Marina PDR Operations, LLC v. Master Link Corporation
Filing
106
OPINION AND ORDER: The Court GRANTS Plaintiff's Motion for Partial Summary Judgment (Docket No. 82 ) and DENIES Defendant's Motion for Summary Judgment (Docket No. 80 ). Judgment shall be entered accordingly upon trial on the claims pertaining to the M/V FAJARDO II. Signed by Judge Raul M. Arias-Marxuach on 7/29/2020. (mrr)
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 1 of 32
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
Marina PDR Operations, LLC
Plaintiff,
v.
MASTER Link Corp., Inc.;
Master Link I, in rem
M/V CIVIL NO. 17-1307 (RAM)
Defendants,
OPINION AND ORDER
RAÚL M. ARIAS-MARXUACH, United States District Judge
Pending before the Court is Defendant Master Link Corp.’s
Motion for Summary Judgment and Plaintiff Marina PDR Operations,
LLC’s Motion for Partial Summary Judgment and Memorandum of Law in
Support Thereof (“Motion for Partial Summary Judgment”). (Docket
Nos. 80-83). Having considered the parties’ submissions, the Court
DENIES Defendant’s Motion for Summary Judgment (Docket Nos. 80 and
81) and GRANTS Plaintiff’s Motion for Partial Summary Judgment
(Docket Nos. 82 and 83).
I.
PROCEDURAL BACKGROUND
On August 30, 2017, Plaintiff Marina PDR Operations, LLC
(“Plaintiff” or “Marina PDR”) filed a Third Amended Complaint (the
“Complaint”) against Defendants Master Link Corp. (“Defendant” or
“Master Link” or “ML”) and M/V MASTER LINK I (“MASTER LINK I”), in
rem. (Docket No. 47 at 5-6). Marina PDR is the operator of the
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 2 of 32
Civil No. 17-1307 (RAM)
2
Puerto Rico Del Rey Marina in Fajardo, Puerto Rico, providing wet
slip and land storage for vessels of various sizes. Id. ¶ 4. ML’s
business consists of providing repair and maintenance services to
vessels. Id. ¶ 5. ML had a contract with the Commonwealth of Puerto
Rico’s
Maritime
Transportation
Authority
(“MTA”),
a
public
corporation which was “created to provide ocean transportation of
cargo
and
passengers
between
mainland
Puerto
Rico
and
the
municipalities of Vieques and Culebra.” Id ¶ 6. The contract, which
expired on November 4, 2012, was a Puerto Rico General Services
Administration (“GSA”) contract for repair services for M/V FAJARDO
II (“FAJARDO II”). ( D o c k e t No. 81- 5 at 6; 81- 9 at 2). ML also
had a contract with the marina’s previous owner Puerto del Rey,
Inc. (“PDR”) for the repair of MASTER LINK I. (Docket No. 81-2).
Per the Complaint, ML allegedly breached both contracts.
(Docket No. 47 at 3-4). Thus, Marina PDR claimed ML owes it
$115,292.04 in unpaid fees and taxes for FAJARDO II and MASTER
LINK I. Id. at 5. In the alternative, Marina PDR requested that
MTA be held liable for $78,311.85 for overdue payments because it
is the owner of FAJARDO II and original signatory to a Boat Space
License Agreement (“BSLA”) with the marina’s previous owner PDR.
Id. at 6. On June 26, 2018, Plaintiff and MTA filed a Settlement
Agreement dismissing the claim against the latter. (Docket No.
64). Partial judgment was entered accordingly. (Docket No. 66).
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Civil No. 17-1307 (RAM)
3
On November 15, 2018, ML filed a Motion for Summary Judgment
(“MSJ”) and a Statement of Material Facts in Support of Defendant’s
Motion for Summary Judgment (“SUMF”). (Docket Nos. 80 and 81). It
alleges that: 1) Marina PDR lacks standing to sue; 2) ML did not
become indebted to Marina PDR under the contract between MTA and
PDR concerning FAJARDO II because the assumption of debt and
novation doctrines are inapplicable, and 3) Marina PDR cannot
recover twice on the same claim. Id. Plaintiff opposed the MSJ and
propounded additional facts (“Opposition to MSJ”). (Docket Nos. 88
and 88-1). Plaintiff’s Opposition to MSJ is currently unopposed.
On November 15, 2018, Marina PDR filed a Motion for Partial
Summary Judgment and Memorandum of Law in Support Thereof (“PMSJ”)
and a Statement of Uncontested Material Facts in Support of Motion
for Summary Judgment (“PSUMF”). (Docket Nos. 82 and 83). It alleges
that partial summary judgment is proper because there is no genuine
issue regarding the amount due by ML for the storage of MASTER
LINK I. (Docket No. 82 at 5-8). ML opposed the same (“Opposition
to PSUMF”) and Marina PDR replied. (Docket Nos. 86-87 and 93).
II.
LEGAL STANDARD
Summary judgment is proper under Fed. R. Civ. P. 56(a) if a
movant shows “no genuine dispute as to any material fact” and that
they are “entitled to judgment as a matter of law.” A genuine
dispute exists “if the evidence about the fact is such that a
reasonable jury could resolve the point in favor of the non-moving
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Civil No. 17-1307 (RAM)
4
party.” Alicea v. Wilkie, 2020 WL 1547064, at *2 (D.P.R. 2020)
(quotation omitted). A fact is material if “it is relevant to the
resolution of a controlling legal issue raised by the motion for
summary judgment.” Bautista Cayman Asset Co. v. Terra II MC & P,
Inc., 2020 WL 118592, at *6 (D.P.R. 2020) (quotation omitted).
The movant “bears the burden of showing the absence of a
genuine issue of material fact.” United States Dep't of Agric. v.
Morales-Quinones, 2020 WL 1126165, at *1 (D.P.R. 2020) (citation
omitted). The non-movant may “defeat a summary judgment motion by
demonstrating, through submissions of evidentiary quality, that a
trialworthy issue persists.” Robinson v. Town of Marshfield, 950
F.3d 21, 24 (1st Cir. 2020) (quotation omitted). “On issues of
motive and intent, essential elements of novation, trial courts
are to observe a ‘cautious approach’ upon evaluating summary
judgment motions.” Jorge Rivera Surillo & Co. v. Cerro Copper Prod.
Co., 885 F. Supp. 358, 363 (D.P.R. 1995) (citation omitted). The
United States Supreme Court has also held that summary judgment is
to be issued “sparingly” in litigation “where motive and intent
play leading roles.” Poller v. Columbia Broad. Sys., 369 U.S. 470,
473 (1962); see also Dominguez–Cruz v. Suttle Caribe, Inc., 202
F.3d 424, 433 (1st Cir. 2000) (finding that “determinations of
motive and intent ... are questions better suited for the jury”).
