Nelson v. Novas Dueno

Full title: TRACY L. NELSON, et als., Plaintiffs, v. JOSE LUIS NOVAS DUEÑO, et als.…

Court: United States District Court, D. Puerto Rico

Date published: Sep 1, 2005

Civil No. 04-2132 (SEC/CVR) (D.P.R. Sep. 1, 2005)

Opinion

Civil No. 04-2132 (SEC/CVR).

September 1, 2005

OPINION AND ORDER

CAMILLE VELEZ-RIVE, Magistrate Judge

INTRODUCTION

This is an action for collection of monies and is brought pursuant to the Puerto Rico Civil Code, 31 L.P.R.A. § 3052 et seq., as defendants failed to comply with the terms and obligations stated in the Agreement to Sell Yacht dated March 1, 2002. The Court has jurisdiction pursuant to diversity of citizenship between the parties and the matter in controversy exceeds $75,000.00, exclusive of interest and costs. 28 U.S.C. § 1332(a)(1). (Docket No. 1).

On June 8, 2005, plaintiffs filed a Motion for Summary Judgment, Memorandum of Law in Support thereof and supporting documents. Plaintiffs claim defendants failed to pay them the total amount of the sales price and have thus breached the Agreement. Accordingly, plaintiffs request summary judgment in their favor for specific performance or resolution of the Agreement with the corresponding indemnity for damages and interests. (Docket No. 21).

Defendants filed a two (2) page Opposition to plaintiff's Motion for Summary Judgment attaching several documents, including a sworn statement from plaintiff. Defendants did not file a separate statement of material facts as required by Local Rule 56(c). (Docket No. 27).

FACTUAL BACKGROUND

On March 1, 2002, plaintiff Tracy Nelson and defendant José Luis Novas-Dueño entered into an Agreement in which defendants agreed to buy a 48' 1989 Model Yacht from plaintiffs for the amount of $224,000.00. The Agreement called for the full price to be paid approximately in seventy (75) days starting from March 1, 2002.

Defendant made the initial payments pursuant to the Agreement but failed to make the final payment of $185,000.00 to liquidate the vessels' mortgage.

The last payment made by defendants was a check made payable to Novas-Dueño and Wachovia Bank for $5,056.16, product of an insurance claim previously filed by him. This check was applied by the Bank to the principal mortgage loan of the vessel.

Consequently, plaintiffs had to pay the installments of the vessel from August 2004 until present. The total amount of money paid by plaintiffs in these installment is $9,013.34. As of May 26, 2005, the outstanding balance of the vessel's mortgage was $134,269.53.

Plaintiffs remain exposed to the liability for the vessel's mortgage loans because defendants have not paid the full price of the vessel. Defendants are in possession and using the vessel without paying the remaining balance of the sale.

SUMMARY JUDGMENT STANDARD

Summary judgment is appropriate if there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c). Pagano v. Frank, 983 F.2d 343, 347 (1^st Cir. 1993); Lipsett v. Univ. of P.R., 864 F.2d 881, 894 (1^st Cir. 1988); see Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505 (1986).

Material facts are those that are outcome-determinative under the governing substantive law. Morrissey v. Boston Five Cents Savings Bank, 54 F.3d 27, 31 (1^st Cir. 1995). To be successful in its attempt, the moving party must demonstrate the absence of a genuine issue as to any outcome-determinative fact in the record, DeNovellis v. Shalala, 124 F.3d 298, 306 (1^st Cir. 1997), through definite and competent evidence.Maldonado-Denis v. Castillo-Rodríguez, 23 F.3d 576, 581 (1^st Cir. 1994). If the non-movant generates uncertainty as to the true state of any material fact, the movant's efforts should be deemed unavailing. Suárez v. Pueblo Int'l, 229 F.3d 49, 53 (1^st Cir. 2000). Nonetheless, the mere existence of "some alleged factual dispute between the parties will not affect an otherwise properly supported motion for summary judgment."Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505 (1986).

