Gomez v. Rodriguez-Wilson

United States Court of Appeals
For the First Circuit
No. 14-1538
MARÍA GÓMEZ, ET AL.,
Plaintiffs, Appellants,
v.
DR. JORGE E. RODRÍGUEZ-WILSON, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Carmen Consuelo Cerezo, U.S. District Judge]
Before
Torruella, Lipez, and Thompson,
Circuit Judges.
Rafael E. García-Rodón, with whom Carlos A. Del Valle-Cruz
and Juan H. Saavedra-Castro, were on brief, for appellants.
Richard Schell-Asad IV, with whom Rebeca Vélez-Gómez, were on
brief, for appellee Dr. Jorge E. Rodríguez-Wilson.
April 8, 2016
TORRUELLA, Circuit Judge. Plaintiffs-Appellants María
Gómez and María Migdalia Ojeda-Morales appeal the district court's
order vacating the jury award, as well as the district court's
order declining attorneys' fees in their favor. Because we find
that the district court improperly vacated the jury award and
because we find that Defendant-Appellee Dr. Jorge E. Rodríguez-
Wilson ("Dr. Rodríguez") engaged in obstinate conduct during
trial, we must vacate the district court's ruling and remand this
case to the district court.
I. Background
Mr. Enrique Ojeda-Morales ("Mr. Ojeda") injured his knee
while driving and was referred to Dr. Rodríguez at Doctors' Center
Hospital in San Juan, Puerto Rico. On November 19, 2008,
Dr. Rodríguez performed surgery on Mr. Ojeda's right knee. After
the surgery, Mr. Ojeda's condition did not improve and his leg
began to turn purple. Mr. Ojeda remained in Doctors' Center
Hospital in San Juan, Puerto Rico, under the care of Dr. Roberto
Ruiz-López ("Dr. Ruiz"). Subsequently, Mr. Ojeda was transferred
to Doctors' Center Hospital in Manatí, Puerto Rico, where portions
of his right leg were amputated on two separate occasions.
However, Mr. Ojeda's condition continued to deteriorate and he
passed away while at Doctors' Center Hospital in Manatí.
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After Mr. Ojeda's death, his widow, María Gómez, and his
sister, María Migdalia Ojeda-Morales, (collectively "Appellants")
filed suit against Doctors' Center Hospital San Juan, Inc.;
Doctors' Center Hospital, Inc.; Dr. Rodríguez; and Dr. Ruiz
alleging that Mr. Ojeda perished as a result of their negligent
care.1
The parties entered into a confidential settlement
agreement. As a result, the district court dismissed the suit
without the imposition of costs or attorneys' fees.
However, Dr. Rodríguez failed to comply with the
settlement agreement when he did not deposit his share with the
district court. According to the terms of the settlement
agreement, Dr. Rodríguez's failure to comply rendered the entire
agreement null and void. Doctors' Center Hospital San Juan, Inc.
and Doctors' Center Hospital, Inc., entered into a second
settlement agreement with Appellants. Similarly, Dr. Ruiz also
entered into a second settlement agreement with Appellants. Both
settlement agreements released Doctors' Center Hospital San Juan,
Inc.; Doctors' Center Hospital, Inc.; and Dr. Ruiz (collectively
the "settling parties") of any and all liability. Importantly,
1 Appellants named other entities related to Doctors' Center
Hospital in their suit, but ultimately settled with Doctors' Center
Hospital San Juan, Inc. and Doctors' Center Hospital, Inc.
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the settlement agreements clarified that the releases did not apply
to any non-settling co-defendants and that the agreements did not
constitute an admission of liability. Further, the settlement
agreements made clear that should the settling defendants be found
responsible for a percentage of fault, Appellants agreed to
indemnify and exonerate them. Lastly, the settlement agreements
clearly severed any joint and several liability amongst the parties
and stated that there may not be any "leveling" amongst the
parties. Appellants received a total of $700,000 from their
settlement with the settling parties.
The district court dismissed the settling parties from
the case and Dr. Rodríguez remained as the sole defendant.
Dr. Rodríguez proceeded to trial and a jury determined that his
negligent care was the proximate cause of Mr. Ojeda's death and
awarded Appellants a total of $475,000. Accordingly, the district
court issued a judgment in favor of Appellants.
Dr. Rodríguez sought to alter the judgment on the ground
that the jury's damages award should be offset against the
settlement amounts. In other words, Dr. Rodríguez sought to offset
the judgment of $475,000 against the $700,000 that Appellants
received from the settling parties. The district court granted
Dr. Rodríguez's request and vacated the jury award.
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The district court also refused the Appellants' request
for attorneys' fees due to Dr. Rodríguez's obstinate conduct, as
permitted by Puerto Rico law.2 Notably, the district court did
not provide any reasoning to support its conclusion that
Dr. Rodríguez was not obstinate. This timely appeal followed.
