Maduro-Colon v. CCI Limited Partnership et al

Filing 97

ORDER ON MOTION FOR LEAVE TO APPEAR AND MOTION IN COMPLIANCE granting 92 Motion for Leave to Appear ; noting 93 Motion In Compliance; finding as moot 96 Motion to Strike Signed by Judge John Woodcock, Jr on 05/23/2019. (cs)

UNITED STATES DISTRICT COURT
DISTRICT OF PUERTO RICO
BRENDA LEE MADURO COLON,

)
)
Plaintiff,
)
)
v.
)
)
COCA-COLA PUERTO RICO BOTTLERS, )
a/k/a CCI LIMITED PARTNERSHIP )
)
Defendant.
)

3:17-cv-01591-JAW

ORDER ON MOTION FOR LEAVE TO APPEAR AND MOTION IN
COMPLIANCE
The Court allows the entry of appearance of counsel hired by the Puerto Rico
Guaranty Association of Miscellaneous Insurance to represent the interests of its
insured, Coca-Cola Puerto Rico Bottlers but declines to allow the entry of appearance
of counsel for the Guaranty Association itself because it is not a party to this personal
injury action against its insured.
I.

BACKGROUND
On May 5, 2017, Brenda Lee Maduro Colon filed a lawsuit in the United States

District Court for the District of Puerto Rico against Coca-Cola Puerto Rico Bottlers,
a/k/a CC1 Limited Partnership (Coca-Cola) and Real Legacy Assurance Company,
Inc., claiming that she was injured while operating a motor vehicle on August 12,
2013 because of the negligence of an employee of Coca-Cola. Compl. (ECF No. 1). On
July 17, 2017, Coca-Cola and Real Legacy Assurance answered the Complaint.
Answer to Compl. (ECF No. 13).

On September 4, 2018, the Court ordered counsel to file a joint proposed
pretrial order on or before October 1, 2018. Order (ECF No. 33). On October 1, 2018,
the parties duly filed the joint pretrial report. Jt. Proposed Pre-Trial Order (ECF No.
35). However, also on October 1, 2018, the Defendants filed an informative motion
requesting the rescheduling of the pretrial conference because the Commissioner of
Insurance of the commonwealth of Puerto Rico had issued an order of rehabilitation
against Real Legacy Assurance.

Informative Mot. Requesting Rescheduling of

Pretrial Conf. (ECF No. 36). In response, on October 2, 2018, Ms. Maduro Colon filed
a motion to dismiss Real Legacy Assurance as a defendant. Pl.’s Mot. to Dismiss Real
Legacy Assurance Co., Inc. (ECF No. 40). On October 3, 2018, Judge Gustavo A. Gelpi
issued an order, granting the motion to dismiss Real Legacy Assurance, Order
Granting Mot. to Dismiss (ECF No. 41), and Judge Gelpi issued a partial judgment,
dismissing without prejudice Real Legacy Assurance the same day. Partial J. (ECF
No. 43). On October 18, 2018, United States Magistrate Judge Marco E. Lopez held
a pretrial and settlement conference and ordered:
CC1 Limited Partnership is put on notice that, although they are
entitled to change their legal representation, trial proceedings will not
be delayed. The discovery of the case will not be reopened, and trial will
not be postponed should they choose to change legal representation.
Mins. of Proceedings at 1 (ECF No. 44).
The case continued to move toward trial. On November 16, 2018, Ms. Maduro
Colon filed two motions in limine. Mot. in Limine to Preclude Def. Coca-Cola from
Introducing Unnamed and/or Unknown Witnesses or Witnesses Never Disclosed
During Disc. (ECF No. 47); Mot. in Limine to Preclude Def. Coca-Cola from Changing
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its Factual Defenses and Theory (ECF No. 48). On December 11, 2018 and December
18, 2018 respectively, the Court addressed these motions, Order (ECF No. 55); Min.
Entry (ECF No. 63).
On January 4, 2019, Attorney Néstor J. Navas D’Acosta moved to withdraw as
counsel for Coca-Cola, Withdrawal of Legal Representation (ECF No. 65), and on
January 8, 2019, Judge Gelpi denied the motion without prejudice until new counsel
appeared for Coca-Cola. Order (ECF No. 66).
On January 25, 2019, Coca-Cola moved to stay the proceedings due to the
liquidation order dated January 18, 2019 of the Court of First Instance San Juan
Part, which decreed Real Legacy Assurance Company insolvent. Informative Mot.
Requesting Stay of the Proceedings due to Liquidation Order Issued Against Real
Legacy Assurance Company and Requesting Pretrial Conf. Scheduled for Jan. 29,
2019 be Left Without Effect (ECF No. 71). On January 29, 2019, Magistrate Judge
Lopez held the second pretrial conference and discussed Coca-Cola’s January 25, 2019
motion:
ECF No. 71 was discussed. There is consensus that Real Legacy
Assurance Company is not a party in this case. However, it is
defendant’s contention that, as an insurer of CC1 Limited Partnership,
Real Legacy Assurance Company is required to defend CC1 Limited
Partnership and thus, it is encompassed by the stay order issued by the
Court of the First Instance San Juan Part. However, it is plaintiff’s
position that this order issued by a local court does not bind a federal
court.
Mins. of Proceedings at 1 (ECF No. 75).
On February 15, 2019, the case was reassigned to Senior United States District
Judge John A. Woodcock, Jr. and on the same day, the matter was scheduled for a
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pretrial/settlement conference before Judge Woodcock for February 21, 2019. Order
Reassigning Case (ECF No. 76). On February 20, 2019, the day before the scheduled
pretrial/settlement

