Adrian v. Mesirow Financial Structured Settlements, LLC
| Decision Date | 09 July 2010 |
| Docket Number | Civil No. 08-1180 (FAB) |
| Citation | 736 F.Supp.2d 404 |
| Parties | Yanisse ADRIAN, Plaintiff, v. MESIROW FINANCIAL STRUCTURED SETTLEMENTS, LLC, et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
Ana L. Toledo-Davila, Ana L. Toledo Law Office, San Juan, PR, Frederick J. Jekel, South Carolina, SC, for Plaintiff.
Bryson M. Geer, Jennifer Hess Thiem, Richard Ashby Farrier, Jr., Nelson Mullins Riley and Scarborough, Charleston, SC, Francisco E. Colon-Ramirez, Colon & Colon PSC, San Juan, PR, Cheryl A. Green, Lusting and Brown, Buffalo, NY, Richard Scott Atwater, Gross Shuman Brizdle & Gilfillan PC, Buffalo, NY, for Defendants.
Before the Court is defendants' motion for summary judgment (Docket No. 132), plaintiff's opposition (Docket No. 147), and defendants' reply (Docket No. 166.) On June 10, 2010, the Court granted the defendants' motion for summary judgment and dismissed the case with prejudice. (Docket No. 182.) This opinion sets forth the reasons for that dismissal.
In August, 1998, plaintiff Yanisse Adrian ("Adrian") was seriously injured and is now a paraplegic as the result of a shooting that occurred in the Montehiedra Mall parking lot in San Juan, Puerto Rico. Adrian brought suit in this Court to recover money damages for the injuries she alleged were caused by a lack of security at the premises where the incident occurred (Civil Number 03-1890). The parties attempted to settle that case in 2006 prior to the start of trial, but those negotiations did not bear fruit. On April 17, 2007, three weeks into trial, the parties agreed to settle for five million dollars ($5,000,000).
In her Amended Complaint of January 9, 2008 (Docket No. 13), Adrian contends that she only agreed to the $5,000,000 settlement as a result of her reliance on numerous representations made to her by defendant Mesirow Financial Structured Settlements, LLC ("Mesirow"), a structured settlement broker. Adrian further alleges that she would not have agreed to the terms of the April 17, 2007 settlement were it not for her reliance on Mesirow's advice and promises regarding Adrian's tax immunity. Adrian alleges that she relied on Mesirow to advise her regarding Puerto Rico's tax laws and the requirements of Puerto Rico's Treasury Department ("Hacienda"), and that Mesirow made representations to the effect that Adrian would not owe taxes to Puerto Rico (nor would any withholding occur) related to the settlement of her suit if she opted to rely on Mesirow's services. Adrian contends she suffered damages because the payment of her settlement was delayed as a result of the disagreement that ensued regarding the settlement's terms and because she lost her opportunity to finish her trial.1
Based on these alleged misrepresentations and the damages allegedly suffered as a result, Adrian accuses Mesirow of (1) negligence; (2) negligent misrepresentation; (3) fraudulent inducement; (4) breach of fiduciary duty; (5) equitable estoppel; and (6) promissory estoppel.2 Adrian voluntarily dismissed her claims against Mesirow for civil conspiracy and intentional interference with contractual relations. (Docket No. 147 at 28.)
Mesirow argues that it at no time influenced Adrian's settlement decisions; that Mesirow had a legitimate concern that it not be exposed to potential tax liability or regulatory action against their insurance licenses and/or criminal prosecution for failure to follow Puerto Rico law; that it was Adrian who caused the delay in payment; and that Adrian only intended to structure one-half of her net settlement proceeds and to take the remaining one-half in cash.
Local Rule 56 requires parties to support a motion for summary judgment with a statement of material facts as to which the moving party contends there is no genuine issue of material fact to be tried. Loc. Civ. R. 56(b). As a general principle, parties may not include legal arguments or conclusions in their statement of facts. See MVM Inc. v. Rodriguez, 568 F.Supp.2d 158, 163 (D.P.R.2008); Juarbe-Velez v. Soto-Santiago, 558 F.Supp.2d 187, 192 (D.P.R.2008). Both parties, but most egregiously the plaintiff, have failed to comply with this principle.
The plaintiff's additional statement of uncontested facts does not present separate facts supported by reference to record citation as required by Local Rule 56; the statement submits lengthy paragraphs containing statements of argument, opinion, and conclusion which more often than not contain no factual statements. If and when a factual statement is present, however, it is intertwined with argument, opinion or conclusion that requires an exhausting process to pick apart the offending paragraph, something that this Court will not undertake. Counsel should note that these lengthy paragraphs confuse facts with conclusory statements, opinions and arguments and as such are not appropriate under Local Rule 56.
