De Conway v. Lopez

May 18, 1993 UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-2046
CARMEN FRAGOSO, a/k/a
CARMEN FRAGOSO DE CONWAY,
Plaintiff, Appellant,
v.
DR. MARIA A. LOPEZ, ET AL.,
Defendants, Appellees.
ERRATA SHEET
The opinion of the Court issued on April 5, 1993 is
corrected as follows:
On page 5, line 16 delete (1976 & Supp. 1989)
On page 7, footnote 5, line 1 change "provision" to
"language"
On page 7, footnote 5, lines 5-6 delete P.R. Laws Ann.
tit. 26, 4021(1) (Supp. 1992).
On page 10, line 7 delete (1976 & Supp. 1989)
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
No. 92-2046
CARMEN FRAGOSO, a/k/a
CARMEN FRAGOSO DE CONWAY,
Plaintiff, Appellant,
v.
DR. MARIA A. LOPEZ, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Raymond L. Acosta, U.S. District Judge]
Before
Selya, Circuit Judge,
Bownes, Senior Circuit Judge,
and Cyr, Circuit Judge.
Hector M. Alvarado-Tizol on brief for appellant.
Efren T. Irizarry-Colon and Elisa Figueroa-Baez on brief for
appellees.
Jose Luis Gonzalez Castaner on brief for Juan Antonio
Garcia, Commissioner of Insurance of the Commonwealth of Puerto
Rico.
April 5, 1993
SELYA, Circuit Judge. Plaintiff-appellant Carmen
SELYA, Circuit Judge.
Fragoso de Conway (Fragoso), a citizen of New Jersey, appeals
from an order of the district court granting summary judgment in
favor of certain defendants, including an insurer, Corporacion
Insular de Seguros (CIS), which became insolvent during the
pendency of the appeal. We now conclude (1) that there is no
compelling reason, based on either Erie R.R. Co. v. Tompkins, 304
U.S. 64 (1938), or Burford v. Sun Oil Co., 319 U.S. 315 (1943),
for us to abstain in favor of the liquidator's forum, (2) that
the appeal may proceed in the ordinary course, notwithstanding
CIS's financial plight, and (3) that appellant's arguments on the
merits are unavailing. Consequently, we affirm the judgment
below.
I. BACKGROUND
Dr. Maria A. Lopez first treated appellant's mother,
Milagros Rodriguez de Fragoso, as an outpatient. She diagnosed
Mrs. Rodriguez's condition as transient cerebrovascular ischemic
activity and referred her to Dr. Mojica for a neurological
consultation. On October 13, 1984, Mrs. Rodriguez was admitted
to Doctor's Hospital complaining of numbness in her limbs. Dr.
Lopez performed a cardiology evaluation the next day. On October
18, Mrs. Rodriguez complained of tightness in her chest. Dr.
Lopez sharply reduced the prescribed medication and ordered an
electrocardiogram. Later that evening, Mrs. Rodriguez died of
heart failure.
Plaintiff's cousin, Nilda Fragoso de Rodriguez,
3
suspected medical malpractice. In December 1984, she relayed her
suspicions to appellant. On January 16, 1985, appellant
contacted Attorney Hector Alvarado-Tizol to explore the
possibility of a suit. That same day, appellant hand-delivered a
letter to Doctor's Hospital requesting her mother's medical
records.1 Appellant then returned to New Jersey, leaving
matters in her attorney's hands.
On April 5, 1989 over four full years after her
mother's death appellant invoked diversity jurisdiction, 28
U.S.C. 1332 (1988), and sued Lopez, CIS, and several other
health-care providers in Puerto Rico's federal district court.
(CIS was joined as a defendant pursuant to Puerto Rico's direct
action statute, P.R. Laws Ann. tit. 26, 2003 (1990).)
Following a lengthy period devoted to discovery and pretrial
skirmishing, and marked by settlement of the plaintiff's
differences with other named defendants, Lopez and CIS sought
summary judgment. On July 13, 1992, the district court found the
suit to be barred by Puerto Rico's one-year statute of
limitations governing negligence actions and granted the
defendants' motion. The court thereafter denied Fragoso's motion
for reconsideration. This appeal ensued.2
II. THE REQUEST TO DISMISS THE APPEAL OR STAY PROCEEDINGS
1In her deposition, Fragoso speculated that the letter may
have been delivered during the spring of 1985. She now concedes
that it was delivered on January 16, 1985.
