Aponte-Bermudez v. Berrios et al

MOTION to Dismiss/Lack of Jurisdiction as to Universal Insurance Company

D.P.R.October 26, 2016

1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO YEITZA MARIE APONTE-BERMÚDEZ, Plaintiff, v. HÉCTOR H. BERRÍOS, et al, Defendants. CIVIL No.: 3:15-cv-01034-CVR PLAINTIFF DEMANDS TRIAL BY JURY ELIGIO COLÓN, Defendant-Cross-Plaintiff, v. HÉCTOR H. BERRÍOS, et al, Defendants/Cross-Defendants. MOTION TO DISMISS TO THE HONORABLE COURT: COMES NOW, Co-Defendant UNIVERSAL INSURANCE COMPANY (“UNIVERSAL”), through the undersigned counsel, without submitting to the jurisdiction of this Honorable Court by way of special appearance, and very respectfully move the Court to Partially Dismiss the Amended Complaint pursuant to Fed. R. Civ. P. 12(b)(2) and (6). I. PROCEDURAL BACKGROUND 1. On January 16, 2015 the Complaint was filed in the instant case, including fictitious co-defendants “UNKNOWN INSURANCE COMPANIES A through H” (ECF No. 1 at ¶ 11). 2. Even though Co-Defendants Héctor H. Berríos, Sonia Ortiz, the Conjugal Partnership Berríos-Ortiz, Gabriel A. Medina Ortiz and Cristalería La Vega, Inc. (collectively, the Berríos Co-Defendants”) all appeared and answered the Complaint on February 27, 2015 indicating that Universal Insurance Company was their insurer providing coverage in the instant case (ECF No. 11 at ¶ 11 and ECF No. 12 ¶ 11), Plaintiff never moved the Court Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 1 of 9 2 nor served a summons by publication to any of the unknown fictitious insurers that were included and named in the Complaint as co-defendants, so this Court never acquired jurisdiction over the “unknown” insurer (Universal) prior to the expiration of the Statue of Limitations, which ran out on January 15, 2016. 3. Curiously, after the statute of limitations had expired - more than a year and six months after filing the original Complaint, on July 29, 2016 as the trial date approached Plaintiff filed a Motion for Leave to Amend the Complaint (ECF No. 57) requesting leave, among other things, to amend the Complaint and for the first time to substitute the unknown insurance companies with their real names. 4. On August 2, 2016, this Honorable Court entered Order (ECF No. 60), granting Plaintiff’s Motion for leave to substitute fictitious parties with their real names, among them, the unknown insurance companies, to amend the complaint, and to serve a summons for the first time upon Universal. 5. Then, on August 24, 2016 Plaintiff filed an Amended Complaint (ECF No. 69), in which, among other things, it proceeded to substitute Universal for an unknown insurance company. 6. On September 9, 2016, a summons was issued and it was served upon Universal Insurance Company on September 15, 2016. Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 2 of 9 3 DISCUSSION 7. As a matter of law, partial dismissal as to the action against Universal is proper in the instant case because this Court never acquired personal jurisdiction over Universal before the action became time barred under the local statute of limitations1. 8. Under Puerto Rico law, while the real name of an unknown party is being discovered, a Plaintiff must serve a summons by publication to any unknown parties pursuant to Rule 4.6 of the Puerto Rico Rules of Civil Procedure 2, and such publication must be published within the 120-day period specified by Rule 4.3(c). 32 L.P.R.A. Ap. V, R. 4.6 and 4.3(c). 9. Since the original Complaint in the instant case included unknown-fictitious defendants, Plaintiff was required to move for service of summons over any unknown parties by way of publication of an edict under Rule 4.6 of the Puerto Rico Rules of Civil Procedure, as authorized by Rule 4(e) of the Federal Rules of Civil Procedure3, in order for the Court to acquire jurisdiction over the unknown defendants. However, Plaintiff failed to do so. 1 Affirmative defenses, such as the statute of limitations, may be raised in a motion to dismiss under Fed. R. Civ. P. 12(b)(6). See Trans- Spec Truck Serv., Inc. v. Caterpillar, Inc., 524 F.3d 315, 320 (1st Cir.2008). 2 Rule 4.6, 32 L.P.R.A. Ap. V, provides in its pertinent part as follows: Where the person upon whom service is to be made is outside of Puerto Rico, or, if within Puerto Rico, is not found after the pertinent necessary steps are taken, or conceals himself to avoid service of summons, or is a foreign corporation having no agent, business agent, cashier, or secretary in Puerto Rico, and if it is so established to the satisfaction of the court by affidavit, and if it also appears from such affidavit or from the verified complaint filed that a cause of action exists which warrants the granting of a relief against the person upon whom service is to be made, or that such person is a necessary or legitimate party to the action, the court may issue an order that service be made by publication. 