conference,

the

Puerto

Rico

Guaranty

Association

of

Miscellaneous Insurance (Guaranty Association) through its Attorney Miriam
González Olivencia moved to stay this case for a period of at least six months. Mot.
Requesting Stay of Proceedings Pursuant to Order of Liquidation (ECF No. 80)
(Guaranty Mot. to Stay). On February 21, 2019, the Court heard argument from
Attorney González Olivencia on behalf of the Guaranty Association, from Attorney
Navas D’Acosta on behalf of Coca-Cola, and from Attorney Sanchez-La-Costa on
behalf of Ms. Maduro Colon. Min. Entry (ECF No. 83). The Court allowed the
Guaranty Association to file a supplemental motion and for Ms. Maduro Colon to
respond, and they did so on February 28, 2019 and on March 6, 2019 respectively.
Mot. Supplementing Req. for Stay of Proceedings and Req. for Intervention (ECF No.
81) (Guaranty Suppl. Mot.); Pl.’s Resp. in Opp’n to a Mot. to Stay Filed by a Non-Party
P.R. Guaranty Assoc. Seeking to Radically Alter the Case (ECF No. 84) (Pl.’s Opp’n).
In its supplemental motion, Guaranty affirmed that it would provide a defense
and coverage to Coca-Cola “pursuant to the underlying provisions of the original
policy issued by Real Legacy Assurance Company and Chapter 38 of the Insurance
Code.” Guaranty Suppl. Mot. at 3. Immediately thereafter, on March 13, 2019,
Attorneys Navas D’Acosta and Carmen Lucía Rodríguez Vélez filed a second motion
to withdraw as counsel for Coca-Cola.

Mot. Reiterating Withdrawal of Legal

Representation (ECF No. 85).

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On March 15, 2019, the Court issued an order on Guaranty’s motion to stay
and Attorneys Navas D’Acosta and Rodríguez Vélez’s motion to withdraw. Order on
Mot. to Stay Proceedings and Reiterated Mot. to Withdraw (ECF No. 86). The Court
granted the Guaranty Association’s motion to stay the proceedings until July 19, 2019
to give the Guaranty Association an opportunity to “retain defense counsel to
represent Coca-Cola in the Maduro Colon lawsuit, to assess Coca-Cola’s liability for
Ms. Maduro Colon’s personal injuries, to analyze her claim of damages, and to make
its own independent determination of the potential settlement value of her claim.”
Id. at 16-17. At the same time, the Court was concerned that Guaranty had not yet
retained defense counsel and gave Guaranty until April 15, 2019 to file a report with
the Court “explaining why it had not complied with its acknowledged duty to defend
this case.” Id. at 20-21.
On April 15, 2019, Attorney González Olivencia filed a document entitled,
“Motion Complying with Court Order.” Mot. Complying with Ct. Order (ECF No. 88).
Attorney González Olivencia reiterated:
So in summary, the Guaranty Association will provide defense to Coca
Cola pursuant to the terms, limits and dispositions of Chapter 38 and
the underlying policy it had with Real Legacy, and has suggested that
Coca Cola retain counsel in excess of said terms, limits and dispositions.
Id. at 7. On April 16, 2019, in light of the representations in Guaranty’s motion, the
Court ordered Attorney González Olivencia to enter an appearance on behalf of CocaCola by April 19, 2019. Order (ECF No. 89). On April 17, 2019, Attorney González
Olivencia moved for an extension of time within which to comply with the Court’s

