United States Court of Appeals
For the First Circuit
No. 10-1122
TROPIGAS DE PUERTO RICO, INC.,
Plaintiff, Appellant,
v.
CERTAIN UNDERWRITERS AT LLOYD'S OF LONDON,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Raymond L. Acosta, U.S. District Judge]
Before
Lipez, Circuit Judge,
Souter,* Associate Justice,
and Selya, Circuit Judge.
Francisco E. Colón-Ramirez and Colón & Colón, P.S.C. on brief
for appellant.
Manuel Sosa, Luis N. Saldaña, and Saldaña, Carvajal & Vélez-
Rivé, P.S.C. on brief for appellee.
March 11, 2011
*
Hon. David H. Souter, Associate Justice (Ret.) of the Supreme
Court of the United States, sitting by designation.
SELYA, Circuit Judge. This case is an exercise in
summary judgment practice. It involves a dispute about whether
sums are due under a certificate of insurance issued by certain
underwriters at Lloyd's of London (Lloyd's) to plaintiff-appellant
Tropigas de Puerto Rico, Inc. The district court opined that the
plaintiff had failed to adduce facts sufficient to show the
existence of a covered loss and granted summary judgment for
Lloyd's. We affirm.
I. BACKGROUND
We rehearse the facts in the light most agreeable to the
plaintiff (the party resisting summary judgment). Suarez v. Pueblo
Int'l, Inc., 229 F.3d 49, 51 (1st Cir. 2000); McCarthy v. Nw.
Airlines, Inc., 56 F.3d 313, 314 (1st Cir. 1995).
The plaintiff is a propane gas distributor based in
Puerto Rico. In the ordinary course of its business, it purchased
fourteen large underground storage tanks manufactured in Dallas,
Texas. The tanks were transported to Houston for shipment by barge
to Puerto Rico.
At the plaintiff's behest, Lloyd's issued a certificate
of insurance, insuring the tanks "against all risks of physical
loss or damage from external causes." The coverage attached
dockside from the start of loading operations in Houston, continued
while the barge was in transit, and "cease[d] upon berthing of the
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barge at the destination port" (San Juan). No coverage was
afforded for unloading operations.
On January 28, 2004, a marine surveyor inspected the
tanks at the Houston docks. Loading operations, monitored by the
marine surveyor, began on February 8 and concluded the next day.
The process encompassed two stages. First, stevedores used rollers
and heavy-lift transport equipment to maneuver the tanks to a
designated area alongside the barge. Second, a crane fitted with
nylon straps attached to a spreader bar hoisted them onto the
waiting barge.
In a report dated February 16, the surveyor noted that,
prior to loading, all the tanks exhibited minor chafing to exterior
painted surfaces. That damage was repaired by the manufacturer on
site and plays no role in this litigation. The report noted no
other damage. With one exception, not relevant here, it described
the loading process as having taken place without incident.1
The barge left Houston on February 10. It encountered no
inclement weather during the voyage. When the barge docked in San
Juan, the plaintiff did not conduct a pre-discharge inspection of
the cargo. The plaintiff did, however, videotape a portion of the
1
The report explained that during the process of moving the
tanks to the staging area, one tank was damaged. The plaintiff's
brief contains no developed argument about this damage. Lloyd's
answering brief asserted that this damage "is not part of the
controversies brought forth before" either the district court or
this court. The plaintiff has not contested this assertion.
Consistent with the parties' approach, we disregard this damage.
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off-loading. In that process, the tanks were lifted by cranes,
placed on heavy haulers, trucked to the plaintiff's yard, and
installed.
The plaintiff subsequently conducted a post-installation
inspection of the tanks. This inspection revealed extensive
warping and deformation.
In December of 2004, the plaintiff wrote to Lloyd's
seeking recompense for the discovered damage. Its claim letter
posited that the warping and deformation of the tanks had occurred
during either loading operations in Houston or the ensuing marine
transport (and in any event, within the policy coverage). Lloyd's
refused payment, maintaining that the plaintiff had not established
that the damage arose during the coverage period.
II. TRAVEL OF THE CASE
Invoking diversity jurisdiction, 28 U.S.C. § 1332(a)(1),
the plaintiff sued in the federal district court. In its
complaint, the plaintiff alleged that the tanks had been damaged
due to improper loading at the point of origin (Houston).2 Lloyd's
denied this allegation and the parties engaged in pretrial
discovery.
