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IN THE SUPERIOR COURT OF THE VIRGIN ISLANDS DIVISION OF ST. THOMAS AND ST. JOHN KKK MARJORIE E. BELLOT, ) CASE NO. ST-2012-CV-0000297 PAULITA ANDREW, THERESA ) THOMAS and JANET PIERRE, ) ) ACTION FOR WRONGFUL Plaintiffs, ) DISCHARGE AND DAMAGES ) vs. ) ) JURY TRIAL DEMANDED CARDOW, INC. d/b/a CARDOW, ) ) Defendant.) ) MEMORANDUM OPINION AND_ ORDER Before the Court is Defendant Cardow, Inc’s [sic] Motion for Summary Judgment, which was filed on December 9, 2016. Along with its Motion, Defendant filed a Memorandum of Law in Support of Motion for Summary Judgment on the same day.! Plaintiffs filed an Opposition on December 29, 2016 and Defendant filed a Reply on January 23, 2017. Defendant requests a hearing for oral arguments but the Court determines oral arguments are not necessary. The Court will grant Defendant’s Motion and enter summary judgment in favor of Defendant. BACKGROUND This matter concerns four former employees claiming their former employer wrongfully discharged them. At its height in the mid to late 1990s, Defendant Cardow, Inc. operated thirteen retail jewelry stores and outlets on St. Thomas, U.S. Virgin Islands.” At the time this matter was initiated by Plaintiffs’ Verified Complaint, Defendant’s business was down to two locations.’ Plaintiffs Marjorie E. Bellot, Paulita Andrew, Theresa Thomas, and Janet Pierre are Defendant’s former employees who were discharged on July 5, 2010. Defendant employed the requisite number of employees during pertinent years so as to be covered under the Virgin Islands Wrongful Discharge Act.4 Defendant states Plaintiffs were laid off due to a general downsizing of its workforce that was brought about by a severe decline in revenue. This decline in revenue occurred in the wake of the 2008-2009 global economic downturn commonly referred to as the Great Recession. Defendant asserts it experienced significant net losses for several years, which prompted closure of several of its locations and a reduction in force. Upon discharging them, Defendant provided Plaintiffs with uniform letters informing them that they were being terminated for the above-mentioned reason.° ' Defendant filed the Memorandum of Law under seal pursuant to the Court’s December 6, 2016 Order. Defendant also filed a Statement of Undisputed Material Facts and several exhibits under seal. ? Ex. C., Aff. of Michael Lotterman 4] 11 (executed on Dec. 1, 2016). 3 Td. at §§ 12, 14, 16. * Third Am. Compl. | 10 (filed on Sept. 8, 2014); Def.’s Statement of Undisputed Facts {| 18 (filed under seal on Dec. 9, 2016). 5 Def.’s Statement of Undisputed Facts 4 16; Ex. H, July 5, 2010 Lay-Off Letter to Plaintiffs (filed with Defendant’s Statement of Undisputed Facts). Bellot et al. v. Cardow, Inc. Case No. ST-12-CV-297 Memorandum Opinion and Order Plaintiffs counter that Defendant’s proffered reason for discharging them is pretextual. They allege Defendant’s true motivations were the following: a. Defendant believes these employees are likely to take off more time for medical reasons. b. These Plaintiffs are likely to utilize more sick days. c. The Defendant wanted to prevent Plaintiffs] from getting retirement benefits. d. Defendants [sic] wanted to replace Plaintiff with younger Caucasian employees.° The parties have been unable to resolve their dispute in mediation.’ Defendant now moves the Court to enter summary judgment in its favor. Defendant filed several exhibits under seal and claims there is no longer a genuine issue of material facts. The exhibits include affidavits from Defendant’s President/Chief Operating Officer, accountant, and former Director of Human Resources. Furthermore, Defendant filed with the Court its tax returns for several years, excerpts of Plaintiffs’ depositions, letters of discharge, and letters providing some plaintiffs offers of reinstatement. Defendant argues that the evidence contained in the exhibits demonstrates Defendant is entitled to favorable judgment as a matter of law and Plaintiffs failed to mitigate damages resulting from their discharge. STANDARD OF REVIEW FOR SUMMARY JUDGMENT Summary judgment is appropriate 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.”