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Carpenter v. All American Games

United States District Court, D. Arizona

October 10, 2017

Chad Carpenter, an individual, Plaintiff/Defendant,
All American Games, a limited liability company, Douglas Berman, an individual, and Does 1-30, inclusive, Defendants/Counterclaimants.



         Defendant All American Games, LLC (“AAG”) has moved for partial summary judgment on Plaintiff Chad Carpenter's defamation claim. Doc. 37. The motion is fully briefed (Docs. 39, 41), and no party has requested oral argument. For reasons that follow, the Court will deny the motion.[1]

         I. Background.

         AAG, through its subsidiary Football University, LLC, operates a national youth football tournament and football camps in more than 20 U.S. markets, including camps in Phoenix, Seattle, Denver, and various cities in California. Doc. 38 ¶ 1. Carpenter is a former AAG employee. Id. ¶ 2. As AAG's “West Coast Director, ” Carpenter was responsible for recruiting athletes to participate in the camps in his region and recruiting teams to participate in the national tournament. Id. In 2015 Carpenter was being paid a base salary of $65, 000 and was eligible to receive commissions based on his camp and tournament enrollment revenue. Id. ¶ 3.

         Carpenter was terminated on June 10, 2015. On the same day, AAG's chairman, Douglas Berman, sent the following e-mail to 54 recipients:

Everyone -
As of this morning, AAG terminated its employment of Chad Carpenter. Without going further, this move was necessitated because of conduct that was violative of the norms of integrity and professionalism expected of members of the AAG community.
We will be adjusting in the short term to execute the LA camp and coordinate the transition of other responsibilities for territories that Chad was responsible for.
Douglas Berman
Chairman/CEO, All American Games, LLC

Doc. 37-1 at 11-12; Doc. 38 ¶ 10. Carpenter asserts a defamation claim based on this e-mail.[2]

         The parties offer conflicting explanations of the circumstances leading up to the email. AAG alleges that in May 2015 it “uncovered a troubling and improper relationship between Plaintiff and another former employee, ” Karen King, which prompted an investigation and ultimately led to Carpenter's termination. Doc. 37-1 ¶ 5. AAG claims that King was manipulating AAG's financial systems to inflate revenue numbers and that it “found considerable evidence that Plaintiff was fully knowledgeable of [King's] fraudulent actions.” Id. ¶¶ 6, 8. AAG cites two additional reasons for the termination: Carpenter offered discounts to customers without authorization to inflate his revenue and was “gross[ly] insubordinate[e] with respect to his supervisor, ” Steve Quinn. Id. ¶¶ 9-10. Carpenter disputes each of these reasons and claims that AAG conducted a “half-baked” investigation and fired him because it was struggling financially and Quinn did not like him. Doc. 39-1 at 3, 5. Carpenter asserts that neither he nor King manipulated financial records, and that the “considerable evidence” AAG claimed to possess is discredited by his controverting evidence. Doc. 39-1 at 2-5.

         To support its claim that it had considerable evidence of financial misreporting, AAG produces various e-mail threads between Carpenter and King, in which the two discuss reaching a certain revenue amount for Carpenter to receive a higher commission. Doc. 39-1 at 17-18; Doc. 37-1 at 7-9. In these e-mails, Carpenter states: “[b]etter get over a 250 FPE seriously Karen, ”[3] and King makes statements such as “[w]e will get you the higher payout [f]or Seattle” and “I will do everything I can to make it happen . . . [e]ven if I have to sell my soul to the devil.” Id. Carpenter's declaration explains that the e-mails do not suggest fraud, but simply evidence tactics he used to motivate his team to reach their target FPE numbers - part of his job. Doc. 39-1 at 3.

         AAG also produces screenshots from its accounting systems, AGGIS and Cybersource, which allegedly prove that King misreported revenue on eight occasions. Doc. 39-1 at 13-15, 26-43. AGGIS was used to track customers and report revenue for calculating commissions, while Cybersource was used to process actual payments received. Doc. 39-1 at 15-16. AAG identifies eight instances where there were discrepancies between the amount King reported in AGGIS and the amount actually processed in Cybersource. Doc. 39-1 at 14-15. Carpenter responds with a number of explanations, including that AGGIS experienced technical glitches during the 2015 camps that may have caused the discrepancies, and that participants often pay portions of their fee in cash when they arrive at camp, but the cash receipts are not always reflected in AGGIS. Doc. 39-1 at 2-3, 5. Carpenter also argues that the screenshots AAG provided are illegible, some of the corresponding screenshots appear to have ...

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