In re: Maria Ana Perez Gonzalez v. MCS Life Insurance Co., Medical Card System, Inc.

• Court: United States Bankruptcy Court, D. Puerto Rico
• Decided: November 5, 2012
• Docket: 11-00255
• Status: Unknown

Opinion

1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF PUERTO RICO ; IN RE: : 3 : CASE NO. 10-05375 (ESL) MARIA ANA PEREZ GONZALEZ : Debtor : CHAPTER 13

6 || MARIA ANA PEREZ GONZALEZ ADVERSARY NO, 11-00255 7 Plaintiff : 8 vs. 9 || MCS LIFE INSURANCE CO., : MEDICAL CARD SYSTEM, INC. : Defendants il : 12 OPINION AND ORDER 13 This adversary proceeding is before the court upon defendants MCS Life Insurance Co and 14 || Medical Card Systems Inc.’s (collectively referred to as “MCS”) Motion to Dismiss ... For Failure 15 |] to State [a] Claim Upon Which Relief can be Granted (“Motion to Dismiss’, Docket No. 16), and 16 || the Plaintiff's two Motion/s for] Leave to Amend Complaint (Docket Nos. 23 and 31) alleging that 17 || the Second and Third Amended Complaint[s] moot MCS’ Motion to Dismiss. For the reasons stated 18 || below, MCS’ Motion to Dismiss is hereby denied in part and granted in part, Plaintiffs Motion for 19 || Leave to Amend Complaint (Docket No. 23) is hereby granted and her subsequent Motion [for] 20 || Leave to File Amended Complaint (Docket No. 31) is hereby denied. — - 21 Factual Background 22 The Plaintiff filed her Chapter 13 bankruptcy petition on June 17, 2010 (Lead Case Docket No. 23 || 1). On June 18, 2010, Alejandro Oliveras Rivera, Esq. (“Oliveras”) was appointed as the Chapter 13 24 || Trustee (Lead Case Docket No. 14). On August 28, 2010, the Plaintiff filed an Amended Chapter 13 | . 25 | Plan (the “Plan”, Lead Case Docket No. 15) which proposed monthly payments of $450.00. On 26 || November 17, 2010, the Plan was confirmed (Lead Case Docket No. 23). 27 On or about September 30, 2010, the Plaintiff purchased money order no. 17796898271 at the 28 || United States Post Office in the amount of $450.00 and made it payable to the order of Oliveras (the “Money Order”). See Lead Case Docket No. 27. She mistakenly addressed the Money Order to a

1 || mailbox that MCS uses to receive payments for MCS Personal, one of its insurance products. See 2 || Docket No. 16, p. 4. 3 Upon receipt, the Money Order was altered by someone writing “MCS Personal” on it and it 4 || was deposited into MCS’ account. See Docket No. 16-1. MCS became aware that the Money Order 5 || had been erroneously deposited into its account and thus, on February 2, 2011, it issued a check to the 6 || Plaintiff in the amount of $450, which the Plaintiff endorsed and deposited (Docket Nos. 16, p. 5, and 7 || 16-2). 8 Procedural Backrgound 9 The Plaintiff filed the instant Complaint on November 11, 2011 seeking compensatory and 10 || punitive compensation against defendant MCS Life Insurance Co. for the alteration of the Money Order, 11 || which was meant to be paid on or around September 30, 2010 to Oliveras to fund the Plan. See Docket 12 | No. 1. The Plaintiff avers that altering a money order issued by the United States Post Office is a 13 |] criminal offense pursuant to 18 U.S.C. § 500 and that pursuant to Article 1802 of Puerto Rico’s Civil 14 |) Code, 31 L.P.R.A. § 5141, she is entitled to recover compensatory and punitive damages. The summons 15 |) were issued on even date (Docket No. 2). 16 Before the defendant MCS Life Insurance Co. appeared to answer the Complaint or otherwise 17 || plead, on December 27, 2011 the Plaintiff amended her complaint to include Medical Card System, Inc. 18 } as a defendant (Docket No. 5) and requested an order for the issuance of new summons, which were 19 || issued on January 12, 2012 (Docket Nos. 6, 7 and 8). 20 After the Court granted two motions for extensions of time to answer the Amended Complaint 21 }| or otherwise plead (Docket Nos. 10, 11, 13 and 14), on March 21, 2012, MCS filed its Motion to 22 || Dismiss (Docket No. 16) under Fed. R. Civ. P. 12(b)(6) alleging that 18 U.S.C. § 500 does not provide 23 || for a private cause of action for recovery of damages and that because she admitted her own errors, she 24 || is the direct cause of her alleged damages and as such, she is not entitled to recovery under 31 L.P.R.A. 25 || § 5141. In addition, MCS sustains that punitive damages are not available to the Plaintiff under 31 26 || L.P.R.A. § 51471 as a matter of law. 27 On March 27, 2012, this Court ordered the Plaintiff to “file a reply to the Motion to Dismiss 28 || within thirty (30) days” (Docket No. 18). Because the Plaintiff did not comply, MCS filed a Request