Yet, “even in cases where elusive concepts such as motive or intent
are at issue, summary judgment may be appropriate if the nonmoving
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Civil No. 17-1307 (RAM)
party
rests
merely
5
upon
conclusory
allegations,
improbable
inferences, and unsupported speculation.” Roman-Basora v. Potter,
2010 WL 5677118, at *3 (D.P.R. 2010) (quotation omitted).
Local Rule 56 also governs summary judgment. See L. CV. R.
56. Per this Rule, a nonmoving party must “admit, deny or qualify
the facts supporting the motion for summary judgment by reference
to each numbered paragraph of the moving party’s statement of
material facts.” Id. Local rules “are designed to function as a
means of ‘focusing a district court's attention on what is and
what
is
not
genuinely
controverted.’”
Marcano-Martinez
v.
Cooperativa de Seguros Multiples de Puerto Rico, 2020 WL 603926,
at *2 (D.P.R. 2020) (quotation omitted). Lastly, the First Circuit
has
stated
that
adequately
supported
facts
“shall
be
deemed
admitted unless controverted in the manner prescribed by the local
rule.” Advanced Flexible Circuits, Inc. v. GE Sensing & Inspection
Techs. GmbH, 781 F.3d 510, 520 (1st Cir. 2015) (quotation omitted).
III. FINDINGS OF FACT
After analyzing ML’s SUMF (Docket No. 81), Marina PDR’s
unopposed additional uncontested facts (Docket No. 88-1) and ML’s
PSUMF (Docket No. 83), and only crediting material facts that are
properly supported by a record citation and uncontroverted, the
Court makes the following findings of facts: 1
1
References to a specific Finding of Fact shall be cited in the following
manner: (Fact ¶ _).
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6
1. Plaintiff Marina PDR is a limited liability company created
under
the
laws
of
the
state
of Delaware on May 22,
2013. (Docket No. 81 ¶ 5).
2. Marina PDR was registered in
of
State
and
authorized
the
to
entity on September 5, 2013.
Puerto
Rico
do business
as
Department
a
foreign
Id. ¶ 6.
3. Marina PDR operates a marina in Fajardo, providing wet slip
and land storage services for vessels of different sizes.
(Docket No. 47 ¶ 4).
4. FAJARDO II and MASTER LINK I are currently being stored in
Marina PDR’s marina in Fajardo. (Docket Nos. 81 ¶¶ 10, 13;
83 ¶ 1; 88-1 ¶ 1).
5. Defendant Master Link is a corporation organized under the
laws of the Commonwealth of Puerto Rico providing repair and
maintenance services to vessels. (Docket No. 47 ¶ 5).
6. In rem defendant Master Link I is a custom-made barge, 90
feet in length, fabricated in 1987, with Hull Identification
Number
(HIN)
MMV10401135208,
and
Documentation
or
Registration Number DC-1234918. Id. ¶ 7.
7. Master Link I is owned by Master Link. Id. ¶ 16.
8. Defendant MTA is a public corporation of the Commonwealth of
Puerto Rico ascribed to the Department of Transportation and
Public Works. It provides ocean transportation of cargo and
passengers
between
mainland
Puerto
Rico
and
the
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Civil No. 17-1307 (RAM)
7
municipalities of Vieques and Culebra. Id. ¶ 6.
9. MTA was the owner and original signatory to the BSLA for
FAJARDO II. Id. ¶ 23.
10. On
June
26,
2018,
Marina
PDR
and
MTA
entered
into
a
Settlement Agreement where Marina PDR dismissed all claims
against MTA regarding liability for dockage, storage and
other fees incurred by Marina PDR. (Docket No. 64).
11. That same day, the Court dismissed Marina PDR’s claims
against MTA via a partial judgment. (Docket No. 66).
Puerto del Rey, Inc. and Bankruptcy Proceedings
12. PDR was owner and operator of Marina Puerto del Rey in
Fajardo, Puerto Rico up to May 2013. (Docket No. 81 ¶ 1).
13. On December 28, 2012, PDR filed a Chapter 11 bankruptcy
petition
before
the
U.S.
Bankruptcy
Court,
District
of
Puerto Rico. Id. ¶ 2.
14. Per the May 30, 2013 Order Confirming the First Amended Joint
Chapter 11 Plan Proposed by the
Debtor, FirstBank Puerto
Rico,
Inc.
and
Amended
PBF-TEP
Joint
Acquisitions,
Chapter
11
Plan”),
all
(“Order
of
Confirming
PDR’s
assets,
including contracts, were purchased by and transferred to
Putnam Bridge and various other entities including Plaintiff
(jointly, “the Purchaser”). (Docket Nos. 81 ¶ 4; 88-1 ¶ 5).
15. Regarding
the
transfer
of
Purchased
Assets,
the
Order
Confirming Amended Joint Chapter 11 Plan states as follows:
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Civil No. 17-1307 (RAM)
8
The transfer of the Purchased Assets to the
Purchaser (including,
without limitation, the
transfer of the Affiliate Assets (including,
without limitation, the Affiliate Contracts) to
the Debtor, the subsequent transfer of the
Affiliate Assets (including, without limitation,
the Affiliate Contracts) as Purchased Assets to
the Purchaser, the assumption by the Debtor of the
Assumed Contracts, the assignment by the Debtor to
the Purchaser of the Assumed Contracts, and the
rejection by the Debtor of any and all Affiliate
Contracts or Executory Contracts that do not
constitute Assumed Contracts), is a legal, valid,
and effective transfer of the Purchased Assets, and
will vest in the Purchaser with all right, title,
and interest of the Debtor in and to the Purchased
Assets (including, without limitation, the interest
of the Debtor in the Affiliate Assets upon
effectuation of the Affiliate Transfer, the
assumption by the Debtor of the Assumed Contracts
(including the Affiliate Contracts so transferred
to the Debtor, and the assignment by the Debtor to
the Purchaser of the Assumed Contracts (including,
without
limitation,
the
Affiliate
Contracts
transferred to the Debtor) […] free and clear of
and
other
all
liens,
Claims,
encumbrances
interests,
except
as
otherwise
specifically
provided in the Plan or the Term Sheet, with all
such
liens,
Claims,
encumbrances
and
other
interests to attach to the sale proceeds in the
same order of priority and with the same validity
and enforceability as they had immediately before
the closing of the sale of the Purchased Assets,
subject to all defenses thereto.
