Nieves v. INTERCONTINENTAL LIFE INS. CO. OF PR
| Decision Date | 21 April 1991 |
| Docket Number | Civ. No. 88-1840 (JP). |
| Citation | 763 F. Supp. 1161 |
| Parties | Rebecca R. NIEVES, Individually and as Next Friend of Andrew J. Nieves and Alan J. Nieves, Minors, Plaintiffs, v. INTERCONTINENTAL LIFE INSURANCE COMPANY OF PUERTO RICO (Saint Lawrence Garment-Third Party Defendant). |
| Court | U.S. District Court — District of Puerto Rico |
Alberto J. Pérez Hernández, Hato Rey, P.R., for plaintiffs.
Fernando Pérez Colón, San Juan, P.R., for defendant.
Ayxa Rey Díaz, San Juan, P.R., for Saint Lawrence Garment.
The Court has before it the parties' cross motions for summary judgment. This case, originally part of an action removed to the District Court for the Southern District of Texas, Houston Division, was severed and transferred to this Court pursuant to an agreement and order issued by Honorable Gabrielle McDonald. See Docket Entry # 1. This is an action in which the plaintiff, Rebecca R. Nieves and her children, claim medical expenses and life insurance proceeds under a policy issued by defendant Intercontinental Life Insurance Company of Puerto Rico ("Intercontinental"), to Saint Lawrence Garment Co., Inc. ("St. Lawrence"), for the benefit of a group of employees. The plaintiffs contend that their deceased husband and father, Anthony J. Nieves, had been covered under this policy although he was technically employed by the Office of Strategic Security Inc. ("OSS"). They further argue that from September 9, 1985, the date he suffered an accident, in Baton Rouge, Louisiana, until October 5, 1985, the date of death, Nieves continued to be covered by the policy. Plaintiffs seek $152,201.18 in medical payments, $10,000.00 for death benefits under the policy, plus funeral and burial expenses. The defendants deny that Nieves was covered by the policy, and essentially argue that even if the plaintiffs were covered by the insurance policy, the claim is extinct because they have already recovered, from the third parties who caused the death of Mr. Nieves, certain expenses in another legal proceeding.
Defendant Intercontinental has filed a third party complaint against St. Lawrence Garment Corp. alleging that: 1) St. Lawrence induced Anthony Nieves to submit an insurance application under Policy No. SSP-365-03-84; and 2) the inclusion of Nieves as a covered insured under the policy constituted a breach of the insurance contract, which was specifically limited to include employees of St. Lawrence. They further argue that this breach of the contract induced Intercontinental to pay benefits to Nieves's dependents and that St. Lawrence should therefore be liable to the plaintiffs for the sums claimed in the complaint, and should reimburse Intercontinental for any amounts its pays out.
For the reasons stated below, we grant plaintiffs' motion as to the issue of coverage and life insurance benefits. We also partially grant defendant's motion as to the issue of medical and funeral expenses.
A "genuine" issue is one that is dispositive and that must be decided at trial. FDIC v. Municipality of Ponce, 904 F.2d 740, 742 (1st Cir.1990). The issue must be decided at trial because the evidence, when viewed in the light most favorable to the nonmovant, would allow a reasonable juror to resolve the issue in favor of either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249-250, 106 S.Ct. 2505, 2510-11, 91 L.Ed.2d 202 (1986); Mack v. Great Atlantic and Pacific Tea Co., 871 F.2d 179, 181 (1st Cir.1989). The evidence illuminating the factual controversy cannot be "conjectural or problematic; it must have substance in the sense that it limns differing versions of the truth which a factfinder must resolve...." Mack, 871 F.2d at 181. A "material" fact is one which affects the outcome of the case and must be resolved before consideration of related legal issues. Municipality of Ponce, 904 F.2d at 742. Therefore, in a summary judgment motion, the burden is on the moving party to demonstrate "an absence of evidence to support the nonmoving party's case." Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 2254, 91 L.Ed.2d 265 (1986). The nonmovant then bears the burden of establishing the existence of a genuine material issue. Brennan v. Hendrigan, 888 F.2d 189, 191 (1st Cir.1989). However, the nonmovant may not rest upon mere allegations or denial of the pleadings; it must respond, by affidavits or other supporting evidence, setting forth specific facts showing that there is a genuine issue for trial. Fed.R.Civ.P. 56(e).