1 || that [the] Motion to Dismiss be Granted as Unopposed (Docket No. 20). On May 3, 2012, the Plaintiff 2 || filed a Motion [for] Final Extension of Time to expire on May 7, 2012 to reply to MCS’ Motion to 3 || Dismiss (Docket No. 21), which the Court granted (Docket No. 22). Instead of replying, however, the 4 || Plaintiff filed a Motion [for] Leave to Amend Complaint and tendered a Second Amended Complaint 5 || (Docket No. 23). The amendments in the Second Amended Complaint consist of additional factual 6 allegations regarding the investigation the Plaintiff pursued at the United States Post Office regarding 7 || the Money Order. 8. On May 11, 2012, MCS filed an Opposition to Plaintiff's Request for Leave to File Second 9 || Amended Complaint (Docket No. 26) alleging that the causes of action in this the Second Amended 10 || Complaint are the same as those alleged in the Amended Complaint , which MCS had already moved 11 to dismiss for failure to state a claim upon which relief can be granted. Consequently, MCS avers that 12 || the Second Amended Complaint is an exercise in futility that would needlessly prolong the instant case. 13 On May 14, 2012, this Court entered an Order denying the Plaintiff's Motion [for] Leave to 14 || Amend Complaint (Docket No. 23) without prejudice to moving the Court within 14 days setting forth 15 || the factual and legal basis for the Court to find that the Second Amended Complaint moots MCS’ 16 || pending Motion to Dismiss, which until then had remained unopposed. The Court also noted that MCS’ 17 || Motion to Dismiss was addressed to Plaintiff’s Amended Complaint. 18 On June 24, 2012, the Plaintiff filed a Motion in Compliance with Order (Docket No. 29) 19 || arguing that her claim is based on illegal acts by MCS ~—which could result in federal criminal 20 || prosecution— that caused her damages. She also avers that the jurisdiction of this Court is proper 21 || because MCS took control of assets administered by the Chapter 13 trustee and under the jurisdiction 22 || of this Court inasmuch the Money Order was issued to fund the Chapter 13 Plan. As to the “mooting 23 || argument”, the Plaintiff contends that she addressed MCS’ bald and unsupported statements in its 24 || Motion to Dismiss by heightening the pleading standard in the Second Amended Complaint and 25 || explaining in more detail the allegations. She also avers that in Puerto Rico, negligence or fault can 26 || arise from illegal acts for tort purposes under 31 L.P.R.A. § 5141 (Docket No. 23-1, p. 8, § 28). 27 On June 25, 2012, the Plaintiff filed another Motion [for] Leave to Amend Complaint with 28 || which she tendered a Third Amended Complaint (Docket No. 31). She claims that the Third Amended

1 || Complaint would also moot MCS’ Motion to Dismiss and alleges for the first time that the jurisdiction 2 || of this Court in the instant civil action arises from 11 U.S.C. § 105. On even date, MCS filed an 3 || Opposition to Plaintiff's Request for Leave to File Third Amended Complaint (Docket No. 32) alleging 4 || that it suffers from the same infirmities as its previous two versions and that it constitutes a continued 5 attempt to cure not having to file an opposition to MCS’ Motion to Dismiss. MCS also requests that 6 || the Plaintiff be sanctioned by paying all of MCS’ attorneys’ fees and costs incurred in the instant 7 || adversary proceeding. 8 On June 29, 2012, MCS filed an Opposition to Plaintiff's Motion in Compliance with Order and 9 || Third Motion Requesting Leave to Amend Complaint (Docket No. 33) rehashing its prior positions. 10 Legal Analysis and Discussion 11 | (4D Jurisdiction of this Court 12 Bankruptcy Courts, like other lower federal courts, cannot create their own jurisdiction. They 13 have only the jurisdiction permitted under the Constitution and given to them by Congress. See Celotex 14 || Corp. v. Edwards, 514 U.S. 300, 307 (1995). Consequently, Bankruptcy Courts have “an obligation 15 || to inquire sua sponte into [their] subject matter jurisdiction...” Godin v. Schencks, 629 F.3d 79, 83 (1" 16 || Cir. 2010). 17 Fed. R. Civ. P. 8, applicable in adversary proceedings through Fed. R. Bankr. P. 7008, requires 18 || an express allegation on the grounds of the Court’s jurisdiction. 19 The Bankruptcy Court’s subject matter jurisdiction emanates from a District Court’s jurisdiction 20 under 28 U.S.C. § 1334, which endows it with original and exclusive jurisdiction for cases that are 21 |} under Title 11 of the United States Code, that is, the actual bankruptcy case commenced by the filing 22 || ofa petition under one ofthe applicable chapters of the Bankruptcy Code, and original but not exclusive 23 || jurisdiction for civil proceedings arising under Title 11, or arising in or related to cases under Title 11. 24 See 28 U.S.C. § 1334(a) & (b); Nickless v. Aaronson (In re Katz), 341 B.R. 123, 127 (Bankr. D. Mass. 25 || 2006). 26 Because an adversary proceeding in bankruptcy is not the same as the lead case, the Bankruptcy 27 || Court must determine whether the adversary proceeding, which is a civil proceeding, “arises under” the 28 || Bankruptcy Code, “arises in” a case under the Bankruptcy Code, or is “related to” the bankruptcy case.

