Galarza-Cruz v. Grupo Hima San Pablo, Inc.

YADIRA GALARZA-CRUZ, Plaintiff, v. GRUPO HIMA SAN PABLO, INC.; CENTRO MÉDICO DEL TURABO, INC.;JOCAR ENTERPRISES CORP.; FERNADNO RODRÍGUEZ;LIBERTY INTERNATIONAL UNDERWRITERS; JOHN DOE; JANE ROE;INSURANCE COMPANIES B AND C Defendants.

CIVIL NO. 17-1606 (RAM)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

May 28, 2020

OPINION AND ORDER

RAÚL M. ARIAS-MARXUACH, U.S. District Judge

Pending before the Court is co-defendant Liberty Mutual Insurance Company's Motion for Summary Judgment and Memorandum in Support, accompanied by a Statement of Uncontested Material Facts. (Docket Nos. 84 and 84-1). For the reasons discussed below, having considered the parties' submissions both in opposition and support of the same, the Court hereby GRANTS Defendants' Motion for Summary Judgment. (Docket No. 84).

I. PROCEDURAL BACKGROUND

On May 8, 2017, Plaintiff Yadira Galarza-Cruz ("Galarza" or "Plaintiff") sued Grupo HIMA San Pablo, Inc. ("Grupo HIMA"); JOCAR Enterprises, Inc. ("JOCAR"); Centro Médico del Turabo, Inc. ("CMT"); Joaquín Rodríguez; and Fernando Rodríguez for sex discrimination, retaliation, wrongful discharge and damages pursuant to Title VII of the Civil Rights Act, 42 U.S.C. § 2000e, et seq. ("Title VII") and various Puerto Rico labor statutes.¹ (Docket No. 1). On January 8, 2018, this Court granted the co-defendants' motions to dismiss and issued a Memorandum and Order dismissing various of Plaintiff's claims. (Docket No. 39).

Plaintiff subsequently filed an Amended Complaint, substituting the previously unnamed co-defendant "insurance Company A" with Liberty Mutual Insurance Company ("Liberty" or "Liberty Mutual"), who issued an insurance policy to Grupo HIMA. (Docket No. 46 ¶¶ 24-25. Plaintiff also dropped Joaquin Rodríguez as a co-defendant and eliminated several claims, pursuant to the Memorandum and Order. Id. The remaining co-defendants, including Liberty, filed timely, individual answers to the Amended Complaint. (Docket Nos. 48, 49, 50, 51, 55).

In its Answer to the Amended Complaint, Liberty asserted the following affirmative defenses:

24. Liberty raises as an affirmative defense all the terms, conditions, limitations,exclusions, endorsements and immunities contained in the applicable insurance policy, titled "Executive Advantage Policy", policy number VKUDO-000197-16 issued to Grupo HIMA San Pablo, Inc. (hereinafter "the Insured") for the policy period of December 31, 2016 and December 31, 2017 (hereinafter "the Policy").

[...]

29. Liberty reserves the right to deny coverage for the instant case due to noncompliance with the notice requirement under the Policy and under any other policy issued by Liberty to the Insured, for any of the claims raised by Plaintiff against the Insured.

30. Liberty reserves the right to deny coverage for the instant case under any of the terms, exclusions, conditions and endorsements of the Policy and under any other policy issued by Liberty to the Insured.

(Docket No. 55 at 17-18).

On May 31, 2019, Liberty filed a Motion for Summary Judgment and Memorandum in Support, with an accompanying Statement of Uncontested Material Facts. (Docket Nos. 84 and 84-1). Essentially, Liberty alleges that Grupo HIMA failed to timely report Plaintiff's initial claim against it in accordance with the terms and conditions of Liberty's insurance policy. (Docket No. 84 at 5). Accordingly, Liberty contends that Galarza's Amended Complaint is not afforded coverage under said policy. Id.

Co-defendants Grupo HIMA, CMT, JOCAR, and Fernando Rodríguez (collectively the "HIMA Defendants") filed a joint Response to Liberty Mutual's Motion for Summary Judgment claiming that Liberty did not raise the coverage issue in a timely manner that would allow them to conduct discovery. (Docket No. 98). Moreover, they argue that Liberty needs to file a cross-claim to assert the lack of coverage. Id. at 3. The HIMA Defendants also contend that Liberty "is estopped from denying coverage for failure to notify because the past practices between the parties created the reasonable expectation that coverage would be granted." Id. at 10.

Lastly, Liberty filed a Reply and the HIMA Defendants filed a Sur-Reply. (Docket Nos. 114 and 124, respectively). Galarza did not file a response.

II. LEGAL STANDARD

Motions for summary judgment are governed by Fed. R. Civ. P. 56(a). Summary judgment is proper if the movant shows that (1) there is no genuine dispute as to any material fact and (2) they are entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). "A dispute is 'genuine' if the evidence about the fact is such that a reasonable jury could resolve the point in favor of the non-moving party." Thompson v. Coca-Cola Co., 522 F.3d 168, 175 (1st Cir. 2008). A fact is considered material if it "may potentially 'affect the outcome of the suit under governing law.'" Albite v. Polytechnic Univ. of Puerto Rico, Inc., 5 F. Supp. 3d 191, 195 (D.P.R. 2014) (quoting Sands v. Ridefilm Corp., 212 F.3d 657, 660-661 (1st Cir. 2000)).