Id. at 19 (emphasis added).
16. Among
the
transferred
assets
in
the
“Assumed
Contracts
Schedule (Filed Under Seal)” filed alongside the Bankruptcy
Court’s May 30, 2013 Order was ML-PDR BSLA. (Docket Nos. 881 ¶ 5; 88-3 at 23).
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Civil No. 17-1307 (RAM)
9
THE MASTER LINK I BARGE STORAGE
17. On
April
22,
2013, ML
and PDR entered i n t o a BSLA a n d
a Boatyard Order and Agreement (“Boatyard Order”)
for the storage of MASTER LINK I at PDR’s Fajardo marina
(jointly, “ML-PDR BSLA”). (Docket Nos. 83 ¶ 1; 88-1 ¶ 1).
18. Both contracts were signed by Mr. Francisco Berrios (“Mr.
Berrios”) on behalf of ML. (Docket No. 88-1 ¶ 1).
19. ML and Marina PDR did not sign a BSLA. (Docket No. 81 ¶ 7).
20. The ML-PDR BSLA states in its Terms and Conditions as follows:
3. Monthly
dockage/storage charges
are due
(monthly) in advance. All checks must be drawn
on U.S. or P.R. banks. Returned checks will carry
a service charge. In case of non-payment for 15
days or more, Marina will charge a late fee of 5%
and charge account to Owner’s credit card. Boats
for which the dockage/storage charges are not paid
within sixty (60) days of due will incur daily
rather than monthly charges until the account is
brought up to date.
4. If an account is not paid when due, Owner
shall be in default under this Agreement. In the
event of default or failure by Owner to pay any
indebtedness to Marina, Marina shall have the
right to secure the boat and/or remove it until
all amounts then due are paid in full. Securing
the boat shall mean chaining the vessel, or
removing same to the land storage facility at the
sole risk of the Owner, and at Marina’s sole
discretion. Owner shall be liable to Marina for any
damages Marina may suffer as a result of Owner’s
default. Unpaid balances will incur in 1.5% monthly
interest. Owner grants Marina the right to retain
the vessel as guarantee for
payment and/or
performance by Owner of any obligation under this
Agreement.
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Civil No. 17-1307 (RAM)
10
Id. ¶ 3.
21. ML did not pay MASTER LINK I’s monthly storage fee from October
2014 to March 2016. (Docket Nos. 88 ¶ 1; 83 ¶ 6).
22. ML agreed to pay storage fees for MASTER LINK I from March
2016 to March 2017 totaling $15,654.60. (Docket No. 83 ¶ 7).
23. The monthly
fee for
land
storage
for
MASTER LINK I is
$1,170.00, excluding taxes, late fees or interests. Id. ¶ 8.
24. The amounts owed to Marina PDR by ML for the unpaid monthly
storage fees for October 2014 to March 2016 are:
Principal Land Storage Fees 18 months $22,899.24
1.5% interests on the Balance Due
15,627.96
TOTAL
$38,527.17
Id. ¶ 9.
25. ML judicially admitted that
it “entered into a Boat Space
License Agreement with PDR for the storage of the barge.”
(Docket Nos. 69 ¶ 17; 88-1 ¶ 3).
26. ML still
denied
the
authenticity
of
the
BSLA
and the
Boatyard Order. (Docket No. 88-1 ¶ 4).
27. ML paid for MASTER LINK I’s storage and even accepted a prepayment offer from PDR to aid ML in lessening its debt.
(Docket Nos. 9; 13; 88-1 ¶ 8).
THE FAJARDO II FERRY STORAGE
28. In 2011, ML was awarded a contract to repair the motor vessel
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Civil No. 17-1307 (RAM)
11
FAJARDO II, a passenger ferry owned and operated by MTA.
(Docket No. 81 ¶ 8).
29. In the first quarter of 2012, MTA requested from PDR a space
in the marina to work on and repair FAJARDO II. Id. ¶ 10.
30. ML was not a party to MTA and PDR’s BSLA (“the MTA-PDR
BSLA”). Id. ¶ 11.
31. While
ML
advanced
was
working
Plaintiff
on
some
FAJARDO
of
II
at
the
marina,
MTA’s outstanding
it
storage
fees on behalf of and to the benefit of MTA. Id. ¶ 13.
32. ML then billed MTA for the storage charges and other fees
advanced to Marina PDR.
33. The
contract
between
Id. ¶ 14.
Puerto
Rico
General
Services
Administration (“GSA”) and ML for repair services to FAJARDO
II expired on November 11, 2012. Id. ¶ 15.
34. The GSA contract was not extended or renewed. Id. ¶ 16.
35. In
mid-June
2014,
ML’s
Agosto (“Mr. Agosto”), the
Mr. Berrios
marina’s
met
Boatyard
with Isander
Manager,
to
discuss FAJARDO II’s outstanding storage fees. Id. ¶ 17.
36. On June 26, 2014, Mr. Berrios sent
Mr. Agosto a letter
stating: (1) ML and GSA’s agreement for the repairs of
FAJARDO II had expired on November 2012; (2) ML paid Marina
PDR
for
FAJARDO
II
storage
charges (haul out, blocking,
lays days, and land storage) and then collected these from
MTA; (3) the marina had not invoiced ML for the charges,
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Civil No. 17-1307 (RAM)
and
(4)
ML
would
12
pay
the FAJARDO II balance. (Docket
Nos. 81 ¶ 18; 88-1 ¶ 11).2
37. In said letter, ML did not offer Marina PDR to become the
debtor under the MTA-PDR BSLA. (Docket No. 81 ¶ 19).
38. ML requested the invoices
relating to
FAJARDO II to pay
Marina PDR what it owed. (Docket No. 88-1 ¶ 11).
39. ML offered to pay the “balance” of the FAJARDO II overdue
fees, but it did not state it was willing to pay the storage
fees that would accrue in the future or become the debtor
under the MTA-PDR BSLA. (Docket No. 81 ¶¶ 20, 23).
40. In the letter, ML through Mr. Berrios, threatened Marina PDR
with legal action if it handed over FAJARDO II to MTA. The
purpose behind this was so that ML could obtain payment from
ATM to pay Marina PDR for Fajardo II’s storage. (Docket No.
88-1 ¶ 12).
41. On
September
17,
2014,
ML’s President Mr. Carlos Morales
(“Mr. Morales”) met at the marina with Arturo Rodriguez and
Victor Cotto of MTA, and with Richard Christiansen, Miguel
Muntaner, and Blanca Rodriguez of PDR. (Docket No. 81 ¶21).