In due season, Lloyd's moved for summary judgment, Fed.
R. Civ. P. 56, arguing that the plaintiff had failed to limn a
2
The plaintiff has not developed any claim, either below or
on appeal, that the tanks were damaged during the ocean voyage.
Any such claim is, therefore, waived.
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triable issue as to whether the alleged loss occurred within the
currency and scope of the insurance certificate. Along with the
motion, Lloyd's submitted a statement of uncontested material facts
as required by Local Rule 56(b).3 In that statement, it emphasized
the surveyor's finding that no damage had occurred to the tanks at
issue during loading. It also proffered a report from its expert,
Andrew Johnstone, which concluded that, assuming the tanks were
properly designed and manufactured, "the load-out and
transportation of these tanks from Houston to San Juan would not
have imposed sufficient loads on the tanks to cause the damage
reported." (There is no evidence in the record suggesting that the
tanks were either improperly designed or constructed).
The plaintiff opposed the motion, arguing that the
record, viewed favorably to it, supported a finding that the tanks
were damaged during loading operations in Houston. The plaintiff's
counter-statement of material facts, submitted in accordance with
3
The rule provides:
A motion for summary judgment shall be
supported by a separate, short, and concise
statement of material facts, set forth in
numbered paragraphs, as to which the moving
party contends there is no genuine issue of
material fact to be tried. Each fact asserted
in the statement shall be supported by a
record citation as required by subsection (e)
of this rule.
D.P.R. Civ. R. 56(b).
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Local Rule 56(c),4 included thirty-one so-called "supplemental
facts." It noted, for example, that there was no mention in the
survey about how the rollers used during loading operations were
leveled; that Lloyd's had failed to exclude a difference in the
height of the rollers as a possible cause of the damage; that there
was photographic evidence suggesting that the tanks were improperly
hoisted; and that a videographic depiction of the off-loading
operations showed that nothing unusual had occurred during that
activity.
The district court granted the motion for summary
judgment. It observed that the plaintiff's arguments in support of
its claim consisted of nothing more than speculation. This timely
appeal ensued.
4
This local rule provides:
A party opposing a motion for summary
judgment shall submit with its opposition a
separate, short, and concise statement of
material facts. The opposing statement shall
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. Unless a
fact is admitted, the opposing statement shall
support each denial or qualification by a
record citation as required by this rule. The
opposing statement may contain in a separate
section additional facts, set forth in
separate numbered paragraphs and supported by
a record citation as required by subsection
(e) of this rule.
D.P.R. Civ. R. 56(c).
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III. APPLICABLE LEGAL STANDARD
We review a district court's grant of summary judgment de
novo. Dávila v. Corporación de P.R. para la Difusión Pública, 498
F.3d 9, 12 (1st Cir. 2007). We will affirm only if the record
discloses no genuine issue as to any material fact and the moving
party is entitled to judgment as a matter of law. See Vineberg v.
Bissonnette, 548 F.3d 50, 55 (1st Cir. 2008); see also Fed. R. Civ.
P. 56.5 While we must mull the facts in the light most agreeable
to the nonmoving party and draw all reasonable inferences in that
party's favor, Suarez, 229 F.3d at 53, we afford no evidentiary
weight to "conclusory allegations, empty rhetoric, unsupported
speculation, or evidence which, in the aggregate, is less than
significantly probative." Rogan v. City of Boston, 267 F.3d 24, 27
(1st Cir. 2001); see Medina-Munoz v. R.J. Reynolds Tobacco Co., 896
F.2d 5, 8 (1st Cir. 1990).
The vocabulary of summary judgment is well defined. An
issue is "genuine" if "a reasonable jury could resolve the point in
favor of the nonmoving party." McCarthy, 56 F.3d at 315 (quotation
omitted). A fact is "material" if "its existence or nonexistence
has the potential to change the outcome of the suit." Borges ex
rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 5 (1st Cir. 2010).
5
Rule 56 was amended effective December 1, 2010 (while this
case was pending on appeal). The substantive standard for summary
judgment remains unchanged. See Fed. R. Civ. P. 56 advisory
committee's note.
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Where, as here, the nonmovant bears the burden of proof on the
dispositive issue, it must point to "competent evidence" and
"specific facts" to stave off summary judgment. McCarthy, 56 F.3d
at 315.
