SALVADOR E. CASELLAS, Senior District Judge.
Before the Court are third party defendant Chardon/Hato Rey Partnership S.E.'s ("Chardon") motion to dismiss (Docket #230), third-party plaintiffs Electro Mechanical Corporation d/b/a/ ("Federal Pacific"), Alarm & Control System Co. d/b/a/ ("Acotrol"), together with Rimco Inc.'s ("Rimco") oppositions thereto (Dockets # 233, 239 & 244), and Chardon's replies (Dockets # 242, 247 & 249). Also before this Court is third-party defendant Securitas Security Services of Puerto Rico, Inc.'s ("Securitas") unopposed motion to dismiss (Docket # 232). After reviewing the filings, and the applicable law, Chardon motion is
A brief introduction to the underlying facts of this case suffices to set the stage for the analysis. The facts, as alleged by the plaintiffs in their complaint, are as follows:
On February 6, 2009, Zurich American Insurance Company ("Zurich"), UBS Financial Services Inc. ("UBS"), and Firemans' Fund Insurance Company ("Firemans") (collectively, "Plaintiffs") filed this diversity suit against a multitude of defendants. Docket # 1. According to the complaint, on February 12, 2008, a substantial amount of diesel overflowed from the day tanks of the American International Plaza's (the "Building") backup generators.
With respect to Rimco, a Puerto Rican corporation distributing diesel-powered generators, the complaint essentially states that Rimco failed to ensure that the emergency generators operated properly and safely. Id. at ¶¶ 8, 47 & 58.
Finally, as to Federal Pacific, a corporation based in Virginia that manufactures and designs commercial building transformers, Plaintiffs allege that Federal Pacific's negligence lies in its failure to properly manufacture and design the transformer (the "Transformer") that allegedly malfunctioned in the Building. Id. According to the complaint, the Transformer's failure, which Plaintiffs attribute to its incompatibility with humidity, triggered a domino effect that climaxed with the Spill. Id.
Against this factual backdrop, the third-party plaintiffs filed separate third-party complaints against Chardon, a special partnership that owns the Building. Docket # 67, ¶ 8.
Rimco's third-party complaint came first. In a nutshell, it alleged that Chardon was the sole party responsible for the damages caused to Plaintiffs because, among other things, Chardon failed to connect or maintain the day tank's drainage system. Docket #37, ¶¶ 20 & 24-26. This, according to Rimco, caused the diesel to "seep down inside the office building." Id. at ¶ 20. Tracking Rimco's allegations against Chardon, Acotrol and Federal Pacific subsequently followed suit. Docket # 134, ¶¶ 12-13; Docket # 136, ¶¶ 18-20. Notably, Acotrol included two meager allegations against another nonparty: Securitas.
Chardon timely moved to dismiss the third-party complaints. Dockets # 67, 152 & 153. The core of Chardon's defense was that, pursuant to Fed. R. Civ. 14(a)(1), these third-party complaints improperly impleaded it. See e.g., Docket # 152, p. 4. Chardon's proffer rested on two contractual clauses in effect at the time of the Spill, which were included in tenants UBS and O'Neill's lease contracts with Chardon (the "Lease Contracts"). In pertinent part, the Lease Contracts provided (1) a waiver of subrogation rights, by virtue of which, UBS and O'Neill waived any right of recovery against Chardon for any damage
Adopting Chardon's Rule 14 defense, Securitas moved to dismiss Acotrol's third-party complaint. Docket # 154. Pointing to the scarcity of allegations against it, Securitas countered that Acotrol's third-party complaint contained no averments to conclude that Securitas was contractually bound to service the Building. Id. at ¶¶ 6-7.
Although Acotrol never opposed Securitas' motion to dismiss, the third-party plaintiffs did protest Chardon's request for dismissal. See Dockets #78, 161, 162.
After several procedural nuances, Rimco filed an amended third-party complaint against Chardon. Docket # 226.
On November 4, 2011, Chardon filed the instant consolidated motion to dismiss the amended third-party complaints, rehashing its previous arguments.
