Alvarado-Rivera et al v. Oriental Bank & Trust et al

Filing 47

OPINION & ORDER granting in part and denying in part 30 Motion for Summary Judgment. Signed by Judge Jay A Garcia-Gregory on 12/13/2012. (IL)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

JEANNETTE ALVARADO-RIVERA, et.
al.,
Plaintiffs
v.

CIVIL NO. 11-1458 (JAG)

ORIENTAL BANK AND TRUST, et al.,
Defendant

OPINION AND ORDER
Pending

before

the

Court

is

Oriental

Bank

and

Trust’s

(“Oriental”) Motion for Summary Judgment (Docket No. 30). For
the reasons outlined below, summary judgment is hereby GRANTED
in part and DENIED in part.
Background
This claim arises as a result of the demise of Eurobank
Puerto Rico. On April 30, 2010, the Office of the Commissioner
of Financial Institutions of the Commonwealth of Puerto Rico
(“OCFI”) closed Eurobank due to insolvency, and appointed the
Federal Deposit Insurance Company (“FDIC”) as receiver. (Docket
No. 30-2). Thereafter, the FDIC and Oriental entered into a
Purchase and Assumption Agreement (“the Agreement”) under which
Oriental acquired certain assets of the failed bank. (Docket No.
30-3).

On

May

3,

2010,

following

Oriental’s

acquisition

of

CIVIL NO. 11-1458 (JAG)
Eurobank’s

assets,

(“Plaintiffs”)

signed

2
Jeannette
employment

Alvarado-Rivera,
contracts

with

et

al.,

Oriental.

(Docket No. 30-5). However, while a probationary working period
was

in

effect,

Oriental

terminated

most

of

Plaintiffs’

employment contracts.1

1

Out of all fifty nine (59) plaintiffs, fifty eight (58) signed
probationary work contracts. From these, the following eighteen
(18) plaintiffs were terminated by Oriental prior to the
conclusion of the Initial Probationary Period on July 30, 2010:
Alfredo Amador, Roberto Carreras, Daisy Cotto, Isabel Garcia,
Mercedes K. Gonzalez, Charmelyns Hernandez, Maria Laracuente,
Wanda Levante, Maria D. Martinez Zengotita, Nilda Mora, Jorge
Perez Grana, Salvio Rabel, Mildred Rivera, Héctor L. Rivera
Rivera, Milagros Rodríguez, Luis Suau, Leopoldo Toro and
Margarita Vélez. See Docket No. 30-4 at ¶ 8.
The remaining forty (40) plaintiffs’ employment was extended
until October 29, 2010: Miriam R. Aponte Sánchez, Gloria M.
Cabán Cortés, Tomás R. Capestany Santiago, María del L.
Carrasquillo Navarro, Sandra L. Colón Cintrón, Evelyn del
Rosario Torres, María J. Fernández Rohena, Pedro J. Fernández
Torres, Gladiana Y. García González, Francisco García Ramos,
Aida González de León, Petra I. González Díaz, Awilda González
Rivera, Carmen G. Gracia Rosado, Carlos F. Guerrero Henríquez,
Jeanette M. Hall Font, Víctor M. Hernández Peña, Nancy López
Cruz, Carmen E. Marrero Sánchez, Luis A. Martínez Arroyo, Magda
I. Morales Muñiz, Víctor M. Ortega Morena, Samuel Pastrana
Ortiz, Amarilis Pedraza Sánchez, Javier I. Pérez Suárez, Juan A.
Ramos Flores, Grace Ríos Burgos, Jose A. Rivera Cruz, Janette
Rodríguez Rivera, Magdalys Román Maldonado, Carlos Santaella
Serrano, Mercedes Soto Burgos, Jose F. Terrada Pérez, Jose D.
Tirado Sierra, Joanne M. Torres Rivera, Raquel Torres Sotomayor,
María Torres Vargas, Rafael Vargas Pacheco, Lionel Vélez
Delgado. See Docket No. 30-6 (a-vv), Letters from the Department
of Labor extending the Probationary Work Contracts. See also
Docket No. 30-4 at ¶ 10. The Court notes that Plaintiff Miriam
Aponte Sánchez is currently an employee of Oriental and that
Plaintiff Wanda I. Miranda Irizarry never became an employee of
Oriental. (Docket No. 30-4 at ¶ 4 and ¶ 21).

