In re Watts

• Docket Number: 21-10419 (MG)
• Decision Date: 25 August 2023
• Parties: In re: LOUASIA A. WATTS, Debtor.
• Court: United States Bankruptcy Courts. Second Circuit. U.S. Bankruptcy Court — Southern District of New York

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In re: LOUASIA A. WATTS, Debtor.

No. 21-10419 (MG)

United States Bankruptcy Court, S.D. New York

August 25, 2023

NOT FOR PUBLICATION

Chapter 7

ARENSON, DITTMAR & KARBAN Attorneys for the Debtor By: Avi Mermelstein, Esq.

FOX ROTHSCHILD LLP Attorneys for Interested Parties Pret A Manger (USA) Limited and Katherine Lopez By: Glenn S. Grindlinger, Esq. Timothy A. Gumaer, Esq.

WILLIAM K. HARRINGTON UNITED STATES TRUSTEE Department of Justice Office of the U.S. Trustee Alexander Hamilton U.S. Custom House One BoBy: Andrew D. Velez-Rivera, Esq.

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MEMORANDUM OPINION GRANTING MOTION TO REOPEN CHAPTER 7 BANKRUPTCY CASE

MARTIN GLENN, CHIEF UNITED STATES BANKRUPTCY JUDGE

Pending before the Court is the motion (the "Motion," ECF Doc. #15) of Louasia A. Watts (the "Debtor") seeking entry of an Order, (i) granting Debtor leave to reopen the Chapter 7 case (the "Chapter 7 Case"); (ii) granting Debtor leave to amend her Chapter 7 Bankruptcy Petition for the purpose of filing an amendment to the Debtor's Schedule A/B, to reflect the pending employment discrimination action captioned Louasia Watts v. Pret A Manger (USA) Limited, et al., Index No. 802764/2023E, in the Supreme Court of the State of New York, County of Bronx, before the Honorable Judge Veronica G. Hummel (the "State Court Action"), as an asset; (iii) allowing the United States Trustee to appoint a Chapter 7 trustee to administer the asset; and (iv) for such other and further relief as this Court deems just and proper. The Debtor separately filed exhibits in support of this Motion (the "Exhibits," ECF Doc. #14), including the Declaration of Louasia A. Watts (the "Watts Decl.," ECF Doc. # 14-1) and the Declaration of Avi Mermelstein (the "Mermelstein Decl," ECF Doc. # 14-5). Attached as Exhibit A is the state court complaint (the "Complaint," ECF Doc. # 14-2), naming as defendants Pret A Manger (USA) Limited ("Pret," or the "Company") and Katherine Lopez ("Lopez," and with Pret, "Defendants," or "Interested Parties"). Defendants filed an opposition to the Motion (the "Opposition," ECF Doc. #19) which relies on the Declaration of Glenn S. Grindlinger (the "Grindlinger Decl."). The Debtor then filed a reply (the "Reply," ECF Doc. # 21). The United States Trustee ("UST") also filed a declaration (the "UST Declaration," ECF Doc. # 20) which indicated that the UST took no position on the Motion and provided a transcript of the Debtor's testimony from the Debtor's 341 meeting.

The Court held a hearing (the "Hearing") on the Motion on July 31, 2023. At the Hearing, the Court orally granted the Motion and that same day entered an order reopening the

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Chapter 7 Case. (See ECF Doc. # 22.) The Court writes separately here to explain its reasoning for granting the motion.

I. BACKGROUND

A. The Chapter 7 Case

On March 4, 2021, the Debtor filed a voluntary petition for bankruptcy (the "Petition," ECF Doc. # 1), along with schedules of assets and liabilities (the "Schedules") and statement of financial affairs (the "Statement") under Chapter 7 of the Bankruptcy Code in this Court. (Motion ¶ 1.)

In Schedule A/B, Debtor's Summary of Assets and Liabilities, the Debtor stated that she did not have any "claims against third parties." (Watts Declaration ¶ 7.) The Debtor states that at the time she filed her Petition, she was unaware that she had a potential legal claim against her former employer and was therefore unaware that she was required to disclose this potential claim in her Schedules. (Id. ¶¶ 4, 7). On June 11, 2021, the Bankruptcy Court granted Plaintiff's discharge. (See ECF Doc. # 10.) The case was closed on June 14, 2021.

B. State Court Action

On February 17, 2023, following the granting of the discharge, the Debtor filed her Complaint in the Supreme Court of the State of New York, Bronx County, against her former employer, Pret A Manger (USA) Limited, and her former supervisors, Cristian Perez, and Katherine Lopez (the "Discrimination Claim"). (Mermelstein Decl. ¶¶ 2, 8; Watts Decl., Ex. A.) The Complaint alleges that the Defendants created and fostered a discriminatory and hostile work environment on the basis of gender and race in violation of the New York City Administrative Code §8-107, et seq. ("NYCHRL"). (See Complaint.)

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C. Allegations in New York State Court Action

The Complaint alleges a detailed history of racial and sex-based discrimination. The allegations are summarized below.

1. Plaintiff's Employment at the Company's Park Avenue Location

Pret owns and operates an international chain of over 500 shops that offer handmade ready-to-eat sandwiches, salads, and drinks. (See Complaint ¶ 5.) In or around May 2016, the Company hired Plaintiff,^[1] a female African American, as a Team Member at its 54th Street and Park Avenue location in New York City ("Park Avenue Location"). (See id. at ¶¶ 4, 15.)

