Nieto-Vincenty et al v. Valledor et al

Filing 104

MEMORANDUM AND ORDER re 75 Motion for Partial Summary Judgment; re 80 Motion for Summary Judgment; re 81 Motion for Partial Summary Judgment; and re 95 Motion to Strike. The Court GRANTS the Valledor matrimony's and PDMYC's motions for summary judgment (Docket Nos. 75 & 81). The Court GRANTS IN PART AND DENIES IN PART Zurqui, Inc. and the Valledor defendants' motion for summary judgment (Docket No. 80). All remaining claims against Zurqui, Inc. and the Valledor defendants survive. The Court DENIES Zurqui, Inc. and the Valledor defendants' motion to strike (Docket No. 95). Signed by Judge Francisco A. Besosa on 05/30/2014. (brc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
RAFAEL ISMAEL NIETO-VINCENTY, et
al.,
Plaintiffs,
Civil No. 12-1585 (FAB)

v.
RONALD JOSE VALLEDOR, et al.,
Defendants.

MEMORANDUM AND ORDER
BESOSA, District Judge
Before the Court are three motions for summary judgment:

one

filed by Jose A. Valledor, Concepcion Valledor, and their conjugal
partnership

(Docket

defendants,

as

well

No.
as

75);

a

Zurqui,

second
Inc.

filed

d/b/a

by

Sea

those
Watch

same

Divers

(“Zurqui”), and Ronald Jose Valledor (Docket No. 80); and a third
filed by Palmas del Mar Yacht Club and Marina (“PDMYC”) (Docket
No. 81.)

Also pending is a motion to strike.

(Docket No. 95.)

After considering all relevant motions and replies, the Court now
GRANTS the motions for summary judgment at Docket Numbers 75
and 81, GRANTS IN PART and DENIES IN PART the motion for summary
judgment at Docket Number 80, and DENIES the motion to strike at
Docket Number 95.

Civil No. 12-1585 (FAB)
I.

2

Summary Judgment Standard
Summary judgment serves to assess the evidence and determine

if there is a genuine need for trial.
895 F.2d 46, 50 (1st Cir. 1990).

Garside v. Osco Drug, Inc.,

The Court may grant a motion for

summary judgment “if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”

Fed. R. Civ. P. 56(a).

A fact is

“material” if it has the potential to “affect the outcome of the
suit under the governing law.”

Id.

A dispute is “genuine” when it

“could be resolved in favor of either party.”

Calero-Cerezo v.

U.S. Dep’t. of Justice, 355 F.3d 6, 19 (1st Cir. 2004).
moving

for

summary

judgment

has

the

initial

The party
burden

of

“demonstrat[ing] the absence of a genuine issue of material fact”
with definite and competent evidence.

Celotex Corp. v. Catrett,

477 U.S. 317, 323 (1986); Maldonado-Denis v. Castillo-Rodriguez, 23
F.3d 576, 581 (1st Cir. 1994).

It must identify “portions of ‘the

pleadings, depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any’” which support its
motion.

Id. (citing Fed. R. Civ. P. 56(c)).

Once a properly

supported motion has been presented, the burden shifts to the nonmoving party “to demonstrate that a trier of fact reasonably could
find in [its] favor.”

Santiago-Ramos v. Centennial P.R. Wireless

Corp., 217 F.3d 46, 52 (1st Cir. 2000) (internal citation omitted).

Civil No. 12-1585 (FAB)

3

It is well-settled that “[t]he mere existence of a scintilla
of evidence” is insufficient to defeat a properly supported motion
for summary judgment.
242,

252

(1986).

Anderson v. Liberty Lobby, Inc., 477 U.S.
“[A]

party

opposing

summary

judgment[,

therefore,] must ‘present definite, competent evidence to rebut the
motion.’”

Maldonado-Denis, 23 F.3d at 581 (internal citation

omitted).

In making this assessment, the Court must take the

entire record in the light most favorable to the nonmoving party
and draw all reasonable inferences in its favor.

Farmers Ins.

Exch. v. RNK, Inc., 632 F.3d 777, 779-80 (1st Cir. 2011).
II.

Zurqui, Inc.’s and the Valledor Defendants’ Motion for Summary
Judgment
Defendants Zurqui, Inc. d/b/a Sea Watch Divers (“Zurqui,

Inc.”),

Ronald

Jose

Valledor,

Jose

A.

Valledor,

Concepcion

Valledor, and the conjugal partnership between Jose and Concepcion
Valledor (collectively, “the Valledor defendants”) move for summary
judgment on three different grounds.

(Docket No. 80.)

After

addressing defendants’ motion to strike plaintiffs’ expert witness
(Docket No. 95), the Court will address each ground for summary
judgment in turn.
A.

Motion to Strike Plaintiffs’ Expert Witness
Pursuant

to

deadlines

agreed

upon

by

the

parties,

plaintiffs’ written answers to discovery were due on August 30,
2013, their expert reports on September 3, 2013, and their expert
names and curricula vitae on September 6, 2013; discovery closed on

Civil No. 12-1585 (FAB)
February 7, 2014.

4

(Docket No. 95.)

On August 30, 2013, plaintiffs

provided defendants with a preliminary report by an expert witness
with whom they had consulted, Commander John Deck III.
Nos. 103-1 & 103-2.)

