Of the District of Rhode Island, sitting by designation. *

United States Court of Appeals

For the First Circuit

No. 06-2623

CMI CAPITAL MARKET INVESTMENT, LLC; WILMINGTON TRUST COMPANY, as

TRUSTEE OF THE PR TAX-EXEMPT LEASE CERTIFICATE TRUST; RICHARD J.

SCHMEELK; WILLIAM B. FINNERMAN; JIRA ASSOCIATES, LP,

Plaintiffs, Appellees,

STRONG CAPITAL MANAGEMENT, INC.;

LEHIGH MUNICIPAL LEASING, INC.,

Plaintiffs,

v.

MARYLIN GONZÁLEZ-TORO; CONJUGAL PARTNERSHIP AGUIRRE-GONZÁLEZ,

Defendants, Appellants,

AA PUBLIC FINANCE CO., INC.; CROSS-BORDER LEASING CO., INC.;

LIMITED FUNDING SERVICES, INC.; ALVIN F. AGUIRRE, in his

individual and representative capacities; JOHN DOE, 03CV1770;

ADVANCE OFFICE ELECTRONICS CENTER, INC. AND ROYAL INTERNATIONAL

ELECTRONICS AND FURNITURE, INC.; INMOBILIARIA AA, INC.;

A-Z INSURANCE CO.,

Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Salvador E. Casellas, U.S. District Judge]

Before

 Lipez and Howard, Circuit Judges,

and Smith, District Judge. *
Rubén T. Nigaglioni, with whom Nigaglioni & Ferraiuoli Law

Offices, P.S.C. was on brief, for appellants.

Manuel A. Pietrantoni, with whom Casellas Alcover & Burgos,

P.S.C. was on brief, for appellees.

March 18, 2008
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HOWARD, Circuit Judge. In this tort and breach of

contract suit, Marilyn González-Toro ("González") and the Conjugal

Partnership Aguirre-González (together, "appellants") failed to

challenge plaintiffs' statement of material facts in support of a

motion for summary judgment. Because the appellants did not

counter the statement of material facts, the district court deemed

the facts admitted, granted summary judgment, and imposed joint and

several liability on the appellants for fraudulent acts committed

by Alvin Aguirre-González ("Aguirre") and several corporations. We

approve of the district court's decision to deem the uncontested

facts admitted under Local Rule 56(e), and against that backdrop we

affirm.

1. Facts

On review of a motion for summary judgment, we take the

facts in the light most favorable to the non-moving party, in this

case the appellants. Cash v. Cycle Craft Co., 508 F.3d 680, 682

(1st Cir. 2007). We likewise draw whatever reasonable inferences

favor the non-moving party. Id. In this case, the familiar

standard is qualified somewhat because the district court deemed

admitted the facts contained in the movant's statement of material

facts. We analyze that decision below, and as we find it within

the district court's discretion we will not upset it here.

Consequently, we review the facts as set out in the statement of

material facts accompanying the summary judgment motion. To the
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extent that other facts might cast doubt on them, those other facts

are disregarded. This is because, on appeal from summary judgment,

we consider the same record that was before the district court.

Torres-Rosado v. Rotger-Sabat, 335 F.3d 1, 5 (1st Cir. 2003). 

The plaintiffs are various companies, trustees, and

individuals who filed suit against Aguirre, González, their

conjugal partnership, and several corporations controlled by

Aguirre. The suit alleged fraud, breach of contract, and various

tortious violations of the Puerto Rico civil code. González and

Aguirre were married throughout conduct complained of and when the

complaint was filed -- the pair divorced only after the plaintiffs

filed suit. Their conjugal legal partnership has never been

settled. According to the complaint, Aguirre and other defendants

committed torts regarding leases they held with various municipal

and government entities in Puerto Rico. Some examples provide

enough of the flavor of the complaint. The complaint alleged that

Aguirre had assigned to more than one party, for value, the right

to receive the same payments from some leases. And Aguirre

allegedly concealed that some leases were in default and would

likely remain in default, thereby selling the right to receive

payments that would never come. Aguirre also allegedly

misrepresented the amounts due under some leases, leading

purchasers to pay more than they could ever receive.
Alvin Aguirre-González has since been arrested and pled guilty to 1

18 counts of mail fraud. During the pendency of this appeal he was

sentenced to 57 months' imprisonment, forfeiture of one and a half

million dollars, and restitution of nearly five million dollars.

