Perez-De-Munoz v. Volvo Car Corp.

United States Court of Appeals
For the First Circuit

No. 00-1867

ALMA I. PEREZ ET AL.,
Plaintiffs, Appellants,

v.

VOLVO CAR CORPORATION,
Defendant, Appellee.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. José Antonio Fusté, U.S. District Judge]

Before

Selya, Circuit Judge,

Coffin, Senior Circuit Judge,

and Acosta,* Senior District Judge.

Gordon T. Walker, with whom Marc E. Sorini, Laura McLane,
and McDermott, Will & Emery were on brief, for appellants.
Gael Mahony, with whom Alexander W. Moore, Shannon McCarthy
Jandorf, Joseph C. Lyons, Hill & Barlow, Rubén T. Nigaglioni,
Veronica Ferraiuoli Hornedo, Joanne Habib Figueroa, and
McConnell Valdes were on brief, for appellee.

May 2, 2001
_____________
*Of the District of Puerto Rico, sitting by designation.
 SELYA, Circuit Judge. In this case, purchasers of

certain Volvo automobiles claim that they were tricked into

overpaying for their cars. The district court, referring to our

decision in Bonilla v. Volvo Car Corp., 150 F.3d 62 (1st Cir.

1998), declared that the doctrine of res judicata barred this

suit and granted the manufacturer's motion for summary judgment.

Although we disagree with the district court's rationale, we

affirm the entry of summary judgment on an alternate ground.

I. BACKGROUND

The complaint in this case alleges that Volvo Car

Corporation (a Swedish automobile manufacturer) acted in concert

with Trebol Motors (its exclusive importer/distributor and

principal dealer in Puerto Rico),1 and other affiliated

individuals and firms, to violate the Racketeering Influenced

and Corrupt Organizations Act (RICO), 18 U.S.C. § 1962. The

gravamen of the plaintiffs' complaint involves allegations that

Volvo assisted in the commission of a series of fraudulent acts.

This is essentially the same approach taken by the Bonilla

plaintiffs in their earlier suit against Volvo, and the reader

who desires more information about how the RICO statute operates

1
Volvo actually dealt with two related entities, Trebol
Motors Corporation and Trebol Motors Distributor Corporation.
Because the distinction is immaterial here, we refer to these
entities, collectively, as "Trebol."

-3-
in this context should consult that opinion. See Bonilla, 150

F.3d at 66-67.

In their third amended complaint, the Bonilla

plaintiffs alleged five frauds. See id. at 67-75. This case is

more narrowly focused. The particular fraud allegations that

matter here are those that we previously characterized as

involving double invoicing and disclosure labeling. Id. at 72-

75. For present purposes, these merge into a single scheme,

which we sometimes call "sticker fraud."

As Bonilla makes clear, id. at 72-74, this scheme had

its genesis in the triangulation of the manufacturer-dealer

relationship caused by the interposition of a Liechtenstein-

based corporation, Auto und Motoren Aktiengesellschaft (AUM),

into that relationship. AUM's ostensible role was as a

guarantor of Trebol's debts to Volvo. The guarantee worked this

way: when Trebol ordered motor vehicles, Volvo would ship them

to Puerto Rico, sending duplicate invoices to both Trebol and

AUM. AUM would pay Volvo. It also would re-invoice Trebol for

the same vehicles, but at higher prices (ostensibly to cover

AUM's "guarantee fee" and a smaller "processing fee").2

2
Trebol actually remitted the higher amounts to AUM,
resulting in the accumulation of a pool of excess funds in
Liechtenstein. The plaintiffs allege that some of these funds
were funneled back to Trebol or its principals. There is no
proof, however, either that Volvo knew of any such kickbacks or

-4-
 The instant case centers on the plaintiffs' allegation

that the double invoicing permitted Trebol to misrepresent

information on disclosure labels (commonly called "stickers")

mandated by law. From 1972 to 1992, a Puerto Rico statute (Law

77) required automobile dealers to affix to each vehicle held

for sale a label disclosing various kinds of data, including the

name and address of the selling entity, the factory cost of the

vehicle, and the "[r]etail price in Puerto Rico suggested by the

seller." 23 P.R. Laws Ann. § 1023 (1987) (repealed 1992). A

parallel federal law also required (and still requires) certain

disclosures. See 15 U.S.C. §§ 1231-1233. The plaintiffs —

Myrna Font, Angel Muñoz, Alma Perez, Venancio Rodríguez, María

Rodríguez, Francisco Ramos, Marina Resto, Francisco Cortez, Ada

Moreno, Efraín González, Migdalia Berdecia, José Colón, and

Mirta Rivera3 — are persons who purchased Volvo automobiles of

the 700, 800, or 900 series in Puerto Rico on various dates

ranging from 1985 to 1993. They maintain — as did the Bonilla

plaintiffs, 150 F.3d at 72-74 — that AUM functioned primarily as

a device to permit Trebol to boost the prices paid by consumers.

that Volvo officials received payments on the side.
3
Certain of the plaintiffs are married to each other, and a
number of conjugal partnerships also are designated as parties
plaintiff.

-5-
 Consistent with this theme, the plaintiffs aver that

Trebol's stickers reflected artificially high "factory costs"

and "manufacturer's suggested retail prices" because Trebol

based those calculations on the inflated figures contained in

the AUM invoices. They further allege that Trebol, which had

copies of the original Volvo-prepared invoices, knew the actual

figures and, consequently, knew that the posted sticker prices

were false and misleading. For their part, the plaintiffs were

exposed to, and duped by, the bogus cost figures displayed on

the stickers of the cars that they bought, and were damaged in

that those fraudulent misrepresentations marked the starting

point for negotiations as to price and caused them to pay more

than they otherwise would have.

Since Trebol has gone bankrupt and is no longer

involved in this case, the plaintiffs' guns are trained on

Volvo. They allege that Volvo knew of, and helped facilitate,

Trebol's nefarious activities by, among other things, allowing

Trebol to misrepresent its costs and condoning Trebol's

arrangement with AUM even though Volvo knew that the guarantees

issued by AUM were worthless. Volvo adamantly denies these

accusations.

