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Rivera-Carrasquillo v. Centro Ecuestre Madrigal, Inc.

United States Court of Appeals, First Circuit

January 25, 2016

ÁNGELA RIVERA-CARRASQUILLO; JOSÉ HERNÁNDEZ-QUIÑONES; CONJUGAL PARTNERSHIP HERNÁNDEZ-RIVERA, Plaintiffs, Appellees,
v.
CENTRO ECUESTRE MADRIGAL, INC., d/b/a Hacienda Madrigal; INTEGRAND ASSURANCE COMPANY; PASIÓ N ECUESTRE, INC.; GERARDO CALDERÓ N-LOZANO, Defendants, Appellants, FLORENCIO BERRÍOS-CASTRODAD; IRMA SARA CASILLAS; AGRO MONTELLANO, INC., CRIADERO LA GLORIA, INC.; EDGARDO VÉ LEZ; RESTAURANTE EL ESTRIBO; CONJUGAL PARTNERSHIP BERRÍOS-CASILLAS, Defendants

As Amended January 26, 2016.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO. Hon. José Antonio Fusté, U.S. District Judge.

Eduardo Cobian-Roig, with whom José R. DÁvila-Acevedo and Cobian & Bonilla, P.S.C., were on brief, for appellants.

José L. Ubarri, with whom David W. RomÁn and Ubarri & RomÁn Law Office were on brief, for appellees.

Before Torruella, Lynch, and Thompson, Circuit Judges.

OPINION

Page 214

THOMPSON, Circuit Judge.

Spending time astride an animal as magnificent, spirited, and powerful as a horse

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can be risky business. Unfortunately, Ángela Rivera-Carrasquillo experienced this first-hand when she was thrown from a horse in the midst of a guided ride she and her husband, José Hernández-Quiñones, were taking at a ranch outside San Juan, Puerto Rico.

Rivera suffered some pretty significant injuries in her fall, so she and her husband[1] filed suit, and they ultimately secured a jury verdict in their favor at the Puerto Rico federal district court. In this Court, the appealing defendants say the district court erred in refusing either to grant them judgment as a matter of law or, failing that, to submit the question of whether the plaintiffs' suit is time-barred to the jury. They also argue that certain parties may not be held liable for the negligence of the company who rented the horse to Rivera and put on the tour.

After careful review of the at-times-confusing trial record and counsels' appellate arguments, we are unable to discern the district court's reasons for its rulings. Because " we deem this a case where we feel we need the reasoning of the district court," Anderson v. Boston Sch. Comm., 105 F.3d 762, 764 (1st Cir. 1997), we remand for the district court to explain its decision with respect to the statute of limitations defense and articulate the ground(s) on which two of the defendants are liable for Rivera's injuries. And given our inability to parse what happened below from the limited record submitted on appeal (which keeps us from figuring out exactly what we should be reviewing and what standard of review we should apply), we necessarily explain in considerable detail just why we think remand is necessary.

STATUTE OF LIMITATIONS OVERVIEW

We readily acknowledge that, ordinarily, it makes the most sense to begin our discussion by describing what happened and how this case got here. But this particular appeal hinges, to a large degree, on when Puerto Rico's statute of limitations began ticking on the plaintiffs' claims. And the parties, unsurprisingly, have different views about this. None of their arguments will make sense -- and the reader won't know what's important in our discussion of the facts underlying this case -- unless we start with a general overview of Puerto Rico's statute of limitations.

Puerto Rico's statute of limitations[2] for tort actions like this one is one year. P.R. Laws Ann. tit. 31, § 5298(2). A claim filed after time runs out is barred, regardless of its merit. Much of the controversy here revolves around exactly when that one-year period began.

The one-year clock begins ticking " from the time the aggrieved person had knowledge" of the existence of her claim. Id.; see also Rodriguez-Suris v. Montesinos, 123 F.3d 10, 13 (1st Cir. 1997). To have " knowledge" that she has a claim -- thereby triggering the countdown -- a person needs to be aware not only that she has been injured, she also needs to know who is (or may be) responsible for that injury. See Rodriguez-Suris, 123 F.3d at 13-14 (recognizing that a plaintiff must

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have an " awareness of the existence of an injury" and knowledge of the injury's " author" before the statute of limitations begins to run).

Puerto Rico's Supreme Court recognizes two types of " knowledge" as sufficient to start the clock. First, a plaintiff may have " actual knowledge of both the injury and of the identity of the person who caused it." Alejandro-Ortiz, 756 F.3d at 27; see also Rodriguez-Suris, 123 F.3d at 13-14. The one-year period begins to run on the date a plaintiff gains this knowledge. See Alejandro-Ortiz, 756 F.3d at 27.