As a Team Member, Plaintiff reported to the store's General Manager, Karines Ayala ("Ayala"). (See id. at ¶ 15.) The Complaint alleges that: (1) Ayala "was from the Dominican Republic and favored Hispanic workers, especially from the Dominican Republic" (id. at ¶ 16); (2) Ayala "discriminated against Plaintiff by, among other things, scheduling her for less hours than Hispanic workers at the shop" (id. at ¶ 17); and (3) when "Plaintiff complained about Ayala's discriminatory behavior, Ayala retaliated by further cutting Plaintiff's hours." (Id. at ¶ 18.)

During her time working at Pret's Park Avenue location, Plaintiff also alleges that she was "sexually harassed by a kitchen worker named Jamie who, like Ayala, was from the Dominican Republic, and was close with Ayala." (Id. at ¶ 19.) Specifically, Plaintiff asserts that: (1) "[o]n a daily basis Jamie would make sexual comments about Plaintiff, such as, 'Nice ass' or 'Ay, Mami'" (id. at ¶ 20); (2) "[o]n a daily basis, Jamie would make sexual comments about Plaintiff's female coworkers in Plaintiff's presence" (id. at ¶ 21); and (3) "[o]n at least

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several occasions Jamie touched Plaintiff's buttocks," causing Plaintiff to react by "shoving him away." (Id. at ¶ 22.)

In or around September 2017, Plaintiff's coworker purportedly "threatened her by telling her, 'I'm going to get someone to fuck you up.'" (Id. at ¶ 24.) When Plaintiff reported this incident to the Company's Human Resources Department ("HR"), it responded by suspending both Plaintiff and the co-worker for two weeks. (See id.) Upon return from her suspension, HR "transferred [Plaintiff] to a different location." (Id.)

2. Plaintiff's Employment at the Company's Madison Avenue Location

Plaintiff next worked at the Company's 48th Street and Madison Avenue location ("Madison Avenue Location") from "approximately September 2017 through approximately October 2018." (Id. at ¶ 26.) While there, Plaintiff "was put on track by the General Manager, O'Neil Smith, to join the Assistant General Manager program, but the Hispanic Operations Manager named Gustavo removed her while elevating less qualified Hispanic workers into the program." (Id.) "Frustrated by the lack of opportunities, Plaintiff left [the Company] for a different job in approximately October 2018." (Id.)

3. Plaintiff Returns in February 2018 and Works at the Company's Broadway Location

In or around February 2019, Plaintiff learned that she was pregnant. (See id. at ¶ 27.) Given that she "could not afford to go on unpaid leave for an extended period of time and she understood that she would not receive paid maternity leave working for her new job," Plaintiff determined that she "needed to return to work at Pret due to its paid maternity leave policy." (Id.) Accordingly, in or around February 2019, Plaintiff returned to the Company as a Team Leader at its 56th Street and Broadway location ("Broadway Location") and reported to the store's General Manager, Cristian Perez ("Perez"). (See id. at ¶ 28.)

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While working at the Broadway Location, Perez allegedly sexually harassed Plaintiff by: (1) "mak[ing] sexual comments about Plaintiff and her female coworkers" (id. at ¶ 30); (2) "ogl[ing] Plaintiff in a sexual manner" (id. at ¶ 31); (3) "puncuat[ing] his ogling and/or comments with a wolf whistle" (id. at ¶ 34); and (4) "devalu[ing] [Plaintiff's female coworkers] by making it clear that he held them in minimal regard," such as calling them "'fucking bitch'" or "'stupid bitch." (Id. at ¶ 36.) Moreover, despite Plaintiff's pregnancy, "Perez also made a point of asking her to carry heavy loads" and, when she "complained and told him that her doctors had instructed her to avoid heavy lifting to minimize risk to her pregnancy, he responded by saying, 'Women are so dramatic.'" (Id. at ¶ 37.) Plaintiff allegedly "endured the sexually hostile work environment fostered by Perez until she took time off for maternity leave, on or around July 18, 2019." (Id. at ¶ 39.)

4. Plaintiff Returns From Maternity Leave and Works at the Company's Sixth Avenue Location

In or around November 2019, Plaintiff returned from maternity leave and worked at the Company's 48th Street and Sixth Avenue location ("Sixth Avenue Location"). (See id. at ¶ 40.) During her time at the Sixth Avenue Location, Plaintiff was "the only Black Team Leader" and reported to the store's General Manager, Lopez. (See id. at ¶¶ 40, 42.)

Similar to her previous supervisors, Lopez purportedly "discriminated against Plaintiff on the basis of Plaintiff's race" by scheduling her for fewer than 40 hours of work per week and assigning "Plaintiff and other Black employees to menial tasks such as cleaning the customer bathrooms and taking out garbage a disproportionate amount of times in comparison to their mostly Hispanic coworkers." (Id. at ¶¶ 41-43.)

Plaintiff also alleges that Lopez "tolerated widespread use of the N-word at the shop by the shop's mostly-Hispanic kitchen." (Id. at ¶ 44.) For example, "Hispanic members of the

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kitchen staff addressed...