CIVIL NO. 11-1458 (JAG)

3

In March 2011, Plaintiffs filed a civil complaint against
Oriental before the San Juan Court of First Instance, Case No. K
PE2011-1231 (808), alleging wrongful termination of employment
under PR Law No. 80 of May 30, 1976, P.R. Laws Ann. tit. 29, § §
185a-185m (1976) (“Law 80”). The FDIC, as receiver of Eurobank
and interested party, filed a motion to intervene; on May 17,
2011, it removed the case to the federal court. (Docket No. 1).
On June 29, 2012, Oriental filed a Motion for Summary Judgment
(Docket

No.

30);

Plaintiffs

timely

filed

their

opposition.

(Docket No. 38).
Plaintiffs claim that Oriental terminated their employment
without just cause and that, as successor employer of Eurobank,
it should be held responsible for Plaintiffs’ severance payment,
pursuant to Law 80. Plaintiffs argue that Oriental became a
successor

employer

of

Eurobank

upon

acquiring

the

latter’s

banking operations and, thus, the statutory severance owed to
them should take into account the years they worked for both
Eurobank and Oriental.
Oriental counters that they are not liable for Plaintiffs’
termination of employment on the grounds that: (1) Oriental is
not a successor employer of Eurobank; (2) Oriental is not the
proper party to respond to Plaintiffs’ claims; (3) Plaintiffs
were

under

a

probationary

contract;

Plaintiffs signed waivers of release.

and

(4)

some

of

the

CIVIL NO. 11-1458 (JAG)

4
Standard of Review

I. Summary Judgment
Federal Rule of Civil Procedure 56 states, in pertinent
part,

that

a

pleadings,

court

may

grant

depositions,

summary

answers

judgment

to

only

if

“the

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 judgment as a matter of law.”
Fed.R.Civ.P. 56(c); See also Santiago-Ramos v. Centennial P.R.
Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000).
Summary judgment is appropriate if “there is no genuine
issue

as

to

any

material

fact

and

...

the

moving

party

is

entitled to a judgment as a matter of law.” See Fed.R.Civ.P.
56(c). The party moving for summary judgment bears the burden of
showing the absence of a genuine issue of material fact. See
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).
Once a properly supported motion has been presented before
the court, the opposing party has the burden of demonstrating
that a trial-worthy issue exists that would warrant the court’s
denial of the motion for summary judgment.

For issues where the

opposing party bears the ultimate burden of proof, that party
cannot merely rely on the absence of competent evidence, but
must affirmatively point to specific facts that demonstrate the

CIVIL NO. 11-1458 (JAG)

5

existence of an authentic dispute. See Suarez v. Pueblo Int’l,
Inc., 229 F.3d 49 (1st Cir. 2000).
In

order

for

a

factual

controversy

to

prevent

summary

judgment, the contested facts must be “material” and the dispute
must be “genuine”. “Material” means that a contested fact has
the potential to change the outcome of the suit under governing
law.

The issue is “genuine” when a reasonable jury could return

a verdict for the nonmoving party based on the evidence. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). It is
well

settled

that

“[t]he

mere

existence

of

a

scintilla

of

evidence” is insufficient to defeat a properly supported motion
for summary judgment.” Id. at 252. It is, therefore, necessary
that “a party opposing summary judgment must present definite,
competent

evidence

to

rebut

the

motion.”

Maldonado-Denis

v.

Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir. 1994).
In making this assessment, the court “must view the entire
record

in

the

light

most

hospitable

to

the

party

opposing

summary judgment, indulging in all reasonable inferences in that
party’s favor.” Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st
Cir. 1990). The court may safely ignore “conclusory allegations,
improbable

inferences,

and

unsupported

speculation.”

Medina-

Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.
1990).
II. Local Rule 56

CIVIL NO. 11-1458 (JAG)

6

Local Rule 56 provides, inter alia, that 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. An assertion of
fact

set

forth

in

a

statement

of

material

facts

shall

be

followed by a citation to the specific page or paragraph of
identified record material supporting the assertion. The court
may disregard any statement of fact not supported by a specific
citation

to

record

material

properly

considered

on

summary

judgment. The court shall have no independent duty to search or
consider any part of the record not specifically referenced in
the parties’ separate statement of facts.
Fed.R.Civ.P.56(e)

“relieve[s]

the

district

court

of

any

responsibility to ferret through the record to discern whether
any material fact is genuinely in dispute.” CMI Capital Market
Inc. v. González-Toro, 520 F.3d 58, 62 (1st Cir. 2008). Thus,
parties
evidence

cannot

simply

presented

in

“shift
a

given

the
case

burden
to

of

the

organizing
district

the

court.”