The district court stayed proceedings in this case

pending resolution of the Bonilla appeals. That was prudent

-6-
because the Bonilla plaintiffs, comprising a class of persons

who had purchased Volvo automobiles of the 200 series, had

leveled virtually indistinguishable charges and, moreover, had

prevailed at trial. Eventually, however, this court found, as

a matter of law, that the Bonilla plaintiffs had offered

insufficient evidence of Volvo's awareness of, or participation

in, the ongoing fraud. See Bonilla, 150 F.3d at 72-76.4 Volvo

then moved for summary judgment in this case, alleging that

here, as in Bonilla, the plaintiffs had failed to tie Volvo to

the fraudulent scheme. The plaintiffs opposed the motion, but

the district court granted it, adverting to our decision in

Bonilla and invoking the doctrine of res judicata. The

plaintiffs moved unsuccessfully for reconsideration and then

filed this timely appeal.

II. THE SUMMARY JUDGMENT STANDARD

4
After mandate issued, the Bonilla plaintiffs docketed a
motion in the district court entitled "Informative Motion
Regarding Fraud by Volvo Sufficient to Warrant Further Discovery
and Potentially Re-Open the Judgment." In support of this
motion, they filed the Gonzalez affidavit, discussed infra Part
IV(A). On April 16, 2001, the district court (Pieras, J.)
granted the motion in part, allowing discovery to go forward on
the issue of Volvo's alleged misconduct. The court specifically
reserved decision as to whether it would (or could) reopen the
judgment and order a new trial. Notwithstanding these ongoing
proceedings, the Bonilla judgment may be regarded as final for
res judicata purposes. See Cruz v. Melecio, 204 F.3d 14, 20-21
(1st Cir. 2000); see also 18 James Wm. Moore et al., Moore's
Federal Practice §§ 131.20[2][c] (3d ed. 1999).

-7-
 This appeal stems from an order granting summary

judgment. Since we have written at length about the

jurisprudence associated with that procedural device, e.g.,

McCarthy v. Northwest Airlines, Inc., 56 F.3d 313, 314-15 (1st

Cir. 1995) (collecting cases), an outline suffices here.

A district court may enter summary judgment only to the

extent that "the pleadings, depositions, answers to

interrogatories, and admissions on file, together with the

affidavits, if any, show that there is no genuine issue as to

any material fact and that the moving party is entitled to a

judgment as a matter of law." Fed. R. Civ. P. 56(c). To

determine whether these criteria have been met, a court must

pierce the boilerplate of the pleadings and carefully review the

parties' submissions to ascertain whether they reveal a

trialworthy issue as to any material fact. Grant's Dairy-Me.,

LLC v. Comm'r of Me. Dep't of Agric., Food & Rural Res., 232

F.3d 8, 14 (1st Cir. 2000). In applying this screen, the court

must construe the record and all reasonable inferences from it

in favor of the nonmovant (i.e., the party opposing the summary

judgment motion). Suarez v. Pueblo Int'l, Inc., 229 F.3d 49, 53

(1st Cir. 2000). In this formulation, an absence of evidence on

a critical issue weighs against the party — be it the movant or

the nonmovant — who would bear the burden of proof on that issue

-8-
at trial. See Torres Vargas v. Santiago Cummings, 149 F.3d 29,

35-36 (1st Cir. 1998); Garside v. Osco Drug, Inc., 895 F.2d 46,

48 (1st Cir. 1990).

In appraising summary judgment orders, an appellate

court applies essentially the same standards. See Werme v.

Merrill, 84 F.3d 479, 482 (1st Cir. 1996). Withal, the

appellate tribunal is not wed to the trial court's reasoning.

Because appellate review is plenary, the court of appeals may,

if the occasion arises, "reject the rationale employed by the

lower court and still uphold its order for summary judgment."

Houlton Citizens' Coalition v. Town of Houlton, 175 F.3d 178,

184 (1st Cir. 1999). In other words, we may affirm the entry of

summary judgment on any ground made manifest by the record. See

Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir. 1991).

Against this backdrop, we divide the discussion that

follows into two parts. First, we examine the district court's

stated rationale. Finding that rationale unpersuasive, we

address Volvo's alternate line of defense.

III. THE DISTRICT COURT'S RATIONALE

As said, the district court decided this case on the

basis of res judicata. Federal law determines the preclusive

effect of a judgment previously entered by a federal court. See

Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n, 142 F.3d

-9-
26, 37 (1st Cir. 1998). Under federal law, the doctrine of res

judicata dictates that "a final judgment on the merits of an

action precludes the parties or their privies from relitigating

issues that were or could have been raised in that action."

Allen v. McCurry, 449 U.S. 90, 94 (1980). Three conditions must

be met in order to justify an application of the doctrine: "(1)

a final judgment on the merits in an earlier suit, (2)

sufficient identicality between the causes of action asserted in

the earlier and later suits, and (3) sufficient identicality

between the parties in the two suits." Gonzalez v. Banco Cent.

Corp., 27 F.3d 751, 755 (1st Cir. 1994).

The district court concluded that these conditions had

been fulfilled. As to the first two conditions, this conclusion

is irreproachable: Bonilla went to final judgment, and there is

an apparent congruence between the causes of action asserted

there and here. The third condition, however, is not so easily

overcome.

The lower court thought that the parties in the two

cases — Bonilla and the case at bar — were to all intents and

purposes identical. But in arriving at this conclusion, the

court mistakenly relied on a proposed description of the Bonilla

class, derived from the Bonilla plaintiffs' complaint. The

proposal importuned the court to certify a class of plaintiffs

-10-
that included the named plaintiffs and "all other persons who,

as a direct result of defendants' scheme, . . . bought or

acquired from defendants motor vehicles of the Volvo model 240

GLE and/or any other Volvo model." Withal, the district court

in Bonilla eschewed this proposal. Instead, it ultimately

certified a narrower class composed of "all persons who

purchased or acquired from any of the defendants from 1983 to

the present, Volvo motor vehicles sold as, or represented to be,

new or used 200 Series [vehicles]."