(Docket

On April 21, 2014, plaintiffs submitted a

supplemental report by Commander Deck as an attachment to their
opposing statement of material facts.

(Docket No. 87-15.)

That

same day, Zurqui, Inc. and the Valledor defendants moved to strike
Commander Deck’s unsworn declaration and supplemental report, and
to preclude the designation of Commander Deck as an expert witness.
(Docket No. 95.)

Defendants contend that, despite their allowing

plaintiffs multiple extensions of time to comply with discovery
obligations and deadlines, plaintiffs failed to designate their
expert witness and submit a supplemental expert report before the
mutually agreed upon deadline.

Id.

Federal Rule of Civil Procedure 37 provides for the
exclusion of tardy expert witness disclosures “unless the failure
was

substantially

37(c)(1).

justified

or

harmless.”

Fed.

R.

Civ.

P.

Plaintiffs do not offer any justification for their

failure to comply fully with their supplemental discovery and
disclosure deadlines, and the Court sympathizes with defendants’
frustration.

Nevertheless,

tardiness was harmless.

the

Court

finds

that

plaintiffs’

Defendants had knowledge of plaintiffs’

expert’s identity and the substance of his preliminary report on
August 30, 2013. (Docket Nos. 103-1 & 103-2.)

Additionally,

Civil No. 12-1585 (FAB)

5

defendants assure that they did not “throw caution to the wind and
simply assume that [p]laintiffs had not designated an expert
witness,” but rather retained two expert witnesses of their own.
(Docket No. 95 at ¶ 15.)

Their suspicion that plaintiffs would

eventually designate Captain Deck takes the wind out of the sails
of defendants’ prejudice argument and indicates that defendants
could have similarly arranged to depose him prior to the close of
discovery.

Accordingly, defendants’ motion to strike (Docket

No. 95) is DENIED.

The Court declines to reopen discovery; any

future non-compliance on behalf of either party, particularly the
plaintiffs, however, will result in sanctions.
B.

Uncontested Facts
On July 24, 2011, the M/V Sea Watch (“Sea Watch”), a

seagoing diesel-propelled vessel, sank approximately 3.4 miles off
the coast of Humacao, Puerto Rico.

(Docket No. 82-1 at ¶ 9.)

At

that time, twenty-three persons were on board the vessel, including
twenty-one plaintiffs as passengers, Ronald Valledor at the helm,
and crew-member Edwin Sanchez.1

(Docket No. 82-1 at ¶ 7.)

All

passengers on board the vessel were rescued. (Docket No. 1 at
¶ 54.)

Plaintiff Alicia Vincenty-Medina, the wife of co-plaintiff

and passenger Camillo Cangani, was not a passenger aboard the Sea
Watch.

1

(Docket Nos. 1 at ¶ 37; 82-2 at pp. 16-17.)

Sanchez is not a party to this lawsuit.

Civil No. 12-1585 (FAB)

6

A few days before July 24, 2011, plaintiff Rafael Ismael
Nieto-Vincenty (“Nieto-Vincenty”) contacted Ronald Valledor to
discuss the possibility of transporting a group of friends and
family members, including several children, from the Palmas del Mar
marina to Vieques.

(Docket Nos. 82-1 at ¶ 4; 1 at ¶ 33.)

On

July 23, 2011, plaintiff Nieto-Vincenty and his wife, plaintiff
Zelma Charlotte Chiesa-Fuxench, met with Ronald Valledor and paid
him $100.00.2

(Docket Nos. 87-3 at p. 2; 94-1 at ¶ 8.)

The

twenty-one passengers arrived at Palmas del Mar Yacht Club and
Marina (“PDMYC”) on the morning of July 24, 2011.
at ¶ 6.)

(Docket No. 82-1

The Sea Watch had a total seating capacity for twenty-two

persons, not including the helmsman’s seat. (Docket No. 82-3 at
p. 2.)
From the beginning of the voyage, smoke came from the
vessel; the crew informed the passengers that the smoke was a
normal occurrence, and the trip continued. (Docket Nos.87-3 & 87-6
at pp. 12-13.)

Approximately midway through the voyage, the Sea

Watch began to take on water below deck.
87-5 at pp. 25-26.)

(Docket Nos. 87-2; 87-3;

Ronald Valledor — assisted by Sanchez — was

operating the Sea Watch at the time of its sinking. (Docket No. 87

2

The parties dispute whether this meeting took place at the
Palmas del Mar marina (Docket No. 87-3 at p.2), or inside the Sea
Watch (Docket No. 94-1 at ¶ 7).
They also dispute whether the
$100.00 payment was a cash deposit for the trip (Docket No. 87-3 at
p. 2), or a contribution for diesel and refreshments (Docket
No. 94-1 at ¶ 8).

Civil No. 12-1585 (FAB)
at p. 10.)

7

The United States Coast Guard subsequently conducted a

search and rescue operation and investigation, but could not
definitively determine the cause of the vessel’s flooding and
sinking.

(Docket Nos. 87-9; 87-11 at ¶ 5.)
On July 25, 2011, Ronald Valledor and others dove in the

location where the Sea Watch had sunk in order to recover some of
the

passengers’s

personal

belongings;

they

inspected

and

photographed the vessel, and discovered that the hull had been
perforated.
C.