1 || If the adversary proceeding falls within none of the aforementioned categories, then the Bankruptcy 2 || Court has no jurisdiction. In re Katz, 341 B.R. at 127. Adversary proceedings “arise under” Title 11 3 || if they involve a “cause of action created or determined by a statutory provision of title 11.” Wood v. 4 || Wood (In re Wood), 825 F.2d 90, 96 (5" Cir. 1987). Also see Work/Family Directions v. Children's 5 || Discovery Ctrs, dn re Santa Clara County Care Consortium), 223 B.R. 40, 43 fn. 2 (B.A.P. 1* Cir. 6 || 1998). In contrast, proceedings “arising in” a bankruptcy case “are those that are not based on any right 7 || expressly created by Title 11, but nevertheless, would have no existence outside of the bankruptcy.” 8 || Inre G.S.F. Corp., 938 F.2d 1467, 1475 (1" Cir. 1991) quoting In re Wood, 825 F.2d at 97. “[R]elated 9 || to” proceedings are proceedings which “potentially have some effect on the bankruptcy estate, such as 10 altering the debtor’s rights, liabilities, options, or freedom of action, or otherwise have an impact upon 11 }| the handling and administration ofthe bankruptcy estate.” Inre G.S.F. Corp., 938 F.2d at 1475, quoting 12 || Smith v. Commercial Banking Corp. (In re Smith), 866 F.2d 576, 580 (3" Cir. 1989). Adversary 13 || proceedings that “arise in” and “arise under” Title 11 constitute the Bankruptcy Court’s “core” 14 | jurisdiction. See 28 U.S.C. § 157(b); In re Wood, 825 F.2d at 96-97. Bankruptcy Courts also have 15 || jurisdiction over non-core proceedings provided the proceeding is “related to” a bankruptcy case but 16 || can only submit proposed findings of fact and conclusions of law to the District Court. 28 U.S.C. § 17 |} 157(c)(1). Proceedings which are outside the boundaries of 28 U.S.C. § 1334 (a) or (b) —proceedings 18 || which do not fall even within the “related to” jurisdiction— are outside of the subject matter jurisdiction 19 || of a Bankruptcy Court. In re Vienneau, 410 B.R. at 334. 20 The Plaintiff initially sought the jurisdiction of this Court under and 28 U.S.C. §§ 157 21 [Procedures before bankruptcy judges] and 1334(b) [Bankruptcy cases and proceedings]. She then pled 22 || jurisdiction under 28 U.S.C. §§ 1331 [Federal question] and 1343 [Civil rights and elective franchise], 23 || 18 U.S.C. §§ 1 et seg. (United States Crime Code) and supplemental jurisdiction under 28 U.S.C. § 24 || 1367 to entertain tort claims under Article 1802 of Puerto Rico’s Civil Code, 31 L.P.R.A. § 5141. See 25 || the Plaintiff's Complaint (Docket No. 1, 1-4, pp. 3-4) and Amended Complaint (Docket No. 5, 4 1-4, 26 || p. 1-2). The Plaintiff also sustains that the instant case is a core proceeding under 28 U.S.C § 157(b). 27 Because the Money Order in controversy is property of the bankruptcy estate pursuant to 11 28 || U.S.C. § 1306, this adversary proceeding properly “arises in” a bankruptcy case within the context of

