Best Auto Repair Shop, Inc. v. Universal Insurance Group

United States Court of Appeals
For the First Circuit
No. 16-1549
BEST AUTO REPAIR SHOP, INC.; ELVIS MARTÍNEZ-EVANGELISTA,
Plaintiffs, Appellants,
MARÍA BETANCOURT-BORIA,
Plaintiff,
v.
UNIVERSAL INSURANCE GROUP; UNIVERSAL INSURANCE COMPANY;
CARIBBEAN ALLIANCE INSURANCE COMPANY; EASTERN AMERICA INSURANCE
AGENCY; JUANITA ORTIZ; JOHN DOE; JANE DOE,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Pedro A. Delgado-Hernández, U.S. District Judge]
Before
Howard, Chief Judge,
Torruella and Barron, Circuit Judges.
Carlos M. Sánchez La Costa, for appellants.
Juan J. Casillas-Ayala, with whom Israel Fernández-Rodríguez,
and Casillas Santiago Torres LLC were on brief, for appellees.
November 16, 2017
BARRON, Circuit Judge. Plaintiffs-Appellants -- Best
Auto Repair Shop, Inc. ("Best Auto") and Elvis Martínez-Evagelista
("Martínez") -- appeal the District Court's denial of their motion
for reconsideration of the District Court's grant of summary
judgment dismissing all of their claims. We affirm, largely on
waiver grounds.
I.
The plaintiffs1 brought suit in the United States
District Court for the District of Puerto Rico against various
insurance companies and certain of those companies' employees --
including Juanita Ortiz ("Ortiz") -- pursuant to 42 U.S.C. § 1981
and Puerto Rico law. With respect to § 1981, the suit alleges
that these defendants had unlawfully interfered with the
plaintiffs' right to "make or enforce" existing and prospective
contracts with the defendants' insureds or third-party claimants.2
1
This appeal arises from a pair of consolidated, one of
which, early on, also included María Betancourt-Boria
("Betancourt") as a plaintiff. However, finding that Betancourt's
injury was derivative of her interest in the auto repair shop, the
District Court terminated her from the case in September 2011. As
Betancourt was already dismissed from the case at all times
relevant to this appeal, our references to "the plaintiffs" refer
to Martínez and Best Auto.
242 U.S.C. § 1981 "protect[s] against impairment by
nongovernmental discrimination and impairment under color of State
law" the right of "[a]ll persons within the jurisdiction of the
United States [to] have the same right in every State and Territory
to make and enforce contracts," wherein "the term 'make and enforce
contracts' includes the making, performance, modification, and
termination of contracts, and the enjoyment of all benefits,
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Specifically, the suit alleges that these defendants had
discriminated against Martínez and his business, Best Auto, by
excluding Best Auto as a repair shop for which the insurance
companies would reimburse repairs by their insureds or third-party
claimants, because Martínez is black and Dominican. Pursuant to
the federal courts' supplemental jurisdiction, see 28 U.S.C. §
1367, the plaintiffs also brought related Puerto Rico law claims
for negligence and tortious interference with contracts.
On March 8, 2013, the defendants moved for summary
judgment with respect to all of the plaintiffs' claims. The
defendants included in their briefing an argument that the
plaintiffs' negligence claims were more properly characterized as
defamation claims and that, as defamation claims, they must be
dismissed on summary judgment.
The District Court referred the defendants' summary
judgment motions to a magistrate judge. The Magistrate Judge that
was assigned the case then issued a report and recommendation that
Ortiz's motion be denied, but that the remaining defendants' motion
be granted in part. In so deciding, the Magistrate Judge concluded
that the plaintiffs' negligence claims were more appropriately
characterized as defamation claims, which should be dismissed as
privileges, terms, and conditions of the contractual
relationship."
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time-barred, unsupported by the evidence, or for having failed to
allege that the supposedly defamatory statements were not merely
opinions for which there could be no liability.3 All parties filed
objections to the Magistrate Judge's report and recommendation,
and these objections included objections by the plaintiffs to the
characterization of their negligence claims as claims for
defamation.
On March 27, 2014, the District Court issued an order
denying Ortiz's motion for summary judgment and partially granting
the remaining defendants' motion for summary judgment, but denying
summary judgment as to: Martínez's 42 U.S.C. § 1981 claims for,
prior to February 20, 2009, interference with contracts and
interference with Martínez's ability to make contracts; Best
Auto's 42 U.S.C. § 1981 claims for, after February 20, 2009,
interference with contracts and interference with the making of
contracts; and Martínez's and Best Auto's claims for tortious
interference with contracts and negligence under Puerto Rico law.
