De Cosme v. Sea Containers, Ltd., 88-1907

• Decision Date: 07 April 1989
• Docket Number: No. 88-1907,88-1907
• Citation: 874 F.2d 66
• Parties: Benita Sanchez Vda. DE COSME, et al., Plaintiffs, Appellees, v. SEA CONTAINERS, LTD., et al., Defendants, Appellees. Appeal of R. MEDIAVILLA & SONS, INC., Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 66

874 F.2d 66

Benita Sanchez Vda. DE COSME, et al., Plaintiffs, Appellees, v. SEA CONTAINERS, LTD., et al., Defendants, Appellees Appeal of R. MEDIAVILLA & SONS, INC., Defendant, Appellant.

No. 88-1907.

United States Court of Appeals First Circuit.

Heard April 7, 1989.

Decided May 10, 1989.

Charles A. Cordero with whom Keith A. Graffam and Cordero, Miranda & Pinto was on brief, for defendant, appellant.

Reina Colon De Rodriguez, Asst. Sol. Gen., Dept. of Justice, with whom Hon. Rafael Ortiz Carrion, Sol. Gen., and Norma Cotti Cruz, Deputy Sol. Gen., were on brief, for appellee State Ins. Fund.

Before BOWNES and SELYA, Circuit Judges, and CAFFREY, ^* Senior District Judge.

BOWNES, Circuit Judge.

Defendant-Appellant R. Mediavilla & Sons, Inc. appeals from the refusal of the district court to enjoin a proceeding in the Superior Court of Puerto Rico under the third exception to the Anti-Injunction Act which allows a federal court "to stay proceedings in a State court ... to protect or effectuate its judgments." 28 U.S.C. Sec. 2283. Appellant claims that a prior settlement judgment in the federal court is a bar to the Commonwealth court proceeding.

I.

This case had its genesis in an accident that happened on March 21, 1977, in San Juan harbor, aboard a vessel, the Hustler Cheyenne, when the cable of a crane owned and operated by Mediavilla broke. A number of workmen were injured. On April 14, 1977, the estate of Juan Adolfo Cosme-Petersen, who died as a result of the injuries received, brought suit in federal court (the Cosme suit). Subsequently, Fausto Soriano Fardonk, who was injured in the accident, but did not die, also brought a complaint in the federal court (the Soriano suit). Mediavilla was named as a third-party defendant in both actions. The plaintiffs in both cases were represented by the same law firm, and the two actions were consolidated for trial.

Appellee is the State Insurance Fund of Puerto Rico (SIF). Under P.R.Laws Ann. tit. 11, ch. 1, Sec. 32, SIF has certain subrogation rights against a third party responsible for an accident in which workmen are injured. SIF paid workmen's compensation accident claims made by the estate of Cosme and by Soriano. It was named as a claimant in the amended complaint in the Cosme suit. Our examination of the docket entries and pleadings in the Soriano suit shows that SIF was not named in that action.

The consolidated cases were settled prior to trial by a stipulation dated October 1, 1985. On October 21, the settlement stipulation was incorporated by reference into the district court judgment. "It is ORDERED and ADJUDGED that said stipulation be and the same is binding between the parties. It is further ORDERED and ADJUDGED that said stipulation be and the same is incorporated herein in extenso and this case is dismissed as to all the plaintiffs herein." Paragraph 5 of the settlement stipulation states, inter alia: "It is expressly understood that the aforesaid payment shall be made by Mediavilla, and Mediavilla shall have subrogation rights against Monitowoc [another defendant] for said sums. All plaintiffs agree to dismiss their claims against all defendants without charges for costs, disbursements, interests or attorney's fees." The stipulation was signed by the attorneys for the plaintiffs and defendants. SIF was not mentioned in the settlement stipulation.

A Notice of Satisfaction of Judgment was filed on December 5, 1985. It states in pertinent part: "Notice is hereby given that the claim of the State Insurance Fund (El Fondo del Seguro del Estado) was settled, and that said entity was represented by Ulises Ortiz Rodriguez, Esq. whose address appears below." The signature of Ulises Ortiz Rodriguez appears beneath the paragraph, along with signatures of the attorneys for the plaintiffs and defendants.

Over a year later, on April 9, 1987, SIF filed a complaint in the Superior Court of Puerto Rico against Mediavilla seeking reimbursement in the amount of $34,302.80 for payments made to or on behalf of Soriano as a result of the injuries he sustained in the accident. On July 15, 1987, Mediavilla filed a motion in the federal court asking that SIF be asked to show cause why it should not be permanently enjoined from prosecuting the suit in the Commonwealth Superior Court. Mediavilla also filed a supporting memorandum of law. SIF replied to the motion to show cause by stating: (1) that it was not a party claimant in the Soriano suit; (2) that it was never informed of and did not know that the Cosme suit and the Soriano suit had been consolidated; (3) that it never was reimbursed for sums paid to or on behalf of Soriano, as it had been in the Cosme suit; and (4) that under Puerto Rico law it was entitled to the reimbursement claimed. SIF suggested that its attorney signed the Notice of Satisfaction of Judgment under the belief that it pertained only to the Cosme suit. SIF argued that since it received no reimbursement for the sums paid to or on behalf of Soriano, the Notice of Satisfaction of Judgment was not binding on it as to the Soriano suit.

On June 30, 1988, the district court denied Mediavilla's motion for a permanent injunction stating: "After due consideration of the arguments presented, this motion is hereby denied and there will be no injunction issued regarding SIF and the Superior Court of Puerto Rico, Civil Action No. 87-1983(803)." This appeal followed.

II.

The Anti-Injunction Act provides:

A court of the United States may not grant an injunction to stay proceedings in a State court except as expressly authorized by Act of Congress, or where necessary in aid of its jurisdiction, or to protect or effectuate its judgments.

28 U.S.C. Sec. 2283. Appellant maintains that SIF should be enjoined "to protect or effectuate" the judgment entered by the district court. It contends that allowing the Superior Court of the Commonwealth to proceed with the action brought by SIF would result in needless relitigation of a case that has already been settled.

The Supreme Court has recently spoken to the issue before us, the applicability of the "relitigation exception" of the Anti-Injunction Act. In Chick Kam Choo v. Exxon Corp., --- U.S. ----, 108 S.Ct. 1684, 100 L.Ed.2d 127 (1988), Justice...