alter the definition of retaliation and to expand the scope of the prohibition.” Pierce v. Better Holdco, Inc., No. 22 Civ. 4748 (AT), 2023 WL 6386920, at *4 (S.D.N.Y. Sept. 29, 2023). As amended, the statute provides:
An employer shall not take any retaliatory action against an employee . . . because such employee does any of the following: (a) discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that the employee reasonably believes is in violation of law, rule or regulation or that the employee reasonably believes poses a substantial and specific danger to the public health or safety . . . .
NYLL § 740(2). Plaintiffs argue that Defendants violated this provision by retaliating against Komorek after he raised concerns about Conflict's accounting and licensing practices. Doc. 46 at 7.
A plaintiff is not required to allege a reasonable belief that the activity poses a danger to public health or safety. See Pierce, 2023 WL 6386920, at *4 (“He amended law prohibits an employer from ‘tak[ing] any retaliatory action against an employee . . . because such employee . . . discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer that the employee reasonably believes is in violation of law, rule or regulation,' whether or not the violation relates to public health or safety.” (alteration in original) (second emphasis added) (quoting NYLL § 740(2)(a))).
N. NYLL Claim Against McLaren
Defendants assert that the NYLL claim against McLaren should be dismissed because McLaren was not Komorek's employer, which renders § 740 inapplicable to him. Doc. 45 at 5. Plaintiffs do not address this argument in their opposition, so the motion could be granted on this basis alone. See, e.g., Tenemille v. Town of Ramapo, No. 18 Civ. 724 (KMK), 2022 WL 126003, at *10 (S.D.N.Y. Jan. 13, 2022) (“A plaintiff effectively concedes a defendant's arguments by his failure to respond to them.” (citation omitted)).
He NYLL defines an employer as “any person, firm, partnership, institution, corporation, or association that employs one or more employees.” NYLL § 740(1)(b). He Second Circuit has articulated an “economic reality” test that governs whether an individual qualifies as an employer in Fair Labor Standards Act (“FLSA”) and NYLL cases. Zheng v. Liberty Apparel Co., 355 F.3d 61, 71 (2d Cir. 2003); see also Copantitla v Fiskardo Estiatorio, Inc., 788 F.Supp.2d 253, 308 n.21 (S.D.N.Y. 2011) (acknowledging that the definition of employer under the NYLL is coextensive with its definition under the FLSA). He court looks to four factors-though they are not exhaustive-that ask whether the alleged employer: (1) could hire and fire employees; (2) supervised employee work schedules and conditions of employment; (3) determined the rate and method of payment; and (4) maintained employment records. Carter v. Dutchess Cmty. College, 735 F.2d 8, 12 (2d Cir. 1984).
Plaintiffs have failed to sufficiently allege that McLaren was Komorek's employer. Plaintiffs assert that McLaren referred Jacobson to Komorek in 2021, Doc. 40 ¶ 20, and contacted her about Komorek in February and April 2022. Id. ¶¶ 19, 30. Plaintiffs also claim that McLaren contacted Reyes and Welsh in May and August 2022, respectively. Id. ¶¶ 34, 43-45. However, Plaintiffs have not alleged any facts indicating that McLaren hired or could fire Komorek from Conflict or that he was involved in Conflict's operations. None of the facts alleged demonstrate that McLaren exercised any formal or functional control over Komorek. Accordingly, Plaintiffs' NYLL claim against McLaren may also be dismissed on this alternative basis.
2. NYLL Claim Against Conflict
Plaintiffs claim that Conflict retaliated against Komorek for two separate disclosures he made to LaCorte. First, Komorek disclosed his belief that Conflict was engaging in illegal accounting practices. Id. ¶ 48. Second, Komorek disclosed his belief that Conflict was engaging in illegal licensing practices. Id. ¶ 49. In response, Conflict waged a “campaign of defamation,” acquired Komorek's confidential medical records, and filed the WAD Complaint to impair his employment prospects and undermine his credibility. Id. ¶ 54.
