USCA1 Opinion
March 31, 1994 [NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
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No. 93-2263
SURFACT, INC.,
Plaintiff, Appellant,
v.
SOUTH PEARL CHEMICAL, INC.,
Defendant, Appellee.
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APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gilberto Gierbolini, U.S. District Judge]
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Before
Breyer, Chief Judge.
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Selya and Boudin, Circuit Judges.
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David Efon and Kevin G. Little on brief for appellant.
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Gloria L. Lebron Nieves and Cobian & Valls, on brief for
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appellee.
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Per Curiam. Appellant Surfact, Inc., a Florida
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corporation, appeals the dismissal for lack of diversity
jurisdiction of its action against appellee, South Pearl
Chemical, Inc. We affirm.
I
On February 1, 1988, appellant Surfact, entered into an
exclusive dealership agreement with South Pearl Chemical,
Inc. According to appellant, the agreement was illegally
terminated on January 31, 1990, in violation of Puerto Rico
Law 75, 10 L.P.R.A. 278. Appellant brought suit in the
United States District Court for the District of Puerto Rico
and invoked diversity jurisdiction pursuant to 28 U.S.C.
1332. Appellee in turn moved to dismiss for lack of
diversity. A magistrate judge issued a report and
recommendation that the motion for dismissal be granted
because both parties to the agreement were Florida
corporations. The district court affirmed.
II
The dispute in this case arises out of the fact
that there have been two corporations with the name "South
Pearl Chemical, Inc." One corporation [South Pearl Puerto
Rico] was incorporated in 1984 in the Commonwealth of Puerto
Rico. South Pearl Puerto Rico amended its corporate charter
in July 1987 to change its corporate name to Ole South Pearl
Chemical, Inc. The other corporation [South Pearl Florida]
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was incorporated in 1987 in the state of Florida. In May
1987, Ole South Pearl transferred all its "assets and
business" to South Pearl Florida in exchange for 800 shares
of South Pearl Florida common stock.1 However, the
corporations remained separate entities. The exclusive
dealership agreement between Surfact and South Pearl
Chemical, Inc. was entered into almost ten months after the
transfer of assets between Ole South Pearl and South Pearl
Florida.
Surfact asserts that it entered into the exclusive
dealership agreement with Ole South Pearl. The district
court, however, found that the exclusive dealership contract
had been entered into by Surfact and South Pearl Florida.
Hence, diversity of parties was absent. We review findings
of jurisdictional facts only for clear error. See, e.g.,
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Marshall County Bd. of Educ. v. Marshall County Gas Dist.,
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992 F.2d 1171, 1178 (11th Cir. 1993); Rocovich v. United
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States, 933 F.2d 991, 993 (Fed. Cir. 1991).
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The district court's finding is supportable in the
record. Prior to the signing of the exclusive dealership
agreement, all Ole South Pearl's "assets and business" were
transferred to South Pearl Florida. From this, the court
could have inferred that, at the time of the exclusive
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1. The transfer agreement, dated May 31, 1987, refers to Old
South Pearl, Inc., even though the amendment to the corporate
charter changing the name was not filed until July 24, 1987.
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dealership agreement, South Pearl Florida was the only active
corporation and thus the only one which would have entered
into the agreement with Surfact. This inference is confirmed
not only by the fact that, by the time of the agreement,
South Pearl Puerto Rico had changed its name to Old South
Pearl, but also by tax records, which show that, after the
transfer of assets, South Pearl Florida was an active
corporation with net sales of over $1,600,000 in 1988 and
$4,000,000 in 1989, whereas there is no record of any tax
reports having been filed by Ole South Pearl after 1987.
Finally, Heraclio Prieto, who signed the agreement on behalf
of South Pearl Chemical, Inc., filed a sworn affidavit
stating that he did so as a representative of South Pearl
Florida. Although other evidence in the record might
support a contrary finding, the district court's finding is
not clearly erroneous. See Lundquist v. Precision Valley
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Aviation, Inc., 946 F.2d 8, 11 (1st Cir. 1991) (no clear
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error where factfinder chooses between two permissible views
of the evidence).2
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2. Appellant also contends that the district court erred in
dismissing the case before granting appellant an adequate
opportunity to conduct discovery relevant to the motion to
dismiss. However, this objection was not raised before the
magistrate judge or in appellant's objection to the
recommendation and report of the magistrate judge. It,
therefore, cannot be raised before this court. See Borden v.
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Secretary of Health & Human Services, 836 F.2d 4, 6 (1st Cir.
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1987) (argument which could have been but was not presented
to magistrate in first instance is waived on review).
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Affirmed.
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