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Esmilla v. The Cosmopolitan Club

United States District Court, S.D. New York

March 26, 2013

JULIA V. ESMILLA, Plaintiff,

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For Julia V. Esmilla, Plaintiff: Felix Boy Q. Vinluan, LEAD ATTORNEY, Law Office of Felix Q. Vinluan, Woodside, NY.

For The Cosmopolitan Club, Defendant: Daniel T. Hughes, Litchfield Cavo, New York, NY.


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DEBRA FREEMAN, United States Magistrate Judge.


In this diversity action, which is before me on consent pursuant to 28 U.S.C. § 636(c), plaintiff Julia Esmilla (" Plaintiff" ) claims that her employment as the Comptroller of defendant The Cosmopolitan Club (" Defendant" or the " Club" ) was terminated in retaliation for her complaints to her supervisors that, in her view, management was using, or intending to use, certain funds in a manner that violated the New York State Labor Law. Plaintiff also alleges that Defendant failed to pay her a guaranteed annual bonus of $10,000. Currently before the Court is Defendant's motion for summary judgment dismissing all of Plaintiff's claims. (Dkt. 32.) For the reasons discussed below, Defendant's motion for summary judgment is granted in part and denied in part.


A. Factual Background[1]

1.Plaintiff's Initial Employment With Defendant

The Club is a private organization whose members are exclusively women. ( See Statement of Facts Pursuant to Civil Local Rule 56.1, dated May 31, 2012 (Dkt. 34) (" Def. 56.1 Stmt." ) ¶ 2; Counter-Statement of Facts Pursuant to Local Rule 56.1, dated July 15, 2012 (Dkt. 38) (" Pl. 56.1 Stmt." ) ¶ 2.) The Club's former General Manager, Rita Evans (" Evans" ), hired Plaintiff in August 2005 to serve as the Club's Comptroller. ( See Def. 56.1 Stmt. ¶ 1; Pl. 56.1 Stmt. ¶ 1.) Plaintiff claims that she was hired at an annual salary of $100,000, with a guaranteed annual bonus of at least $10,000. (Pl. 56.1 Stmt., at 8 ¶ 1.)

The parties do not dispute that Plaintiff's first year was largely a success. Plaintiff's first annual review, conducted on November 10, 2006, by Evans and the Club's Treasurer, Janet Offensend (" Offensend" ), acknowledged several of Plaintiff's accomplishments. ( See Def. 56.1 Stmt. ¶ 6; Pl. 56.1 Stmt. ¶ 6; Affidavit in Opposition to Summary Judgment Motion by Julia V. Esmilla, dated July 15, 2012 (Dkt. 39) (" Pl. Aff." ), Ex. 1, at 1.) Nonetheless, for the 2006 year, Plaintiff contends that she only received a bonus of $6,000. (Pl. Aff., ¶ 19.)

The record does not contain a copy of any second annual review that Plaintiff may have been given, although it does contain a memorandum to Plaintiff, dated April 16, 2007, from JoAnn Goodspeed, the Finance Committee Chair, and Betsy Maas (" Maas" ), the Acting Human Resources

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Manager, documenting certain billing errors. (Declaration of Daniel T. Hughes, dated May 31, 2012 (Dkt. 33) (" Hughes Decl." ), Ex. P.) This memorandum set performance goals for Plaintiff to improve accuracy and timeliness in monthly billing and the delivery of monthly financials. ( See id. ) Other than this, there is no documentary evidence in the record reflecting that the Club had any issues with Plaintiff's performance until the end of 2007.

2.Plaintiff's Alleged Complaints Regarding the " Pegasus Fund"

Plaintiff contends that, starting in December 2007, she began to complain about some of management's practices regarding the use of monies in a fund called the " Pegasus Fund." According to Plaintiff, members of the Club paid annual dues ( see Def. 56.1 Stmt. ¶ 2; Pl. 56.1 Stmt. ¶ 2), and, in addition, both member and non-member patrons of the Club paid certain service charges for taking advantage of various services offered by the Club, including dining, events, and overnight stays ( see Def. 56.1 Stmt. ¶ 2; Pl. 56.1 Stmt. ¶ 2). Plaintiff contends that, as tipping of Club staff was expressly prohibited ( see Def. 56.1 Stmt. ¶ 5; Pl. 56.1 Stmt. ¶ 5), both Club patrons and staff understood that these service charges were being paid in lieu of direct gratuities ( see Pl. 56.1 Stmt., at 8-9 ¶ ¶ 3-5), and thus, according to Plaintiff, the charges were supposed to be distributed to the staff, pursuant to the requirements of the New York Labor Law. The service charges, however, together with certain contributions by Club members, were paid into the Pegasus Fund ( see Def. 56.1 Stmt. ¶ 3; Pl. 56.1 Stmt. ¶ 3), which was then not simply distributed to staff, but rather was used to benefit Club employees and others in a number of ways ( see Def. 56.1 Stmt. ¶ 4). The Pegasus Fund was traditionally used, for example, to pay for Thanksgiving turkeys, year-end gifts, retirement gifts, and employee training. ( Id. )

