Court Opinion

ID: 614258
Source: CourtListenerOpinion
Date Created: 2011-09-27 16:29:53+00
Date Added: 2024-06-11T17:50:29.198198
License: Public Domain

Not for Publication in West's Federal Reporter

          United States Court of Appeals
                       For the First Circuit

No. 10-1565

    JOSÉ A. MUÑIZ-OLIVARI; CONJUGAL PARTNERSHIP MUÑIZ-DURÁN,

                               Plaintiffs,

                       ANNABELLE DURÁN-LÓPEZ,

                        Plaintiff, Appellant,

                                     v.

                    STIEFEL LABORATORIES, INC.,

                         Defendant, Appellee.

          APPEAL FROM THE UNITED STATES DISTRICT COURT
                 FOR THE DISTRICT OF PUERTO RICO

          [Hon. Jaime Pieras, Jr., U.S. District Judge]

                                  Before

                       Lynch, Chief Judge,
              Boudin and Thompson, Circuit Judges.

     Rubén T. Nigaglioni and Nigaglioni & Ferraiuoli Law Offices
P.S.C. on brief for appellant.
     Arturo Díaz-Angueira and Cancio, Nadal, Rivera & Díaz, P.S.C.,
on brief for appellee.

                          September 27, 2011
            LYNCH, Chief Judge. In 2005, a jury found that José

Muñiz-Olivari had been promised continued employment by Stiefel

Laboratories, Inc., and that Stiefel was in breach of that promise.

Under Puerto Rico law, a breach of contract may give rise to both

a contract claim under Article 1054 of the Civil Code, P.R. Laws

Ann. tit. 31, § 3018, and a corollary tort claim under Article

1802, id. § 5141, so the jury was instructed on both.            The jury

awarded Muñiz-Olivari about $600,000 for back pay, front pay, and

benefits.    It also awarded $100,000 each to Muñiz-Olivari and his

wife, Annabelle Durán-López, for mental pain and suffering.               On

appeal, this court affirmed the finding of liability.                Muñiz-

Olivari v. Stiefel Labs., Inc., 496 F.3d 29 (1st Cir. 2007).

            The present case involves the question whether Durán-

López is entitled to the $100,000 award for mental pain and

suffering.

            Our previous opinion in this case affirmed the $600,000

contract damages award.     As to the two $100,000 awards for mental

pain and suffering, it appeared from the district court's reasoning

to be a novel issue under Puerto Rico law whether damages for

mental   pain   and   suffering   were   available   "for   breach   of   an

employment contract in an ordinary civil case that involved no

                                   -2-
claim of violation of anti-discrimination laws or civil rights

laws."1   Id. at 39.

            Because we considered that to be a policy issue best

resolved by the Supreme Court of Puerto Rico, we instructed the

district court to certify appropriate questions to that court. Id.

at 39-40.    We also ordered that, if the Supreme Court concluded

pain and    suffering   damages   were   available    to   either    or    both

plaintiffs, the district court enter an additional judgment for

such damages as awarded by the jury, with interest.           Id. at 41.

            The   questions   certified,   after     commentary     from    the

parties, were:

            1. Whether pain and suffering damages are
            available to a party to a contract in a civil
            action for breach of contract which does not
            involve any separate tort allegations; and

            2. Whether pain and suffering damages are
            available to a non-party to a contract who is
            directly affected by a breach of contract in a
            civil action for breach of contract which does
            not involve any separate tort allegation.

Muñiz-Olivari v. Stiefel Labs., Inc., Civ. No. 03-02076 (JP), 2010

WL 891325, at *2 (D.P.R. Mar. 8, 2010).            The Supreme Court of

Puerto Rico answered the questions in Muñiz-Olivari v. Stiefel

Laboratories, Inc., 174 P.R. Dec. 813 (P.R. 2008).2

     1
        Plaintiffs' claims for damages under Puerto Rico's anti-
discrimination statute, "Law 100," P.R. Laws Ann. tit. 29, §§ 146-
151, were dismissed by the district court before trial.
     2
       A certified translation of the Puerto Rico Supreme Court's
opinion was filed in the district court docket for this case.

                                   -3-
            As to the first question, the Supreme Court of Puerto

Rico held that "in an action for breach of contract, indemnity for

suffering and mental anguish is proper, as long as they could have

been foreseen at the time the obligation was entered into and are

a necessary consequence of the breach."

