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May 15, 2003


The opinion of the court was delivered by: George B. Daniels, United States District Judge


Plaintiffs, Hispanic females, brought this action against defendants alleging race and sex discrimination and retaliation in violation of 42 U.S.C. § 1981, Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et. seq., the New York State Human Rights Law, Executive Law § 290 et. seq., and the New York City Human Rights Law, N.Y.C. Admin. Code § 8-101 et. seq. Defendants move to dismiss all claims by plaintiff Candelaria in the amended complaint pursuant to Fed.R.Civ.P. 12(b)(1) and (6). For the following reasons, defendants' motion is granted.


Plaintiff Candelaria was employed at the Plaza Hotel as a guest services coordinator from approximately November 1999 to November 20, 2001. Plaintiff Perez began employment at the same hotel around November 1999, and is still employed there. Defendant Plaza Hotel is a hotel business, and defendant Plaza Operating Partners, Ltd., is a corporation that either owns or manages the Plaza Hotel (collectively, "the Hotel").

Plaintiff Candelaria alleges in the amended complaint that during the course of her employment she witnessed her supervisor sexually harassing plaintiff Perez on numerous occasions. The amended complaint alleges that plaintiff Candelaria objected to this harassment and participated in an investigation of her supervisor. She alleges that, in retaliation, her supervisor switched her work-shift, suspended her, falsified her attendance records, treated her worse than other employees, and ultimately terminated her employment on November 20, 2001.

Plaintiff Candelaria brought a union grievance against the Hotel on or about December 13, 2001 pursuant to a collective bargaining agreement. On January 4, 2002, a hearing was held at the Office of the Impartial Chairman during which the parties agrued to, and executed, a settlement agreement. The agreement provided that: 1) Candelaria's termination would be converted to a voluntary resignation for personal reasons; 2) the Hotel would provide a service letter of reference upon request; and 3) the Hotel would pay Candelaria two weeks' salary plus one personal day. Dertouzos Aff. at ¶ 7 and Ex. C. The agreement also stated that: 1) Candelaria would withdraw her grievance with prejudice; 2) the agreement would satisfy any and all of Candelaria's claims and serve as a general release by Candelana against the Hotel for any matter arising out of Candelaria's employment under federal, state, and local labor and discrimination laws; and 3) the agreement was entered into voluntarily and the settlement was acceptable to both parties. Id.

On January 8, 2002, the New York State Department of Labor (the "DOL") sent Candelaria a letter informing her that it was denying her application for unemployment benefits because she was discharged for misconduct by the Hotel. Candelaria appealed the DOL's determination. The Hotel was notified of Candelaria's appeal, but did not appear at the February 22, 2002 hearing to contest the appeal. On February 25, 2002, based upon representations made by Candelaria, the Administrative Law Judge ("ALJ") assigned to the appeal overruled the DOL's determination, and Candelaria was awarded unemployment benefits retroactive to December 9, 2001.

On or about February 22, 2002, Candelaria filed an EEOC complaint against the Hotel alleging retaliation for participating in an investigation of plaintiff Perez' complaint of sexual harassment. Plaintiffs filed this suit in federal court on March 14, 2002, and the EEOC issued Candelaria a right to sue letter on April 4, 2002.*fn1