42. Mr. Morales told Marina PDR and MTA that ML was willing to
pay FA J A R D O I I’ s storage charges balance only
issued ML a purchase order
2
for
the balance
if
MTA
and provided
Both Marina PDR and ML filed as an exhibit to their motions nearly identical
copies of the June 24, 2014 letter. (Docket Nos. 81-9; 88-4). Subsequent
references to the same will only cite Docket No. 81-9.
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Civil No. 17-1307 (RAM)
13
the 2012 charges invoiced by PDR. Id. ¶ 22.
43. Marina PDR
did
not
give
notice
of
its
consent
to
ML
becoming the debtor under the FAJARDO II BSLA until after
the present litigation had commenced and ML moved to dismiss
the F A J A R D O I I claims due to a lack of consent. Id. ¶ 24.
44. Marina PDR’s
Master
Link
supposed
as
consent
debtor
was
to
made
substituting
after
expressly told Marina PDR that it
would
MTA
for
Master
Link
had
only
pay
the
vessel’s storage if MTA issued purchase orders. Id. ¶ 25.
45. Plaintiff continued to collect FAJARDO II storage from MTA
even
after
Master Link
supposedly
offered
to
become
obligated under their storage agreement. Id. ¶ 26.
46. FAJARDO II’s monthly storage fee was $1,300.05. Id. ¶ 27.
47. Marina PDR accepted payments from Master Link for the storage
of FAJARDO II for about five to six years. Id. ¶ 14.
48. Marina PDR sent a letter to ML on January 20, 2017 requesting
payment for FAJARDO II’s acquired debt. Id. ¶ 17.
IV.
ANALYSIS
A. M/V MASTER LINK I BARGE
1. Marina PDR’s Standing
In the present case, ML’s MSJ alleges that Marina PDR does
not have standing to sue for collection of monies for barge MASTER
LINK I because Marina PDR was not a party to the April 2013 MLPDR BSLA. (Docket No. 80 at 2, 6). ML also claims there is no
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Civil No. 17-1307 (RAM)
14
evidence on record that PDR assigned the debts arising out of an
agreement with ML to Marina PDR after the latter became the
marina’s new operator. Id. at 6.
Conversely, Marina PDR states that as the marina’s current
operator, it has standing to bring the suit because it acquired
PDR’s assets, including the agreement between ML and PDR, pursuant
to the May 30, 2013 Order Confirming Amended Joint Chapter 11 Plan.
(Docket No. 88 at 4-5). Moreover, Plaintiff avers that this Court
may take judicial notice of said order. Id. Lastly, ML posits that
all parties with contracts with PDR, including ML, were duly
notified of the transfer of assets to Putnam Bridge and other
entities such as Marina PDR. Id.
The Court finds that Marina PDR has standing to bring this
suit against ML for collection of monies as to MASTER LINK I.
Moreover, Marina PDR can be considered a “real party in interest”
under Fed. R. Civ. P. 17(a) because it is the operator of the
marina where MASTER LINK I is being stored (Facts ¶¶ 3-4) and
currently shoulders the loss of the unpaid storage fees arising
out of the ML-PDR BSLA it acquired alongside other entities in the
bankruptcy proceeding (Facts ¶¶ 13-14). See Sawyer Bros., Inc. v.
Island Transporter, LLC, 887 F.3d 23, 34 (1st Cir. 2018) (citations
omitted) (“[W]hen an insurer pays only part of the loss suffered
by its insured, the insured remains a real party in interest
together with the insurer. […] Sawyer Brothers was thus a real
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Civil No. 17-1307 (RAM)
15
party in interest because its insurer paid only part of its loss”).
Hence, Marina PDR is a party who “possesses the right to be
enforced” which is the operative question when analyzing which
party may be considered a real party in interest. See Marina Mgmt.
Servs., Inc. v. Vessel My Girls, 202 F.3d 315, 319 (D.C. Cir. 2000)
(quotation
omitted);
see
also
Bautista
Cayman
Asset
Co.
v.
Evangelista, 2017 WL 3309685, at *2 (D.P.R. 2017) (citing Fed. R.
Civ. P. 17(a)) (“[N]o one disputes that plaintiff, thus, is the
only real party in interest when it comes to the collection of
defendants' alleged debt.”).
Further, the Court may take judicial notice of the Bankruptcy
Court’s Order Confirming Amended Joint Chapter 11 Plan. (Docket
Nos. 82-2). Fed. R. Evid. Rule 201(b) limits judicial notice and
provides that a court may take notice of a fact not subject to
reasonable dispute if it: “(1) is generally known within the trial
court's territorial jurisdiction; or (2) can be accurately and
readily determined from sources whose accuracy cannot reasonably
be questioned.” Thus, “courts may take judicial notice of another
court's order for the limited purpose of recognizing the judicial
act
or
the
Rodriguez,
subject
568
F.
matter
Supp.
2d
of
the
158,
litigation.”
164
(D.P.R.
MVM
2008)
Inc.
v.
(citation
omitted). The Court may also take notice of “other undisputable
aspects of those proceedings.” Quiñones v. Puerto Rico Elec. Power
Auth., 199 F. Supp. 3d 474, 489 (D.P.R. 2016) (quotation omitted);
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 16 of 32
Civil No. 17-1307 (RAM)
16
see also Southern Cross Overseas Agencies, Inc. v. Wah Kwong
Shipping Group Ltd., 181 F.3d 410, 426 (3d Cir. 1999) (taking
notice of a bankruptcy opinion). Courts may not “take as true
another court’s finding of facts.” Almeida-Leon v. WM Capital
Mgmt., Inc., 2019 WL 2052601, at *6 (D.P.R. 2019).
Just as the Court takes judicial notice of the bankruptcy
court’s order, so too may it take notice of the “Assumed Contracts
Schedule (Filed Under Seal)” accompanying the same. (Docket Nos.
88-2 and 88-3). See United States v. Pulliam, 2014 WL 3615776, at
*1 (D. Mont. 2014) (“The Court takes notice of the existence of
the Settlement Agreement, the Bankruptcy Court's Order Approving
Settlement,
bankruptcy
and
the
case.”)