(Docket Nos. 82-1 at ¶ 10-11; 87-10.)

Defendants’ Arguments
1.

The Warranty of Seaworthiness
Zurqui, Inc. and the Valledor defendants claim that

because plaintiffs were not “seamen” pursuant to admiralty law,
they were not entitled to a warranty of seaworthiness, or any
protection derived from that warranty, from defendants. Defendants
contend that plaintiffs’ first cause of action is tantamount to a
warranty of seaworthiness claim, under which the vessel and her
owner are liable for the injuries suffered by a “seaman” caused by
the unseaworthiness of the ship.

See The Osceola, 189 U.S. 158

(1903) (superseded in part by statute 46 U.S.C. § 30104, as stated
in Atlantic Sounding Co. v. Townsend, 557 U.S. 404 (2009)).

“The

duty of seaworthiness is absolute and independent of negligence .
. . .”

1 Thomas Schoenbaum, Admiralty & Maritime Law § 6-25 (5th

ed. 2012).

This duty is owed to “a narrow class of maritime

Civil No. 12-1585 (FAB)

8

workers — those who can claim ‘seaman’ status under the law.

Other

persons who come aboard a vessel, such as passengers and visitors,
are not seamen and cannot claim the benefit of the warranty.”
at

§

6-27.

See

also

Kermarec

v.

Compagnie

Id.

Generale

Transatlantique, 358 U.S. 625, 629 (1959) (noting that because the
plaintiff was not a seaman, but rather a visitor on the vessel, he
could not raise an unseaworthiness claim). Although shipowners owe
the duty of seaworthiness only to seamen, they also owe the duty of
reasonable care to non-crew members who are legally aboard the
vessel.

Kermarec, 358 U.S. at 630.
Plaintiffs concede that they were not, and are not,

“seamen” within the meaning of the Jones Act, 46 U.S.C. § 30104,
and governing maritime law.

Plaintiffs’ first cause of action,

however, includes and emphasizes a claim that defendants breached
their duty of reasonable care towards plaintiffs. (Docket No. 1 at
¶ 60.)

Defendants’ surreply allows as much; they simply reiterate

that the claim of unseaworthiness is unavailable to plaintiffs,
without contesting the validity of the negligence claim.
No. 93 at p. 2.)

(Docket

Because the Court reads plaintiffs’ first cause

of action as a negligence claim, defendants’ motion for summary
judgment

based

on

the

seaworthiness is DENIED.

inapplicability

of

the

warranty

of

Civil No. 12-1585 (FAB)
2.

9

Alicia
Vincenty-Medina’s
Claim
Infliction of Emotional Distress

for

Negligent

Defendants contend that because plaintiff Alicia
Vincenty-Medina was not in the “zone of danger” when the Sea Watch
sank, she cannot recover for negligent infliction of emotion
distress pursuant to maritime law.

Plaintiffs do not dispute that

Alicia Vincenty was not in the “zone of danger” at the time of the
incident in question — she was at her home in Trujillo Alto.
(Docket Nos. 1 at p. 4; 82-2 at p. 16.)

Rather, plaintiffs argue

that recovery for emotional distress is permissible pursuant to the
“zone of danger,” “relative bystander,” and “physical impact”
tests.

Plaintiffs contend that Alicia Vincenty’s claim survives

summary judgment because (1) Alicia Vincenty’s husband was placed
in danger, (2) Alicia Vincenty suffered emotional distress upon
learning of

this

danger, and

3)

this

emotional

distress

was

Appeals

has

reasonably foreseeable to defendants.
While

the

First

Circuit

Court

of

recognized that boating accidents are maritime torts within the
admiralty and maritime jurisdiction of the federal courts, Medina
v. Perez, 733 F.2d 170, 171 (1st Cir. 1984), the court of appeals
has not decided whether a cause of action for negligent infliction
of emotional distress lies in admiralty.

See Fairest-Knight v.

Marine World Distrib., Inc., 652 F.3d 94, 102 n.7 (1st Cir. 2011)
(noting

that

the

First

Circuit

Court

of

Appeals

has

not

definitively addressed the issue and declining to do so in that

Civil No. 12-1585 (FAB)

10

case) (internal citations omitted). Relying on the Supreme Court’s
Federal Employers’ Liability Act (“FELA”) jurisprudence, however,
other federal appeals courts and this Court have recognized a cause
of

action

admiralty.

for

negligent

infliction

of

emotional

distress

in

Chan v. Soc’y. Expeditions, Inc., 39 F.3d 1398 (9th

Cir. 1994) (citing Consol. Rail Corp. v. Gottshall, 512 U.S. 532,
550 (1994)); Peemoller Sultan v. Pleasure Craft Contender 25, 139
F. Supp. 2d 230, 235 (D.P.R. 2001)(Fuste, J.) (compiling cases).
While the Ninth Circuit Court of Appeals declined to decide which
theory of liability would apply to admiralty claims of negligent
infliction of emotional distress, that court noted that none of the
theories would allow for recovery when the plaintiff was not
present at the accident scene.

Chan, 39 F.3d at 1409-10.

Other

federal courts have followed the Supreme Court’s decision in
Gottshall and applied the “zone of danger” test.

