Pagan-Ramirez v. MBTI Business Training Institute et al
Filing
118
OPINION AND ORDER granting 86 Motion for Partial Summary Judgment. Signed by US Magistrate Judge Marcos E. Lopez on 10/31/2018. (YI)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
MARIANGELY PAGÁN RAMIREZ,
Plaintiff,
v.
CIVIL NO.: 15-2168 (MEL)
MBTI BUSINESS TRAINING INSTITUTE
AND/OR MBTI; MBTI OF PUERTO RICO,
INC.; MBTI TECH COLLEGE, INC.; MBTI
TECH, INC.; ANGEL NEGRÓN, HIS WIFE
SOE DOE, AND THEIR CONJUGAL LEGAL
PARTNERSHIP; ACE INSURANCE
COMPANY, INC.
Defendants.
OPINION AND ORDER
Mariangely Pagán Ramirez (“Plaintiff”) filed an amended complaint against MBTI
Business Training Institute and/or MBTI; MBTI of Puerto Rico, Inc.; MBTI Tech College, Inc.;
MBTI Tech, Inc.; Angel Negrón, his wife Soe Doe, and their conjugal legal partnership; and ACE
Insurance Company, Inc. 1 (“Defendants”) on June 20, 2016. ECF No. 43. Plaintiff alleged
violations of her employment rights protected by Title VII of the Civil Rights Act of 1964 (“Title
VII”), 42 U.S.C. § 2000e et seq. and pendent claims raised pursuant to Sections 1 and 8 of Article
II of the Constitution of the Commonwealth of Puerto Rico; Law No. 17 of April 22, 1988 (“Act
17”), 29 L.P.R.A. § 155 et seq.; Law. No. 100 of June 30, 1959, as amended (“Act 100”), 29
L.P.R.A. § 146 et seq.; Law No. 69 of July 6, 1985 (“Act 69”), 29 L.P.R.A. § 1321 et seq.; Act
No. 115 of December 20, 1991 (“Act 115”), 29 L.P.R.A. § 194; and Articles 1802 and 1803 of the
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ACE Insurance Company, Inc. is now called Chubb Insurance Company of Puerto Rico. Because the company refers
to itself as ACE Insurance Company, Inc. in its motion for partial summary judgment, the court will also refer to it as
ACE Insurance Company, Inc.
Civil Code of the Commonwealth of Puerto Rico (“Puerto Rico Tort Statute”), 31 L.P.R.A. §§
5141-42. Id. at 1–2. Pending before the court is ACE Insurance Company, Inc.’s motion for
partial summary judgment as to ACE Insurance Company, Inc. in its capacity as insurer of MBTI
Tech College, Inc. and MBTI Tech, Inc. ECF No. 86. ACE Insurance Company, Inc. argues in
its motion for partial summary judgment that MBTI Tech College, Inc. and MBTI Tech, Inc. are
not insured under the policy issued to MBTI of Puerto Rico, Inc. by ACE Insurance Company,
Inc. In her response in opposition, Plaintiff, who is not the insured, nor claims to be, denies the
arguments made within ACE Insurance Company, Inc.’s motion for partial summary judgment.
ECF No. 88. ACE Insurance Company, Inc. filed a reply to Plaintiff’s opposition. ECF No. 92.
Plaintiff filed a surreply to ACE Insurance Company, Inc.’s reply. ECF No. 95. As of today,
neither MBTI Tech College, Inc. nor MBTI Tech, Inc. have filed a response in opposition to the
motion for partial summary judgment.
I.
STANDARD OF REVIEW
The purpose of summary judgment “is to pierce the boilerplate of the pleadings and assay
the parties’ proof in order to determine whether trial is actually required.” Wynne v. Tufts Univ.
Sch. of Med., 976 F.2d 791, 794 (1st Cir. 1992) (citations omitted). Summary judgment is granted
when the record 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).
The party moving for summary judgment bears the burden of showing the absence of a
genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Once the
movant presents a properly focused motion “averring ‘an absence of evidence to support the
nonmoving party’s case[,]’ [t]he burden then shifts to the nonmovant to establish the existence of
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at least one fact issue which is both ‘genuine’ and ‘material.’” Griggs-Ryan v. Smith, 904 F.2d
112, 115 (1st Cir. 1990) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990)).
In assessing a motion for summary judgment, the court “must view the entire record in the
light most hospitable to the party opposing summary judgment, indulging all reasonable inferences
in that party’s favor.” Id. at 115. There is “no room for credibility determinations, no room for
the measured weighing of conflicting evidence such as the trial process entails, [and] no room for
the judge to superimpose his own ideas of probability and likelihood.” Greenburg v. P. R. Mar.