II. Analysis
A. Offset of Jury Award
Appellants posit that the district court erred when it
offset the jury verdict against Dr. Rodríguez by the amount that
Appellants obtained from the settling parties. We review a
district court's interpretation of state law de novo. Gargano v.
Liberty Int'l Underwriters, Inc., 572 F.3d 45, 49 (1st Cir. 2009);
Villarini–García v. Hosp. del Maestro, 112 F.3d 5, 7 (1st Cir.
1997).
In Villarini–García, we found that the Supreme Court of
Puerto Rico had not spoken as to whether a jury award secured
against one defendant should be offset by a settlement payment
made by another party, allegedly vicariously liable for the same
injury. 112 F.3d at 7-8. In the absence of controlling state
2 Appellants contended that Dr. Rodríguez was obstinate when he:
(1) failed to honor the original settlement agreement; (2) deprived
the Appellants of their original trial date; (3) forced Appellants
to engage in an unnecessary trial; (4) behaved smugly towards the
court during trial; and (5) refused to accept the possibility that
he acted negligently.
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law, we interpreted Puerto Rico law as favoring dollar-for-dollar
setoff in the vicarious liability context. Id.; see also Río Mar
Assocs., LP, SE v. UHS of P.R., Inc., 522 F.3d 159, 166 (1st Cir.
2008).
Offsetting a damages award by the settlement amount is
rooted in "the principle that no one should or may unjustly enrich
himself by receiving double compensation for the same accident."
Villarini–García, 112 F.3d at 8 (citing Robles v. Superior Court,
85 P.R.R. 640, 647 (P.R. 1962)). We have repeatedly stated that
it makes sense to require an offset in those cases where both the
settling and non-settling tortfeasors are liable for the
plaintiff's injury. Portugués–Santana v. Rekomdiv Int'l, Inc.,
725 F.3d 17, 27 (1st Cir. 2013); Río Mar Assocs., LP, SE, 522 F.3d
at 165. However, we held in Río Mar that Puerto Rico law requires
a proportionate offset in the joint tortfeasor or successive
tortfeasor context. 522 F.3d at 167 (citing Szendrey v. Hospicare,
158 D.P.R. 648, 2003 WL 751582 (P.R.2003)).
After our decision in Villarini–García, the Supreme
Court of Puerto Rico has made clear that when a plaintiff settles
and releases a joint tortfeasor from liability, the remaining joint
tortfeasors are not released from liability unless the settlement
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agreement clearly states so. Sagardía de Jesús v. Hosp. Auxilio
Mutuo, 177 D.P.R. 484 (P.R. 2009) (citations omitted).3
Offset may be proper if the plaintiff liberated the
settling tortfeasor from all liability and the settling tortfeasor
accepted responsibility or if the court makes a determination as
to the settling tortfeasor's share of responsibility.4 However,
if the settling tortfeasor is not adjudged any share of
responsibility then there may not be an offset. Id.
In Sagardía de Jesús, the plaintiffs sued several
doctors, as well as the hospital that employed them, alleging
negligent care, which resulted in the death of their child. Some
of the doctors named in the suit settled with the plaintiffs. Id.
The settlement agreement made clear that the settling doctors did
not accept any responsibility for the alleged damages. Id.
Because the plaintiffs subrogated themselves in the settling
3 Because the official English translation of this case does not
contain internal page numbers, we cannot include pin-point
citation references.
4 When the settling tortfeasor accepts responsibility or is
adjudged a percentage of responsibility, the plaintiff subrogates
himself in the settling tortfeasor's position. Because the
settling tortfeasor is liberated from all responsibility, the non-
settling tortfeasors may not seek contribution against the
settling tortfeasor. As a result, a proportionate setoff in which
the portion of responsibility attributed to the settling
tortfeasor is deducted from an award against the non-settling
torfeasor is proper in order to prevent unjust enrichment. Id.
n.17 (citing Szendrey v. Hospicare, 158 D.P.R. 648 (P.R. 2003)).
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doctors' position, offset would have been proper if the settling
doctors were later adjudged a percentage of responsibility. Id.
The trial court allowed the non-settling tortfeasors to present
evidence regarding the settling tortfeasors' percentage of
responsibility. Id. The non-settling defendants appear to have
failed to present such evidence. Id. Nonetheless, the non-
settling tortfeasors submitted a post-judgment motion asking the
trial court to determine the settling tortfeasors' percentage of
responsibility, which the trial court denied. Id. The Supreme
Court of Puerto Rico concluded that because the trial court made
no affirmative finding regarding the apportionment of fault,
offset was improper.5
After a careful reading of Supreme Court's opinion, we
understand that the Puerto Rico Supreme Court's determination
hinged on the conclusion that, in failing to present evidence
regarding the settling tortfeasors' degree of responsibility, the
non-settling tortfeasors waived their argument as to the need to
apportion responsibility. Thus, in the absence of such a
determination, there could be no proportional offset.