Alternatively, a plaintiff " is deemed to be on notice of her cause of action if she is aware of certain facts that, with the exercise of due diligence, should lead her to acquire actual knowledge of her cause of action." Id. The test for this so-called " deemed knowledge" is an objective one. Id. Under Puerto Rico law, deemed knowledge " is essentially parlance for the discovery rule, which stands for the proposition that '[t]he one-year [statute of limitations] does not begin to run until the plaintiff possesses, or with due diligence would possess, information sufficient to permit suit.'" Id. (alterations in original) (quoting Villarini-Garcia v. Hospital Del Maestro, 8 F.3d 81, 84 (1st Cir. 1993)). In other words, the statute of limitations begins running at the time a reasonably diligent person would discover sufficient facts to allow her to realize that she'd been injured and to identify the party responsible for that injury. The rationale being, of course, that once a plaintiff comes into such knowledge, she can file suit against the tortfeasor.[3]

Determining the date on which a diligent plaintiff would have learned enough to allow her to file suit presents a question of fact that may be submitted to the jury in an appropriate case. Espada v. Lugo, 312 F.3d 1, 4-5 (1st Cir. 2002) (concluding from the evidence in the record that a jury could properly find the plaintiff had been diligent in investigating the cause of her injury); Villarini-Garcia, 8 F.3d at 86 (" [W]hether a plaintiff has exercised reasonable diligence is usually a jury question." (quoting Bohus v. Beloff, 950 F.2d 919, 925 (3d Cir. 1991))); see also id. at 87 (" [E]ven where no raw facts are in dispute, the issues of due diligence and adequate knowledge are still ones for the jury so long as the outcome is within the range where reasonable men and women can differ." ).

Generally speaking, the statute of limitations is an affirmative defense with the defendant bearing the burden of establishing that a claim against it is time-barred. Asociación de Suscripción Conjunta del Seguro de Responsabilidad Obligatorio v. Juarbe-Jiménez, 659 F.3d 42, 50 n.10 (1st Cir. 2011). But a plaintiff who, like Rivera, sues more than one year after the date of injury " bears the burden of proving that she lacked the requisite 'knowledge' at the relevant times." Alejandro-Ortiz, 756 F.3d at 27 (quoting Hodge v. Parke Davis & Co., 833 F.2d 6, 7 (1st Cir. 1987)). Put a little differently, to avoid having her claim barred as untimely,

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the plaintiff must show (perhaps by convincing a jury) that despite her diligence in pursuing her legal rights, she did not gain enough knowledge to bring suit until sometime after the date of her injury. Such a showing will result in the one-year clock beginning to tick on some date after the injury.[4]

With these basic principles in hand, we now turn to what happened to Rivera and the facts relevant to when the statute of limitations began to run. Except for a couple instances (which we'll point out as we go along), these facts are not contested. Rather, their legal consequence is what's at stake.

BACKGROUND

1. The Accident and the Ranch

Rivera was hurt on July 4, 2009, when she was thrown from a rented horse she was riding as part of a guided tour on property owned by Florencio Berríos (" Berríos" ). Berríos used the land as a ranch, or farm, which he operated through his own corporation, Centro Ecuestre Madrigal, Inc. (" Madrigal, Inc." ).[5] But, as it turns out, Madrigal, Inc. did not own the horse Rivera was riding, nor did it (or any of its employees) own the horse-rental business or conduct the tour she'd been on. Rather, a completely separate company owned by Gerardo Calderón (" Calderón" ) -- Pasión Ecuestre, Inc. (" Pasión" ) -- owned the horse Rivera rented, and it put on the tour as part of its horse rental business conducted from Berríos's property.

Pasión operated its business pursuant to a five-year lease (effective June 15, 2007 through June 13, 2012) with Madrigal, Inc.[6] The lease indicated that Pasión was allowed to use Madrigal, Inc.'s premises to " keep its saddle horses for rent by the general public." In addition to payment of monthly rent, the lease stipulated that " [a]ll liability waivers used by [Pasión] when renting horses must clearly and precisely state that [Madrigal, Inc.] has no relationship with or obligation to [Pasión], and furthermore that [Madrigal, Inc.] is released from any liability to [Pasión's] customers."

