Quilez-Velar et al v. Ox Bodies, Inc. et al
Filing
364
MEMORANDUM AND OPINION granting 351 Motion for Extension of Time; finding as moot 359 Motion to Dismiss; denying 353 Motion to Strike; finding as moot 360 Amended Motion to Dismiss; granting 352 Motion for Leave to File Reply; granting 344 Motion for Judgment on the Pleadings. Signed by US Magistrate Judge Silvia Carreno-Coll on 9/4/2014.(NBB)
IN THE UNITED STATES COURT
FOR THE DISTRICT OF PUERTO RICO
BERARDO A. QUILEZ-VELAR,
ET AL.,
Plaintiff,
v.
CIV. NO.: 12-1780(SCC)
OX BODIES, INC., ET AL.,
Defendant.
MEMORANDUM AND ORDER
The accident giving rise to this case birthed a complicated
history of lawsuits. At the federal level, two sets of plaintiffs
separately brought suit against a set of defendants that was
entirely diverse from plaintiffs. These cases were consolidated,
and then one set of plaintiffs settled. Meanwhile, in state court,
two other lawsuits were initiated and consolidated, this time
against a more complete set of defendants. The most notable
difference between the state and federal suits was that the
federal suits did not name as a defendant the Municipality of
QUILEZ-VELAR v. OX BODIES
Page 2
San Juan. Unsurprisingly, then, Defendants Ox Bodies and
Truck Bodies filed a third-party complaint against the Municipality and its insurer in the consolidated federal suit. See
Docket No. 19.
The Municipality has consistently maintained that its
monetary liability is limited to the single-occurrence cap in its
insurance policy, which is $500,000. See P.R. LAWS ANN. tit. 26,
§ 2004(1). That the Municipality cannot be liable for more than
$500,000 has not been disputed by any other parties, and in any
case the statute is plainly applicable in this case. See, e.g.,
Mintatos v. Municipality of San Juan, 322 F. Supp. 2d 143, 145
(D.P.R. 2004) (applying § 2004). At the same time, the Municipality has admitted liability up to $500,000. See Docket No. 360,
at 3 (informing this Court that the Municipality had admitted
liability up to $500,000 in state court).1 To that end, the Municipality has consigned $500,000 to the state court for eventual
distribution to the parties as that court deems proper. In
return, it asks to be dismissed from this case. See Docket No.
1.
I take notice of this fact, stated in an amended motion to dismiss filed
by the Municipality, but I do not otherwise consider the amended
motion to dismiss, which is repetitive of the motion for judgment on
the pleadings under consideration. Instead, I find the amended
motion—and the motion it amended, Docket No. 359—MOOT.
QUILEZ-VELAR v. OX BODIES
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344.2
According to the Municipality, it has “obligations” to
multiple people, including the plaintiffs that have been
dismissed from the federal action. See Docket No. 344, at 10.
The Municipality notes that under Puerto Rico law, obligations
“are extinguished” by “their payment.” P.R. LAWS ANN. tit. 31,
§ 3151. This payment, however, must be “made to the person
in whose favor the obligation is constituted.” P.R. LAWS ANN.
tit. 31, § 3166. Thus, says the Municipality, because of the
dismissed plaintiffs it cannot fully discharge its obligations in
the federal case.
The Municipality made a settlement offer and a Rule 68
offer of judgment for the full policy limit to both the dismissed
and remaining plaintiffs. The dismissed plaintiffs accepted it,
2.
Plaintiffs opposed the Municipality’s motion for judgment on the
pleadings, see Docket No. 349, and the Municipality requested leave to
file a reply, Docket No. 352, along with a motion for an extension of
time in which to file it, Docket No. 351. However, the reply was filed
outside of the period of time the Municipality requested, and so
Plaintiffs moved to strike, see Docket No. 353. Because the
noncompliance was minimal, the motion to strike is DENIED and the
Municipality’s motions are GRANTED, except insofar as they request
leave not requested in the original motion.
