Leary v. Warnaco, Inc.

• Citation: 251 BR 656
• Decision Date: 28 July 2000
• Docket Number: No. 00 CIV. 3358(CLB).,00 CIV. 3358(CLB).
• Parties: Marlene LEARY, Plaintiff-Appellant, v. WARNACO, INC., Defendant-Appellee,
• Court: U.S. District Court — Southern District of New York

251 B.R. 656 (2000)

Marlene LEARY, Plaintiff-Appellant,
v.
WARNACO, INC., Defendant-Appellee,

No. 00 CIV. 3358(CLB).

United States District Court, S.D. New York.

July 28, 2000.

251 BR 657

James B. Glucksman, Daniel S. Alter, Rattet & Pasternak, LLP, Harrison, NY, for Plaintiff.

Cynthia Glasgow, Seyfarth Shaw Fair-weather & Geraldson, New York City, for Defendant.

MEMORANDUM & ORDER

BRIEANT, District Judge.

Plaintiff-Appellant Marlene Leary seeks to review an order of Bankruptcy Judge Adlai S. Hardin, Jr. dated March 17, 2000, granting Defendant-Appellee's motion to dismiss the complaint and denying Plaintiff's motion for leave to amend the complaint. This Court has appellate jurisdiction pursuant to 28 U.S.C. § 158.

On December 17, 1998, Plaintiff-Appellant Marlene Leary filed a voluntary petition under Chapter 7 of the Bankruptcy Code. On April 20, 1999, Plaintiff received her discharge under Chapter 7, and the case was closed on April 29, 1999. We are told that there is nothing unusual about this bankruptcy, which is characterized by Plaintiff's attorney as a "plain vanilla case."

On May 3, 1999, Plaintiff interviewed with Defendant for an executive assistant position. On June 23, 1999, Plaintiff had a second interview with James Morgan, Defendant's President of Intimate Apparel. Plaintiff claims that Mr. Morgan offered Plaintiff the position, which was to commence on July 26, 1999. According to the complaint, this offer was "subject to" the results of a credit report. Complaint ¶ 11. By letter dated August 4, 1999, Defendant informed Plaintiff that it would not hire her "in whole or in part" because of the credit report. The credit report revealed the bankruptcy, with no special features bearing on Plaintiff's conduct or her character.

On September 23, 1999, Plaintiff-Appellant filed a complaint in the United States Bankruptcy Court for the Southern District of New York (Hardin, J.) alleging that Defendant-Appellee violated 11 U.S.C. § 525(b)(1) and (3) by refusing to hire Plaintiff because of her bankruptcy status, and also alleging a claim under New York law for Intentional Infliction of Emotional Distress ("IIED"). On November 19, 1999, Defendant-Appellee moved to dismiss the complaint for failure to state a claim upon which relief can be granted. On January 21, 2000, Plaintiff opposed the motion and moved for leave to amend the complaint. Plaintiff's proposed amended complaint removed the IIED claim, and added a claim for attorneys' fees and punitive damages. The proposed amended complaint also removed the "subject to" language and "clarified" that the employment offer was unconditional. On March 17, 2000, the bankruptcy court entered an order dismissing the complaint and denying Plaintiff's motion. Plaintiff filed her Record on Appeal with this Court on March 31, 2000.

Motion to Dismiss

This Court reviews the bankruptcy court's dismissal of the complaint de novo. In re Pudgie's Development of NY, Inc., 239 B.R. 688, 691 (S.D.N.Y.1999)(Conner, J.)(citing Federal Deposit Insurance Company v. Hirsch, 980 F.2d 125 (2d Cir.1992)). The District Court will affirm the bankruptcy court's dismissal of the complaint if Plaintiff can

251 BR 658

prove no set of facts which would entitle her to relief. See Acito v. IMCERA Group, Inc., 47 F.3d 47, 51 (2d Cir.1995); George C. Frey Ready-Mixed Concrete, Inc. v. Pine Hill Concrete Mix Corp., 554 F.2d 551, 553 (2d Cir.1977). For purposes of reviewing the bankruptcy court's dismissal of the complaint, this Court must take as true all factual allegations contained in the complaint. Easton v. Sundram, 947 F.2d 1011, 1014-15 (2d Cir. 1991), cert. denied, 504 U.S. 911, 112 S.Ct. 1943, 118 L.Ed.2d 548 (1992)

Section 525(b) is one of the bankruptcy provisions which Congress enacted to effectuate the "fresh start" policy, which is behind personal bankruptcies. 11 U.S.C. § 525(b) states:

No private employer may terminate the employment of, or discriminate with

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