United States District Court, S.D. New York
OPINION AND ORDER
Trabajamos Community Head Start, Inc.
("Trabajamos") received federal funds under the
American Recovery and Reinvestment Act of 2009
("ARRA"), the economic stimulus package enacted
early in President Barack Obama's first term of office.
Naomi Herrera-Castro ("Castro"), the former
Executive Director of Trabajamos, claimed that she was fired
for reporting a fraudulent scheme involving stimulus funds,
and brought a one-claim "whistleblower" complaint
against the defendant. Following discovery, Castro died, but
her suit was taken over by her next-of-kin, Carmen Herrera.
Trabajamos had meanwhile moved for summary judgment
dismissing the suit. Having carefully considered the
parties' arguments and submissions, the Court hereby
denies the defendant's motion, save for one minor aspect
of the motion that is granted.
judgment is proper only if 'the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.'" In
re World Trade Ctr. Lower Manhattan Disaster Site
Litig., 846 F.3d 58 (2d Cir. 2017) (quoting Fed.R.Civ.P.
56(a)). Courts "view the evidence in the light most
favorable to the party opposing summary judgment, draw all
reasonable inferences in favor of that party, and eschew
credibility assessments." Smith v.
Barnesandnoble.com, LLC, 839 F.3d 163, 166 (2d Cir.
2016) (alterations omitted).
pertinent facts, undisputed except where noted, are as
follows. Trabajamos is a not-for-profit corporation that
provides Head Start programming to low-income children in the
Bronx. Defendant Trabajamos Community Head Start, Inc.'s
Local Civil Rule 56.1 Statement of Undisputed Facts
("Def. 56.1"), ECF No. 18, ¶ 1;
Plaintiff's Counter-Statement of Material Facts
("Pl. 56.1"), ECF No. 21, ¶ 1. Trabajamos
receives federal funds administered by the New York City
Administration for Children's Services ("ACS"),
a Delegate Agency under the federal Head Start Program
Performance Standards. Amended Complaint, ECF No. 33, ¶
9; Defendant Trabajamos Community Head Start, Inc.'s
Answer to Plaintiff's Amended Complaint, ECF No. 34,
¶ 9. In September 2012, Trabajamos's Board of
Directors consisted of Sandra Martinez (Chairperson), Donald
Antonetty, Stacey Andino (now Stacey Santiago), Paul Block,
Vicky Gholson, Nilda Lont, and Monique Van Putten. Def. 56.1
¶¶ 4, 17; Pl. 56.1 ¶¶ 4, 17. In December
2013, the Board consisted of Martinez (Chairperson), Block,
Lont, and Gholson. Def. 56.1 ¶ 5; Pl. 56.1 ¶ 5.
though no longer affiliated with Trabajamos, was a central
figure in the organization for many years, having served on
the Board for around twenty years, and as Chairman for around
ten. Pl. 56.1. ¶¶ 119-20; Defendant Trabajamos
Community Head Start, Inc.'s Reply to Plaintiff's
Counterstatement of Material Facts ("Reply 56.1"),
ECF No. 29, ¶¶ 119-20. He resigned as Chairman at
some point in 2012, and resigned from the Board entirely on
or about October 3, 2013. Pl. 56.1 ¶¶ 133-35; Reply
56.1 ¶¶ 133-35. The circumstances of his departure
are somewhat disputed, but there is evidence that ACS, for
which Antonetty also worked, forced him to resign because of
a conflict of interest. Pl. 56.1 ¶¶ 132-35; Reply
56.1 ¶¶ 132-35. However, Antonetty continued to
play a role in Trabajamos's affairs following his
resignation, including advising Board member Nilda Lont on
personnel matters (though the extent of his involvement is
disputed). Pl. 56.1 ¶ 136; Reply 56.1 ¶ 136.
Antonetty also allows Lont, a longtime friend, to live
rent-free in a residence owned by Antonetty. Pl. 56.1 ¶
128; Reply 56.1 ¶ 128.
began working for Trabajamos in January 1986 as a Records
Clerk. Def. 56.1 ¶ 9; Pl. 56.1 ¶ 9. By March 2012,
she had risen to the position of Acting Director of
Trabajamos, and in September of that year, the Board
appointed her Program (Executive) Director. Def. 56.1
¶¶ 12, 14; Pl. 56.1 ¶¶ 12, 14. Castro, as
Executive Director, was nominally responsible for managing
the day-to-day operations of Trabajamos, Def. 56.1 ¶ 7;
Pl. 56.1 ¶ 7, but the parties dispute the true
distribution of authority within the organization. Trabajamos
maintains that Castro reported to the entire Board, which
jointly supervised Castro and oversaw the organization;
according to Castro, she reported to Antonetty, who exercised
complete and unilateral control over Trabajamos. Def. 56.1
¶¶ 3, 13; Pl. 56.1 ¶¶ 3, 13, 121-129;
Reply 56.1 ¶¶ 121-129.
point between May and September 2013, Santiago,
Trabajamos's Fiscal Officer and Castro's niece,
brought to Castro's attention certain invoices and
payments Santiago suspected were fraudulent. Def. 56.1
¶¶ 17, 99; Pl. 56.1 ¶¶ 17, 99, 137; Reply
56.1 ¶ 137. The precise details of the supposed fraud
are unclear, but there is evidence that Antonetty had
submitted invoices totaling around $9, 000 under the names
Victor Martinez and Luis Castillo. Def. 56.1 ¶¶
97-104; Pl. 56.1 ¶¶ 97-104, 138; Reply 56.1 ¶
138. Castro had approved these invoices for payment when they
were submitted, and had known that some of them sought
payment for work that had not been performed by the person
named in the invoice. Def. 56.1 ¶¶ 100, 102-04; Pl.