® A fact is material only if its existence or non-existence will affect the outcome of a lawsuit under applicable law, and a dispute over a material fact is genuine only if the evidence is such that a reasonable fact- finder could return a verdict for the nonmoving party.” The moving party must demonstrate “an absence of evidence to support the non-moving party’s case.”!° Thereafter, the non-moving party must show specific facts to establish a genuine issue for trial.'! The “[c]ourt must view the inferences to be drawn from the underlying facts in the light most favorable to the non-moving party, and . . . must take the non-moving party’s conflicting allegations as true if ‘supported by ® Third Am. Compl. at § 14. Paragraph 14 of the Third Amended Complaint, which asserts the above-mentioned accusations, switches from the plural “Plaintiffs” to the singular “Plaintiff” without specifying a particular person. For example, Paragraph 14(c) states “(t]he Defendant wanted to prevent Plaintiff from getting retirement benefits.” The Court is unsure whether the word “Plaintiff” is written in the singular tense due to a typographical error or because only one unspecified plaintiff asserts a claim. For the sake of being thorough, the Court will assume Plaintiffs meant to assert these allegations for each plaintiff in this matter. 7 Mediation Report (filed on Sept. 30, 2016). 8 V.I. Civ. R. 56(a). Defendant filed its Motion for Summary Judgment pursuant to Federal Rule of Civil Procedure 56. However, since filings its Motion, the Superior Court adopted the Virgin Islands Rules of Civil Procedure. Jn re Adoption of the V.I. Rules of Civ. Procedure, No. 2017-001, 2017 V.I. Supreme LEXIS 22, at *1 (V.I. Apr. 3, 2017). Finding that adjudicating Defendant’s Motion under the new procedural rule would not be infeasible or work an injustice, the Court will consider the Motion under the Virgin Islands Rules of Civil Procedure. V.I. Civ. R. 1- 1(c)(2). ° Anderson v. Liberty Lobby Inc., 477 U.S. 242, 247-48 (1986). '° Williams v. United Corp., 50 V.I. 191, 194 (V.L. 2008) (citing Fed. R. Civ. P. 56(c)). Even though the Supreme Court of Virgin Islands in Williams v. United Corp. set out a framework for adjudicating motions for summary judgment pursuant to the now-abrogated Federal Rule of Civil Procedure 56, the Court finds Williams's analysis convincing and suitable for considering motions for summary judgment pursuant to V.I. Civ. R. 56. '! Td. (citing Fed. R. Civ. P. 56(e)). Bellot et al. v. Cardow, Inc. Case No. ST-12-CV-297 Memorandum Opinion and Order proper proofs.’”!? “Th{e] [cJourt may not itself weigh the evidence and determine the truth; rather, we decide only whether there is a genuine issue for trial such that a reasonable jury could return a verdict for the non-moving party.”'? Then, if there is no genuine issue of material fact, the Court must determine whether the movant is entitled to judgment as a matter of law.'* “It is well settled that a single, nonconclusory affidavit or witness's testimony, when based on personal knowledge and directed at a material issue, is sufficient to defeat summary judgment or judgment as a matter of law.”!> “This remains true even if the affidavit is self-serving in the sense of supporting the affiant's own legal claim or interests.” '® STANDARD FOR WRONGFUL DISCHARGE The Virgin Islands Wrongful Discharge Act (“WDA”) provides that an employer can lawfully discharge an employee for only one of nine enumerated reasons.'’ In addition, an employer is allowed to terminate an employee “as a result of the cessation of business operations or as a result of a general cutback in the work force due to economic hardship, or as a result of the employee's participation in [unprotected] concerted activity . . ..”'® As a result, the WDA amounts to a statutory abrogation of the common law rule of at-will employment.'