In cases in which the parties have filed cross motions for summary judgment, the fact that both parties simultaneously argue that there is no genuine factual issue does not establish that a trial is unnecessary. 10A C. Wright, A. Miller, E. Cooper, 10A Federal Practice and Procedure § 2720, at 16-17 (1983). In the cross-motion context, the court must consider each motion separately, since each party, as a movant for summary judgment, bears the burden of establishing the non-existence of a genuine issue of material fact, and that movant's entitlement to judgment as a matter of law; the fact that one party had failed to sustain its Rule 56 burden does not automatically entitle the opposing party to summary judgment. Id. at 23.
Because this is a diversity action, we apply the law of Puerto Rico, see Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), in order to resolve the legal issues in this case.
The Insurance Code of Puerto Rico provides that every "insurance contract shall be construed according to the entirety of its terms and conditions as set forth in the policy, and as amplified, extended, or modified by any lawful rider, endorsement, or application attached to and made a part of the policy." 26 L.P.R.A. § 1125. See also Puerto Rico Electric Power Authority v. Philipps, 645 F.Supp. 770, 772 (D.P.R. 1986); Banco de la Vivienda v. Pagán Ins. Underwriters, 111 D.P.R. 1, 6 (1981). When the Insurance Code of Puerto Rico does not provide an interpretive approach for a particular situation, the Civil Code is used as a supplemental source of law in interpreting the insurance agreement. Gonzalez v. John Hancock Mutual Life Insurance Co., 927 F.2d 659, 660 (1st Cir. 1991); see also Banco de la Vivienda, 111 D.P.R. at 1. Article 1233 of the Civil Code, 31 L.P.R.A. § 3471, incorporates the general principle of contract law that if "the terms of a contract are clear and leave no doubt as to the intentions of the contracting parties, the literal sense of its stipulations shall be observed."
In this case, the defendant claims that the plaintiffs are excluded from coverage under the policy because the policy was issued for employees of St. Lawrence who worked at least thirty hours a week. According to defendant, Mr. Nieves was not such an employee, and was therefore not an "eligible employee" under the terms of the insurance agreement.
The plaintiffs counter that Nieves and his family are "insured" under the terms of the policy, and that pursuant to the policy, St. Lawrence used other criterion in order to categorize Nieves as an "eligible employee" under the insurance agreement. They further argue that St. Lawrence voluntarily included them in the policy, Intercontinental accepted the enrollment application for Anthony Nieves, and represented to him that they were insured. In addition, they point out the following stipulated facts: Intercontinental issued a group policy, Number G-0365 and plaintiffs and decedent Anthony J. Nieves appeared as insured under the policy effective March 1, 1985, through March 1, 1986; Rebecca Nieves was named beneficiary of a $10,000.00 death benefit provision contained in the policy; an identification card was issued under this group policy, certificate number 82, naming Anthony J. Nieves as insured and affording coverage to his dependents; Intercontinental paid benefits to Anthony J. Nieves and his dependents under group policy Number G-0365, certificate number 82, for various claims, including claim numbers 1195580, 01195581, 01195583, 91195584, 91125084, and 31738120; Intercontinental admitted (in a letter dated March 24, 1986) that group policy Number G-0365, certificate number 82, afforded coverage to Anthony J. Nieves and that plaintiffs were entitled to the life insurance and health benefits provided by said policy,1 and issued a check to Mrs. Nieves in the amount of $5,000 as partial payment of the policy's death benefit under the policy's death benefit provision. See Initial Scheduling Conference Order, Docket Entry # 8, Agreement of Parties Nos. 3-5, 12 at 3-5 and attached exhibits; Proposed Pretrial Order filed by the parties, Docket Entry # 20, Uncontested Facts Nos. 3-5, 12.
We disagree with the defendant Continental and conclude that Mr. Nieves and his dependents, the plaintiffs in this case, were covered under the policy. After thoroughly reviewing the entirety of the terms and conditions set forth in the insurance agreement, we find that Mr. Nieves was an "eligible employee," as well as an "insured" under Article I of the agreement. The policy names St. Lawrence as the policyholder and states that Intercontinental will make payments to persons entitled to such payments, under the terms and conditions of the policy. See Certified Translation of Intercontinental Life Insurance Policy, Defendant's Motion for Summary Judgment, Exhibit E, at 1. Article I, section (b) defines "employee" as "an employee who is working a minimum of at least 30 hours per week for the employer." Article I,...
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Nieves v. Intercontinental Life Ins. Co. of Puerto Rico
...as to the issue of coverage and life insurance benefits and Intercontinental's motion as to the issue of medical and funeral expenses. 763 F.Supp. 1161. Both parties appealed. Intercontinental argues that the district court erred in determining that Nieves was an eligible employee and the b......