Nieto-Vincenty et al v. Valledor et al

Filing 72

MEMORANDUM AND ORDER re 50 Motion for Partial Summary Judgment. The Court DENIES defendants' current motion for summary judgment and invites defendants to refile summary judgment motions on this issue once discovery has been completed. Defendants may refile summary judgment motions no later than 4/7/2014, once discovery has been completed no later than 2/7/2014, as set forth in the Case Management Order. Signed by Judge Francisco A. Besosa on 12/05/2013. (brc)

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

v.
RONALD JOSE VALLEDOR, et al.
Defendants.

MEMORANDUM AND ORDER
BESOSA, District Judge
Before
conjugal

the

Court

partnership’s

(Docket No. 50.)

is defendant
motion

for

Jose

A.

partial

Valledor
summary

and

his

judgment.

For the reasons that follow, at this time the

Court DENIES defendant’s motion for partial summary judgment.1
I.

Background
On July 20, 2012, twenty-eight plaintiffs filed a complaint in

admiralty and maritime jurisdiction against thirteen defendants,
including

Jose

A.

Valledor

and

his

conjugal

partnership

(hereinafter collectively referred to as “the Valledors”), alleging
injuries caused by a malfunctioning vessel.

(Docket No. 1.)

This

Court has admiralty and maritime jurisdiction over plaintiffs’

1

Because the motion for summary judgment is denied as
prematurely filed, defendants are invited to refile summary
judgment motions no later than April 7, 2014, once discovery has
been completed no later than February 7, 2014, as set forth in the
Case Management Order. (Docket No. 20.) No extensions will be
allowed.

Civil No. 12-1585 (FAB)

2

claims pursuant to 28 U.S.C. § 1333.

The complaint alleges that

the vessel at issue was owned by Zurqui, Inc., which was in turn a
corporate alter ego for the Valledors.

(Docket No. 1 at p. 13.)

The Court entered a case management order on February 11, 2013,
specifying that September 6, 2013 was the deadline for filing
motions to dismiss or judgment on the pleadings and April 7, 2014
was the deadline for filing motions for summary judgment.
No. 20 at p. 9.)

(Docket

On April 26, 2013, the parties filed a joint case

management memorandum, noting that depositions of the defendants
were scheduled to be taken in August, September, and October of
2013.

(Docket No. 43 at pp. 4-5.)

February 7, 2014.

The discovery cut off date is

(Docket No. 20.)

On June 6, 2013, the Valledors filed a motion for partial
summary judgment, a memorandum of law in its support, and a
statement of uncontested material facts.
52.)

(Docket Nos. 50, 51, &

The crux of the Valledors’ summary judgment argument is that

plaintiffs cannot show a genuine issue of material fact regarding
the corporate identity of Zurqui, Inc., and summary judgment is
accordingly warranted for the Valledors.

Plaintiffs filed their

opposition and reply statement of opposing facts on June 25, 2013.
(Docket Nos. 59 & 60.)

Plaintiffs contend that the motion for

summary judgment was filed prematurely and that they have not had
a fair chance to obtain necessary evidence to support their claims.
(Docket No. 59 at p. 7.)

Civil No. 12-1585 (FAB)
II.

3

Discussion
1.

Summary Judgment Standard
The Court may grant a motion for summary judgment only if

“the

pleadings,

depositions,

answers

to

interrogatories,

and

admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the
moving party is entitled to judgment as a matter of law.”
Civ. P. 56(c).

Fed. R.

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).
The party moving for summary judgment bears the burden of
showing the absence of a genuine issue of material fact.

See

Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). The party must
demonstrate it through definite and competent evidence. MaldonadoDenis 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)). If the movant supports its motion by demonstrating
“that the non-moving party will be unable to carry its burden of
persuasion at trial,” the non-moving party must have first been
afforded

an

“adequate

opportunity

to

discover

material

facts

Civil No. 12-1585 (FAB)
supporting its claim.”

4
Carmona v. Toledo, 215 F.3d 124, 133 (1st

Cir. 2000.)
2.