See, e.g.,

Peemoller, 139 F. Supp. 2d at 235 (adopting the “zone of danger”
test for claims of negligent infliction of emotional distress);
Williams v. Carnival Cruise Lines, Inc., 907 F. Supp. 403, 406
(S.D. Fla. 1995) (same); Yballa v. Sea-Land Servs., Inc., 919 F.
Supp. 1428, 1435-36 (D. Haw. 1995)(same).
Plaintiffs,

citing

Gottshall,

argue

that

the

“relative bystander” and “physical impact” tests also apply to a
negligent infliction of emotional distress claim.

(Docket No. 87

Civil No. 12-1585 (FAB)
at p. 8.)

11

This argument is unavailing.3

Gottshall held that the

“relative bystander” test was inappropriate in the FELA context,
and determined that the “zone of danger” test was most consistent
with the goals of the federal statute.

Id. at 556.

The Supreme

Court noted that even in the jurisdictions that apply the “relative
bystander” test, it “limits recovery to persons who witness the
severe injury or death of a close family member.”

Id.

The Court, persuaded by the reasoning of Judge Fuste
in

Peemoller,

holds

that

the

“zone

of

danger”

test

governs

admiralty claims for negligent infliction of emotional distress.
The “zone of danger” test, however, limits recovery for emotional
injury to “those plaintiffs who sustain a physical impact as a
result of a defendant’s negligent conduct, or who are placed in
immediate risk of physical harm by that conduct.”
U.S. at 548.

Gottshall, 512

Because plaintiffs do not even allege — much less put

forth evidence — that Alicia Vincenty was “placed in immediate risk
of physical harm” by defendants’ conduct in operating the Sea
Watch, her claim for negligent infliction of emotional distress
fails.

Accordingly, defendants’ motion for summary judgment of

this claim is GRANTED.

3

All claims brought by plaintiff Alicia

Even if the other two tests cited by plaintiffs were
applicable here, plaintiffs have not identified facts to support
Alicia Vincenty’s claim for intentional infliction of emotional
distress under either theory.

Civil No. 12-1585 (FAB)

12

Vincenty against Zurqui, Inc. and the Valledor defendants are
DISMISSED WITH PREJUDICE.
3.

Plaintiffs’ Maritime Tort Claim
Lastly, defendants argue that plaintiffs have not

produced sufficient evidence to support their maritime tort claim.
(Docket No. 80 at p. 6.)

To make out a maritime negligence claim,

a plaintiff must establish the following elements:

(1) a duty

required by law; (2) breach of that duty; (3) proximate cause; and
(4)

damages.

Schoenbaum,

supra,

at

§

5-2.

Specifically,

defendants argue that because plaintiffs failed to retain an expert
witness on time, they cannot put forth evidence to of breach and
causation.

The success of this argument is moored to defendants’

motion to strike, discussed above.

See supra Part II.A.

Having

denied defendants’ motion to strike, the Court may consider both
plaintiffs’ and defendants’ expert witness reports. The competing
expert opinions create genuine factual issues as to the breach and
causation

elements

Specifically,

of

plaintiffs’

plaintiffs’

expert,

maritime

Commander

Deck,

tort

claim.

opines

that

defendants breached their duty of care by transporting more than
six passengers on the Sea Watch, and that this overloading caused
the Sea Watch to sink.

(Docket No. 87-15.)

Defendants’ expert

witness, Captain Paul Simpson, opined that the Sea Watch was not
overloaded and that she sank as a result of a breach in her hull,
which was in turn caused by striking an unknown obstruction — a

Civil No. 12-1585 (FAB)
superseding, intervening cause.

13
(Docket No. 82-3.)

Because there

remain genuine factual issues for each element of plaintiffs’ tort
claim, defendants’ motion for summary judgment on a maritime tort
claim ground is DENIED.
III. The Valledor Matrimony’s Motion for Partial Summary Judgment
Defendants Jose A. Valledor, Concepcion Valledor, and their
conjugal partnership (collectively “the Valledor matrimony”) move
for partial summary judgment. (Docket No. 75.)

Plaintiffs base

their claims against the Valledor matrimony on the theory that Jose
Valledor is the true and lawful owner of the Sea Watch, while
Zurqui, Inc. — the record owner of the vessel — was merely Jose
Valledor’s alter ego. (Docket No. 1 at ¶¶ 21-22.)

The Valledor

matrimony now moves for partial summary judgment in Jose Valledor’s
personal

capacity,

contending

that

plaintiffs

have

failed

to

establish any genuine disputes of material fact regarding the
corporate identity of Zurqui, Inc. (Docket Nos. 75 & 77.)

Because

plaintiffs did not oppose the Valledor matrimony’s motion for
partial summary judgment, the tide runs strongly against their

Civil No. 12-1585 (FAB)
claim.4

14

“When a non-moving party fails to file a timely opposition

to an adversary’s motion for summary judgment, the [C]ourt may
consider

the

summary

judgment

motion

unopposed,

and

take

uncontested all evidence presented with that motion.”

as

Perez-

Cordero v. Wal-Mart P.R., 440 F.3d 531, 533-34 (1st Cir. 2006)
(internal citation omitted).

“While an unopposed summary judgment

still must be scrutinized in accordance with [Rule 56], . . . a
party’s failure to oppose summary judgment is [usually] fatal to
its case.”
A.