At the summary judgment juncture, there is "no room for the measured weighing of conflicting evidence", or for the injection of the judge's own conceptions of likelihood into the determination. Greenburg v. Puerto Rico Maritime Shipping Auth., 835 F.2d 932, 936 (1^st Cir. 1987). The Court must examine the facts in the light most favorable to the non-movant, indulging that party with all possible inferences to be derived from the facts. See Rochester Ford Sales, Inc. v. Ford Motor Co., 287 F.3d 32, 38 (1^st Cir. 2002). Nonetheless, when evaluating the evidence before it, the Court may safely ignore "conclusory allegations, improbable inferences and unsupported speculation." Pueblo Int'l, 229 F.3d at 53.

The fact that a plaintiff fails to file a timely opposition does not, by itself, require that the summary judgment be affirmed as to defendants. See Méndez v. Banco Popular de Puerto Rico, 900 F.2d 4, 7 (1st Cir. 1990). Opposed or not, summary judgment can only be granted "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c); see Fed.R.Civ.P. 56(e). Carmona v. Toledo, 215 F.3d 124, 134 (1^st Cir. 2000) (if adverse party fails to respond, "summary judgment, if appropriate, shall be entered").

LEGAL ANALYSIS

Article 1077 of the Civil Code of Puerto Rico, 1930 ed., 31 LPRA § 3052, provides in part as follows:

The right to rescind the obligations is considered as implied in mutual in case one of the obligated persons does not comply with what is incumbent upon him. The person prejudiced may choose between exacting the fulfilment of the obligation or its rescission, with indemnity for damages and payment of interest in either case. He may also demand the rescission, even after having requested its fulfilment, should the latter appear impossible.

Felix A. Rodríguez, Inc. v. Bristol-Myers Co., 281 F.Supp. 643, 645 (D.P.R. 1968).

Plaintiffs' Motion for Summary Judgment is mainly based on the Sworn Statement of Tracy Nelson in which it is established defendants have not complied with their obligations under the contract.

Pursuant to Mr. Nelson's Sworn Statement, on March 1, 2002, he sold to defendants his 1989 Model Motor Yacht for $224,000.00. The transaction of the sale of the vessel was supposed to be concluded within approximately seventy (75) days starting from March 1, 2002. Defendants made the initial payments pursuant to the Agreement but failed to make the final payment of $185,000.00 to liquidate the vessels' mortgage. The last payment made by defendants was a check made payable to Novas-Dueño and Wachovia Bank for $5,056.16, product of an insurance claim previously filed by him. This check was applied by the Bank to the principal mortgage loan of the vessel. Plaintiffs have paid from August 2004 until present the installments of the vessel because defendants have failed to make those payments. The total amount of money paid by plaintiffs for these installment has been $9,013.34. As of May 26, 2005, the outstanding balance of the vessel's mortgage was $134,269.53. (Docket No. 21).

Defendants have opposed the summary judgment request but their opposition is devoid of substance. As explained in detail herein below, there is no controversy of genuine material facts and no credibility determinations which preclude the granting of summary judgment as requested by plaintiffs, more so since defendants' Opposition fails to address, in form and in substance, defendants' substantiated statements or to comply with Local Rule 56.

Local Rule 56(c) provides that:

A party opposing a motion for summary judgment shall submit with its opposition a separate, short, and concise statement of material facts. The opposing statement shall admit, deny or qualify the facts by reference to each numbered paragraph of the moving party's statement of material facts and unless a fact is admitted, shall support each denial or qualification by a record citation as required by this rule. The opposing statement may contain in a separate section additional facts, set forth in separate numbered paragraphs and supported by a record citation as required by subsection (e) of this rule.

However, Local Rule 56(e) states that:

Facts contained in a supporting or opposing statement of material facts, if supported by record citations as required by this rule, shall be deemed admitted unless properly controverted. An assertion of fact set forth in a statement of material facts shall be followed by a citation to the specific page or paragraph of identified record material supporting the assertion. The court may disregard any statement of fact not supported by a specific citation to record material properly considered on summary judgment. The court shall have no independent duty to search or consider any part of the record not specifically referenced in the parties; separate statement of facts.

Furthermore, it is well established that district courts have been specifically and expressly encouraged by the First Circuit Court of Appeals to adopt "anti-ferreting rules" which might assist them in adjudicating motions for summary judgment. "The `anti-ferret rules' serves one crucial purpose. It lays out the material facts in dispute clearly for a district court that is swamped with an overwhelming number of civil and criminal dispositive motions. It requires both the moving party and the non-moving party to properly support their respective lists of material facts with specific references to the record." Vélez v. Puerto Rico Electric Power Authority, 170 F.Supp. 2d 158, 162 (1^st Cir. 2001).

