Tokyo Marine and Fire Ins. Co., Ltd. v. Perez & Cia., De Puerto Rico, Inc.

• Decision Date: 03 November 1997
• Docket Number: Nos. 96-2029,96-2030,s. 96-2029
• Citation: 142 F.3d 1
• Parties: TOKYO MARINE AND FIRE INSURANCE CO., LTD., Plaintiff, Appellant, v. PEREZ & CIA., DE PUERTO RICO, INC., Defendant, Appellee. TOKYO MARINE AND FIRE INSURANCE CO., LTD., Plaintiff, Appellee, v. PEREZ & CIA., DE PUERTO RICO, INC., Defendant, Appellant. . Heard
• Court: U.S. Court of Appeals — First Circuit

Page 1

142 F.3d 1

TOKYO MARINE AND FIRE INSURANCE CO., LTD., Plaintiff, Appellant, v. PEREZ & CIA., DE PUERTO RICO, INC., Defendant, Appellee.

TOKYO MARINE AND FIRE INSURANCE CO., LTD., Plaintiff, Appellee, v. PEREZ & CIA., DE PUERTO RICO, INC., Defendant, Appellant.

Nos. 96-2029, 96-2030.

United States Court of Appeals First Circuit.

Heard Nov. 3, 1997.

Decided April 21, 1998.

Vanessa Viera, with whom Raymond P. Burgos, Rafael VilaCarrin and Pinto-Lugo & Rivera were on brief, for appellant.

Antonio M. Bird, Jr., with whom Bird Bird & Hestres was on brief, for appellee.

Before TORRUELLA, Chief Judge, LYNCH, Circuit Judge, and DiCLERICO, Jr., ^* District Judge.

TORRUELLA, Chief Judge.

Tokyo Marine and Fire Insurance Co., Ltd. ("Tokyo Marine"), as subrogee to the rights of its insured, Mitsubishi Motors Sales of the Caribbean, Inc. ("Mitsubishi"), filed this tort suit in diversity against defendant Perez y Ca. de Puerto Rico, Inc. ("Perez y Ca.") for the damage caused to vehicles owned by Mitsubishi while they were stored at a facility owned by Perez y Ca. After holding a bench trial, the district court entered judgment finding Perez y Ca. liable to Tokyo Marine on seven out of the eight counts in the complaint. Tokyo Marine and Perez y Ca. now cross-appeal from the judgment of the district court. Tokyo Marine contends that the district court erred in finding that the first count of its complaint was time-barred, while Perez y Ca. challenges the court's finding of liability. Perez y Ca. also appeals from the district court's decision to award attorneys' fees to Tokyo Marine under P.R. R. Civ. P. 44.1 as a sanction for what it perceived as Perez y Ca.'s obstinate conduct in this litigation. For the reasons explained below, we affirm in part and reverse in part.

I. Background

We recite the facts in the light most favorable to the judgment. See Wainwright Bank & Trust Co. v. Boulos, 89 F.3d 17, 18 (1st Cir.1996).

This case involves eight shipments of cars owned by Mitsubishi that were damaged while they were stored at a harbor-side lot owned by defendant Perez y Ca. On February 15, 1993, the M/V ORION HIGHWAY arrived in San Juan, Puerto Rico, and docked at a berthing facility owned by Perez y Ca. The ship was carrying the first shipment of cars at issue in this case, which consisted of 619 Mitsubishi-brand motor vehicles consigned to Mitsubishi Motors Sales of the Caribbean, Inc. The cars were discharged and stationed on Perez y Ca.'s lot for one week, at the end of which they were delivered to Mitsubishi. The Perez y Ca. dock and storage lot were chosen by San Juan Mercantile Corp., Mitsubishi's agent and stevedoring contractor. San Juan Mercantile was responsible for the vehicles from the time of discharge until they were delivered to Mitsubishi.

Tokyo Marine had a working arrangement with Intermodal Transportation Services, Inc. ("Intermodal"), a Florida firm that provides survey services, whereby Intermodal surveyed vehicle damage claims presented to Tokyo Marine under the insurance policy issued to Mitsubishi. Pursuant to this arrangement, Intermodal's surveyors would conduct "hatch and discharge" surveys of vehicle shipments when they arrived at a port, and "first point of rest" surveys just after the vehicles were discharged. The purpose of these surveys was to discover any damage to the vehicles, and to determine whether such damage occurred before, during, or after the discharge of the vehicles from the ship.

After the M/V ORION HIGHWAY arrived, a local surveyor retained by Intermodal performed hatch, discharge, and first point of rest surveys of the shipment, and found the vehicles to be free of paint damage. When the vehicles were delivered to Mitsubishi a week later, however, many were found to be covered with a light dusting of paint. It was later discovered that during the week that the cars were parked at Perez y Ca.'s lot, Perez y Ca. employees were also painting an ocean-going barge at a drydock directly adjacent to the lot on its upwind side. After hearing evidence on the issue, the district court found that the Mitsubishi vehicles were damaged by free-floating paint that wafted onto the vehicles.

