Puerto Rico Am. Ins. Co. v. Burgos

• Decision Date: 30 September 2011
• Docket Number: Civil No. 01–1186 (SEC).
• Parties: PUERTO RICO AMERICAN INSURANCE COMPANY, et al., Plaintiffs. v. Carlos H. BURGOS, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

867 F.Supp.2d 216

PUERTO RICO AMERICAN INSURANCE COMPANY, et al., Plaintiffs.

v.Carlos H. BURGOS, et al., Defendants.

Civil No. 01–1186 (SEC).

United States District Court,

D. Puerto Rico.

Sept. 30, 2011.

James W. McCartney, Rafael E. Barreto–Sola, Harry R. Nadal–Arcelay, Cancio, Nadal, Rivera & Diaz, Cesar A. Andreu, Andreu & Andreu, Edif Centro De Seguros, San Juan, PR, for Plaintiffs.

Maria I. Santos-Rivera, Maria I. Santos Law Office Office, San Juan, PR, for Plaintiffs/Defendants.

George Otero–Calero, Bayamon, PR, John R. O'Connor–Casanas, John R. O'Connor Law Office, Jorge A. Cartaya–Brao, Jorge A. Cartaya Law Office, San Juan, PR, for Defendants.

Alexandra Rivera–Rondon, Catano, PR, pro se.

Norman De–Jesus–Ortiz, Catano, PR, pro se.

Ivys Lopez–Diaz, San Juan, PR, pro se.

Jeanice Casiano, Guaynabo, PR, pro se.

OPINION AND ORDER

SALVADOR E. CASELLAS, Senior District Judge.

Before the Court are plaintiffs Puerto Rican American Insurance Company (“PRAICO”), National Insurance Company (“National”), Integrand Assurance Company (“Integrand”), Cooperativa de Seguros Multiples de Puerto Rico (“Cooperativa”), Caribbean Alliance Insurance Company (“CAICO”), and Universal Insurance Company's (“Universal”) (collectively “Plaintiffs” or the “Insurance Companies”) motion for summary judgment against defendants Rafael Rivera–Vázquez (“Rivera”), Isabel C. Hurtado–Suarez (“Hurtado”) and their conjugal partnership (Dockets 1242–1243), and defendants' oppositions thereto (Dockets 1262–1263). Defendants also moved for summary judgment (Dockets 1245–1248), and plaintiffs opposed (Docket # 1266).¹ After reviewing the parties' filings, and the applicable law, both motions are GRANTED in part and DENIED in part.

Factual and Procedural Background

This protracted litigation dates back to 2001, when several insurance companies initiated a massive civil action against multiple defendants under the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§ 1961–1969. Since 2001, however, the number of defendants in this case has dwindled significantly.² In fact, Rivera and his wife, Hurtado, are the only remaining ones. The cross-summary judgment motions before this Court thus solely involve Rivera, Hurtado, and their conjugal partnership. According to Plaintiffs' amended complaint (the “Complaint”), Rivera—and to a lesser extent, Hurtado—engaged in a scheme to defraud them by submitting false automobile insurance claims in contravention of RICO. See Docket # 443 ¶¶ 202–206. Specifically, the Complaint alleged that Rivera participated in these fraudulent claims, both as an attorney representing claimants and as a claimant himself, and that Hurtado took part in the hoax as a claimant. Id.

Comprehensive discovery ensued, accompanied by an active motion practice. The procedural skirmishing finally came to an end in 2006 when Plaintiffs moved for summary judgment against Rivera and Hurtado. Dockets 966, 973–978. Subsequently, Rivera and Hurtado riposted with a summary judgment motion of their own. Dockets 1010–1011. On June 12, 2008, this Court granted Plaintiffs' motion for summary judgment and entered judgment against defendants. Dockets 1156 & 1157.

In the same time frame, the Court denied Rivera and Hurtado's cross-summary judgment motion. Docket # 1176. Dissatisfied, Rivera and Hurtado appealed. The Court of Appeals ruled that the district court “[h]eld opposing parties to materially different standards in the application and enforcement of a local rule....” Puerto Rico American Ins. Co. v. Rivera–Vazquez, 603 F.3d 125, 133 (1st Cir.2010). And, noting that “[t]he parties b[ore] the lion's share of the responsibility for the predicament in which [this] [C]ourt found itself[,]” id. at 132 n. 8, the First Circuit vacated the orders on the cross-motions for summary judgment and remanded to the district. Id. at 128. In line with the First Circuit's directive, the parties re-filed their motions for a second round of cross-motions for summary judgment.

In their second motion, Plaintiffs reallege that Rivera and Hurtado participated in a fraudulent scheme against them, whereby, through a series of carefully orchestrated and synchronized transactions, they submitted fraudulent claims for fictitious accidents involving bogus or non-existent damages. Plaintiffs predicate their claims upon § 1962(c), a substantive RICO violation, and § 1964(c), which provides for a private cause of action to recover damages.³ As a result of this fraud, Plaintiffs posit that Rivera and Hurtado are liable to them in the amount of $2,375,850.50. Docket # 1242, p. 14.