IV. ANALYSIS
As a threshold matter, the plaintiff argues that the
district court failed to deem its supplemental facts admitted and
that, had it done so, summary judgment would have been
inappropriate. This argument implicates Local Rule 56, which in
relevant part requires a party opposing summary judgment to submit
with its opposition a "separate, short, and concise statement of
material facts" not set forth by the movant. D.P.R. Civ. R. 56(c).
In turn, the movant is directed to submit a reply statement, in
which it "shall admit, deny or qualify those additional facts."
D.P.R. Civ. R. 56(d). Facts not denied, qualified, or otherwise
"properly controverted" are deemed admitted. D.P.R. Civ. R. 56(e).
Local Rule 56 is in service to Federal Rule of Civil
Procedure 56. See CMI Capital Mkt. Inv., LLC v. González-Toro, 520
F.3d 58, 62 (1st Cir. 2008) ("The purpose of this rule is to
relieve the district court of any responsibility to ferret through
the record to discern whether any material fact is genuinely in
dispute."). Like Rule 56 itself, the local rule makes clear that
its focus is on facts, not speculation or argumentation. Moreover,
these facts must be material.
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In the instant case, the district court's summary
judgment ruling was terse, and it is impossible to tell what use,
if any, the court made of the supplemental facts contained in the
plaintiff's Local Rule 56(c) counter-statement. Assuming,
favorably to the plaintiff, that the court did not "deem admitted"
the supplemental facts, we discern no error. We explain briefly.
The supplemental facts can be divided into two groups.
The first group consists of facts that are not material. Thus, for
example, it is a fact that there is no evidence as to how the
rollers had been leveled — but that fact does not prove that
improper leveling of the rollers caused the damage. The second
group consists of items which, though labeled as facts, are nothing
more than speculation or argumentation. Thus, for example, that
Lloyd's had failed to exclude the height of the rollers as a cause
of the damage is a non-fact; it is an argument, pure and simple,
for the proposition that the improper leveling of the rollers
caused the damage.
Neither half of this taxonomy profits the plaintiff. To
the extent that the items are factual, deeming them admitted does
not change the outcome of the case. To the extent that they are
non-facts, they are equally impuissant. Either way, the
plaintiff's claim of error fails. See P.R. Am. Ins. Co. v. Rivera-
Vázquez, 603 F.3d 125, 130 (1st Cir. 2010); see also McCarthy, 56
F.3d at 315.
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This brings us to the merits. Under a policy of first-
party insurance, the insured bears the burden of establishing that
the policy was in force and effect at the relevant time and that
the loss was covered. See Fajardo Shopping Ctr., S.E. v. Sun
Alliance Ins. Co., 167 F.3d 1, 7 (1st Cir. 1999). The coverage at
issue attached prior to loading in Houston and ceased when the
transporting barge docked in San Juan.6 Here, then, the plaintiff
bears the burden of showing, at a minimum, that a genuine issue of
material fact exists as to whether the damage to the tanks occurred
during that period. To meet this standard, it must present
"definite, competent evidence," Pagano v. Frank, 983 F.2d 343, 347
(1st Cir. 1993) (quotation omitted), that the tanks were damaged
during loading and not during off-loading, ground carriage, or
installation.
The record concerning loading operations is not helpful
to the plaintiff's cause. It reflects that a marine surveyor
monitored the loading and compiled a contemporaneous report that
did not indicate any damage to the tanks occasioned during those
operations. In an effort to contradict this report, the plaintiff
contends first that the tanks may have been damaged by the rollers
used to maneuver them into place. It suggests that the level and
6
This case does not raise a choice of law issue. The outcome
would be the same whether we applied the substantive law of either
Texas or Puerto Rico to the interpretation of the insurance policy.
Thus, we need not decide what law governs. See Fajardo Shopping
Ctr., 167 F.3d at 7.
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height of the rollers were of particular importance because even a
slight variation in height could have resulted in increased
pressure on the tanks and, thus, could have caused the damage. To
bolster this theory, the plaintiff notes that the loading survey
contained no information about the height and level of the rollers,
nor did the survey describe the level of the ground on which the
rollers were stationed.
The plaintiff's second contention deals with the
supposedly improper placement of the straps used in hoisting the
tanks. It cites as evidence a photograph depicting one tank being
hoisted by two straps hanging from a spreader bar. In its view,
the straps are too close to each other7 and, thus, the photograph
suggests that the improper placement of the straps might possibly
have caused damage to the tanks. In reaching its conclusion, the
plaintiff cites Johnstone's deposition testimony to the effect that
it is possible that improper strap placement could cause damage to
an object that is being hoisted.