QUILEZ-VELAR v. OX BODIES
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but the remaining plaintiffs failed to respond.3 Under Puerto
Rico law, where a tender of payment is made and refused, the
debtor may be released from liability by consignation of the
amount due. P.R. LAWS ANN. tit. 31, § 3180. This consignation
is “made by depositing the things due at the disposal of the
judicial authority before whom the tender shall be proven in a
proper case.” P.R. LAWS ANN. tit. 31, § 3182. To that end, the
Municipality has deposited $500,000 with the state court and
has accordingly asked to be released from liability.
Notably, Ox Bodies and Truck Bodies—the only parties to
this lawsuit with federal claims against the Municipality—have
not opposed the Municipality’s motion.4 Plaintiffs have,
however. Essentially, Plaintiffs argue that § 3180 is inapplicable
because there is presently no judgment making the Municipality liable for any debt. Thus, say Plaintiffs, the Municipality’s
3.
By the offer’s terms, a failure to be accepted by all of the plaintiffs
nullified the offer. See Docket No. 344-3, at 3.
4.
Defendants failed to file any opposition to the motion under
consideration, which is therefore deemed unopposed by them.
However, Defendants did file a response to the Municipality’s moot
amended motion to dismiss. See Docket No. 361. There, they do not
oppose the requested relief but instead argue that they may only be
held responsible for their proportional share of the damages in this
case. See id. at 4. Those arguments are discussed below.
QUILEZ-VELAR v. OX BODIES
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liability “is contingent on the occurrence of a future and
uncertain event, namely: a jury finding [the Municipality]
liable to [Ox Bodies and Truck Bodies] after a trial on the merits.”
Docket No. 349, at 6. Plaintiffs also argue that the offer of
judgment on which the consignation is made is invalid, first
because it was made to Plaintiffs rather than Ox Bodies and
Truck Bodies, and second because it fails to include accrued
costs and attorneys’ fees. Plaintiffs arguments fail for several
reasons.
First, Plaintiffs attack on the offer of judgment lacks merit.
As Plaintiffs note, the only claims in this suit against the
Municipality are by Ox Bodies and Truck Bodies. They are
claims for contribution, though: Ox Bodies and Truck Bodies
contend that the Municipality is also a tortfeasor, and that if
they are found liable the Municipality should pay for at least
some of those costs. Moreover, taking a more global look at the
litigation flowing from the underlying accident, it is obvious
that Plaintiffs and the Municipality are adverse parties. Were
this case to go to trial with the Municipality as a party, the
practical result would be for the jury to find damages and
apportion liability between the Municipality and Defendants;
the Municipality and Defendants would be jointly and sever-
QUILEZ-VELAR v. OX BODIES
Page 6
ally liable for those damages, with the Municipality’s exposure
capped at $500,000. See, e.g., Project Hope v. M/V IBN SINA, 250
F.3d 67, 76–77 (2d Cir. 2001) (holding that “a formal amendment of a plaintiff’s complaint asserting causes of action
against a party impleaded under Rule 14(a) is unnecessary if
the third-party is effectively on notice that it will be held liable
on the plaintiff’s claims and the two proceed against one
another in an adverse manner”). Given this fact—and given
that Plaintiffs were elsewhere asserting claims against the
municipality5—it made practical sense for the Municipality to
make an offer of judgment directly to Plaintiffs. After all, it
would not have made sense to make such an offer to Ox Bodies
and Truck Bodies, who were only asserting contingent liability
claims against the Municipality.6
5.
In fact, the offer was made “to all plaintiffs in the consolidated cases in
both federal and state court.” Docket No. 344-3, at 1.
6.
Plaintiffs’ argument that the offer of judgment is inadequate because of
a supposed failure to include costs and attorneys’ fees is frivolous.