Where the Court can easily distinguish a statement of fact from an argument or other sort of statement, that fact will be added to the record if properly supported. The Court disregards entirely, however, all arguments, opinions and conclusions improperly submitted as additional facts.
On August 19, 2003, plaintiff filed civil action 03-1890 ("underlying case") in this Court for physical and mental damages suffered as a result of a shooting incident that occurred at the Montehiedra Mall in Puerto Rico. (Docket No. 132-1 at 2.) In her third amended complaint in the underlying case, plaintiff claimed that her damages were due to the fault or negligence ofRanger American of Puerto Rico, Inc., for failure to provide reasonable security at the mall premises. Id. Plaintiff also alleged that Manley Berenson Montehiedra Management ("Manley Berenson"), the malls' owner, was "negligent in implementing managerial or operational strategies, actions and decisions relating [to] mall security." Id. (quoting from Docket No. 93 in Civil Action 03-1890). Plaintiff named the Continental Casualty Company ("Continental") as an insurer of Manley Berenson in her complaint in the underlying case. Id. at 2.
Plaintiff's counsel of record for the underlying case included Paul Hulsey ("Hulsey"), Cherie K. Durand ("Durand"), and Jose Quetglas ("Quetglas"). Id. Eric Quetglas also appeared as counsel for plaintiff in the underlying case, filing documents on Adrian's behalf and appearing at trial. Id. Hulsey and Durand were lead counsel during the case, trial, and during negotiations. Gustavo Gelpi ("Gelpi") and Arturo Diaz ("Diaz") were both counsel for Manley Berenson and Continental. Id. at 3 (). The Court discusses other participants in the underlying case as necessary.
The parties engaged in a prolonged initial settlement negotiation prior to trial. On January 14, 2005, Hulsey wrote a letter to Gelpi in which he made a settlement demand on behalf of Adrian for what he understood were the limits of Manley Berenson's insurance policy coverage: fifty million dollars ($50,000,000). (Docket No. 132-2.)
On August 26, 2005, Fireman's Fund Insurance Company ("Fireman's Fund"), another insurance carrier for Manley Berenson, and a defendant named in case 08-1179(ADC), contacted Connie Klinger ("Klinger"), a representative of Mesirow, to work on the underlying case.3 Klinger is a licensed life insurance agent and a certified structured settlement consultant. (Docket No. 132-14 at 5, 3.) Mesirow and Klinger are both members of the National Structured Settlements Trade Association (NSSTA). At the date of her deposition for this case, on December 7, 2009, Klinger had been a structured settlement broker for almost nine years. ( Id. at 6.) When she places a structured settlement with a life insurance company, Klinger earns a commission of four percent 4 of the premium paid for any structured settlement she sells. Id.
A plaintiff receiving compensation for physical injury may utilize a procedure by which an annuity is purchased, and the proceeds from that annuity are tax free. ( See Docket No. 132-14 at 9; Docket No. 147-1 at 21.) This is referred to as a structured settlement. To purchase a structured settlement, the parties must execute a settlement agreement and release and a qualified assignment which transfers from the defendant to the defendant's insurance company the payment of compensation to plaintiff. Id. at 9-10.
On August 29, 2005, Klinger's assistant obtained quotes for structured settlement options, plugging in settlement amounts of $7,000,000 and $8,000,000, and apportioning half of those settlement amounts into structures and half into cash. (Docket No. 132-14 at 16.)
On September 16, 2005, in an effort to settle the case, Gelpi provided Hulsey with a settlement offer of three million dollars ($3,000,000) cash and three million dollars ($3,000,000) to be used to purchase a structured settlement, including a benefits schedule for the proposed structured settlement. (Docket No. 132-3.) Also on September 16, 2005, Hulsey wrote to Gelpi stating that Adrian was "not interested in negotiating the vagaries of a structured settlement." (Docket No. 132-4.) On September 19, 2005, Hulsey wrote to Gelpi making a settlement offer of thirty million dollars ($30,000,000), cash up front, in addition to the structured settlement amount that Gelpi offered in his September 16, 2005, letter. (Docket No. 132-5.)
On September 21, 2005, Gelpi sent Hulsey a revised settlement offer of seven million dollars ($7,000,000) structured in two different ways: one option would have provided Adrian a four million dollar ($4,000,000) cash payment for use in the purchase of an annuity of $8,828 per month; a second option would have provided Adrian a cash payment of three million, five hundred thousand dollars ($3,500,000) with another three million, five hundred thousand dollars ($3,500,000) to be used to...
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