2When summary judgment was entered, Lopez and CIS were the
sole remaining defendants. They are, therefore, the sole
appellees.
4
On December 23, 1992, shortly after this appeal had
been assigned for hearing, appellees filed a motion relating
that, on December 21, 1992, the Puerto Rico Insurance
Commissioner (the Commissioner) had petitioned for the
liquidation of CIS; that a superior court judge, discerning a
$28,000,000 capital insufficiency, appointed the Commissioner as
liquidator of CIS under P.R. Laws Ann. tit. 26, 4004 (1976);
and that the judge had issued an order remitting all claims
against CIS to the claims process demarcated within the
liquidation proceedings.3 Appellees requested that the claim
underlying the instant appeal be so forwarded (and the appeal
dismissed), or, alternatively, that proceedings herein be stayed
pendente lite pursuant to a provision of Puerto Rico's Insurance
Code.4 We granted an interim stay of proceedings and requested
3The original order was soon amended and we refer herein to
the amended version as the Liquidation Order. Paragraph 25 of
the Liquidation Order provides that "any claims against [CIS] or
its insurers under an insurance policy or any[] other kind of
claim, be remitted to the Liquidator . . . . "
4The statute provides in pertinent part:
Judicial proceedings to which [an] insolvent
insurer is an interested party or in which
[it] is bound to represent a party in a court
of competent jurisdiction in Puerto Rico
shall be temporarily suspended for six (6)
months or that period in addition to the six
(6) months granted by a court with
jurisdiction, from the date the insolvency
was determined to permit the [liquidator] an
adequate defense of all causes pending
action.
P.R. Laws Ann. tit. 26, 3818 (Supp. 1989).
5
supplemental briefing from the parties and the Commissioner. The
briefing period having passed, we now consider appellees' and the
Commissioner's requests that we remit the underlying claim to the
liquidator's claims process or, at least, stay proceedings in
this case pending the expiration of the full cooling-off period
stipulated in the Insurance Code.
A. The Erie Doctrine.
A. The Erie Doctrine.
We start with bedrock: a state court cannot enjoin
federal proceedings. See General Atomic Co. v. Felter, 434 U.S.
12, 17 (1977); Donovan v. Dallas, 377 U.S. 408, 413 (1964).
Thus, the prohibitions contained in the Liquidation Order do not
bind this court.
The truism, however, does not end the matter. Relying
on the Rules of Decision Act, see 28 U.S.C. 1652 (1988), and
the familiar Erie doctrine, 304 U.S. at 78, the Commissioner
posits that, in the exercise of diversity jurisdiction, this
court must apply several provisions of Puerto Rico's Insurance
Code collectively requiring dismissal of the claim against CIS
and a six-month stay of the claim against Lopez. See P.R. Laws
Ann. tit. 26, 3818, 3819, 4021, 4032. We disagree.
A federal court sitting in diversity is not required
automatically to follow all particulars of a state court's
process for dispute resolution. Rather, Erie and its progeny
identify certain principles that must be used to cull wheat from
chaff. The "twin aims" animating the Erie doctrine are
"discouragement of forum-shopping and avoidance of inequitable
6
administration of the laws." Hanna v. Plumer, 380 U.S. 460, 468
(1965). These goals are intertwined with the policy that a
federal forum "should conform as near as may be in the absence
of other considerations to state rules even of form and mode"
when those rules "may bear substantially" on the outcome of the
litigation. Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S.
525, 536 (1958); see Guaranty Trust Co. v. York, 326 U.S. 99, 109
(1945); Feinstein v. Massachusetts Gen. Hosp., 643 F.2d 880, 884
(1st Cir. 1981). After giving respectful consideration to the
Commissioner's views, we believe that processing Fragoso's appeal
without regard to Puerto Rico's legal framework for dealing with
insolvent insurers will not offend the Erie rule.
For one thing, it is inconceivable that a defendant's
differential ability, depending upon whether the suit is brought
in a federal or in a commonwealth court, to invoke Puerto Rico's
procedural law anent insolvent insurers after trial and entry of
judgment will influence a litigant's choice of forum. When a
plaintiff selects a forum at the commencement of litigation, she
is unlikely to weigh the possibility that a defendant's insurer
might become insolvent years later, thus influencing the
procedural status of pending appeals. We think, too, that the
uncertainty as to how a Puerto Rico appellate court might apply
the laws in question would stymie attempted forum-shopping.
