Rivera-Carrasquillo v. Calderon-Lozano , 812 F.3d 213 ( 2016 )

United States Court of Appeals
For the First Circuit
No. 14-1047
ÁNGELA RIVERA-CARRASQUILLO; JOSÉ HERNÁNDEZ-QUIÑONES; CONJUGAL
PARTNERSHIP HERNÁNDEZ-RIVERA,
Plaintiffs, Appellees,
v.
CENTRO ECUESTRE MADRIGAL, INC., d/b/a Hacienda Madrigal;
INTEGRAND ASSURANCE COMPANY; PASIÓN ECUESTRE, INC.; GERARDO
CALDERÓN-LOZANO,
Defendants, Appellants,
FLORENCIO BERRÍOS-CASTRODAD; IRMA SARA CASILLAS; AGRO
MONTELLANO, INC., CRIADERO LA GLORIA, INC.; EDGARDO VÉLEZ;
RESTAURANTE EL ESTRIBO; CONJUGAL PARTNERSHIP BERRÍOS-CASILLAS,
Defendants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Torruella, Lynch, and Thompson,
Circuit Judges.
Eduardo Cobian-Roig, with whom José R. Dávila-Acevedo and
Cobian & Bonilla, P.S.C., were on brief, for appellants.
José L. Ubarri, with whom David W. Román and Ubarri & Román
Law Office were on brief, for appellees.
January 25, 2016
THOMPSON, Circuit Judge. Spending time astride an
animal as magnificent, spirited, and powerful as a horse can be
risky business. Unfortunately, Ángela Rivera-Carrasquillo
experienced this first-hand when she was thrown from a horse in
the midst of a guided ride she and her husband, José Hernández-
Quiñones, were taking at a ranch outside San Juan, Puerto Rico.
Rivera suffered some pretty significant injuries in her
fall, so she and her husband1 filed suit, and they ultimately
secured a jury verdict in their favor at the Puerto Rico federal
district court. In this Court, the appealing defendants say the
district court erred in refusing either to grant them judgment as
a matter of law or, failing that, to submit the question of whether
the plaintiffs' suit is time-barred to the jury. They also argue
that certain parties may not be held liable for the negligence of
the company who rented the horse to Rivera and put on the tour.
After careful review of the at-times-confusing trial
record and counsels' appellate arguments, we are unable to discern
the district court's reasons for its rulings. Because "we deem
this a case where we feel we need the reasoning of the district
court," Anderson v. Boston Sch. Comm., 105 F.3d 762, 764 (1st Cir.
1997), we remand for the district court to explain its decision
1
Since we are focused on what happened at trial, we'll simply
call them the "plaintiffs." Similarly, we'll refer to any party
that was a defendant in the district court as a defendant here.
- 3 -
with respect to the statute of limitations defense and articulate
the ground(s) on which two of the defendants are liable for
Rivera's injuries. And given our inability to parse what happened
below from the limited record submitted on appeal (which keeps us
from figuring out exactly what we should be reviewing and what
standard of review we should apply), we necessarily explain in
considerable detail just why we think remand is necessary.
STATUTE OF LIMITATIONS OVERVIEW
We readily acknowledge that, ordinarily, it makes the
most sense to begin our discussion by describing what happened and
how this case got here. But this particular appeal hinges, to a
large degree, on when Puerto Rico's statute of limitations began
ticking on the plaintiffs' claims. And the parties,
unsurprisingly, have different views about this. None of their
arguments will make sense -- and the reader won't know what's
important in our discussion of the facts underlying this case --
unless we start with a general overview of Puerto Rico's statute
of limitations.
Puerto Rico's statute of limitations2 for tort actions
like this one is one year. P.R. Laws Ann. tit. 31, § 5298(a)(2).
2 Because this is a diversity case, Puerto Rico's substantive
law controls. See Alejandro-Ortiz v. P.R. Elec. Power Auth., 756
F.3d 23, 26-27 (1st Cir. 2014) (recognizing that Puerto Rico's
statute of limitations "is a substantive and not a procedural
matter," and so we must apply it in diversity cases).
- 4 -
A claim filed after time runs out is barred, regardless of its
merit. Much of the controversy here revolves around exactly when
that one-year period began.
The one-year clock begins ticking "from the time the
aggrieved person had knowledge" of the existence of her claim.
Id.; see also Rodríguez-Surís v. Montesinos, 123 F.3d 10, 13 (1st
Cir. 1997). To have "knowledge" that she has a claim -- thereby
triggering the countdown -- a person needs to be aware not only
that she has been injured, she also needs to know who is (or may
be) responsible for that injury. See Rodríguez-Surís, 123 F.3d at
13-14 (recognizing that a plaintiff must have an "awareness of the
existence of an injury" and knowledge of the injury's "author"
before the statute of limitations begins to run).
Puerto Rico's Supreme Court recognizes two types of
"knowledge" as sufficient to start the clock. First, a plaintiff
may have "actual knowledge of both the injury and of the identity
of the person who caused it." Alejandro-Ortiz, 756 F.3d at 27;
see also Rodríguez-Surís, 123 F.3d at 13-14. The one-year period
begins to run on the date a plaintiff gains this knowledge. See
Alejandro-Ortiz, 756 F.3d at 27.
Alternatively, a plaintiff "is deemed to be on notice of
her cause of action if she is aware of certain facts that, with
the exercise of due diligence, should lead her to acquire actual
knowledge of her cause of action." Id. at 27. The test for this
- 5 -
so-called "deemed knowledge" is an objective one. Id. Under
Puerto Rico law, deemed knowledge "is essentially parlance for the
discovery rule, which stands for the proposition that '[t]he one-
year [statute of limitations] does not begin to run until the
plaintiff possesses, or with due diligence would possess,
information sufficient to permit suit.'" Id. (alterations in
original) (quoting Villarini-García v. Hosp. Del Maestro, Inc., 8
F.3d 81, 84 (1st Cir. 1993)). In other words, the statute of
limitations begins running at the time a reasonably diligent person
would discover sufficient facts to allow her to realize that she'd
been injured and to identify the party responsible for that injury.
The rationale being, of course, that once a plaintiff comes into
such knowledge, she can file suit against the tortfeasor.3
Determining the date on which a diligent plaintiff would
have learned enough to allow her to file suit presents a question
of fact that may be submitted to the jury in an appropriate case.
Espada v. Lugo, 312 F.3d 1, 4-5 (1st Cir. 2002) (concluding from
3 The Puerto Rico Supreme Court has recognized an exception
to a plaintiff's actual or deemed knowledge triggering the one-
year limitations period: "[w]here the tortfeasor, by way of
assurances and representations, persuades the plaintiff to refrain
from filing suit, or otherwise conceals from the plaintiff the
facts necessary for her to acquire knowledge, the statute of
limitations will be tolled." Alejandro-Ortiz, 756 F.3d at 27
(citing Rodríguez-Surís, 123 F.3d at 16). It is, however, "only
the assurances of the tortfeasor, and not those of a third party,"
that can lead to such tolling. Id. at 29. Neither party invokes
this principle of Puerto Rico law, so we need not mention it again.
- 6 -
the evidence in the record that a jury could properly find the
plaintiff had been diligent in investigating the cause of her
injury); Villarini-García, 8 F.3d at 86 ("[W]hether a plaintiff
has exercised reasonable diligence is usually a jury question."
(quoting Bohus v. Beloff, 950 F.2d 919, 925 (3d Cir. 1991))); see
also id. at 87 ("[E]ven where no raw facts are in dispute, the
issues of due diligence and adequate knowledge are still ones for
the jury so long as the outcome is within the range where
reasonable men and women can differ.").