The moving party has "the initial burden of demonstrat[ing] the absence of a genuine issue of material fact with definite and competent evidence." Mercado-Reyes v. City of Angels, Inc., 320 F. Supp. 344, at 347 (D.P.R. 2018) (quotation omitted). The burden then shifts to the nonmovant, to present "competent evidence to rebut the motion." Bautista Cayman Asset Co. v. Terra II MC & P, Inc., 2020 WL 118592, at 6* (quoting Méndez-Laboy v. Abbott Lab., 424 F.3d 35, 37 (1st Cir. 2005)). A nonmoving party must show "that a trialworthy issue persists." Paul v. Murphy, 948 F.3d 42, 49 (1st Cir. 2020) (quotation omitted).

While a court will draw all reasonable inferences in favor of the non-movant, it will disregard conclusory allegations, unsupported speculation and improbable inferences. See Johnson v. Duxbury, Massachusetts, 931 F.3d 102, 105 (1st Cir. 2019). Moreover, the existence of "some alleged factual dispute between the parties will not affect an otherwise properly supported motion for summary judgment." Scott v. Harris, 550 U.S. 372, 379 (2007) (quotation omitted). The court must review the record in its entirety and refrain from making credibility determinations or weighing the evidence. See Reeves v. Sanderson Plumbing Products, Inc., 530 U.S. 133, 135 (2000).

In this District, summary judgment is also governed by Local Rule 56. See L. CV. R. 56(c). Per this Rule, an opposing party must "admit, deny or qualify the facts supporting the motion for summary judgment by reference to each numbered paragraph of the moving party's statement of material facts." Id. Furthermore, unless the fact is admitted, the opposing party must support each denial or qualification with a record citation. Id.

Additionally, Local Rule 56(c) allows an opposing party to submit additional facts "in a separate section." L. CV. R. 56(c). Given that the plain language of Local Rule 56(c) specifically requires that any additional facts be stated in a separate section, parties are prohibited from incorporating numerous additional facts within their opposition. See Natal Pérez v. Oriental Bank & Trust, 291 F. Supp. 3d 215, 218-219 (D.P.R. 2018) (quoting Carreras v. Sajo, Garcia & Partners, 596 F.3d 25, 32 (1st Cir. 2010) and Malave-Torres v. Cusido, 919 F.Supp. 2d 198, 207 (D.P.R. 2013)).

If a party opposing summary judgment fails to comply with Local Rule 56(c)'s strictures, "a district court is free, in the exercise of its sound discretion, to accept the moving party's facts as stated." Caban Hernandez v. Philip Morris USA, Inc., 486 F.3d 1, 7 (1st Cir. 2007). Thus, litigants ignore this rule at their peril. See Natal Pérez, 291 F. Supp. 3d at 219 (citations omitted).

III. FINDINGS OF FACT

To make findings of fact, the Court analyzed Liberty's Statement of Uncontested Material Facts (Docket No. 84-1), HIMA'S Response to Liberty Mutual's Statement of Uncontested Facts (Docket No. 98-1 at 1-3), including the HIMA Defendants' Additional Statement of Uncontested Facts (Docket No. 98-1 at 4-5), and Liberty's Reply Statement of Uncontested Material Facts. (Docket No. 114-1).

After only crediting material facts that are properly supported by a record citation and uncontroverted, the Court makes the following findings of fact²:

A. Terms of the Insurance Policy

1. Liberty Mutual Insurance Company, issued an "Executive Advantage Policy", policy number VKUDO-000197-16 to Grupo HIMA San Pablo, Inc. (hereinafter "the Insured" or "Grupo HIMA")) for the Policy Period of December 31, 2016 and December 31, 2017 (hereinafter "the Policy"). (Docket No. 84-1 ¶ 1).

2. The Policy is a "claims made policy." Id. ¶ 2.

3. Pursuant to the Policy's declarations and terms, it "covers only claims first made against the insureds during the policy period or discovery period if applicable, and reported to the insurer as soon as practicable but in no event later than 60 days after the end of the policy period or discovery period if applicable." (Docket Nos. 84-1 ¶ 2; 84-2 at 1, 6).

4. Likewise, Section 7 of the Policy establishes the following reporting requirement: "The Insureds, as a condition precedent to their rights under this Policy, shall report every Claim to the Insurer as soon as practicable but in no event later than 60 days after the end of the Policy Period or Discovery Period, if applicable." (Docket No. 84-2 at 6).

5. Pursuant to the Policy, "Policy Period means the period from the inception date set forth in Item II of the Declarations to the expiration date set forth in Item II of the Declarations, or its earlier termination pursuant to Section 23." (Docket Nos. 84-1 ¶ 5; 84-2 at 11).

6. Item II of the Declaration states that the Policy Period's Inception Date is December 31, 2016 and its Expiration Date is December 31, 2017. (Docket No. 84-2 at 1).

7. The definition of "Claim" in the Policy is the following:

(a)a written demand for monetary or non-monetary relief against an Insured Person or, with respect to Insuring Agreement 1.3, against the Insured

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