Although the Commissioner maintains that a commonwealth court
would dismiss the appeal against CIS, the forecasted result is by
no means certain. The Insurance Code directs a six-month stay
7
of all proceedings against the insolvent insurer. See P.R. Laws
Ann. tit. 26, 3818, quoted supra note 4. While the
Commissioner assumes that P.R. Laws Ann. tit. 26, 4021(1)
mandates dismissal of the appeal,5 he neither suggests how to
reconcile this provision with section 3818 nor explains how an
appellate proceeding filed against the insurer before the
issuance of a liquidation order comes within the contemplation of
section 4021. The first Erie consideration, then, does not favor
application of Puerto Rico's Insurance Code provisions to the
instant appeal.
For another thing, declining to apply the
Commonwealth's procedural laws here will not advantage Fragoso as
compared with similarly situated, non-diverse plaintiffs. Cf.
Erie, 304 U.S. at 74-75. A principal function of the Insurance
Code provisions is to allow adequate time for defense preparation
and minimize expense. Here, additional time is wholly
unnecessary; the case was fully briefed prior to the entry of the
Liquidation Order and the merits are straightforward, not
requiring oral argument. See Fed. R. App. P. 34(a) (providing
for eschewal of oral argument where "the facts and legal
arguments are adequately presented in the briefs and record and
the decisional process would not be significantly aided by oral
argument"); 1st Cir. Loc. R. 34.1(a)(2)(iii) (same). Thus,
5The language upon which the Commissioner relies states in
pertinent part that "no action at law or equity shall be brought
against the insurer or liquidator, whether in Puerto Rico or
elsewhere, nor shall any such existing actions be maintained or
further presented after issuance [of a liquidation order]."
8
refusal to remit the action against CIS to the liquidator's forum
or to stay the action against Lopez works no inequity from the
standpoint of either preparation or defense costs.
What is more, Puerto Rico's insolvent insurers'
liquidation provisions do not bear in the slightest on the
substantive outcome of the appeal. These laws provide a
procedure through which claims against the insurer can be
resolved and its assets equitably distributed. They do not
absolve the insurer of any substantive liability. There is no
basis for concluding that this court will reach a result
regarding the underlying merits of Fragoso's appeal that is any
different from the result that a Puerto Rico court would reach,
had it stayed the action, or that the liquidator's forum would
reach, had the action been forwarded there.
Thus, we reject the Commissioner's argument that the
Erie doctrine compels us to dismiss the appeal against CIS and
stay the proceeding against Lopez.
B. Relevancy of Burford Abstention.
In the alternative, the Commissioner urges that we
abstain from hearing the instant appeal under the rule of Burford
v. Sun Oil Co., 319 U.S. 315 (1943). In its most recent
discussion of Burford abstention, see New Orleans Pub. Serv.,
Inc. v. City Council of New Orleans [NOPSI], 491 U.S. 350, 360-64
(1989), the Supreme Court explained that the doctrine counsels
federal courts "sitting in equity" to refrain from interfering
with "proceedings or orders of state administrative agencies"
9
when "timely and adequate state court review is available" and:
(1) when there are 'difficult questions of
state law bearing on policy problems of
substantial public import whose importance
transcends the result in the case then at
bar'; or (2) where the 'exercise of federal
review of the question in a case and in
similar cases would be disruptive of state
efforts to establish a coherent policy with
respect to a matter of substantial public
concern.'
Id. at 361 (quoting Colorado River Water Conservation Dist. v.
United States, 424 U.S. 800, 814 (1976)). In sum, NOPSI cabins
the operation of the Burford doctrine. Post-NOPSI Burford
applies only in narrowly circumscribed situations where deference
to a state's administrative processes for the determination of
complex, policy-laden, state-law issues would serve a significant
local interest and would render federal-court review
inappropriate. Abstention will be "the exception, not the rule."
Id. at 359 (citation and internal quotation marks omitted);
accord County of Allegheny v. Frank Mashuda Co., 360 U.S. 185,
188-89 (1959).
In light of this recent characterization of Burford
abstention, we have three reasons for questioning whether the
doctrine is at all relevant here. In the first place, Burford
commands federal courts "sitting in equity" to abjure
interference with certain state fora. NOPSI, 491 U.S. at 361.
