Laracuente v. Chase Manhattan Bank

• Decision Date: 06 October 1989
• Docket Number: No. 89-1510,89-1510
• Citation: 891 F.2d 17
• Parties: , 19 Bankr.Ct.Dec. 1775, Bankr. L. Rep. P 73,100, 4 IER Cases 1729 Elviraida LARACUENTE, et al., Plaintiffs, Appellants, v. The CHASE MANHATTAN BANK, Defendant, Appellee. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 17

891 F.2d 17

58 USLW 2345, 19 Bankr.Ct.Dec. 1775,

Bankr. L. Rep. P 73,100,

4 IER Cases 1729

Elviraida LARACUENTE, et al., Plaintiffs, Appellants, v. The CHASE MANHATTAN BANK, Defendant, Appellee.

No. 89-1510.

United States Court of Appeals First Circuit.

Heard Oct. 6, 1989.

Decided Dec. 5, 1989.

Jose E. Fernandez-Sein, Rio Piedras, P.R., with whom Nachman & Fernandez-Sein, San Turce, P.R., was on brief, for plaintiffs, appellants.

Jay A. Garcia-Gregory, with whom Cynthia Navarro, Arturo Bauermeister, and Fiddler, Gonzalez & Rodriguez, San Juan, P.R., were on brief, for defendant, appellee.

Before CAMPBELL, Chief Judge, TIMBERS, ^* Senior Circuit Judge, and BREYER, Circuit Judge.

TIMBERS, Circuit Judge:

Appellants Elviraida Laracuente ("Laracuente") and her husband Angel L. Ginorio Hernandez ("Ginorio") (collectively "appellants") appeal from an order and judgment entered April 19, 1989 in the District of Puerto Rico, Gilberto Gierbolini, District Judge, which granted summary judgment in favor of Chase Manhattan Bank ("the Bank"), dismissing appellants' claim under the anti-discrimination provisions of the Bankruptcy Code, 11 U.S.C. § 525(b) (1988).

On appeal, appellants contend that the district court incorrectly adopted a restrictive, narrow view of § 525(b). Appellants argue that under the correct, broad construction of the anti-discrimination statute, they have established a prima facie case of employment discrimination which the Bank has failed to rebut by showing a legitimate reason for Laracuente's termination from the Bank. The Bank contends that the district court, in granting its motion for summary judgment, correctly followed the plain language of the statute. The Bank also contends that, even assuming that appellants' statutory construction is the correct one, appellants did not establish a prima facie case of discrimination. Moreover, the Bank contends that, even if appellants have established a prima facie case, it has rebutted such case with a legitimate business reason for Laracuente's termination.

For the reasons set forth below, we affirm the district court's order granting summary judgment in favor of the Bank.

I.

We shall summarize only those facts and prior proceedings believed necessary to an understanding of the issues raised on appeal.

As a threshold matter, we are mindful that, since this is an appeal from summary judgment in favor of the Bank, we review the facts in the light most favorable to appellants. We find, however, that appellants have committed a procedural defect by not including a statement of contested issues of material facts along with their opposition to the Bank's motion for summary judgment, as required by Local Rule 311.12 of the United States District Court of Puerto Rico. In accordance with that rule, the district court properly considered the Bank's statement of material facts as uncontroverted and found them to have been admitted by appellants. Alvarado-Morales v. Digital Equip. Corp., 843 F.2d 613, 615 (1st Cir.1988). With this in mind, we turn to the relevant facts.

Laracuente began working as a consumer credit department coordinator for the Bank on January 20, 1975. Her responsibilities included receiving loan applications, verifying their completeness, requesting credit checks from the United Credit Bureau, referring the completed applications to her supervisors, and making recommendations on loan applications.

On May 23, 1985, the Bank commenced an action in local court in an attempt to collect on a defaulted loan to Raul Hernandez Munoz ("Hernandez"). At a pretrial conference, legal representatives of Hernandez asserted that he was induced and pressured to sign for the loan by his employers at Glenview Bakery, appellants Ginorio and Laracuente. The Bank began an investigation of this situation. It discovered various loans made to Laracuente's family members and employees that were in default.

With respect to the loan made to Hernandez, the Bank learned that Ginorio asked Hernandez to take out a loan to be invested in the financially ailing bakery. Ginorio told Hernandez that, if he did not take out the loan, he would be dismissed from his employment. On July 7, 1983, Hernandez applied for a $2500 loan. He was interviewed by Laracuente, who identified Hernandez and his employment and initialed the application to that effect. She recommended that he state that the loan was for house repairs. He was approved for the loan and gave the coupon book to Ginorio. He lent the loan proceeds to appellants for their business. Appellants made payments on the loan until they filed for bankruptcy. Hernandez is listed as a creditor for $2400 on the amended schedule filed by appellants in the Bankruptcy Court.