This deviation shrank the boundaries of the Bonilla

class and, in the process, destroyed any basis for a claim that

the Bonilla class encompassed the plaintiffs in this case

(purchasers of Volvo motor vehicles in the 700, 800, or 900

series). The two groups are entirely separate and distinct. It

follows inexorably that identicality of parties does not exist.

While this descriptive difference undermines the

district court's stated rationale, it does not altogether

preclude the possible applicability of res judicata. There are

recognized proxies for identicality of parties, see Gonzalez, 27

F.3d at 757-63, and we briefly explore the record in an effort

to detect their presence.

One such proxy arises when a party has had a

"significant degree of effective control in the prosecution or

-11-
defense of the [earlier] case — what one might term, in the

vernacular, the power — whether exercised or not — to call the

shots." Id. at 758. No such control existed here. By

definition, the plaintiffs in the two cases are owners of

different models of automobiles. The one noteworthy commonality

is that the same attorneys represented the plaintiffs in both

cases. The law is settled, however, that the appearance of

common counsel, without more, does not prove substantial

control. Id. at 759.

The other possible proxy for identicality of parties

is virtual representation. This looks promising at first blush.

There is, in a sense, an identity of interests between the two

sets of plaintiffs: both sued the same manufacturer for damages

suffered as a result of the same alleged chicanery. In order

for this proxy to pertain, however, there must be something more

than a mere confluence of interests (or else, a manufacturer's

successful defense of a product liability suit would bar other

unrelated persons from pressing claims arising out of the same

product defect). For nonparty claim preclusion to operate on

this level, the party urging preclusion (typically, the

defendant) must demonstrate, at a bare minimum, that the

plaintiffs in the second suit had notice of, and an opportunity

to participate in, the earlier suit. See id. at 761. Put

-12-
another way, the doctrine of virtual representation cannot be

used to bar the claim of a person who was not a party to the

earlier suit unless that person, at the least, had actual or

constructive notice of the earlier suit and, thus, a chance to

join it.5 See id.

The case at hand cannot qualify under this rubric. The

record does not suggest (and Volvo does not argue) that the

Volvo owners here (purchasers of vehicles in Volvo's 700, 800,

or 900 series) had either actual or constructive notice of the

Bonilla litigation (brought by purchasers of Volvos in the 200

series).6 Hence, virtual representation is not a viable option

here.

That ends this aspect of the matter. There is no

credible basis for applying res judicata principles in their

5
We do not mean to suggest that notice of, and an
opportunity to join, an earlier suit is all that is required for
virtual representation. These are, however, the most
abecedarian requirements — and since they are not satisfied
here, we need go no further.
6
Although this case and the earlier case involved different
vehicle models, one plaintiff — Efraín González — straddles both
cases because he owned a Volvo of the 200 series as well as a
Volvo of the 700 series. We do not regard this minuscule
overlap as significant. González was not a named plaintiff in
the Bonilla case, and the class notice that he received
specifically stated that the suit involved only Volvos in the
200 series. Nothing in the record suggests that he was put on
notice that an adjudication of the claims before the Bonilla
court would preclude later claims involving other Volvo
automobiles.

-13-
classic iteration to bar the plaintiffs' suit. By like token,

the facts necessary to support related theories of nonparty

claim preclusion do not lurk in the penumbra of this record.

Accordingly, we disavow the district court's stated rationale.

IV. THE ALTERNATE LINE OF DEFENSE

Volvo hypothesizes that it was entitled to brevis

disposition on an alternate ground: insufficiency of the

evidence. We test this hypothesis.

As we have said, the plaintiffs' claim against Volvo

builds upon the RICO statute. Both sides agree that this claim

depends, inter alia, on the plaintiffs' ability to show the

conduct of an "enterprise" through a "pattern of racketeering

activity." 18 U.S.C. § 1962(c). In turn, this requires a

corollary showing of "at least two acts of racketeering

activity" within ten years of each other. Id. § 1961(5). For

summary judgment purposes, the plaintiffs have attempted to

satisfy this "predicate act" requirement by proving numerous

instances of mail and wire fraud. See id. § 1961(1)(B)

(defining racketeering activities to include mail and wire

fraud). As a practical matter, this strategic choice makes a

showing of attribution — that is, Volvo's complicity in no fewer

than two of the predicate acts — crucial to the success of the

-14-
plaintiffs' RICO claim. See Bonilla, 150 F.3d at 66; Ahmed v.

Rosenblatt, 118 F.3d 886, 888-89 (1st Cir. 1997).

To prove mail or wire fraud attributable to Volvo, the

plaintiffs must adduce evidence of (1) a scheme to defraud; (2)

Volvo's knowing and purposeful participation in the scheme,

intending to defraud; and (3) the use of the mails or interstate

wire or radio communication in furtherance of the scheme.

Bonilla, 150 F.3d at 66; United States v. Cassiere, 4 F.3d 1006,

1011 (1st Cir. 1993); McEvoy Travel Bureau, Inc. v. Heritage

Travel, Inc., 904 F.2d 786, 790 (1st Cir. 1990). Thus, in order

to survive summary judgment, the plaintiffs must proffer

competent evidence on each of these three elements — evidence

which, when taken in the light most favorable to them, suffices

to create a jury question. This quantum of evidence is

analogous to the quantum of evidence needed at trial to defeat

a Rule 50 motion for judgment as a matter of law. See Cont'l

Grain Co. v. PRMSA, 972 F.2d 426, 431 (1st Cir. 1992). Given

that comparability, Bonilla (which was decided under the

"judgment as a matter of law" standard) serves as a useful

prototype for the inquiry we must undertake.

