Situ v. O'Neill

• Decision Date: 25 August 2015
• Docket Number: Civil No. 11–1225 (GAG).
• Citation: 124 F.Supp.3d 34
• Parties: SITU, et al., Plaintiffs v. O'NEILL, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

124 F.Supp.3d 34

SITU, et al., Plaintiffs

v.O'NEILL, et al., Defendants.

Civil No. 11–1225 (GAG).

United States District Court, D. Puerto Rico.

Signed Aug. 25, 2015.

Terry Morris, Maria Caridad Palerm, Morris Palerm LLC, Rockville, MD, Jane A. Becker–Whitaker, Jane Becker Whitaker, PSC, San Juan, PR, for Plaintiffs.

Frances R. Colon–Rivera, Miguel J. Ortega–Nunez, Ian P. Carvajal–Zarabozo, Saldana, Carvajal & Velez–Rive, PSC., San Juan, PR, for Defendants.

OPINION AND ORDER

GUSTAVO A. GELPI, District Judge.

The present case arises from the damages Laura Rodríguez Situ (the "decedent") suffered and her ensuing death, allegedly caused by her turning on a light switch to the bathroom of an apartment she rented, which caused an explosion and resulted in second degree burns covering seventy percent (70%) of her body and injuries to her lungs. (Docket Nos. 2; 27; 126.) Plaintiffs in this case, all relatives of the decedent, filed suit for their own economic, mental and moral damages resulting from the loss of their family member. (Docket No. 126.) In addition, the decedent's heirs assert a survivorship claim on her behalf seeking restitution for the damages she personally suffered prior to her demise. Id. Plaintiffs, all citizens and residents of Colombia, invoke the court's diversity jurisdiction pursuant to 28 U.S.C. § 1332, claiming that Jerome O'Neill ("O'Neill"), the administrator of the property, Elena Properties, Inc. ("Elena Properties"), the owner of the property, and MAPFRE PRAICO Insurance Company, as their insurer, (collectively "Defendants") are liable for the decedent's injuries and death pursuant to Article 1802 of the Civil Code of Puerto Rico, P.R. LAWS ANN. tit. 31, § 5141.

Pending before the court are two motions for summary judgment filed by Defendants. The first is Defendants' Motion for Summary Judgment asking the court to find that Plaintiffs failed to establish a causal connection between Defendants alleged failure to obtain the adequate state permits pertaining to the property's use and the use of propane gas and the explosion. (Docket No. 332.) Essentially, Plaintiffs move the court to enter a judgment as a matter of law regarding the absence of proof of the essential elements of Plaintiffs' negligence claim, namely a breach of Defendants' duty of care and proximate causation. Id. Defendants moreover ask the court to find that one of Plaintiffs' theories of liability, as asserted in their complaint—that a cause of the explosion was a small gas leak in the stove of the apartment—fails because said leak was inconsequential and not a proximate cause of the explosion.Id. at 2, 16–17.

Plaintiffs opposed the motion, arguing that indeed there is a causal connection between Defendants' acts and/or omissions and the resulting explosion. (Docket No. 347 at 3.) Further, Plaintiffs argue that Defendants, as owners and operators of a guesthouse, have a heightened legal duty as to their guests, and that Defendants violated that duty. As such, Plaintiffs argue that a reasonable jury could find that Defendants are liable because it was foreseeable that failing to comply with the law, failing to have the property duly inspected, and failing to obtain the applicable permits certifying the premise were safe could result in the sort of damage that occurred in this case. (Id. at 17.) Defendants replied to Plaintiffs' contentions (Docket No. 367) and Defendants lodged a sur-reply. (Docket No. 376.)

The second motion is O'Neill's Motion for Summary Judgment, requesting the dismissal of Plaintiffs' claims against him in his personal capacity because any liability should be borne by Elena Properties since any act and/or omission on his part was made in his capacity as an officer of the corporation. (Docket No. 329.) Plaintiffs opposed O'Neill's motion, arguing that the existence of genuine issues of material facts concerning O'Neill's negligence renders the motion improper. Further, Plaintiffs claim that Elena Properties is O'Neill's alter ego under a veil-piercing theory, and, therefore, the court should not respect the corporate form and impose personal liability. (Docket No. 350.) O'Neill replied to Plaintiffs' opposition (Docket No. 365) and, in turn, Plaintiffs' sur-replied. (Docket No. 377.)