? An employer is prohibited from firing an employee for any reason not provided in the WDA and a presumption exists that an employee has been wrongfully discharged if terminated for any reason other than those listed.”° In order to state a valid claim under the WDA, a plaintiff must allege that: (1) he was an employee, (2) of a covered employer, (3) he was discharged, and (4) the discharge was wrongful.?! Plaintiff must indicate that Defendant is a “covered employer;” i.e., someone “that has employed five (5) or more employees for each working day in each of the twenty (20) or more calendar weeks in the two (2) year period preceding a discharge.””* The V.I. Supreme Court has held that an employee only bears the initial burden of pleading a valid claim and does not have to present evidence, at the outset, demonstrating that he or she was not discharged for one of the lawful reasons enumerated in title 24, § 76 of the Virgin Islands Code.” Instead, the employer bears the '2 Td. (citations omitted). '3 Id. at 195 (citing Anderson v. Liberty Lobby, Inc., 477 U.S. at 255). MV J. Civ. R. 56(a). 'S Burd v. Antilles Yachting Servs., Inc., 57 V.1. 354, 360 (V.I. 2012) (quoting Cappuccio v. Prime Capital Funding, LLC, 649 F.3d 180, 189-90 (3d Cir. 2011)). '6 Jd. (quoting Cappuccio, 649 F.3d at 189-90) (internal quotations omitted). 724 V.LC. § 76. 18 Td. '° Edwards v. Marriott Hotel Mgmt. Co. (V.L), Inc., 2015 V.1. LEXIS 13, at *20 (V.I. Super. Ct. Jan. 29, 2015). 20 Td. 7! Rennie v. Hess Oil V.I. Corp., 62 V.1. 529, 544 (V.I. 2015) (“to state a claim under section 76, Rennie only needed to plead that HOVIC was his employer and that HOVIC wrongfully discharged him”); Webster v. CBI Acquisitions, LLC, 2012 V.I. LEXIS 9, at *6 (V.I. Super. Ct. Mar. 5, 2012). 2 Webster, 2012 V.I. LEXIS 9, at *6; 24 V.L.C. § 62. 3 Rennie, 62 V.1. at 544 (“Rennie only needed to plead that HOVIC was his employer and that HOVIC wrongfully discharged him, and was not required to anticipate in his complaint any affirmative defenses HOVIC might raise in its answer, such as the permissible grounds for discharge”). Bellot et al. v. Cardow, Inc. Case No. ST-12-CV-297 Memorandum Opinion and Order initial burden of demonstrating by a preponderance of the evidence that it discharged the employee for a legitimate, statutorily-approved reason.”4 ANALYSIS I. This Matter is Ripe For Summary Judgment Review. Discovery deadlines for this matter have passed.” The record does not reveal the existence of a discovery dispute that would indicate further discovery may be needed. Plaintiffs also do not ask the Court to reserve ruling on Defendant’s Motion and they do not assert that further discovery is needed to present facts to oppose the Motion. Therefore, the Court finds that this matter is ripe for summary judgment review. II. Plaintiffs Have Met Their Initial Burden of Pleading a Valid Claim. The Court determines that Plaintiff have pleaded satisfactorily a valid claim under the WDA. Plaintiffs assert they were employees of Defendant,” Defendant was a covered employer with the requisite number of employees,’ they were discharged,”* and the discharge was wrongful.*’ As such, the burden shifts to Defendant to provide and demonstrate a lawful reason for discharging Plaintiffs. III. Defendant Has Met Its Burden of Producing Evidence Showing It Experienced Economic Hardship and, as a Result, It Had to Layoff Plaintiffs. The WDA does not define “economic hardship.” However, the Court still must provide a cogent analysis of whether Defendant reasonably demonstrated it underwent economic hardship.*? “[A]n employer must show some evidence of its financial condition. Mere assertions that business was slow, without more, do not constitute economic hardship.”*! Instead, “an employer must show some meaningful evidence of its financial condition.”** In addition, Defendant must provide evidence linking economic hardship to Plaintiffs’ termination. 4 See id; Pedro v. Ranger Am. of the V.1., Inc., 63 V.1. 511, 520 (V.1. 