In Bonilla, 150 F.3d at 72-75, the plaintiffs' "sticker

fraud" evidence was adequate as to the first and third elements,

but fizzled on the second; we ruled that the evidence did not

-15-
support a finding that the acts of mail or wire fraud could be

attributed to Volvo. Essentially the same evidence has been

proffered here, and Volvo does not raise any questions of

evidentiary sufficiency as to the first and third elements of

the plaintiffs' prima facie case. We assume, therefore, that

the record establishes trialworthy issues as to the existence of

the "sticker fraud" scheme and the repeated use of the mails and

international telephone lines to facilitate that scheme. Thus,

we train the lens of our inquiry on the second element: Volvo's

knowing and willful participation in the scheme (and its intent,

if any, to defraud).

Bonilla decided, as a matter of law, that the

plaintiffs there had offered insufficient evidence to implicate

Volvo in the fraudulent scheme. See id. at 72-76. Although

Bonilla has no res judicata effect here, see supra Part III, we

nonetheless are bound to follow it, under principles of stare

decisis, insofar as the record now before us does no more than

replicate the same facts that were before us in Bonilla. See

Stewart v. Dutra Constr. Co., 230 F.3d 461, 467 (1st Cir. 2000)

(explaining the operation of stare decisis).

The plaintiffs do not quarrel with this concept, but,

rather, point to new information concerning Volvo's role

(information that was not before this court in Bonilla). This

-16-
new material comprises (1) the affidavit of Ricardo Gonzalez

Navarro (Gonzalez), and (2) two internal Volvo e-mails. We

consider these items sequentially, with a view toward

determining whether, singly or in combination, they fill the

void that the Bonilla court perceived.

A. The Gonzalez Affidavit.

To place the first of these items into perspective, it

is helpful to understand its provenance. Gonzalez was a member

of the family that owned and operated Trebol and, beginning in

1988, served as Trebol's general manager. When the Bonilla

litigation began, Trebol, Gonzalez, and certain of Gonzalez's

relatives were named as defendants, along with Volvo. Years of

acrimonious pretrial proceedings ensued and, somewhere along the

line, Gonzalez opted to depart for Spain. He did not testify in

the Bonilla lawsuit.

Notwithstanding Gonzalez's absence (or, perhaps,

because of it), the Bonilla plaintiffs prevailed at trial. They

lost on appeal. Endeavoring to gain a new trial, they then

"turned" Gonzalez and secured an affidavit from him (signed and

sworn to on September 7, 1999) as part of a negotiated

settlement of the pending lawsuits brought by the Bonilla

plaintiffs against Gonzalez, his family members, and their

business interests. The Bonilla plaintiffs' efforts to obtain

-17-
a new trial remain unresolved, see supra note 4, but the details

need not concern us.

The plaintiffs here submitted the same affidavit —

which we call "the Gonzalez affidavit" — as part of their

opposition to Volvo's motion for summary judgment. Inasmuch as

the affidavit was not before the court of appeals in Bonilla, it

qualifies as new matter — but it is nonetheless controversial.

Like dueling swordsmen, the parties thrust and parry concerning

both the admissibility of this new matter and its probative

force. Volvo asserts that the affidavit should not be

considered at all because it does not conform to the

requirements of the Civil Rules. Whatever portions of the

affidavit avoid this objection, Volvo says, prove nothing of

consequence. The plaintiffs counter that Volvo has forfeited

any right to raise an objection because it did not move to

strike the affidavit. In all events, the plaintiffs urge us to

find that the affidavit both satisfies the baseline requirements

for admissibility and proves a great deal.

In the interest of orderliness, we start our appraisal

with the question of whether Volvo properly preserved its right

to object to the statements contained in the Gonzalez affidavit.

We then mull the admissibility of those statements. Finally, we

assess their probative force.

-18-
 1. The Need for a Motion to Strike. The law as to

what is required to preserve a party's right to object to the

admissibility of statements contained in an affidavit proffered

in connection with a summary judgment motion is not crystal

clear. The plaintiffs invite us to apply literally language

lifted from one sentence in this court's opinion in Lacey v.

Lumber Mutual Fire Insurance Co., 554 F.2d 1204, 1205 (1st Cir.

1977) (stating that, in such circumstances, a party "must move

to strike an [allegedly violative] affidavit," and that "if he

fails to do so, he will waive his objection," thus opening the

door for the court, absent "a gross miscarriage of justice," to

"consider the defective affidavit") (citations and internal

quotation marks omitted). This invitation would, however, make

matters murkier and, in the bargain, require us to ignore the

Lacey court's reasoning. Accordingly, we decline the

invitation.

Statements of law should be taken in context and

applied in a practical, commonsense manner. We believe that

what is required to preserve a party's rights vis-à-vis an

allegedly deficient affidavit is for the dissatisfied party to

(a) apprise the trial court, in a conspicuous manner and in a

timely fashion, that she considers the affidavit defective, and

(b) spell out the nature of the ostensible defects clearly and

-19-
distinctly. Whether the dissatisfied party fulfills these

requirements by means of a motion to strike or in some

substantially equivalent way (say, by an objection or, as here,

in a legal memorandum urging the granting of summary judgment

notwithstanding the affidavit) is of little moment.

This rule is fully consistent with the Lacey court's

reasoning.7 There the court's principal concerns plainly related

to notice and fair play, not to the form which a challenge to an

affidavit might take. Thus, in explicating its rationale, the

court stated:

Were a summary judgment to be set aside
[where no complaint about the affidavit was
lodged in the district court], a party could
play dog in the manger, making no response
to a movant's affidavits with the chances of
both . . . defeating the motion and, if
unsuccessful, of later setting it aside.

Id.

The rule that, in summary judgment proceedings,

something less than a formal motion to strike can suffice to

preserve an objecting party's rights vis-à-vis a defective

affidavit also finds favor in case law from other circuits.