Although enjoining an action in deference to a state proceeding
is an exercise of equitable power, the case at hand is a tort
action. When, as now, the only equitable power a court is asked
to exercise constitutes the very act of abstaining under Burford,
10
we think it is highly questionable whether the court is one
"sitting in equity" to which Burford abstention might be
available.6
In the second place, NOPSI characterizes Burford
abstention as a doctrine shielding "state administrative
agencies" from federal court interference. Id. While Puerto
Rico's tailored revision of the Rehabilitation and Liquidation
Model Act, see P.R. Laws Ann. tit. 26, 4001-4054, sets in
place a "comprehensive framework for the liquidation of insolvent
insurance companies and the resolution of claims against them,"
Gonzalez v. Media Elements, Inc., 946 F.2d 157, 157 (1st Cir.
1991)(per curiam), we question whether the scheme creates a state
administrative agency, as opposed to a judicial structure,7 to
6Prior to NOPSI, the Third Circuit considered whether
Burford abstention is appropriate when a "court is not being
asked to provide equitable relief." Lac D'Amiante Du Quebec v.
American Home Assurance Co., 864 F.2d 1033, 1044 (3d Cir. 1988).
In rejecting the proposition that Burford abstention may turn on
the type of relief sought, the court noted that the Supreme
Court's discussion of Burford abstention in Colorado River
"failed to mention the relevancy of equitable relief." Id. But,
the NOPSI Court specifically described the doctrine as one
available to "a federal court sitting in equity." 491 U.S. at
361. Because we believe that this reference cannot be dismissed
as language languorously loosed, we conclude that the NOPSI
Court's distillation of Burford abstention shines a different
light on this issue. We note, moreover, that the Third Circuit,
in NOPSI's wake, seems similarly inclined. See University of Md.
v. Peat Marwick Main & Co., 923 F.2d 265, 271-72 (3d Cir. 1991).
7The estates of insolvent insurance companies are exempt
from the operation of the federal bankruptcy laws. See 11 U.S.C.
109(b)(2) (1988). Thus, the Puerto Rico Insurance Code
fashions a format for regulating insurers' insolvencies,
rehabilitations, and liquidations, centralizing proceedings into
a single court analogous to a federal bankruptcy court wherein
the Commissioner, as an agent of the court, functions as a
11
which deference under Burford may be paid. While the Insurance
Code regulates insolvent insurers doing business in Puerto Rico,
it is not at all clear that it sets up the functional equivalent
of an administrative agency.
In the third place, Burford abstention is implicated
when the federal courts are asked to interfere with state
processes by reviewing the proceedings or orders of state
administrative agencies, ergo, the requirement of "timely and
adequate state-court review." NOPSI, 491 U.S. at 361. In
Burford, for example, the Supreme Court abstained in the face of
a demand that it review a state railroad commission's order
allocating oil drilling rights. See Burford, 319 U.S. at 316-17;
see also NOPSI, 491 U.S. at 352-53 (discussing abstention in the
context of a challenge to a ratemaking order); Alabama Public
Serv. Comm'n v. Southern Ry. Co., 341 U.S. 341, 342 (1951)
(approving abstention from review of a commission order
prohibiting the discontinuance of certain local train service).
Here, however, we are not being asked to review the actions or
decisions of any state body, be it judicial or administrative.
Thus, the relevancy of Burford abstention is equally questionable
from this standpoint.
C. Applying Burford Abstention.
C. Applying Burford Abstention.
Even assuming, for argument's sake, that Burford
remains relevant to this genre of litigation, the current
situation affords no occasion for abstention. We explain
receiver. See P.R. Laws Ann. tit. 26, 4008 (1976).
12
briefly.
This appeal frames no "difficult question[] of state
law" bearing on significant public policy issues such as would
prompt abstention. NOPSI, 491 U.S. at 361 (quoting Colorado
River, 424 U.S. at 814). The action merely entails the
application of a Puerto Rico statute of limitations, frequently
interpreted in the past, to an idiocratic set of facts. Thus,
the first avenue to Burford abstention is a dead end. And,
moreover, even if difficult or unresolved questions of local law
were present and we descry none the presence of such
questions, without more, would not justify abstention by a
federal court properly sitting in diversity. See Bergeron v.
Estate of Loeb, 777 F.2d 792, 800 (1st Cir. 1985), cert. denied,
475 U.S. 1109 (1986); Construction Aggregates Corp. v. Rivera de
Vicenty, 573 F.2d 86, 91 (1st Cir. 1978).
