FONT LLACER DE PUEYO v. RG Premier Bank of Puerto Rico et al

Filing 41

OPINION AND ORDER granting 28 motion for summary judgment. Partial judgment shall be entered accordingly. Signed by Judge Juan M. Perez-Gimenez on 11/20/2013. (PMA)

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

ELSIE FONT LLACER DE PUEYO
Plaintiff,
v.

Civil Case. NO. 10-2086 (PG)

RG PREMIER BANK OF PUERTO RICO; RG
PREMIER MORTGAGE INC.; SCOTIABANK
OF PUERTO RICO, INC.; THE FEDERAL
DEPOSIT INSURANCE CORPORATION,
Defendants.

OPINION AND ORDER
Pending before the Court is co-defendant Scotiabank’s motion for
summary judgment (Docket No. 28). Therein, Scotiabank moved for summary
disposition of the complaint, inasmuch as the present case poses no
genuine issues of material fact and as a matter of law the instant
complaint should be dismissed against it. For the reasons set forth
below, this Court GRANTS the co-defendant’s Motion for Summary Judgment.
I.

FACTUAL AND PROCEDURAL BACKGROUND

On November 5, 2010, Plaintiff Elsie Font Llacer de Pueyo (“Font” or
“Plaintiff”) filed the above-captioned claim against R-G Premier Bank, R-G
Mortgage,

the

Federal

Deposit

Insurance

Corporation

and

Scotiabank

(hereinafter collectively referred to as “Defendants”). Font alleges she
was discriminated against on the basis of age and seeks redress under the
Age Discrimination in Employment Act (“ADEA” or “the Act”), 29 U.S.C. §
623. Font also pleads supplemental state law claims of age discrimination
under Puerto Rico’s anti-discrimination statute, Law No. 100 of June 30,
1959 (“Law No. 100”), P.R. LAWS ANN. tit. 29, § 146, et seq.; of wrongful
discharge under Puerto Rico’s wrongful termination statute, Law No. 80 of
May 30, 1976 (“Law No. 80”), P.R. LAWS ANN. tit. 29, § 185, et seq.; of
retaliation

pursuant

to

Puerto

Rico’s

anti-retaliation

statute

(“Law

No. 115”), P.R. LAWS ANN tit. 29, § 194 et seq.; and, of damages under
Puerto Rico’s general tort statute, Article 1802 of the Puerto Rico Civil
Code (“Article 1802”), P.R. LAWS ANN. tit. 31, § 5141.
At the time the complaint was filed, Plaintiff alleged to be a 72year-old who had been working for R-G Premier Bank for thirty-two (32)

Civil No. 10-2086(PG)

Page 2

years. See Docket No. 1 at ¶ 5-6. Font stated in her complaint that prior
to her forced resignation, she occupied the position of Senior Manager
Vice-President earning more than $98,000.00. Id. at ¶ 9. On or about
December

of

2009,

Font

alleges

that

her

supervisor,

Steven

Velez

(“Velez”), informed her of several changes in the terms and conditions of
her

employment,

including

a

reduction

in

responsibilities,

status,

participation in meetings and office space. According to Plaintiff, after
her return from her Christmas vacations, Velez announced to her that she
would report to a much younger and less experienced employee, namely,
Peter Torres. Id. at ¶ 13. Font claims in her complaint that these actions
were the result of age discrimination and forced her to involuntarily
resign.

Id. at ¶ 15. Ultimately,

Plaintiff

now

alleges that she

was

discriminated against because of her age and discharged without just
cause.

Id.