Shipping Auth., 835 F.2d 932, 936 (1st Cir. 1987). The court may, however, safely ignore
“conclusory allegations, improbable inferences, and unsupported speculation.” Medina-Muñoz v.
R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) (citations omitted).
II.
UNCONTESTED MATERIAL FACTS 2
ACE Insurance Company, Inc. issued the Management Protection Insurance Policy number
DO2859 for the period covering November 30, 2012 to November 30, 2013, with a limit of
$1,000,000 per claim and a $25,000 retention in the aggregate, subject to its terms, clauses,
conditions, and exclusions. ECF Nos. 87, at 1, ¶ 1; 88-1, at 2, ¶ 1. 3
The Employment Liability Practices Coverage provides that “the Insurer shall pay on
behalf of the Insureds Loss which the Insureds become legally obligated to pay by reason of any
Claim first made against the Insureds during the policy Period for any Wrongful Acts taking place
prior to the end of the Policy Period, if such Claim is brought and maintained by or on behalf of
2
Local Rule of Civil Procedure 56 provides that a party replying to the opposition to a motion for summary judgment
shall submit with its reply a separate, short, and concise statement of material facts, which shall be limited to any
additional facts submitted by the opposing party. The reply statement shall admit, deny or qualify those additional
facts. Here, ACE Insurance Company, Inc. replied to Plaintiff’s opposition to its motion for partial summary
judgment. However, ACE Insurance Company, Inc. did not admit, deny, or qualify the additional facts submitted by
Plaintiff. In accordance with Local Rule of Civil Procedure 56, Plaintiff’s additional facts will be deemed admitted.
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Plaintiff has denied the second half of ACE Insurance Company, Inc.’s factual paragraph 1. ECF No. 87, at 1, ¶ 1.
However, Plaintiff does not support this denial by a record citation as required by the local rules. L.Cv.R. 56(c). Thus,
these facts will be deemed admitted, to the extent that they are supported by the record cited to.
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any past, present or prospective full-time, part-time, temporary or leased employee(s) of the
Company.” ECF Nos. 87, at 2, ¶ 2; 88-1, at 2, ¶ 2.
Under the terms of the policy, Insureds mean the Insured Persons and the Company (ECF
Nos. 87, at 2, ¶ 3; 88-1, at 2, ¶ 3); with respect to any Coverage Part, Insureds mean all
organizations, plans, and natural persons defined as Insured in thereunder (ECF Nos. 87, at 2, ¶ 4;
88-1, at 2, ¶ 4); Company is defined as the Parent Company and the Subsidiaries (ECF Nos. 87, at
2, ¶ 6; 88-1, at 2, ¶ 6); the Parent Company is the organization named in Item 1 of the Declarations,
in this case, MBTI of Puerto Rico, Inc. (ECF Nos. 87, at 3, ¶ 7; 88-1, at 2, ¶ 7); and subsidiary
means 1) any company in which more than 50% of the outstanding voting securities representing
the present right to vote for election of directors is owned, directly or indirectly, in any
combination, by one or more Companies and 2) any foundation or charitable trust controlled by
one or more Companies. ECF No. 87-1, at 4. 4
Under the Employment Practices Liability Coverage, Insured Persons mean “any one or
more persons who were, now are or shall become duly elected or appointed directors, trustees or
officers of, or full-time, part time, seasonal, temporary, committee members, leases volunteers
Employee in his or her capacity who are indemnified as if they were employees of the Company
or with respect to a Company incorporated outside of the United S[t]ates, their functional
equivalent.” ECF Nos. 87, at 2, ¶ 5; 88-1, at 2, ¶ 5.
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Plaintiff objected to ACE Insurance Company, Inc.’s factual paragraph 8, which states that subsidiary means any
company in which more than 50% of the outstanding voting securities representing the present right to vote for election
of directors is owned, directly or indirectly, in any combination, by MBTI of Puerto Rico, Inc. ECF No. 87, at 3, ¶ 8.
Plaintiff contends that subsidiary means any company in which more than 50% of the outstanding voting securities
representing the present right to vote for election of directors is owned, directly or indirectly, in any combination, by
one or more companies, any foundation or charitable trust controlled by one or more Companies. ECF No. 88-1, at
2, ¶ 8. The definition Plaintiff proffered more accurately reflects the definition in the insurance policy than that
proffered by ACE Insurance Company. However, Plaintiff’s definition still does not fully capture the scope of the
definition in the policy, so the court has relied on the language in the policy for purposes of this motion.