Federal Rule of Civil Procedure 12(b)(6) allows a party to move to dismiss a complaint where the complaint "fail[s] . . . to state a claim upon which relief can be granted[.]" FED. R. Civ. P. 12(b)(6). In this case, the parties have attached a number of documents and affidavits to their motion papers for this Court to consider. When matters outside the pleadings are presented to a court, and not excluded, a motion to dismiss will be converted to one for summary judgment. See Carter v. Stanton, 405 U.S. 669, 671 (1972); Chambers v. Time Warner, Inc., 282 F.3d 147, 152 (2d Cir. 2002). Summary judgment is appropriate when "there is no genuine issue as to any material fact. . . ." FED. R. Civ. P. 56(c). A court will resolve all factual disputes in favor of the non-moving party. See Nationwide Life Ins. Co. v. Bankers Leasing Ass'n, Inc., 182 F.3d 157, 160 (2d Cir. 1999). If there is evidence from which a reasonable inference could be drawn in favor of the non-movant, then summary judgment is not appropriate. See Tri-State Employment Serv., Inc. v. Mountbatten Surety Co., Inc., 295 F.3d 256, 260 (2d Cir. 2002). However, the non-movant "must do more than simply show that there is some metaphysical doubt as to the material facts. . . . [T]he nonmoving party must come forward with specific facts showing that there is a genuine issue for final." Caldarola v. Calabrese, 298 F.3d 156, 160 (2d Cir. 2002) (emphasis in original), quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).

The Hotel argues that Candelaria executed a valid release, and under the terms of the settlement agreement, Candelaria is estopped from bringing a claim against the Hotel for any issues arising out of her employment. Candelaria does not dispute the terms of the agreement or argue that the language is ambiguous. Rather, she argues that the agreement is void because the Hotel committed a material breach of the agreement by failing to convert her discharge to a voluntary resignation for personal reasons, and by refusing to provide her with a service letter of reference.

"Where the language of the release is clear, effect must be given to the intent of the parties as indicated by the language employed." Metz v. Metz, 572 N.Y.S.2d 813, 815 (App. Div. 1991) (citations omitted). "[I]t is firmly established that a valid release which is clear and unambiguous on its face and which is knowingly and voluntarily entered into will be enforced as a private agreement between the parties." Skluth v. United Merchants & Mfrs., Inc., 163 A.D.2d 104, 106 (1st Dept. 1990), quoting Appel v. Ford Motor Co., 111 A.D.2d 731, 732 (2d Dept. 1985). However, "[r]eleases are contracts whose interpretation is governed by principles of contract law." Metz, 572 N.Y.S.2d at 815. Equity may intervene to rescind a contract where a party commits a material and willful breach that substantially defeats the purpose of the contract. See Babylon Assoc. v. County of Suffolk, 475 N.Y.S.2d 869, 874 (App. Div. 1984); see also Nat'l Union Fire Ins. Co. v. Turtur, 892 F.2d 199, 204 (2d Cir. 1989) (material breach excuses performance of the non-breaching party to a contract).

In this case, plaintiff initially applied for unemployment benefits sometime in late November 2001, after she was terminated but before she signed the settlement agreement with the Hotel. The DOL then sent a form to the Hotel's Director of Human Resources (the "Director") on or about November 29, 2001, asking the Hotel to indicate on the form any reason why Candelaria should not be paid unemployment benefits. The Director noted on the form that Candelaria had been discharged due to excessive absences and rules violations. Dertouzos Reply Aff. at ¶ 6 and Ex. C. From this information, the DOL made its initial determination to deny Candelaria unemployment benefits. The letter the DOL sent to Candelaria informing her of the denial was mailed out on January 8, 2002, four days after Candelaria signed the settlement agreement with the Hotel. Id. at ¶ 8 and Ex. D.

Around January 16, 2002, after the settlement agreement was signed, the Hotel received a notice from the DOL informing it that Candelaria was appealing the determination, and informing the Hotel that it could appear at the hearing to present facts to support its position. Id. at ¶ 9 and Ex. E. As the denial of benefits was based upon the Hotel's prior representation that Candelaria was discharged for misconduct, the Hotel chose not to contest the appeal, and did not appear at the hearing. In a decision issued on February 25, 2002, the ALJ overturned the initial determination and Candelaria was awarded unemployment benefits retroactive to December 9, 2001. Id. at ¶ 9 and Ex. F. The timeline of events clearly shows that once the settlement agreement was signed on January 4, 2002, the Hotel kept its promise to convert Candelaria's termination to a voluntary resignation for ...

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