The opinion of the court was delivered by: William C. Conner, District Judge:
Plaintiff Lisa Bolden, a citizen of New Jersey, brings this
defamation action against defendant Morgan Stanley & Co., Inc.
("Morgan Stanley"), a Delaware corporation with its principal
place of business in New York, and two of its employees,
defendants Elaine LaRoche ("LaRoche") and David Blair ("Blair")
for damages in the amount of $2,000,000. Defendant Morgan
Stanley has interposed counterclaims based of fraud, conversion
and breach of contract against plaintiff and seeks to recover
monies it claims to have reimbursed plaintiff based on her
allegedly falsified expense reports as well as salary paid to
plaintiff during the relevant period. This Court has diversity
jurisdiction pursuant, to 28 U.S.C. § 1332 and therefore New
York law applies.
This action is presently before the Court on defendants' motion
for summary judgment pursuant to Rule 56(c), Fed.R.Civ.P. and
plaintiff's cross-motion for sanctions for alleged violations
of Rule 11, Fed.R. Civ.P.
Plaintiff served as an associate in the Municipal Finance
Department at Morgan Stanley for nearly one year until her
resignation on September 20, 1989.*fn1 Her annual salary at
the commencement of her employment on September 26, 1988 was
$50,000 plus an expected bonus of $25,000 per annum. Plaintiff
claims to have resigned from Morgan Stanley as a result of a
disagreement with her superiors over alleged discrepancies in
her expense reports. The allegedly defamatory statements
occurred in discussions of these perceived discrepancies. The
employees of defendant Morgan Stanley who made the allegedly
defamatory statements include defendant Elaine LaRoche, manager
of the Municipal Finance Department, and defendant David Blair,
manager of the Health Care Group where plaintiff was assigned
to work from January 1989 until her departure from the company.
Plaintiff contends that on September 20, 1989, defendant
LaRoche defamed her by communicating with plaintiff in the
presence of defendant Blair and another Morgan Stanley employee
about plaintiff's expense report of September 18, 1989 which
defendants allege was falsified.*fn2 Plaintiff claims that
defendant LaRoche accused her of submitting said report "[i]n a
harsh, threatening and confrontational manner and without any
justification or evidence. . . ." Plaintiff's Memorandum, at
13. Plaintiff alleges that defendant LaRoche denied plaintiff
an opportunity to respond to the allegations and conducted
herself in a "malicious manner, clearly with the intent to
embarrass, insult, degrade and humiliate plaintiff in front of
[defendant] David Blair and Alex Foroglou [an employee of
defendant Morgan Stanley]. . ." Plaintiff's Memorandum, at 14.
Plaintiff is now employed by the United States Department of
Housing and Urban Development ("HUD"). It is alleged that
plaintiff received a job offer from HUD on the same day she
left the firm at a salary commensurate with her earnings at
A. Defendants' motion for summary judgment.
The Standard for Summary Judgment.
A party seeking summary judgment must demonstrate that "there
is no genuine issue as to any material fact." Fed.R. Civ.P.
56(c), Knight v. U.S. Fire Ins. Co., 804 F.2d 9, 11 (2d Cir.
1986), cert. denied, 480 U.S. 932, 107 S.Ct. 1570, 94 L.Ed.2d
762 (1987); see Celotex Corp. v. Catrett, 477 U.S. 317, 106
S.Ct. 2548, 91 L.Ed.2d 265 (1986). "When the moving party has
carried its burden under Rule 56(c), its opponent must do more
than simply show that there is some metaphysical doubt as to
the material facts." Matsushita Electric Industrial Co. v.
Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356,
89 L.Ed.2d 538 (1986). It must establish that there is a
"genuine issue for trial." Id. at 587, 106 S.Ct. at 1356. "In
considering the motion, the court's responsibility is not to
resolve disputed issues of fact but to assess whether there are
any factual issues to be tried, while resolving ambiguities and
drawing reasonable inferences against the moving party."
Knight, 804 F.2d at 11. The inquiry under a motion for
summary judgment is thus the same as that under a motion for a
directed verdict: "whether the evidence presents a sufficient
disagreement to require submission to a jury or, whether it is
so one-sided that one party must prevail as a matter of law."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 251-52, 106
S.Ct. 2505, 2512, 91 L.Ed.2d 202 (1986).
Defendants' summary judgment motion.
The gravamen of defendants' summary judgment motion is that the
alleged defamatory statements are qualifiedly privileged and,
absent proof that defendants were actuated solely by malice,
plaintiff's action must fail.*fn3 Defendants also argue that
the veracity of their spoken words stands as an absolute
defense to plaintiff's defamation claim ...