Colón-Torres v. BBI Hosp. Inc.
| Decision Date | 20 July 2021 |
| Docket Number | CIVIL NO. 19-1151 (GAG) |
| Citation | 552 F.Supp.3d 186 |
| Parties | María COLÓN-TORRES, Plaintiff, v. BBI HOSP. INC. d/b/a Borinquen Beach Inn; Temistocles Ramírez De Arellano; Nelly King; José Piraquet, and P.R. Misc. Ins. Guar. Ass'n; et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
Manuel Cobian-Roig, Guaynabo, PR, for Plaintiff.
Gerardo Pavia, Pavia & Lazaro PSC, Guillermo J. Ramos-Luina, San Juan, PR, for Defendant BBI Hospitality, Inc.
Maria E. Pico, Rexach & Pico, Miramar, PR, for Defendant Puerto Rico Miscellaneous Insurance Guaranty Association.
María Colón-Torres ("Ms. Colón-Torres" or "Plaintiff") brought the present suit against Puerto Rico Miscellaneous Insurance Guaranty Association ("AGSM" or "Defendant") seeking to hold it liable for the damages allegedly suffered by Plaintiff when she slipped and fell on BBI Hospitality Inc., d/b/a Borinquen Beach Inn ("BBI")’s premises. (Docket No. 44). In her amended complaint, Plaintiff alleges that AGSM is the entity that insures BBI after its insurer, Real Legacy Assurance Co. ("Real Legacy"), was administratively declared insolvent by the Court of First Instance of the Commonwealth of Puerto Rico. Id. ¶ 26. AGSM's citizenship is a matter contested in the present case. (Docket No. 57 at 5-9). Moreover, AGSM argues that Plaintiff did not meet the necessary requirements established by the Puerto Rico Court of First Instance's Order of Liquidation to obtain relief from AGSM in regard to the liquidation proceeds of Real Legacy. Id. at 13-19. Federal jurisdiction is predicated upon diversity of citizenship pursuant to 28 U.S.C. § 1332(a)(1).
Pending before the Court is AGSM's motion to dismiss for lack of subject-matter jurisdiction and failure to state a claim upon which relief can be granted, pursuant to FED. R. CIV. P. 12(b)(1) and 12(b)(6). (Docket No. 57). Plaintiff opposed. (Docket No. 65). With leave of Court, AGSM replied and Plaintiff sur-replied. (Docket Nos. 70; 73). BBI filed a motion to join AGSM's motion to dismiss only as for lack of jurisdiction, pursuant to FED. R. CIV. P. 12(b)(1). (Docket No. 61). For the ensuing reasons, the Court GRANTS Defendant's motion to dismiss at Docket No. 57.
The factual allegations originate from Plaintiff's slip and fall that occurred in BBI's premises on July 1, 2017. (Docket No. 44 ¶ 10). At around 3:00 P.M., Ms. Colón-Torres arrived at BBI's hotel accompanied by her husband, Roberto Colón, and friends. Id. As she set foot in the rear entrance of BBI's lobby, Ms. Colón-Torres, 86-years old at that time, "slipped on a slippery, wet, uneven and/or damaged step," and fell on her back injuring "her neck, shoulder, back, knee, and leg." Id. ¶¶ 11-12.
On April 5, 2018, Plaintiff sent a letter to BBI that was intended to be an extrajudicial claim. (Docket Nos. 44 ¶ 21; 65 ¶ 8; 65-2). According to Plaintiff, said letter "met the requirements for an extrajudicial claim[,]" and the letter was signed by BBI's front desk personnel as confirmation of receipt. Id.
On February 19, 2019, Plaintiff filed the present lawsuit against BBI asserting negligence under Articles 1802 and 1803 of the Puerto Rico Civil Code, P.R. LAWS ANN . tit. 31, §§ 5141 -42. (Docket No. 1 ¶¶ 28-29). On June 26, 2020, after four hundred and ninety-four (494) days had elapsed since the filing of the complaint, Plaintiff moved for leave to amend it to include AGSM as co-defendant to the action. (Docket No. 42). Plaintiff claims that it wasn't until September 19, 2019, during the discovery phase in this litigation, that she found out that Real Legacy—BBI's insurer—was being liquidated after the Insurance Commissioner failed to rehabilitate Real Legacy pursuant to the Commonwealth of Puerto Rico's Insurance Code, P.R. LAWS ANN. tit. 26, §§ 4001 et seq. (Docket Nos. 42 ¶ 2; 65 ¶ 51). The Court granted Plaintiff's request, who subsequently amended her complaint substituting unknown defendant Company ABC with AGSM. (Docket Nos. 42 ¶ 5; 44 ¶ 26).
On January 18, 2019, the Commonwealth of Puerto Rico Court of First Instance established the liquidation procedure for Real Legacy. (Docket No. 57-2). The Puerto Rico Court's liquidation order dictated that "the term for the filing of claims shall not exceed the period of ninety (90) days counted from the date of this liquidation order." (Docket No. 57-2 at 18). The liquidation order also stipulated that there was an obligation for any claimant to file a claim during said term, as "[i]f the proper proofs and claims are not filed or presented in the indicated period, it is considered that the right to claim was abandoned." (Docket No. 57-2 at 19).