After carefully reviewing the parties' submissions and pertinent law, for the reasons set forth below the court DENIES Defendants' Motion for Summary Judgment at Docket No. 332 and DENIES O'Neill's Motion for Summary Judgment at Docket No. 329

I. Standard of Review

Summary judgment is appropriate 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 a judgment as a matter of law." Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986) ; see Fed.R.Civ.P. 56(a). "An issue is genuine if ‘it may reasonably be resolved in favor of either party’ at trial, ... and material if it ‘possess[es] the capacity to sway the outcome of the litigation under the applicable law.’ " Iverson v. City of Boston, 452 F.3d 94, 98 (1st Cir.2006) (alteration in original) (internal citations omitted). The moving party bears the initial burden of demonstrating the lack of evidence to support the non-moving party's case. Celotex, 477 U.S. at 325, 106 S.Ct. 2548. "The movant must aver an absence of evidence to support the nonmoving party's case. The burden then shifts to the nonmovant to establish the existence of at least one fact issue which is both genuine and material." Maldonado–Denis v. Castillo–Rodriguez, 23 F.3d 576, 581 (1st Cir.1994). The nonmovant may establish a fact is genuinely in dispute by citing particular evidence in the record or showing that either the materials cited by the movant "do not establish the absence or presence of a genuine dispute, or that an adverse party cannot produce admissible evidence to support the fact." Fed.R.Civ.P. 56(c)(1)(B). If the court finds that some genuine factual issue remains, the resolution of which could affect the outcome of the case, then the court must deny summary judgment.See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

When considering a motion for summary judgment, the court must view the evidence in the light most favorable to the non-moving party and give that party the benefit of any and all reasonable inferences. Id. at 255, 106 S.Ct. 2505. Moreover, at the summary judgment stage, the court does not make credibility determinations or weigh the evidence. Id. Summary judgment may be appropriate, however, if the non-moving party's case rests merely upon "conclusory allegations, improbable inferences, and unsupported speculation." Forestier Fradera v. Mun. of Mayaguez, 440 F.3d 17, 21 (1st Cir.2006) (quoting Benoit v. Technical Mfg. Corp., 331 F.3d 166, 173 (1st Cir.2003) ).

II. Relevant Factual and Procedural Background

On March 27, 2003, Elena Properties, a corporation organized under the laws of Puerto Rico, purchased from Mr. Virgilio Cordero a property located at Elena Street # 6 (hereinafter "the property"). (Docket Nos. 329–1 ¶ 1; 351 ¶ 1.) The property was thus owned by Elena Properties. Elena Properties is a corporation engaged in the business of renting apartments in the property. (Docket Nos. 329–1 ¶ 2; 351 ¶ 2.) Defendants claim that Elena Properties, in conjunction with O'Neill personally, engaged in the business of operating and renting the property as a guesthouse. (Docket No. 351 ¶ 2.) At all times relevant, O'Neill was the president and sole officer of Elena Properties. (Docket Nos. 329–1 ¶ 3; 351 ¶ 3.) As such, O'Neill administered the property. (See Docket No. 126 ¶ 17.)

Use permit No. PU–65–5–0117 was issued to the property authorizing it to be occupied as a guesthouse. (Docket Nos. 331 ¶¶ 2–3; 348 ¶¶ 2–3.) Said authorization was issued as to the second and first floors of the property. (Id. ¶ 4; Id. ¶ 4.) The use permit provides that the property may only be used for the purposes authorized therein. (Docket Nos. 331 ¶ 5; 348 ¶ 5.) A change in the use of the property entailed the issuance of a new use permit. (Id. ¶ 6; Id. ¶ 6.) Also, a change in tenants, if not a change in use, did not require a new use permit. (Id. ¶ 7; Id. ¶ 7.) On May 10, 2010, the date the explosion occurred, the property was being used as a guesthouse. (Id. ¶ 9; Id. ¶ 9.)

From November 2009 through March 2010, Open Systems, the decedent's employer, rented from Elena Properties several apartments on the property for the use of the decedent and other employees. (Docket No. 329–4.) Elena Properties invoiced Open Systems for the rental fees of said apartments. (Id. at 3–6.) Open Systems paid Elena Properties for the rental through money transfers. (Id. at 7–11.)

On March 10, 2010, there was an explosion and fire in apartment number five (hereinafter "the apartment") of the property, where the decedent was staying. (Docket Nos. 329–1 ¶ 6; 351 ¶ 6.) Plaintiffs contend that the decedent turned on a light switch to the bathroom of the apartment, causing the apartment to explode and resulting in second degree burns covering seventy percent (70%) of her body and injuries to her lungs, which ultimately caused her death. (See Docket No. 126.) The explosion was so violent that the decedent burst through the apartment door despite it being locked. (Id. at 6.) It also knocked the room's windows from their frames, melted appliances and burnt the room completely. (Id. ) Plaintiffs contend that the decedent suffered and agonized through her treatment for burns for several days until she died at the age of 39. (Id. at 7.) The decedent suffered her injuries in the property and she died as a result of those injuries. (Docket Nos. 329–1 ¶ 7; 351 ¶ 7.)

Plaintiffs claim that the decedent's neighbors called an ambulance, which took her to the burn unit of the Río Piedras Medical Center and that in...