In explaining the importance of making specific references to the record, the First Circuit Court held in Stepanischen v. Merchants Despatch Trans., 722 F.2d 922, 927 (1^st Cir. 1983), that "a party's failure to comply would, where appropriate, be grounds for judgment against that party." It is well established that District Courts have been encouraged to adopt "anti-ferreting" rules, which warn parties opposing summary judgment that, to preclude judgment as a matter of law, they must identify factual issues buttressed by record citations. "[O]nce so warned," we added, "a party's failure to comply would, where appropriate, be grounds for judgment against that party." "This case is a lesson in summary judgment" Morales v. A.C. Orssleff's EFTF, 246 F.3d 32, 33 (1^st Cir. 2001) (quoting Stepanischen, 722 F.2d at 931). Furthermore, opposing parties are also reminded that: "[a]ll material facts set forth in the statement required to be served by the moving party shall de deemed to be admitted unless controverted by the statement required to be served by the opposing party." Stepanischen, 722 F.2d at 927, ( emphasis added). Accordingly, if the opposing party fails to comply fully with the requirements of Local Rule 56(c), the Court will deem admitted the facts set forth in the moving party's statement of uncontested facts, which as a practical matter will often be equivalent to entering default judgment against the non-moving party.

The instant case, and particularly in view of defendants' Opposition, is not the paragon of compliance with this Court's "anti-ferreting" rule, Local Rule 56(c). This, notwithstanding the First Circuit's strong and consistent admonition that "parties ignore [said rule] at their own peril . . .," Ruiz Rivera v. Riley, 209 F.3d 24, 28 (1^st Cir. 2000), and that "a party's failure to comply [with it] would, where appropriate, be grounds for judgment against that party." See Morales v. A.C. Orssleff's EFTF, 246 F.3d at 33; see also Vélez v. Puerto Rico Electric Power Authority, 170 F.Supp. 2d at 162.

Defendants' Opposition to plaintiffs' Motion for Summary Judgment fails to meet the threshold established by Local Rule 56(c) and the applicable case law. Defendants' Opposition consists of two (2) pages and three (3) paragraphs with several attachments including a sworn statement from defendant Novas. Nonetheless, no argument is made by defendants as to how the three (3) cases cited or the exhibits attached support their Opposition. Moreover, no reference is made to record citations. In addition, defendants have totally failed to file a separate concise statement of material facts. Therefore, defendants have not admitted, denied or qualified plaintiffs' individual statements of uncontested facts.

Accordingly, in light of the Local Rule 56 and the jurisprudence above cited, the Court will deem admitted the facts set forth in plaintiff's statement of uncontested facts and will consider plaintiff's Motion for Summary Judgment as unopposed. Consequently, defendants' failure to comply with this requisite provides grounds for judgment against them.

Nonetheless, even if we were to consider the content of defendants' Opposition, defendant Novas' sworn statement and the attached documents, summary judgment in plaintiff's failure is still appropriate. We explain.

Defendants claim in their sworn statement that, according to the Agreement for the purchase of the vessel, plaintiff (as seller) warranted title to her to be "free of any and all liens, mortgages, charges and encumbrances" and in fact there was an outstanding loan secured by a lien upon said vessel in favor of Wachovia Bank, N.A. (Docket No. 27, sworn statement ¶ 2). Defendants contend that on June 22, 2004, defendant delivered to plaintiff through plaintiffs' attorney the sum of $4,901.40 to prepay installments of the Loan to become due to Wachovia's bank for the months of July, August and September 2004 of the $1,264.04 each, and the sum of $1,209.28 towards the installment to become due for the month of October 2004. (Docket No. 27, sworn statement ¶ 4). Defendants also claim that as of May 16, 2002, defendant paid to plaintiff the sum of $65,686.04 and plaintiff had no equity of the vessel; and that as of said date the amount outstanding on the loan was the sum of $158,313.96. (Docket No. 27, sworn statement ¶ 5). Finally, defendants allege they satisfied the installments which became due on the Loan until and including the installment that became due on August 2003, and thereafter, through plaintiff, those that became due up to and including the installment due on the month of June 2004. On June 2004, defendant delivered to plaintiffs attorney funds to prepay up to October 2004 but plaintiff used the funds to reduce the principal of the loan. (Docket No. 27, sworn statement ¶ 6).