1 || 28 U.S.C. § 157(b)(1), and therefore is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A). Inre 2 || G.S.F. Corp., 938 F.2d at 1475. Thus, the Court has jurisdiction pursuant to 28 U.S.C.§ 1334. 3 Because no “personal injury tort” is alleged, this case does not fall under 28 U.S.C. § 157(b)(5). 4 | Jurisdiction under 28 U.S.C. § 1343, as purported by the Plaintiff, is improper and inapplicable. 5 || Likewise, this Court will not entertain a criminal proceeding under 18 U.S.C. §§ 1 et seq. 6 || (B) Leave to Amend Complaints in Adversary Proceedings 7 Fed. R. Bankr. P. 7015 makes Fed. R. Civ. P. 15 applicable to adversary proceedings. Fed. R. 8 || Civ. P. 15(1) allows a party to amend his/her/its pleadings once “as a matter of course” if filed within 9 || the time limits established therein. In all other circumstances, a party may amend its pleadings under 10 |} Fed. R. Civ. P. 15(2) “only with the opposing party’s consent or the court’s leave. The court should 11 freely give leave when justice so requires.” 12 The Rule allows for liberal amendments in the interest of resolving cases on the merits. See 13 |) Foman v. Davis, 371 U.S. 178, 181-182 (1962); O’Connell v. Hyatt Hotels of PR, 357 F.3d 152, 154 14 | C1" Cir. 2004); Wilson v. Mendon, 294 F.3d 1, 7 n.16 (1" Cir. 2002); Mills v. Maine, 118 F.3d 37, 53 15 || Cir. 1997); USM Corp. v. GKN Fasteners Ltd., 578 F.2d 21, 23 (1" Cir. 1978). Although Fed. R. 16 || Civ. P. 15 “reflects a liberal amendment policy ... [lower courts] enjoy[] significant latitude in deciding 17 || whether to grant leave to amend”. ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46, 55 (1" Cir. 18 || 2008). “Grounds for denial include undue delay, bad faith or dilatory motive, repeated failure to cure □ 19 || deficiencies by amendments previously allowed, undue prejudice to the opposing party and futility of 20 || amendment.” Id. at 56, quoting Foman v. Davis, 371 U.S. at 182. 21 In the instant case, the Plaintiff first amended her complaint to include Medical Card System, 22 || Inc. as a defendant (Docket No. 5), and as a result new summons were issued (Docket No. 8). 23 || Thereafter, the Plaintiff could only amend her complaint by obtaining the opposing party’s consent or 24 || the court’s leave. See Fed. R. Civ. P. 15(2). She opted for the latter. 25 After the defendants filed their Motion to Dismiss (Docket No. 16), the Plaintiff filed her Motion 26 || [for] Leave to Amend Complain (Docket No. 23) alleging that the Second Amended Complaint would 27 || moot the Motion to Dismiss, in which MCS alleged that Plaintiff failed to state a claim upon which 28 || relief can be granted because 18 U.S.C. § 500 (in which she bases her claim) is a criminal statute that

1 || does not provide for private cause of action for recovery of damages (Docket No. 16). Plaintiff’s leave 2 || was denied without prejudice to her setting forth the factual and legal basis for this Court to find that 3 || the second amended complaint moots MCS’ Motion to Dismiss (Docket No. 27). In her Motion in 4 || Compliance with Order (Docket No. 29), the Plaintiff argues that she is entitled to claim damages 5 || arising from MCS’ illegal acts. She explained that “[i]n Puerto Rico, civil liability for damages can 6 || result from illegal acts once it is established that a damage was caused, there has to be a direct nexus 7 || between the act and the damage...” (Docket No. 23-1, p. 8, § 28). This allegation is part of the 8 || amendments included in the Second Amended Complaint. 9 In light of the liberal amendment policy afforded in Fed. R. Civ. P. 15 to resolve cases on the 10 || merits, Plaintiff's Motion in Compliance with Order (Docket No. 29) and Motion [for] Leave to Amend 11 || Complaint (Docket No. 23) are granted and thus allows the Second Amended Complaint. 12 |) Notwithstanding, the Plaintiffs subsequent Motion [for] Leave to file for a Third Amended Complaint 13 |} (Docket No. 31) is hereby denied. The Court takes into account her repeated attempts to cure 14 deficiencies by amendments previously allowed, to wit, the Amended Complaint and the Second 15 || Amended Complaint, and the fact that the last Motion [for] Leave to Amend Complaint (Docket No. 31) 16 || does not purport any reason for its tardiness at this stage of the proceedings. A review of the Third 17 || Amended Complaint also reveals that the proposed amendments are superfluous, futile and do not seek 18 || additional causes of action. See Foman v. Davis, 371 U.S. at 182. 19 | (CE) Motion to Dismiss under Fed. R. Civ. P. 12(b)(6) 20 Fed. R. Bankr. P. 7012 makes Fed. R. Civ. P. 12(b)(6) applicable to adversary proceedings. 21 || Fed. R. Civ. P. 8(a)(2) mandates complaints to contain a “short and plain statement of the claim 22 || showing that the pleader is entitled to relief.” Although detailed factual allegations are not required, 23 || the Rule does call for sufficient factual matter. Therefore, to survive a motion to dismiss under this 24 || Rule, a complaint must contain sufficient factual matter, accepted as true, to “state a claim to relief 25 || that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim 26 || has facial plausibility when the pleaded factual content allows the court to draw the reasonable 27 || inference that the defendant is liable for the misconduct alleged. Id. at 556. This new “plausibility” 28 || standard replaced the traditional standard, under which the movant was simply required to show

