Oahn Nguyen Chung v. Studentcity.com, Inc.

• Decision Date: 14 April 2017
• Docket Number: No. 16-1765,16-1765
• Citation: 854 F.3d 97
• Parties: OAHN NGUYEN CHUNG, individually and as administratrix of the Estate of Lisa Tam Chung, and Liem Chung, Plaintiffs, Appellants, Ollie Daily, Loren Daily and Patricia Daily, Plaintiffs, v. STUDENTCITY.COM, INC., Defendant, Appellee.
• Court: U.S. Court of Appeals — First Circuit

854 F.3d 97

OAHN NGUYEN CHUNG, individually and as administratrix of the Estate of Lisa Tam Chung, and Liem Chung, Plaintiffs, Appellants,Ollie Daily, Loren Daily and Patricia Daily, Plaintiffs,

v.STUDENTCITY.COM, INC., Defendant, Appellee.

No. 16-1765

United States Court of Appeals, First Circuit.

April 14, 2017

Joseph P. Musacchio , with whom Anthony Tarricone and Kreindler and Kreindler LLP , Boston, MA, were on brief, for appellants.

Rodney E. Gould , Framingham, MA, with whom Robert C. Mueller , Burke, VA, and Smith Duggan Buell & Rufo LLP were on brief, for appellee.

Before Howard, Chief Judge, Selya and Lynch, Circuit Judges.

SELYA, Circuit Judge.

District courts have authority to enter summary judgment on grounds not raised by the parties. That authority, though, is far from unbridled. Here, the district court—with the acquiescence of the parties—limited pretrial discovery to specific issues. It later entered summary judgment on a completely different issue—an issue not briefed and on which discovery had not been allowed. Concluding, as we do, that the district court's shift in focus exceeded its authority, we vacate the judgment and remand for further proceedings consistent with this opinion.

I. BACKGROUND

We rehearse the facts in the light most amenable to the parties opposing summary judgment (here, the plaintiffs). See Jones v. Secord , 684 F.3d 1, 3 (1st Cir. 2012). StudentCity.com, Inc. (StudentCity) is a Delaware corporation that maintains its principal place of business in Massachusetts. It sells vacation packages to students, including those traveling for spring break or to celebrate graduations.

In the fall of 2007, Lisa Tam Chung and Loren Daily were high-school seniors in Grand Prairie, Texas. A StudentCity representative contacted Loren to promote the firm's wares and piqued her curiosity about booking a graduation trip. Once a critical mass of students had expressed interest about such a trip, the StudentCity representative held an informational meeting.

The representative assured the assemblage (including several parents) that StudentCity staff attend all events and that participating students would not be permitted to go anywhere unaccompanied. She also distributed promotional materials that stated in pertinent part:

• StudentCity will provide "[o]n site staff at all scheduled events—beginning to end."

• StudentCity "staffs all scheduled events from beginning to end."

• StudentCity maintains "the largest staff-to-student ratio and our 24–hour staff is there to give you the peace of mind you need."

• StudentCity staff will be present "to assure that everyone is having a great and responsible time."

Loren's parents met with the StudentCity representative and read the written materials. Lisa relayed StudentCity's representations to her parents, who had limited English proficiency. With the blessing of both families, the girls purchased vacation packages for a June 2008 trip to Cancún, Mexico, adding an optional snorkeling excursion.

The snorkeling excursion took place on June 7, when the participants boarded the SS Sea Star, a catamaran owned and operated by Servicios Maritimos y Acua del Caribe SA de C.V. (SMA). A StudentCity staff member transported Lisa and Loren to the Sea Star, a vessel approved to carry eighty passengers and three crew members for this kind of outing.¹ On the day in question, however, it carried at least 120 StudentCity travelers and no fewer than 210 persons in total. No on-duty StudentCity representative was on board.

The snorkeling trip had a tragic ending: the Sea Star hit a coral reef and began to take on water, yet the crew provided no assistance to the passengers (indeed, some crew members deserted ship). Acting on their own, Lisa and Loren donned life preservers and tried to reach safety by grabbing a rope that extended between the Sea Star and a small private vessel. Their efforts failed and they were pulled under the water. Loren suffered serious injuries, but survived; Lisa was pronounced brain dead at a local hospital and died on June 10, 2008.

Following an investigation, the harbormaster concluded that the "concentration of passengers in the boat" caused a "considerable imbalance," which most likely led to the Sea Star's collision with the coral reef. Similarly, the Mexican government attributed the accident to the catamaran's "imprudent overload" and the "negligent performance" of the captain.