The district court also found that Mitsubishi vehicles that arrived in seven other shipments over the next year and a half were damaged in like manner while they were stored at the Perez y Ca. lot. The district court determined that the claim based on the damage to the vehicles in the first shipment was time-barred, but allowed the claims arising from the damage to vehicles in the remaining seven shipments. With regard to those claims, the district court found that Perez y Ca. was negligent in permitting the vehicles to be damaged because, although its employees knew of the "over spray" problem, the company took no measures to avoid or prevent the problem. The district court also found that Mitsubishi had not acted in a comparatively negligent manner by continuing to store its vehicles at the Perez y Ca. lot because, short of stopping vehicle shipments altogether, it could not prevent the use of the Perez y Ca. berthing and vehicle storage facilities. The district court therefore entered judgment for the plaintiff in the amount of $243,530. Finally, the district court concluded that the defendant had been obstinate in its conduct of this litigation and was therefore liable for attorneys' fees pursuant to P.R. R. Civ. P. 44.1. Both parties have appealed from the judgment below.

II. Statute of Limitations

Tokyo Marine argues that the district court erred in finding that its claim for the damage caused to the cars in the M/V ORION HIGHWAY shipment was barred by the applicable statute of limitations. This tort action was brought under Puerto Rico's tort statute, article 1802 of the Civil Code, P.R. Laws Ann. tit. 31, § 5141. Tort claims under article 1802 are subject to the one-year statute of limitations provided by article 1868(2) of the Civil Code, P.R. Laws Ann. tit. 31, § 5298(2). A cause of action under article 1802 accrues--and the prescriptive period set by article 1868(2) therefore begins to run--when the injured party knew or should have known of the injury and of the likely identity of the tortfeasor. See Colon Prieto v. Geigel, 115 P.R. Dec. 232, 243, 1984 WL 270950 (1984). As noted above, the district court found that the cars in the M/V ORION HIGHWAY shipment were damaged at some point no later than February 23, 1993. This suit was filed on April 19, 1994, more than one year after the cause of action had accrued. Therefore, unless the prescription of the cause of action was interrupted, the cause of action relating to the cars in the M/V ORION HIGHWAY shipment would be time-barred.

Pursuant to article 1873 of the Civil Code, a prescriptive period may be interrupted in one of three ways: by the institution of an action "before the courts, by extrajudicial claim of the creditor, and by any act of acknowledgment of the debt by the debtor." P.R. Laws Ann. tit. 31, § 5303 (official translation 1991). Although prescription is an affirmative defense, once it has been raised, the burden of proving that prescription has been interrupted shifts to the plaintiff. See Velez Rodriguez v. Pueblo Int'l, Inc., 135 P.R. Dec. ----, 1994 WL 909577, at * 8 (Mar. 18, 1994); Zambrana Maldonado v. Puerto Rico, 129 P.R. Dec. ----, 1992 WL 754996, at * 4 (Jan. 30, 1992). Under article 1874 of the Puerto Rico Civil Code, the interruption of prescription against one defendant also tolls the statute against any other defendants who are solidarily liable ¹ with the first. See P.R. Laws Ann. tit. 31, § 5304 ("Interruption of prescription of actions in joint obligations equally benefits or injures all the creditors or debtors.") (official translation 1991); Arroyo v. Hospital La Concepcion, 130 P.R. Dec. ----, 1992 WL 755630, at * 6 (June 5, 1992). Regardless of the method used, when the prescriptive period is successfully interrupted, the full period begins to run again. See Cintron v. Puerto Rico, 127 P.R. Dec. 582, 589, 1990 WL 710069 (1990); Diaz De Diana v. A.J.A.S. Ins. Co., 110 P.R. Dec. 471, 474, 1980 WL 138494 (1980).

Neither the first nor the third method of interrupting prescription is applicable here: no suit concerning the events in question was filed before April 19, 1994, and the defendants have consistently denied liability. The issue before us is therefore reduced to the question whether the plaintiff interposed an "extrajudicial claim" with regard to the M/V ORION HIGHWAY shipment that successfully interrupted the prescription of the cause of action before the original one-year term expired on February 23, 1994.

The Supreme Court of Puerto Rico has often relied on a definition of "extrajudicial claim" written by Spanish commentator Luis Diez-Picazo:

In principle, claim stands for demand or notice. That is: it is an act for which the holder of a substantive right addresses the passive subject of said right, demanding that he adopt the required conduct.

Luis Diez-Picazo, La prescripcin en el Cdigo Civil [Prescription in the Civil Code ] at 130 (Barcelona, Ed. Bosch 1964) (translation ours) (cited in Cintron, 127 P.R. Dec. at 592; Secretario Del Trabajo v. Finetex Hosiery Co., 116 P.R. Dec. 823, 827 (1986); Diaz De Diana, 110 P.R. Dec. at 476). As this court has previously explained, an extrajudicial claim is subject to only a few requirements:

[A]n extrajudicial claim does in fact include virtually any demand formulated by the creditor. The only limitations are that the claim must be made by the holder of the substantive right (or his legal representative), ... it must be addressed to the debtor or passive subject of the right, not to a third party, ... and it must require or demand the same conduct or relief ultimately sought in the subsequent lawsuit.

Rodriguez Narvaez v. Nazario, 895 F.2d 38, 44 (1st Cir.1990) (citations omitted); see Galib Frangie v. El Vocero, Inc., 138 P.R....