Rivera had gone to the ranch with her husband and a family friend after seeing

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advertisements for horse riding at Madrigal, Inc.'s farm. This friend apparently wanted the outing to be his treat, and so he paid for it on his credit card. Before setting out on her ride, Rivera signed a written liability release (" Release" ) agreeing that neither Madrigal, Inc. nor Pasión would be liable in the event she suffered any injury.[7]

Two of Pasión's employees acted as the group's guides. One rode at the front to lead the way, and the other brought up the rear. At some point during the ride, the rear guide rode quickly from the back to the front of the line. In doing so, he passed close to Rivera's horse, which spooked. Rivera was thrown from her horse after she proved unable to maintain control of the animal.

This appeal, at least with respect to Pasión (and to a lesser extent, Calderón), is not primarily about the jury's finding of liability.[8] The parties, rather, have focused on Pasión's and Calderón's claims that Rivera failed to sue the right parties in time and, therefore, the statute of limitations bars her and her husband's claims. So before going further, we need to discuss what else was going on at Madrigal, Inc.'s property in 2009 and lay out the cast of characters important to the legal analysis to come.

On the date of Rivera's fall, Pasión was not the only horse-based business at Madrigal, Inc.'s property. A second corporation, Criadero La Gloria (owned and operated by Edgardo Vélez (" Vélez" )), leased land and 108 stables there. Criadero La Gloria provided boarding services for off-property horse owners. Its clients would come to Madrigal, Inc. to ride their horses and use the ranch's facilities. Like Pasión, this company conducted business pursuant to a lease. The parties to this lease, dated June 1, 2009, were Vélez, Criadero La Gloria, Berríos (the property owner), and another of Berríos's companies, Agro Montellano, Inc.[9] The lease indicated that Criadero La Gloria was leasing the land and stables (along with some other facilities) in order to " [m]anage a stable leasing business for horses."

Thus, when Rivera took her tumble on July 4, 2009, Criadero La Gloria's horse boarding business had no interest at all in Pasión's horseback rental business. Also, since Pasión owned its own horses, Pasión did not rent out any of the ones boarded in Criadero La Gloria's 108 stables.

In the late summer or early fall of 2009, Calderón figured out that Pasión could no

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longer afford to stay in business because it was costing him more money to feed his horses than he was bringing in. So, and with Berríos's approval, Calderón offered to sell his horse renting and touring business to Vélez. Vélez agreed, and by the end of November 2009 the transaction was complete.

To further complicate things, on July 4, 2009, Madrigal, Inc. had a non-horse-based business operating on the premises. Restaurante El Estribo (which was separate from Madrigal, Inc., Pasión, and Criadero La Gloria), operated a restaurant there. And there's yet another company we have to identify, Integrand Assurance Company. Integrand wrote a single general liability policy that covered Madrigal, Inc., Pasión, and Criadero La Gloria, and which was effective on the date of Rivera's accident. Berríos, through Madrigal, Inc. paid for the policy, and the other corporations operating at Madrigal, Inc.'s property reimbursed him for their share of the premium.

Ultimately, the plaintiffs brought suit against all of the individuals and companies we have just mentioned, but they did not sue them all right off the bat. The travel of this case through the state and federal court systems is critical to our analysis of the parties' statute of limitations arguments. Thus, we must give special attention to the dates on which various parties were brought into the litigation. Our rundown is based on testimony and exhibits introduced at trial, as the statute of limitations was a hotly-contested issue there, and each side called witnesses and introduced evidence speaking to it.

2. State Court Proceedings

The plaintiffs retained Attorney Francisco Torres Díaz (" Attorney Díaz" ) to represent them. On June 11, 2010, within the one-year statute of limitations, the plaintiffs initially filed suit in Puerto Rico state court against Berríos and Madrigal, Inc. -- the two parties Attorney Díaz had identified in his research as being potentially liable. Rivera made a personal injury claim, while her husband's was for loss of consortium.[10] Berríos's personal lawyer, Yesenia Ramos Talavera (" Attorney Ramos" ), initially defended both Berríos and Madrigal, Inc. in state court.

The plaintiffs served written interrogatories on January 1, 2011. Several were geared towards identifying the name of the individual that owned the horseback riding business operated on Madrigal, Inc.'s property. Others sought disclosure of the nature of the relationship between the horseback riding business and Madrigal, Inc.

In early February of 2011 -- before the defendants answered the interrogatories -- the parties then in the case (plaintiffs Rivera and her husband Hernández, and defendants Berríos and Madrigal, Inc.) jointly filed in Puerto Rico superior court a document known as a Case Management Report (" Report" ). This Report is made in accordance with Rule 37.1 of Puerto Rico's Rules of Civil Procedure which, the parties tell us, is the " local law equivalent" of Fed.R.Civ.P. 16. The Report essentially set forth a joint discovery plan, and was ...


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