Defendants insist that Plaintiffs' NYLL claims against Conflict must be dismissed for three reasons. First, Defendants argue that the amended complaint is “conclusory at best” and therefore fails to identify the specific accounting and licensing activities in which Conflict fraudulently engaged. Doc. 45 at 5-7. Second, with respect to the accounting claims, Defendants assert that Komorek's objections were directed at Conflict's third-party accounting firm, which is not a party to this litigation. Id. at 7-8. Finally, Defendants claim that Plaintiffs have not pled facts supporting Komorek's supposed reasonable belief that Conflict's practices were illegal, Id. at 8-13, or presented a danger to the public, Id. at 13-14. Plaintiffs contend that their NYLL claim is sufficiently specific, Doc. 46 at 10-11, and that they do not make any claims against the third-party accounting firm, Id. at 13-14.
To state a claim pursuant to NYLL § 740(2)(a)-as amended-Plaintiffs must allege that Komorek was retaliated against because he disclosed or threatened to disclose an activity, policy, or practice that Conflict was engaging in, which he reasonably believed either (1) violated a law, rule, or regulation, or (2) posed a substantial and specific danger to public health or safety. NYLL § 740(2)(a); see also Thacker v. HSBC Bank USA, N.A., No. 22 Civ. 7120 (GHW), 2023 WL 3061336, at *6 (S.D.N.Y Apr. 24, 2023).
a. Specific Activities
Defendants contend that the amended complaint fails to identify the specific activities in which Conflict engaged, Doc. 45 at 5-6, while Plaintiffs respond that they were not required to identify the specific law that Conflict violated, Doc. 46 at 9. Both are correct. NYLL § 740 does not require Plaintiffs to identify the specific law, rule, or regulation that Komorek believed Conflict was violating. See Webb-Weber v. Cmty. Action for Hum. Servs., Inc., 15 N.E.3d 1172, 1174 (N.Y. 2014). However, the amended complaint “must identify the particular activities, policies or practices in which the employer allegedly engaged, so that the complaint provides the employer with notice of the alleged complained-of conduct.” Id.
Regarding the alleged licensing violations, Plaintiffs assert that Komorek disclosed to LaCorte his belief that Conflict illegally solicited business without a license in Florida, California, Illinois, and other states. Doc. 40 ¶¶ 16, 49. Defendants counter that these allegations are mere “labels and conclusions,” Doc. 45 at 10, which they cannot meaningfully answer because Plaintiffs failed to include facts regarding any individual instance in which Defendants committed these violations, Doc. 49 at 2. Therefore, Defendants conclude that they have not been provided with “fair notice of Plaintiffs' claims.” Id. Plaintiffs maintain that the amended complaint's allegations are sufficiently straightforward and definite. Doc. 46 at 13.
He Court finds Plaintiffs' allegations regarding Conflict's allegedly illegal licensing practices to be sufficiently specific to state a claim pursuant to NYLL § 740. Plaintiffs have identified a specific practice-namely, the solicitation of business in states where Conflict's investigators did not have a license. Believing this practice was illegal, Komorek allegedly confronted LaCorte. Doc. 40 ¶ 16. He amended complaint, therefore, provides Conflict “with notice of the alleged complained-of conduct.” Webb-Weber, 15 N.E.3d at 1174. Accordingly, with respect to the licensing objections, Plaintiffs have sufficiently identified an activity in which Conflict allegedly engaged that Komorek reasonably believed was illegal. See id. at 1174-75 (concluding that complaints about an organization's policies and procedures regarding fire safety, treatment of individuals, and falsification of records were sufficiently specific to survive a motion to dismiss); see also Arazi v. Cohen Bros. Realty Corp., No. 20 Civ. 8837 (GHW), 2022 WL 912940, at *11-12 (S.D.N.Y Mar. 28, 2022) (finding that by notifying their employer that they believed his policy requiring plaintiffs to return to work was illegal, plaintiffs pled a NYLL § 740 claim with sufficient specificity).
He same cannot be said, however, for the accounting objections. According to the amended complaint, Komorek disclosed his belief to LaCorte that Conflict was engaging in unlawful accounting practices. Doc. 40 ¶ 48. He amended complaint lists certain activities that Conflict UK was engaging in that Komorek believed were illegal- namely, overbilling clients and inflating the hours necessary for certain tasks. Id. ¶ 15. But Conflict UK is not a party to this litigation. Plaintiffs fail to identify any practices that Conflict itself engaged in that Komorek reasonably believed were illegal. Instead, Plaintiffs allege merely that Komorek “began to sense” that Conflict's “accounting of [its] work was being performed contrary to law and regulations.” Id. Although Plaintiffs allege that LaCorte pressured Komorek to commit accounting fraud at Conflict, Plaintiffs also allege that Komorek refused to do so. Id. He amended complaint lacks any facts demonstrating what Conflict's accounting violations were or how Conflict engaged in such misconduct. Hus, Plaintiffs have failed to identify specific practices and activities, as required to state a claim pursuant to NYLL § 740 for Komorek's disclosure of Conflict's alleged accounting violations.
