Tropigas De P.R. Inc. v. Certain Underwriters At Lloyd's of London

• Decision Date: 11 March 2011
• Docket Number: No. 10–1122.,10–1122.
• Citation: 637 F.3d 53
• Parties: TROPIGAS DE PUERTO RICO, INC., Plaintiff, Appellant,v.CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

637 F.3d 53

2011 A.M.C. 869

TROPIGAS DE PUERTO RICO, INC., Plaintiff, Appellant,

v.CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON, Defendants, Appellees.

No. 10–1122.

United States Court of Appeals, First Circuit.

Submitted Jan. 6, 2011.Decided March 11, 2011.

Francisco E. Colón–Ramirez and Colón & Colón, P.S.C., on brief, for appellant.Manuel Sosa, Luis N. Saldaña, and Saldaña, Carvajal & Vélez–Rivé, P.S.C., on brief, for appellee.Before LIPEZ, Circuit Judge, SOUTER,^* Associate Justice, and SELYA, Circuit Judge.SELYA, Circuit Judge.

This case is an exercise in summary judgment practice. It involves a dispute about whether sums are due under a certificate of insurance issued by certain underwriters at Lloyd's of London (Lloyd's) to plaintiff-appellant Tropigas de Puerto Rico, Inc. The district court opined that the plaintiff had failed to adduce facts sufficient to show the existence of a covered loss and granted summary judgment for Lloyd's. We affirm.

I. BACKGROUND

We rehearse the facts in the light most agreeable to the plaintiff (the party resisting summary judgment). Suarez v. Pueblo Int'l, Inc., 229 F.3d 49, 51 (1st Cir.2000); McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 314 (1st Cir.1995).

The plaintiff is a propane gas distributor based in Puerto Rico. In the ordinary course of its business, it purchased fourteen large underground storage tanks manufactured in Dallas, Texas. The tanks were transported to Houston for shipment by barge to Puerto Rico.

At the plaintiff's behest, Lloyd's issued a certificate of insurance, insuring the tanks “against all risks of physical loss or damage from external causes.” The coverage attached dockside from the start of loading operations in Houston, continued while the barge was in transit, and “cease[d] upon berthing of the barge at the destination port” (San Juan). No coverage was afforded for unloading operations.

On January 28, 2004, a marine surveyor inspected the tanks at the Houston docks. Loading operations, monitored by the marine surveyor, began on February 8 and concluded the next day. The process encompassed two stages. First, stevedores used rollers and heavy-lift transport equipment to maneuver the tanks to a designated area alongside the barge. Second, a crane fitted with nylon straps attached to a spreader bar hoisted them onto the waiting barge.

In a report dated February 16, the surveyor noted that, prior to loading, all the tanks exhibited minor chafing to exterior painted surfaces. That damage was repaired by the manufacturer on site and plays no role in this litigation. The report noted no other damage. With one exception, not relevant here, it described the loading process as having taken place without incident.¹

The barge left Houston on February 10. It encountered no inclement weather during the voyage. When the barge docked in San Juan, the plaintiff did not conduct a pre-discharge inspection of the cargo. The plaintiff did, however, videotape a portion of the off-loading. In that process, the tanks were lifted by cranes, placed on heavy haulers, trucked to the plaintiff's yard, and installed.

The plaintiff subsequently conducted a post-installation inspection of the tanks. This inspection revealed extensive warping and deformation.

In December of 2004, the plaintiff wrote to Lloyd's seeking recompense for the discovered damage. Its claim letter posited that the warping and deformation of the tanks had occurred during either loading operations in Houston or the ensuing marine transport (and in any event, within the policy coverage). Lloyd's refused payment, maintaining that the plaintiff had not established that the damage arose during the coverage period.

II. TRAVEL OF THE CASE

Invoking diversity jurisdiction, 28 U.S.C. § 1332(a)(1), the plaintiff sued in the federal district court. In its complaint, the plaintiff alleged that the tanks had been damaged due to improper loading at the point of origin (Houston).² Lloyd's denied this allegation and the parties engaged in pretrial discovery.

In due season, Lloyd's moved for summary judgment, Fed.R.Civ.P. 56, arguing that the plaintiff had failed to limn a triable issue as to whether the alleged loss occurred within the currency and scope of the insurance certificate. Along with the motion, Lloyd's submitted a statement of uncontested material facts as required by Local Rule 56(b).³ In that statement, it emphasized the surveyor's finding that no damage had occurred to the tanks at issue during loading. It also proffered a report from its expert, Andrew Johnstone, which concluded that, assuming the tanks were properly designed and manufactured, “the load-out and transportation of these tanks from Houston to San Juan would not have imposed sufficient loads on the tanks to cause the damage reported.” (There is no evidence in the record suggesting that the tanks were either improperly designed or constructed).