Mariani-Colón v. Dep’t of Homeland Sec., 511 F.3d 216, 219 (1st
Cir. 2007). A litigant ignores these directives at their own
peril: “If the party opposing summary judgment fails to comply
with Local Rule 56(c), the rule permits the district court to
treat the moving party’s statement of facts as uncontested.” Id.
III. Law 80

CIVIL NO. 11-1458 (JAG)
Puerto

Rico’s

Law

7
80

provides

the

exclusive

remedy

for

employees hired for an indeterminate period of time who are
discharged without just cause. See Hoyos v. Telecorp Commc’ns,
Inc.,

488

F.3d

1,

6

(1st

Cir.

2007).

It

offers

relief

for

“[e]very employee in commerce, industry, or any other business
or work place ... in which he/she works for compensation of any
kind, contracted without a fixed term, who is discharged from
his/her employment without just cause.” P.R. Laws Ann. tit. 29 §
185a.

In

severance,

these
in

cases,

the

accordance

law

with

requires
the

the

formula

employer
provided

to
by

pay
said

statute. Id.
In contrast, an employee hired for a fixed term does not
fall within Law 80’s reach. See Otero-Burgos v. Inter American
University, 558 F.3d 1, 8 (1st Cir. 2009). But Law 80 does cover
employees

hired

under

a

fixed-period

of

time

who

have

an

expectation of continuity in employment. See Medina v. Adecco,
561 F.Supp.2d 162 (2008). In this respect, the law provides:
[T]he mere fact that an employee renders services
under a fixed term contract, in itself, shall not have
the automatic effect of depriving him/her of the
protection of §§ 185a-185m of this title, if the
practice and circumstances involved or other evidence
in the contracting were of such a nature that they
tend to indicate the creation of an expectation of
continuity in employment, or appears to be a bona fide
employment contract for an indefinite period of time.
P.R. Laws Ann. tit. 29 § 185a (emphasis added).

CIVIL NO. 11-1458 (JAG)

8

This section refers to employees who, although hired under
a fixed-term contract, had reason to believe that they would
continue working for the employer. In these cases, the employee
shall be considered hired for an indefinite period of time and
Law 80’s protection shall be applicable. Id.
Among the grounds for dismissal which constitute just cause
and do not require a severance payment pursuant to the law,
section 185b lists:

(c)
The
employee's
repeated
violations
of
the
reasonable rules and regulations established for the
operation of the establishment, provided a written
copy thereof has been opportunely furnished to the
employee.
(d) Full, temporarily or partial
operations of the establishment.

closing

of

the

Provided, That in those cases in which the company has
more than one office, factory, branch or plant, the
full, temporary or partial closing of operations of
any of these establishments shall constitute just
cause for discharge pursuant to this section. P.R.
Laws Ann. tit. 29 § 185b (emphasis added).

Given that Plaintiffs assert that Oriental is a successor
employer of Eurobank, we must also consider section 185f, which
provides, in pertinent part:

In the case of transfer of a going business, if the
new acquirer continues to use the services of the
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

CIVIL NO. 11-1458 (JAG)

9

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.

Discussion
The focal point of this controversy concerns whether or not
Oriental was Eurobank’s successor employer under Law 80.
In regards to the transfer of an ongoing business, Puerto
Rico’s Law 80 grants employees who are retained by the purchaser
of the ongoing business the right to claim for the years worked
under the former employer, in case of an unjustified discharge.
However, this doctrine requires the new purchaser to be the
successor employer of the former business. See Rodríguez v. Urban
Brands, 167 D.P.R. 509, 516 (2006).
In

Acosta-Ramirez

v.