5 We note former Chief Justice Hernández Denton's vigorous dissent
in which he argued that the case should be remanded to the trial
court so that a finding as to the responsibility of the non-
settling tortfeasors could be made. Id. (Hernández Denton, C.J.,
concurring in part and dissenting in part).
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Here, Dr. Rodríguez was found liable for all of the
plaintiffs' harm valued at $475,000. The settling parties did not
accept responsibility for the alleged tort and the jury never
apportioned responsibility for plaintiffs' damages. Had the jury
determined that Dr. Rodríguez was responsible for less than 100
percent of plaintiffs' damages, and that the remainder was fairly
attributable to a settling co-defendant, Dr. Rodríguez would have
only had to pay the percentage of the $475,000 for which he was
fairly responsible.6 Id.; see also Río Mar, 522 F.3d at 166.
However, Dr. Rodríguez failed to ask the district court
to instruct the jury to apportion responsibility. Nor did he ask
for a proportional offset of his damages award below. Thus, in
similar fashion to the non-settling defendants in Sagardía de
Jesús, Dr. Rodríguez waived his argument that he is entitled to a
proportional offset. Moreover, Dr. Rodríguez also failed to
address the issue of proportional offset before this court, even
after Appellants argued it in their opening brief. As a result,
any argument that he is entitled to offset has been waived.
6 However, the jury's determination that a settling co-defendant
was responsible for a portion of the damages would not be binding
on the co-defendant because the plaintiffs already discharged
their claims against them and indemnified them against any future
contribution. See Sagardía de Jesús, 177 D.P.R. 484.
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Because Sagardía de Jesús establishes that proportional
offsets apply in cases such as this one, we conclude that the
district court misapplied Puerto Rico law when it implemented a
dollar-for-dollar offset. Furthermore, Dr. Rodríguez waived his
right to seek a proportional reduction in the damages award and no
such reduction may be made in this case.
We therefore conclude that it is necessary to vacate the
district court's decision and remand so that Appellants may receive
the amount that the jury determined in their favor.
B. Obstinacy
Appellants also dispute the district court's decision to
refuse a grant of attorneys' fees in light of Dr. Rodríguez's
obstinate conduct. "In a diversity case in which the substantive
law of Puerto Rico supplies the basis of decision, the federal
court must give effect to Rules 44.1(d) and 44.3(b) of the Puerto
Rico Rules of Civil Procedure." Dopp v. Pritzker, 38 F.3d 1239,
1252 (1st Cir. 1994). Because these rules speak in imperatives,
the imposition of attorneys' fees and prejudgment interest is
obligatory once a threshold finding brings the rules into play.
Id.
"[A] losing party who has been obstinate during the
course of a lawsuit can be held liable for prejudgment interest
(if a money judgment has eventuated) and for its adversary's
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attorneys' fees." De León López v. Corporación Insular de Seguros,
931 F.2d 116, 126 (1st Cir. 1991) (internal quotations omitted);
see also P.R. Laws Ann. tit. 32, App. III, Rule 44.1(d); P.R. Laws
Ann. tit. 32, App. III, Rule 44.3(b).
The purpose of these rules is to penalize "a losing party
that because of his stubbornness, obstinacy, rashness, and
insistent frivolous attitude has forced the other party to
needlessly assume the pains, costs, efforts, and inconveniences of
a litigation." Fernández v. San Juan Cement Co., Inc., 18 P.R.
Offic. Trans. 823, 830 (P.R. 1987) (citation omitted).
In order to determine if a party has been obstinate, we
must determine whether a litigant has been "unreasonably adamant
or stubbornly litigious, beyond the acceptable demands of the
litigation, thereby wasting time and causing the court and the
other litigants unnecessary expense and delay." De León López,
931 F.2d at 126 (citing La Playa Santa Marina, Inc. v. Chris–Craft
Corp., 597 F.2d 1, 7 (1st Cir. 1979)).
We review the district court's obstinacy findings for
abuse of discretion. Id. A court "abuses its discretion when a
relevant factor of significant weight is overlooked," an "improper
factor is accorded significant weight," or a district court
"considers the appropriate mix of factors, but commits palpable
error in calibrating" its decision. Dopp, 38 F.3d at 1253
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(citations omitted). "Though abuse of discretion is a relatively
relaxed standard of review, it is a standard nonetheless, and the
court of appeals will interject itself if the trial court does not
meet its measure." Id.
