Travelers Cas. & Sur. Co. of Am. v. Vazquez-Colon

TRAVELERS CAS. & SUR. CO. OF AM., Plaintiff, Counter Defendant, v. ALBERTO VÁZQUEZ COLÓN; HILDA PIÑEIRO CÁCERES; CARLOS GONZÁLEZ TORRES; IVETTE GÓMEZ DÍAZ; MIGUEL BERMÚDEZ CARMONA; ALUMA CONSTR. CORP.; VIEQUES CONCRETE MIX CORP.; INTER-ISLAND FERRY SYS. CORP.; VIEQUES F.O.& G INC., and; PUERTO RICO AQUEDUCTS AND SEWER AUTH.; et al., Defendants,

Cross Claimants, Counter Claimants, Cross Defendants.

No. 18-1795 (GAG)

United States District Court, D. Puerto Rico

September 15, 2021

OMNIBUS OPINION & ORDER

GUSTAVO A. GELPI, United States District Judge.

Travelers Casualty & Surety Company of America (“Travelers”) filed this action against Aluma Construction Corp., Alberto Vázquez Colón Hilda Piñeiro Cáceres, Carlos González Torres, Ivette Gómez Díaz, Miguel Bermudez Carmona, Vieques Concrete Mix Corp., Inter-Island Ferry System Corp., Vieques F.O. & G, Inc. (collectively, the “Indemnitors” and/or “Aluma”), and the Puerto Rico Aqueduct and Sewer Authority (“PRASA”) to obtain indemnification from Indemnitors and subrogation from PRASA as to surety claims Travelers paid to laborers and materialmen in the rehabilitation and completion of the Marisol, Kennedy, Vegas and Camaselles Sanitary Sewer System (the “Construction Project”) in Toa Baja, Puerto Rico. (Docket No. 33).

The Indemnitors answered^[1] and counterclaimed against Travelers alleging it failed to sign the closing documents when the Construction Project was completed as well as crossclaims against PRASA of: (1) reimbursement for any damages Indemnitors might pay to Travelers from this suit, (2) monies owed from services rendered, and (3) commercial torts. (Docket No. 85).

Presently before the Court are PRASA's motion for partial summary judgment as to Indemnitors' crossclaim for breach of contract, (Docket No. 354), Indemnitors' motion for summary judgment, ^[2] (Docket No. 366), and Travelers' motion for summary judgment, (Docket No. 376), as well as motion for judgment on the pleadings as to Indemnitors' counterclaim, (Docket No. 375). Travelers also filed an alternative motion for summary judgment as to Indemnitors' counterclaim. (Docket No. 387). PRASA Indemnitors, and Travelers all submitted statement of facts, respectively. (Docket Nos. 354-1; 366-1; 376-1).

PRASA moves to strike Indemnitors' statement of facts alleging that it fails to comply with Local Rule 56(e), L. Cv. R. 56(e) (D.P.R. 2020). (Docket No. 381). As such, the Court will first determine whether to strike Indemnitors' statement of facts before propounding upon the factual background of the pending motions for summary judgment.

I. Indemnitors, Travelers, and PRASA's Statement of Facts and PRASA's Motion to Strike

A. Local Rule 56

A party that moves for summary judgment must show “that there is no genuine dispute as to any material fact” in order to succeed. Fed.R.Civ.P. 56(a). Rule 56 requires that the movant support the factual assertions allegedly not in dispute with citations “to particular parts of materials in the record[.]” Id. at 56(c)(1)(A). Working together with Rule 56, Local Rule 56(b) requires a movant to include a separate statement of material facts and to support each factual assertion with a citation to the evidentiary record. L. Cv. R. 56(b) (D.P.R. 2020). In addition, Local Rule 56(e) requires that the citation to the record specifically include “the specific page or paragraph of identified record material supporting the assertion.” Id. at 56(e); see also Natal Pérez v. Oriental Bank & Tr., 291 F.Supp.3d 215, 218 (D.P.R. 2018).

PRASA contends that the Indemnitors' statement of facts used exhibits that left out the specific page or paragraph of the identified record material that support a given proposed fact. (Docket No. 381 ¶ 7). PRASA cites to P.R. Am. Ins. v. Rivera-Vázquez, 603 F.3d 125, 130 (1st Cir. 2010), Toledo-Colón v. Puerto Rico, 941 F.Supp.2d 234, 239 (D.P.R. 2013), and Local Rule 56(c) and (e), L. Cv. R. 56 (c), (e) (D.P.R. 2009), to argue that Indemnitors' behavior overlooks the root purpose of the anti-ferret rule. (Docket No. 381 ¶¶ 8-10, 12-13). For example, PRASA indicates that Indemnitors' proposed fact at paragraph 20 does not contain record citation to support it, in violation of Local Rule 56(e). (Docket No. 381 ¶ 14). Thus, PRASA requests the Court to strike Indemnitors' entire statement of facts. (Docket No. 381 at 5).

After considering Indemnitors' opposition, (Docket No. 404), PRASA's reply, (Docket No. 411), Indemnitors' sur-reply, (Docket No. 427), as well as an independent review of all statements of facts, (Docket Nos. 354-1; 366-1; 376-1), the Court finds that Indemnitors' statement of facts appropriately cited to the specific page or paragraph of identified record material supporting their proposed facts. As such, the Court DENIES PRASA's motion to strike under Local Rule 56(e) at Docket No. 381. Notwithstanding, if deemed necessary, the Court shall disregard any proposed fact submitted by the parties that is unsupported by record citation to the specific page or paragraph. The United States Court of Appeals for the First Circuit has consistently held that litigants ignore Local Rule 56 at their own peril. See Cabán Hernández v. Philip Morris USA, Inc., 486 F.3d 1, 7 (1st Cir. 2007). The Court will employ its judicial common sense when interpreting whether the citation provided violates the anti-ferret rule and shall decide accordingly.