Generally speaking, the statute of limitations is an
affirmative defense with the defendant bearing the burden of
establishing that a claim against it is time-barred. Asociación
de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio
v. Juarbe-Jiménez, 659 F.3d 42, 50 n.10 (1st Cir. 2011). But a
plaintiff who, like Rivera, sues more than one year after the date
of injury "bears the burden of proving that she lacked the
requisite 'knowledge' at the relevant times." Alejandro-Ortiz,
756 F.3d at 27 (quoting Hodge v. Parke Davis & Co., 833 F.2d 6, 7
(1st Cir. 1987)). Put a little differently, to avoid having her
claim barred as untimely, the plaintiff must show (perhaps by
convincing a jury) that despite her diligence in pursuing her legal
rights, she did not gain enough knowledge to bring suit until
sometime after the date of her injury. Such a showing will result
- 7 -
in the one-year clock beginning to tick on some date after the
injury.4
With these basic principles in hand, we now turn to what
happened to Rivera and the facts relevant to when the statute of
limitations began to run. Except for a couple instances (which
we'll point out as we go along), these facts are not contested.
Rather, their legal consequence is what's at stake.
BACKGROUND
1. The Accident and the Ranch
Rivera was hurt on July 4, 2009, when she was thrown
from a rented horse she was riding as part of a guided tour on
4 Because our summary of Puerto Rico's statute of limitations
law is sufficient for us to decide the appeal before us, we have
not given an exhaustive description of it. Indeed, Puerto Rico
law sets forth several other mechanisms by which the one-year
period may be tolled, and we address these only to the extent
necessary to decide this appeal. We also note that, according to
a certified translation of a Puerto Rico Supreme Court opinion
submitted by the parties, approximately two months before the
plaintiffs filed their complaint in the federal district court,
the Puerto Rico Supreme Court overruled longstanding state law
that automatically tolled the statute of limitations against all
joint tortfeasors provided that suit was timely brought against at
least one of them. See Fraguada Bonilla v. Hosp. Aux. Mutuo, 186
D.P.R. 365 (P.R. 2012). (And we note that since "Puerto Rico is
a state for diversity-jurisdiction purposes," Rodríguez v. Señor
Frog's de la Isla, Inc., 642 F.3d 28, 32 (1st Cir. 2011), our
reference to "state law" is appropriate in this diversity case.)
According to the parties' certified translation, henceforth "the
statute of limitations must be tolled separately for each joint
tortfeasor," in light of the Puerto Rico Supreme Court's holding
that "the timely filing of a complaint against an alleged joint
tortfeasor does not toll the statute of limitations against the
rest of the alleged joint tortfeasors." Fraguada Bonilla, 186
D.P.R. at 389 (certified translation at 8).
- 8 -
property owned by Florencio Berríos ("Berríos"). Berríos used the
land as a ranch, or farm, which he operated through his own
corporation, Centro Ecuestre Madrigal, Inc. ("Madrigal, Inc.").5
But, as it turns out, Madrigal, Inc. did not own the horse Rivera
was riding, nor did it (or any of its employees) own the horse-
rental business or conduct the tour she'd been on. Rather, a
completely separate company owned by Gerardo Calderón ("Calderón")
-- Pasión Ecuestre, Inc. ("Pasión") -- owned the horse Rivera
rented, and it put on the tour as part of its horse rental business
conducted from Berríos's property.
Pasión operated its business pursuant to a five-year
lease (effective June 15, 2007 through June 13, 2012) with
Madrigal, Inc.6 The lease indicated that Pasión was allowed to
use Madrigal, Inc.'s premises to "keep its saddle horses for rent
by the general public." In addition to payment of monthly rent,
the lease stipulated that "[a]ll liability waivers used by [Pasión]
when renting horses must clearly and precisely state that
[Madrigal, Inc.] has no relationship with or obligation to
5
Madrigal, Inc. used the name "Hacienda Madrigal" as its
"doing business as" identity. To keep things clear, we'll simply
refer to the business as Madrigal, Inc.
6
With respect to that lease, Madrigal, Inc. was "represented
by its President, [Berríos]," who signed on the corporation's
behalf. The lease does not indicate that Berríos signed in his
personal capacity.
- 9 -
[Pasión], and furthermore that [Madrigal, Inc.] is released from
any liability to [Pasión's] customers."
Rivera had gone to the ranch with her husband and a
family friend after seeing advertisements for horse riding at
Madrigal, Inc.'s farm. This friend apparently wanted the outing
to be his treat, and so he paid for it on his credit card. Before
setting out on her ride, Rivera signed a written liability release
("Release") agreeing that neither Madrigal, Inc. nor Pasión would
be liable in the event she suffered any injury.7
Two of Pasión's employees acted as the group's guides.
One rode at the front to lead the way, and the other brought up
the rear. At some point during the ride, the rear guide rode
quickly from the back to the front of the line. In doing so, he
7 The document purported to serve as a release of all claims
against more than just these two companies, as it also listed their
"officers, directors, managers, agents and representatives in
their individual and corporate capacities." Here's the legalese:
I, Angela Rivera, of legal age, on my own
behalf and on behalf of any conjugal
partnership, freely, consciously and
voluntarily release Hacienda Madrigal, Centro
Ecuestre Madrigal, Inc., Pasión Ecuestre, Inc.
and its officers, directors, managers, agents
and representatives in their individual and
corporate capacities and their successors and
subsidiaries, fully and absolutely from any
liability directly or indirectly related to
recreational or any other kind of activities
carried out, sponsored, held, performed or
promoted in any way by myself or any minor in
my care at Hacienda Madrigal . . . .
- 10 -
passed close to Rivera's horse, which spooked. Rivera was thrown
from her horse after she proved unable to maintain control of the
animal.
This appeal, at least with respect to Pasión (and to a
lesser extent, Calderón), is not primarily about the jury's finding
of liability.8 The parties, rather, have focused on Pasión's and
Calderón's claims that Rivera failed to sue the right parties in
time and, therefore, the statute of limitations bars her and her
husband's claims. So before going further, we need to discuss
what else was going on at Madrigal, Inc.'s property in 2009 and
lay out the cast of characters important to the legal analysis to
come.
On the date of Rivera's fall, Pasión was not the only
horse-based business at Madrigal, Inc.'s property. A second
corporation, Criadero La Gloria (owned and operated by Edgardo
Vélez ("Vélez")), leased land and 108 stables there. Criadero La
Gloria provided boarding services for off-property horse owners.
Its clients would come to Madrigal, Inc. to ride their horses and
use the ranch's facilities. Like Pasión, this company conducted
8
Madrigal, Inc. and Calderón do raise arguments that they
are separate and distinct from Pasión and, therefore, are not
liable for the negligence of Pasión's employees. Since the
majority of the parties' arguments on appeal focus on the statute
of limitations issue, we'll deal with that first. Once we take
care of that, we'll circle back and get into these other grounds
of appeal.
- 11 -
business pursuant to a lease. The parties to this lease, dated
June 1, 2009, were Vélez, Criadero La Gloria, Berríos (the property
owner), and another of Berríos's companies, Agro Montellano, Inc.9
The lease indicated that Criadero La Gloria was leasing the land
and stables (along with some other facilities) in order to
"[m]anage a stable leasing business for horses."
Thus, when Rivera took her tumble on July 4, 2009,
Criadero La Gloria's horse boarding business had no interest at
all in Pasión's horseback rental business. Also, since Pasión
owned its own horses, Pasión did not rent out any of the ones
boarded in Criadero La Gloria's 108 stables.
In the late summer or early fall of 2009, Calderón
figured out that Pasión could no longer afford to stay in business
because it was costing him more money to feed his horses than he
was bringing in. So, and with Berríos's approval, Calderón offered
to sell his horse renting and touring business to Vélez. Vélez
agreed, and by the end of November 2009 the transaction was
complete.
To further complicate things, on July 4, 2009, Madrigal,
Inc. had a non-horse-based business operating on the premises.