Bankruptcy
Here,
it
is
Court's
an
Order
undisputed
dismissing
the
aspect
the
of
bankruptcy proceeding that Putnam Bridge, and additional entities
including Plaintiff, acquired all rights and titles over PDR’s
assets. (Docket No. 88-2; Facts ¶¶ 13-16). The bankruptcy order
stated that the transfer of the assets is: “a legal, valid, and
effective transfer of the Purchased Assets, and will vest in the
Purchaser with all right, title, and interest of the Debtor in
and to the Purchased Assets.” (Fact ¶ 15). It is also undisputed
that the ML-PDR BSLA was one of the contracts listed in subsection
“Boat Slip Licenses” of the “Assumed Contracts Schedule (Filed
Under Seal).” (Fact ¶ 16). See In re Alexander, 524 B.R. 82, 89
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Civil No. 17-1307 (RAM)
17
(E.D. Va. 2014) (“the court takes judicial notice of the Relief
Order and attendant filings.”)
ML judicially admitted that it entered the ML-PDR BSLA. (Fact
¶ 25). ML’s SMUF also cited as an uncontroverted fact that PDR
filed a Chapter 11 Bankruptcy petition. (Docket No. 81 ¶¶ 2; Fact
¶ 13). And the SMUF also stated that because of that petition,
Putnam Bridge and Plaintiff, among other entities, purchased PDR’s
assets including the MASTER LINK I BSLA. (Docket No. 81 ¶¶ 4, 7;
Facts ¶¶ 14-16). Considering that Plaintiff acquired all rights
and titles over the contracts belonging to PDR via the Order
Confirming Amended Joint Chapter 11 Plan, Marina PDR has standing
to sue for collection of monies for MASTER LINK I. (Fact ¶ 13).
2. Novation Doctrine
Defendant bears the burden of proof on a novation claim, an
affirmative defense pursuant to Fed. R. Civ. P. 8(c)(1). See Web
Servs. Group v. Ramallo Bros. Printing, 336 F.Supp.2d 179, 183
(D.P.R. 2004) (citation omitted). ML did not plead novation as an
affirmative defense in its answer to the Complaint. (Docket No. 69
at 4-5). Typically, this would amount to waiver of the defense.
See Conjugal P’ship v. Conjugal P’ship, 22 F.3d 391, 400 (1st Cir.
1994). But, there are exceptions such as “where [1] the defendant
asserts it [the defense] without undue delay and the plaintiff is
not
unfairly
prejudiced
by
circumstances
necessary
to
any
delay,”
establish
or
where
entitlement
“[2]
the
to
the
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 18 of 32
Civil No. 17-1307 (RAM)
18
affirmative defense did not obtain at the time the answer was
filed.” O'Brien v. Town of Bellingham, 943 F.3d 514, 528 (1st Cir.
2019) (quotation omitted). Here, Plaintiff was not prejudiced by
a failure to plead the defense because novation was addressed in
ML’s Motion to Dismiss the Second Amended Complaint (Docket No.
30), and which was later incorporated by reference into ML’S Motion
to Dismiss Third Amended Complaint (Docket No. 52). Further, this
occurred before the discovery deadline and both parties briefed
the novation issue in their respective summary judgment motions.
(Docket Nos. 80 and 82). See Williams v. Ashland Engineering Corp.,
45 F.3d at 593 (1st Cir. 1995) (abrogated on other grounds by
Carpenters Local Union No. 26 v. U.S. Fidelity & Guard Co., 215
F.3d 136 (1st Cir. 2000)) (holding that plaintiff was not ambushed
by defense where defendant amplified its position before the close
of discovery and the parties briefed the issue during summary
judgment). Hence, ML can proceed with the novation defense.
There are two types of novation: modificatory and extinctive. 3
See Fed. Deposit Ins. Corp. v. Arrillaga-Torrens, 212 F. Supp. 3d
312, 339–40 (D.P.R. 2016); Warner Lambert Co. v. Tribunal Superior,
101 P.R. Dec. 378, 390–91, 1 Offic. Trans. 527, 545–47 (1973). In
the first type, “a modificatory novation simply modifies [either
3
Novation is defined as “[t]he act of substituting for an old obligation a
one that either replaces an existing obligation with a new obligation
replaces an original party with a new party. […] A novation may substitute
a new obligation between the same parties, (2) a new debtor, or (3) a
creditor.” Novation, Black's Law Dictionary (11th ed. 2019).
new
or
(1)
new
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Civil No. 17-1307 (RAM)
19
the object or principle condition of an agreement], but does not
extinguish, the original agreement.” Web Serv. Grp., Ltd., 336 F.
Supp. 2d at 182 (quotation omitted). Whereas in the second type,
a novation “extinguishes the old obligation and creates a new one.”
Id. Notably, “novation is never presumed” and must be proved
“without any trace of doubt.” Provimi de Puerto Rico, Inc. v.
Certified Angus Beef LLC, 2014 WL 12889576, at *11 (D.P.R. 2014)
(citation omitted) (emphasis added). It is always “established by
the parties' intention,” as determined case-by-case. Id.
Puerto
Rico
jurisprudence
recognizes
two
subtypes
of
extinctive novation: express or tacit. The first occurs when the
parties expressly state their intent to create a new agreement.
See Kellogg USA v. B. Fernandez Hermanos, Inc., 2010 WL 376326, at
*8
(D.P.R.
2010).
The
second
occurs
when
there
is
a
total
incompatibility between the old and the new agreement. Id.; see
also Alvarez v. Amgen Mfg. Ltd., 2017 WL 8948946, at *2 (D.P.R.
2017), report and recommendation adopted in part sub nom. Alvarez
v. Amgen Mfg. Ltd., 2017 WL 4122610 (D.P.R. 2017). Under the first
subtype, extinctive novation occurs “even when the contractual
condition modified is of secondary importance, as long as that is
what the parties intended[,] and they have conclusively stated
that the prior contract is canceled and substituted by another.”
Kellogg USA, 2010 WL 376326, at *8. In the second subtype, the new
contract
and
the
original
one
must
be
incompatible
“in
all
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 20 of 32
Civil No. 17-1307 (RAM)
20
points.” Nieves Domenech v. Dymax Corp., 952 F. Supp. 57, 62
(D.P.R. 1996) (citation omitted). The change “must be so radical
in nature as to make the new and old agreements unable to coexist
and to make them mutually excludable.” Id. (citation omitted).
Changes “that are mainly quantitative in nature do not extinguish”
the contract’s main obligation, “which remains in effect with all
its supplementary and accessory guarantees.” Fed. Deposit Ins.
Corp.,
212
“quantitative
F.
Supp.
3d
change[s]
at
[…]
339
(citation
[do]
not
omitted).
reflect
the
Hence,
will
to novate.” Santiago-Negron v. Carlos Albizu Univ., Inc., 2009 WL
2777972, at *5 (D.P.R. 2009) (quotation omitted).