As

a

result

of

these

events,

Font

filed

charges

of

age

discrimination before the EEOC on March 5, 2010 and received a right-tosue letter in August of 2010. Id. at ¶ 4.
Finally,

Plaintiff

also

states

in

her

complaint

that

after

“Scotiabank acquired RG’s banking operations,” id. at ¶ 19, sometime in
2009, the FDIC became “successor in interest of RG,” id. at ¶ 18, and
insofar as “Scotiabank acquired RG’s banking operations,” id. at ¶ 19, it
consequently also became a successor in interest of Plaintiff’s employer
“under the Doctrine of Successor Employer.” Id.
On January 10, 2011, the FDIC-R filed a motion to substitute party,
wherein it informed the Court that on April 30, 2010, the FDIC was
appointed receiver of R-G Premier Bank by order of the Commissioner of
Financial Institutions of Puerto Rico. See Docket No. 5. Accordingly, the
FDIC-R requested that it be substituted as the defendant in the place of
R-G Premier Bank. See id. On February 28, 2011, the Court granted its
request. See Docket No. 7.
On May 25, 2011, FDIC–R filed a motion to dismiss pursuant to
Federal

Rule

of

Civil

Procedure

12(b)(1)

for

lack

of

subject-matter

jurisdiction and Rule 12(b)(6) for failure to state a claim. See Docket
No. 8. Co-defendant Scotiabank filed a motion to join the FDIC-R’s motion
to dismiss. See Docket No. 9. This Court granted Plaintiff until July 13,
2011 to respond to these motions, see Docket No. 11, however, on said
date, the Plaintiff filed a second motion for extension of time until July

Civil No. 10-2086(PG)

Page 3

18, 2011 to oppose the pending motions, see Docket No. 12. On July 20,
2011, this Court entered an order finding this second request as moot
inasmuch as the requested extension had elapsed and Plaintiff had yet to
file an opposition. See Docket No. 13. On July 28, 2011, FDIC–R filed a
request to deem its motion to dismiss as unopposed (Docket No. 14), which
the Court granted (Docket No. 17).
Thereafter, the case was stayed pending the bankruptcy proceedings
of R-G Mortgage. See Docket No. 18. On January 23, 2013, R-G Mortgage and
the FDIC-R filed a motion to lift the stay and requesting that the Court
adjudge the pending motions to dismiss in their favor. See Docket No. 21.
This

Court

then

issued

an

Opinion

and

Order

(Docket

No.

22).

Therein, it denied without prejudice co-defendant Scotiabank’s motion to
dismiss, after finding that “in order for the Court to be in a position to
determine whether or not an acquiring bank is the successor of a failed
bank, a factual record must be presented.” Id. at page 12.1

Subsequently,

co-defendant Scotiabank moved for summary judgment (Docket No. 28) and
Plaintiff filed an opposition thereto (Docket No. 37). In short, codefendant Scotiabank asserts that it is not a successor employer of R-G
and thus, not liable for claims arising from R-G’s actions, including
alleged discrimination or constructive discharge. In the alternative,
Scotiabank alleges that if this Court was to find that Plaintiff is
entitled to remedies resulting from her alleged claims and constructive
discharge

from

R-G,

the

proper

party

to

respond

is

not

Scotiabank.

(Docket No. 28-1). For the reasons set forth below, this Court GRANTS codefendant’s motion for summary judgment.
II.

SUMMARY JUDGMENT STANDARD

A motion for summary judgment is governed by Rule 56(c) of the
Federal Rules of Civil Procedure, which allows disposition of a case if
“the pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.” See Sands v. Ridefilm Corp.,
212 F.3d 657, 660 (1st Cir.2000). A factual dispute is “genuine” if it
could
1

be

resolved

in

favor

of

either

party,

and

“material”

if

it

Also, the Court granted in part and denied in part FDIC-R’s motion to dismiss, and
dismissed with prejudice several claims against the same. See Docket No. 22.

Civil No. 10-2086(PG)

Page 4

potentially affects the outcome of the case. Calero-Cerezo v. U.S. Dep’t
of Justice, 355 F.3d 6, 19 (1st Cir .2004).
To be successful in its attempt, the moving party must demonstrate
the absence of a genuine issue as to any outcome-determinative fact in
the record, DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir.1997),
through

definite

and

competent

Rodriguez, 23 F.3d 576, 581 (1

st

evidence.