To survive a Rule 12(b)(6) motion to dismiss, Plaintiffs' "well-pleaded facts must possess enough heft to show that [they are] entitled to relief." Clark v. Boscher, 514 F.3d 107, 112 (1st Cir.2008). In evaluating whether Plaintiffs are entitled to relief, the court must accept as true all "`well-pleaded facts [and indulge] all reasonable inferences" in plaintiffs' favor." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). The First Circuit has held that "dismissal for failure to state a claim is appropriate if the complaint fails to set forth factual allegations, either direct or inferential, respecting each material element necessary to sustain recovery under some actionable legal theory." Nevertheless, in judging the sufficiency of a complaint, courts must "differentiate between well-pleaded facts, on the one hand, and `bald assertions, unsupportable conclusions, periphrastic circumlocution, and the like,' on the other hand; the former must be credited, but the latter can safely be ignored." LaChapelle v. Berkshire Life Ins., 142 F.3d 507, 508 (1st Cir.1998) (quoting Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996)); Buck v. American Airlines, Inc., 476 F.3d 29, 33 (1st Cir.2007); see also Rogan v. Menino, 175 F.3d 75, 77 (1st Cir. 1999). Thus, Plaintiffs must rely on more than unsupported conclusions or interpretations of law, as these will be rejected. Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir.1997) (citing Gooley v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir.1988)).
In Ashcroft v. Iqbal, 556 U.S. 662, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009), the Supreme Court reaffirmed Twombly and clarified that two underlying principles must guide a court's assessment of the adequacy of pleadings when evaluating whether a complaint can survive a Rule 12(b)(6) motion. See Iqbal, 129 S.Ct. at 1949-50. First, the court must identify any conclusory allegations in the complaint as such allegations are not entitled to an assumption of truth. Id. at 1949. Specifically, the court is not obligated to accept legal conclusions set forth as factual allegations in the complaint. Id.
Moreover, "threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice." Id. (quoting Twombly, 550 U.S. at 555, 127 S.Ct. 1955); see also Penalbert-Rosa v. Fortuno-Burset, 631 F.3d 592, 595 (1st Cir.2011) ("[S]ome allegations, while not stating ultimate legal conclusions, are nevertheless so threadbare or speculative that they fail to cross the line between the conclusory to the factual."). In other words, "[a] plaintiff is not entitled to `proceed perforce' by virtue of allegations that merely parrot the elements of the cause of
Second, a complaint survives only if it states a plausible claim for relief. Id. (citing Twombly, 550 U.S. at 556, 127 S.Ct. 1955). Thus, any nonconclusory factual allegations in the complaint, accepted as true, must be sufficient to give the claim facial plausibility. Id. A claim has facial plausibility when the pleaded facts allow the court to reasonably infer that the defendant is liable for the specific misconduct alleged. Id. at 1949, 1952. Such inferences must amount to more than a sheer possibility and be as plausible as any obvious alternative explanation. Id. at 1949, 1951. Plausibility is a context-specific determination that requires the court to draw on its judicial experience and common sense. Id. at 1950.
For its part, Fed.R.Civ.P. 14(a)(4) permits "[a]ny party to move to strike the third-party claim, to sever it, or to try it separately." Although this rule does not explicitly provide for a motion to dismiss third-party claims, "[t]he federal courts have entertained both motions to dismiss and to strike and have not drawn distinctions between them." 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1460 (3d ed. 2011) (hereinafter "Wright & Miller"); see also Kenny v. City of New York, No. 09-CV-1422 2011 WL 4460598, at *1 (E.D.N.Y. Sept. 26, 2011) ("[T]he form of or the name given to the motion is not significant, let alone determinative. Whenever a motion to dismiss or to strike, or to vacate, or for a judgment on the pleadings, or for a summary judgment actually challenges the desirability of the impleader, it will be treated accordingly.") (citation omitted).