Id. at 534.
Uncontested Facts
Zurqui,

Inc.

is

a

for-profit

corporation

that

was

organized pursuant to the laws of the Commonwealth of Puerto Rico
on June 7, 2010.
Valledor,

and

incorporators.

(Docket No. 76-1.)

Concepcion
Id. at p. 2.

Valledor

Rego

Jose Valledor, Ronald
are

Zurqui,

Inc.’s

Jose Valledor, Concepcion Valledor-

Rego, Ronald Valledor, and Janice Valledor are Zurqui, Inc.’s equal
shareholders and directors.

4

(Docket No. 76-2 at pp. 4, 9, 10, &

The Valledor matrimony moved for partial summary judgment on
the same grounds on June 6, 2013. (Docket No. 50.) On December 5,
2013, the Court denied the motion as premature because discovery
had not yet been completed. (Docket No. 72.) In response to that
motion, plaintiffs conceded their inability to survive summary
judgment on the issue of corporate alter ego at that stage of the
litigation. (Docket No. 59.) Having had an opportunity to plumb
the depths of defendant’s corporate identity, plaintiffs now fail
to respond to defendant’s motion. Nevertheless, for the purposes
of deciding this motion, the Court will consider all arguments and
exhibits submitted by plaintiffs in opposition to the previous
motion. (Docket Nos. 59 & 60.)

Civil No. 12-1585 (FAB)
19.)

15

Zurqui, Inc. adopted its corporate bylaws on June 7, 2010,

(Docket No. 76-3 at pp. 20-25), and kept a record of its corporate
meetings and resolutions (Docket No. 76-2 at pp. 3-19.)

In 2010,

Zurqui, Inc. received an employer identification number (Docket
No. 76-4), filed a corporate income tax return (Docket No. 76-6),
and

submitted

a

corporate

annual

report

Department of State (Docket No. 76-7).

to

the

Puerto

Rico

In 2011, Zurqui, Inc.

registered as a merchant with the Puerto Rico Department of the
Treasury.

(Docket No. 76-8.)

As of March 28, 2011, Zurqui, Inc.

was the registered owner of the Sea Watch.5
B.

(Docket No. 76-14.)

Choice of Law
In a diversity case, the Court “applies the choice-of-law

rules of the forum state.”

Wadsworth, Inc. V. Schwarz-Nin, 951 F.

Supp. 314, 320 (D.P.R. 1996) (Pieras, J.) (citing Klaxon Co. v.
Stentor Elec. Mfg. Co., 313 U.S. 487, 496)(1941)).

This Court has

applied the “most significant contacts” test in tort cases, as well
as in the judicial process of piercing the corporate veil.

See,

e.g., Mercado-Salinas v. Bart Enter. Int’l., Ltd., 800 F. Supp. 2d
354, 359 (D.P.R. 2011) (Gelpi, J.); Goya Foods, Inc. v. UnanueCasal, 982 F. Supp. 103, 107 (D.P.R. 1997) (Fuste, J.); Wadsworth,
Inc., 951 F. Supp. 314, 320. Among other contacts, the Court

5

The Court does not consider the purchase and sale agreement
for the Sea Watch submitted as defendant’s exhibit 9 (Docket
No. 76-9), because it is signed only by the buyer (defendant) and
not the seller.

Civil No. 12-1585 (FAB)

16

considers the corporation’s place of incorporation and business,
the place where the tortious conduct occurred, and the place where
the relationship between the parties existed.

Goya Foods, 982 F.

Supp. at 107 (citing Wadsworth, 951 F. Supp. at 321-322).
Here, all of the parties’ significant contacts were with
Puerto Rico.

Zurqui, Inc. was incorporated and located in Puerto

Rico, all interactions between plaintiffs and defendants took place
in Puerto Rico, and the tortious conduct occurred in Puerto Rico.
Accordingly, the Court applies Puerto Rico law to the veil-piercing
analysis.
C.

Piercing the Corporate Veil - Puerto Rico Law
Under Puerto Rico law, corporations are presumed to be

legal

entities

shareholders.

separate

from

their

officers,

directors,

and

P.R. Laws Ann. tit. 14 § 3501 et seq.; Oficina del

Comisionado de Seguros v. Option Health Care Network, Inc., No. AL2012-59, 2014 WL 1806900, at *12 (P.R. Cir. March 31, 2014); Colon
v. Blades, 757 F. Supp. 2d 107, 109 (D.P.R. 2010)(Arenas, J.);
Milan v. Centennial Commc’ns. Corp., 500 F. Supp. 2d 14, 26 (D.P.R.
2007) (Gelpi, J.) (citing Fleming v. Toa Alta Dev. Corp., 96 D.P.R.
240, 243 (1968)).
may

be

pierced

In certain circumstances, the “corporate veil”
and

individual

liability

imposed

upon

the

individuals for which the corporate entity served merely as an
alter ego.
Puerto

Rico

Id.
law

The corporate veil may be pierced pursuant to
where

recognizing

the

corporate

form

would

Civil No. 12-1585 (FAB)

17

(1) sanction a fraud; (2) promote an injustice; (3) evade statutory
obligations; (4) violate public policy; (5) result in inequity; or
(6)

cover

up

fraudulent

or

criminal

activity.