See United States v. Aguirre-González, 3:05-cr-00387-PG (D.P.R.).

An appeal is pending.

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González was a director, officer, incorporator, or

resident agent for all of the defendant corporations. She signed

checks on their behalf and drew a monthly salary from one. After

the divorce, González continued to derive all her support from her

husband, taking cash advances on a credit card he paid and

receiving wire transfers totaling hundreds of thousands of dollars

from corporations he controlled. She understood this money to be

an advance on the settlement of their conjugal legal partnership.

Aguirre never answered the complaint; he had decamped to

the Dominican Republic, or perhaps Panama. Neither did the 1

defendant corporations answer. González answered on her own behalf

and for the conjugal legal partnership.

The district court issued an attachment order against

those defendants who had not answered the complaint. The

appellants were directed to show cause why the order should not

apply to them, and they did so to the district court's

satisfaction. The district court declared Aguirre and the

defendant corporations (the "other defendants") in default and

issued partial judgment against them.
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The plaintiffs moved to expand the scope of the

attachment order so that it would apply to the appellants.

González testified at a hearing on the motion and was crossexamined by her own counsel. On the basis of that hearing and

evidence received into the record, the district court expanded the

attachment order as requested.

The plaintiffs then moved for summary judgment against

the appellants, citing the facts adduced at the attachment hearing.

The plaintiffs, in conformance with Local Rule 56(b), submitted a

statement of material facts to support their motion for summary

judgment. The appellants submitted an opposition to the summary

judgment motion, but failed to include an opposing statement of

material facts as required by Local Rule 56(c). The district court

noted the procedural failure, deemed the facts in the plaintiffs'

statement to be admitted by the appellants, and on the basis of

those facts granted summary judgment against the appellants. 

2. Discussion

The appellants claimed in their opposition to summary

judgment, and claim again on appeal, that there is a genuine

dispute about a material fact. But given their failure to

challenge the plaintiffs' facts, in reality their argument is that

the plaintiffs have failed to prove that they are entitled to

judgment as a matter of law. Neither formulation of the argument

avails.
The deeming order is both a sanction for the parties and a balm 2

for the district court: the parties are given an incentive to

conform to the rule (provided they wish to have their version of

the facts considered), and the district court is in any case

relieved of the obligation to ferret through the record.

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a. The Anti-Ferret Rule

District of Puerto Rico Local Rule 56(c) is clear about

the obligation of a party opposing summary judgment:

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 by reference to each numbered

paragraph of the moving party’s statement of

material facts and unless a fact is admitted,

shall support each denial or qualification by

a record citation as required by this rule.

Local Rule 56(c). Rule 56(e) sets forth in mandatory terms the

result of failure to follow Rule 56(c): "Facts contained in a

supporting or opposing statement of material facts, if supported by

record citations as required by this rule, shall be deemed admitted

unless properly controverted." Local Rule 56(e) (emphasis added).

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. We have upheld 2

the application of the rule. Mariani-Colon v. Dep't of Homeland

Sec., 511 F.3d 216, 219 (1st Cir. 2007). We review the "deeming

order" for an abuse of discretion. Hernandez v. Philip Morris USA,

Inc., 486 F.3d 1, 7 (1st Cir. 2007).
We have previously held that failure to set forth a paragraph-by- 3

paragraph admission or denial of the movant's material facts

justifies a deeming order even where the opposition does propound

other facts. See Hernandez, 486 F.3d at 7. Hernandez leaves open

the possibility that facts marshaled in opposition might be

accepted to "augment" the facts contained in movant's statement of

material facts, rather than contradict them. Id. at n.2. Without

deciding the issue of whether the district court could have

excluded these facts entirely, we proceed to evaluate the record as

though those facts were accepted to augment the movant's facts; as

we shall see, they do not change the result. 

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Here, the appellants failed to submit a separate

statement of material facts. Nor did they anywhere in their

opposition undertake to "admit, deny or qualify the facts by

reference to each numbered paragraph of the moving party's

statement of material facts." The appellants did include five

facts in their opposition to the motion, but those facts are not

explicitly directed at qualifying or contradicting specific facts

in the plaintiffs' statement, nor are they presented in an

"opposing statement" "separate" from the opposition itself. The 3

language of the rule is plain, and the appellants' conduct

obviously falls within its scope. The district court therefore was

within its discretion to deem the facts in the statement of

material facts admitted.

When summary judgment is granted after a deeming order,

we are bound by the order as well, provided it was not an abuse of

the district court's discretion. If it were otherwise, then the

task of sifting through the record for genuine issues of material

fact would merely have been transferred from the district court, at
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summary judgment, to the appellate court, on appeal of that summary

judgment. The anti-ferret rule would thus be rendered toothless.

The appellants do not contest the district court's

deeming order. Nor do they seek to controvert any of the facts in

plaintiffs' statement. Rather, they claim that the facts therein

and in the remainder of the record are insufficient as a matter of

law to hold them liable for Aguirre's actions. Although they couch

the issue in terms of genuine issues of material fact, their real

arguments are these: first, that the conjugal legal partnership

should not have liability imposed on it because there is

insufficient evidence in the record that it received the benefit of

Aguirre's actions; and second, that the plaintiffs have failed to

introduce evidence establishing that González is liable under

Puerto Rico law for her husband's commission of these torts. We

examine each in turn. 

b. The Conjugal Legal Partnership

Under Puerto Rico law, the conjugal legal partnership can

be held responsible for torts committed by one spouse as long as

the action that gave rise to the tort was for the benefit of the

conjugal legal partnership. "The generally acknowledged rule is

that if the member's work is profitable for the community the

liability will also fall on said community's property." Asociacion

De Proprietarios Del Condominio Villas De Playa I De Dorado Del

Mar, Inc. v. Santa Bárbara Company of Puerto Rico, Inc., 12 P.R.
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Offic. Trans. 41 (1982). This has been the rule in Puerto Rico

since Lugo-Montalvo v. González-Manon, 4 P.R. Offic. Trans. 517

(1975). In that case, the Puerto Rico Supreme Court held the

conjugal legal partnership shared the husband's potential liability

in a malpractice action. The court reasoned:

While [the husband] is married, everything he

earns exercising his profession goes to the

community property. In the course of his

professional practice he may incur civil

liability for malpractice. Should he be the

only one liable with his separate property, or

should he have the backing of the community

for which he works? . . . [H]is professional

economical endeavor benefits the bulk of the

community property and the latter should also

be liable when the obligation arises.

Id. at 525-26. So it is here. Alvin Aguirre earned money from his

business activities, money that went to the conjugal legal

partnership. His business activities included the fraudulent

transactions at issue. Therefore the conjugal legal partnership,

which has yet to be settled, is liable. The appellants' contention

that Aguirre was acting on behalf of the defendant corporations and

therefore not for the benefit of the conjugal legal partnership is

an argument that was squarely rejected by the Puerto Rico Supreme

Court twenty-five years ago. "[R]espondents' argument that since

it was not the marital community that directly received the income

of engineer Ariel Gutiérrez, but rather another artificial person

who received it--Sociedad E.H.G. Arquitectos e Ingenieros--it is

exempted from liability, fails to convince us." Asociacion De
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Proprietarios Del Condominio Villas De Playa I De Dorado Del Mar,

Inc., 12 P.R. Offic. Trans. at 61. 

This provides a basis for the liability of the conjugal

legal partnership even if González herself were not liable for the

actions of her husband. But, as we establish below, the district

court was right to hold her liable as well.

c. Marilyn González-Toro

The district court also found González jointly and

severally liable for the acts of her husband. The district court

based summary judgment on Article 1802 of the Puerto Rico Civil

Code. "A person, who by an act or omission causes damage to

another through fault or negligence shall be obliged to repair the

damage done." Id. The district court determined that González

negligently assisted the fraud. We instead affirm the judgment

because the evidence supports a finding of "fault." The terms

"fault" and "negligence" used here have specific meanings in the

civil code context of Puerto Rico law. "Fault consists in the

failure to exercise due diligence, the use of which would have

prevented the wrongful result. Due diligence is that which one can

expect from the average human being, the good paterfamilias."

Jimenez v. Pelegrina Espinet, 12 P.R. Offic. Trans. 881, 886

(1982); see also Gierbolini v. Employers Fire Ins. Co., 4 P.R.

Offic. Trans. 1197, 1201-02 (1976) ("[F]ault requires the execution

of a positive act causing a damage to another person different from
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the one who executed it, and, in turn, negligence supposes an

omission producing the same effect, although both have in common

that the act be executed or the omission incurred without an

injurious intent." (internal quotation marks omitted) (citation

omitted)). Further, it is an oft-cited precept of Puerto Rico law

that "the concept of fault 'is as broad as the behavior of human

beings, and that it includes any fault that causes harm or

injury.'" Bonilla v. Chardon, 18 P.R. Offic. Trans. 696, 709

(1987) (quoting Colón v. Romero Barceló, 112 D.P.R. 573, 579

(1982)).

In granting summary judgment, the district court pointed

to González's behavior both during the frauds and afterwards.

During the frauds, González was a director, officer, incorporator,

or resident agent for all of the defendant corporations. After the

divorce, when she knew Aguirre was subject to an attachment order

and was being investigated for possible criminal charges, she

continued to receive money from him.

On appeal, González argues that the funds she received

came from corporations other than the defendant corporations, and

that she cannot be subject to a judgment of negligence because she

owed no duty to the plaintiffs. Considered in the context of the

statement of uncontested material facts, neither contention avails

her. The fact that the funds came from different corporations is

irrelevant. The statement of uncontested material facts cited to
We repeat that because the opposition to summary judgment did not 4

include an "Opposing Statement of Material Facts" as required by

Local Rule 56(c), the district court would likely have been free to

disregard the facts in the opposition itself. We do not decide

that question because it is not presented to us. In this case the

district court did not explicitly reject the facts, nor did it

explicitly consider them. It makes no difference whether these

opposing facts are considered because they can easily be harmonized

with the view of the evidence propounded in the statement of

uncontested material facts. 

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González's own statements in the record that all or nearly all the

money she received came from Aguirre. In the opposition to summary

judgment, the appellants did set forth that the funds came from

other corporations. But because appellants failed to satisfy the

anti-ferret rule, we accept those facts only to the extent that

they do not contradict the facts deemed admitted by the district

court.4

Here, the two sets of facts are easy to harmonize.

González was not lying under oath when she said at the attachment

hearing that her ex-husband had given her the money; and it is

correct to say that the wire transfers came from corporations that

were not defendants in this case. Even viewing these facts in the

light most favorable to the appellants, the record is clear that

Aguirre was using these other corporations to disburse funds to

González, funds she knew or should have known were subject to the

attachment order.

The appellants spend considerable time in their brief

making this out to be a case of piercing the corporate veil. But
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it is not. Rather, this is a case where the established facts

point to a person aiding her spouse by participating in the

creation and administration of corporations used to defraud, and

then aiding him again by receiving funds from him even though she

knew he was under an attachment order and being sued to recover the

money those corporations had fraudulently obtained. Even assuming

that González is not liable for the actions of defendant

corporations by virtue of her role in them, she is still liable

because she helped her husband carry out these schemes and helped

him dispose of the money.

Turning to the appellants' contention that González owed

no duty to the appellees, it is true that the district court did

not spell out the duty owed. Nevertheless, summary judgment was

equally proper under the alternative "fault" standard in Puerto

Rico law. "We may affirm a summary judgment decision on any basis

apparent in the record." Perry v. Wolaver, 506 F.3d 48, 53 (1st

Cir. 2007) (internal quotation marks omitted) (quoting Uncle

Henry's, Inc. v. Plaut Consulting Co., 399 F.3d 33, 41 (1st Cir.

2005)). Here, the uncontested material facts support summary

judgment because no reasonable construction of them excuses

González from willfully receiving money from her ex-husband when

she knew he was subject to an attachment order in this case.

González had actual knowledge of the attachment order because she

had defended against the same order. While perhaps her earlier
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actions, viewed alone, could have been put down to ignorance or a

good-faith belief that her husband had enlisted her aid in

incorporating and administering these corporations for legitimate

business purposes, such an inference is rendered unreasonable by

her subsequent actions. The district court properly assessed the

facts in context and supportably found no contested issue of

material fact to preclude summary judgment.

Affirmed.