3
The Magistrate Judge concluded that, although the defendants
contended in their summary judgment briefing that the plaintiffs'
negligence claims should be treated as defamation claims, in their
opposition to the motion for summary judgment "[p]laintiffs ma[d]e
no effort to respond to [the defendants'] . . . arguments," and
that, as the "[p]laintiffs ha[d] not given [the court] any other
indication of the basis for their negligence claims," the court
would "not do their work for them." Thus, on that basis, the
Magistrate Judge recommended granting summary judgment in the
defendants' favor, given the numerous grounds on which the
Magistrate Judge had determined that the defamation claims failed.
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With regard to the negligence claims, in particular, the District
Court explained that such claims were appropriately treated as
defamation claims, as the plaintiffs did not dispute this
characterization in their summary judgment briefing and the
Magistrate Judge had, thus, deemed the issue uncontested.
The plaintiffs and the defendants each moved for
reconsideration, with Ortiz and the other defendants filing a joint
motion for reconsideration. On March 31, 2016, the District Court
granted the defendants' motion for reconsideration. In doing so,
the District Court granted summary judgment on all the claims
against the defendants that remained after the District Court's
March 27, 2014 summary judgment ruling. The plaintiffs now appeal
this March 31, 2016 ruling granting summary judgment to the
defendants.
II.
We start with the plaintiffs' challenge to the denial of
the motion for reconsideration of the grant of summary judgment to
the defendants on the § 1981 claims. In the March 31, 2016 motion
for reconsideration order, the District Court held that the
plaintiffs failed to establish an essential element of a § 1981
action. Specifically, the District Court ruled that, even with
"[a]ll reasonable inferences . . . drawn in favor of [the
plaintiffs]," the plaintiffs' § 1981 claims failed because the
"[p]laintiffs' clients were at liberty to contract with them
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without Universal's paying for anything," and, as such, the
"plaintiffs cannot point to a prohibited interference with their
right to 'make and enforce contracts' under Section 1981."
Whatever doubts we may have about whether the District
Court's conclusion is right, the key fact for purposes of this
appeal is that the District Court provided a substantial analysis
of precedents from both our circuit and from others in support of
its conclusion. Yet, the plaintiffs on appeal do not address any
of that precedent, or even the underlying legal ruling about the
types of claims that are actionable under § 1981, in their opening
brief. See Díaz-Colón v. Fuentes-Agostini, 786 F.3d 144, 149 (1st
Cir. 2015) (quoting Rodríguez v. Municipality of San Juan, 659
F.3d 168, 175 (1st Cir. 2011)) (holding "we deem waived claims not
made" (internal quotation marks omitted)).
To be sure, faced with defendants' arguments in their
brief that the plaintiffs expressly waived the issue by failing to
raise it in their opening brief, the plaintiffs do include a short
footnote in their reply brief that appears to attempt to address
the District Court's statutory holding. But, "[o]ur precedent is
clear[] [that] we do not consider arguments for reversing a
decision of a district court when the argument is not raised in a
party’s opening brief." Sparkle Hill, Inc. v. Interstate Mat
Corp., 788 F.3d 25, 29 (1st Cir. 2015). We thus see no basis for
overturning the ruling granting summary judgment to the defendants
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on the § 1981 claims, given that the plaintiffs' federal claims
necessarily fail if the District Court is right about what § 1981
requires, and that the plaintiffs failed to challenge that
conclusion in their opening brief on appeal. We, therefore, affirm
the denial of the motion to reconsider the dismissal of the § 1981
claims.
III.
We turn then to the Puerto Rico law claims, which consist
of claims for negligence and tortious interference with contracts.
As described in our recent opinion in Wilber v. Curtis, 872 F.3d
15 (1st Cir. 2017), when all federal claims have been dismissed,
it is an abuse of discretion for a district court to retain
jurisdiction over the remaining pendent state law claims if doing
so would not serve "the interests of fairness, judicial economy,
convenience, and comity." Id. at 23 (quoting Desjardins v.
Willard, 777 F.3d 43, 45-46 (1st Cir. 2015)).
As was the case in Wilber, however, the plaintiffs ask
us to overturn the District Court's summary judgment ruling as to
the pendent claims solely on the ground that the District Court
erred in concluding that there was no genuine issue of material
fact that would preclude granting summary judgment to the
defendants on each of those claims. Furthermore, the only
arguments presented to us on appeal do not require us to resolve
any difficult issues of Puerto Rico law in order to decide if
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affirmance of the District Court's March 31, 2016 ruling is
appropriate. We thus proceed to the merits. See Wilber, 872 F.3d
at 23 (citing Disher v. Info. Res., Inc., 873 F.2d 136, 141 (7th
Cir. 1989)).
We "normally review a district court's decision to grant
or deny a motion for reconsideration for abuse of discretion."
Santiago v. Puerto Rico, 655 F.3d 61, 67 (1st Cir. 2011). But
here, as "the parties' arguments [are] directed to the underlying
substantive issue (the propriety vel non of summary judgment)
rather than the procedural issue (the desirability vel non of
reconsideration)," we review de novo the summary judgment ruling.