We turn, then, to the second roadway to Burford
abstention: when federal review will disrupt "state efforts to
establish a coherent policy with respect to a matter of
substantial public concern." NOPSI, 491 U.S. at 361 (quoting
Colorado River, 424 U.S. at 814). Several circuits have
considered whether deciding cases involving insolvent insurance
companies would inflict a sufficiently profound dislocation of a
state's efforts to develop policies of substantial local concern
as to merit abstention, see, e.g., Bilden v. United Equitable
Ins. Co., 921 F.2d 822, 825-27 (8th Cir. 1990), and some have
approved abstention in such circumstances. See Barnhardt Marine
13
Ins., Inc. v. New Eng. Int'l Sur. of Am., Inc., 961 F.2d 529,
531-32 (5th Cir. 1992) (upholding abstention in an action to
recover premiums on canceled policies); Martin Ins. Agency, Inc.
v. Prudential Reinsurance Co., 910 F.2d 249, 254-55 (5th Cir.
1990) (upholding abstention in an action to retrieve reinsurance
proceeds); Lac D'Amiante Du Quebec v. American Home Assurance
Co., 864 F.2d 1033, 1042-49 (3d Cir. 1988) (finding abstention
appropriate and vacating declaratory judgment); Law Enforcement
Ins. Co. v. Corcoran, 807 F.2d 38, 43-44 (2d Cir. 1986) (finding
abstention appropriate in declaratory judgment action), cert.
denied, 481 U.S. 1017 (1987). We, ourselves, heretofore
abstained in an appeal against an insolvent insurance company so
as not to "disrupt Puerto Rico's regulatory system." Media
Elements, 946 F.2d at 157.8
Be that as it may, we do not believe, in general, that
federal court decisionmaking of the kind that exists alongside
state insurance liquidation proceedings so significantly disrupts
state regulatory frameworks to call for abstention. After NOPSI,
Burford abstention is only appropriate where federal
decisionmaking demands "significant familiarity with . . .
distinctively local regulatory facts or policies." NOPSI, 491
U.S. at 364. The doctrine's function is to allow a state to
develop, where necessary, the uniformity needed to achieve
important local interests. Deciding appeals like Fragoso's,
8In Media Elements, no one opposed the request for
abstention. We granted it by summary order, without extensive
analysis.
14
which will have at most an indirect effect on the liquidator's
claims process by potentially giving rise to an additional claim
against the insolvent insurance company, will neither
discombobulate local proceedings nor frustrate the Commonwealth's
regulatory system. Just as the federal courts would not abstain
from deciding legal issues pertaining to a party involved in a
federal bankruptcy proceeding, see, e.g., Picco v. Global Marine
Drilling Co., 900 F.2d 846, 850 (5th Cir. 1990) ("The automatic
stay of the bankruptcy court does not divest all other courts of
jurisdiction to hear every claim that is in any way related to
the bankruptcy proceeding."), we can see no reason for Burford
abstention simply because the judicial bankruptcy proceedings
happen to be before a state court.
We believe, therefore, that the circuit court cases
favoring abstention in insurer insolvency matters are suspect in
light of NOPSI.9 At any rate, they are distinguishable from
9This view is neither original nor exclusive to us. See
Erwin Chemerinsky, Federal Jurisdiction 111-12 (Supp. 1990)
(concluding that NOPSI reins in "several . . . lower court
decisions expansively interpreting Burford abstention"). One
decision specially mentioned by Professor Chemerinsky is Lac
D'Amiante, 864 F.2d 1033 a Third Circuit decision on which
Media Elements relies. See Media Elements, 946 F.2d at 157. We
agree with Professor Chemerinsky that Lac D'Amiante is no longer
good law. Burford, as explicated by the NOPSI Court, involves
the protection of "complex state administrative processes from
undue federal interference, [but] it does not require abstention
whenever there exists such a process, or even in all cases where
there is a potential for conflict with state regulatory law or
policy." NOPSI, 491 U.S. at 362 (citation and internal quotation
marks omitted); see also Chemerinsky, supra, at 112. Indeed, we
read the Third Circuit's post-NOPSI caselaw as signalling the
demise of Lac D'Amiante. See University of Md. v. Peat Marwick
Main & Co., 923 F.2d 265, 272 (3d Cir. 1991); see also Melahn v.