3 Fed. R. Civ. P. 4(e) provides that an individual-may be served in a judicial district of the United States by following state law for serving a summons in an action brought in courts of general jurisdiction in the state where the district court is located or where service is made. This Court has supplemental jurisdiction under 28 U.S.C. §1367 to apply Rule 4.6 of the Puerto Rico Rules of Civil Procedure for service of summons by publication within the local federal district. Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 3 of 9 4 10. Therefore, in the instant case, the Court never acquired personal jurisdiction over any unknown insurer prior to the expiration of the statute of limitations, because Plaintiff failed to serve summons by publication upon the unknown fictitious insurers within the 120 days established in the Rules of Civil Procedure, allowing the statute of limitations to expire before requesting the substitution of the “unknown” insurer on July 29, 20164. Hence, the tolling of the 1 year statute of limitations with the filing of the Complaint against unknown defendants would not be properly perfected until the subsequent completion with the filing on the record of a served summons (by publication) pursuant to the local rules. 11. Since this is a diversity case and the question of time limitations is one of substantive law, we must turn to the laws of Puerto Rico. Santiago v. Becton Dickinson & Co., S.A., 539 F. Supp. 1149, 1151 (DPR 1982). Based on the doctrine set out in Erie R.R. Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), when a federal court is sitting in diversity jurisdiction, it must apply state substantive law for state law claims. See, Hoyos v. Telecorp Comm’ns. Inc., 488 F.3d 1, 5 (1st Cir. 2007). State law governs tolling. Walker v. Armco Steel Corp., 446 U.S. 740 (1980). 12. In Núñez González v. Jiménez Miranda, 122 D.P.R. 134, 142-143 (1988), the Puerto Rico Supreme Court indicated that “a defendant with fictitious name must be served a summons by publication according to Rule 4.6 of Civil Procedure, 32 L.P.R.A. Ap. III, R. 4.6”. In Nuñez González, supra, regarding the period of time in which a claimant must substitute the unknown parties with the correct names, the Puerto Rico Supreme Court expressed that it is 4 The Complaint in this case was brought under Puerto Rico’s Tort Statute, Article 1802, 31 LPRA § 5141. Tort claims under article 1802 are subject to the one-year statute of limitations provided by article 1868(2) of the Civil Code, P.R. Laws Ann. tit. 31, § 5298(2); in this case the statute of limitations expired on December 30, 2013. Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 4 of 9 5 necessary that any amendment to the complaint in order to include co-defendants with their true names be made within the period to serve process. 13. In Díaz v. Massas, 178 D.P.R. 820 (2010), the Puerto Rico Supreme Court also expressed that, for an action to prosper against a fictitious or unknown party, “it is indispensable that a process of summons by publication be issued, be served within the 120-day term, and later the complaint be amended to change the name for the correct one within the period stated in our judicial system”. 14. Other Courts have agreed with the notion that a party cannot just amend a complaint to substitute an unknown party after the Statue of Limitations has expired, but it’s worse in the case when plaintiff did not even serve a summons by publication upon an unknown party in order to safeguard the Courts Personal jurisdiction. 15. In Walker v. Armco Steel Corp., 446 U.S. 740 (1980), plaintiff had filed his complaint and thereby commenced the action under Rule 3 of the Federal Rules of Civil Procedure within the statutory period. He did not, however, serve the summons and complaint until after the statutory period had run. The United States Supreme Court held that state law (which required both filing and service within the statutory period) governed, barring plaintiff's action. 16. In Watson v. Unipress Inc., 733 F.2d 1386 (10th Cir. 1984), plaintiff designated a "John Doe" in the complaint and moved to amend it with the real party’s name after the applicable statute of limitations had expired. The Court concluded that the suit was barred by the applicable statute of limitations even though plaintiff had named a "John Doe" defendant. The court further determined that Fed. R. Civ. P. 15(c) could not be used to relate the amendment back to the date of the original complaint. Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 5 of 9 6 17. Furthermore, under Puerto Rico law, the Courts cannot give extensions to serve process, when a tort action under Art. 1802 against a party is time barred5, until a final judgement is rendered, pursuant to the Direct Action Statue in Article 20.030 of the Puerto Rico Insurance Code, 26 L.P.R.A. Sec. 2003. 18. As ascertained previously, in Puerto Rico, the statute of limitations of civil actions is a question of substantive rather than procedural law. See Rodríguez v. Suzuki Motor Corp., 570 F.3d 402, 406 (1st Cir. 2009). Since this case comes before this Court under diversity jurisdiction pursuant to 28 U.S.C. § 1332(a) and the events giving rise to the action occurred in Puerto Rico, we must apply Puerto Rico’s substantive law to resolve the statute of limitations issue in dispute. See Rodríguez Narvaez v. Nazario, 895 F.2d 38, 43 (1st Cir. 1990). 