A civil action ensued. Although this suit originally had a wider compass, the only claim that is still velivolant is the claim for Lisa's wrongful death—a claim brought by her parents, Oahn Nguyen Chung (individually and in her capacity as administratrix of Lisa's estate) and Liem Chung.² As to this claim, StudentCity moved to dismiss or, in the alternative, for summary judgment. See Fed. R. Civ. P. 12(b)(6), 56(a). The district court denied the motion to dismiss, but reserved decision on summary judgment. See Chung v. StudentCity.com, Inc. (Chung I ), No. 10-10943, 2013 WL 6528516, at *2 (D. Mass. Dec. 12, 2013). It reasoned that

[d]iscovery has not yet begun in this matter.... Much of the factual information plaintiffs desire is in defendant's control and can be turned over expeditiously. That information may affect the determination of whether defendant voluntarily undertook a duty to ensure the safety of trip participants, and whether defendant knew or should have known about [SMA]'s dubious prior safety record, if indeed it exists.

Id.

After limited discovery—a circumstance to which we shortly shall return—the district court granted summary judgment in favor of StudentCity. With respect to one of the issues to which discovery had been allowed, the court concluded that there was "no evidence to suggest that the steps StudentCity took in selecting its snorkeling excursion vendor were unreasonable under the circumstances."³ With respect to the other issue, the court concluded that "StudentCity voluntarily assumed a duty to generally supervise tour participants during all StudentCity-organized/scheduled events, including the June 7, 2008 snorkeling excursion." Even so, the court ruled that the negligent supervision "claim fails on causation" because "Lisa's death resulted not from inadequate supervision by StudentCity staff, but rather from the boat accident caused by the overloading of the Sea Star and its negligent operation by [SMA]." This timely appeal followed.

II. ANALYSIS

We review a district court's entry of summary judgment de novo. See Gomez v. Stop & Shop Supermkt. Co. , 670 F.3d 395, 396 (1st Cir. 2012). In conducting this appraisal, we take "all the facts in the light most flattering to the nonmoving party, resolving any evidentiary conflicts in that party's favor, and drawing all reasonable inferences therefrom to his behoof." Id. "We will affirm only if the record discloses no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law." Tropigas de P.R., Inc. v. Certain Underwriters at Lloyd's of London , 637 F.3d 53, 56 (1st Cir. 2011). An issue is genuine if a reasonable factfinder could resolve it in favor of either party. See id. An issue is material if it holds the potential to change the outcome of the suit. See id.

Jurisdiction in this case is predicated on diversity of citizenship and the existence of a controversy in the requisite amount. See 28 U.S.C. § 1332(a). In a diversity case, state law supplies the substantive rules of decision. See Erie R.R. Co. v. Tompkins , 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938) ; Geshke v. Crocs, Inc. , 740 F.3d 74, 77 (1st Cir. 2014). The parties agree that, consistent with the choice-of-law provision in the customer agreement, Massachusetts law controls here. We have said that "a federal court sitting in diversity is free, if it chooses, to forgo independent analysis and accept the parties' agreement" as to which state law applies. Borden v. Paul Revere Life Ins. Co. , 935 F.2d 370, 375 (1st Cir. 1991). Accordingly, we look to Massachusetts law.

Under Massachusetts law, wrongful death is a species of negligence, see Mass. Gen. Laws ch. 229, § 2 (imposing liability for damages against "[a] person who ... by his negligence causes the death of a person"), and as such demands proof of four elements: "that the defendant owed the plaintiff a duty of reasonable care, that the defendant breached this duty, that damage resulted, and that there was a causal relation between the breach of the duty and the damage," Jupin v. Kask , 447 Mass. 141, 849 N.E.2d 829, 834–35 (2006).

The existence vel non of a duty presents "a question of law to be resolved by the judge." Cottam v. CVS Pharmacy , 436 Mass. 316, 764 N.E.2d 814, 819 (2002). Massachusetts courts recognize that a duty may be voluntarily assumed and, if it is, "must be performed with due care." Id. at 821 (quoting Mullins v. Pine Manor Coll. , 389 Mass. 47, 449 N.E.2d 331, 336 (1983) ). Causation, by contrast, generally presents a question of fact within "the special province of the jury." Jupin , 849 N.E.2d at 835. It is thus apparent that duty and causation are separate and distinct elements of negligence and negligence-like actions.

Here, the plaintiffs' principal argument is that the district court erred in premising its summary judgment decision on the perceived absence of causation—an issue that was neither argued by StudentCity nor open to discovery. StudentCity demurs: it asserts that the issue of causation was squarely raised at summary judgment. The record, though, belies this assertion. We start there.

StudentCity posits that its motion papers made clear that neither it nor its agents were

part of the Sea Star's crew, and had no responsibility for boarding passengers, determining where passengers were to be positioned, navigating the vessel, providing safety equipment on the vessel, controlling or limiting the number of passengers, or otherwise instructing the passengers or the StudentCity participants on the Sea

...