A motion to dismiss under FED. R. CIV. P. 12(b)(1) "constitutes a challenge to the federal court's subject-matter jurisdiction[.]" Suren-Millan v. United States, 38 F. Supp. 3d 208, 212 (D.P.R. 2013). The party asserting jurisdiction bears the burden of demonstrating the existence of subject-matter jurisdiction.
Murphy v. United States, 45 F.3d 520, 522 (1st Cir. 1995). When considering a Rule 12(b)(1) motion to dismiss, the Court may consider all pleadings submitted by the parties. Aversa v. United States, 99 F.3d 1200, 1210 (1st Cir. 1996). The Court "is not restricted to the face of the pleadings but may consider extra-pleading materials, such as affidavits and testimony to resolve factual disputes concerning the existence of jurisdiction." Fernández Molinary v. Industrias la Famosa, Inc., 203 F. Supp. 2d 111, 114-15 (D.P.R. 2002) (citing Land v. Dollar, 330 U.S. 731, 735, 67 S.Ct. 1009, 91 L.Ed. 1209 (1947) )."[A] federal court may not hypothesize subject-matter jurisdiction for the purpose of deciding on the merits." Ruhrgas AG v. Marathon Oil Co., 526 U.S. 574, 577, 119 S.Ct. 1563, 143 L.Ed.2d 760 (1999). "The requirement that jurisdiction be established as a threshold matter ... is ‘inflexible and without exception,’ for ‘jurisdiction is power to declare the law,’ and ‘[w]ithout jurisdiction the court cannot proceed at all in any cause[.]’ " Marathon Oil Co., 526 U.S. at 577, 119 S.Ct. 1563 (citing Steel Co. v. Citizens for Better Environment, 523 U.S. 83, 94-95, 118 S.Ct. 1003, 140 L.Ed.2d 210 (1998) ) (internal citations omitted).
The Court has expressed that the "[p]ertinent inquiry is whether the challenged pleadings set forth allegations sufficient to demonstrate that the subject matter jurisdiction of the Court is proper." Marrero v. Costco Wholesale Corp., 52 F. Supp. 3d 437, 439 (D.P.R. 2014). As previously stated, in reviewing this motion, the Court must construe the complaint liberally and treat all well-pleaded facts as true, "according the plaintiff the benefit of all reasonable inferences." Murphy, 45 F.3d at 522. Dismissal would be proper if the facts alleged reveal a jurisdictional defect not otherwise remediable. Sumitomo Real Estate Sales (N.Y.), Inc. v. Quantum Dev. Corp., 434 F. Supp. 2d 93, 95 (D.P.R. 2006). Lastly, the Court has discretion as to the manner in which preliminary questions of jurisdiction are to be resolved. Torres Vázquez v. Com. Union Ins. Co., 417 F. Supp. 2d 227, 233, n. 3 (D.P.R. 2006).
i. Diversity of Citizenship
AGSM argues that the Court lacks subject-matter jurisdiction pursuant to FED. R. CIV. P. 12(b)(1) because AGSM is an unincorporated entity whose citizenship is determined by the citizenship of all its members. (Docket No. 57 at 5-9); see Pramco, LLC v. San Juan Bay Marina, Inc., 435 F.3d 51, 54 (1st Cir. 2006). Plaintiff is a resident of the State of New York, and so are five of AGSM's member insurers. (Docket Nos. 44 ¶ 1; 57 at 5-9; 57-1 at 1, 3, 5, 7, 9). Thus, AGSM argues that complete diversity does not exist between the parties. See In re Olympic Mills Corp., 477 F.3d 1, 6 (1st Cir. 2007) (). In opposition, Plaintiff rebuts the application of the unincorporated entity citizenship test by arguing that the applicable inquiry for AGSM's citizenship is the nerve center test from Hertz Corp. v. Friend, 559 U.S.77, 80-81, 130 S.Ct. 1181, 175 L.Ed.2d 1029 (2010). (Docket No. 65 ¶¶ 23-31). Thus, Plaintiff asserts that AGSM's citizenship is solely that of Puerto Rico because its principal place of business is in San Juan, Puerto Rico. Id. at ¶¶ 27, 29.
The present case requires the Court to identify whether AGSM, a guaranty association created by Puerto Rico statute,2 is either solely a citizen of Puerto Rico under the Hertz nerve center test or also a citizen of all the states of its members under the Pramco unincorporated entity test. The First Circuit has expressed that "the citizenship of an unincorporated entity, such as a partnership, is determined by the citizenship of all of its members." Pramco, 435 F.3d at 54. However, it has not addressed the citizenship of a guaranty association for purposes of diversity jurisdiction.
In Carden v. Arkoma Assoc., 494 U.S. 185, 195-96, 110 S.Ct. 1015, 108 L.Ed.2d 157 (1990), the Supreme Court held that the citizenship of the limited partners had to be considered for determining diversity of citizenship among the parties because the diversity determination could not be based solely upon the general partners but rather upon the citizenship of all the partners. While the present case does not involve a limited partnership, Carden lays out the standard for interpreting incorporated and unincorporated entities in Puerto Rico for purposes of diversity jurisdiction. 494 U.S. at 190, 110 S.Ct. 1015. While assessing Steelworkers v. R.H. Bouligny, Inc., 382 U.S. 145, 151, 86 S.Ct. 272, 15 L.Ed.2d 217 (1965), the Supreme Court clarified that:
There could be no doubt, after Bouligny, that at least common-law entities (and likely all...
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