Because the Court finds that Plaintiffs have failed to allege with specificity the accounting violations that Komorek reasonably believed Conflict was committing, the Court need not address Defendants' alternative argument that Komorek's objections were directed at a third-party accounting firm rather than at Conflict. See Doc. 45 at 7-8.
b. Reasonable Belief in Illegality
Defendants argue that Plaintiffs have not sufficiently alleged that Komorek reasonably believed Conflict's practices were illegal or presented a danger to the public. Doc. 45 at 8-14. As the Court has already decided the fate of Plaintiffs' claim regarding the accounting objections, the Court need only address this argument as it pertains to the licensing objections.
Defendants provide a detailed explanation of reciprocal licensing agreements and the “complicated patchwork of state licensure, exemptions, and reciprocity,” which purportedly shows that Komorek could not have reasonably believed Conflict's licensing practices to be illegal. Id. at 10-11. Plaintiffs respond that reciprocal licensing agreements and state licensing laws do not allow for unlicensed solicitation. Doc. 46 at 11-13. Therefore, Plaintiffs assert that Komorek had a reasonable belief that by soliciting business in Florida, California, Illinois, and other states without a license, Conflict was violating the law. Id.
The Court need not determine whether Conflict's licensing practices were in fact illegal; rather, the Court must decide whether Komorek reasonably believed the licensing practices were illegal. See Pierce, 2023 WL 6386920, at *6 (explaining that a plaintiff “need only demonstrate reasonable belief, not an actual violation of law”). Here, Plaintiffs allege that Komorek learned Conflict was soliciting business in Florida, California, and Illinois without a license. Doc. 40 ¶ 16. Defendants do not argue that Conflict was licensed in those states. Instead, they contend that licensure is a “complicated patchwork” scheme with exemptions, reciprocity, and state-by-state determinations. Doc. 45 at 10-11. However, the complicated nature of this scheme lends credence to the reasonableness of Komorek's belief that Conflict was violating licensing laws. With this understanding, Komorek allegedly confronted LaCorte about these practices, but LaCorte refused to adjust Conflict's business practices. Doc. 40 ¶ 16. Accordingly, the Court finds that Plaintiffs have alleged that Komorek reasonably believed Conflict violated licensing rules and regulations-and that he disclosed that reasonable belief to LaCorte. See Pierce, 2023 WL 6386920, at *6 (finding that a plaintiff “easily” satisfied the reasonable belief requirement by alleging that her supervisor repeatedly disregarded legal obligations).
B. Libel
Plaintiffs also allege five counts of libel against McLaren-and against Conflict based on vicarious liability-regarding various statements McLaren made after Komorek resigned from Conflict on February 25, 2022. he parties appear to agree that Ohio law governs these defamation claims. Doc. 45 at 14; Doc. 46 at 16-17; see also, e.g., Lee v. Bankers Tr. Co., 166 F.3d 540, 545 (2d Cir. 1999) (“Under New York choice-of-law rules in defamation cases ‘the state of the plaintiff's domicile will usually have the most significant relationship to the case,' and its law will therefore govern.” (quoting Reeves v. Am. Broad. Co., 719 F.2d 602, 605 (2d Cir. 1983))).
Ohio defines libel as “a false written publication, made with some degree of fault, reflecting injuriously on a person's reputation, or exposing a person to public hatred, contempt, ridicule, shame or disgrace, or affecting a person adversely in his or her trade, business or profession.” A&B - Abell Elevator Co. v. Columbus/Cent. Ohio Bldg. & Constr. Trades Council, 651 N.E.2d 1283, 1289 (Ohio 1995). To state a claim for libel, Plaintiffs must allege that: (1) McLaren made a false statement of fact about Komorek; (2) the statement was defamatory; (3) the statement was written; (4) the statement was published; and (5) McLaren acted with the necessary degree of fault in publishing the statement. See Taylor Bldg. Corp. of Am. v Benfield, 507 F.Supp.2d 832, 838 (S.D. Ohio 2007). Finally, there must be no qualified privilege available to McLaren in making the statement. See Hahn v. Kotten, 331 N.E.2d 713, 718 (Ohio 1975).