Maldonado-Denis

v.

Castillo

Cir.1994). Once the movant has averred

that there is an absence of evidence to support the non-moving party’s
case, the burden shifts to the non-movant to establish the existence of
at least one fact in issue that is both genuine and material. Garside v.
Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.1990) (citations omitted). If
the non-movant generates uncertainty as to the true state of any material
fact, the movant’s efforts should be deemed unavailing. Suarez v. Pueblo
Int’l, 229 F.3d 49, 53 (1st Cir.2000). Nonetheless, the mere existence of
“some alleged factual dispute between the parties will not affect an
otherwise properly supported motion for summary judgment.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986).
At the summary judgment juncture, the Court must examine the facts
in the light most favorable to the non-movant, indulging that party with
all possible inferences to be derived from the facts. See Rochester Ford
Sales, Inc. v. Ford Motor Co., 287 F.3d 32, 38 (1st Cir.2002). The Court
must review the record “taken as a whole,” and “may not make credibility
determinations

or

weigh

the

evidence.”

Reeves

v.

Sanderson

Plumbing

Products, Inc., 530 U.S. 133, 135 (2000). This is so, because credibility
determinations,

the

weighing

of

the

evidence,

and

the

drawing

of

legitimate inferences from the facts are jury functions, not those of a
judge. Id.
III. FACTUAL FINDINGS
The following undisputed material facts are appropriately supported
in co-defendant Scotiabank’s statement of material facts submitted in
accordance

with

Local

Rule

56.

Also,

said

facts

were

admitted

by

2

Plaintiff in their entirety:

2

Even though the Plaintiff denies co-defendant’s statement No. 11 in its opposition
(Docket No. 37-2), plaintiff failed to support its contention with evidence or record
citation. The court notes that pursuant to Local Rule 56(c), a non-movant’s opposing
statement of material facts shall admit, deny or qualify the facts submitted by the
movant, and in so doing, “shall support each denial or qualification by a record citation

Civil No. 10-2086(PG)

Page 5

1. Scotiabank is a banking institution that provides personal and
commercial banking services, such as deposits, checking accounts
and loans.
2. R-G Premier Bank (“RG”) was a bank in Puerto Rico offering
business

and

consumer

financial

services,

including

banking,

trust and brokerage services.
3. The

Federal

Deposit

Insurance

Corporation

(“FDIC”)

is

an

independent agency of the federal government whose primary duty
is to insure deposits in banks and thrift institutions up to
$250,000, and to identify, monitor and address risks to the
deposit insurance funds, and limit the effect on the economy and
the financial system when a bank of thrift institution fails.
4. The FDIC insures more than $7 trillion of deposits in U.S. banks
and thrifts-deposits in virtually every bank and thrift in the
country. The FDIC directly examines and supervises more than
4,900

banks

and

savings

banks

for

operational

safety

and

soundness.
5. To protect insured depositors, the FDIC responds when a bank or
thrift institution fails. Institutions generally are closed by
their chartering authority-the state regulator, the Office of
the

Comptroller

Supervision.

of

The

the

FDIC

Currency,
has

or

several

the

Office

options

of

for

Thrift

resolving

institution failures, but the one most used is to sell deposits
and loans of the failed institution to another institution.
6. The

Puerto

Rico

Institutions

Office

(“OCIF”)

responsibility

is

to

is

of

the

the

supervise

Commissioner

public
and

office
regulate

for

Financial

whose

primary

Puerto

Rico’s

financial sector to ensure its safety and soundness, as well as
to

oversee

a

strict

adherence

to

all

applicable

laws

and

regulations.
as required by this rule.” Local Rule 56(c). “Facts contained in a supporting or opposing
statement of material facts, if supported by record citations as required by this rule,
shall be deemed admitted unless properly controverted.” Local Rule 56(e). In addition,
“[t]he court may disregard any statement of fact not supported by a specific citation to
record material properly considered on summary judgment” and has “no independent duty to
search or consider any part of the record not specifically referenced in the parties’
separate statement of fact.” Id.; See also Sánchez-Figueroa v. Banco Popular de Puerto
Rico, 527 F.3d 209, 213-14 (1st Cir.2008). Having the Plaintiff failed to abide by the
herein cited rule, the fact she denied shall be deemed admitted.