Plaintiff claims that, following a December 3, 2007 meeting of the Pegasus Fund Committee, which oversaw the Pegasus Fund, the Club's General Manager, Chrisian Dewailly (" Dewailly" ) instructed her to prepare a budget for fiscal year 2008-2009 that would have diverted a portion of the Pegasus Fund to the Club's Food and Beverage account. ( See Pl. 56.1 Stmt., at 9 ¶ 7.) Plaintiff believed that such a budget would violate New York law, an objection she claims to have voiced to Dewailly. ( See Pl. Aff. ¶ ¶ 40-42, 46.) Plaintiff also claims that, on more than one occasion during the period from December 2007 to early February 2008, she informed Dewailly that several of the Club's existing practices relating to the Pegasus Fund violated New York law. ( See Pl. Aff. ¶ ¶ 42, 46.) More specifically, Plaintiff claims that, during this period, she objected to the practice of commingling service charges with solicited donations, as well as the Club's distribution of the commingled funds as year-end and retirements gifts. ( See Pl. Aff. ¶ 42; Pl. 56.1 Stmt., at 9 ¶ ¶ 9-10; see also id. ¶ ¶ 38-39 (attesting that she told Dewailly that the Pegasus Fund had been used to fund substantial severance packages for, among others, the Club's former Assistant Manager, former Comptroller, and former General Manager).) According to Plaintiff, she suggested that the Club instead pass the proceeds from the service charges directly to the Club's employees. ( See Pl. 56.1 Stmt., at 9 ¶ ¶ 9-10; Pl. Aff. ¶ ¶ 42, 60.)

3.Plaintiff's Termination

On February 14, 2008, Plaintiff's employment was terminated at a meeting attended by Dewailly, Offensend, and Maas. ( See Def. 56.1 Stmt. ¶ 24; Pl. 56.1 Stmt.

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¶ 24; Pl. Aff. Ex. 6 (Letter to Plaintiff from Dewailly, dated Feb. 14, 2012 (Dkt. 39-6) (" Termination Letter" ) (letter signed by Plaintiff, Dewailly, Offensend, Maas, stating that Plaintiff's last day of employment at the Cosmopolitan Club was February 14, 2008).) The parties do not dispute that the termination decision was made collaboratively by Dewailly and the Club's Executive Committee ( see Def. 56.1 Stmt. ¶ 22; Pl. 56.1 Stmt. ¶ 22), but they do dispute the reasons for Plaintiff's termination. Plaintiff claims that she was fired in retaliation for having complained to Dewailly about company practices that she believed were illegal (Def. 56.1 Stmt. ¶ 25; Pl. 56.1 Stmt. ¶ 25), while Defendant asserts that Plaintiff was fired for performance reasons, particularly relating to her purported harassment of her subordinates (Def. 56.1 Stmt. ¶ ¶ 6-24).

In support of its position, the Club has submitted a series of emails, starting in December 2007, memorializing complaints about Plaintiff's performance and management's decision to address those complaints by terminating Plaintiff's employment. These emails include, among others:

(1) an email dated December 20, 2007, from Dewailly to Plaintiff, telling Plaintiff not to raise her voice to her employees and stating that " drastic action" would be taken if such behavior continued;
(2) an email dated January 21, 2008, from Maas to Molly Parkinson (" Parkinson" ), the Club's President, describing the results of meetings with members of the accounting department that Plaintiff supervised; stating, inter alia, that Plaintiff had " yelled at, criticized and publicly humiliated her direct reports in such a way that one of our trusted employees felt she had to resign to avoid the 'poison[ous] atmosphere' in the office and the other is reduced to tears on a regular basis" ; further stating that, while the Club could employ its " progressive discipline approach," doing so " would take too long" ; and recommending Plaintiff's termination for harassment;
(3) an email dated January 21, 2008, from Parkinson to other members of the Club's Board of Governors, forwarding Maas's email of the same date, and adding that Parkinson " want[ed] to act," and that, if the Board concurred, she would " make an appointment with [Dewailly] to deliver the message" ;
(4) an email dated January 29, 2008, from Parkinson to Offensend and Maas, recounting a meeting with Dewailly, and stating " He gets it. He knows that we want him to move and I am inclined to let him do it at his pace" ; and
(5) an email dated January 29, 2008, from Parkinson to Offensend, stating that Parkinson hoped that Offensend would be " reinforcing the Executive Committee directives to [Dewailly] that we want the dismissal of the comptroller [ i.e., Plaintiff] to be his first priority and that we do not want her as our employee acting as she has been."