2015); Donovan v. A.H. Riise Gift Shop, Inc., 2016 U.S. Dist. LEXIS 7829, at *22 (D.V.I. Jan. 21, 2016) (“when assessing a WDA claim in a § 76(c) context, the proper analysis would require that an employer show, by a preponderance of the evidence, that it suffered economic hardship which caused it to undergo a general cutback in its workforce”); see also Defoe v. Phillip, 56 V.1. 109, 119 (V.I. 2012) (holding that the Superior Court should treat interpretations of Virgin Islands law by the Appellate Division of the District Court as binding precedent). °5 Scheduling Order (June 25, 2015). 6 Third Am. Compl. 4 4 to 8. 27 Td. at 10. 8 Td. at § 12. 29 Td. at 49] 14, 16. 3° Donovan, 2016 U.S. Dist. LEXIS 7829, at *26. 3! Island Block Corp. v. Dep't of Labor, 2001 U.S. Dist. LEXIS 16612, at *4 (D.V.I. July 23, 2001). *» Prentice v. OfficeMax N. Am., 2012 U.S. Dist. LEXIS 35090, at *12 (D.V.I. Mar. 15, 2012). 33 See id. at *28 (“the Superior Court must review both the evidence of economic hardship and its link to the terminations to determine whether [an employer] carried its burden of persuasion under 24 V.I.C. § 76(c), as a matter of law’’). Bellot et al. v. Cardow, Inc. Case No. ST-12-CV-297 Memorandum Opinion and Order Defendant represents that it faced severe economic hardship in the backdrop of the 2008- 2009 global recession. Defendant’s tax returns for 2008, 2009, 2010, and 2011 reveal a business income loss of millions of dollars in all four years.*4 Mark R. Thaw, Defendant’s Certified Public Accountant, testified in a November 29, 2016 affidavit that Defendant operated at a loss for several years and “these financial losses have since continued for every year since 2010 up to and including the current year.”*> Michael Lotterman, Defendant’s Director of Human Resources, testified in an affidavit that Plaintiffs were laid off along with twenty (20) other employees in July of 2010 due to loss of sales.*© Lotterman also testified that Defendant closed several of its locations due to its financial losses.*”7 Two more locations closed on June 1, 2012.78 The Court determines Defendant has met its burden of producing evidence that demonstrates it discharged Plaintiffs as part of a general reduction of its workforce resulting from economic hardship. The documents provided in the exhibits substantiate that Defendant suffered economic hardship by revealing it operated at a significant financial loss for several years. Furthermore, Lotterman testified that Defendant discharged twenty (20) other employees, which reinforces Defendant’s position that it engaged in a general cutback, instead of firing employees with the intent of replacing them. In addition, Defendant closed several of its locations, which makes a cutback of its workforce pragmatic. In fact, Bellot and Andrew worked at the Diamond Center at Havensight, which closed on June 1, 2012.°° The positions held by Thomas and Pierre were never reopened and no one was hired to replace them.*® Lotterman also testified in his Affidavit that Plaintiffs were among those selected for a workforce reduction and that “[e]mployees at each location were evaluated based on need, performance, and attendance and skills.”**! Plaintiffs argue that Defendant did not suffer “debilitating” economic hardship because it is still in business. However, Plaintiffs do not provide any authority requiring an employer to face “debilitating” economic hardship in order to reduce its workforce. Plaintiffs also claim that Defendant did not establish a causal link between its general need for layoffs and its decision to terminate Plaintiffs specifically. Plaintiffs state “[njone of the Plaintiffs were informed of these alleged ‘evaluations’ and were certainly not informed of them when there were being told they were being laid-off.”*? However, Plaintiffs do not provide any authority dictating that employees should be apprised of the method used to determine which workers will be laid off and which will be retained. Instead, Defendant only needed to actually make such evaluations. Plaintiffs appear to assert there is a discrepancy between the letter provided to Plaintiffs when they were discharged and the statements made in Lotterman’s Affidavit. Plaintiffs point out 44 Exs. D, E, F, and G. *S Ex. B, Aff. of Mark R. Thaw.