7
This consistency is adequately evinced by the Lacey court's
citation, with approval, 554 F.2d at 1205, of Noblett v. General
Electric Credit Corp., 400 F.2d 442, 445 (10th Cir. 1968), in
which the Tenth Circuit hinged waiver in this sort of situation
to a failure to make "a motion [to strike] or other objection"
(emphasis supplied).

-20-
See, e.g., Williams v. Evangelical Ret. Homes, 594 F.2d 701, 703

(8th Cir. 1979); Associated Press v. Cook, 513 F.2d 1300, 1303

(10th Cir. 1975). Equally as important, the rule coheres with

our post-Lacey jurisprudence. For example, in Maiorana v.

MacDonald, 596 F.2d 1072 (1st Cir. 1979), we found an issue

anent the form of affidavits preserved for review

notwithstanding the defendant's failure to file a motion to

strike. We premised our ruling on two facts: a codefendant had

interposed a written objection to the challenged affidavits, and

the district court had noted the ostensible defects and taken

appropriate action. Id. at 1079 n.9; see also Davis v. Sears,

Roebuck & Co., 708 F.2d 862, 864 (1st Cir. 1983) (suggesting, at

least inferentially, that an oral objection would suffice to

preserve such an issue for appeal).

We need not tarry. While Volvo did not move to strike

the Gonzalez affidavit, it objected seasonably, strenuously, and

specifically to critical portions of the affidavit on the ground

that those excerpts violated Federal Rule of Civil Procedure

56(e). In that fashion, Volvo straightforwardly brought the

claimed shortcomings in the affidavit to the district court's

(and the plaintiffs') attention in a timeous manner. Given

these detailed objections, we conclude that Volvo has

-21-
satisfactorily preserved its right to challenge the Gonzalez

affidavit in this proceeding.

2. Admissibility. We next inspect the Gonzalez

affidavit to determine the admissibility of the statements

contained therein. For ease in reference, we have reprinted the

material portions of the affidavit as an appendix to this

opinion. In so doing, we have omitted paragraphs 21 through 27,

all of which deal with aspects of the broader array of claims

asserted by the Bonilla plaintiffs (the so-called "five

frauds"), but not with the sticker fraud scheme.

The question of admissibility is governed by Rule

56(e). That rule provides:

Supporting and opposing affidavits shall be
made on personal knowledge, shall set forth
such facts as would be admissible in
evidence, and shall show affirmatively that
the affiant is competent to testify to the
matters stated therein.

Fed. R. Civ. P. 56(e). The rule requires a scalpel, not a

butcher knife. The nisi prius court ordinarily must apply it to

each segment of an affidavit, not to the affidavit as a whole.

Akin v. Q-L Invs., Inc., 959 F.2d 521, 531 (5th Cir. 1992) ("On

a motion for summary judgment, the district court should

disregard only those portions of an affidavit that are

inadequate and consider the rest."). We therefore take a

-22-
selective approach to the Gonzalez affidavit, intending to

disregard those parts of it that are inadmissible and to credit

the remaining portions. See Casas Office Machs., Inc. v. Mita

Copystar Am., Inc., 42 F.3d 668, 682 (1st Cir. 1994).

In conducting this tamisage, personal knowledge is the

touchstone. See Sheinkopf v. Stone, 927 F.2d 1259, 1271 (1st

Cir. 1991) ("It is apodictic that an affidavit . . . made upon

information and belief . . . does not comply with Rule 56(e).")

(citations and internal quotation marks omitted). Of course,

the requisite personal knowledge must concern facts as opposed

to conclusions, assumptions, or surmise. Stagman v. Ryan, 176

F.3d 986, 995 (7th Cir. 1999). While the line between facts and

non-facts often seems blurry, courts nonetheless must strive to

plot it. Cf. Dartmouth Review v. Dartmouth Coll., 889 F.2d 13,

16 (1st Cir. 1989) (explaining, in the context of a motion to

dismiss, that "facts are susceptible to objective verification"

whereas conclusions "are empirically unverifiable in the usual

case").

The Gonzalez affidavit is a mixed bag. Some portions

of it plainly meet the requirements of Rule 56(e), while others

obviously do not. For instance, Gonzalez's statements about his

job responsibilities and Trebol's overall working relationship

with Volvo (e.g., Appendix, ¶¶ 2, 3, 5) are based on personal

-23-
knowledge and, accordingly, are properly considered for summary

judgment purposes. But his statements anent the origins of

Trebol's relationship with AUM (Appendix, ¶ 7) are a different

matter. Because the record makes manifest that the relationship

began before Gonzalez became Trebol's general manager, his

statements about the early years of the Volvo/Trebol/AUM

arrangement cannot properly be considered.

This comparison illustrates the general nature of what

must be done to separate wheat from chaff. We refrain, however,

from classifying every statement in the Gonzalez affidavit. The

proof of the pudding lies in those (relatively few) paragraphs

which, if admissible, tend to prove Volvo's complicity in the

sticker fraud. We turn, then, to those paragraphs, assuming,

for argument's sake, that the remainder of the affidavit passes

muster.

Paragraph 8 reads:

Volvo knew about the higher AUM invoice cost
figures. From my personal discussions with
various Volvo representatives, I know that
Volvo was fully aware of the relationship
between Trebol and AUM, including the nature
and amount of the guarantees.

If admissible, these statements are little short of damning. We

conclude, however, that they cannot be considered. Although the

statements purport to be based on personal knowledge, they are

totally lacking in specificity about the identity of the "Volvo

-24-
representatives" with whom Gonzalez ostensibly spoke, when those

alleged conversations occurred, what was said, how Volvo "knew

about the higher AUM invoice cost figures," and how Gonzalez

"kn[e]w" the extent of Volvo's knowledge. Affidavits purporting

to describe meetings or conversations need not spell out every

detail, but to receive weight at the summary judgment stage they

must meet certain rudiments. Statements predicated upon

undefined discussions with unnamed persons at unspecified times

are simply too amorphous to satisfy the requirements of Rule

56(e), even when proffered in affidavit form by one who claims

to have been a participant. See Jefferson Constr. Co. v. United

States, 283 F.2d 265, 267 (1st Cir. 1960); Alger v. United

States, 252 F.2d 519, 521 (5th Cir. 1958); see also 11 James Wm.