56.1 ¶¶ 100, 102-04.
to Castro, at some point in August or September 2013, she
confronted Antonetty about a check made out to Luis Castillo,
and he became argumentative and repeatedly told her that he
"need[ed] that check." Pl. 56.1 ¶¶
140-41. At that time, Antonetty was still on the Board of
Directors. Santiago testified that she also questioned
Antonetty about the Castillo check, and Antonetty told her
that he needed the check and that he was not otherwise able
to pay himself for the work he did. Pl. 56.1 ¶ 139.
Antonetty denies these conversations took place. Reply 56.1
¶¶ 139-41. Castro took no further action on the
fraudulent invoices at that time.
resigned from the Board on or about October 3, 2013. Pl. 56.1
¶ 135; Reply 56.1 ¶ 135. Around the same time, the
Board began to report deficiencies in Castro's
performance. For example, according to the minutes of an
October 3, 2013 Board meeting, Castro's reports were
mislabeled and incorrect, and there were security concerns at
certain Trabajamos facilities. Def. 56.1 ¶¶ 36-41.
Castro was present at this meeting, but denies that the
concerns reflected in the minutes were in fact discussed. Pl.
56.1 ¶¶ 36-41.
point after the October 3 Board meeting, Antonetty, Lont, and
Castro met to discuss Castro's employment with
Trabajamos. The circumstances of this meeting are disputed.
Castro testified that Antonetty and Lont came to her office
after working hours and demanded that she step down as
Executive Director; she refused, but eventually agreed to a
leave of absence. Def. 56.1 ¶¶ 44-45; Pl. 56.1
¶¶ 44-45, 147, 149. According to Castro, Antonetty
was motivated by his belief that she had disclosed his
conflict of interest to ACS, which had forced him to resign
from the Trabajamos Board. Pl. 56.1 ¶ 148. For his part,
Antonetty testified that Castro arranged the meeting at her
house in order to confess her own misconduct (she allegedly
had rented a car for personal use with Trabajamos funds) and
requested a leave of absence. Def. 56.1 ¶¶ 46-47;
Reply 56.1 ¶¶ 147-49.
all of this remains the subject of competing contentions, it
is at least undisputed that after that meeting, Castro sent a
letter to the Board requesting a leave of absence, which was
granted within a few days. Def. 56.1 ¶¶ 52, 58; Pl.
56.1 ¶¶ 52, 58. According to Trabajamos, while
Castro was on leave, Board member Lont discovered other
indications of possible misconduct by Castro, including
excessive petty cash receipts, payments to Castro's
boyfriend Enrique Rivera for maintenance work, and
disrespectful conduct toward staff. Castro, however, denies
all misconduct and performance issues, claiming in particular
that Antonetty had approved the decision to hire Rivera. Def.
56.1 ¶¶ 60-61; Pl. 56.1 ¶¶ 60-61. On
November 12, 2013, Martinez sent Castro a letter stating that
the Board had extended her leave for an additional two weeks.
Def. 56.1 ¶ 62; Pl. 56.1 ¶ 62. On November 18,
2013, Castro requested a meeting with the Board, and Martinez
responded that the Board would promptly hold one. Def. 56.1
¶¶ 63-64; Pl. 56.1 ¶¶ 63-64.
to Castro, at some point between November 18 and December 5,
2013, Castro had a telephone conversation with Block (another
member of the Board) in which Castro told Block that Castro
had evidence of fraud at Trabajamos. Pl. 56.1 ¶ 142.
There is no other evidence of this call, and no evidence that
Castro gave Block any details of the supposed fraud.
December 2, 2013, the Board met to discuss Castro's
performance. Def. 56.1 ¶ 69. According to minutes
of that meeting, Trabajamos "reviewed the issues of the
Executive Director's performance" and "came to
consensus that a decision was needed as to Ms. Castro
continuing as the Executive Director and possibly being asked
to step down, " though no final decision was made. Def.
56.1 ¶¶ 70-71, 73; Ex. 36 to Rotenberg Decl.
on December 5, 2013, the Board (Martinez, Lont, and Block in
attendance) held a special meeting with Castro and Santiago.
Def. 56.1 ¶¶ 77-78; Pl. 56.1 ¶¶ 77-78.
The circumstances of this meeting are disputed, but, in broad
strokes, Castro and Santiago testified that Castro presented
the fraudulent Victor Martinez and Luis Castillo invoices to
the Board, which refused to discuss them, whereas Lont and
Block testified that they remembered no such allegations of
fraud. Def. 56.1 ¶¶ 77-82, 85; Pl. 56.1
¶¶ 77-82, 85, 144-46; Reply 56.1 ¶ 144-46;
Santiago Deposition, Ex. C to Clark Decl., at 104-05. The
Board voted to fire Castro after she left. Def. 56.1 ¶
84; Pl. 56.1 ¶ 84. According to the minutes of the
meeting, Castro was terminated for a number of
performance-related reasons, such as her failure to seek
Board approval before hiring Santiago (her niece), her
failure to seek Board approval of contracts over $5, 000, and