Banco

Popular

de

Puerto

Rico

WL

1123602 (D.P.R. March 30, 2012) the Court defined a successor
employer as an employer who has acquired an already existing
operation and continues those operations in a manner consistent
with the previous employer. The successor doctrine requires “a
continuity in the identity of the business before and after the
change.” Id. at 8 (citing Rodríguez, 167 D.P.R. at 516). In
determining whether a company is a successor, one must focus on

CIVIL NO. 11-1458 (JAG)
whether

the

new

10

company

“acquired

substantial

assets

of

its

predecessor and continued, without interruption of substantial
change, the predecessor’s business operations.” Id. (citing Fall
River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 43 (1986)).
The

record

demonstrates

that

Eurobank

was

declared

insolvent and involuntarily liquidated by the OCFI, which, in
turn,

designated

the

FDIC

as

receiver

of

the

failed

bank’s

assets. (Docket No. 30-2). The FDIC terminated all employees,
and provided them with notice of the claims process under the
Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (“FIRREA”), 12 U.S.C. § 1821 (d) (3)-(13). (Docket No. 11,
¶ 2). Thereafter, Oriental and the FDIC executed the Agreement
(Docket No. 11 ¶ 3; Docket 30-3); at which point, Eurobank had
already ceased to exist.
As

part

indemnity

of

for

liabilities.

the

Agreement,

claims

arising

(Docket

No.

the
out

of

The

30-3).

FDIC

provided

the

Oriental

failed

Agreement

bank’s

specifically

provided that liabilities related to Eurobank were to remain
with the FDIC and were not to be transferred to Oriental. (Docket
No.

30-3).

It

responsibility
regarding
Thus,

their

Oriental

operations.

is
of

undisputed
claims

employment
did

not

that

Oriental

from

Eurobank’s

with

Eurobank.

continue

with

did

not

former
(Docket

assume

employees
No. 30-3).

Eurobank’s

business

CIVIL NO. 11-1458 (JAG)
Furthermore,

11

Eurobank’s

employees

were

terminated

as

a

result of liquidation and the closing of the bank. The mere fact
that Eurobank was closed on insolvency grounds and that the FDIC
dismissed

all

Plaintiffs

prior

to

being

hired

by

Oriental,

confirms that Oriental was not a successor employer of Eurobank.
Since Oriental’s acquisition of Eurobank’s assets did not make
Oriental a successor employer of Plaintiffs, Oriental is not
liable

for

severance

benefits

accrued

during

Plaintiffs’

employment with Eurobank. See Arends v. Eurobank & Trust Co.,
845 F. Supp. 60 (D.P.R. 1994) (“Bank that acquired 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; employees' positions with failed
bank

were

terminated

when

that

institution

was

declared

insolvent…”); see also Acosta-Ramirez v. Banco Popular de Puerto
Rico WL 1123602 (D.P.R. March 30, 2012).
Since Oriental is not a successor employer of Eurobank and,
thus, not accountable for any cause of action arising out of
Plaintiffs’

former

employment,

we

now

consider

if

Oriental

terminated Plaintiffs’ contracts without just cause.

(1) Plaintiffs hired under probationary work contracts

CIVIL NO. 11-1458 (JAG)
At

the

time

12

Plaintiffs

were

dismissed

as

employees

of

Oriental, a probationary work contract was in effect. Oriental
argues that Plaintiffs have no right under Law 80 because they
were

dismissed

during

this

probationary

period.

Plaintiffs

contest that the probationary period is null because Oriental
failed to comply with the procedures established by the Puerto
Rico Department of Labor and Human Resources for requesting an
extension of the initial 90-day probationary work term.
Plaintiffs allege that, in conformity with the regulations
of the Department of Labor and Human Resources, when an extension
of the probationary period is requested, the employer should
notify

the

employee

on

the

same

day

the

request

is

filed.

However, Plaintiffs fail to support their allegations with a
proper reference to the record. See D.P.R. Civ. R. 56. This
Court

has

disputed

stressed
facts

that

“failure

embroidered

with

to

present

specific

a

statement

citations

to

of
the

record, justifies the court’s deeming the facts presented in the
movant’s statement of undisputed facts admitted.” Cosme Rosado
v.

Serrano

Rodríguez,

360

F.3d

42,

45

(1st

Cir.

2004).