Moore et al., Moore's Federal Practice ¶ 56.14[1][d] (3d ed.

1997) ("The affidavit, in addition to presenting admissible

evidence, must be sufficiently specific to support the affiant's

position.").

For similar reasons, we find the statements contained

in paragraphs 9, 14, 16, and 20 of the Gonzalez affidavit to be

insufficiently supported with particularized factual

information. The same holds true for the last two sentences of

paragraph 19. Although these statements purport to deal with

Volvo's knowledge of ongoing events, they are conclusory rather

-25-
than factual. See, e.g., Appendix ¶ 20 ("[T]here is no doubt

that Volvo did in fact know of the stickers' contents."). Such

gauzy generalities are not eligible for inclusion in the summary

judgment calculus.

We add a coda. We think it bears mentioning that, in

December of 1999 — three months after Gonzalez switched sides

and executed the affidavit — the parties took his deposition in

this case. Although both sides offer an occasional reference to

the deposition, the complete transcript is not part of the

summary judgment record. More importantly, the plaintiffs do

not claim that Gonzalez, when deposed, divulged the specifics

(names, dates, places, and the like) that are so conspicuously

absent from his affidavit. The plaintiffs' failure to fill the

gaps in the Gonzalez affidavit, despite ample opportunity to do

so, seals the deal.

3. Probative Value. We proceed at last to the

question of whether the admissible portions of the Gonzalez

affidavit (all the challenged statements other than those

specifically proscribed above), when added to the proof

marshaled at trial by the Bonilla plaintiffs, create a genuine

issue of material fact anent Volvo's knowledge of the fraudulent

scheme (and, thus, allow the plaintiffs to avert the swing of

the summary judgment ax). For the plaintiffs to achieve this

-26-
safe haven, the proof must consist of something more than

grounds for suspecting that Volvo knew of the ongoing

machinations. See Dow v. United Bhd. of Carpenters & Joiners,

1 F.3d 56, 58 (1st Cir. 1993) (holding that "unsupported

speculation" will not suffice to block summary judgment);

Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st

Cir. 1990) (same). The mustered evidence must be significantly

probative of specific facts. See Anderson v. Liberty Lobby,

Inc., 477 U.S. 242, 249-50 (1986); Sheinkopf, 927 F.2d at 1262.

The decisive question here reduces to whether the

redacted Gonzalez affidavit, when married to the evidence

adduced during the Bonilla trial, is "significantly probative"

on the issue of Volvo's complicity in the fraud. We know from

the surviving portions of the Gonzalez affidavit that Volvo had

a close working relationship with Trebol, including frequent

inter-staff communications; that Volvo representatives regularly

visited Trebol's showroom in Puerto Rico (and from time to time

saw stickers displayed on vehicles offered for sale); that Volvo

executives periodically reviewed Trebol's financial statements;

that Volvo knew of, and did not object to, the Trebol-AUM

guarantee arrangement; that Volvo produced and sent to both AUM

and Trebol original invoices for each motor vehicle shipped;

that AUM, in turn, re-invoiced Trebol, invariably showing a

-27-
higher per-car dealer cost; that Volvo loaned AUM $2,700,000 in

a three-way transaction among Volvo, AUM, and Trebol;8 that Volvo

representatives attended several meetings at which Trebol's

entire cost structure (including the cost of the AUM guarantee)

was discussed; and that Volvo officials offered Trebol their

views as to acceptable pricing policies. Taken in the

aggregate, this information fleshes out the scenario that was

before the court of appeals in Bonilla, but adds nothing very

substantial to it.

To be sure, the new material shows that Volvo was

involved in some of the financial aspects of Trebol's business

and that Volvo had the capability to discover the scam if it had

sought to do so. But this is a fraud case, not a negligence

case, and the new matter falls well short of proving that Volvo

was aware of the fraud — let alone that Volvo participated in it

or knowingly abetted it. The most that the redacted affidavit

reveals is that Volvo knew certain cars were being priced higher

because of a costly guarantee arrangement with a third party.9

8
This transaction occurred in 1993, some eight years after
the commencement of the guarantee relationship. By then, all
the plaintiffs had purchased their Volvos. If the transaction
proves anything, it tends to prove that Volvo did not know, even
at that late date, that AUM was a dummy corporation. Elsewise,
why would Volvo lend AUM so large a sum?
9We note that Gonzalez's carefully crafted affidavit never
once says that any price-inflation practices actually were

-28-
With the other evidence of record, this may be enough to prove

that Volvo condoned an inefficient business practice, but it is

not enough to prove that Volvo knowingly condoned a fraud.

Indeed, neither the Gonzalez affidavit nor any other piece of

the plaintiffs' proof so much as suggests a reason why Volvo

might have thought that the AUM guarantee was a tool to help

Trebol bilk car buyers.

In sum, while the redacted Gonzalez affidavit provides

more detail on some points, it is essentially cumulative of the

evidence that was before the Bonilla court. Where, as here, the

nonmovant has the burden of proof on a critical issue and the

evidence that she proffers in opposition to summary judgment is

so vague that she could not prevail at trial, the motion must be

granted. See Liberty Lobby, 477 U.S. at 252; Yusefzadeh v.

Ross, 932 F.2d 1262, 1264-65 (8th Cir. 1991); cf. Smith v. F.W.

Morse & Co., 76 F.3d 413, 425 (1st Cir. 1996) (holding that "a

mere scintilla of evidence is not enough to forestall a directed

verdict"). Because the Gonzalez affidavit is not significantly

probative of Volvo's complicity in the ongoing sticker fraud

scheme, the record still lacks evidence indicating that Volvo

knowingly and willingly participated therein.