As an initial matter, the Court must decide whether, at the motion to dismiss stage, it may consider documents unattached to the third-party complaints; in this case, the Lease Contracts that confer immunity to Chardon. See Docket # 249, Exhs. 2-10. Taking exception to Chardon's exhibits, Rimco claims that their evidentiary admissibility has not been established, and that, in order to properly consider the Lease Contracts, this Court should convert Chardon's motion into one for summary judgment. Docket # 219, p. 4; Docket #244, p. 2. For the reasons set forth below, the Court declines Rimco's invitation.
It is common ground that courts ordinarily may not consider documents that are outside of the complaint, unless the motion to dismiss is converted into one for summary judgment. E.g., Watterson v. Page, 987 F.2d 1, 3 (1st Cir.1993). But a court may consider "facts extractable from documentation annexed to or incorporated by reference in the complaint and matters susceptible to judicial notice." Rederford v. U.S. Airways, Inc., 589 F.3d 30, 34 (1st Cir.2009) (quoting Jorge v. Rumsfeld, 404 F.3d 556, 559 (1st Cir. 2005)). Indeed, "[c]ourts have made narrow exceptions for documents the authenticity of which are not disputed by the parties; ... or for documents sufficiently referred to in the complaint." Watterson v. Page, 987 F.2d 1, 3 (1st Cir.1993).
The foregoing suffices to dispatch Rimco's argument quickly; its amended complaint explicitly alludes to Chardon's "release by [P]laintiffs." Docket # 226, ¶ 38. The Lease Contracts thus fall under the "documents sufficiently referred to in the complaint" exception. Watterson, 987 F.2d at 3. This, alone, authorizes this Court to consider the Lease Contracts, whose authenticity has never really been in debate here; the third-party plaintiffs have not questioned the validity of the Lease Contracts, although they have had
Rule 14(a)(1) of the Federal Rules of Civil Procedure prescribes when and how a defendant may sue a non-party: "A defending party may, as third-party plaintiff, serve a summons and complaint on a nonparty who is or may be liable to it for all or part of the claim against it...." Id. Or, per the First Circuit, this rule "contemplat[es] the availability of third-party practice when a non-party is or may be liable for all or part of the plaintiff's claim against the defendant." Lehman v. Revolution Portfolio L.L.C., 166 F.3d 389, 393 (1st Cir.1999) (internal quotation marks omitted). The rationale behind Rule 14 is to avoid "[u]nnecessary duplication and circuity of action...." Id. at 394-95. Further, "[t]hird-party claims, being by definition logically dependent on the resolution of the original suit, fall within the court's ancillary jurisdiction over that suit." Metropolitan Life Ins. Co. v. Ditmore, 729 F.2d 1, 9 (1st Cir.1984) (citations omitted)
From the clear language of this rule it follows that a third-party plaintiff is procedurally obliged to predicate its claims upon secondary or derivative liability. As succinctly put by the Seventh Circuit over thirty years ago, secondary liability "is a plain condition on the face of Rule 14." U.S. Gen., Inc. v. City of Joliet, 598 F.2d 1050, 1053 (7th Cir.1979). In line with the foregoing, "[i]f [a] third-party plaintiff were found liable to plaintiff, then [it] has a right under substantive law to transfer [its] liability derived from the original complaint to third-party defendant." Lopez de Robinson v. United States, 162 F.R.D. 256, 258 (D.P.R.1995). Among others grounds, "[a] contractual right of indemnification, or a [] right [to] contribution between joint tortfeasors are ... rights under substantive law which allow a []third-party plaintiff to pass along all or a portion of his liability to third-party defendant." Lopez de Robinson, 162 F.R.D. at 258.
In contrast, a third-party plaintiff may not implead a third-party defendant purely on direct liability from the third-party defendants to the plaintiff. Arroyo Lopez v. Hosp. Dr. Dominguez, Inc., 262 F.R.D. 93, 96 (D.P.R.2009); see also Wright & Miller § 1455 (noting that "an impleader complaint ... will be dismissed if it does not aver that the third-party defendant is or may be liable to the third-party plaintiff for all or part of plaintiff's claim against defendant....").