Pennock Ins., Inc., 965 F.2d 1497, 1505 (8th Cir. 1992)
15
the instant case for a number of reasons. First, in nearly all
of those cases, insolvency intervened before the trial court had
entered final judgment. Ordinarily, the more embryonic a case,
the more significant an interference with the state framework for
handling insurance liquidation if the federal tribunal does not
yield. A case such as Fragoso's, where a trial is complete and
solely legal questions suitable for federal appellate resolution
are pending on appeal, is a very weak candidate for abstention.
As we have remarked before, abstention serves "the interests not
only of federalism, but of comity and judicial efficiency."
Medical Malpractice Joint Underwriting Ass'n v. Pfeiffer, 832
F.2d 240, 244 (1st Cir. 1987). Once a federal court has rendered
a final judgment, it is questionable whether abstention is an
efficient or practical move. After all, the liquidator's forum
has no mechanism for reviewing a federal court decision. What
would become of the original judgment is a puzzle. In Bilden,
where the district court rendered its judgment before the
insurance company entered liquidation proceedings, see Bilden,
921 F.2d at 824, the Eighth Circuit held that an appeals court's
decision on the merits would not interfere with the
rehabilitator's control of the insurance company or with the
proper operation of the state's regulatory format. See id. at
826. It is difficult to fault so level-headed an approach.
Second, the concerns animating abstention in Media
(observing "that the Third Circuit has cast doubt on the vitality
of [Lac D'Amiante] as a result of the Supreme Court's more recent
holding in NOPSI") (citing Peat Marwick Main).
16
Elements, the one case cited supra where the Burford issue became
relevant only on appeal and the court nevertheless abstained, do
not apply here. The appeal in Media Elements involved a coverage
issue and, therefore, the court reasoned that abstention would
lessen the risk of inconsistent coverage interpretations. See
Media Elements, 946 F.2d at 157. Fragoso's appeal, however,
requires that we decide a question of law unrelated to coverage.
The case is idiocratic and fact-specific. Passing on this appeal
could not possibly impair uniformity in the interpretation of
CIS's insurance policies, nor could doing so obstruct the
adjudication of claims against CIS in the liquidator's forum.
This is a singularly important difference. See Grimes v. Crown
Life Ins. Co., 857 F.2d 699, 704 (10th Cir. 1988) (stating that
abstention is less desirable where a suit does not require the
court to determine issues which are directly relevant to the
liquidation proceeding or to state policies), cert. denied, 489
U.S. 1096 (1989). In fact, it seems more likely that processing
the appeal, with the result that the district court's judgment
will be affirmed or vacated, would help the Commissioner, for it
is totally unclear how the commonwealth forum would resolve the
appellate matter, or that it could.
The Media Elements panel also observed that compliance
with Puerto Rico's process would reduce the funds which the
insurer would have to spend on litigation. See 946 F.2d at 157.
Resolving this appeal in the ordinary course, however, would not
cost CIS money. The briefs are already filed, and, as previously
17
pointed out, see supra p.7, there is no need for oral argument.
Therefore, the concerns that may have warranted abstention in
Media Elements are not present here. We are, therefore,
comfortable in limiting Media Elements to its own facts.10
We need go no further. NOPSI makes clear that Burford
abstention requires more than a desire to avoid every
inconvenience to, or disruption of, a state's regulatory systems.
Otherwise, abstention would be proper "in any instance where a
matter was within an administrative body's jurisdiction."
Chemerinsky, supra, at 112. That cannot be the rule. It
follows, then, that the mere existence of state procedures, or
even the existence of a complex state apparatus designed to
handle a specific class of problems, does not necessarily justify
abstention. See Melahn v. Pennock Ins., Inc., 965 F.2d 1497,
1505 (8th Cir. 1992). In the final analysis, abstention here
would be inconsistent with the policies underlying the
constitutional grant of diversity jurisdiction and would render a
substantial injustice to those litigants seeking to avail
themselves of their statutory right to a federal forum. See
Allegheny County, 360 U.S. at 188 (observing that abstention "is
an extraordinary and narrow exception to the duty of a District
Court to adjudicate a controversy properly before it"). We,
10We note in passing that, while Media Elements was decided
after NOPSI, the order for abstention neither cited NOPSI nor
acknowledged its suzerainty.