[sic] CPA § 10 (executed on Nov. 29, 2016). 36 Ex. C., Aff. of Michael Lotterman § 10 (executed on Dec. 1, 2016). 37 Id, at. $9 11, 12, 14, 16. 8 Ex. A. Aff. Of Louis de Lyrot J 10 (executed on Dec. 1, 2016). 9 Ex. J., Dep. of Paulita Andrew 62:6-25, 63:1-5; Ex. A. | 15; Ex. C 4 16. 40 Ex. C.4 17. 4! Td. at $99, 10. * Pls.’ Opp. to Def.’s Mot. for Summ. J. and Mem. in Support 6. Bellot et al. v. Cardow, Inc. Case No. ST-12-CV-297 Memorandum Opinion and Order that the letter explained that the main reason for layoffs was a decline in business. Plaintiffs then instruct the Court to compare the letter to Lotterman’s statement that he was directed to discharge twenty-four (24) employees and they were to be evaluated based on need, performance, attendance, and skills. The Court does not find any inconsistency in these two statements. An employer can reduce its workforce due to a decline in business and then go about discharging workers based on the above attributes. Plaintiffs fail to articulate a factual dispute. Plaintiffs reference Bachelor v. Pitt Des-Moines, Inc.,* in which an employer testified at an administrative hearing that it laid off employees based on their skills and the availability of work. However, the court affirmed the administrative law judge’s decision and did not find fault in way in which the employer selected employees to discharge or retain.4 Accordingly, the Court finds that Defendant has sufficiently produced evidence demonstrating it discharged Plaintiffs for a lawful reason. IV. Considering the Evidence Presented in the Light Most Favorable to the Plaintiffs, the Court Determines that Plaintiffs Have Failed to Produce Evidence from which a Trier of Fact Could Reasonably Determine They Were Unlawfully Discharged. Plaintiffs contend that Defendant’s proffered reason for discharging them is pretextual. In their Third Amended Complaint, Plaintiffs assert the actual motivations for terminating them were the following: a) Defendant believed Plaintiffs were employees that would likely take more time off for medical reasons,*° b) Defendant wanted to prevent Plaintiff[s] from getting retirement benefits,*° and c) Defendant wanted to replace Plaintiff[s] with younger Caucasian employees.*” A. The Claim Articulated in Paragraph 14(c) of the Third Amended Complaint is Unsound Because Plaintiffs Had a 401(k) Retirement Plan, Instead of a Defined Benefits Pension Plan. Paragraph 14(c) of the Third Amended Complaint alleges that Defendant discharged Plaintiffs to prevent them from getting retirement benefits. This claim is baseless because Plaintiffs were not eligible to receive benefits from a defined benefits pension plan that would require them to work a certain number of years to become vested. Each Plaintiff received retirement benefits in the form of a 401(k) plan and Defendant did not contribute to their retirement.** Therefore, it is does not logically follow that Defendant would discharge Plaintiffs due to their retirement benefits because Plaintiffs’ retirement plans were not a noteworthy financial 3 2003 V.I. LEXIS 2 (V.I. Super. Ct. Feb. 3, 2003). “4 Td. at *10. 4S Third Am. Compl. fj 14(a), (b). 46 Td. at J 14(c). 47 Td. at § 14(d). 48 See Ex. K, Dep. of Marjorie Evans Bellot, 43:1-13; Ex. N, Dep. of Janet Pierre, 38:6-21; Ex. O, Dep. of Theresa Thomas, 32:23-25 and 33:1-2. Bellot et al. v. Cardow, Inc. Case No. ST-12-CV-297 Memorandum Opinion and Order burden on Defendant and discharging Plaintiffs would not deprive them of their retirement benefits. The funds in the 401(k) plan would be still available to Plaintiffs after their discharge. B. Plaintiffs’ Testimony Contradicts Some of Their Allegations, which Leads the Court to Find There Is No Genuine Dispute Over Material Facts as to Certain Claims. 1. Bellot Stated She Does Not Believe She Was Discharged for Taking Sick Leave. Paragraphs 14(a) and 14(b) allege Defendant fired Plaintiffs because it believed they were more likely to take time off for medical reasons. However, Plaintiff Bellot testified she does not believe this was the reason she was discharged.