(Hughes Decl. Ex. E (transcript of Plaintiff's continued deposition, conducted May 13, 2011 (" 5/13/11 Pl. Dep." ), 53:4-10 (describing Dec. 2007 email)); id. Ex. K, at CC 00498, CC 00500, CC 00501; see also Def. 56.1 Stmt. ¶ ¶ 14-16 (referencing Ex. K).)[2]

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In addition, the Club has submitted a memorandum dated January 29, 2008, purportedly prepared by Maas, and entitled " Managerial Issues." (Hughes Decl. Ex. N; see also Def. 56.1 Stmt. ¶ 23 (referencing the " Managerial Issues" memorandum); Pl. 56.1 Stmt. ¶ 23 (same).) The memorandum details numerous complaints from Plaintiff's subordinates regarding her managerial style, and concludes that Plaintiff was a " poor communicator, not able to lead," that Plaintiff " exhibit[ed] poor judgment," and that she was " divisive and unprofessional as a manager of a department." (Hughes Decl. Ex. N.) Plaintiff objected to all of the memorandum's complaints and its conclusions. ( See Def. 56.1 Stmt. ¶ 23; Pl. 56.1 Stmt. ¶ 23.)

B. Procedural History

Plaintiff commenced her action in this Court on December 14, 2009, alleging retaliation under Section 215 of New York Labor Law and seeking relief in excess of $10 million. ( See generally Complaint, dated Dec. 14, 2009 (" Compl." ) (Dkt. 1).) The Club filed its Answer on January 25, 2010. (Dkt. 4.) On July 19, 2010, Plaintiff moved for leave to amend her Complaint to add claims for breach of contract and failure to pay wages under Article 6 of New York Labor Law. (Dkt. 13.) The Court granted leave to amend on March 3, 2011 (Dkt. 22), and, on March 22, 2011, Plaintiff filed an Amended Complaint (" Am. Compl." ) (Dkt. 24). The Club filed an Amended Answer on June 1, 2011. ( See Hughes Decl. Ex. 2 (Amended Answer (Dkt. 33-2)).)

On May 31, 2012, the Club moved for summary judgment on all of Plaintiff's claims. (Dkt. 32.) Focusing principally on Plaintiff's claim that she was fired, at least in part, for complaining about the budget that Dewailly had allegedly instructed her to prepare, the Club contends that Plaintiff's retaliation claim must fail because (1) Plaintiff did not have a reasonable belief that the budget Dewailly requested for fiscal year 2008-09 would have violated the New York Labor Law; (2) the Board was unaware of Plaintiff's complaint about the budget; and (3) Plaintiff cannot demonstrate a causal nexus between any such complaint and her termination. ( See Memorandum of Law in Support of Motion to Dismiss the Amended Complaint and for Summary Judgment, dated May 31, 2012 (" Def. Mem." ) (Dkt. 35), at 4-8.) Regarding Plaintiff's breach-of-contract claim, the Club claims that its alleged oral agreement to pay Plaintiff a guaranteed bonus cannot be enforced, as any such agreement would violate the Statute of Frauds. ( See id. at 8-9.) Finally, the Club argues that Plaintiff's claim for failure to pay wages under Article 6 of New York Labor Law must fail because a bonus cannot be considered " earned wages" under the statute. ( See id. at 10.)

Plaintiff filed an opposition on July 15, 2012, arguing that she had submitted evidence sufficient to establish a prima facie case of retaliation under Section 215 of New York Labor Law, and that the Club's assertion that she was terminated for harassing her subordinates should be disregarded as pretextual. ( See Plaintiff's Memorandum of Law in Opposition to Defendant's Motion for Summary Judgment, dated July 15, 2012 (Dkt. 37) (" Pl. Mem." ), at 6-12.) Plaintiff's opposition fails to address the Club's contentions regarding her claims for breach of contract or failure to pay wages under Article 6 of New York

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Labor Law. Defendant has not filed a reply.



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