Accordingly, the Court finds this argument waived.
In

the

alternative,

if

the

Court

were

to

regard

the

probationary contract null as Plaintiffs propose, their claim
would still be unwarranted, as Oriental provided Plaintiffs with
sufficient notice of the requested extension. (Docket No. 30-6,

CIVIL NO. 11-1458 (JAG)

13

p. 2). Therefore, we consider that Oriental’s actions did not
injure Plaintiff’s rights in this aspect. There being no genuine
trial-worthy

issue

as

to

material

facts,

Oriental’s

summary

judgment is granted.
(2)

Javier

Perez-Suarez’s

Employment

Termination

with

Oriental
Javier

Perez-Suarez

(“Perez-Suarez”)

was

hired

as

a

temporary employee to perform a specific task for a definitive
period of time. He signed two (2) temporary employment contracts
with Oriental. In the first contract, Perez-Suarez acknowledged
that he was being hired from November 1, 2010 to January 17,
2011. In the second contract, Perez-Suarez acknowledged that his
employment would be commencing January 18, 2011 and concluding
February 8, 2011. Thus, Perez-Suarez’s temporary employment with
Oriental terminated February 8, 2011. (Docket No. 30-1 ¶¶ 21-27;
Docket 30-4 at ¶ 19; Docket 30-10)
The contracts signed by Pérez-Suarez clearly established
that employment was to be temporary. In no way do we find PérezSuarez had reason to believe he would continue to be employed by
Oriental after three months. Thus, without an expectation of
continuity, Law 80 does not protect him from dismissal without a
good

cause.

In

addition,

Pérez-Suarez

fails

to

cite

to

the

record in support of his allegations, in compliance with Local
Rule 56. The Court finds that there is no genuine dispute of

CIVIL NO. 11-1458 (JAG)
material

facts

that

14

precludes

summary

judgment

and

requires

further proceedings. Accordingly, summary judgment is granted on
this issue.
(3)

Joanne

Torres-Rivera

and

Jannet

Rodríguez-Rivera’s

Resignation from Oriental
Defendant moves for summary judgment on Plaintiffs Joanne
Torres

Rivera

(“Torres-Rivera”)

(“Rodriguez-Rivera”)

Law

80

and

Jannet

claims

Rodriguez-Rivera’s

alleging

that

they

voluntarily resigned and were never wrongfully dismissed. Torres
Rivera and Rodriguez-Rivera counter that their resignation was
not

voluntary;

rather,

that

it

amounted

to

a

constructive

discharge. “Constructive discharge is a label for treatment so
hostile or degrading that no reasonable employee would tolerate
continuing in the position.” Torres-Alman v. Verizon Wireless
Puerto Rico, Inc., 522 F. Supp. 2d 367, 395 (D.P.R. 2007).
However, nothing on the record suggests that Torres-Rivera
and Rodriguez-Rivera suffered any hostile treatment that would
support a finding of constructive discharge. Thus, there being
no genuine issue of material fact, the Court grants the moving
party’s summary judgment regarding these claims.
(4)

José

D.

Tirado-Sierra’s

Employment

Termination

with

Oriental
José

Tirado-Sierra

(“Tirado-Sierra”)

became

a

regular

employee of Oriental after his probationary employment concluded

CIVIL NO. 11-1458 (JAG)

15

on October 29, 2010. On December 16, 2010, he was dismissed for
alleged violations of Oriental’s policies.
Oriental claims that Tirado-Sierra was granting loans in
his personal capacity to employees of Oriental during working
hours, in violation of Oriental’s Code of Ethics and Conduct.
(Docket

30-1

¶

21;

Docket

30-9;

and

Docket

30-4

at

¶

17).

Tirado-Sierra denies such allegations and states that he simply
helped co-worker Ruth Ferreira during a personal emergency by
lending

her

money.

Later

on,

as

Tirado-Sierra

stresses,

she

handed him a check as repayment, and he cashed it. (Docket 38
page 17; Docket 38-5).
The issue at hand is whether there was just cause in the
dismissal

of

Tirado-Sierra,

on

account

of

what

Oriental

categorizes as a single violation of Oriental’s Code of Ethics
of Conduct. After careful review, the Court understands that the
circumstances

surrounding

his

dismissal,

as

briefed

in

the

motion for summary judgment and its response, admit different
interpretations of what happened. The Court is not satisfied
that the record is sufficiently clear and/or developed so as to
justify a grant of summary judgment on the matter.

Conclusion
As a result of the aforementioned, the Court GRANTS in part
and DENIES in part Oriental’s Motion for Summary Judgment. In

CIVIL NO. 11-1458 (JAG)

16

respect to Tirado-Sierra’s Law 80 claim, summary judgment is
DENIED; for all other claims, summary judgment is GRANTED.

IT IS SO ORDERED.
In San Juan, Puerto Rico, this 13th day of December, 2012.

S/ Jay A. Garcia-Gregory
JAY A. GARCIA-GREGORY
United States District Judge