Civil No. 10-2086(PG)
7. Plaintiff

Page 6

began

working

for

R-G

occupying

the

position

of

“Senior Manager Vice President.”
8. In December 2009 Plaintiff was allegedly informed of substantial
changes

in

eventually

the
led

terms
to

and

her

conditions
alleged

of

her

demotion

employment
and

that

constructive

discharge.
9. On February 25, 2010, Plaintiff subscribed a sworn statement, as
part of her Charge before the Antidiscrimination Unit, detailing
R-G’s

alleged

adverse

actions

and

how

those

actions

were

implemented to force her resignation.
10. After those events, on April 30, 2010, the OCFI closed R-G
because it was insolvent, the OCFI also assumed control of R-G
for its total liquidation and appointed the FDIC to serve as its
receiver. The FDIC accepted the appointment as Receiver of the
depository institution.
11. After

the

intervention

by

the

Commissioner

of

Financial

Institutions all of R-G Premier Bank employees were terminated
by the FDIC due to the closing of said institution.
12. Plaintiff never applied for employment nor has she ever been
employed by Scotiabank.
13. The FDIC-R exercised its option to preserve much of the failed
bank’s

business

Purchase

and

operations

Assumption

through

(P&A)

the

implementation

transaction

with

a

of

a

healthy

financial institution, namely, an “assuming bank.” 12 U.S.C. §
1823 (c)(2)(a).
14. Specifically,

the

FDIC-R

entered

into

a

P&A

Agreement

with

Scotiabank, whereby Scotiabank assumed the insured deposits of
R-G and acquired certain assets formerly held by R-G.
15. Scotiabank did not assume or acquire any obligation to R-G’s
employees under the P&A Agreement; to the contrary, the P&A
Agreement

specifically

provides

that

any

such

liabilities

remained with the FDIC-R.
16. As part of the P&A Agreement, the FDIC-R agreed to indemnify
Scotiabank

for

certain

liabilities

that

Scotiabank

did

not

assume, and which are included in Section 12 of the same. The
P&A Agreement specifically states in its Section 12.1:

Civil No. 10-2086(PG)

Page 7

12.1 Indemnification of Indemnities. From and after
Bank Closing and subject to the limitations set
forth in this Section and Section 12.6 and
compliance by the Indemnities with Section 12.2,
the Receiver agrees to indemnify and hold harmless
the Indemnities against any and all costs, losses,
liabilities, expenses (including attorneys’ fees)
incurred prior to the assumption of defense by the
Receiver pursuant to paragraph (d) of Section 12.2,
judgments, fines and amounts paid in settlement
actually and reasonably incurred in connection with
claims against any Indemnities based on liabilities
of the Failed Bank that are not assumed by the
Assuming Institution pursuant to this Agreement or
subsequent to the execution hereof by the Assuming
Institution or any Subsidiary or Affiliate of the
Assuming Institution for which indemnification is
provided hereunder in (a) of this Section 12.1,
subject to certain exclusions as provided in (b) of
this Section 12.1:
[…]
(3) claims based on the rights of any present or
former director, officer, employee or agent as such
of the Failed Bank or of any Subsidiary or
Affiliate of the Failed Bank;
(4) claims based on any action or inaction prior to
Bank Closing of the Failed Bank, its directors,
officers, employees or agents as such, or any
Subsidiary or Affiliate of the Failed Bank, or the
directors, officers, employees or agents as such of
such Subsidiary or Affiliate; […].
17. The P&A Agreement specifically states in Section 12.9(a):
12.9 Successor Liability under Puerto Rico Act 80.
Notwithstanding
any
other
provision
in
this
Agreement, from and after Bank Closing:
(a) Any claim by a failed Bank employee against the
Assuming institution and based, in whole or in
part, on any successor liability arising by
operation of law pursuant to Puerto Rico Act. No.
80 of May 30, 1976, as amended (“Act 80”),
including a claim for severance or enhanced
severance, shall be subject to indemnity under
Section 12.1(a)(3) and shall not be excluded from
liability by reason of Section 12.1(b), other than
a claim for salary for the period from the Bank
closing until the list is provided to the
Receiver.”
18. R-G’s alleged unlawful employment actions occurred before the
OCFI closed R-G because of insolvency, before the FDIC-R was