*? 2. Thomas Stated She Does Not Believe She Was Discharged Because of Race and Age Discrimination. Pierre Stated She Did Not Know if a Caucasian Employee Was Hired to Replace Her. Paragraph 14(c) alleges Defendant discharged Plaintiffs so it could replace them with younger Caucasian employees. However, Thomas testified she did not believe she was terminated for this reason.*° In addition, she stated that she was not replaced.*! Janet Pierre testified she did not know the race or nationality of employees hired to replace her.*? 3. Andrew Testified that She Accepts Defendant’s Proffered Reason for Terminating Her. During her deposition, Andrew was asked, “why do you think you were terminated?” Andrew answered, “Based on the [July 5, 2010] letter, I’m going by what they say on the [July 5, 2010] letter.” She then was asked for a second time “And that’s why you think you were terminated?” and Andrew answered, “That’s why | think I was terminated, yes.” Accordingly, as to Andrew’s claims, evidence demonstrates there is no genuine dispute over facts and Defendant is entitled to judgment as a matter of law. C. Plaintiffs Fail to Produce Any Evidence Demonstrating that Defendant’s Reason for Terminating Them Is Pretextual. Plaintiffs have not filed any exhibits along with their Opposition or otherwise presented evidence revealing other motivations for their discharge. In addition, Plaintiffs do not provide any supporting documents, such as answers to interrogatories or Plaintiffs’ affidavits, that would provide factual allegations contradictory to those provided by Defendant and whose credibility would need to be resolved by a trier of fact.*? Ex. K, Dep. of Marjorie Evans Bellot, 42:12-21. °° Ex. O, Dep. of Theresa Thomas, 33:3-15. Td. * Ex. N, Dep. of Janet Pierre, 30:11-23. *8 See Pedro v. Ranger Am. of the Virgin Islands, Inc., 63 V.1. 511, 515 (V.1. 2015) (holding that a court should not weigh evidence or determine the credibility of witnesses when assessing a motion for summary judgment). Bellot et al. v. Cardow, Inc. Case No. ST-12-CV-297 Memorandum Opinion and Order Furthermore, Plaintiffs’ depositions do not provide contradictory factual allegations from which the Court could ascertain a remaining genuine dispute over material facts.** For example, when Pierre was asked “Why do you think that you were terminated, Ms. Pierre,” she answered “I really can’t say .. ..” When further asked, “Do you think it was for another reason [besides the reason provided in the July 5, 2010 letter],” Pierre answered, “Well I can’t say.” Even when given an opportunity to substantiate their claims, Plaintiffs have not presented evidence proffering facts differing from those alleged by Defendant. Il. Conclusion. The Court determines that Defendant has met its burden of producing evidence demonstrating it discharged Plaintiffs for a lawful reason. However, Plaintiffs have failed to present any evidence demonstrating that a genuine dispute of facts exists in this matter or that Defendant is not entitled of judgment as a matter of law. Based upon the evidence presented, the Court will grant Defendant’s Motion for Summary Judgment. Accordingly, it is hereby ORDERED that Defendant Cardow, Inc’s Motion for Summary Judgment is GRANTED; and it is further ORDERED that summary judgment is entered in favor of Defendant and against Plaintiffs, and Plaintiffs’ Third Amended Complaint is DISMISSED with prejudice; and it is further ORDERED that copies of this Memorandum Opinion and Order shall be directed to Clive Rivers, Esquire and Bennett Chan, Esquire. Date Mey |! 2017 } Wosnwes M) pana DENISE M. FRANCOIS Judge of the Superior Court of the Virgin Islands ATTEST:-— rella H. George Clerk of the Court ' ** The Court recognizes that Defendant did not file the complete transcripts of Plaintiffs’ depositions. However, Plaintiffs did not file any skipped over pages and the Court must adjudicate this matter by considering the evidence available in the record.