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On January 22, 2007, MBTI of Puerto Rico, Inc. informed the Secretary of State that it had
no objection to MBTI Tech, Inc. and MBI Tech College, Inc. being registered with the Department
of State to conduct business in Puerto Rico. ECF No. 88-1, at 2, ¶ 11. 5 On January 24, 2007,
MBTI Tech College, Inc. and MBTI Tech, Inc. were incorporated by Bárbara Alonso Vilá and
Paulette Alonso Vilá. ECF Nos. 87, at 3, ¶¶ 9–10; 88-1, at 2, ¶¶ 9–10. In 2011, Bárbara Alonso
Vilá was the President of the Board of Directors of MBTI of Puerto Rico, Inc. (ECF No. 88-1, at
2, ¶ 1) and Paulette Alonso Vilá was the Vice-President of the Board of Directors of MBTI of
Puerto Rico, Inc. (ECF No. 88-1, at 2, ¶ 2). In 2015, Bárbara Alonso Vilá was the President of
MBTI of Puerto Rico, Inc. ECF No. 88-1, at 2, ¶ 3.
III.
LEGAL ANALYSIS AND DISCUSSION
ACE Insurance Company, Inc.’s sole contention in support of its motion for partial
summary judgment is that MBTI Tech College, Inc. and MBTI Tech, Inc. are not subsidiaries of
MBTI of Puerto Rico, Inc. MBTI Tech College, Inc. and MBTI Tech, Inc. were incorporated by
Bárbara Alonso Vilá and Paulette Alonso Vilá. Thus, ACE Insurance Company, Inc. argues, they
“are separate legal entities and neither is a subsidiary of MBTI of Puerto Rico, Inc.” ECF No. 86,
at 8.
This argument is unconvincing. Under the terms of the policy, subsidiary means any
company in which more than 50% of the outstanding voting securities representing the present
right to vote for election of directors is held by MBTI of Puerto Rico, Inc., its subsidiaries, or
MBTI of Puerto Rico, Inc. together with its subsidiaries. 6 The identity of the incorporators of
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Plaintiff objected to ACE Insurance Company, Inc.’s factual paragraph 11, which states that MBTI of Puerto Rico,
Inc. had to consent to Paulette Alonso Vilá and Bárbara Alonso Vilá registering MBTI Tech College, Inc. and MBTI
Tech, Inc., rather than simply informing the Secretary of State that it had no objection to these two entities being
registered with the Department of State. ECF No. 87, at 3, ¶ 11. While this fact is in dispute, it is not material for the
reasons described below.
6
Nobody has alleged that MBTI Tech College, Inc. and MBTI Tech, Inc. are foundations or trusts.
5
MBTI Tech College, Inc. and MBTI Tech, Inc. does not clarify or answer whether at the time of
the events alleged in the complaint and at the present, more than 50% of the outstanding voting
securities of these two entities was and/or is held by MBTI of Puerto Rico, Inc., its subsidiaries,
or MBTI of Puerto Rico, Inc. together with its subsidiaries. Nonetheless, the analysis does not end
here.
On summary judgment, for issues where the nonmoving party bears the ultimate burden of
proof, the party cannot merely “rely on an absence of competent evidence, but must affirmatively
point to specific facts [in the record] that demonstrate the existence of an authentic dispute.”
McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995) (citation omitted). Under Puerto
Rico law, the insured bears the burden of showing that a claim falls within the policy’s grant of
coverage. See Gradmann & Holler GmbH v. Cont’l Lines, S.A., 504 F. Supp. 785, 795 (D.P.R.
1980) (“Plaintiffs had the burden of proving to the court, in addition to the fact that they were the
real party in interest, that there existed insurance coverage which would justify a payment under
the policy of insurance, taking into consideration a given risk and a given insured party.”); United
States Fid. & Guar. Co. v. Superior Court of P.R., 85 D.P.R. 131 (1962) (“The person claiming
from an insured has the burden to establish that the action or omission which gave rise to the cause
of action exercised is within the coverage of the insurance contract.”). Thus, to defeat the motion
for partial summary judgment, it is not enough to merely point to ACE Insurance Company, Inc.’s
own lack of evidence; there must be admissible evidence showing that MBTI Tech College, Inc.
and MBTI Tech, Inc. are subsidiaries of MBTI of Puerto Rico, Inc.