I. The April Statement
Plaintiffs claim that McLaren first committed libel when he emailed Jacobson on April 1, 2022, with the intent to harm Komorek's business. Doc. 40 ¶¶ 30, 57-64. McLaren's email stated:
You have been told third party misinformation. He truth of the matter is I politely asked [] Komorek to pay me the money he owes me from [a] 10% commission and he refused. I then decided to end my business relationship and friendship with him since he did not keep his word. . . . Sometimes it takes years and some soul searching to realize who is lying and who is telling the truth. I wish you success and happiness and I have faith you will eventually figure out who is lying and who is telling the truth.Id. ¶ 30 (second alteration in original). Defendants argue that Plaintiffs fail to establish the first element of a libel claim because McLaren's email offered his opinion that Komorek owed him money rather than a factual assertion. Doc. 45 at 16. Specifically, Defendants suggest that McLaren was not attempting to be impartial or to hide his bias, which would lead a reader to doubt the statement's truth. Id. Plaintiffs respond that McLaren's email uses language evincing truth and falsity and that his reference to the existence of a debt is a verifiable fact. Doc. 46 at 18. Additionally, Plaintiffs claim that the email implies a factual basis, which is a proper basis for liability even if it is an opinion. Id. at 18-19.
To determine whether a statement is an opinion or a fact, Ohio courts apply a totality of the circumstances test considering the statement's: (1) specific language; (2) verifiability; (3) general context; and (4) broader context. Vail v. The Plain Dealer Publ'g Co., 649 N.E.2d 182, 185 (Ohio 1995). Statements regarding an individual's honesty “are possibly verifiable facts” but still must be evaluated “in the context in which they were written.” Id. at 186 (finding references to the plaintiff's honesty to be a protected opinion because in context they represented the author's subjective point of view). However, when a statement is “accompanied by explicit language professing its truth, reasonable readings normally view the statement as conveying information of a factual nature, rather than as expressing an opinion.” Susan B. Anthony List v. Driehaus, 805 F.Supp.2d 423, 428 (S.D. Ohio 2011). Finally, when context reveals that the author of a statement is clearly biased, a reader is more likely to interpret the statement as an opinion. See Scott v. News-Herald, 496 N.E.2d 699, 708 (Ohio 1986).
He Court finds that McLaren's email to Jacobson is not a protected opinion. Each of the four factors mentioned above weighs in favor of finding that McLaren's email contained factual assertions rather than opinions. First, the email includes language indicating that McLaren was stating facts because it asserted that Jacobson would “eventually figure out who is lying and who is telling the truth.” Doc. 40 ¶ 30. Second, the primary message of the email was that Komorek failed to pay McLaren a commission he was owed. Id. He existence of any such debt and whether Komorek paid it is a verifiable fact, which can be proven false. Cf. Wampler v. Higgins, 752 N.E.2d 962, 977 n.8 (Ohio 2001) (“[A] statement deemed to be an opinion as a matter of law cannot be proven false.”). Finally, McLaren sent this email to Komorek's client and sent several other communications to a newspaper executive and Komorek's business partner to call into question Komorek's honesty. Doc. 40 ¶¶ 30, 34, 43-45. Although McLaren may have been biased against Komorek, the context of the email indicates that he was attempting to convince people of the truth of his allegations-not merely to express an opinion.
2. The May Statement
Plaintiffs claim that McLaren again committed libel on May 8, 2022, when he contacted Reyes at Law Enforcement Today to accuse Komorek of fabricating his resume and impersonating a military intelligence specialist. Id. ¶¶ 34, 65-72.
Defendants first argue that Plaintiffs' Exhibit A contradicts the assertions in the amended complaint. Doc. 45 at 22-23; see, e.g., Weiss v. Sherloq Revenue Solutions, Inc., No. 19 Civ. 7103 (NSR), 2021 WL 965810, at *2 (S.D.N.Y Mar. 12, 2021) (“[W]here a conclusory allegation in the complaint is contradicted by a document attached to the complaint, the document controls and the allegation is not accepted as true.” (citation omitted)). According to Defendants, the exhibit indicates that another individual-not McLaren-was responsible for sending the report. Doc. 45 at 23. Therefore, Defendants contend that the exhibit requires the Court to dismiss Plaintiffs' claim regarding the May Statement. Id.