Restaurante El Estribo (which was separate from Madrigal, Inc.,
Pasión, and Criadero La Gloria), operated a restaurant there. And
9Similar to Madrigal, Inc.'s lease with Pasión, Berríos
signed this one as Agro Montellano, Inc.'s "Executive President."
- 12 -
there's yet another company we have to identify, Integrand
Assurance Company. Integrand wrote a single general liability
policy that covered Madrigal, Inc., Pasión, and Criadero La Gloria,
and which was effective on the date of Rivera's accident. Berríos,
through Madrigal, Inc. paid for the policy, and the other
corporations operating at Madrigal, Inc.'s property reimbursed him
for their share of the premium.
Ultimately, the plaintiffs brought suit against all of
the individuals and companies we have just mentioned, but they did
not sue them all right off the bat. The travel of this case
through the state and federal court systems is critical to our
analysis of the parties' statute of limitations arguments. Thus,
we must give special attention to the dates on which various
parties were brought into the litigation. Our rundown is based on
testimony and exhibits introduced at trial, as the statute of
limitations was a hotly-contested issue there, and each side called
witnesses and introduced evidence speaking to it.
2. State Court Proceedings
The plaintiffs retained Attorney Francisco Torres Díaz
("Attorney Díaz") to represent them. On June 11, 2010, within the
one-year statute of limitations, the plaintiffs initially filed
suit in Puerto Rico state court against Berríos and Madrigal, Inc.
-- the two parties Attorney Díaz had identified in his research as
being potentially liable. Rivera made a personal injury claim,
- 13 -
while her husband's was for loss of consortium.10 Berríos's
personal lawyer, Yesenia Ramos Talavera ("Attorney Ramos"),
initially defended both Berríos and Madrigal, Inc. in state court.
The plaintiffs served written interrogatories on January
1, 2011. Several were geared towards identifying the name of the
individual that owned the horseback riding business operated on
Madrigal, Inc.'s property. Others sought disclosure of the nature
of the relationship between the horseback riding business and
Madrigal, Inc.
In early February of 2011 -- before the defendants
answered the interrogatories -- the parties then in the case
(plaintiffs Rivera and her husband Hernández, and defendants
Berríos and Madrigal, Inc.) jointly filed in Puerto Rico superior
court a document known as a Case Management Report ("Report").
This Report is made in accordance with Rule 37.1 of Puerto Rico's
Rules of Civil Procedure which, the parties tell us, is the "local
law equivalent" of Fed. R. Civ. P. 16. The Report essentially set
forth a joint discovery plan, and was signed by Attorney Ramos as
10 The parties have not included a copy of the actual state
court complaint in their joint appendix. As such, our description
of it is based on the parties' representations rather than a review
of the document itself.
- 14 -
counsel for Berríos and Madrigal, Inc., and Attorney Díaz for the
plaintiffs.11
The Report described the discovery still to be
completed, identified particular documents required by each side
as part of its case, and named various individuals the parties
anticipated deposing. The Report indicated the answers to the
plaintiffs' interrogatories remained outstanding. It also
represented that the lease agreement "[b]etween Defendants and the
horse rental operator" was "in possession of the [d]efendants" and
that the deadline to deliver it to the plaintiffs was April 11,
2011. The defendants did not, however, specifically identify
Calderón or Pasión as the horse rental operator in Report.
Attorney Ramos served her clients' answers to the
plaintiffs' interrogatories on March 7, 2011. Berríos had answered
them and signed in his "personal capacity and as president of"
Madrigal, Inc. The answers twice identified "Gerardo Calderón" as
the owner of the horse rental business. Berríos further stated
there was a lease agreement between Madrigal, Inc. and Calderón's
business, and that he'd attached a copy of it to the answers.12
11
In this regard, the Report appears to be a close analog to
the written discovery plan described in Fed. R. Civ. P. 26(f).
12
This representation led to a dispute at trial, which we
will discuss in more detail later. For now, it's enough to know
that the defendants insisted they'd produced the lease between
Madrigal, Inc. and Pasión in effect on the date of Rivera's
accident, while the plaintiffs maintained that what was actually
- 15 -
The written answer did not, however, specifically mention the name
of Calderón's business (Pasión), and it further stated that Berríos
did not know Calderón's address.
The plaintiffs amended their state court complaint on
August 30, 2011 to add Madrigal, Inc.'s and Berríos's liability
insurer, Integrand, as an additional defendant.13 The amended
complaint did not assert any claims against Pasión, Calderón,
Vélez, or Criadero La Gloria. At some point after the insurance
company was added, Berríos's personal lawyer, Attorney Ramos,
withdrew and new defense counsel, Eduardo Cobian-Roig ("Attorney
Cobian") entered.
Discovery continued, and the plaintiffs deposed Berríos
in October 2011. Attorney Cobian represented the defendants at
the deposition. Berríos testified -- using the present tense --
that Vélez, through his company Criadero La Gloria, rents the
stables at Madrigal, Inc.'s ranch. When plaintiffs' counsel asked
Berríos, "Who is the owner of Centro Ecuestre Madrigal, Inc.?"
attached was a copy of the lease between Agro Montellano, Inc.
(another of Berríos's corporations) and Criadero La Gloria,
executed by Vélez. Assuming the plaintiffs are correct, from all
that appears in the record they made no attempt to follow up with
Attorney Ramos about why she had produced a contract that did not
so much as mention Calderón.
13 Remember, under the then-existing law, the timely filing
of a complaint against one joint tortfeasor automatically tolled
the statute of limitations with respect to all other joint
tortfeasors. See n.4, supra.
- 16 -
Berríos answered (incorrectly, we might add): "Centro Ecuestre
Madrigal Inc. That was operated before um . . . Gerardo
Calderón."14 Plaintiffs' counsel did not pose any follow-up
questions about Calderón's involvement at the property, nor did he
inquire who Calderón is or ask about the timeframe during which
Calderón had a business relationship with Madrigal, Inc.
A little later in his deposition, Berríos testified
(again incorrectly) that Criadero La Gloria operated the horse
rental business on the date of Rivera's accident. This statement,
the parties now agree, was incorrect -- on July 4, 2009, Vélez's
Criadero La Gloria operated the boarding business, while
Calderón's company Pasión ran the horse rental business. Yet, no
one appears to have picked up on this error at the time it was
made.
Calderón's name came up one more time at the October
2011 deposition. Although the context of how this came about isn't
quite clear, it seems that plaintiffs' counsel (Attorney Díaz) was
offhandedly telling Berríos about a time when he himself had gone
to Madrigal, Inc. to ride horses and managed to lose a set of car
keys. The following exchange took place:
Q. [by Atty. Díaz] Yes, I lost one of those
keys there and I learned how much they cost.
Um . . . Well . . .
14
This question referred to Madrigal, Inc., which no one
disputes Berríos himself owned.
- 17 -
A. [by Berríos] I think that was when... when
it was Gerardo.[15]
Q. No that was before, that was before.
A. Yes, yes.
Q. I'm talking about 2006, 2005 back then.
Again, no one asked who Gerardo is or posed any follow-up questions
about his involvement on the property.
Thus, at the end of Berríos's deposition, the substance
of his testimony regarding two facts was wrong: not only did he
say that that Criadero La Gloria (rather than Pasión) operated the
horse rental business on July 4, 2009, but he also testified that
Gerardo Calderón had run Madrigal, Inc. -- Berríos's own company
-- at some point in the past. The record discloses no effort from
anyone on either side to probe any inconsistencies or to clear up
either misstatement.
The plaintiffs voluntarily dismissed their complaint
without prejudice in April 2012, ostensibly because they had moved
to Nebraska. As non-residents of Puerto Rico, if they continued
to litigate in state court, the plaintiffs could have been required
to put up a bond to pay costs should they lose the case. They did
not join (or seek to join) Calderón, Pasión, Criadero La Gloria,
or Vélez before dismissing the state court complaint.