            As to the second question, the Supreme Court held that "a

third party that is an outsider in a contractual relationship has

no standing to demand -- under article 1054 -- compensation for

damages suffered as a result of a breach in the contractual

obligation." However, the Supreme Court added: "Now then, there is

nothing to prevent that third party, who is an outsider in the

contractual relationship from which the damages claim arises, from

claiming compensation for his own damages pursuant to article 1802

of the Civil Code."

            Based   on   the   Supreme     Court's   conclusion   that   a

contracting party could recover foreseeable damages for pain and

suffering on a breach of contract action, Stiefel paid Muñiz-

Olivari   his   $100,000   mental   pain    and   suffering   award,   plus

interest.   However, Stiefel refused to pay Durán-López her damages

award for mental pain and suffering.          Plaintiffs filed a motion

requesting the district court to order Stiefel to pay the judgment,

Certified English Translation of the Opinion and Sentence from The
Supreme Court of Puerto Rico, Muñiz-Olivari v. Stiefel Labs., Inc.,
Civ. No. 03-02076 (JP), 2010 WL 891325 (D.P.R. Mar. 8, 2010), ECF
No. 126.

                                    -4-
which the district court denied.   Muñiz-Olivari, 2010 WL 891325.

Durán-López appeals that decision.

          The answer of the Supreme Court made it clear that while

a person who is not a party to a contract may not claim damages for

mental pain and suffering caused by a breach of that contract

pursuant to Article 1054 of the Civil Code, such a non-party may

obtain pain and suffering damages when conduct said to constitute

a breach of contract also constitutes a tort as to that non-party

under Article 1802.    Article 1802 is a tort law that has been

broadly interpreted by the Puerto Rico Supreme Court.

          Article 1802 states that "[a] person who by an act or

omission causes damage to another through fault or negligence shall

be obliged to repair the damage so done."   P.R. Laws Ann. tit. 31,

§ 5141.   A plaintiff must prove three elements to support a claim

for damages under Article 1802: "first, proof of the reality of the

damage suffered; second, a causal relation between the damage and

the action or omission of another person; and third, said act or

omission is negligent or wrongful."   Santini Rivera v. Serv Air,

Inc., 137 P.R. Dec. 1, 1994 P.R.-Eng. 909,527 (P.R. 1994).

          Under Puerto Rico law, "[d]amage is any material or moral

loss suffered by a person, either in its natural rights or in its

property or patrimony, brought about by violation of a legal

provision and which is chargeable on another party."    Garciá Pagán

v. Shiley Caribbean, 22 P.R. Offic. Trans. 183, 196 (P.R. 1988).

                                -5-
Pain and suffering damages are available under Puerto Rico law not

only to the direct victim of tortious conduct, but also to his or

her   family.      The    Puerto   Rico   Supreme   Court    has   "repeatedly

recognized that a person is entitled to compensation for the

sufferings, emotional distress or mental anguish experienced as a

consequence of the material or other damages caused directly to

their relatives."        Santini Rivera, 137 P.R. Dec. 1, 1994 P.R.-Eng.

909,527.

           Given    the    Supreme   Court's    answers     to   the   certified

questions and that court's case law on the availability of pain and

suffering damages in Article 1802 actions, the $100,000 award to

Durán-López for mental pain and suffering was recoverable under

Article 1802 if that claim was adequately presented and preserved.

           Stiefel says it was not.            Stiefel asserts that Durán-

López's argument that she was entitled to damages for mental pain

and suffering on a tort theory had been waived before the district

court and this court.        We disagree.

           The record shows that an Article 1802 tort claim for pain

and suffering damages was presented to the jury and had been pled

in the complaint.          The district court instructed the jury on

negligence.     Specifically, the court instructed the jury that

"[u]nder Article 1802 of the Puerto Rico Civil Code, a person who

by an act or omission causes damages to another through fault or

negligence shall be obliged to repair the damage so done."

                                      -6-
          Importantly, the district court explicitly connected the

availability of damages for mental pain and suffering to a finding

of negligence.   The court instructed the jury, "[Y]ou can award

damages for emotional pain, suffering and mental anguish already

suffered or to be suffered in the future if you find that this will

cause or aggravate it or will be cause[d] or aggravated in the

future by the Defendant's negligence." Stiefel does not argue that

the instructions on negligence or damages were erroneous.

          Stiefel's arguments that Durán-López has waived the claim

are based on mischaracterizations of the record and a misreading of

both this court's prior opinion3 and of the helpful response of the

Puerto Rico Supreme Court.

          Accordingly, we reverse and direct entry of judgment for

Durán-López in the sum of $100,000 plus interest.        Costs are

awarded to the appellant.

     3
        Our prior opinion did not rule that no Article 1802 claim
had been presented by Durán-López.

                               -7-