Plaintiffs' Exhibit A, as previously noted, includes an email to Jacobson and another recipient on August 9, 2022, attaching a report about Komorek. Doc. 40-1. It also includes what appears to be part of a message from McLaren. Id.
Plaintiffs respond that Defendants have misunderstood the exhibit. Doc. 46 at 22. In their view, Plaintiffs' Exhibit A-viewed along with the amended complaint- illustrates that McLaren forwarded the report about Komorek to Reyes to explain why a separate article was “complete B.S.” Id.
As the Court has already observed, it is difficult to draw any definitive conclusions about what Plaintiffs' Exhibit A shows. While the exhibit does not appear to support Plaintiffs' allegations regarding the May Statement, it also does not contradict them. Put differently, the exhibit does not cast any doubt on the allegation that McLaren sent Reyes a report accusing Komorek of “fabricating his resume and being a con.” Doc. 40 ¶ 34. Accordingly, the Court declines Defendants' invitation to dismiss the claim regarding the May Statement based on the contents of Plaintiffs' Exhibit A.
Defendants also urge the Court to consider an exhibit attached to their opposition, Doc. 45-2 (“Defendants' Exhibit B”), which they claim is the communication between McLaren and Reyes that Plaintiffs reference in the amended complaint. Doc. 45 at 23. Plaintiffs respond that Defendants' Exhibit B actually “accentuate[s] the actionable nature of the May Defamation.” Doc. 46 at 23.
Both parties seem to take for granted that the Court may consider Defendants' Exhibit B. However, the Court may consider only documents that are attached to, integral to, or incorporated by reference in the amended complaint. AECOM, 19 F.4th at 106. Defendants' Exhibit B is not attached to the amended complaint, and it is unclear that it could be deemed integral to or incorporated by reference in the pleading. He amended complaint asserts that McLaren contacted Reyes at 9:43 a.m. on May 8, 2022, to send him a report accusing Komorek of fabricating his resume. Doc. 40 ¶ 34. Defendants' Exhibit B includes messages from May 8-presumably in 2022-beginning at 8:28 a.m., between Reyes and an unnamed individual. Doc. 45-2. (According to Defendants' brief, the unnamed individual is McLaren, Doc. 45 at 23, though that is not explicit in the exhibit itself.) He messages do not include any report that McLaren sent to Reyes, as Plaintiffs allege. Doc. 40 ¶ 34. It is thus hard to see how the amended complaint has made the “clear, definite and substantial reference” to Defendants' Exhibit B that is required to incorporate it by reference. See Madu, Edozie & Madu, PC. v. Socket Works Ltd. Nigeria, 265 F.R.D. 106, 123 (S.D.N.Y. 2010) (citation omitted).
He Court need not decide the question, however, because the exhibit would not defeat the amended complaint's allegations even if it could be considered. He exhibit appears to show an excerpt of a conversation between McLaren-assuming he is the unnamed individual-and Reyes. Doc. 45-2. McLaren provided Reyes the contact information for two other individuals and stated: “Call them and ask for [Komorek's] military records. You'll be able to see who is lying and who is telling the truth pretty easily.” Id. His statement does not contradict the amended complaint's allegations. Plaintiffs assert that McLaren sent Reyes a report accusing Komorek of “fabricating his resume and being a con.” Doc. 40 ¶ 34. Hey further allege that McLaren used the report to suggest that a related article-which he thought had been “ghostwritten” by Komorek-was “complete B.S.” Id. He excerpted conversation in Defendants' Exhibit B is not inconsistent with these allegations: McLaren could have sent Reyes the report and told him to reach out to the other two individuals. Again, because the exhibit does not contradict Plaintiffs' allegations, the Court declines to dismiss the claim on that basis.
Th. The August Statements
Plaintiffs allege that McLaren committed three more acts of libel in August 2022 when he contacted Welsh. Id. ¶¶ 43-45, 73-96. First, McLaren messaged Welsh that Komorek was a “pathological [l]iar” and a “complete fraud.” Id. ¶ 43. Hen, McLaren sent a report accusing Komorek of fabricating his resume and lying about his military credentials. Id. ¶¶ 44, 85. Finally, McLaren wrote that Komorek lied about being a military intelligence soldier, being in special forces, and conducting special operations. Id. ¶ 45. McLaren's final message also indicated that Komorek had no college degree, was denied a security clearance, earned no individual awards, and was discharged from the National Guard for behavioral reasons after he “was found to be a habitual liar.” Id.