Civil No. 10-2086(PG)

Page 8

appointed as receiver of the fail bank, and before the FDIC-R
entered into a P&A Agreement with Scotiabank.
IV.

DISCUSSION

A. Claim Against Scotiabank Pursuant to the Doctrine of Successor
Employer
In her complaint, the Plaintiff asserts that because Scotiabank
acquired R–G Premier Bank's operations, the former became liable to
Plaintiff under the doctrine of successor employer. See Docket No. 1 at
¶¶ 18–19. After R–G Premier Bank was declared insolvent and the FDIC–R
was appointed receiver on April 30, 2010, Scotiabank argues that “R–G
Premier

Bank

ceased

permanently.” See
contends

that

“it

to

exist

and

its

employees

Docket No. 9 at page 5. As a
is

not

liable

for

any

were

terminated

result, Scotiabank

damages

resulting

from

[Plaintiff's] employment with R–G Premier Bank. Scotiabank is not RG
Premier

Bank

successor

employer

and

at

no

time

became

Plaintiff's

employer.” Id. at page 3. The Court agrees.
Courts have previously held that “[a] successor employer is an
employer which has acquired an already existing operation and which
continues

those

operations

in

approximately

the

same

manner

as

the

previous employer.” Peña-Villegas v. Oriental Bank, 11-1670 No. 30 at
page 14 (D.P.R. August 24, 2012). “The determination of whether one
business is the successor to another is primarily … factual in nature and
is based upon the totality of the circumstances of a given situation.”
Garcia-Rosado v. Scotiabank, No. 12-1383, 2013 WL 209294, at *6 (D.P.R.
January 17, 2013) (citing Fall River Dyeing & Finishing Corp. v. NLRB,
482 U.S. 27, 43 (1987)). Moreover, this doctrine “requires continuity in
the identity of the business before and after the change, whether the new
company has acquired substantial assets of its predecessor and continued,
without interruption or substantial change, the predecessor’s business
operations.” Peña-Villegas v. Oriental Bank, 11-1670 No. 30 at page 14
(D.P.R. August 24, 2012).
Inasmuch

as

the

Plaintiff

here

claims

that

Scotiabank

is

a

successor employer of R-G, the Court shall consider Law No. 80 which
states, in relevant part:
In the case of transfer of a going business, if the
new acquirer continues to use the services of the

Civil No. 10-2086(PG)

Page 9

employees who were working with the former owner,
such employees shall be credited with the time they
have worked in the basis under former owners. In
the event that the new acquirer chooses not to
continue with the services of all or any of the
employees and hence does not become their employer,
the former employer shall be liable for the
compensation provided herein, and the purchaser
shall retain the corresponding amount from the
selling price stipulated with respect to the
business. In case he discharges them without good
cause after the transfer, the new owner shall be
liable for any benefit which may accrue under
sections 183a–185l of this title to the employee
laid off. P.R. Laws Ann. tit. 29 § 185f.
P.R. LAWS ANN. TIT. 29 § 185(f).
In the present case, the record demonstrates that R-G Premier Bank
was declared insolvent and was involuntarily liquidated by the OCFI.
Thereafter, the OCFI designated the FDIC as receiver of the failed
bank’s assets. According to the undisputed material facts, the FDIC
terminated all of R-G Premier Bank’s employees due to the closing of
said

institution.