B. The Internal E-mails.

discussed with Volvo officials.

-29-
 Our journey continues. After the district court

granted summary judgment, the plaintiffs moved for

reconsideration. They not only disputed the court's res

judicata analysis but also cited, for the first time, two

internal Volvo e-mails that discussed employees' concerns about

the actual value of the AUM guarantee. The district court

denied the motion without comment. The plaintiffs assign error,

arguing (insofar as relevant to Volvo's alternate line of

defense) that the e-mails make a dispositive difference on the

issue of Volvo's knowledge of the fraud. Volvo says that the

proffered e-mails are too late and, in all events, prove too

little.

In the peculiar circumstances of this case, we reject

Volvo's assertion that the plaintiffs proffered the e-mails too

late. Although the e-mails were not called to the district

court's attention until after the court had granted summary

judgment, the plaintiffs seem relatively blameless. After all,

Volvo did not produce the e-mails to the plaintiffs until

January 2000 (the same month that Volvo filed its summary

judgment motion) — and then only in Swedish. Given the timing,

the sheer volume of documents involved in the case, and the need

for translation, fundamental fairness counsels in favor of

treating the e-mails as newly-discovered evidence within the

purview of Federal Rule of Civil Procedure 59(e). See Aybar v.

-30-
Crispin-Reyes, 118 F.3d 10, 16 (1st Cir. 1997) (explicating the

reach of Rule 59(e)). Thus, timeliness is not a significant

issue.

We likewise reject Volvo's suggestion that we should

apply a deferential standard of review to the district court's

denial of reconsideration. Although we typically review a

district court's disposition of a Rule 59(e) motion for abuse of

discretion, e.g., Vasapolli v. Rostoff, 39 F.3d 27, 36 (1st Cir.

1994), this is not the typical case. The court below never

really considered the contents of the plaintiffs' proffer,

instead basing its denial of reconsideration on the mistaken

belief that res judicata barred the action. This was an error

of law, subject to de novo review.

The question then becomes how best to remedy this

error. We could remand to allow the lower court to ponder the

significance vel non of the e-mails, but we prefer, in the

interests of judicial economy, to resolve a quintessentially

legal judgment: do the e-mails have enough probative value to

ward off summary judgment? If they do, then the error requires

that we vacate the existing order for summary judgment. If they

do not, then any error in the denial of reconsideration was

harmless.

-31-
 The plaintiffs assert that the e-mails constitute

"smoking gun" evidence of Volvo's culpability.10 We think that

this colorful metaphor grossly overstates their probative force.

The first e-mail, transmitted on September 12, 1991, reads as

follows:

Marie, the latest news is that the guarantee
that [Volvo] has had for many years is
valueless, we must have a discussion with
Antonio Pauli [a Volvo representative whose
responsibilities included dealing with
Trebol] when he has returned!

The second e-mail, sent on October 2, 1991, reads as follows:

The value of Trebol Motors' guarantee = 0.

We have had a guarantee from a company in
Liechtenstein (since 1986) that should cover
our risks in P[ue]rto Rico, after studying
this guarantee of payment, I can only come
to the conclusion that, unfortunately, it is
not worth more than paper it is written on!

Before our next customer visit, we must take
up the question of security of payment with
Trebol Motors immediately.

The trail goes cold at this point; the plaintiffs have supplied

no information as to what (if any) follow-up the e-mails

generated.

While these e-mails, read in the light most favorable

to the plaintiffs, show that some individuals at Volvo had

concerns about the value of the AUM guarantee in 1991, they do

10
The record contains competing translations of the e-mails.
These differ slightly, but the differences are not material for
our purposes.

-32-
not reflect knowledge on Volvo's part that AUM was part and

parcel of an ongoing fraud. More importantly, even if Volvo had

come belatedly to realize that AUM was a dummy corporation, the

logical inference to be drawn was that AUM had been utilized

either to dupe Volvo into extending credit to Trebol or to put

funds beyond the reach of the tax collector. There is simply

nothing in the e-mails that suggests an awareness on Volvo's

part that AUM was being used as a mechanism to boost sticker

prices artificially (and, thus, to swindle retail customers).

We need not probe this point more deeply. Because the

e-mails, even when added to the Bonilla record and the

admissible portions of the Gonzalez affidavit, are not

significantly probative of Volvo's complicity in the sticker

fraud, the district court's error in handling the motion for

reconsideration was harmless.

V. CONCLUSION

We need go no further. In this complicated case, the

district court reached the correct destination, albeit by the

wrong route. Even when one piles the admissible portions of the

Gonzalez affidavit and the newly-discovered e-mails atop the

record amassed in Bonilla, the total does not suffice to raise

a genuine issue of material fact as to Volvo's knowledge of, or

complicity in, the fraudulent scheme. Consequently, the

plaintiffs cannot stave off Volvo's motion for summary judgment.

-33-
Affirmed.

-34-
 APPENDIX

SWORN STATEMENT OF RICARDO GONZALEZ

[1] My name is Ricardo Gonzalez Navarro. I am at least

twenty-one years of age. Except where specifically noted, I

describe the facts set out below based upon my own personal

knowledge.

[2] I serve as the General Manager of Trebol Motors

Corporation and the General Manager of Trebol Motors Distributor

Corporation (collectively "Trebol"). I have held those

positions since 1988. Prior thereto I worked at Trebol. My

family has been the 100% owner of Trebol since 1979.

[3] After 1984, Trebol has been an importer and

retailer of Volvo automobiles. Since 1988, I have been the

Trebol employee with the most extensive relationship and contact

with Volvo Car Corporation; maintaining that relationship is

part of my job responsibility.

[4] Throughout the time that I have been responsible

for Trebol's relationship with Volvo, officials of Volvo have

possessed detailed knowledge of Trebol's importation and sales

practices. I have read, for example, [a district court opinion

in the Bonilla case] which accurately discusses the very close

relationship between Trebol and Volvo, including (as the opinion

sets forth): Volvo's assistance in advertising, training, and

-35-
financing; many trips by Volvo's representatives to Trebol and

Trebols' representatives to Volvo; and other regular

communications by fax and phone.