ML did not raise a novation defense for ML-PDR BSLA for MASTER
LINK I in its MSJ. (Docket No. 80). Instead, it only mentions
novation to argue why ML did not become a debtor under the MTAPDR BSLA for FAJARDO II. Id. at 8-13. ML did bring forth the
defense in its Opposition to PSMUF, where it alleges that the MLPDR BSLA was “novated by the parties when they agreed to a lower
monthly charge.” (Docket No. 86 at 7). This allegedly occurred
when the parties agreed that the “discount [of $6,114.32] on
storage fees was for past and future invoices for the storage of
the barge.” Id. at 8.
Marina PDR denied that the discount was a novation. (Docket
No. 93 at 6). It explains that the “discount was offered as a deal
on September 2014 […] [for] Master Link to be able to pay the
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 21 of 32
Civil No. 17-1307 (RAM)
21
minimum amount owed at the time promptly, since it owed almost
$14,285.79 at the time to PDR.” (Docket No. 93 at 7; Fact ¶ 27).
Thus, it should not be considered an intent to change the terms of
the ML-PDR BSLA. Id. Plaintiff also avers that no invoice after
2014 includes a discount, which should also indicate that Marina
PDR did not intend to change the storage rate set in the BSLA. Id.
The Court agrees with Marina PDR. First, ML does not state
whether it is relying on an extinctive or modificatory novation.
Second,
it
fails
to:
(1)
provide
evidence
of
an
intent
to
extinguish the ML-PDR BSLA; (2) prove an incompatibility between
the BSLA and a new agreement, if one exists at all; or (3) proffer
sufficient evidence of a modification of the ML-PDR BSLA. The
District of Puerto Rico has held that “[t]he party raising the
affirmative defense of novation has the duty to proffer sufficient
competent
evidence
of novation,
specifically,
evidence
of
the
contracting parties' express intention or incompatibility of the
two agreements.” Sandoval Diaz v. Sandoval Orozco, 296 F. Supp. 2d
122, 127 (D.P.R. 2003) (citation omitted). ML did neither here.
For example, in Ceramic Enterprises, Inc. v. Dexion Inc. the
District of Puerto Rico held that extinctive novation did not occur
since “[c]hanges in the price, duration, and square footage terms
of the lease are not so material as to extinguish the Lease in
favor of a new and separate lease.” Ceramic Enterprises, Inc. v.
Dexion Inc., 994 F. Supp. 97, 103 (D.P.R. 1998). Here therefore,
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 22 of 32
Civil No. 17-1307 (RAM)
22
the discount seems to be a mere “quantitative change” which did
not extinguish the terms of the BSLA.
Lastly, the Court observes that the original ML-PDR BSLA
stated that “[r]ates may be changed from time to time at Marina’s
[then PDR’s] sole discretion.” (Docket No. 81-2 at 2 ¶ 1). Hence,
any change by PDR to the storage and repair rates, whether a
discount or otherwise, would not necessarily novate an existing
BSLA. In RentPath, LLC v. CarData Consultants Inc., the District
of Georgia held that the original contract between the parties
showed that “the parties understood basic modifications to the
service
price
would
not
create
an
entirely
new
agreement.”
RentPath, LLC v. CarData Consultants Inc., 2016 WL 7888041, at *4
(N.D. Ga. 2016). This because the service agreement in question
stated “that fees ‘may be amended from time to time[.]’” Id.; see
also Entact Servs., LLC v. Rimco, Inc., 526 F. Supp. 2d 213, 223
(D.P.R. 2007) (holding inappropriate the novation theory because
“the POS and the Rental Contract do not constitute subsequent
agreements. They are both part of an agreement executed by Entact
and Rimco in which they stipulated that the rental rate of the
equipment provided by Rimco was to be calculated on a daily, weekly
and monthly basis.”). Thus, even when viewing the facts in the
light most favorable to ML and drawing all reasonable inferences
in its favor, the novation theory is inapplicable.
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 23 of 32
Civil No. 17-1307 (RAM)
23
3. Authenticity of the April 2013 ML-PDR BSLA
In the present case, ML posits in its Opposition to PMSUF
that the ML-PDR BSLA is not authenticated and is inadmissible at
the summary judgment stage, thus denial of the PMSJ is proper.
(Docket No. 86 at 7). Conversely, Plaintiff avers that the BSLA
was
properly
authenticated
via
Ms.
Marinés
Camacho’s
unsworn
statement filed alongside the PMSUF. (Docket Nos. 83-1; 93 at 26). The Court agrees with Plaintiff. Moreover, it sees no need to
address the authenticity of the BSLA given that ML filed the same
exhibit as an exhibit to its SMUF. (Docket Nos. 81-2; 83-1).
In referencing the ML-PDR BSLA in its MSJ and SMUF, ML is
essentially adopting and authenticating it. The same BSLA it now
declares inadmissible with regards to the PMSJ and PSMUF. Defendant
cannot have it both ways. This Court overrules ML’s objection to
admission of the ML-PDR BSLA. The District of Wisconsin reached a
similar ruling in Daud v. Nat'l Multiple Sclerosis Society when it
overruled the defendant’s objection regarding inadmissibility of
an exhibit filed alongside a summary judgment motion. See Daud v.
Nat'l Multiple Sclerosis Soc'y, 2019 WL 3082467, at *4 (W.D. Mo.
2019). The District Court held that “Defendant cannot utilize an
exhibit to support one of its facts, ostensibly representing the
exhibit is admissible, but also argue Plaintiff cannot use the
same
exhibit
to
support
of
one
of
her
facts
because
it
is
purportedly inadmissible.” Id.; see also In re Fort Wayne Telsat,
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 24 of 32
Civil No. 17-1307 (RAM)
24
Inc., 2009 WL 9073366, at *2 (Bankr. N.D. Ind. 2009) (“[I]t would
seem that there should be very little reason for a dispute over
admissibility when both [parties] plan to use the same exhibit.”)
The Court thus GRANTS Plaintiff’s Motion for Partial Summary
Judgment. (Docket No. 82).
B. M/V FAJARDO II
1. Novation and Assumption of Debt Doctrine
The
party
pleading
novation,
particularly
extinctive
novation, has the burden of proving the same. See Sandoval Diaz,
296 F. Supp. 2d at 127. Here, Marina PDR agrees with ML that
extinctive novation of the MTA-PDR BSLA did not occur. To wit, it
states in its Reply that “Master Link indicates that an extinctive
novation did not occur regarding MTA and PDR’s agreement. However,
the same cannot be said for its argument regarding an assumption
of debt.” (Docket No. 88 at 7). The Court agrees that no extinctive
novation occurred as to the MTA-PDR BSLA given that the record
does not show the existence of a contract between ML and Marina
PDR
which
expressly
extinguished
the
MTA-PDR
BSLA
or
was
so
incompatible with the former that a tacit extinction occurred. See
Kellogg USA, 2010 WL 376326, at *8.