sufficient

to

Courts

have

previously

determine

that

the

deemed

successor

these

employer

facts

alone

doctrine

is

inapplicable to a given case. See Alvarado-Rivera v. Oriental Bank and
Trust, No. 11-1458 2012 WL 6213305 (D.P.R. Dec. 13, 2012) (finding that
the mere fact that a failed bank was closed on insolvency grounds and
that the FDIC dismissed all employees confirms that the acquiring bank
was not a successor employer and thus, was not liable for severance
benefits accrued during Plaintiff’s employment with the failed bank);
Arends v. Eurobank and Trust Co., 845 F.Supp. 60 (D.P.R. 1994) (finding
that a bank that acquired a substantial portion of failed bank’s assets
and liabilities was not liable to failed bank’s former employees for
severance benefits under Puerto Rico statute requiring such benefits when
employees are terminated without just cause); Peña-Villegas v. Oriental
Bank, 11-1670 No. 30 (D.P.R. August 24, 2012) (finding that a bank’s
acquisition of some of failed bank’s assets and deposits by means of a
transaction

executed

with

FDIC-R

did

not

turn

the

first

into

the

successor of the latter).
The record also reflects that Scotiabank did not carry on R-G’s
business operations nor the latter’s identity. Scotiabank, rather, kept
its own operations after obtaining some assets of the failed bank from

Civil No. 10-2086(PG)

Page 10

the FDIC-R. Consequently, this Court finds that acquiring some of R-G’s
assets

pursuant

Scotiabank

into

to
a

the

P&A

Agreement

successor

with

employer.

the

Thus,

FDIC

did

not

turn

Scotiabank

is

“not

accountable for any cause of action arising out of the Plaintiff’s
former employment.” Alvarado-Rivera v. Oriental Bank and Trust, No. 111458, 2012 WL 6213305, at *4 (D.P.R. Dec. 13, 2012).
On a separate point, the Court notes that the conduct that gave rise
to the Plaintiff’s claims took place while she worked for R-G prior to
the

bank’s

insolvency.

Furthermore,

the

record

reflects

that

the

Plaintiff was at no time employed by Scotiabank. Thus, we find that
insofar as Plaintiff never worked for Scotiabank, the latter “cannot be
directly liable as an employer under Puerto Rico law.” Arends v. Eurobank
and Trust Co., 845 F.Supp. at 63.
B. Co-defendant Scotiabank’s argument that it did not agree to respond
to R-G Premier Bank’s former employees claims
In its motion for summary judgment, co-defendant Scotiabank also
asserts that if this Court was to find that the Plaintiff is entitled to
remedies resulting from her alleged claims and constructive discharge
from R-G, the proper party to respond is not Scotiabank. This, because
pursuant to the P&A Agreement, Scotiabank did not agree to respond to
claims from R-G former employees related to their employment with said
entity.

To

that

effect,

Scotiabank

cites

extensive

caselaw

wherein

Courts have determined that, unless they agree otherwise, the receiver
and

not

the

acquiring

bank

is

the

legal

successor

that

assumes

liabilities of the failed bank. See Docket No. 28-1. However, having
found

that

directly

Scotiabank

liable

to

is

the

not

a

successor

Plaintiff,

this

employer,
Court

and

will

hence,

refrain

not
from

addressing said issue herein.
CONCLUSION
Pursuant to the foregoing, co-defendant Scotiabank’s motion for
summary judgment (Docket No. 28) is GRANTED. Plaintiff’s claims against
Scotiabank are hereby DISMISSED WITH PREJUDICE. Partial judgment shall be
entered accordingly.

Civil No. 10-2086(PG)

Page 11

SO ORDERED.
In San Juan, Puerto Rico, November 18, 2013.
S/ JUAN M. PÉREZ-GIMÉNEZ
JUAN M. PÉREZ-GIMÉNEZ
UNITED STATES DISTRICT JUDGE