Defendants argue that McLaren's messages to Welsh are protected by the common interest privilege because McLaren, Komorek, and Welsh were all Conflict employees. Doc. 45 at 16-18. Defendants claim that communications between employees about a third employee are protected communications. Id. at 18. Additionally, Defendants contend that McLaren, Komorek, and Welsh were all WAD members and in the private investigations business, and therefore they shared a common interest in maintaining the integrity of the organization and of the general profession. Doc. 49 at 4-5. Plaintiffs point out that these messages were sent in August 2022, several months after both Komorek and Welsh left Conflict. Doc. 46 at 20.
“A qualified or conditionally privileged communication is one made in good faith on any subject matter in which the person communicating has an interest, or in reference to which he has a right or duty, if made to a person having a corresponding interest or duty of a privileged occasion and in a manner and under circumstances fairly warranted by the occasion and duty, right or interest.” Sygula v. Regency Hosp. of Cleveland E., 64 N.E.3d 458, 466 (Ohio Ct. App. 2016) (citation omitted). he “essential elements” for the privilege to apply are “good faith, an interest to be upheld, a statement limited in its scope to this purpose, a proper occasion, and publication in a proper manner and to proper parties only.” Id.
In asserting that McLaren's communications with Welsh were privileged, Defendants rely on Yoakam v. Boyd, No. 07 Civ. 287 (PMH), 2010 WL 3064415 (Ohio Ct. App. Aug. 6, 2010). here', a former employee wrote a letter to her employer accusing a different employee of being a felon, stealing business, and directing her to violate the law. Id. at *1-2. he court determined that the letter was limited to employment matters and was covered by the qualified privilege. Id. at *6.
Defendants claim that the statements McLaren made to Welsh are comparable because they “were made between two employees concerning a third employee, or as in Yoakam between an employee and a former employee concerning a third employee.” Doc. 45 at 18. However, this characterization is misleading at best. When McLaren messaged Welsh on August 3, 2022, Welsh and Komorek both were no longer Conflict employees. Doc. 40 ¶¶ 25-26; see also Doc. 46 at 26 n.3. hus, even if the Court determined that McLaren's communications were limited to employment matters, there was no employment interest that McLaren shared with Welsh that he could have been trying to promote. Cf. Stearns v. Ohio Sav. Ass 'n, 472 N.E.2d 372, 374-75 (Ohio Ct. App. 1984) (“[W]here the defamation is published . . . to someone not within the qualified privilege . . . the privilege will not protect an individual.”).
As the Court does not find that McLaren's statements in August were protected by the qualified privilege, the Court need not determine whether Plaintiffs have sufficiently pled that the statements were made with malice to overcome that privilege.
4. Allegations that the Statements Were False
Defendants also claim that all five of Plaintiffs' libel claims must fail because Plaintiffs have not plausibly alleged which aspects of McLaren's statements were false. Doc. 45 at 19-22. Plaintiffs respond that these allegations appear plainly in the amended complaint. Doc. 46 at 19-20.
He Court finds that the amended complaint clearly disputes the veracity of each of McLaren's allegedly libelous statements. Plaintiffs dispute the truth of McLaren's email to Jacobson in April by stating that Komorek “was not delinquent on any debt” and never owed McLaren money. Doc. 40 ¶ 61. Next, Plaintiffs challenge the veracity of McLaren's statements to Reyes in May by alleging that Komorek “did not misrepresent his resume or experience and did not impersonate a former military intelligence specialist.” Id. ¶ 69. Finally, Plaintiffs claim that all three of McLaren's August Statements to Welsh were false. Plaintiffs dispute the First August Statement by asserting that Komorek “is not a pathological liar or a fraud” and that Komorek's “representations about his background are utterly true.” Id. ¶ 77. Plaintiffs counter the Second August Statement by stating that Komorek “did not misrepresent his resume or experience and did not impersonate a former military intelligence specialist.” Id. ¶ 85. And Plaintiffs specifically assert that the allegations made in the Third August Statement were false. Id. ¶ 93. Accordingly, Plaintiffs have satisfied their burden on this motion by alleging that each of the defamatory statements was false. See Fisher v. Ahmed, 153 N.E.3d 612, 628 (Ohio Ct. App. 2020).