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April 16, 2019 order and on April 17, 2019, the Court granted her motion for
extension. Mot. Requesting Extension of Time (ECF No. 90); Order (ECF No. 91).
On April 25, 2019, Attorney Jaime L. Mayol Bianchi filed a Notice of
Appearance. Notice of Appearance (ECF No. 92). The Notice of Appearance stated:
1. That the undersigned attorney will be representing the commercial
entity COCA COLA PUERTO RICO BOTTLERS a/k/a CCI
LIMITED PARTNERSHIP by means of the Puerto Rico Guaranty
Association in the case of reference, jointly with attorney Miriam
González Olivencia on behalf of the Puerto Rico Miscellaneous
Insurance Guaranty Association.
WHEREFORE is hereby requested from this Honorable Court to
authorize the undersigned attorney to represent Coca Cola Puerto Rico
Bottlers a/k/a CCI Limited Partnership jointly with Mrs. Miriam
González Olivencia, attorney for the Puerto Rico Miscellaneous
Insurance Guaranty Association.
Id. at 1-2.
On April 25, 2019, Attorney González Olivencia filed a motion complying with
the court order. Mot. Complying with Ct. Order (ECF No. 93). In her motion,
Attorney González Olivencia affirmed that “the appearing party acknowledged its
duty to defend Coca Cola, pursuant to an insurance policy issued by Real Legacy
Assurance Company (“Real Legacy”) to Coca Cola.” Id. at 1 (emphasis in original).
After receiving the Court’s March 15, 2019 order, Attorney González Olivencia
realized that she “could not provide dual representation to both the Guaranty
Association and Coca Cola.” Id. at 2. She observed that “[t]oday separate counsel
filed a Notice of Appearance on behalf of Coca Cola.” Id. She asked the Court to deem
its order complied with. Id.

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On April 26, 2019, Ms. Maduro Colon objected. Pl.’s Resp. in Opp’n to Allowing
a Non-Party P.R. Guaranty Assoc. to Appear in this Case Without a Cognizable and
Real Interest or Standing (ECF No. 94). Ms. Maduro Colon observed that Guaranty
is not a party to this lawsuit and she contended that Guaranty should not be allowed
to intervene and “impermissibly limit the damages recoverable in this case.” Id. at
1. She noted that on October 3, 2018, this Court granted a motion to dismiss Real
Legacy from this case. Id. at 1-2 (citing Order (ECF No. 41)). Even though the Court
granted Guaranty’s motion to stay the lawsuit, Ms. Maduro Colon argued that the
Court never “allowed the non-party [Guaranty] to appear on this case on its own to
litigate the merits of the case.” Id. at 2. Ms. Maduro Colon observed that Guaranty
has never moved to intervene in this lawsuit and contended that it had “no real
interest” in its resolution. Id. Ms. Maduro Colon states that “[w]hatever limit Coca
Cola is facing as to the amount of damages it may seek reimbursement from
[Guaranty] . . . [is] not an issue in this personal injury case at all.” Id.
On May 1, 2019, Attorney González Olivencia replied. Mot. for Leave to Reply
to Opp’n by Pl. to Allow a Non-party P.R. Guaranty Assoc. to Appear in the Captioned
Case (ECF No. 95). Attorney González Olivencia observed that its “intervention in
the captioned case is based on Article 38.180 of the Insurance Code.” Id. at 3. In
Attorney González Olivencia’s view, this statute “permits the appearance of
[Guaranty] in any case.” Id. She writes that Guaranty’s “intervention in this case is
to raise its statutory limits, which are $300,000.00 by law and as a result of the
insolvency of Real Legacy Assurance Company, as well as all of the defenses afforded

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to [Guaranty].” Id. Attorney González Olivencia insists that Guaranty has the right
to “raise these statutory limits, and other special defenses afforded.” Id. at 4-5. She
says that Coca-Cola “cannot raise these defenses because it has no standing to do so.”
Id. at 5. On May 6, 2019, Ms. Maduro Colon filed a motion to strike Guaranty’s Reply,
arguing Guaranty had not asked the Court for leave to file the reply as required under
the District of Puerto Rico’s local rules and that, in any event, the Guaranty’s
arguments have been previously rejected by the Court. Pl.’s Mot. to Strike Non-Party
Guaranty Association’s Reply (ECF No. 96). 1
II.

DISCUSSION
A.

Guaranty’s Right to a Limited Appearance

The Court agrees with Guaranty’s position but only to a very limited extent.
Section 3818 of title 26 gives Guaranty the opportunity to vindicate the provisions of
the statute in ongoing litigation. Thus, section 3818 empowered Guaranty to attempt
to obtain a stay in pending litigation for six months or longer to allow Guaranty and
its new insureds an adequate defense in all pending cases, and once obtained, to seek
to enforce the stay in lawsuits pending against the insolvent insurer or its insureds.
This is what Guaranty did in this case and it did so in a manner plainly authorized
by the Puerto Rico statute.
B.