Id. at 67–68. In doing so, we "take the facts, along with all
reasonable inferences therefrom, in the light most favorable to
the nonmoving party," and "affirm only if the record, so viewed,
discloses 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." Id.
A.
We start with the "negligence" claims. In the District
Court's motion for reconsideration ruling, the District Court held
that the plaintiffs had not timely contested the defendants'
characterization of the negligence claims as defamation claims.
The District Court granted summary judgment dismissing the
negligence claims on the grounds that, as defamation claims, they
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were time-barred and that, in any event, the plaintiffs had failed
to prove an essential element of such claims.
On appeal, the plaintiffs' only argument for reversing
the summary judgment ruling as to the negligence claims is that
the District Court erred in characterizing them as defamation
claims. But, as the District Court found, the plaintiffs did not
contest this characterization in their opposition to the
defendants' motion for summary judgment. Given that the plaintiffs
do not make any arguments that the claims are not appropriate for
summary judgment as defamation claims, we thus affirm the grant of
summary judgment to the defendants as to the negligence claims.
See Schneider v. Local 103 I.B.E.W. Health Plan, 442 F.3d 1, 3
(1st Cir. 2006) (finding that where a party "never responded to
any of the arguments against them made by the [the other party] in
their summary judgment memo," "an issue . . . ignored at summary
judgment may be deemed waived" on appeal (internal quotation marks
omitted)).
B.
With respect to the District Court's denial of the motion
to reconsider the grant of summary judgment in favor of the
defendants as to the claims of tortious interference with
contracts, we also affirm. In ruling that the defendants were
entitled to summary judgment on the tortious interference claims,
the District Court found that for certain of the customer
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agreements with which the defendants allegedly tortiously
interfered, the alleged interference occurred at a time that makes
the claims for tortious interference time-barred. And, in their
briefing to us on appeal, the plaintiffs do not dispute the
District Court's statute of limitations ruling. That leaves, then,
only the plaintiffs' challenge to the District Court's ruling
granting the defendants summary judgment as to the tortious
interference claims that the District Court did not rule to be
time-barred.
The District Court ruled that summary judgment must be
granted to the defendants as to these remaining tortious
interference claims because the plaintiffs did not "submit
admissible evidence of enforceable contracts" with respect to
these particular claims.4 In so ruling, however, it is somewhat
unclear what the District Court was concluding. On the one hand,
the District Court's conclusion may have been that the plaintiffs
had not provided sufficient evidence from which a reasonable jury
4 Notably, some of the evidence proffered by the plaintiffs,
in the form of charts "summariz[ing] testimony" submitted pursuant
to Federal Rule of Evidence 1006 -- which permits the admission of
summary charts of documents -- was disregarded by the District
Court as failing to comply with Rule 1006. But, the plaintiffs do
not develop any argument that the District Court erred in this
respect, and, in any event, the District Court found the charts
would have been unhelpful to its enforceability determination as
they failed to include information such as "the terms of the
[alleged] contract" and if the parties "relied on an estimate as
a contract."
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could find that there were any contracts in place at all. On the
other hand, the District Court was perhaps ruling instead that the
plaintiffs had not provided sufficient evidence from which a jury
reasonably could find anything other than that, even if contracts
had been executed, they were subject to a condition or conditions
precedent -- i.e., "completion of [the defendants]'s inspection
and adjustment process" which included "[the defendants'] ultimate
inspection; a determination of whether the car could be repaired;
and how much [the defendants] would pay for the repair" -- that
had not been fulfilled at the time of the allegedly "interfer[ing]"
actions by defendants. See Terradata, Inc. v. Budget Rent-A-Car
Int'l, Inc., 218 F. Supp. 2d 101, 104-05 (D.P.R. 2002) (explaining
"[a] contract subject to a [condition precedent] remains a pre-
contract until the [condition precedent] . . . is met," and finding
no tortious interference where the condition precedent was not
met); Satellite Broad. Cable, Inc. v. Telefónica de España, 786 F.
Supp. 1089, 1095 (D.P.R. 1992), opinion adhered to as modified on
reconsideration, 807 F. Supp. 210 (D.P.R. 1992) (quoting Henna v.
Saure & Subirá, 22 P.R.R. 776, 785 (1915) aff'd, 237 F. 145 (1st
Cir. 1916)) (finding, in the case of a contract subject to a
condition precedent, no tortious interference as "it is plain that
so long as the condition is not realized[] . . . there is no
contract . . . . " (emphasis removed)). Either way, however, the
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plaintiffs provide us with no reason to overturn the grant of
summary judgment against them as to these claims.