Examples of obstinate conduct include a defendant's: (1)
denial of total liability only to later accept responsibility; (2)
raising undue defenses; (3) denial of all liability when only the
amount of damages sought is contested; and (4) denial of a fact
that he knows to be true. Correa v. Cruisers, a Div. of KCS
Intern., Inc., 298 F.3d 13, 31 (1st Cir. 2002) (citing Fernández,
18 P.R. Offic. Trans. 823, 830-31 (P.R. 1987)). In Fajardo
Shopping Center, S.E. v. Sun Alliance Ins. Co. of Puerto Rico,
Inc., 167 F.3d 1, 15 (1st Cir. 1999), we held that the district
court's finding of obstinacy was adequately supported by the
defendant's failure to timely submit names of candidates for
appointment as special master, a barrage of unwarranted
allegations regarding the special master's appointment, the
defendant's unsubstantiated allegations regarding the special
master's findings, the defendant's uncalled for allegations that
the special master was unqualified, and the defendant's refusal to
participate in the discovery process conducted by the special
master. Moreover, "Puerto Rico courts have previously imposed
obstinacy-based attorneys' fees on insurance companies that
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unreasonably refuse to settle out of court claims." Id. at 15-16
(citing Morales v. Automatic Vending Service, Inc., 3 P.R. Offic.
Trans. 390 (P.R. 1975)).
Notably, obstinacy is to be judged in light of the
overall circumstances of the particular case. See Dopp, 38 F.3d
at 1253.
Appellants contend that the district court should have
found Dr. Rodríguez to be obstinate. Appellants emphasize that
the parties, including Dr. Rodríguez, voluntarily entered into the
initial settlement agreement, which resulted in the district
court's dismissal of the suit. However, Dr. Rodríguez reneged on
the settlement agreement by not depositing the amount to which he
had agreed.
The record reveals that Dr. Rodríguez did renege on the
settlement agreement and that Dr. Rodríguez requested an extension
of time of twenty days to deposit his share of the settlement.
Despite his request, Dr. Rodríguez failed to deposit his share
during the twenty-day window he requested. 7 Nonetheless, the
district court provided Dr. Rodríguez with additional time to
7 The district court did not grant Dr. Rodríguez's motion for an
extension of time. However, the district court noted that his
motion for an extension of time had become moot since Dr. Rodríguez
did not deposit the settlement amount within the time frame he
requested in his motion.
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deposit his share of the settlement amount in light of the district
court's congested trial calendar. Despite the extension of time,
Dr. Rodríguez again failed to deposit the settlement amount. In
light of Dr. Rodríguez's repeated failures to comply with the
settlement agreement, Appellants requested an expedited trial
date, which the district court granted.
Subsequently, the district court set a final settlement
conference in an effort to revisit the settlement. The district
court ordered Dr. Rodríguez to personally appear at the settlement
conference. Minutes before the settlement conference was to begin,
Dr. Rodríguez e-mailed his attorney and stated that he would not
attend because he had to tend to a patient in the emergency room.
Importantly, Dr. Rodríguez was supposed to be present in the
courtroom at the time that he e-mailed his attorney. The district
court found Dr. Rodríguez's excuse to be unacceptable and noted
that it would proceed to trial.
The district court concluded that Dr. Rodríguez was not
obstinate during the course of litigation. However, the district
court did not express any rationale for its decision. We fail to
see how the district court concluded that Dr. Rodríguez was not
obstinate in light of the particulars of this case. Here,
Dr. Rodríguez: (1) reneged on his agreement to settle and nullified
the initial settlement agreement as to all parties; (2) failed to
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comply with the settlement agreement during the twenty-day
extension of time he requested; (3) failed to comply with the
settlement agreement during the district court's additional
extension of time; and (4) failed to appear before the district
court for a final settlement conference.8 Dr. Rodríguez's behavior
stubbornly prolonged the life of this dispute, causing Appellants
the inconvenience and expense of continuing to trial after reaching
a settlement. Further, Dr. Rodríguez also victimized the settling
parties in this case by forcing them to continue the litigation
and enter into a second settlement.
In sum, Dr. Rodríguez engaged in wholly unacceptable
dilatory tactics that nullified the first settlement agreement and
forced the district court to set aside the judgment dismissing the
case. Dr. Rodríguez's behavior constituted a flagrant disregard
for other litigants and the court, which forced Appellants to incur
additional litigation costs and proceed to trial after the case
had been dismissed. Thus, we conclude that Dr. Rodríguez was
patently obstinate and find that the district court abused its
discretion.
8 Appellants also allege that Dr. Rodríguez's failure to call any
witnesses or settling defendants, as well as his exclusive reliance
on the medical record constituted obstinate conduct. Because
Dr. Rodríguez's pre-trial conduct was so egregious that it
independently supports a finding of obstinacy, we do not reach his
conduct during trial.
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III. Conclusion
Accordingly, we vacate and remand for further
proceedings consistent with this opinion. Costs are awarded to
Appellants.
Vacated and Remanded.
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