15 Recall that Gerardo is Calderón's first name.
- 18 -
3. The Federal Case
On October 11, 2012, almost exactly one year after
Berríos's deposition and six months after they dismissed their
state court complaint, the plaintiffs filed a personal injury
action grounded on diversity in the federal district court in
Puerto Rico.16 The federal complaint contained the same
substantive allegations from state court, but it brought in a few
new defendants. In total, the named defendants were Berríos; his
wife Irma Sara Casillas ("Casillas"); the "conjugal partnership
composed by" Berríos and Casillas; Madrigal, Inc.; Agro
Montellano, Inc.; Criadero La Gloria; Vélez; and Integrand. The
plaintiffs amended their complaint as-of-right fewer than twenty-
one days later, see Fed. R. Civ. P. 15(a)(1) (describing when a
party may amend its pleading without leave of court), but still
did not assert claims against Calderón or Pasión. And along with
the change in court came a change in plaintiffs' counsel, with
16 The original defendants -- Berríos and Madrigal, Inc. --
do not contend that the statute of limitations bars the federal
complaint against them. This is because Puerto Rico law contains
a "restart rule" that gives a plaintiff one year from the date of
a dismissal without prejudice to re-file an action against any and
all defendants that had been timely joined. Rodríguez v. Suzuki
Motor Corp., 570 F.3d 402, 408 (1st Cir. 2009) ("The usual rule
under Puerto Rico law is that the filing of a judicial action tolls
that statute of limitations and, if the action is dismissed without
prejudice, the limitations period is reset and starts to run again
from that date."). As we noted earlier, the initial state court
complaint against Berríos and Madrigal, Inc. was timely.
- 19 -
Attorney José Ubarri ("Attorney Ubarri") taking over from Attorney
Díaz. Attorney Cobian continued to represent all the named
defendants in federal court.17
Pursuant to Federal Rule of Civil Procedure 26(a)(1),
the defendants served their Initial Disclosures on January 30,
2013. In accordance with that Rule, the defendants were required
to disclose the name "of each individual likely to have
discoverable information -- along with the subjects of that
information -- that the [defendants] may use to support [their]
claims or defenses . . . ." Fed. R. Civ. P. 26(a)(1)(A)(i).
The defendants' response included the following:
"Gerardo Calderón Lozano -- Owner and administrator of the
horseback riding business in Hacienda Madrigal, at the time of the
incident alleged in the complaint." The defendants also indicated
they would rely on the lease agreement between Madrigal, Inc. and
Pasión to support their defenses. It was at this time, the
plaintiffs claim, that the defendants first produced Pasión's
lease and first identified Calderón as the owner of the horse
rental business.
Two weeks later, on February 15, 2013, the plaintiffs
moved for leave to file a Second Amended Complaint. This time
17
Attorneys Ubarri and Cobian also represent the parties in
this appeal.
- 20 -
they wanted to name Pasión and Calderón as additional defendants.18
The plaintiffs did not make any argument in their motion geared
specifically towards tolling the one-year statute of limitations.
Instead, they said they'd been unaware of Calderón's ownership of
the horseback riding business and of the contract between Madrigal,
Inc. and Pasión until the defendants served their Rule 26(a)(1)
disclosures.
The existing defendants had until March 4 to file an
objection to the plaintiffs' motion to amend. But we do not know
whether or how they would have responded to that motion because
the district judge, by a docket order and without explanation,
allowed the motion to amend on February 22, 2013.
Thereafter, the plaintiffs filed their Second Amended
Complaint ("Complaint") on February 25, 2013. The Complaint
appears to reflect some continuing uncertainty on the plaintiffs'
part about just who had put on the horseback riding tour. For
example, the Complaint alleges that Calderón, "along with Pasión
Ecuestre, and/or El Estribo [the restaurant] and/or Edgardo Vélez
and/or Criadero La Gloria operated the horseback riding business
at Hacienda Madrigal under an agreement with [Berríos] and [Agro
Montellano, Inc.]." The Complaint went on to allege that Pasión
(along with all these other defendants) negligently caused
18 They also sought to add the restaurant operating on
Madrigal, Inc.'s property, Restaurante El Estribo, Inc.
- 21 -
Rivera's injuries through failing to properly select, train, and
supervise the tour guides. The Complaint also set forth a strict
liability theory against Madrigal, Inc., Calderón, and Pasión
pursuant to Article 1805 of the Puerto Rico Civil Code, P.R. Laws
Ann. tit. 31, § 5144.19February 25, 2013, the day Calderón and Pasión were first
brought into the case, is more than three-and-a-half years after
Rivera's July 4, 2009 injury. This posed a potential problem for
the plaintiffs' claims against them in light of the one-year
statute of limitations. Indeed, Calderón and Pasión soon sought
summary judgment for exactly that reason. They argued the case
should not go to a jury because the plaintiffs' claims are time-
barred and that the limitations period cannot be tolled because
the plaintiffs failed to diligently work to learn the identity and
importance of Calderón and Pasión.
The district judge denied the motion in a brief written
order. He stated first that "[e]vidence concerning the name and
identity of the correct parties was not made apparent until October
2012." So, the judge ruled, the plaintiffs' February 2013 "motion
19 This section provides, "[t]he possessor of an animal, or
the one who uses the same, is liable for the damages it may cause,
even when said animal should escape from him or stray. This
liability shall cease only in case the damage should arise from
force majeure or from the fault of the person who may have suffered
it." P.R. Laws Ann. tit. 31, § 5144.
- 22 -
to join Pasión Ecuestre as a party has occurred within one year of
that time and is well taken." The judge went on, stating that
summary judgment would be denied because "[d]isputed material
facts remain concerning the responsibility and role of each
defendant in this case."
The defendants filed a motion for reconsideration, which
the district judge denied. He wrote in another short order that
he denied the "original [summary judgment] motion because the
plaintiffs will have an opportunity at trial to present evidence
of their diligence." At this point in the case, the district judge
evidently viewed the statute of limitations issue as presenting a
jury question.
4. Trial
Not surprisingly, Madrigal, Inc.'s and Calderón's
statute of limitations defense was a hotly-contested issue at
trial. Aware of their burden to demonstrate grounds for tolling
the limitations period, the plaintiffs put on evidence of their
own diligence in seeking to identify and sue Pasión and Calderón.
First up was Rivera's husband, Hernández. In addition
to testifying about how the accident occurred, he told the jury
about their efforts to identify and sue Pasión and Calderón. He
testified that after he and his wife filed their lawsuit in state
court, the initial defendants (Berríos and Madrigal, Inc.)
questioned whether he or his wife had even been on the premises on
- 23 -
July 4, 2009. So Hernández asked his friend, who had paid for the
ride, to give him a copy of a receipt for that day. Hernández's
friend ended up emailing him a copy of a credit card statement
showing "the date that indicated we had been there" [i.e.,
Madrigal, Inc.'s ranch] and the charge for the horse rental. Per
Hernández, the statement showed the "name" of the company that put
on the ride, but he didn't recall it any longer.20
The plaintiffs called Berríos as part of their case in
chief. He testified that Madrigal, Inc. has become well-known,
such that "[e]verybody that goes horseback riding says, let's go
to Hacienda Madrigal," rather than to Pasión or Criadero La Gloria.
Berríos told the jury that back in July of 2009, Calderón owned
the rental business and operated it under the Pasión name, while
at the time of trial it was being run by Vélez through Criadero La
Gloria. Berríos agreed that both Calderón and Vélez "us[ed] the
name Hacienda Madrigal to promote their horse rental
operation[s]." He also testified that he obtained insurance for
Madrigal, Inc. and had Pasión and Criadero La Gloria named as
insured entities on the policy, and that each company would pay
him its corresponding share of the policy premium.