Accordingly, for their third-party complaints to conform to Rule 14, Rimco, Acotrol, and Federal Pacific must show that if they were found liable to Plaintiffs, then they would have a right under Puerto Rico
It should go without saying that, in diversity cases such as this one, state law governs the substantive outcome. E.g., Essex Ins. Co. v. BloomSouth Flooring Corp., 562 F.3d 399, 403 (1st Cir.2009). And, when interpreting Puerto Rico law, federal courts employ the method and approach promulgated by the Commonwealth's Supreme Court. See Nat'l Pharmacies, Inc. v. Feliciano-de-Melecio, 221 F.3d 235, 241-42 (1st Cir.2000). Last but not least, it is Puerto Rican hornbook law that the "[f]ield of [torts] is governed — both in form and in content — by the civil law system." Valle v. American International Insurance Co., 108 D.P.R. 692, 8 P.R. Offic. Trans. 735, 736 (1979).
In Puerto Rico, solidarity exists "when several people take part or cooperate in causing a wrong." Rodriguez v. Suzuki Motor Corp., 570 F.3d 402, 410 (1st Cir.2009) (quoting Arroyo v. Hosp. La Concepcion, 130 D.P.R. 596, 604 (1992)). Put another way, in the Commonwealth, "joint tortfeasors are solidarily liable." Tokyo Marine & Fire Ins. Co. v. Perez & Cia., 142 F.3d 1, 6 (1st Cir.1998) (citation omitted). In the same vein, "Puerto Rico is a comparative negligence jurisdiction that imposes joint and several liability on joint tortfeasors." Ruiz-Troche v. Pepsi Cola, 161 F.3d 77, 87 (1st Cir.1998) (citing Ramos Acosta v. Caparra Dairy, Inc., 116 D.P.R. 60, 62-64, 116 P.R. Offic. Trans. 78, 81-82 (1985)).
As a corollary of this principle, an aggrieved party may collect the entirety of the damages from one, some, or all of the joint tortfeasors. Ramos Acosta, 116 P.R. Offic. Trans. at 81.
As previously noted, the bulk of Chardon's argument is that the Lease Contracts with Plaintiffs render it immune from any liability, and that this immunity disposes of the third-party complaints lodged against it. Docket # 230, p. 3. The threshold question here, therefore, is whether Chardon's immunity from Plaintiffs' claims entails that it is shielded from being solidarily liable. This determination is neuralgic because, if Chardon is deemed solidarily responsible — along with the third-party plaintiffs — for the damages alleged in the original complaint, then its motion must be denied. Conversely, if Chardon is not solidarily responsible under Puerto Rico law, then Chardon could never be "[l]iable to [the third-party plaintiffs] for contribution, [and] no such liability can be imposed upon [it] by the federal court on a third-party complaint under Rule 14." D'Onofrio Const. Co., 255 F.2d at 906. The Court thus turns to the effect of the exoneration clauses contained in the Lease Contracts.
As relevant here, "[a] hold-harmless agreement is one [in] which one party assumes all or part of the liability inherent in a situation, thereby relieving the other party of responsibility." Ramos-Roman v. Puerto Rico, No. 08-1378, 2011 WL 1484148, at *6 (D.P.R. Apr. 14, 2011) After carefully examining the Lease Contracts, Plaintiffs' unequivocal intention to waive any and all rights of recovery against Chardon is irrefragable. See Tokyo Marine and Fire Ins. Co., Ltd., 142 F.3d at 11 (noting that, based on Puerto Rico law, an exoneration "[c]lause will release a party from liability for future negligence only where the clause clearly and explicitly states so"). Moreover, the fact that Plaintiffs never included Chardon as a party in the original complaint further evinces the validity of this waiver. Importantly, the third-party plaintiffs have not even tried to cast a doubt on the Lease Contract's validity. Consequently, Chardon has been released from any liability in connection to Plaintiffs' damages.