Oficina

el

Comisionado de Seguros, 2014 WL 1806900, at *12; Milan, 500 F.
Supp. 2d at 26 (internal citations omitted).
considered

federal

common

law

This Court has also

factors,

such

as

(1)

undercapitalization; (2) nonpayment of dividends; (3) failure to
observe corporate formalities; (4) absence of corporate records;
(5) commingling of funds; and (6) use of corporate funds for noncorporate purposes.

Colon, 757 F. Supp. 2d at 109 (quoting United

States v. JG-24, Inc., 331 F. Supp. 2d 14, 63 (D.P.R. 2004)
(Acosta, J.)).

The party seeking to pierce the veil has the burden

of producing “strong and robust evidence” that the corporate form
should be disregarded.

Escude Cruz v. Ortho Pharm. Corp., 619 F.

2d 902, 905 (1st Cir. 1980) (quoting San Miguel Fertilizer Corp. v.
P.R. Drydock & Marine Terminals, 94 P.R.R. 403, 409 (1967)).
Defendants contend that because the plaintiffs cannot
show a genuine issue of material fact regarding the corporate
identity of Zurqui, Inc., summary judgment is warranted in favor of
the Valledor matrimony.

In response to an earlier motion for

partial summary judgment, plaintiffs pointed to a transcript of a
communication between the Coast Guard and Jose Valledor regarding
the sinking of the Sea Watch in which Jose Valledor was identified
as “the father and co-owner of the vessel Sea Watch.”

(Docket

Civil No. 12-1585 (FAB)
No. 59-1.)

18

Plaintiffs anchored their claim on this “admission,”

which they purport establishes that Jose Valledor was the true
owner of the Sea Watch.
Drawing all reasonable inferences in plaintiffs’ favor,
the evidence offered falls short of establishing a genuine issue
regarding Zurqui, Inc.’s corporate identity.

Plaintiffs offer no

evidence — much less “strong and robust evidence” — suggesting that
Zurqui, Inc. is merely Jose Valledor’s alter ego, while defendants
have provided sufficient proof that Zurqui, Inc. observed all
relevant corporate formalities.

Though the record contains some

evidence that Zurqui, Inc. was extensively controlled by its
shareholders (see Docket Nos. 76-1 & 76-2), it is devoid of any
indication that recognizing the corporate form would (1) sanction
a fraud; (2) promote an injustice; (3) evade statutory obligations;
(4) violate public policy; (5) result in inequity; or (6) cover up
fraudulent or criminal activity.

See Oficina el Comisionado de

Seguros, 2014 WL 1806900, at *12; Milan, 500 F. Supp. 2d at 26).
The record does not permit the Court to disregard Zurqui, Inc.’s
corporate form and impose individual liability on Jose Valledor at
this stage.

Accordingly, the Valledor matrimony’s motion for

partial summary judgment is GRANTED; all claims against Jose

Civil No. 12-1585 (FAB)

19

Valledor, Concepcion Valledor, and their conjugal partnership are
DISMISSED WITHOUT PREJUDICE.6
IV.

PDMYC’s Motion for Partial Summary Judgment
Defendant Palmas del Mar Yacht Club and Marina (“PDMYC”) moves

for partial summary judgment.

(Docket No. 81.)

Plaintiffs allege

that defendant PDMYC is jointly and severally liable, along with
the other defendants, because it benefitted from the economic
activity of the Sea Watch, advertised and allowed the vessel to
operate within its premises, and represented to the general public
that the Sea Watch was a seaworthy and safe vessel.
at ¶¶ 23 & 69.)

(Docket No. 1

PDMYC moves for summary judgment, contending that

it neither owed nor breached any duty of care to the passengers of
the Sea Watch.
A.

(Docket Nos. 81 & 84.)

Uncontested Facts7
PDMYC is a corporation organized under the laws of Puerto

Rico.

(Docket No. 83-3 at ¶ 2.)

slips for vessels.

PDMYC’s facilities include 158

(Docket No. 83-3 at ¶¶ 6-9.)

Though PDMYC has

6

Should this case proceed to trial and result in a verdict
for plaintiffs, the parties may raise the issue of corporate
identity for the purposes of executing a judgment against Zurqui,
Inc. See P.R. Laws Ann. tit. 14 § 3784; Colon, 757 F. Supp. 2d at
109-10.
7

The Court notes that while plaintiffs responded to PDMYC’s
statement of uncontested material facts (Docket Nos. 83 & 97), they
did not provide any facts of their own or support their denials
with record citations as required by Local Rule 56. See Loc. R.
56(b)&(c). As a result, the Court deems unopposed all of PDMYC’s
facts that are properly supported.

Civil No. 12-1585 (FAB)

20

rented slips in the past to some charter boat operators, PDMYC is
not in the vessel-chartering business and has never been a partner
of the operators or held a proprietary interest in the operators’
businesses.

(Docket Nos. 83-3 at ¶¶ 9 & 19; 83-4 at ¶¶ 1-5.)

PDMYC does not receive commissions or any other type of income from
the charter vessels docked in its facilities. (Docket Nos. 83-3 at
¶ 17; 83-4 at ¶ 4.)

As of July of 2011, there were two charter

boat operators renting slips in PDMYC’s marina:
and East Puerto Rico Divers.