20
A copy of the credit card statement (which the defendants
submitted in connection with their summary judgment motion) shows
a July 4, 2009 transaction with Pasión.
- 24 -
The plaintiffs then called Attorney Díaz, the lawyer who
had represented them in state court. Díaz testified about the
steps he took to identify potential defendants before he filed the
complaint. He figured out that the farm's name was Madrigal, Inc.
and that it was owned by Berríos, so he filed the state court
complaint against those two. After filing the complaint, he served
interrogatories on the defendants, but the answers made no mention
of Pasión or, for that matter, Criadero La Gloria. He did admit,
however, that the defendants identified Calderón as someone that
may have knowledge of facts relevant to the complaint.
Nevertheless, he said that the defendants attached to their answers
a copy of the June 1, 2009 contract between Agro Montellano, Inc.
and Criadero La Gloria. Per his testimony, the defendants never
produced to him a copy of the contract between Madrigal, Inc. and
Pasión for the horseback riding business.
In the middle of Attorney Díaz's testimony, the judge
announced that the court would recess for lunch. After sending
the jury out, he had the following exchange with the attorneys:
The Court: Counsel, don't go, because I want
to discuss something here. It is pretty
obvious to me, it is pretty obvious to me that
the answers to those interrogatories fail to
disclose extremely important information that
was in the hands of defendants.
[Plaintiffs' Counsel]: I'm sorry, Your Honor?
The Court: Those answers, from what I've
heard up to now . . . fail to disclose
- 25 -
extremely important information that was known
to defendants . . . . Whether it was on
account of bad faith, . . . negligence,
whether it was that the lawyer [Attorney
Ramos] did not do her job correctly in
figuring out the answers, whether it was that
the Cobian law firm did not procure any
additional information, I don't know and I
don't care.
But I'm telling you right now that the way
this looks up to now, you have no Statute of
Limitations defense. Is that clear?
[Defense Counsel]: It's clear, Your Honor.
The Court: Because I'm not going to allow
that here. Is that clear?
[Defense Counsel]: Well --
The Court: If you mess around with the truth
in the answer to interrogatory, you pay the
consequence. The consequence is that the
Complaint may be filed in time. Okay.
In response, defense counsel indicated the defendants'
state court lawyer, Attorney Ramos, would testify that she
personally delivered a copy of the Madrigal, Inc.-Pasión contract
to plaintiffs' counsel before answering the complaint, and then
later attached a copy of that contract to her clients' answers to
interrogatories. The district judge's view, though, was that the
defendants' answers should have explicitly stated that Calderón
"is related to a corporation known as Pasión Ecuestre, Inc.," but
"this information was not disclosed until 2011." The judge said
"[t]here must be a consequence when you screw around with answers
- 26 -
to interrogatories," and he warned defense counsel that he was
"advancing to [him] what's coming."
After lunch, Attorney Díaz resumed his testimony and
described how he asked Berríos at his deposition about who ran the
horse rental business. Attorney Díaz told the jury that Berríos
indicated -- more than once -- that Criadero La Gloria had been
running it when Rivera was injured. Attorney Díaz also denied
that the defendants' first lawyer, Attorney Ramos, delivered a
copy of the contract between Madrigal, Inc. and Pasión to him.
And he further testified that, despite asking for them, he was
never given a copy of Pasión's lease or a copy of the Release
Rivera signed before going on her ride. Attorney Díaz explained
that he did not file suit against Calderón in state court because
he was not "certain" who was running the horse rental business in
July of 2009, and he did not want to assert claims against anyone
who might have no liability for Rivera's injuries.
Once the plaintiffs finished putting on their case in
chief, which included the above-described statute of limitations
evidence, it was the defendants' turn to present their defense.
First, Calderón took the stand and testified that he did run Pasión
in July of 2009, but that he sold the entire business to Vélez a
few months after Rivera's injury. On cross-examination, he
acknowledged that he made use of Madrigal, Inc.'s name, with no
objection from Berríos, to promote his business. He did this
- 27 -
because Madrigal, Inc. was well-known while "Pasión Ecuestre was
a corporate name that nobody knew."
The defendants also called their lawyer from the state
court action, Attorney Ramos. She testified that Berríos was a
client for whom she had done "a lot of contracts . . . and corporate
law," so she agreed to take on the matter even though she does not
handle tort cases. Attorney Ramos told the jury that she
personally went to Attorney Díaz's office and delivered a copy of
the contract between Madrigal, Inc. and Pasión with the expectation
that he would drop the claims against Berríos and Madrigal, Inc.
When that didn't happen, Attorney Ramos testified that she again
produced a copy of the Pasión contract along with her clients'
answers to interrogatories. She explained that she agreed to the
wording in the Report stating that the defendants would produce
the contract (as opposed to, had already produced it) because she
"didn't mind" sending along another copy.
After the close of evidence, defense counsel made a
couple of motions to try to get various defendants out of the case.
First, saying that he wanted to "simplify the case for
the jury," counsel requested "a judgment as a matter of law
dismissing all the defendants that are not the entity Pasión
Ecuestre" or the insurance company, Integrand. Counsel did more
than just appeal to the judge's sense of practicality: he argued
that "it's been established there is no evidence in the record
- 28 -
that relates them" -- meaning defendants other than Pasión and the
insurer -- "with the rental business." He urged the court to
conclude that there was no legal basis to hold any defendant apart
from Pasión liable for Rivera's injuries.
The district judge did not ask the plaintiffs what they
thought about the defense motion. Instead, the judge's response
was, "I would say that at least the entities that appear in the
release are technically speaking involved one way or the other."
The Release, recall, listed "Hacienda Madrigal, Centro Ecuestre
Madrigal, Inc., Pasión Ecuestre, Inc. and its officers, directors,
managers, agents and representatives in their individual and
corporate capacities . . . ."
The judge went on to, essentially, opine that it didn't
matter which defendants remained in the case. After all, he said,
"the truth of the matter is the evidence in this case centers
basically upon the horse renting enterprise, and doesn't really
matter whether you have one or ten or [twenty] or three
[defendants], because it's the same insurance eventually." Thus,
"if the jury were to find in favor of plaintiff[s] against any one
of them, any one of them, the deep pocket is the insurance company
. . . [n]o matter how you look at it." In sum, the judge clearly
indicated that he was not inclined to dismiss the claims against
Madrigal, Inc., Pasión, and their officers or directors, but that
- 29 -
he would let the other defendants -- with the exception of
Integrand -- out.
Defense counsel next focused in on Pasión and said the
claims against it should be dismissed because "[t]he case was not
brought in one year." This motion brought the statute of
limitations issue to a head.21 "There is no way I'm going to do
that, and I told you the reasons," was the judge's immediate
response.
The judge went on to state that, "without entering into
credibility issues" regarding Attorneys Díaz and Ramos, he would
instead rely on the (Puerto Rico Superior Court Rule 37.1) Report
signed by "[b]oth lawyers" to conclude that the defendants had not
produced Pasión's contract at the very beginning of the lawsuit.
The judge took the Report's specific wording that the lease would
be produced by a specific date as an indication that it had not
already been turned over to the plaintiffs. He further expressed
his "view . . . that if Pasión Ecuestre was not included from the
beginning, it wasn't because of negligence or because of anything
21It also ensured that defense counsel had sought judgment
as a matter of law for each and every defendant (again, with the
exception of Integrand). With respect to Calderón, technically
defense counsel did not invoke a statute of limitations defense
and only sought judgement as a matter of law on the grounds that
he did not personally operate the horse rental business. On
appeal, however, the plaintiffs do not argue that Calderón waived
the statute of limitations defense as a result of defense counsel's
failure to explicitly invoke this defense on his behalf when
counsel moved for judgment as a matter of law.
