Mercado Garcia v. Ponce Federal Bank, FSB, Civ. No. 89-0949 (JAF).

• Decision Date: 16 October 1991
• Docket Number: Civ. No. 89-0949 (JAF).
• Citation: 779 F. Supp. 620
• Parties: Julio A. MERCADO GARCIA, Maria Del Carmen Avila Mojica, and the conjugal partnership, Plaintiffs, v. PONCE FEDERAL BANK, F.S.B., Ramiro L. Colon Muñoz, and Jose F. Blasini Lloveras, Defendants.
• Court: U.S. District Court — District of Puerto Rico

779 F. Supp. 620

Julio A. MERCADO GARCIA, Maria Del Carmen Avila Mojica, and the conjugal partnership, Plaintiffs, v. PONCE FEDERAL BANK, F.S.B., Ramiro L. Colon Muñoz, and Jose F. Blasini Lloveras, Defendants.

Civ. No. 89-0949 (JAF).

United States District Court, D. Puerto Rico.

October 16, 1991.

COPYRIGHT MATERIAL OMITTED

Harry Anduze-Montaño, Pia Gallegos, San Juan, P.R., for plaintiffs.

Gregory T. Usera, Rosa M. Cruz-Niemiec, Goldman Antonetti Ferraiuoli & Axtmayer, Cobian & Ramos, San Juan, P.R., for defendants.

OPINION AND ORDER

FUSTE, District Judge.

In an Opinion and Order issued on March 22, 1991 (Docket Document No. 49), this court dismissed plaintiffs' causes of action based on alleged violations of the Age Discrimination in Employment Act, 29 U.S.C. §§ 621-634, ("ADEA") and the Employee Retirement Income Security Act, 29 U.S.C. §§ 1001-1461 ("ERISA"). Also, because we believed that plaintiffs' remaining federal claims, based on supposed violations of the Equal Credit Opportunity Act, as amended, 15 U.S.C. §§ 1691-1691f, ("ECOA"), and the notice requirements of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended, 29 U.S.C. §§ 1161-1168, ("COBRA"), were ripe for summary disposition, we ordered the parties to file cross-motions for summary judgment on the above-mentioned claims. We also reserved judgment as to whether this court would exercise pendent jurisdiction over the state law claims.

Having received the parties' motions,¹ for the reasons stated below, we now grant defendants' motion for summary judgment and dismiss plaintiffs' ECOA, COBRA, and breach of contract causes of action.² Further, we decline to exercise jurisdiction over any remaining pendent state law claims and, therefore, dismiss plaintiffs' amended complaint.

I. Facts

The underlying facts in this dispute revolve around the employment termination of plaintiff Mercado by defendants and have been outlined in this court's earlier Opinion and order. (Docket Document No. 49 at 2-4). Here, we will focus only on the facts relating to the remaining federal claims.

A. Loan Agreement

On April 11, 1986, a loan agreement was executed between plaintiff Mercado and defendant Ponce Federal Bank, F.S.B. ("Ponce Federal" or "Bank"), in which the Bank loaned plaintiff $14,000. In the Loan/Line Fact Sheet, the loan is described as a one year, demand loan without collateral, with a balloon payment to be extended at maturity date and interest paid monthly at the New York prime interest rate. (Docket Document No. 53, Exhibit 1). A promissory note, signed by plaintiff, was also executed which called for payment on demand. (Id., Exhibit 2). Also submitted were the minutes of a bank Management Credit Committee meeting held on April 7, 1986 at which Mercado's loan was approved. (Id., Exhibit 3).

After one year, the bank granted an additional one-year term for payment of the principal. This extension was also approved by the Management Credit Committee. (Id., Exhibits 5-7). At the end of the second year, the bank granted plaintiff a further six-month extension. In a memo, dated June 24, 1988, to Maria Muñiz, Manager of the Commercial Credit, a supervisor of the Collections Unit reported that: plaintiff's loan had become due on April 11, 1988; he had been making his interest payments and periodically paid on the principal; and that plaintiff had requested a six-month extension. The supervisor requested that the extension be granted administratively. (Id., Exhibit 8).

Finally, on November 23, 1988, after plaintiff had been terminated from the bank, the bank notified him that his loan would become due on December 24, 1988. (Id., Exhibit 9).

B. Credit Card

As an employee of Ponce Federal, plaintiff Mercado had both an assigned employee checking account and a VISA credit card which was specially offered to employees. With the checking account, plaintiff had a $3,000 credit line. In the case where plaintiff's available balance would not cover the amount of a check drawn on the account, the reserve account would be activated and, in effect, would create a credit line upon which plaintiff could draw. When an employee left the Bank's service, the employee checking account would be closed and, if the former employee so chose, a regular checking account would be opened.