In their cross-motion for summary judgment, Rivera and Hurtado essentially argue that they did not participate in the alleged swindle, and that the Insurance Companies lack sufficient evidence to succeed on a substantive RICO claim. They also contend that Plaintiffs' conspiracy claims fail as a matter of law. See Dockets 1245 & 1263.

Standard of Review

The Court may grant a motion for summary judgment when “the pleadings, depositions, 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 judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Ramírez Rodríguez v. Boehringer Ingelheim, 425 F.3d 67, 77 (1st Cir.2005). In reaching such a determination, the Court may not weigh the evidence. Casas Office Machs., Inc. v. Mita Copystar Am., Inc., 42 F.3d 668 (1st Cir.1994). At this stage, the court examines the record in the “light most favorable to the nonmovant,” and indulges all “reasonable inferences in that party's favor.” Maldonado–Denis v. Castillo–Rodríguez, 23 F.3d 576, 581 (1st Cir.1994).

Once the movant has averred that there is an absence of evidence to support the nonmoving party's case, the burden shifts to the nonmovant to establish the existence of at least one fact at issue that is both genuine and material. Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir.1990) (citations omitted). “A factual issue is ‘genuine’ if ‘it may reasonably be resolved in favor of either party and, therefore, requires the finder of fact to make ‘a choice between the parties' differing versions of the truth at trial.’ ” DePoutot v. Raffaelly, 424 F.3d 112, 116 (1st Cir.2005) (quoting Garside, 895 F.2d at 48 (1st Cir.1990)); see also SEC v. Ficken, 546 F.3d 45, 51 (1st Cir.2008). “Those facts, typically set forth in affidavits, depositions, and the like, must have evidentiary value; as a rule, ‘[e]vidence that is inadmissible at trial, such as, inadmissible hearsay, may not be considered on summary judgment.’ ” Noviello v. City of Boston, 398 F.3d 76, 84 (1st Cir.2005) (quoting Vazquez v. Lopez–Rosario, 134 F.3d 28, 33 (1st Cir.1998)).

In order to defeat summary judgment, the opposing party may not rest on conclusory allegations, improbable inferences, and unsupported speculation. See Hadfield v. McDonough, 407 F.3d 11, 15 (1st Cir.2005) (citing Medina–Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.1990)). Nor will “effusive rhetoric” and “optimistic surmise” suffice to establish a genuine issue of material fact. Cadle Co. v. Hayes, 116 F.3d 957, 960 (1st Cir.1997). Once the party moving for summary judgment has established an absence of material facts in dispute, and that he or she is entitled to judgment as a matter of law, the “party opposing summary judgment must present definite, competent evidence to rebut the motion.” Méndez–Laboy v. Abbott Lab., 424 F.3d 35, 37 (1st Cir.2005) (quoting from Maldonado–Denis v. Castillo–Rodríguez, 23 F.3d 576, 581 (1st Cir.1994)). “The non-movant must ‘produce specific facts, in suitable evidentiary form’ sufficient to limn a trial-worthy issue....Failure to do so allows the summary judgment engine to operate at full throttle.” Id.; see also Kelly v. United States, 924 F.2d 355, 358 (1st Cir.1991) (warning that “the decision to sit idly by and allow the summary judgment proponent to configure the record is likely to prove fraught with consequence”); Medina–Muñoz, 896 F.2d at 8 (quoting Mack v. Great Atl. & Pac. Tea Co., 871 F.2d 179, 181 (1st Cir.1989)) (holding that “[t]he evidence illustrating 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 fact finder must resolve.”).

Cross-motions for summary judgment do not upend the summary judgment standard; they “[s]imply ‘require [courts] to determine whether either of the parties deserves judgment as a matter of law on the facts that are not disputed.’ ” Wells Real Estate Inv. Trust II, Inc. v. Chardon/Hato Rey Partnership, S.E.Adria Int'l Group, Inc., v. Ferré Development, Inc.,615 F.3d 45, 51 (1st Cir.2010) (quoting Adria Int'l Group, Inc., v. Ferré Development, Inc., 241 F.3d 103, 107 (1st Cir.2001)). Although it is well-settled law that each cross-motion for summary judgment must be decided on its own merits, “[t]hat does not mean, however, that each motion must be considered in a vacuum. When ... cross-motions for summary judgment are filed simultaneously, or nearly so, the district court ordinarily should consider the two motions at the same time.” Puerto Rico American Ins., 603 F.3d at 133 (citing Blackie v. Maine, 75 F.3d 716, 721 (1st Cir.1996)).

Material, Uncontested Facts ⁴

As insurance companies authorized to operate pursuant to the Insurance Code of this jurisdiction, Plaintiffs' businesses consist in receiving and issuing checks for losses reported by claimants whose property they insure. Docket # 1243 ¶ 1–2. They also invest the premiums they collect in the greater United States insurance market, among other places. Id. Naturally, the insurance companies constantly issue claims and checks for losses within the United States, thereby distributing...