[5] It is fair to characterize Volvo's relationship

with Trebol as an "open book" relation and very "hands on."

Volvo was deeply involved in the entire process, all the way

down to monitoring the status of vehicles "on the lot." Volvo's

representatives specifically were very interested in and aware

of Trebol's sales practices and finances. I want to

specifically note that Volvo utilized its "open book"

relationship and participated intimately in the decision-making

process of the dealership. Indeed, when they wanted the final

say on any matter, they had it and they exercised this power

often. They specifically did review financial statements of

Trebol.

[6] I discuss below Volvo's knowledge of certain

specific conduct raised by the plaintiffs in these matters.

[7] AUM Guarantee: On or about July 1985, Trebol and

Volvo arranged for a Liechtenstein company named Auto Und

Motoren ("AUM") to serve as a "guarantor" of Trebol's payment

obligations for new cars purchased by Trebol from Volvo for the

1986 model year and beyond. This relationship continued until

approximately April 1995. As "guarantor", AUM received an

-36-
invoice for each Volvo car sold to Trebol (the "Volvo invoice")

and issued a new, second invoice to Trebol for the same car (the

"AUM invoice"). From the beginning of the relationship with AUM

in or about July 1985 until June 1989 (approximately the end of

the 1989 model year), every AUM invoice was substantially higher

than the Volvo invoice as AUM included the "guarantee" fee in

the cost figure of each AUM invoice. To the best of my

knowledge, the "guarantee" fee for model years 1986, 1987, 1988

and 1989 was determined as a percentage of the CIF cost on each

Volvo invoice — 15%, 20%, 25% and 10% respectively. AUM also

charged a processing fee of approximately $25 per car for model

years 1986-1989 and increased this fee progressively for later

model years until it was approximately $200 per car for model

year 1995.

[8] Volvo knew about the higher AUM invoice cost

figures. From my personal discussions with various Volvo

representatives, I know that Volvo was fully aware of the

relationship between Trebol and AUM, including the nature and

amount of the guarantees.

[9] Volvo knew that Trebol had a guaranty agreement

with AUM, including the collateralization clause in the

agreement and did not object to this agreement despite the fact

that the original importer contract for the sale of Volvos in

-37-
Puerto Rico required that any payment guarantor be a Swedish

bank, which AUM is not.

[10] In addition, in 1993, I discussed in person and

through correspondence with Antonio Paulli and other Volvo

representatives a $2.7 million loan transaction between Volvo,

AUM and Trebol whereby Volvo loaned money to AUM to assist the

payment obligations of AUM and Trebol. I signed this agreement

on behalf of Trebol.

[11] Further, in 1995, I discussed in person and

through correspondence an agreement entered into by Trebol and

AUM whereby AUM agreed to swap Trebol's debt to AUM for equity

with Antonio Paulli and other Volvo representatives. As part of

this agreement, Trebol had to collateralize the Volvo franchise.

Volvo was aware of this arrangement and did not object.

[12] Throughout my service as General Manager of

Trebol, I know that Volvo representatives were aware of the

amount of the AUM guarantee and the AUM invoices because I

personally attended several meetings each year at which Trebol's

entire cost structure — i.e., every cost from invoice cost to

"cost build-up" (i.e., the costs of additions, taxes, warranty,

etc.) to dealer profit — were discussed and factored into the

retail price of each Volvo car sold in Puerto Rico. Included in

the cost structure was the cost from the AUM invoice.

-38-
 [13] Specifically, Trebol and Volvo held regular

meetings, which I attended, which addressed Trebol's "cost

build-up." These meetings occurred, at the very least, prior to

each new model year, which required that new retail prices be

determined. I discussed and debated specific amounts and costs

with Volvo officials. Volvo made its view clear that certain

prices were, or were not, acceptable from its perspective.

[14] . . . I can say with certainty, for the reasons

described above, that Volvo did know of the AUM invoices and

their contents.

[15] Lower prices meant greater sales volume and the

AUM invoices added to the ultimate consumer price. The AUM

relation was in place prior to my joining Trebol, so I do not

have first hand knowledge. I know that my family and company

derived no benefit from AUM commensurate with the extremely high

guarantee cost per car.

[16] Volvo's representatives also knew and understood

the contents of the retail "Law 77" stickers placed on the

windows of new Volvo automobiles offered for sale in the Trebol

showroom. The cost buildup was reflected on the face of the

sticker Trebol placed on the window of each vehicle for sale.

-39-
 [17] Volvo also assisted in sales training. Volvo was

also involved in pricing, which also involved the information on

the stickers.

[18] In addition, Volvo's practice was for its

representatives to inspect the vehicles both in the showroom and

on Trebol's lot and I am certain Volvo representatives have seen

the Law 77 inspection stickers. I know that at least one of

these representatives, Antonio Paulli, spoke Spanish. While in

Puerto Rico, Volvo representatives also visited competitor's

showrooms to gather information, which they could do effectively

only if they could read competing Law 77 stickers, most, if not

all, of which were also in Spanish. Moreover, Volvo

representatives, over the years, attended meetings with local

advertisers during which Spanish language advertising copies

were reviewed and discussed and were regularly sent Spanish

language copies of proposed advertisements to Sweden for review.

[19] When [a government agency] began to question the

. . . sticker, I immediately wrote to Volvo because I believed

they were aware of the sticker. Since Volvo organized Canada,

USA and Puerto Rico as one business unit, I was referred by my

contact at Volvo to Volvo North America (USA) for guidance on

USA law and other Volvo concerns. This happened on more than

one occasion. From my perspective, this was Volvo's

-40-
responsibility. This was Volvo's way of discharging its

responsibility.

[20] . . . For the reasons just discussed, there is

no doubt that Volvo did in fact know of the stickers' contents.

-41-