On October 1, 1988, after having been informed at least once that he was going to be discharged, plaintiff went to a branch of the Bank and cashed a $4,200 check drawn from his employee checking account. Because he did not have sufficient funds, the reserve fund was activated and $2,900 was transferred to his checking account to cover the check. Because there remained a debit balance, the employee account could not be closed.

Likewise, once an employee completes the probationary period, they can obtain bank credit cards (VISA or Mastercard) with a pre-approved limit and with no annual fees. Plaintiff's limit was $5,000. When the employee ceases employment with the bank, the credit card is recodified as a regular credit card and the employee becomes responsible for the annual fee. The credit card agreement contained a standard cancellation clause granting the bank the authority to revoke the card without notice to the cardholder. (Id., Exhibit 13).

On October 6, 1988, plaintiff, using his VISA card which had not yet been recodified, withdrew $1,600 in four $400 transactions at four different electronic banking machines. Along with drawing on his reserve, these transactions resulted in plaintiff incurring a total indebtedness to the Bank of $4,500. As of May 1991, according to defendants, this balance has not been repaid to the Bank.

Thereafter, on October 10, 1988, the Bank restricted plaintiff's VISA card. The Bank's stated reasons were to reevaluate plaintiff's credit and to recodify the credit card. (Id., Exhibit 11). Mercado discovered the fact that the card was restricted when he attempted to use it to pay for gas on October 14, 1988. The next day he wrote a letter to a bank official explaining the incident and requesting that the situation be rectified. (Docket Document No. 61, Exhibit H).

On October 24, 1988, action was taken with respect to the credit card. Although not completely clear from the record, either a new VISA card was issued to plaintiff or, as defendants contend, the prior VISA account was recodified and reactivated.

C. Group Health Plan

On October 13, 1988, Francisco Portuondo, plaintiff's successor, sent a letter to plaintiff advising him of his right to continue his group health coverage, as well as the form specifying the premiums which plaintiff would have to assume. (Docket Document No. 53, Exhibits 14-15). This letter was sent first-class mail. Plaintiff claims never to have received the letter and election form.

On November 13, 1988, plaintiff Mercado sent defendants a letter stating that he had received no information as to his rights under his group health insurance plan. (Docket Document No. 61, Sworn Statement — Julio Mercado at ¶ 58). In response to plaintiff's letter, defendants sent a second letter dated November 22, 1988, making specific reference to the earlier letter and enclosing the October 13th letter, as well as the election form. (Docket Document No. 56, Exhibit 16). This latter correspondence was sent certified mail — return receipt requested. Plaintiff admits to having received this second letter and the supporting documents on November 29, 1988. (Docket Document No. 61 at ¶ 59).

Plaintiff never returned the completed election forms to defendants and, therefore, never elected to continue the group health plan benefits.

II. Summary Judgment Standard

Defendants have made a motion for summary judgment pursuant to Fed.R.Civ.P. 56. A court should grant a motion for summary judgment "if the pleadings, depositions, and 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); Lipsett v. University of Puerto Rico, 864 F.2d 881, 894 (1st Cir.1988). The two inquiries which the court must make before granting or denying a motion for summary judgment relate to the materiality and the genuineness of the factual dispute. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247-48, 106 S.Ct. 2505, 2509-10, 91 L.Ed.2d 202 (1986); Sheinkopf v. Stone, 927 F.2d 1259, 1261 (1st Cir.1991); Local No. 48, United Brotherhood of Carpenters & Joiners v. United Brotherhood of Carpenters & Joiners, 920 F.2d 1047, 1050 (1st Cir.1990); Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.1990).

In order to determine whether the factual dispute between the parties is "material", the substantive law will identify which facts are material. "Only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment. Factual disputes that are irrelevant or unnecessary will not be counted." Anderson, 477 U.S. at 248, 106 S.Ct. at 2510; Sheinkopf, 927 F.2d at 1262; see generally 10A C. Wright, A. Miller & M. Kane, Federal Practice and Procedure § 2725 at 93-95 (1983). Therefore, the law relating to ECOA and COBRA, as well as Puerto Rico law of contract and evidence, will provide the substantive basis for determining which facts are "material" in this case.

The second determination relates to the "genuineness" of the dispute about the material facts. In Anderson v. Liberty Lobby, 477 U.S. at 248, 106 S.Ct. at 2510, the Court explicitly stated that a dispute is genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." It is not required that the party opposing summary judgment, in asserting the existence of an issue of material fact, resolve it conclusively in order to proceed to trial, but rather that "sufficient evidence supporting the claimed...