This leaves only a modificatory novation. Notably, in its
Reply to Plaintiff’s MSJ, Marina PDR seems to equate a modificatory
novation by substitution of a debtor with an assumption of debt.
Id. Although similar, said doctrines differ regarding the consent
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 25 of 32
Civil No. 17-1307 (RAM)
25
required by the creditor for the debtor’s substitution. See Joglor,
LLC v. First Am. Title Ins. Co., 261 F. Supp. 3d 224, 234 (D.P.R.
2016) (quoting Eastern Sands, Inc. v. Roig Commercial Bank, 140
P.R.
Dec.
703
substitution,
(1996)).
the
Joglor
Regarding
opinion
novation
explained
and
that
a
a
debtor’s
modifying
novation arises “when a debt is paid off by a third party, this
may cause such third party to be subrogated to the rights of the
original creditor, in which case the obligation and its guarantees
are not extinguished.” Id. This modificatory novation “requires
certain and positive proof that the creditor had the deliberate
purpose of accepting the new debtor and thereby extinguish any
cause of action against the original debtor upon the debt.” Fed.
Deposit Ins. Corp. v. Prann, 694 F. Supp. 1027, 1035 (D.P.R.
1988), aff'd sub nom. Fed. Deposit Ins. Corp. v. Bracero & Rivera,
Inc., 895 F.2d 824 (1st Cir. 1990) (citation omitted).
On the other hand, assumption of debt occurs where “the
contract through which a third party, with the creditor’s consent,
takes upon him a preexisting obligation, thus becoming a debtor
and releasing the original debtor, while the other elements of the
obligations
remain
unchanged.” TCG
Innovations
Corp.,
Inc.
v.
Aspect Software, Inc., 2014 WL 12889597, at *5 (D.P.R. 2014)
(quoting Teacher’s Annuity v. Soc. de Gananciales, 15 P.R. Offic.
Trans. 372, 386 (1984)). In an assumption of debt, the creditor’s
consent may be implied and does not have to be “expressed in a
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 26 of 32
Civil No. 17-1307 (RAM)
26
certain and positive manner.” Fed. Deposit Ins. Corp., 694 F. Supp.
at 1035. Especially given that “‘implied consent is always a matter
of
intent,’
[and]
to
judge
the
intention
of
the
contracting
parties' attention ‘must principally be paid to [the contracting
parties'] acts, contemporaneous and subsequent to the contract.’”
TCG Innovations Corp., Inc., 2014 WL 12889597, at *5 (quoting P.R.
LAWS ANN. tit. 31, § 3472). The Puerto Rico Supreme Court has
highlighted that solely accepting a payment “does not constitute
implied
consent.”
Id.
Instead,
“acceptance
of
payment
would
doubtlessly constitute implied consent if there is a pattern of
conduct from which the creditor’s intent to accept the new debtor
may be inferred.” Id. (quotation omitted).
Defendant Master Link avers in its MSJ that it did not become
a debtor under the MTA-PDR BSLA for FAJARDO II neither under
novation nor the assumption of debt doctrines. (Docket No. 80 at
8-15). ML’s principal argument concerns a June 24, 2014 letter
(“the June 2014 letter”) following a meeting between ML and Marina
PDR representatives sent by ML’s representative Mr. Berrios to Mr.
Agosto of Marina PDR. The letter stated that: (1) ML is an MTA
contractor for repairing FAJARDO II; (2) ML and GSA’s agreement
for the repairs of FAJARDO II had expired on November 2012 and
has not been renewed; (3) ML
storage
paid
Marina PDR
for
FAJARDO
II
charges (i.e. haul out, blocking, lays days, and land
storage) for the benefit of MTA and then
collected
these
from
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Civil No. 17-1307 (RAM)
27
MTA; (4) that the marina had not invoiced ML for those charges,
and (5) that Marina would allegedly pay the balance of FAJARADO
II. (Docket Nos. 80 at 9; 81-9; Facts ¶¶ 36-40). ML alleges that
nothing in the letter indicates that PDR was relieving MTA from
its outstanding debt regarding FAJARDO II nor that ML was patently
stating that it would substitute MTA and become the new obligor
under the MTA-PDR BSLA. (Docket No. 80 at 10-11). Thus, no novation
of the BSLA occurred. Id. at 12.
ML
also asserts that
assumption
of debt is
inapplicable
because there is no agreement between ML and Marina PDR concerning
the assumption of MTA’s debts by ML. Id. at 14. Moreover, Plaintiff
never stopped collection efforts from MTA even after ML supposedly
offered to become liable for FAJARDO II’s debts. (Docket No. 80;
Fact ¶45). This allegedly shows that Marina PDR never treated ML
as
the
sole
party
liable
for
FAJARADO
II’s
fees.
Thus,
no
assumption of debt occurred. (Docket No. 80 at 14-15).
Marina PDR avers in its Reply that ML has always acted with
the intention of being FAJARDO II’s representative. (Docket No. 88
at 14). More so considering it paid FAJARDO II’s fees for over
five (5) years since April 2012. (Docket No. 88 at 14; Fact ¶ 47).
Thus, based on ML’s conduct, the intention to transfer FAJARDO
II’s obligations to a new debtor were implied and an assumption of
debt occurred. (Docket No. 88 at 14). Since there is a genuine
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 28 of 32
Civil No. 17-1307 (RAM)
28
issue of material fact as to the parties’ intent and ML’s alleged
assumption of debt, summary judgment is not proper. Id. at 5-6.
Having considered the evidence presented by the parties, the
Court finds that there are issues of material fact which preclude
a summary finding of lack of modificatory novation or assumption
of debt in this case. The evidence proffered here does not seem to
evince that the parties positively intended to substitute ML for
MTA in the MTA-PDR BSLA. The parties’ conduct, however, could show
an intent, implied or otherwise, for ML to assume MTA’s debt.
Specifically, Defendant’s conduct in paying Marina PDR for over
five (5) years seems to show an intent by ML to assume MTA’s debts
with Marina PDR. See Fed. Deposit Ins. Corp. 694 F. Supp. at 1030
(holding that while there was no novatory intent, a creditor
tacitly consented to an assumption of debt by a new debtor as
evinced by bank documents and evidence of internal transactions
which showed that original debtor was exonerated from liability).