- 30 -
of the sort. It was because the looseness, if you will, the
tropical nature of the discovery that was created, was done in
Superior Court in Caguas, allowed that to happen."
The judge concluded that "[t]here is no question"
plaintiffs' counsel had been attempting to identify and locate the
proper parties to sue (i.e., Calderón and Pasión), but "the
discovery betrayed him in that sense, and he relied on discovery
that was improper." The judge made it clear that he would consider
no further argument on the matter: "This is it. This is finished.
You will not convince me. I already gave you a ruling, and this
is it."
After a recess, the judge returned to the defense's first
motion for judgment as a matter of law -- the one seeking to
dismiss everyone but Pasión -- and asked "[a]re we in agreement
that we should give the jury a streamlined case regarding parties?"
Defense counsel responded, "Defendants agree, Your Honor,"22 and
the plaintiffs expressed their agreement as well. The court
entered a Partial Judgment formally dismissing all claims against
Vélez, Berríos, Casillas and the conjugal partnership with
Berríos, Agro Montellano, Criadero La Gloria, and Restaurante El
22 We do not interpret the defendants' agreement with the
district court's proposal to "streamline" the case for the jury's
convenience as a waiver of any of the substantive defenses and
arguments they had just raised.
- 31 -
Estribo.23 Accordingly, the only defendants listed on the verdict
form were the parties named in the Release Rivera had signed --
Madrigal, Inc., Pasión, and Calderón.
The verdict form the court chose to submit to the jury24
effectively treated the three remaining defendants as one entity,
as it did not differentiate between theories of liability against
each. Instead, it simply asked whether the plaintiffs had proved
"that the owner or possessor of the horse is liable," but the jury
was not asked to determine which of the three defendants qualified
as the "owner or possessor." And continuing the theme of lumping
all three together, the verdict form also asked whether force
majeure "absolve[d] the Defendants of liability."25
23
The Partial Judgment mistakenly dismissed Integrand, but
the parties worked this out after trial by amending the judgement
to list Integrand as a liable defendant.
24
The defendants' proposed jury instructions separated the
defendants out and provided for a separate verdict as to each one,
but the district judge did not adopt them.
25
The district judge's written instructions to the jury
explained the concept of force majeure in the following way:
Force majeure means a superior force or event;
an event that cannot be anticipated or
controlled. The term includes both acts of
nature, like floods or hurricanes, and also
acts of people. It means that it becomes
impossible to predict. It is the result of an
event or effect that the parties could not
have anticipated or controlled.
None of the parties on appeal takes issue with the district
court's formulation of force majeure.
- 32 -
Defense counsel took another stab at getting the statute
of limitations defense to the jury by asking the district judge to
instruct the jury on it. The judge refused, saying "I already
decided on the matter of law, Statute of Limitations. So you
cannot argue that before the jury." In response to defense
counsel's continued attempts to argue for the defense, the judge
reiterated his position that "the discovery in this case would
have led any reasonable person to be confused who the parties were
. . . ." With that, the district judge considered the matter
"over."
The jury returned a verdict for the plaintiffs, and the
district court entered judgment against Madrigal, Inc., Pasión,
and Calderón. Those defendants then filed a post-judgment renewed
motion for judgment as a matter of law.26 Much of the motion
rehashed arguments made previously. These defendants once again
argued that the uncontroverted evidence demonstrated that only
Pasión operated the horse rental business, meaning that neither
Madrigal, Inc. nor Calderón could be held liable for the negligence
of Pasión's employees. And, like they did prior to and at trial,
the defendants argued that the claims against Pasión are barred by
the statute of limitations. In a new wrinkle, the defendants also
26 Integrand, though at that point dismissed from the case,
joined this motion.
- 33 -
sought to apply the statute of limitations argument to Calderón
and Integrand, as their prayer for relief sought dismissal of the
"totality of the complaint on statute of limitation[s] grounds."
Finally, the defendants told the judge that even if he did not
agree that they were entitled to judgment as a matter of law, they
should at the very least get a new trial on the statute of
limitations issue.27
The district judge denied the defendants' renewed motion
for judgment as a matter of law in a docket order without
explanation. Aggrieved, the defendants filed this timely appeal.
DISCUSSION
1. Pasión, Calderón, and the Statute of Limitations
Calderón and Pasión appeal the district judge's denial
of their motion for judgment as a matter of law invoking the
statute of limitations.28 They say the judge decided the issue --
27
The defendants also sought a new trial on a specific point
of Puerto Rico's comparative negligence law, but we don't need to
get into that as the defendants do not press the issue on appeal.
28Integrand argues that it, too, may take advantage of the
statute of limitations because it was not brought into the case
until two years after Rivera's accident. Integrand, however, fails
to acknowledge or address "the Puerto Rico Supreme Court's
determination that a suit against an insurer may be filed up to
one year after judgment is entered in a suit against the insured."
Tokyo Marine and Fire Ins. Co., Ltd. v. Perez & Cia., De Puerto
Rico, Inc., 142 F.3d 1, 8 (1st Cir. 1998) (citing Barrientos v.
Gobierno De La Capital, 97 D.P.R. 552, 576-77 (P.R. 1969)).
Because Integrand acknowledges that it insured each of the
defendants against whom judgment was entered, its statute of
limitations defense is without merit.
- 34 -
erroneously -- as a matter of law, and their brief extensively
engages on this claim of error. The plaintiffs have a very
different take on what the judge decided. On this point, they
solely argue in their appellate brief that the district judge
barred the statute of limitations defense not as a matter of law
on the merits of the motion, but as a sanction for the defendants'
having gone out of their way to hide the identities of the proper
defendants to keep the plaintiffs from suing Pasión and Calderón
until long after the statute of limitations had expired.29
29 Because the defendants (appellants here) are the ones who
took an appeal, they filed the initial brief in this Court in
accordance with the Federal Rules of Appellate Procedure. The
plaintiffs (appellees here) then filed their own brief, after which
the defendants filed a reply brief responding to the plaintiffs'
arguments.
The defendants' opening brief was premised (and focused
entirely on) the notion that the district judge decided the statute
of limitations issue as a matter of law. It did not even raise
the possibility that the district judge might have barred the
defense as a sanction. In their response brief, the plaintiffs
not only said that the district judge sanctioned the defendants,
but they also claimed the defendants waived any appellate argument
that the sanction was improper since they didn't even mention the
issue in their opening brief. According to the plaintiffs, even
if the defendants (as they in fact did) used their forthcoming
reply brief to discuss the propriety of the sanction, this would
be too little too late to overcome the waiver.
We have said that parties in the plaintiffs' position are
"entitled to rely on the content of an appellant's brief for the
scope of the issues appealed, and [an] appellant generally may not
preserve a claim merely by referring to it in a reply brief or at
oral argument." Pignons S.A. de Mecanique v. Polaroid Corp., 701
F.2d 1, 3 (1st Cir. 1983); see also Sandstrom v. ChemLawn Corp.,
904 F.2d 83, 87 (1st Cir. 1990) (expressing concern in a situation
in which "the appellee is given no fair chance to respond to a
theory which emerges for the first time in the appellant's reply
- 35 -
The parties' disagreement about what happened in the
district court complicates our work as a reviewing court. And,
regrettably, the record does not supply a ready answer: each side's
characterization of the judge's actions finds at least some support
there.
We start with the plaintiffs' suggestion that the judge
struck the defense as a sanction. At the summary judgment stage,
the district judge's review of the papers led him to conclude that
the defense's success (or lack thereof) was dependent upon the
jury's resolution of contested facts. This is an obvious
indication that the judge did not believe it was appropriate to
resolve the question as a matter of law in light of the expected
evidence at trial.