Sea Watch Divers8

(Docket No. 83-3 at ¶¶ 9-10.)

PDMYC

entered into a “License Agreement for Dockage” with all slip-rental
customers.

Id. at ¶ 11.

To compensate for the commercial use of

facilities, utilities, and marina resources on a daily basis, PDMYC
charges commercial operators $2.00 more per foot than it charges
non-commercial customers.

Id. at ¶ 12.

PDMYC had no involvement with the ownership, maintenance,
operation or navigation of the Sea Watch.
¶ 19; 83-4 at ¶¶ 1-3.)

(Docket Nos. 83-3 at

While PDMYC did not actively promote or

advertise Sea Watch Divers or any other charter operator, Sea Watch
Divers and East Puerto Rico Divers requested — and were granted —
permission from PDMYC to put up signs in the marina facilities.
The charter operators did not pay any extra money to display the
signs.

8

(Docket Nos. 83-3 at ¶ 13; 83-4 at ¶¶ 6-7.)

Sea Watch

PDMYC refers to the operators of the Sea Watch as “Sea Watch
Divers;” the Court understands this name to be interchangeable with
defendant Zurqui, Inc. (See Docket No. 83 at ¶ 18.)

Civil No. 12-1585 (FAB)

21

Divers never had an office space at the PDMYC facilities.
Nos. 83-3 at ¶ 14; 83-4 at ¶¶ 8-9.)
seeking

information

regarding

(Docket

If a person called PDMYC

charter

boats

or

trips,

PDMYC

provided the names and contact numbers of various nearby charter
operators, but did not offer specific information, recommendations,
or

representations

regarding

particular

companies.

(Docket

Nos. 83-3 at ¶ 6; 83-6; 83-7.)
PDMYC did not collect plaintiffs’ payment for the Sea
Watch charter trip, and did not receive any commission or income in
connection with the trip.

(Docket Nos. 83-4 at ¶ 4; 83-9; 83-10.)

As of July 24, 2011, PDMYC was not aware of any claim or complaint
regarding the services or trips offered by the charter operators in
the area, including the Sea Watch.

(Docket No. 83-3 at ¶ 18.)

On

July 24, 2011, the Sea Watch and its passengers departed from
PDMYC’s marina facility.

(Docket Nos. 83-3 at ¶¶ 10-11; 83-4 at

¶¶ 8-9.) After the Sea Watch sank, the passengers were rescued and
brought back to the PDMYC marina facility.
B.

(Docket No. 83 at ¶ 4.)

Discussion
Plaintiffs’ theory of PDMYC’s liability is based on

PDMYC’s (1) representations to the public regarding the Sea Watch
and (2) derivation of economic benefit from the operations of the

Civil No. 12-1585 (FAB)
Sea Watch.9

22

Plaintiffs do not allege — or offer evidence of —

specific acts of negligence committed by PDMYC, but rather impute
the defendants’ negligence to PDMYC as joint a tortfeasor.

(See

Docket No. 1 at ¶¶ 23 & 69.)
In admiralty, shipowners owe all those lawfully aboard
the vessel “the duty of exercising reasonable care under the
circumstances of each case.”

Kermarec, 358 U.S. at 632. A duty of

care exists when an injury is foreseeable or when contractual or
other relations of the parties impose it. Daigle v. Point Landing,
Inc., 616 F.2d 825, 827 (5th Cir. 1980).

In determining the

existence of duty, a court must examine and weigh the probability
of an accident, the potential extent of the injury, and the cost of
adequate precautions.

See Complaint of Paducah Towing Co., 692

F.2d 412 (6th Cir. 1982); United States v. Carroll Towing Co., 159
F.2d 169 (2d Cir. 1947).

To sustain a claim for joint venture,

plaintiffs must put forth facts that support some combination of
the following factors:

9

Plaintiffs’ theory of liability is not entirely clear from
their complaint or pleadings. To the extent that plaintiffs imply
that PDMYC was an agent or broker of the defendants, (see Docket
No. 96 at ¶ 3), this claim fails. Plaintiffs have not put forth any
evidence that would support an inference of apparent agency. See
Hung Kang Huang v. Carnival Corp., 909 F. Supp. 2d 1356, 1361 (S.D.
Fla. 2012) (“Under general maritime law, apparent agency may be
established when: (1) the alleged principal makes some sort of
manifestation causing a third party to believe that the alleged
agent had authority to act for the benefit of the principal,
(2) such belief was [] reasonable, and (3) the claimant reasonably
acted on such belief to his detriment.”) (internal citation
omitted).

Civil No. 12-1585 (FAB)

23

(1) the intention of the parties to create a joint
venture; (2) joint control or right to control; (3) joint
proprietary interest in the subject matter of the joint
venture; (4) the right of all venturers to share in the
profits; and (5) the duty of both to share in the losses.
Hung Kang Huang, 909 F. Supp. 2d at 1361.

See also Fulcher’s Point

Pride Seafood, Inc. v. M/V Theodora Maria, 935 F.2d 208, 211 (11th
Cir. 1991).
Relying on a decision by the District Court for the
Eastern District of Louisiana, PDMYC contends that plaintiffs’
factual showing falls short of establishing the first element of
their negligence claim — duty.
Weighing

Corp.,

considered

the

352

F.