5. API International 's Libel Claims
Defendants argue that none of the allegedly defamatory statements involve API International, necessitating the dismissal of any defamation claims raised by the company. Doc. 45 at 24. He Court does not read any of the allegedly defamatory statements as invoking API International, and Plaintiffs do not address this argument in their opposition. Accordingly, to the extent Plaintiffs intended to allege that McLaren defamed API International, those claims are dismissed.
C. Tortious Interference with Prospective Business Advantage
Finally, Plaintiffs bring a claim for tortious interference with prospective business advantage. Doc. 40 ¶ 97-105. Hey allege that LaCorte filed the WAD Complaint to interfere with API International's potential merger with Global Pursuit. Id. ¶ 99. Plaintiffs contend that Conflict is vicariously liable for LaCorte's tortious interference. Id. ¶ 105.
Plaintiffs originally alleged tortious interference under Colorado law, Doc. 40 ¶¶ 97-102, but they have since asserted that Ohio law would be more appropriate because Ohio was the site of Plaintiffs' alleged injuries, Doc. 46 at 24 & n.4. Defendants appear to agree. Doc. 49 at 5-6 (citing only Ohio cases). Furthermore, as noted above, Plaintiffs have withdrawn the claims brought against LaCorte in his personal capacity. He parties do not address the question whether, under Ohio law, the Court can hold Conflict vicariously liable for LaCorte's allegedly tortious behavior even though LaCorte is no longer a defendant. Cf Sapienza v. Materials Eng'g & Tech. Support Servs. Corp., No. 15AP-101, 2015 WL 4910497, at *4 (Ohio Ct. App. Aug. 18, 2015) (holding that where trial court lacked personal jurisdiction over attorney due to insufficient service, plaintiff could not recover against law firm for legal malpractice). As explained below, however, the Court finds that Plaintiffs fail to state a claim for tortious interference. Accordingly, the Court need not resolve any potential vicarious liability issue.
To state a claim for tortious interference with a business relationship under Ohio law, Plaintiffs must allege that: (1) a prospective business relationship existed; (2) the wrongdoer knew about the prospective business relationship; (3) the wrongdoer intentionally interfered with the relationship, which caused a breach or termination of the prospective relationship; and (4) Plaintiffs suffered resulting damages. Gentile v. Turkoly, 86 N.E.3d 991, 997 (Ohio Ct. App. 2017). Additionally, the wrongdoer's interference must have been improper. Gracetech Inc. v. Perez, No. 96913, 2012 WL 589473, at *5-6 (Ohio Ct. App. Feb. 23, 2012). Finally, as Plaintiffs seek to hold Conflict liable for LaCorte's actions, they must allege that LaCorte's tort was “committed in the scope of his employment.” Byrd v. Faber, 565 N.E.2d 584, 587 (Ohio 1991) (citation omitted).
Plaintiffs allege that API International-Komorek's company-had a prospective merger with Global Pursuit in the summer of 2022 that LaCorte knew about. Doc. 40 ¶¶ 35-36, 100. Plaintiffs also claim that LaCorte filed the “frivolous and retaliatory” WAD Complaint to interfere with the prospective merger, Id. ¶¶ 37-42, 99-101, which, in fact, caused the prospective merger to falter, Id. ¶ 102, costing Plaintiffs more than $200,000 in damages, Id. ¶ 103. Finally, Plaintiffs contend that LaCorte was acting on behalf of Conflict when he filed the WAD Complaint. Id. ¶ 104.
In response, Defendants assert that there were discussions between Komorek and Global Pursuit's owner about doing business together in June 2021, while Komorek was still Conflict's employee. Doc. 45 at 25-26. Defendants contend that Conflict cannot be deemed “an interfering third party” because Komorek was acting on Conflict's behalf at the time. Id. at 26. It is unclear how these assertions are related to the potential merger between Global Pursuit and API International in the summer of 2022, when Komorek was no longer employed by Conflict. But in any event, the Court cannot consider them because they do not appear in the amended complaint.