Guaranty’s Right to a General Appearance

Ms. Maduro Colon correctly observes that Guaranty filed a reply without first obtaining prior
leave from the Court to do so in contravention of Local Rule 7 of this District. In view of the Court’s
conclusions, the Court dismisses as moot Ms. Maduro Colon’s motion to strike (ECF No. 96).

1

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Guaranty is seeking here, however, the right to intervene in pending litigation
to protect its interests. Under article 20.030 of the Puerto Rico Insurance Code, a
claimant is authorized to file a direct claim against the insurance company and, if the
insolvent insurer were a party to the case at the time of insolvency, Guaranty would
step in the shoes of the insolvent insurer.

See Puerto Rico Insurance Code, §

20.030(1), P.R. Laws Ann. tit. 26, § 2003(1). However, here, by January 18, 2019,
when the Insurance Commissioner of the Insurance Commissioner’s Office of Puerto
Rico filed a petition to convert the rehabilitation process for Real Legacy into a
liquidation, Judge Gelpi had already dismissed Real Legacy as a party from the
lawsuit, leaving the only parties as the Plaintiff Brenda Lee Maduro Colon and the
Defendant Coca-Cola Puerto Rico Bottlers. Because Real Legacy had been dismissed
from the lawsuit, Guaranty had no right to participate in this lawsuit beyond its
statutory right to seek a stay.
In the Court’s view, once Guaranty accepted its duty to defend and its duty to
provide coverage for Coca-Cola, as it has done here, this case became like any other
personal injury case. The insurer, Guaranty, had the obligation to provide a defense
to its insured, Coca-Cola, by retaining a lawyer to defend Coca-Cola. The Court has
no reason to conclude that the provisions of the defense in this circumstance are any
different from the mine-run of lawsuits where a duty to defend exists under an
insurance policy. Thus, Attorney Jaime L. Mayol Bianchi’s entry of appearance is not
for Guaranty but for Guaranty’s insured, Coca-Cola, and he is obligated to act in the
best interests of Guaranty’s insured, Coca-Cola.

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As Ms. Maduro Colon filed no direct action against Guaranty, or more
precisely, as Real Legacy (and hence Guaranty) is no longer a party, any insurance
coverage issues are not germane to the resolution of the pending personal injury
action. If Attorney Mayol Bianchi successfully defends Coca-Cola, Guaranty will
have complied with its obligation to provide a defense to its insured. If a verdict is
issued in favor of Ms. Maduro Colon below Guaranty’s $300,000 limits, presumably
Guaranty will recognize its indemnification obligation. If a verdict is issued in favor
of Ms. Maduro Colon in excess of Guaranty’s $300,000 limits, then whether
Guaranty’s exposure is limited to $300,000 and whether Coca-Cola is exposed to the
verdict in excess of coverage will be subject to later litigation. At that point, Attorney
González Olivencia will be free to enter her appearance in any subsequent coverage
litigation on behalf of Guaranty since Guaranty will be a party.

At this point,

however, Guaranty is not a party to this lawsuit and has failed to demonstrate any
basis upon which it may be separately represented in a lawsuit between a claimant
and its insured. If Guaranty wishes to challenge this determination, it is free to file
a formal motion to intervene, explaining why it has a right to become a party in this
litigation. To date, it is not and as such is not entitled to separate representation.
III.

CONCLUSION
The Court accepts Attorney Mayol Bianchi’s entry of appearance on behalf of

Guaranty’s insured, Coca-Cola Puerto Rico Bottlers, but it declines to accept Attorney
Mayol Bianchi’s conditional appearance, namely that he is entering an appearance
jointly with Attorney González Olivencia. The entry of appearance conditioned on

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the joint entry of appearance on the part of Guaranty is inconsistent with Attorney
Mayol Bianchi’s overriding obligation to act in the best interest of Guaranty’s insured
and is not accepted.
The Court STRIKES Attorney González Olivencia’s entry of appearance on
behalf of Guaranty as Guaranty is not a party to this lawsuit. If Guaranty wishes to
intervene in this lawsuit, it must do so by filing a formal motion to intervene,
explaining the basis for its position that it has the legal right to do so. Finally, now
that Coca-Cola is represented by insurance defense counsel selected by Guaranty,
consistent with its April 15, 2019 Order (ECF No. 89), the Court sua sponte ORDERS
that Attorneys Néstor J. Navas D’Acosta and Carmen Lucía Rodríguez Vélez are
deemed withdrawn as counsel for Coca-Cola.
SO ORDERED.
/s/ John A. Woodcock, Jr.
JOHN A. WOODCOCK, JR.
UNITED STATES DISTRICT JUDGE
Dated this 23rd day of May 2019.

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