18
therefore, decline the invitation to abstain.11
III. THE ENTRY OF SUMMARY JUDGMENT
The merits of the appeal need not detain us. Summary
judgment is appropriate when "the pleadings, depositions, answers
to interrogatories, and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any
material fact and that the moving party is entitled to judgment
as a matter of law." Fed. R. Civ. P. 56(c). The rule's
mechanics are well known. Once the movant demonstrates "an
absence of evidence to support the nonmoving party's case,"
Celotex Corp. v. Catrett, 477 U.S. 317, 325 (1986), the nonmovant
must establish the existence of at least one genuine issue of
material fact. See Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248 (1986). Where, as here, a motion for summary judgment
has been granted, appellate review is plenary. Hence, we must
evaluate the entire record in the ambiance most flattering to the
summary judgment loser, indulging all reasonable inferences in
her favor, in order to determine the propriety of the order. See
Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991),
cert. denied, 112 S. Ct. 2965 (1992); Griggs-Ryan v. Smith, 904
F.2d 112, 115 (1st Cir. 1990); Mack v. Great Atl. & Pac. Tea Co.,
11Neither the Commissioner nor the appellees have contended
that any idiosyncracy in Puerto Rico's direct action statute,
P.R. Laws Ann. tit. 26, 2003, compels a different result.
Because of this fact, and because of the utter lack of prejudice
to the insurer in the posture of this case, we do not reach the
question of whether a liquidator of an insolvent Puerto Rico
insurance company may have greater rights to insist upon a local
forum when the company is a party to the underlying suit solely
by virtue of the direct action statute.
19
871 F.2d 179, 181 (1st Cir. 1989).
In this diversity action, the substantive law of Puerto
Rico controls. See Erie, 304 U.S. at 78. The statute of
limitations governing negligence actions is "one year . . . from
the time the aggrieved person has knowledge of the injury." P.R.
Laws Ann. tit. 31, 5298 (1990). "Knowledge of the injury,"
under Puerto Rico law, is a term of art. It requires a showing
of both "notice of the injury" and "notice of the person who
caused it." Colon Prieto v. Geigel, 115 D.P.R. 232, 247, 15
Official Translations 313, 330 (1985) (citation omitted).
Limitations defenses may appropriately be resolved at the summary
judgment stage if reasonable minds could not differ about the
legal effect of the properly documented facts of record, taken in
the light most favorable to the nonmovant. See Kali Seafood,
Inc. v. Howe Corp., 887 F.2d 7, 9 (1st Cir. 1989); Mack, 871 F.2d
at 181.
In this case, Fragoso admittedly knew of the injury
her mother's demise and she was informed shortly thereafter of
the possible link between the injury and medical malpractice.
She treated this information as credible and acted upon it,
promptly retaining an attorney to explore that very nexus. The
question in this case, then, is whether appellant's failure to
acquire notice of the person or persons who caused the injury
tolled the limitations period.
We, like other courts, recognize that it is unfair, by
and large, to bar a tort action by the mere passage of time if a
20
plaintiff, exercising due diligence, cannot ascertain the
tortfeasor's identity. Because self-induced ignorance of the
tortfeasor's identity will not interrupt the limitations period,
"[t]he key inquiry under this prong of the `knowledge'
requirement is whether plaintiff knew or `with the degree of
diligence required by law' would have known whom to sue." Kaiser
v. Armstrong World Indus., Inc., 872 F.2d 512, 516 (1st Cir.
1989) (citations omitted). This means that an inquiring court
must ascertain whether ignorance of a fact reflects the
plaintiff's negligence, because, if it does, the limitations
clock will continue to tick. See Santiago Hodge v. Parke Davis &
Co., 833 F.2d 6, 8 (1st Cir. 1987); Colon Prieto, 115 D.P.R. at
244, 15 Official Translations at 327-28. Just as "the
limitations period will be suspended only upon a clear showing of
diligent efforts to discover the cause of the injury or death,"
Aldahonda-Rivera v. Parke Davis & Co., 882 F.2d 590, 594 (1st
Cir. 1989), so the law requires a clear showing of diligent
efforts to discover the identity of likely defendants before
suspending the prescriptive period.
Under Puerto Rico law, if a plaintiff sues in tort more
than a year after the injury took place, she bears the devoir of
persuasion with respect to proving that she lacked the knowledge
which would have enabled her to sue within the prescriptive
period. See Kaiser, 872 F.2d at 516; Santiago Hodge, 833 F.2d at
7. Here, appellant, who sued long after the year had passed,
wholly failed to carry her corollary burden. The record reflects
21
an extraordinary delay well over four years between the time
appellant first had reason to believe that someone's negligence
had caused her mother's death and the time she actually took aim
at a particular cadre of defendants.