Here, it is undisputed that ML was not a part of the MTA-PDR
BSLA for FAJARDO II. (Fact ¶ 30). Further, as stated above, there
is no evidence on the record of an existing contract between ML
and Marina PDR for the vessel. While, the June 2014 letter does
not evince an express or implied intent by ML to pay all future
debt regarding the storage and repair of FAJARDO II nor an intent
for ML to become custodian of FAJARDO II, it does state an intent
to pay the current pending balance of the vessel. (Docket No. 81-
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 29 of 32
Civil No. 17-1307 (RAM)
29
9). This after it receives a purchase order from MTA, all the while
collecting the amount from MTA. (Docket No. 81-9 at 2-3; Facts ¶¶
42, 44-45). Notably, this letter was in response to a June 19,
2014 e-mail by Marina PDR stating: “[t]o confirm what was discussed
this morning, you will be sending us a document in which Maritime
Transportation Authority awards you custody of the Fajardo II
vessel.” (Docket No. 88-5, certified translation filed at Docket
No. 100-1). However, only one other document on record addresses
the supposed change in custody. Almost three years after the June
2014 letter, Marina PDR states in an April 10, 2017 letter to ML,
that per the terms set forth in the June 2014 letter, “PDR hereby
expressly consents to the substitution of Master Link as the new
and sole debtor under the referenced account [FAJARDO II’s] and
agreement. Alternatively, PDR hereby also consents and accepts
Master Link’s assumption of debts under the referenced account.”
(Docket No. 88-16). Yet, this alleged consent by Marina PDR only
occurred after the suit in the case at bar had been filed. (Fact
¶ 43). No additional evidence was provided by Marina PDR to support
this consent to the substitution of MTA for ML.
Thus, while it is undisputed that ML paid FAJARDO II’s storage
for several years (Fact ¶ 47), there is an ongoing issue of
material
fact
as
to
whether
the
parties
intended
an
actual
substitution of MTA for ML to occur through assumption of debt.
See TCG Innovations Corp., Inc., 2014 WL 12889597, at *6 (“[T]hat
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 30 of 32
Civil No. 17-1307 (RAM)
30
Defendant knowingly agreed to honor the original terms of the
agreement and actually paid Plaintiff approximately $12,000.00 per
month for over one and a half years could be enough to show that
Defendant either assumed Corsidian’s debt or that a novation of
the contract occurred.”) For the Court to definitively determine
if assumption of debt occurred, it would have to delve into the
parties’ intent. And at “this juncture, this Court is disinclined
to consider elusive concepts such as motive and intent.” Gonzalez
v. Hurley Int'l, Inc., 2011 WL 4856454, at *4 (D.P.R. 2011). The
Court DENIES ML’s Motion for Summary Judgment. (Docket No. 80).
See Fin. of Am. Reverse, LLC v. Cancel Marquez, 2019 WL 5866715,
at *3 (D.P.R. 2019) (“[s]ummary judgment is inappropriate where
there are issues of motive and intent as related to material
facts.”); Ferrer Marrero v. Misey Rest., Inc., 2019 WL 6833824, at
*1 (D.P.R. 2019). Finally, since the Court has yet to determine if
ML substituted MTA in the MTA-PDR BSLA and assume its debts under
the same, the Court will not address ML’s argument that Marina PDR
cannot recover twice for the same claim. Id. at 16-17.
2. Assignment of Rights
Similarly, the Court is not convinced at this time that an
assignment of rights regarding the MTA-PDR BSLA occurred. Under
Puerto Rico law, the assignment of a contract or assignment of
rights stemming from a contract is “the transfer by one of the
contracting parties to a third party, of the exact and integral
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 31 of 32
Civil No. 17-1307 (RAM)
31
position occupied by the former in the assigned contract.” Unilever
Home & Pers. Care USA v. Puerto Rico Beauty Supply, Inc., 162 F.
App'x 22, 26 (1st Cir. 2006) (quotation omitted). For an effective
assignment to occur “the three interested parties must concur in
the act of the assignment: the party that transfers its position
in the contract [the assignor], the assignee party that will
acquire it and the obligor, that will be affected by the change of
the person with whom he had contracted.” Goya de Puerto Rico, Inc.
v.
Rowland
(quotation
Coffee,
omitted)
206
F.
Supp.
(emphasis
2d
added).
211,
218
Here,
(D.P.R.
there
2002)
remains
a
dispute regarding whether Marina PDR, MTA, and ML concurred in the
formal act of assignment whereby MTA assigned its position in the
BSLA to ML. For example, ML’s agreement to pay the balance of
pending payments for FAJARDO II (Facts ¶¶ 36, 39, 42) does not
mean that MTA’s duties under the BSLA were automatically assigned
to it, nor that it would be responsible for all future fees. See
Unilever Home & Pers. Care USA, 162 F. App'x at 26–27 (holding
that a promise to pay an outstanding debt is not conclusive proof
of an assignment and that “a factfinder must sort this out.”)
Another example of conflicting evidence is that MTA avers it is
not responsible for ML’s debts with Marina PDR regarding FAJARDO
II. (Docket No. 88-19, certified translation at Docket No. 1007). Yet, the record does not evince that MTA was ever released
from its BSLA with Marina PDR. The consent of the obligor, here
Case 3:17-cv-01307-RAM Document 106 Filed 07/29/20 Page 32 of 32
Civil No. 17-1307 (RAM)
32
Marina PDR, is of essential importance “because the liberation of
the assignor [MTA] as a debtor of the party with whom initially
had
contracted
can
only
be
obtained
with
[its]
will.” Id.
(quotation omitted) (emphasis in original); Cf. Goya de Puerto
Rico, Inc., 206 F.Supp.2d at 219 (finding in motion to dismiss
context, that assignment of distribution contract to new owner of
brand was sufficiently pled, where plaintiff alleged that buyer
would assume seller's obligations to that distributor, the buyer
continued to honor all agreements with that distributor, and it
started a new relationship with the distributor that lasted over
seven months). Hence, at this stage, summary judgment is not proper
because the parties have failed to show that there was no triable
issue of fact on whether Marina PDR assigned MTA’s rights under
the BSLA and whether MTA was released from the BSLA.
V.
CONCLUSION
In accordance with the above, the Court GRANTS Plaintiff’s
Motion for Partial Summary Judgment (Docket No. 82) and DENIES
Defendant’s Motion for Summary Judgment (Docket No. 80). Judgment
shall be entered accordingly upon trial on the claims pertaining
to the M/V Fajardo II.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 29th day of July 2020.
S/ RAÚL M. ARIAS-MARXUACH
United States District Judge
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