More persuasively, Defendants argue that the WAD Complaint cannot be the basis of a tortious interference claim because it qualifies as a privileged communication. Doc. 49 at 5-7. “[W]here claims such as tortious interference . . . are based on statements that are qualifiedly privileged under defamation law,” the privilege can be defeated only by a clear and convincing showing “that the communication was made with actual malice.” A&B - Abell Elevator, 651 N.E.2d at 1295. Again, a privileged communication is one made: (1) in good faith; (2) regarding an interest to be upheld; (3) limited in scope; (4) properly made; and (5) published only to proper parties. Jacobs v. Frank, 573 N.E.2d 609, 612 (Ohio 1991). He privilege may extend to fraternal or professional organizations. See Putka v. First Cath. Slovak Union, 600 N.E.2d 797, 805 (Ohio Ct. App. 1991); Creps v. Waltz, 450 N.E.2d 716, 718 (Ohio Ct. App. 1982).
He Court finds that the WAD Complaint is such a privileged communication, which cannot form the basis for a tortious interference claim. He WAD is a private organization that polices its members through a series of reporting mechanisms and quasi-judicial proceedings. Doc. 35 at 3. As a member of the WAD, LaCorte had an interest in upholding the WAD's procedures and code of conduct. See Putka, 600 N.E.2d at 804-05. Accordingly, when LaCorte and three other WAD members believed Komorek had behaved in a manner that warranted reporting him to the WAD, they filed a complaint. Doc. 35 at 2-3. He WAD Complaint was appropriately filed with the WAD, and there is no indication that it was published to non-members. See Doc. 34. Hus, the qualified privilege attaches to the WAD Complaint.
For the reasons already explained, the same privilege does not defeat the defamation claims concerning the August Statements. He distinction stems from the context in which the communications were made. With respect to the August Statements, McLaren's comments to Welsh were unrelated to their membership in the WAD, and the statements were not made to promote or further the WAD's interests. Here, by contrast, the communication at issue is the WAD Complaint itself.
Although Komorek argues that the WAD Complaint contained “false and salacious allegations,” Doc. 46 at 28, the WAD decided, after “a great deal of discussion and deliberation,” to suspend and reprimand Komorek based on the WAD Complaint's allegations, Doc. 35-1 at 90. Komorek appears to concede that two of the claims against him in the WAD proceeding were successful. See Doc. 46 at 34. In other words, at least two of the six claims were deemed sufficiently meritorious by the WAD to result in an adverse judgment against Komorek. See id. Accordingly, Komorek has not sufficiently alleged that, in submitting the WAD Complaint, LaCorte acted with actual malice-that is, with knowledge that the allegations were false or with reckless disregard as to whether they were false-as required to overcome the qualified privilege. See A&B - Abell Elevator, 651 N.E.2d at 1295. therefore, the Court finds that the qualified privilege attaches to the WAD Complaint, which prevents it from forming the basis of Plaintiffs' tortious interference claim.
IV. CONCLUSION
For the foregoing reasons, LaCorte's motion to dismiss is DENIED as moot, and Defendants' motion to dismiss is GRANTED IN PART and DENIED IN PART, as follows:
Defendants' motion is DENIED with respect to Plaintiffs' NYLL § 740 claim regarding licensing violations but GRANTED with respect to Plaintiffs' NYLL § 740 claim regarding accounting violations. Hie motion is DENIED with respect to Komorek's libel claims but GRANTED to the extent that API International seeks to assert libel claims. Finally, the motion is GRANTED with respect to Plaintiffs' claim for tortious interference with prospective business advantage. He dismissed claims are dismissed with prejudice because Plaintiffs have not requested leave to amend. See, e.g., Cesiro v. Rite Aid of N.Y, No. 20 Civ. 10519 (ER), 2022 WL 392907, at *6 (S.D.N.Y Feb. 9, 2022) (“[W]here a plaintiff has neither requested leave to amend, nor indicated additional facts that would be added to the complaint, a court is not required to grant leave to amend sua sponte.”).
'The parties are directed to appear for a status conference on April 19, 2024, at 2:30 p.m. at the Thurgood Marshall United States Courthouse, 40 Foley Square, New York, New York 10007, Courtroom 619. The Clerk of Court is respectfully directed to terminate LaCorte as a defendant and to terminate the motions, Docs. 42, 44. 'Hie Clerk of Court is also respectfully directed to restrict access to this opinion to the “selected party” viewing level.
It is SO ORDERED.