Both of these contentions traffic in what is possible,
not in what is probable. But the plaintiff's burden on summary
judgment is to make a showing that a reasonable jury could
supportably find that, more likely than not, the loss occurred
within the coverage period. See Mesnick v. Gen. Elec. Co., 950
7
The record contains no expert opinion confirming this
supposition.
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F.2d 816, 822 (1st Cir. 1991). Merely raising possibilities does
not bridge the gap between fact and theory. See Borges, 605 F.3d
at 5; McCarthy, 56 F.3d at 315.
The plaintiff's litany of possible explanations for the
damage does not satisfy this standard. As to the first contention,
it would be unreasonable to infer from an empty record that the
level or height of the rollers caused the damage. The potential of
off-level rollers to cause damage is a matter of fact but, in the
absence of any evidence that the rollers were off-level, that fact
is not material.
This same reasoning defenestrates the plaintiff's second
contention. The photographic evidence to which the plaintiff
alludes may support an inference that one tank was hoisted in a
less-than-optimal manner. But that evidence, without more, is
insufficient to ground a finding that, more likely than not, the
hoisting operation caused the sort of damage of which the plaintiff
complains. No reasonable juror could find liability on this flimsy
showing.
The serial inferences that the plaintiff would have us
draw to move this case past the summary judgment stage collectively
comprise a paradigmatic example of speculation. See Rogan, 267
F.3d at 27-28; Conward v. Cambridge Sch. Comm., 171 F.3d 12, 22
(1st Cir. 1999). The plaintiff's allusion to Johnstone's statement
that he could not definitely rule out improper placement of the
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slings as a cause of the damage does not cure this infirmity. That
statement merely fuels the speculation and, thus, is insufficient
to create a genuine issue of material fact. Simply allowing for a
possibility does not make it more likely than not that the
possibility happened.
As a last-ditch measure, the plaintiff attempts to prove
its case by negative implication. It asserts that the tanks were
not damaged during the voyage, the off-loading in San Juan, ground
transport, or installation and, thus, must have been damaged during
loading operations in Houston. The premise for this assertion is
itself speculative. The plaintiff neither conducted a pre-
discharge survey once the barge docked in San Juan nor inspected
the tanks at any time between their arrival and their installation.
The plaintiff tries to shore up this speculative premise
by pointing to the videotape of a portion of the off-loading
process and a letter drafted by an engineer, Morales, two years
after the fact. Neither piece of evidence does the trick.
The videotape shows only a part of the off-loading
process. Because it is both incomplete and unexplained, its
probative value is very slight.
The letter is thin gruel: although Morales apparently
observed either the off-loading or the ground transport or both,
the record is tenebrous as to what, if any, role he may have played
in that work. His letter provides scant detail but, rather,
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summarily concludes that there was no mishandling of the tanks
during the off-loading and ground transport. These gauzy
generalities are not significantly probative and, therefore, carry
no weight in the summary judgment calculus. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 249-50 (1986).
To sum up, the plaintiff's case depends upon precisely
the kind of conclusory allegations and unsubstantiated speculation
that we have deemed not sufficiently probative to survive summary
judgment. See, e.g., SMS Sys. Maint. Servs., Inc. v. Digital
Equip. Corp., 188 F.3d 11, 27 (1st Cir. 1999) (noting that
"theoretical possibilities alone are inadequate to block the swing
of the summary judgment ax"); Pagano, 983 F.2d at 347 (similar);
see also Kelly v. United States, 924 F.2d 355, 358 (1st Cir. 1991)
("[E]vidence that is merely colorable, or not significantly
probative cannot impede an otherwise deserved summary disposition."
(alterations and internal quotation marks omitted)). The plaintiff
has, therefore, failed to make out a genuine issue of material fact
as to whether the tanks were damaged during loading.
V. CONCLUSION
We need go no further. The dispositive issue raised in
this case is whether the plaintiff has made out a genuine issue of
material fact that the damage occurred during the coverage period.
The plaintiff has adduced no significantly probative evidence to
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that effect. The district court, therefore, appropriately granted
summary judgment in favor of Lloyd's.
Affirmed.
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