Then, in the midst of trial and immediately after hearing
some of the plaintiffs' evidence about how they attempted to
identify the right parties to sue (and before the defendants began
brief and the court of appeals is left with but one side of a two-
sided story").
The defendants' briefing does not offend this principle. As
we discuss in detail herein, the record does not make clear whether
the district judge imposed a sanction or made a legal ruling when
he kept the statute of limitations defense from going to the jury.
The plaintiffs, in their appellate brief, are the ones who framed
the court's decision as that of a sanction order. The defendants
appropriately used their reply brief to challenge this assertion.
See Holmes v. Spencer, 685 F.3d 51, 66 (1st Cir. 2012) (recognizing
that an appellant's reply brief may be "the earliest point when it
[is] logical to" address an argument raised by an appellee in its
brief). Accordingly, we decline to make any finding of waiver.
- 36 -
calling their own witnesses), the district judge sent the jury to
lunch and instructed the parties to remain in the courtroom. He
proceeded to characterize the defendants as having "mess[ed]
around with the truth," and "screwed around with answers to
interrogatories." The judge informed the defendants that they
would "pay the consequence" of their actions and that he was "not
going to allow" them to present a statute of limitations defense.
He also made it abundantly clear that he thought the defendants
were required to specifically identify Pasión in response to the
interrogatories served on them in the state court case, and stated
it was "pretty obvious" to him that the defendants' answers were
inadequate.
We are well-aware of the dangers of trying to glean tone
of voice and demeanor from a cold transcript. Nevertheless, the
timing and wording of the judge's statements can readily and
reasonably be interpreted as evincing his displeasure with the
defendants' conduct in discovery based on the evidence put on by
the plaintiffs. Moreover, by stating "I'm not going to allow" the
defense, the judge was speaking in terms of making a decision
within his purview and up to his discretion as a trial judge, as
opposed to simply applying Puerto Rico law on tolling to the
specific facts of the case. Thus, the record could be read to
support the plaintiffs' assertion that upon hearing the evidence,
- 37 -
the judge found that the defendants engaged in discovery misconduct
and struck their statute of limitations defense as a sanction.
Yet, the defendants' position that the judge ruled as a
matter of law instead of imposing a sanction is not devoid of
record support either. First, though the district judge voiced
his opinion at trial that Madrigal, Inc.'s and Berríos's
interrogatory answers should have identified Pasión by name, the
judge never made an explicit, on-the-record finding that any
defendant violated a discovery obligation or engaged in
misconduct. Indeed, he never uttered the word "sanction" during
or after trial. Given the amount of attention paid to this issue
both at trial and post-verdict, it would be logical to expect that
if the judge had intended to apply a sanction, he would have said
so explicitly at some point along the way.
It also bears mentioning that the district judge did not
address any of the testimonial discrepancies or make any findings
related to the conduct of the trial attorneys' handling of their
discovery obligations. And he did not make a finding as to which
contract the defendants attached to their answers to
interrogatories. Factual findings on these issues, we believe,
would likely have been necessary prerequisites to any ultimate
finding of bad faith or discovery misconduct.
Moreover, when the judge referenced "loose" discovery
practices in Puerto Rico state court, he appears to have been
- 38 -
referring to his perception of the way discovery is generally
conducted there, rather than a criticism specific to the defendants
or Attorney Ramos. And he also said the plaintiffs should not be
penalized because of the "tropical nature" of state court
discovery. Indeed, he opined that, thanks to "the discovery in
this case . . . any reasonable person" would be confused as to who
the plaintiffs should have been suing given the multiplicity of
individuals and companies providing services at Madrigal, Inc.'s
property. This wording calls to mind not a sanction, but the
plaintiffs' success in meeting their burden to establish that they
acted as a reasonably diligent person would in order to toll the
statute of limitations.
Thus, we do not believe the judge's focus on the parties'
mutual confusion and his generalized critique of discovery
practices in Puerto Rico state court are necessarily indicative of
an intent to sanction the defendants. On the contrary, the judge
explicitly stated after the close of evidence that he had decided
"as a matter of law" not to submit the statute of limitations
defense to the jury. This last statement -- especially considering
that the judge never said he was sanctioning the defendants --
lends further record support to the defendants' view that the judge
made a legal ruling that the statute of limitations should be
tolled.
- 39 -
Putting it all together, we simply cannot say with any
confidence whether the judge struck the statute of limitations
defense as a sanction or ruled on that issue as a matter of law.
Coming down either way would require us to emphasize and rely on
some of the judge's words, while ignoring and putting to one side
others. Guessing at what a district judge intended to do does not
strike us as the proper way to go about deciding an appeal.
"As we have observed on several occasions, 'some
explication of the trial court's reasoning will often prove
valuable to both the litigants and to the reviewing court.'"
Francis v. Goodman, 81 F.3d 5, 8 (1st Cir. 1995) (quoting Souza v.
Pina, 53 F.3d 423, 424 n.4 (1st Cir. 1995)) (discussing the need
to remand given the lack of clarity as to why the district court
concluded that exercising diversity jurisdiction was proper).
Here, because the record on appeal can be fairly read to support
each party's divergent view of what went on at trial, an
explanation from the district court is more than valuable, it is
essential for us to conduct a meaningful appellate review. This
is especially so if the district judge intended to impose a
sanction for discovery misconduct. See Figueroa-Ruiz v. Alegria,
905 F.2d 545, 549 (1st Cir. 1990) (holding that a district court
is required to articulate why it is imposing a sanction "when the
reason for the decision is not obvious or apparent from the
record"); see also Navarro-Ayala v. Nunez, 968 F.2d 1421, 1427 n.5
- 40 -
(1st Cir. 1992) (recognizing that a district court's specific
findings "help us better understand why a particular sanction has
been deemed appropriate in respect to a particular instance of
misconduct").
Moreover, a definitive word from the district court
will improve the quality of our ultimate decision because it will
allow the parties to focus their arguments not on what they think
the district court did, but whether or not the trial judge's
decision should be affirmed, reversed, or modified. Thus, "we
feel it necessary to remand the case so that the district court
may review its decision[]" striking the statute of limitations
defense and "make known to us its reasons" for doing so. Anderson,
105 F.3d at 769.30
30 The parties seem to agree that if in fact the district
judge sanctioned the defendants, he did so as a result of the
defendants' conduct during discovery in Puerto Rico Superior
Court. We are, of course, mindful of the defendants' argument
that a federal judge lacks the power to sanction a party for
conduct occurring in a state court. See In re Lothian Oil, Inc.,
531 F. App'x 428, 445 (5th Cir. 2013) (observing that a federal
court's "inherent power to punish bad-faith conduct does not extend
to actions in a separate state court proceeding"); Hunter v.
Earthgrains Co. Bakery, 281 F.3d 144, 157 n.20 (4th Cir. 2002)
(noting that a district judge "lacked authority under the federal
rules to sanction [an attorney] for conduct occurring in state
court"). We, however, can't tell what (if anything) the district
court sanctioned or where, from the judge's perspective, any
misconduct occurred. Accordingly, we note the argument has been
raised, but we take no position on its merits and leave it to the
district court to sort out (if necessary) in the first instance.
- 41 -
2. Madrigal, Inc. and Calderón
We come now to Madrigal, Inc.'s and Calderón's arguments
that they cannot be held liable for Rivera's injuries.
Madrigal, Inc.'s theory, first raised (as best we can
tell) in its motion for summary judgment, is that it cannot be
liable to the plaintiffs because it is merely a landowner and had
nothing to do with the horse rental business. See CMI v. Munc. of
Bayamón, 410 F. Supp. 2d 61, 75 (D.P.R. 2006) ("The imposition of
tort liability for the action of a third party arises only under
certain exceptional circumstances."). Calderón, for his part,
says in his summary judgment offering that he is legally distinct
from his corporation and, therefore, cannot be held personally
liable for the negligence of Pasión's employees. See Burgos-
Oquendo v. Caribbean Gulf Refining Corp., 741 F. Supp. 330, 332
(D.P.R. 1990) ("As a general rule, a person is only liable for his
own acts or omissions and only by exception is a person liable for
the acts or omissions of others.").