Indeed, the offer of judgment itself offers “$500,000, inclusive of
litigation costs and attorney’s fees.” Docket No. 344-3, at 2. This is all
that is needed to satisfy Rule 68. See Marek v. Chesny, 473 U.S. 1, 6 (1985)
(“We do not read Rule 68 to require that a defendant’s offer itemize the
respective amounts being tendered for settlement of the underlying
substantive claim and for costs.”).
QUILEZ-VELAR v. OX BODIES
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In any case, it is not clear why the Rule 68 offer must have
been valid for the Municipality to benefit from the consignation of funds with the state court. By its terms, § 3180 merely
requires that an offer be made and rejected, a requirement that,
notwithstanding any defect in the Rule 68 offer, has unquestionably been satisfied. See, e.g., Docket Nos. 344-2, 344-3. This
is confirmed by the case law; consignation seems to be regularly accepted without any offer of judgment. For example, in
Pilot Life Insurance v. Crespo Martínez, two people filed claims
with the insurer to the proceeds of a life insurance policy. See
136 D.P.R. 624, 630 (1994).7 The insurer knew that it owed
money, but it could not determine to whom that money was
owed; accordingly, it filed an interpleader action and consigned the policy proceeds with the court pursuant to § 3180.
See id. The claimants—both of whom were named as defendants in the suit—seem to have then argued over the proceeds
without the insurer’s further participation, an arrangement that
the Supreme Court of Puerto Rico approved. See id. at 643.
Similarly, another court in this district has interpreted § 3180
to permit an insurer to “file an interpleader action in order for
7.
An unpaginated English-language translation of Crespo Martínez is
available on Westlaw at 1994 P.R.-Eng. 909,301.
QUILEZ-VELAR v. OX BODIES
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the competing claimants [to an insurance policy] to elucidate
who is legally entitled to the proceeds.” Pabon Lugo v. MONY
Life Ins. Co. of Am., 465 F. Supp. 2d 123, 129 (D.P.R. 2006). Once
the deposit has been made, that court explained, “the insurer
is discharged from further liability.” Id. at 130.
Because the Municipality has complied with the provisions
of § 3180, its motion shall be granted and it shall be dismissed
from this case. To do otherwise and require it to represent itself
in the federal trial would be, simply, a waste of its resources.
Notwithstanding the Municipality’s dismissal here, Defendants
will be entitled to have the jury apportion liability between
them and the Municipality. If the jury determines that both the
Municipality and Defendants were responsible for Plaintiffs’
injuries, Defendants will be entitled to a “proportionate share
setoff.” Rio Mar Assocs., LP, SE v. UHS of P.R., Inc., 522 F.3d 159,
165 (1st Cir. 2008) (citing Szendrey v. Hospicare, 158 D.P.R. 648
(2003)). Thus, even if the jury determines that the Municipality
is liable for more than $500,000, Plaintiffs will be unable to
recover that excess amount from Defendants.8 See Zurich Am.
8.
From Plaintiffs’ motion, I gather that the reason why Plaintiffs so
strenuously advocate to keep the Municipality in the case is out of a
hope that, if it defends itself, the jury will apportion a higher
QUILEZ-VELAR v. OX BODIES
Page 9
Ins. v. Lord Elec. Co. of P.R., 828 F. Supp. 2d 462, 471 (D.P.R.
2011); cf. Widow of Andino v. P.R. Water Resources Auth., 93
P.R.R. 168, 179–80 (1966) (holding that where an employertortfeasor was immune from liability by statute, recovery could
not be sought for the employer-tortfeasor’s negligence from a
joint tortfeasor).
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 4th day of September, 2014.
S/ SILVIA CARREÑO-COLL
UNITED STATES MAGISTRATE JUDGE
percentage of liability to Defendants, which will result in a larger
recoverable judgment. Of course, this is not a sufficient basis for
keeping the Municipality in the case when it has admitted liability and
consigned the proceeds of its insurance policy.
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