Under the terms of the policy, subsidiary means any company in which more than 50% of
the outstanding voting securities is held by MBTI of Puerto Rico, Inc., its subsidiaries, or MBTI
of Puerto Rico, Inc. together with its subsidiaries. It is undisputed that in 2011, Bárbara Alonso
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Vilá was the President of the Board of Directors of MBTI of Puerto Rico, Inc. (ECF No. 88-1, at
2, ¶ 1) and Paulette Alonso Vilá was the Vice-President of the Board of Directors of MBTI of
Puerto Rico, Inc. (ECF No. 88-1, at 2, ¶ 2). It is also undisputed that in 2015, Bárbara Alonso Vilá
was the President of MBTI of Puerto Rico, Inc. ECF No. 88-1, at 2, ¶ 3. Thus, Plaintiff contends,
there is some relationship between the two entities at issue and MBTI of Puerto Rico, Inc. and it
is “not clear” that these entities are not subsidiaries of MBTI of Puerto Rico, Inc. ECF No. 88, at
2. These facts, however, are insufficient for a factfinder to conclude that more than 50% of the
outstanding voting securities of MBTI Tech College, Inc. and MBTI Tech, Inc. is held by MBTI
of Puerto Rico, Inc. and/or its subsidiaries. Taking into account that MBTI Tech College, Inc.,
MBTI Tech, Inc., and Plaintiff have failed to produce such evidence, it would be an invitation for
the factfinder to speculate whether indeed said entities are subsidiaries of MBTI of Puerto Rico,
Inc. under the terms of the policy. 7
Plaintiff also requests that the court defer its ruling on ACE Insurance Company, Inc.’s
motion for partial summary judgment until she can conduct discovery on these issues. The court
declines to grant Plaintiff’s request. On October 3, 2016, a status conference was held, in which
the discovery deadline was set to December 30, 2016. ECF No. 51. On December 28, 2016,
Plaintiff filed a motion requesting an extension of time to conclude discovery. ECF No. 76. On
January 3, 2017, the court denied Plaintiff’s motion without prejudice because Plaintiff had failed
to specify the duration of the extension request. See L.Cv.R. 6 (“All motions for extension of time
shall specifically set forth . . . the expiration date of the proposed extension.”). However, Plaintiff
never refiled the motion. Although Plaintiff claims that “discovery in this case has been halted”
(ECF No. 88, at 6), this is only true with respect to those parties as to whom the case has been
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MBTI Tech College, Inc. and MBTI Tech, Inc. have been without legal representation in this case since August 25,
2017.
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stayed, namely Angel Negrón, MBTI of Puerto Rico, Inc., and ACE Insurance Company, Inc. in
its capacity as insurer of MBTI of Puerto Rico, Inc. ECF No. 54. With respect to MBTI Tech
College, Inc. and MBTI Tech, Inc., discovery came to an end by virtue of Plaintiff’s own inactivity
by failing to resubmit the motion for extension of the discovery phase that was denied by the court
without prejudice due to its lack of proposed deadlines. Moreover, even Plaintiff’s opposition to
the motion for partial summary judgment repeats the same mistake in its request for additional
time to conduct discovery by failing to comply with Local Rule of Civil Procedure 6 and submit
the expiration date for the proposed extension. More than three months elapsed between the date
that the court denied without prejudice Plaintiff’s first extension request (ECF No. 77) and her
second one (ECF No. 88). Unfortunately for Plaintiff, her second request suffers from the same
deficiencies as the first one. The court will not reopen the discovery phase as to MBTI Tech
College, Inc. and MBTI Tech, Inc. more than a year and a half after the expiration of the discovery
deadline.
Furthermore, the insurance policy states that the “Insureds agree to provide the Insurer with
all information, assistance and cooperation which the Insurer reasonably requests and agree that
in the event of a Claim or Loss the Insureds will do nothing that shall prejudice the Insurer’s
position or its potential or actual rights of recovery.” ECF No. 87-1, at 7. MBTI Tech College,
Inc. and MBTI Tech, Inc. have been without legal representation since August 25, 2017. Said
entities cannot simply abandon a case, hold hostage the discovery process to uncover the exact
nature of their corporate relationship with MBTI of Puerto Rico, Inc., and expect full insurance
coverage without consequences.
IV.
CONCLUSION
For the foregoing reasons, ACE Insurance Company, Inc.’s motion for partial summary
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judgment (ECF No. 86) is GRANTED. The complaint is DISMISSED WITH PREJUDICE with
regard to ACE Insurance Company, Inc. in its capacity as insurer of MBTI Tech College, Inc. and
MBTI Tech, Inc.
IT IS SO ORDERED
In San Juan, Puerto Rico, this 31st day of October, 2018.
s/Marcos E. López
U.S. Magistrate Judge
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