On December 26, 1978, Laracuente participated in the application process for a $4,000 loan to her brother, Jose Luis Laracuente. Laracuente identified her brother and initialed the application to that effect. The stated purpose of the loan was the purchase of home furniture and Christmas expenses. The loan was approved. Laracuente and her husband Ginorio made payments on the loan and later offered to assume responsibility for the loan. The loan was in default at the time the bankruptcy petition was filed on February 8, 1984.

On August 1, 1980, Laracuente participated in the application process for a $1500 loan to her sister-in-law, Neyda Rodriguez Burgos. The loan application was co-signed by Elizabeth Nunez Torres ("Nunez"). Laracuente identified her sister-in-law and initialed the application to that effect. The information on the application regarding Nunez was incorrect; her signature was forged, and her address and salary were misstated. When Nunez learned that an agent attempted to collect on the loan, she went to the Bank to inform Laracuente of the forgery. Laracuente told Nunez not to worry since her sister-in-law was making payments on the loan. Laracuente did not inform the Bank of this meeting, nor did she inform the Bank of the forgery.

On February 28, 1981, Herminio Rodriguez Torres ("Rodriguez"), an employee of Ginorio at the Glenview Bakery, solicited a loan for $3,000 from the Bank. Laracuente participated in the loan process by filling out the application in her own handwriting, identifying Rodriguez and initialing the application to that effect. The stated purpose of the loan was the purchase of an automobile for another person.

On February 8, 1984, appellants filed a voluntary petition under Chapter 13 of the Bankruptcy Code. In a proposed draft of an employment evaluation regarding Laracuente dated January 30, 1984, her former supervisor, Quintiliano Ramos, mentioned her economic problems. The draft was returned by a member of the Bank's Human Resources Department, who told him to delete any references to Laracuente's economic problems.

On August 1, 1985, almost eighteen months after appellants filed for bankruptcy, Laracuente was dismissed from her employment, allegedly because of information discovered during the Bank's investigation.

On October 8, 1985, appellants commenced the instant action pursuant to the anti-discrimination provision of the Bankruptcy Code, 11 U.S.C. § 525(b). They alleged that Laracuente was discharged wrongfully by the Bank because appellants had filed for bankruptcy. The Bank filed a motion for summary judgment, contending that Laracuente was dismissed for legitimate business reasons, and not because she filed for bankruptcy. Appellants filed an opposition to the motion, asserting that there were questions of material fact regarding the reasons for her termination. In support of this opposition, appellants filed an affidavit by Luis Rios ("Rios"), a former employee of the Bank, who stated that, after Laracuente was fired, an officer of the Bank, as well as the branch manager, told him that Laracuente's dismissal was due to her bankruptcy status. Rios also stated that it was not uncommon for employees of the Bank to have relatives take out loans for the employees' use and benefit. He referred to two specific instances in which loans apparently were made to relatives of the Bank's employees. According to Rios, the proceeds of these loans were given to the employees who paid the loan installments.

On April 19, 1989, the district court granted summary judgment in favor of the Bank, holding that appellants failed to produce evidence from which a reasonable jury might conclude that Laracuente's bankruptcy status was the sole reason for her termination. The court found that the Bank produced substantial evidence justifying Laracuente's discharge for reasons other than her decision to file for bankruptcy. In granting the Bank's motion for summary judgment, the court applied the plain meaning of the "solely because" test under § 525(b).

On appeal, appellants contend that the district court incorrectly construed § 525(b). They assert that the burden of proof requirements for proving a discriminatory discharge under § 525(b) should be approached in precisely the same manner as in cases involving charges of discrimination because of race, color, religion, sex, or national origin. 42 U.S.C. § 2000e et seq. (1988) ("Title VII"). They assert that, under the correct, liberal approach, they have established a prima facie case of discrimination, which the Bank has failed to rebut by showing a legitimate reason for the termination. They rely principally on the Rios affidavit, which they say contains direct evidence of discrimination.

The Bank contends that the correct statutory construction of § 525(b) is narrow and should be limited in scope to the plain language of the statute. Under this approach, the Bank asserts that the district court properly granted summary judgment based on the uncontroverted fact that Laracuente was not fired solely because of her bankruptcy status but for the legitimate reason that she was defrauding the Bank. The Bank also asserts that, even assuming that the statutory...