II. Relevant Factual Background

A. Construction Contract

On September 14, 2010, PRASA and Aluma entered into a contract titled “Agreement for the Rehabilitation and Completion of the Marisol, Kennedy, Vegas, and Camaselles Sanitary Sewer System, Sabana Seca Ward, Toa Baja, Puerto Rico” (the “Construction Contract”) to build the Construction Project. (Docket Nos. 354-1 ¶ 3; 354-2; 366-1 ¶ 1; 366-2 at 1-9). The owner of the Construction Project is PRASA. (Docket Nos. 33 ¶ 23; 85 ¶ 23; 148 ¶ 12; 376-1 ¶ 19). The Construction Contract constituted the entire integrated contract between PRASA and Aluma. (Docket Nos. 354-1 ¶ 6; 354-2 at 5; 366-2 at 5).

The rights and obligations between PRASA and Aluma arise from the Construction Contract as well as from the supplemental contract documents. (Docket Nos. 354-1 ¶¶ 5, 7; 354-2 at 3; 366-2 at 3). The “General Conditions” is a supplemental contract document in the Construction Contract and considered part of the Construction Contract. (Docket Nos. 354-1 ¶¶ 7-8, 10; 354-2 at 3; 354-3; 366-2 at 3; 380-24). In addition, the Change Orders are supplemental contract documents in the Construction Contract as well as considered a part of the Construction Contract. (Docket Nos. 354-1 ¶¶ 9, 14; 354-2 at 3; 354-6; 354-7; 366-1 ¶ 7; 366-7). “Change Orders” are defined in the General Conditions. (Docket Nos. 354-1 ¶ 11; 354-3 at 1, 2-3; 380-24 at 43, 112-13). The General Conditions also outline what is included as part of the “Cost of the Work” and what is excluded from said definition. (Docket Nos. 354-1 ¶ 12; 354-3 at 4-5, 6-7; 380-24 at 106-09).

On June 16, 2014, Aluma sent PRASA a letter submitting a “Modified Total Cost” claim. (Docket Nos. 354-1 ¶ 13; 354-4; 380-25 at 1-10). Two days later, Aluma sent PRASA a letter amending its Modified Total Cost as follows:

• Actual Cost Incurred - $9, 100, 158.74

• Cost of Equipment used by Aluma - $1, 287, 062.64

• Home Office Overhead - $975, 491.13

• Earnings Not Received by Aluma - $910, 017.72

• Cost of Damages to Aluma's Shareholders- $1, 000, 000.00

• Damages for Aluma closure- $2, 400, 000.00

• Total Amount Claimed - $8, 589, 720.58

(Docket Nos. 354-1 ¶ 13; 354-5; 380-25 at 11-13). In Change Order L, the parties executed two (2) separate but substantially identical documents to reflect its content and incorporated the Modified Total Cost into the Construction Contract. (Docket Nos. 354-1 ¶ 15; 354-6; 354-7; 366-7 at 74-76, 78-82). Change Order L states:

FOURTH: [Aluma] declares that a “Modified Total Cost” (MTC) claim was submitted to CH Caribe/PRASA on June 16, 2014 and amended on June 18, 2014. The alleged claims are regarding loss of productivity, costs for the use of Aluma equipment, site office overhead, [home] office overhead, costs to finance project and interest charged, loss of potential earnings on other projects, costs for closing corporation and cost for damages to Aluma partners, among other conditions as indicated and justified in the MTC.

FIFTH: [Aluma] reserves its right to pursue the alleged claims as stated in the MTC in the appropriate forum. PRASA reserves its right to raise any and all affirmative defenses based on the merits of the alleged claims in the MTC submitted by [Aluma], and the [c]ontract documents [in the Construction Contract].

SIXTH: This Written Amendment does not cause, and [Aluma] will not claim, additional economic impact costs to the [Construction] Contract, except for those above mentioned in the [FOURTH clause].

(Docket Nos. 354-1 ¶ 16; 354-6 at 2; 354-7 at 4; 366-7 at 75, 81). However, Aluma's proposed economic damages expert, CPA Armando Suárez, issued a report in which he lists Aluma's claims for damages as follows:

• Direct and Indirect Project Costs (Not Including Own Equipment) - $9, 355, 181

• Equipment Used - $1, 181, 031

• Central Office Overhead - $378, 009

• Percentage of [Aluma] Estimated Profit (12%) - $433, 109

• Loss of Interest Income - through 12/31/2020 - $1, 530, 620

• Insurance (1.2%) - $43, 311

• Municipal Taxes and Toa Baja “Patents” (5.5%) - $198, 508

• Total Estimated Damage - $5, 814, 791

(Docket Nos. 354-1 ¶ 17; 354-8; 366-9 at 18).^[3]

B. General Agreement of Indemnity

On October 4, 2012, Vázquez Colón, Piñeiro Cáceres, González Torres, Gómez Díaz, and Bermúdez Carmona subscribed a General Agreement of Indemnity (the “GAI” contract) with...