Thus, defendant Novas admits in his sworn statement that he has not complied with his obligations under the Agreement inasmuch he admits he made the initial payments but has failed to make the final payment to extinguish the outstanding loan. Thus, the sworn statement corroborates the facts established by plaintiffs in their Motion for Summary Judgment, Statement of Material Uncontested Facts and attached sworn statement as to defendants' failure to make the final payment of $185,000.00 pursuant to the Agreement.

In addition, the documents attached to defendants' Opposition buttress plaintiffs' contention that defendants failed to comply with their obligations. For example, in the letter of August 21, 2003 from defendant Novas to plaintiffs, defendant Novas admits he made the initial payments except for the balance of the outstanding loan which he was going to refinance. (Docket No. 27, letter of August 21, 2002 of defendant Novas to plaintiffs). In addition, in defendant Novas' letter of December 19, 2003, he recognizes the amount he owes and the fact that he has been negligent or careless in obtaining refinancing to substitute the Loan by indicating the following: "I have been remised in fulfilling my obligations to you of re-financing the boat in Puerto Rico and the attitude lately assumed by Wachovia has caused me substantial embarrassment. I fully understand and agree that there is no reason for you to be acting on my behalf as payment agent. I am making the necessary arrangements to make certain that by March 2004 I will either refinance in Puerto Rico or pay in full the outstanding loan." (Docket No. 27, letter of December 19, 2003 of defendant Novas to plaintiffs). Regardless of the promises made by defendant Novas' promises, to this day defendants have neither refinanced the vessel in Puerto Rico nor paid in full the outstanding loan.

We further note the fact the vessel had an outstanding loan does not excuse defendants from complying with their obligations under the Agreement. We recognize the Agreement stated the vessel should be free from liens. Nonetheless, the money from the sale, if timely paid by defendants, would have been used by plaintiffs to pay in full the outstanding loan for the vessel to be free from liens. Thus, the fact that the vessel was not free from liens was caused by defendants' failure to timely pay the sale price.

Defendants submit as a defense that they were not able to obtain refinancing for the vessel. This situation does not excuse defendants from complying with their obligations under the Agreement. Since at least April 15, 2002, defendant Novas was authorized by plaintiffs to obtain information from Wachovia Bank related to the bank loan. (Docket No. 27, letter of April 15, 2002 of defendant Novas to Wachovia Bank). Thus, well within the period defendants had to comply with their obligations, they were aware of the loan and could make the arrangements to get proper refinancing. It is uncontested that defendants agreed to make a final payment and the same was not made. If defendants were not able to obtain refinancing for the vessel, they could not just lay back, fail to pay and continue in possession and use of the vessel as they have done. Defendants should have found an alternate way of payment to plaintiffs or an alternate way to pay in full the outstanding loan. In the worst case, defendants should have returned the vessel to plaintiffs. Defendants have failed to do any of these.

It is uncontested that defendants' failure to comply with the Agreement has caused an unjust financial burden on plaintiffs since, as recognized by defendant Novas, they have been acting on his behalf as his payment agent. That was not the purpose of the Agreement.

Finally, we note that a review of the Opposition and the sworn statement also shows defendants have not challenged the existence of the Agreement and the validity of same. Thus, defendants' obligations of payment of the sale price and the failure to pay same are uncontested.

In view of the foregoing, there are no genuine issues of material fact in controversy which preclude the Court from entering summary judgment in plaintiffs' favor. Summary judgment is appropriate "against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial."Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548 (1986).

CONCLUSION

In view of the foregoing, plaintiffs' Motion for Summary Judgment is GRANTED. Defendants are hereby ORDERED to specifically perform under the Agreement by paying to plaintiffs the amount of $134,269.53 in addition to the amount of $9,013.34 for a total amount of $143,282.87, within thirty (30) days.

Judgment is to be entered accordingly.

IT IS SO ORDERED.