The plaintiffs first argue that the District Court erred
by relying on Massachusetts state law rather than Puerto Rico law
in granting summary judgment as to these claims and that "under
the Civil Code of Puerto Rico, a verbal contract is binding and
valid." But the District Court did not grant summary judgment on
the ground that the contracts were not enforceable because they
were made orally. And, in any event, the District Court cited to
a First Circuit case, albeit one concerning Massachusetts law,
merely in the course of explaining the nature of a "condition
precedent." Thus, we see no error in these aspects of the District
Court's ruling.
The plaintiffs next contend that the record shows that
there is a genuine issue of disputed fact concerning whether the
oral agreements with the customers were subject to a condition
precedent in the first place. On that basis, the plaintiffs argue
that the District Court's ruling cannot be sustained. But, once
again, we do not agree.
Setting aside for the moment what the record shows
regarding the alleged contract with one of the customers, Iraida
Cardona ("Cardona"), we note that the District Court
comprehensively reviewed the record in finding that the customers'
agreements were conditioned on the completion of the defendants'
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inspection and adjustment process, including the obtaining of
authorization from the insurer to make the payments for the
repairs. The plaintiffs, however, do not identify any evidence in
the record that supports a contrary conclusion. Instead, the
plaintiffs point only to the fact that the record shows that the
plaintiffs' customers testified that they each had a "contract"
with the plaintiffs. That testimony, provided in conclusory
fashion, does not suffice to create a dispute of fact as to whether
these agreements were subject to an as-yet-unfulfilled condition
precedent. And the plaintiffs identify no evidence in the record
that suggests that the condition (or conditions) precedent
identified by the District Court had been satisfied at the time of
the alleged tortious interference with the alleged contracts.
Thus, the "contracts" testimony on which the plaintiffs rely does
not warrant reversal of the District Court's summary judgment
ruling. Cf. WHTV Broad. Corp. v. Centennial Commc'ns Corp., 460
F. Supp. 2d 297, 304 (D.P.R. 2006) (explaining that "while [a]
condition precedent is pending it can be said that the
[contractual] obligation does not exist" (internal quotation marks
omitted)); Terradata, Inc., 218 F. Supp. 2d at 104-05 (finding no
tortious interference where the condition precedent was not met).
With respect to the alleged contract with Cardona, the
plaintiffs do point out that she testified that she had a binding
agreement with Martínez (and/or Best Auto) to repair her vehicle.
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The plaintiffs also argue that the record evidence demonstrates
that this binding agreement was not contingent on an insurance
company first completing its inspection and adjustment process or
on Cardona first receiving authorization from an insurer to pay
for the repairs.
But, the defendants contend in response that the
evidence regarding the agreement with Cardona did not suffice to
establish a claim for tortious interference because the record
established that "Cardona actually repaired her car at Martínez's
shop with her own money" and that her insurance claim was never
resolved. In other words, the defendants contend that the evidence
shows that Cardona was at liberty to contract with the plaintiffs
without the defendants paying for anything and that, as a result,
there was no prohibited interference with the contract with
Cardona. The plaintiffs simply do not address this ground for
affirming the ruling below in their briefing to us, even though
the argument that the plaintiffs make would not suffice to warrant
reversal of the District Court's ruling if the defendants are right
on this score. See Díaz-Colón, 786 F.3d at 149. Accordingly,
this argument for challenging the summary judgment ruling fails as
well.
The plaintiffs' final ground for challenging the summary
judgment ruling as to the tortious interference claims relies on
Article 1072 of the Puerto Rico Civil Code, codified at Title 31
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§ 3047 of the Laws of Puerto Rico Annotated. The plaintiffs argue
that, under § 3047, the District Court necessarily erred in
granting summary judgment because, insofar as a contract is subject
to a condition precedent, that contract's condition must be "deemed
fulfilled" if the defendants "impede[d] the fulfillment of the
condition" and there is at least a genuine issue of material fact
as to whether the defendants did so impede the fulfillment of the
condition of the agreements at issue. But, § 3047 states only
that a "condition shall be considered as fulfilled when the
obligated party should voluntarily prevent its fulfilment," P.R.
Laws Ann. tit. 31, § 3047 (2017), see also Satellite Broad. Cable,
Inc., 807 F. Supp. at 212, and the plaintiffs do not allege that
the defendants were an "obligated party" with respect to a contract
between the plaintiffs and their customers.5 Nor do the plaintiffs
identify any other authority for reaching the same conclusion that
they mistakenly contend is compelled by § 3047. Thus, for this
reason, too, the plaintiffs' challenge to the summary judgment
ruling on the tortious interference claims fails.
IV.
We, therefore, affirm the District Court's summary
judgment ruling with respect to all claims.
5 The plaintiffs instead make clear the alleged contracting
parties were only Martínez and his customers, as they argue only
that the agreement of Martínez and each customer was necessary to
form each alleged contract.
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