Federal Common Law of Corporate Veil Piercing
Because this case involves the malfunction of a vessel on

navigable

waters,

it

falls

within

the

Court’s

admiralty

jurisdiction. Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199,
206 (1996); 28 U.S.C. § 1333.

Federal courts sitting in admiralty

must apply federal common law when examining corporate identity.
See Vitol, S.A. v. Primerose Shipping Co. Ltd., 708 F.3d 527, 54344 (4th Cir. 2013); Dow Chem. Pac. Ltd. v. Rascator Mar. S.A., 782
F.2d 329, 342 (2d Cir. 1986); Talen’s Landing, Inc. v. M/V Venture
II, 656 F.2d 1157 (5th Cir. 1981).

See also Brotherhood of

Locomotive Eng’rs. v. Springfield Terminal Ry. Co., 210 F.3d 18,
25-26

(1st

Cir.

2000)

(finding

that

federal

choice

of

law

principles require application of the federal common law rules of
decision in federal question cases where the statute in question
demands national uniformity.) The federal standard “for when it is
proper to pierce the corporate veil is notably imprecise and factintensive.”

Crane v. Green & Freedman Baking Co., 134 F.3d 17, 21

(1st Cir. 1998).

The First Circuit Court of Appeals, along with

other circuit courts of appeals, has “considered the specific
legislative policies at issue and whether piercing the corporate
veil is necessary to further those policies.”
Locomotive Eng’rs., 210 F.3d at 27.

Brotherhood of

Factors to be considered in

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

whether

inadequate

5

to

pierce

the

capitalization,

corporate

(2)

veil

extensive

include

control

by

shareholders, (3) intermingling of the corporation’s properties
with

those

of

its

owner,

(4)

failure

to

observe

corporate

formalities and separateness, (5) siphoning of funds from the
corporation,

(6)

absence

of

corporate

functioning officers or directors.

records,

and

(7)

non-

In re Achushnet River & New

Bedford Harbor Proceedings Re Alleged PCB Pollution, 675 F. Supp.
22, 33 (D. Mass. 1987) (citing Anderson v. Abott, 321 U.S. 349, 362
(1944)).

At the core of this determination is the question of

whether imposing liability would achieve an equitable result.

See

InterGen N.V. v. Grina, 344 F.3d 134 (1st Cir. 2003).
3.

Analysis
The crux of the Valledors’ summary judgment argument is

that plaintiffs cannot show a genuine issue of material fact
regarding the corporate identity of Zurqui, Inc., and summary
judgment is accordingly warranted for the Valledors.
No.

51.)

Plaintiffs

concede

that

their

theory

of

(Docket
personal

liability for the Valledors hinges on a showing of corporate alter
ego, and that they are unable to make a showing sufficient to

Civil No. 12-1585 (FAB)

6

survive summary judgment at this stage of the proceedings. (Docket
No. 59 at p. 5.)2
The Court agrees with plaintiffs and finds that it is
premature

to

conclude

that

the

gaps

in

plaintiffs’

evidence

regarding corporate alter ego “necessarily demonstrate plaintiffs’
inability to establish an issue of material fact” as to the
Valledors’ personal liability.

Carmona, 215 F.3d at 133.

Because

defendants’ motion for summary judgment was filed prematurely,
plaintiffs have not had adequate opportunity to discover evidence
relevant to a showing of corporate alter ego.

Accordingly, rather

than make a premature finding regarding the Valledors’ personal
liability, the Court DENIES defendants’ current motion for summary
judgment and invites defendants to refile summary judgment motions
on this issue once discovery has been completed.
IT IS SO ORDERED.
San Juan, Puerto Rico, December 5, 2013.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE

2

The only evidence plaintiffs offer to support a finding of
corporate alter ego is a statement made by Jose. A. Valledor to the
Coast Guards responding to the vessel’s distress signal. (Docket
No. 59-1.)
This evidence alone would not suffice to create a
genuine issue of material fact regarding corporate identity.