The plaintiff opposed the motion, arguing that the record, viewed favorably to it, supported a finding that the tanks were damaged during loading operations in Houston. The plaintiff's counter-statement of material facts, submitted in accordance with Local Rule 56(c),⁴ included thirty-one so-called “supplemental facts.” It noted, for example, that there was no mention in the survey about how the rollers used during loading operations were leveled; that Lloyd's had failed to exclude a difference in the height of the rollers as a possible cause of the damage; that there was photographic evidence suggesting that the tanks were improperly hoisted; and that a videographic depiction of the off-loading operations showed that nothing unusual had occurred during that activity.

The district court granted the motion for summary judgment. It observed that the plaintiff's arguments in support of its claim consisted of nothing more than speculation. This timely appeal ensued.

III. APPLICABLE LEGAL STANDARD

We review a district court's grant of summary judgment de novo. Dávila v. Corporación de P.R. para la Difusión Pública, 498 F.3d 9, 12 (1st Cir.2007). 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. See Vineberg v. Bissonnette, 548 F.3d 50, 55 (1st Cir.2008); see also Fed.R.Civ.P. 56.⁵ While we must mull the facts in the light most agreeable to the nonmoving party and draw all reasonable inferences in that party's favor, Suarez, 229 F.3d at 53, we afford no evidentiary weight to “conclusory allegations, empty rhetoric, unsupported speculation, or evidence which, in the aggregate, is less than significantly probative.” Rogan v. City of Boston, 267 F.3d 24, 27 (1st Cir.2001); see Medina–Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir.1990).

The vocabulary of summary judgment is well defined. An issue is “genuine” if “a reasonable jury could resolve the point in favor of the nonmoving party.” McCarthy, 56 F.3d at 315 (quotation omitted). A fact is “material” if “its existence or nonexistence has the potential to change the outcome of the suit.” Borges ex rel. S.M.B.W. v. Serrano–Isern, 605 F.3d 1, 5 (1st Cir.2010). Where, as here, the nonmovant bears the burden of proof on the dispositive issue, it must point to “competent evidence” and “specific facts” to stave off summary judgment. McCarthy, 56 F.3d at 315.

IV. ANALYSIS

As a threshold matter, the plaintiff argues that the district court failed to deem its supplemental facts admitted and that, had it done so, summary judgment would have been inappropriate. This argument implicates Local Rule 56, which in relevant part requires a party opposing summary judgment to submit with its opposition a “separate, short, and concise statement of material facts” not set forth by the movant. D.P.R. Civ. R. 56(c). In turn, the movant is directed to submit a reply statement, in which it “shall admit, deny or qualify those additional facts.” D.P.R. Civ. R. 56(d). Facts not denied, qualified, or otherwise “properly controverted” are deemed admitted. D.P.R. Civ. R. 56(e).

Local Rule 56 is in service to Federal Rule of Civil Procedure 56. See CMI Capital Mkt. Inv., LLC v. González–Toro, 520 F.3d 58, 62 (1st Cir.2008) (“The purpose of this rule is to relieve the district court of any responsibility to ferret through the record to discern whether any material fact is genuinely in dispute.”). Like Rule 56 itself, the local rule makes clear that its focus is on facts, not speculation or argumentation. Moreover, these facts must be material.

In the instant case, the district court's summary judgment ruling was terse, and it is impossible to tell what use, if any, the court made of the supplemental facts contained in the plaintiff's Local Rule 56(c) counter-statement. Assuming, favorably to the plaintiff, that the court did not “deem admitted” the supplemental facts, we discern no error. We explain briefly.

The supplemental facts can be divided into two groups. The first group consists of facts that are not material. Thus, for example, it is a fact that there is no evidence as to how the rollers had been leveled—but that fact does not prove that improper leveling of the rollers caused the damage. The second group consists of items which, though labeled as facts, are nothing more than speculation or argumentation. Thus, for example, that Lloyd's had failed to exclude the height of the rollers as a cause of the damage is a non-fact; it is an argument, pure and simple, for the proposition that the improper leveling of the rollers caused the damage.

Neither half of this taxonomy profits the plaintiff. To the extent that the items are factual, deeming them admitted does not change the outcome of the case. To the extent that they are non-facts, they are equally impuissant. Either way, the plaintiff's claim of error fails. See P.R. Am. Ins. Co. v. Rivera–Vázquez, 603 F.3d 125, 130 (1st Cir.2010); see also McCarthy, 56 F.3d at 315.

This brings us to the merits....