19. Article 20.030 of the Puerto Rico Insurance Code, states that an injured party may bring a direct action directly against the tortfeasor's liability insurer, or against both the tortfeasor and the insurer. See, P.R. Laws Ann. tit. 26, 2003. However, although an insurer and its insured are jointly or solidarily liable under the Insurance Code, a Plaintiff must serve process on each of them separately, for one action against the insured does not interrupt the statute of limitations against the insurance company. 20. In Fraguada Bonilla v. Hosp. Aux. Mutuo, 186 D.P.R. 365 (2012), the Puerto Rico Supreme Court held, specifically, that tolling the statute of limitations as to one jointly and severally liable defendant, does NOT toll it as to all subsequent tortfeasors, and a claimant must interrupt the tolling period with relation to each separate tortfeasor within the one- 5 Art. 1868 Puerto Rico Civil Code, 31 L.P.R.A., sec. 5298 establishes a 1-year Statute of Limitations for Actions under Art. 1802. Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 6 of 9 7 year period established in Article 1868 of the Puerto Rico Civil Code, if he or she so desires to preserve the cause of action against each one of them. 21. In Santiago-Rivera v. Royal Ins. Co., 613 F. Supp. 121 (U.S. Dist. PR, 1985), the Court there discussed Art. 20.03 of the Puerto Rico Insurance Code and concluded that a plaintiff may bring suit against the insured defendant alone, but when the statute of limitations has run against the insurer, must first secure final judgment against the insured in order to recover from the insurer. See also Ruiz v. New York Dept. Stores, 146 DPR 353, 364 (1998); Ramos v. Continental Insurance Company, 493 F.2d 329, 333 (1st Cir. 1974). 22. Considering all the above, it must be concluded that in the instant case the Court never acquired personal jurisdiction over insurer Universal as an unknown party, because Plaintiff failed to serve process by publication upon the unknown insurers prior to the expiration of the statute of limitations. Thus, since the 1-year statute of limitations has expired, Plaintiff is precluded from amending the complaint to substitute a party over whom the Court lacks personal jurisdiction, and as a matter of law, such action against Universal must be dismissed under Fed. R. Civ. Proc. 12(b)(2), (5) and (6). 23. In the instant case, Plaintiff knew the real name of the “unknown” insurer Universal since the Answers to the Complaint filed on February 27, 2015 at ECF Nos. 11 and 12. This Honorable Court has specifically held that it may not be so long as to show lack of diligence or constitute a waiver by the plaintiff when failing to make a timely amendment on the complaint. See, Meléndez v. Hosp. Hermanos Meléndez, 608 F. Supp. 2d 196, 202 (DPR 2008). In Meléndez, more than one year had elapsed from the time plaintiffs knew of the insurance carrier of the defendant to the time they requested leave to amend the complaint to substitute the insurance company designated with a fictitious name in the original Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 7 of 9 8 complaint with the real name. This Honorable Court noted in Meléndez that waiting that long to amend the complaint is precisely the type of lack of diligence or waiver that the Rule 15.4 intends to punish with limitation periods. See, Meléndez v. Hosp. Hermanos Meléndez, 608 F. Supp. 2d 196, 202 (DPR 2008). WHEREFORE, Co-Defendant Universal Insurance Company, without submitting to the jurisdiction of this Honorable Court by way of special appearance, respectfully requests that the Amended Complaint be partially DISMISSED as to the action against it, pursuant to Fed. R. Civ. P. 12(b), for the Court never acquired personal jurisdiction over it before the statute of limitations expired and as a matter of law any further action against Universal must wait until judgment is entered against the insureds pursuant to Art. 20.030 of the Puerto Rico Insurance Code. RESPECTFULLY SUBMITTED. IT IS HEREBY CERTIFIED that on this same date, the foregoing was electronically filed with the Clerk of the Court using the CM/EFC system which will send notification of such filing to counsel of record. In San Juan, Puerto Rico, this 26th day of October, 2016. s/Héctor J. Ferrer Ríos HECTOR J. FERRER RIOS USDC-PR 213206 138 Ave. Winston Churchill PMB 887 San Juan, PR 00926 Tel. 787-766-9867/391-5400 Fax 787-721-3972 hecferrer@yahoo.com s/ Julio C. Cayere Quidgley JULIO C. CAYERE QUIDGLEY USDC-PR 226101 Urb. Horizons 109 Calle San Pablo Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 8 of 9 9 San Juan, PR 00926-5317 Tel. 787-460-1098/763-9393 Fax 787-763-9595 jcayere@yahoo.com Case 3:15-cv-01034-CVR Document 95 Filed 10/26/16 Page 9 of 9