Supp.

negligence

of

In Travelers Indemnity Co. v. Gulf
335
a

(E.D.
marina

La.

1972),

that

(1)

a

court

maintained

information about the availability of charter boats kept in the
marina; (2) received frequent phone calls from potential charter
boat customers; (3) informed callers of the charter boat prices;
and (4) directed the plaintiff to the defendant charter boat
company, but never (5) acted as agent or manager for charter boat
owners; (6) entered into any charter agreements; or (7) received
any payment from the charter boat owners or captains for these
services.

Id. at 343.

After a bench trial, the Louisiana district

court found that the marina was “in no way negligent, and did not
breach any duty owed to the plaintiffs.”

Id.

In support of its

verdict, the court noted that the “marina exercised no control over
the vessels” in its space, but “merely leased boat slips to various

Civil No. 12-1585 (FAB)
vessel owners.”

Id.

24

Accordingly, the court reasoned, “the care

and safety of the vessels housed at the marina was left to the
individual vessel owners.”

Id. See also Habans v. Glover, 1992 WL

125372, at * 2-6 (E.D.L.A. 1992) (finding that a marina — from
which a chartered boat trip departed and whose employee collected
the charter fee — did not owe a single duty to the plaintiffs).
Here, plaintiffs have not put forth sufficient evidence
to

support

an

inference

that

legally, all in the same boat.

PDMYC

and

the

defendants

were,

A factual issue exists as to

whether plaintiff Nieto-Vincenty called the marina10 a few days
prior to the trip to inquire about hiring a charter boat to Vieques
and was given the names of two charter companies, including Sea
Watch Divers.

(Docket No. 83-9 at pp. 10-11.)

The undisputed

facts establish that the Sea Watch was kept at PDMYC’s marina
facilities, that PDMYC permitted Sea Watch Divers to put up a sign
on its property, that PDMYC charged a slightly higher rate for
commercial over non-commercial slip leases, and that PDMYC had no
knowledge of any claim or complaint regarding Sea Watch Divers’
charter trips.

10

Nieto Vincenty’s deposition testimony states that he called
“the marina at Palmas Del Mar,” (Docket No. 83-9 at p. 10), which
PDMYC claims is a different marina.
(Docket No. 84 at p. 14.)
(See also Docket No. 1 at ¶¶ 31-32) (referring to Palmas Del Mar
Marina). For the purposes of ruling on this motion, the Court will
assume that plaintiffs have alleged that PDMYC was the marina
contacted.

Civil No. 12-1585 (FAB)

25

Plaintiffs offer nothing to indicate that PDMYC had any
further involvement in the July 24, 2011 Sea Watch trip, or any
other charter by the Sea Watch.

Thus, drawing all inferences in

plaintiffs’ favor, the factual record before the Court contains no
evidence that PDMYC (1) exercised control over the care or safety
of the Sea Watch, (2) made representations about the condition of
the Sea Watch or its captain, (3) acted as an agent or broker for
Sea Watch Divers, or (4) engaged in a joint venture with Sea Watch
Divers.

See Hung Kang Huang, 909 F. Supp. 2d at 1361; Travelers,

352 F. Supp. at 343.
Plaintiffs contend that all of the facts together amount
to a “tacit representation of the existence of a relation, of
whatsoever nature, between Sea Watch and the marina beyond that of
mere boat slip rental, lessor/lessee.” (Docket No. 96 at pp. 8-9.)
Plaintiffs further argue that the economic benefit PDMYC derived
from commercial slip leases indicates a joint venture between PDMYC
and Sea Watch Divers.

This argument goes adrift, however, because

plaintiffs offer no legal authority to suggest that such minimal
involvement

by a marina would give rise to a duty of care,

constitute a joint venture, or establish a breach of any duty of
care owed to passengers on a private charter trip.

The Court

agrees with the reasoning of the Travelers court that, given the
limited relationship between PDMYC and Sea Watch Divers, “the care
and safety of the vessels housed at the marina was left to the

Civil No. 12-1585 (FAB)
individual

vessel

26

owners.”

Travelers,

352

F.

Supp.

at

343.

Plaintiffs have failed to establish any genuine issue of material
fact regarding the existence of a duty owed by PDMYC to plaintiffs,
or a breach of any such duty.

Accordingly, the Court must GRANT

PDMYC’s motion for summary judgment.
V.

Conclusion
For the reasons stated above, the Court GRANTS the Valledor

matrimony’s
Nos.

75

&

and
81);

PDMYC’s
all

motions

claims

for

against

summary
PDMYC

judgment

are

(Docket

DISMISSED

WITH

PREJUDICE; all claims against Jose Valledor, Concepcion Valledor,
and their conjugal partnership are DISMISSED WITHOUT PREJUDICE.
The Court GRANTS IN PART AND DENIES IN PART Zurqui, Inc. and the
Valledor defendants’ motion for summary judgment (Docket No. 80);
all claims brought by plaintiff Alicia Vincenty-Medina against all
defendants are DISMISSED WITH PREJUDICE; all remaining claims
against Zurqui, Inc. and the Valledor defendants survive.

The

Court DENIES Zurqui, Inc. and the Valledor defendants’ motion to
strike (Docket No. 95).
IT IS SO ORDERED.
San Juan, Puerto Rico, May 30, 2014.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE