Opinion ID: 201603
Heading Depth: 2
Heading Rank: 2

Heading: Barquet's Liability: The Depositum Contract

Text: 26 Under Puerto Rico law, depositum contracts can be governed by either the Commercial Code or the Civil Code. See 10 P.R. Laws Ann. § 1621 et seq.; 31 P.R. Laws Ann. § 4621 et seq. Barquet argues that the Commercial Code governs in this case; the plaintiffs contend instead that the Civil Code applies. The district court held that Barquet had waived its general argument about the applicability of the Commercial Code by failing to raise it in an Initial Scheduling Conference or a subsequent scheduling conference. See Astoria Jewelry, 291 F.Supp.2d at 23-24. We do not treat or rely upon the district court's theory of waiver, but of course we may affirm summary judgment against Barquet on any ground supported by the record. 27 A depositum contract is deemed commercial, and therefore governed by the Commercial Code rather than the Civil Code, only in situations where three conditions are met. First, the depositor must be a merchant; second, the items deposited must be commercial goods; and third, the deposit must constitute in itself a commercial transaction, or be made by reason of commercial transactions. 10 P.R. Laws Ann. § 1621. To our knowledge, no Puerto Rico court has interpreted this provision. The first two prongs are met here. On the third prong, the deposit was not in itself a commercial transaction, but Barquet argues that it was made by reason of such a transaction because, according to Weinberg, the bags were left in anticipation of the next morning's meeting at the Barquet store, where Weinberg would attempt to sell jewelry to Barquet. Since Natalio testified that no such meeting was ever set, this is an odd argument for Barquet to make. 28 We are doubtful that the facts here are sufficient to meet the third prong, but even assuming dubitante that a commercial deposit was formed, the provisions of the Commercial Code are of no assistance to Barquet. Barquet points to two provisions of the Commercial Code as aiding its appeal. 29 First, Barquet alludes briefly to 10 P.R. Laws Ann. § 1302, which states that for commercial contracts, the testimony of witnesses shall not in itself be sufficient to prove the existence of a contract the amount of which exceeds three hundred dollars, unless such testimony concurs with other evidence. Although Barquet's general argument about the applicability of the Commercial Code was not an affirmative defense and need not have been pled, by contrast any reliance on this specific provision, § 1302 — which is in the nature of a statute of frauds — is an affirmative defense under Fed.R.Civ.P. 8(c). Affirmative defenses must be pled or they will generally be deemed waived and excluded from the case. See, e.g., Honey Dew Assocs., Inc. v. M & K Food Corp., 241 F.3d 23, 26 (1st Cir.2001). Yet Barquet did not originally plead this provision in its answer, nor did it ever file a motion to amend its answer. See Astoria Jewelry, 291 F.Supp.2d at 23. Thus, any suggestion by Barquet that this contract is unenforceable under § 1302 because unwritten has been waived. 30 Second, Barquet argues that the district court erred in applying the standard of care for deposited goods found in the Civil Code — the good father of a family standard, see 31 P.R. Laws Ann. § 3021 — instead of the standard of care under a commercial depositum contract governed by the Commercial Code. Under the Commercial Code, a commercial depositary is liable for the injury and damage the articles deposited may suffer by reason of his malice or negligence, and also for those arising from the nature or defects of the articles, if he should not in the latter cases personally have done all that was possible in order to avoid or remedy them.... 10 P.R. Laws Ann. § 1624. Barquet's argument assumes it would be better off if the Commercial Code standard rather than the Civil Code standard applied. This assumption is incorrect. 31 Barquet observes that, unlike the Civil Code, see 31 P.R. Laws Ann. § 3192, there is no express provision in the Commercial Code establishing a presumption of the depositary's negligence for deposited goods lost or damaged while in his possession. Such a presumption is familiar from common law bailment, where it exists to force the bailee to come forward with the information it has available, since it, as holder of the bailed items, is in a better position than the bailor to determine the cause of the loss. See, e.g., Goudy & Stevens, Inc. v. Cable Marine, Inc., 924 F.2d 16, 18-19 (1st Cir.1991). This case does not turn on the presence or absence of the depositary's presumption of negligence. And, although it seems that no Puerto Rico court has interpreted § 1624, it is not obvious that the Commercial Code's standard is lower than the Civil Code's good father of a family standard, which — as we explain below — has been interpreted by the Puerto Rico Supreme Court to impose liability only for ordinary negligence. Indeed, the last clause of § 1624 suggests a higher standard of care for commercial depositum contracts than for civil depositum contracts in certain circumstances. Barquet offers no reason why the standard would be lower for commercial depositum contracts than for ordinary, civil depositum contracts. 32 Since Barquet has waived any argument under § 1302 and it would not aid Barquet for us to apply the Commercial Code rather than the Civil Code, we will analyze the rest of this case under the Civil Code provisions, which are both more comprehensive and better glossed by the Puerto Rico courts.
33 Barquet challenges the district court's ruling that it is liable to pay the co-plaintiff jewelers (as well as those jewelers' insurers) for the lost jewelry. 34 The district court's ruling hinged on its holding that under Puerto Rico law, a depositum contract was formed between Barquet and Weinberg and Reisman. The depositum contract is a civil law concept, existing in Louisiana as well as Puerto Rico, that has some relationship with the common law concept of bailment. The two concepts, however, are not identical and therefore one must be cautious in using notions derived from bailment to determine the nature of the depositum contract. See generally Michael H. Rubin, Comment, Bailment and Deposit in Louisiana, 35 La. L.Rev. 825 (1975). 35 The depositum contract under the Puerto Rico Civil Code, which is derived from relevant provisions of the Spanish Civil Code, is in essence a contract whereby one person (the depositor) hands a piece of personal property to another person (the depositary) for the sole purpose of having the depositary keep, conserve, and return the property. See, e.g., Rivera v. San Juan Racing Ass'n, 90 P.R.R. 405, 411, 1964 WL 14320 (1964) ([I]n [depositum contracts] the obligation of custody appears autonomous in nature, it is the essence of the contract itself.); 4 Jose Castan Tobeñas, Spanish Civil, Common and Local Law 681 (12th ed. 1985) ([T]he essential characteristic of the deposit is that of the handing over of the thing, with the sole and exclusive end of its keeping, conservation and return....). Thus the depositary cannot use the property without the depositor's permission, see 31 P.R. Laws Ann. § 4662, and such permission transforms the contract into a loan rather than a deposit, see id. § 4663. Further, the depositary must return the property to the depositor when the latter demands its return. See id. § 4670. 36 A depositum contract can arise in various contexts. A business can act as depositary when it agrees to safeguard an item while performing some service on it for the depositor. See, e.g., M.A. Caribbean Corp. v. Caribbean Ru stproofers, Inc., 115 P.R. Offic. Trans. 896, 900, 1984 WL 270897 (1984) (depositum contract formed when tow truck delivered for rustproofing); Am. Sec. Ins. Co. v. Ocasio, 102 P.R. Offic. Trans. 207, 1974 WL 36891 (1974) (same with respect to car delivered to garage for paint work). Further, a creditor can act as depositary when it attaches a debtor's property in order to secure the effectiveness of a judgment. See Rodríguez Soto v. Adorno, 104 P.R. Offic. Trans. 901, 1976 WL 40173 (1976). Neither of these, of course, is the situation here. 37 But the context here, where a salesman asks a store for permission to leave his wares in its vault, and the store grants such permission out of friendship or kindness without demanding any compensation for the service, can also create a depositum contract. The Civil Code of Puerto Rico is clear that consideration or compensation to the depositary is not necessary to form a depositum contract — in fact, the depositum contract is presumed gratuitous absent some agreement to the contrary. See 31 P.R. Laws Ann. § 4641. Similarly, it is not necessary that the depository act out of some business motive; a depositum contract is formed if the depositary's motive in accepting the depositor's property is simple courtesy. See 22:1 Manuel Albaladejo, Private Law Review: Comments to the Civil Code and Local Compilations 198-99 (1980) (explaining as paradigmatic the case where a passerby, without asking for any compensation, agreed to care for another person's oxen in a public market for a few moments). 38 When determining whether the parties have formed a depositum contract, the Puerto Rico Supreme Court has, as the district court noted, focused on whether or not the delivery of the thing has been accomplished, whether the [depositary] has received the effective possession and control of the thing to the point of excluding the possession of the owner himself.... Nicole v. Ponce Yacht Club, 96 P.R.R. 286, 290, 1968 WL 17213 (1968); see also Rivera, 90 P.R.R. at 414-417. Here, delivery was accomplished when Weinberg placed the jewelry bags—with Barquet's permission — in the Barquet vault. Barquet attained effective and exclusive possession and control of the jewelry bags at that time because they were placed inside Barquet's own vault, in a back room of its store. 39 Barquet hangs its argument that no depositum contract was formed chiefly on an alleged lack of consent. While it admits that it consented to allowing Weinberg to place the jewelry bags in its vault, it argues that there is no evidence that it consented to safeguard the jewelry bags while they were left in the vault. It is true that Natalio agreed that Weinberg could leave the jewelry bags in the Barquet vault but that there was no further discussion of contractual terms. The lack of such discussion is, however, irrelevant. 40 The Puerto Rico Supreme Court has not discussed consent as an element in any of its cases on depositum contracts; instead, as already noted, in Rivera and Ponce Yacht Club it focused on the depositor's delivery of the deposited items and the depositary's subsequent effective and exclusive possession and control of those items. The proper reading of this case law, which is in accord with the commentators, is that the depositary's consent to be bound by the statutory terms of the depositum contract — including the statutory requirement that a depositary safeguard the deposited goods — can be inferred from the depositor's delivery of an item to the depositary, the depositary's knowing acceptance of that item, and the depository's effective and exclusive possession and control over the item. See Albaladejo, supra, at 191 n. 2. Louisiana law on the depositum contract allows a similar inference of consent. See, e.g., United States Fid. & Guar. Co. v. Dixie Parking Serv., Inc., 262 La. 45, 262 So.2d 365, 367 (1972). Barquet argues that Rivera and Ponce Yacht Club are inapposite, because they involved situations in which the parties clearly had formed some kind of contract and the only question was the type of that contract. But this is a distinction without a difference: even though these cases dealt with acknowledged contracts, the Puerto Rico Supreme Court was still required to infer consent by the depositary to be bound by the statutory terms of a depositum contract. 41 Barquet's consent to form a depositum contract, as governed by the Puerto Rico statutes, was properly inferred by the district court from the parties' silence when Weinberg delivered the jewelry to Barquet's vault, Barquet agreed to accept the items, and the items were actually placed in Barquet's vault. Barquet did not make any express statement that it refused to be bound by the obligations of a depositary. 42 Barquet argues that the parties' intent was more consistent with a desire to form a civil law legal arrangement known as a deposit in tolerance, where Barquet would merely allow Weinberg and Reisman to leave their jewelry in its store but would take no responsibility for the safekeeping of this jewelry, than with a classic depositum contract with its attendant obligations. The deposit in tolerance has never been recognized by the Puerto Rico courts, and the commentator that Barquet itself relies on describes the concept as a doubtful supposition[]. See Albaladejo, supra, at 199. The scheme established in Puerto Rico requires us to infer consent to form a full-fledged depositum contract, with its statutory obligations, whenever an item has been delivered by the depositor and is in the effective and exclusive possession and control of the depositary. At least absent some express statement by the parties, we are not permitted to infer consent to some lesser set of obligations. 43 Barquet finally argues that we should not infer a depositum contract here because of the imbalance between Barquet's nonexistent gain from the depositum contract and its substantial liability once the jewelry was stolen. But the Puerto Rico Civil Code seems to contemplate just such an imbalance when it allows for — and indeed presumes — that Civil Code depositum contracts are gratuitous. 4 44 We hold that the parties entered into a depositum contract, constituted when the jewelry was placed in Barquet's vault. 5 We will proceed to examine Barquet's standard of care under that contract.
45 The depositary must, under a depositum contract governed by the Puerto Rico Civil Code, safeguard deposited items with the care of a good father of a family. See 31 P.R. Laws Ann. §§ 3021, 4661; Ocasio, 102 P.R. Offic. Trans. at 209. The good father standard established in section 3021 (which is entitled What constitutes fault or negligence) is a default standard when the parties have not established some other standard, and it is not exclusive to depositum contracts, but is applied more broadly to certain other areas of the law. 46 The Puerto Rico Supreme Court has interpreted the standard in a way that has made it quite similar to ordinary negligence. The question is whether the depositor exercised the proper diligence, which generally should be that which `an average or normal type of diligent person' would have exerted. Ocasio, 102 P.R. Offic. Trans. at 212; see also Rodríguez Soto, 104 P.R. Offic. Trans. at 909. Thus, ordinary measures must be taken, but extraordinary or unusual steps need not. See, e.g., Ocasio, 102 P.R. Offic. Trans. at 212-13 (good father of a family standard met where depositary of car left for paint work surrounded premises with wire fence, barbed wire, and locked gates, despite depositary's failure to take additional precautions, such as maintaining a watchman or watchdogs). 47 Barquet properly points out that the issue of negligence is generally left to the jury, even where there are no undisputed material facts, at least in a tort context. See Joyal v. Hasbro, Inc., 380 F.3d 14, 21 n. 3 (1st Cir.2004). But the judge can properly decide the issue on summary judgment if the material facts are undisputed and no reasonable jury could decide in favor of the nonmoving party. See id.; Commonwealth Utils. Corp. v. Goltens Trading & Eng'g PTE Ltd., 313 F.3d 541, 546 (9th Cir.2002). 48 The undisputed evidence demonstrated that defendant knew that its vault was always open during the day; it admitted as well that customers could easily access the room in the store where the vault was located and were sometimes left alone in that room. The video cameras did not record, there were no hired security personnel, and Barquet's employees felt no responsibility to care for the jewelry bags. Leaving very expensive bags of jewelry in such a state represented a failure to take even basic precautions — no reasonable jury could find that Barquet exercised the care which an average or normal type of diligent person would have exercised. Barquet makes no argument about action it took that would raise a jury question as to whether it met its standard of care. The grant of summary judgment against Barquet on the depositum contract claim is affirmed. 6 49