Having held that Chardon is immune from Plaintiffs' claims, the Court analyzes the ramification of this release upon the third-party plaintiffs' claims against Chardon. As Chardon correctly contends, the legal relationship between it and the third-party plaintiffs — and thus their subsequent right to contribution — was established at the time of the Spill. Garcia v. Gobierno de la Capital, 72 D.P.R. 138, 143 (1951) (official translation provided by the parties at Docket # 225, Exh. 1) (holding that the legal relationship between joint tortfeasors is "established in its substance at the moment of the accident"). This is determinative because if Plaintiffs could have chosen to sue Chardon after the Spill, but instead elected to settle with it, then their settlement could not affect the third-party plaintiffs' right to implead Chardon, as correctly argued by the third-party plaintiffs. See generally Wright & Miller § 1447 (citing, inter alia, Bank of the West v. Estate of Leo, 231 F.R.D. 386, 389 (D.Ariz.2005)) (holding that a non-settling defendant may bring a third-party complaint against a settling defendant).
As discussed, Plaintiffs were and still remain impeded from collecting any damages from Chardon. In this sense, Chardon cannot be solidarily liable to Plaintiffs under Puerto Rico law. As noted above, the third-party plaintiffs have no right to contribution against Chardon, as the latter could not have been liable to Plaintiffs. D'Onofrio Const. Co., 255 F.2d at 906. Given that no right to contribution exists here, Chardon cannot be secondarily or derivatively liable to the third-party plaintiffs. Hence, the third-party complaints fall as a matter of law. See Johnson v. Serra, 521 F.2d 1289 (8th Cir.1975) ("If the substantive law denies plaintiff a right of action against the third-party defendant, the third-party plaintiff cannot recover contribution from him either, even though the joint negligence of both defendants concurrently caused plaintiff's injury.").
To be sure, Rimco, Acotrol, and Federal Pacific can argue that Chardon caused or aggravated Plaintiffs' damages. In so doing, they avail themselves of the "[c]oncept of proportionate share setoffs...." Rio Mar Associates, 522 F.3d at 165 (citing Szendrey v. Hospicare, P.R. Dec. 648, 657, P.R. Offic. Trans. 158, 2003 WL 751582 (2003)): every tortfeasor is ultimately responsible solely for its proportionate allotment of the total damages. Id. In due course, and assuming Plaintiffs succeed, the Court will tally each defendant's percentage of liability. And to the extent that the third-party plaintiffs prove Chardon's proportionate share of the overall damages, their contribution, in turn, will be reduced accordingly. See Merle v. West Bend Co., 97 D.P.R. 403, 406 (1969).
Because the third-party complaints fail to assert a derivative claim against Chardon, they contravene Rule 14. They are thus dismissed or stricken from the record.
Given that no hold-harmless agreement exists between Securitas and Plaintiffs, Acotrol's third-party complaint need not suffer from the same procedural infirmity that plagued its claims against Chardon. Contrary to its allegations against Chardon, its contentions against Securitas do state a derivative claim; to wit, that Securitas aggravated or caused Plaintiffs' damages and, under a theory of contribution, Securitas could be derivatively responsible to Acotrol for a share of the latter's liability. See Docket # 227, ¶ 25.
Securitas' renewed motion to dismiss merely reiterates the two defenses contained
As noted above, Securitas' first argument falls short. With respect to its fallback, it should be noted that Securitas' original motion to dismiss successfully attacked Acotrol's original complaint, whose two perfunctory allegations clearly failed to pass muster under Rule 12(b)(6). But Acotrol filed two subsequent amended complaints, adding specific allegations that Securitas breached its duty to supervise, and timely detect the Spill.
On a motion to dismiss, courts shall "accept[] as true all well-pleaded facts, analyzing those facts in the light most hospitable to the plaintiff's theory, and drawing all reasonable inferences for the plaintiff." New York v. Amgen Inc., 652 F.3d 103, 109 (1st Cir.2011) (quoting United States ex rel. Hutcheson v. Blackstone Medical, Inc., 647 F.3d 377, 383 (1st Cir. 2011)). Here, the collective weight of Acotrol's factual allegations, nudge its claims against Securitas "across the line from conceivable to plausible," Iqbal, 129 S.Ct at 1951. Accordingly, Securitas' motion to dismiss is
Because the third-party complaints fail to state a derivative claim against Chardon, thereby contravening Rule 14(a)(1), the Court
For these reasons, Chardon's motion to dismiss is