Moreover, the delay was never credibly explained.
Although appellant argued before the district court that
difficulties in procuring the hospital record caused the delay,
her argument was based on freestanding allegations and was,
therefore, appropriately rejected. We have made it crystal clear
that, in opposing summary judgment, a litigant "may not rest upon
mere allegations in, say, an unverified complaint or lawyer's
brief, but must produce evidence which would be admissible at
trial to make out the requisite issue of material fact." Kelly
v. United States, 924 F.2d 355, 357 (1st Cir. 1991); accord
United States v. One Lot of U.S. Currency ($68,000), 927 F.2d 30,
32 (1st Cir. 1991); Garside v. Osco Drug, Inc., 895 F.2d 46, 50
(1st Cir. 1990); Mack, 871 F.2d at 181.
The only material of evidentiary weight produced in
plaintiff's opposition to the summary judgment motion was a
partial transcript of her deposition a deposition in which she
acknowledged the passage of time but failed to explain it away.
Her counsel's arguments, contained in a memorandum filed with the
district court, did not suffice to bridge this chasm; after all,
proffers that depend not on verified facts but "on arrant
speculation, optimistic surmise, or farfetched inference" cannot
forestall summary judgment. Kelly, 924 F.2d at 357. We have
22
warned, time and again, that "the decision to sit idly by and
allow the summary judgment proponent to configure the record is
likely to prove fraught with consequence." Id. at 358. So it is
here. Because the record evinced no credible basis for
concluding anything other than that the prescriptive period
expired due to some unexplained cause (not excluding
appellant's inattentiveness), summary judgment was appropriately
entered.
IV. THE REFUSAL TO RETRACT
In a last-ditch effort to salvage her case, appellant
assigns error to the lower court's denial of her motion for
reconsideration. In this instance, the motion for
reconsideration added one new ingredient to the mix: a sworn
statement from appellant's cousin, Nilda Fragoso de Rodriguez.
The affidavit relates that Nilda accompanied appellant to the
lawyer's office in December, 1984; that the lawyer wanted the
decedent's medical records so that he could have them scrutinized
by an expert; that Nilda requested the records from Doctor's
Hospital in January of 1985; that she returned twice more to the
hospital (on unspecified dates) before receiving the record on
her third trip (the date of which is also unspecified); that she
took the record to the attorney; that, later, on a date again
unspecified, she returned to the hospital to get "a certified
copy of the full record"; that, after a few telephone inquires on
unspecified dates, she received the complete record; and that she
delivered it to the lawyer the same day (date unspecified).
23
Bereft, as it is, of even approximate dates, this affidavit is
manifestly insufficient to turn the tide. It shows, at most,
desultory efforts inadequate to demonstrate diligence in
obtaining the records; and, moreover, it wholly fails to suggest
any good reason why appellant and her attorney sat complacently
by for so long a period of time.
Where, as here, a motion for summary judgment has been
granted, "the district court has substantial discretion in
deciding whether to reopen the proceedings in order to allow the
unsuccessful party to introduce new material or argue a new
theory." Mackin v. City of Boston, 969 F.2d 1273, 1279 (1st Cir.
1992), cert. denied, 113 S. Ct. 1043 (1993); accord Mariani-Giron
v. Acevedo-Ruiz, 945 F.2d 1, 3 (1st Cir. 1991); United States v.
5 Bell Rock Road, 896 F.2d 605, 611 (1st Cir. 1990); Appeal of
Sun Pipe Line Co., 831 F.2d 22, 25 (1st Cir. 1987), cert. denied,
486 U.S. 1055 (1988). The trial court's decision on such a
motion will be overturned only if the appellant convinces us that
the court committed a clear abuse of discretion. See Mackin, 969
F.2d at 1279; Sun Pipe Line, 831 F.2d at 25. Given three major
inadequacies in the motion to reconsider appellant offered no
excuse for the belated production of her cousin's affidavit; the
affidavit itself raised more questions than it answered; and
neither appellant nor her attorney, obviously the key players in
the drama, submitted affidavits explaining what had transpired or
why they had allowed it to transpire the district court was
justified in refusing to exercise its discretion to extricate
24
appellant from her self-dug hole.
The provisional stay is dissolved, the appellees'
motion for dismissal of the appeal, a statutory stay, or related
relief is denied, and the judgment below is affirmed. Costs to
appellees.
25