Opposing the summary judgment motion, the plaintiffs
argued that Madrigal, Inc.'s inclusion on the Release Rivera signed
is evidence that the two companies operated the horse rental
business together, which makes Madrigal, Inc. liable as a joint
venturer. They further argued that Madrigal, Inc. may be held
liable on an apparent authority theory given the evidence adduced
in discovery showing that Madrigal, Inc. knowingly allowed Pasión
- 42 -
to utilize Madrigal, Inc.'s better-known name and store of goodwill
in the community to attract customers for its horse rental
business. See Grajales-Romero v. Am. Airlines, Inc., 194 F.3d
288, 293 (1st Cir. 1999) ("Under Puerto Rico law, an apparent
principal may be held liable for the acts of its apparent agent
where the apparent principal's actions 'led the plaintiffs to
reasonably believe [in its] representation' of authority and
control over the apparent agent, through the apparent principal's
conduct, including its 'silence, evasive language and
appearances.'" (alteration in original) (quoting Berríos v.
U.P.R., 16 P.R. Offic. Trans. 112, 122 (1985))). In addition,
they argued that Calderón is personally liable for the negligent
acts of his corporation's employees because Calderón, as Pasión's
principal, operated the horse rental business at the time of
Rivera's injury. See P.R. Laws Ann. tit. 31, § 5142 ("Owners or
directors of an establishment or enterprise are . . . liable for
any damages caused by their employees in the service of the
branches in which the latter are employed or on account of their
duties.").
In denying summary judgment, the district judge
succinctly wrote that "[d]isputed material facts remain concerning
the responsibility and role of each defendant in this case." And
his order on the motion for reconsideration focused solely on the
statute of limitations. Clearly then, the judge thought there was
- 43 -
a jury question on at least one of the theories of liability
against Madrigal, Inc. and Pasión.
These arguments about Madrigal, Inc. and Pasión did not
end with the summary judgment denial. Before trial began, the
defendants submitted proposed jury instructions that would have
informed the jury they must find Berríos and his corporations
(i.e., Madrigal, Inc.) not liable if they had no interest in Pasión
other than as a lessor, or if they did not have control separate
from that of a landowner over Pasión's activities, or if they did
not share profits with Pasión from Pasión's horse rental business.
Then, on the third day of trial, the defendants argued
in their oral motion for judgment as a matter of law that the trial
evidence proved Pasión was the only defendant that operated the
horse rental business and, therefore, the claims against all other
defendants should be dismissed. The judge's response, which he
made without asking the plaintiffs for their feedback, was to say
that any entity listed on the Release (meaning Madrigal, Inc.) was
"technically speaking involved" and would stay in the case. He
did not, however, explain why he concluded that Madrigal, Inc.
could be liable for Pasión's negligence solely by virtue of it
having been included on the Release. Neither did he tell the
parties why Calderón could be held personally liable.
Before the case went to the jury, the defendants asked
the judge to instruct the jury that if they find one defendant
- 44 -
liable, this alone does not mean that all defendants are liable.
The defendants also proposed giving the jury a separate verdict
form for each defendant in the case. And the proposed form for
Madrigal, Inc. would have told the jury that it was not liable
unless the jury found that Madrigal, Inc. owned or operated the
horse rental business on July 4, 2009.
The judge did not oblige defense counsel's request to
separate out the defendants or instruct the jury on different
theories of liability. The jury instructions he actually gave
treated the remaining defendants (Madrigal, Inc., Calderón, and
Pasión) as a single unit, and referred to the three collectively
as "Defendants" without elucidating separate theories of liability
against each. Ditto with the verdict form, which simply asked
whether the plaintiffs had "prove[d] that the owner or possessor
of the horse is liable for the damages caused by it."
Post-verdict, the defendants' renewed motion for
judgment as a matter of law argued that neither Madrigal, Inc. nor
Calderón can be held liable because they "are separate and distinct
entities from Pasión." They argued that none of the trial evidence
tended to show that Madrigal, Inc. was responsible for the
horseback riding business. Furthermore, the defendants said there
was no evidence to support piercing the corporate veil to hold
Calderón personally liable for Pasión's negligence.
- 45 -
In opposition, the plaintiffs made both procedural and
substantive arguments. They first took the position that the
defendants' Rule 50(b) motion was dead on arrival because the
defendants (1) failed to "raise a proper Rule 50(a) insufficiency
of the evidence motion before the case was submitted to the jury,"
and (2) did not object to the jury instructions after the court
gave them. Accordingly, the plaintiffs said the arguments had
been procedurally defaulted and that the judge could summarily
deny the defendants' motion. They also reiterated the joint
venture and apparent authority arguments they'd raised at summary
judgment, only this time they referred to the evidence that came
in at trial.
The district court denied the defendants' post-trial
motion in a docket order without explanation. Because multiple
legal theories had been advanced and were before the court, the
district court's conclusions of law "are not discernible" from the
docket order. Francis, 81 F.3d at 7. It is akin to a "margin
order . . . not amenable to reliable appellate review under any
standard." Id.
Moreover, though these arguments had been before the
court previously, the limited record submitted for this appeal
does not disclose what the judge thought about them before or at
- 46 -
trial.31 A further wrinkle is added by the plaintiffs' post-
verdict argument that the defendants' renewed motion for judgment
as a matter of law was procedurally defaulted and should be
summarily denied. The parties have not provided us with a
transcript of the judge's oral instructions to the jury or of any
post-charge discussion with the parties. So we cannot tell whether
or not the plaintiffs' representation that the defendants failed
to object to the given instructions is correct. In sum, the record
on appeal sheds no light on whether the district judge relied on
procedural or substantive grounds (or some combination) in denying
the defense motion.32
31 Except that the judge concluded at the summary judgment
stage that at least one of those theories presented a jury
question.
32The plaintiffs' appellate brief is not particularly helpful
either, as it focuses almost entirely on their view that the
district court struck the statute of limitations defense as a
sanction. In fact, they only briefly touch upon Madrigal, Inc.'s
and Calderón's arguments, and even then their treatment of the
issue does not extend beyond their observation that these parties
are liable to them because the jury found the Release to be
invalid. Such superficial treatment of the issue runs the risk of
our finding it waived for inadequate briefing on appeal. See
United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990). Here,
however, the defendants have not asked us to find that the
plaintiffs waived any arguments with respect to Madrigal, Inc.'s
and Calderón's liability. So they have, essentially, waived their
waiver argument. This, combined with the fact that we are already
remanding on the statute of limitations defense, counsels against
a finding of appellate waiver and allowing each side to present to
the district court any argument it sees fit.
- 47 -
As with the statute of limitations issue, we will not
rely on guesswork as the jumping-off point for our analysis.
Prudence dictates that we remand for the judge to explain the
grounds on which he denied the defendants' Rule 50(b) motion.
CONCLUSION
Based on the foregoing, the district court's denial of
the defendants' renewed motion for judgment as a matter of law is
vacated and this matter is remanded for further proceedings
consistent with this opinion. The district court is instructed to
explain whether it barred the statute of limitations defense as a
sanction or a matter of law (or, perhaps, on some other basis) and
explain its reasoning for doing so. It should also set forth its
reasoning with respect to Calderón's and Madrigal, Inc.'s
liability. The district court, which may order briefing or convene
a hearing on any remanded issue if deemed appropriate, is hereby
instructed to render its decision on the defendants' renewed motion
for judgment as a matter of law within ninety (90) days from the
date of this opinion. We retain appellate jurisdiction.
- 48 -