1 | “beyond doubt that the plaintiff can prove no set of facts in support of his claim that would entitle 2 || him to relief.” Milton I. Shadurupdates and Mary P. Squiers, 2-12 Moore’s Federal Practice - Civil 3 | § 12.34[1][a]. The current standard requires sufficient facts that “raise the right to relief above the 4 || speculative level”. Twombly, 550 U.S. at 555. Also see Wright & Miller, Federal Practice and 5 || Procedure: Civil 3d § 1357. The plausibility standard is not akin to a “probability requirement”, but 6 || it asks for more than a sheer possibility that a defendant has acted unlawfully. Where a complaint 7 || pleads facts that are “merely consistent with” a defendant’s liability, it “stops short of the line 8 || between possibility and plausibility of entitlement to relief.” Twombly, 550 U.S. at 557. The 9 || Twombly standard was further developed in Ashcroft v. Iqbal, 556 U.S. 622 (2009), advising lower 10 courts that “determining whether a complaint states a plausible claim for relief will ... be a 11 || context-specific task that requires the reviewing court to draw on its judicial experience and 12 |} common sense.” 556 U.S. at 679. “In keeping with these principles, a court considering a motion 13 || to dismiss can choose to begin by identifying pleadings that, because they are no more than 14 || conclusions, are not entitled to the assumption of truth. While legal conclusions can provide the 15 || framework of a complaint, they must be supported by factual allegations. When there are 16 || well-pleaded factual allegations, a court should assume their veracity and then determine whether 17 || they plausibly give rise to an entitlement to relief.” Id. at 679. In sum, allegations in a complaint 18 || cannot be speculative and must cross “the line between the conclusory and the factual”. Pefialbert- 19 || Rosa v. Fortufio-Burset, 631 F. 3d 592, 595 (1* Cir. 2011). “[A]n adequate complaint must provide 20 || fair notice to the defendants and state a facially plausible legal claim.” Ocasio-Hernandez v. 21 || Fortufio-Burset, 640 F.3d 1, 11 1“ Cir. 2011). 22 In deciding whether or not to dismiss under Fed. R. Civ. P. 12(b)(6), the court may consider 23 || the facts alleged in the pleadings, documents attached as exhibits or incorporated by reference in the 24 || pleadings, and matters of which the judge may take judicial notice. See Fed. R. Civ. P. 10(c) 25 || (documents attached to pleadings are part of pleadings); Young v. Lepone, 305 F.3d 1, 11 (1* Cir. 26 || 2002) (district court was entitled to consider letters that were not attached to complaint when 27 || complaint contained extensive excerpts from letters and references to them; when factual allegations 28 || of complaint revolved around document whose authenticity is unchallenged, that document

1 || effectively merges into the pleadings); Lovelace v. Software Spectrum Inc., 78 F.3d 1015, 2 |] 1017-1018 (5" Cir. 1996) (courts must limit inquiry to facts stated in complaint and documents 3 || either attached to or incorporated in complaint; however, courts may also consider matters of which 4 || they may take judicial notice). When considering a motion under Fed. R. Civ. P. 12(b)(6), a “court 5 |} must view the facts contained in the pleadings in the light most favorable to the nonmovant and draw 6 || all reasonable inferences therefrom ...” R.G. Fin. Corp. v. Vergara-Nufiez, 446 F.3d 178, 182 (1 7 | Cir. 2006). 8 MCS’ Motion to Dismiss is premised on three grounds: (a) Plaintiff failed to state a claim upon 9 || which relief can be granted because 18 U.S.C. § 500 is a criminal statute that does not provide for 10 private cause of action for recovery of damages; (b) Plaintiff is barred from recovering damages under 11 31 L.P.R.A. § 5141 because she admitted her own errors and is therefore the cause of her alleged 12 || damages, and because MCS had no in intervention with the Money Order, its alteration or deposit; and 13 || (c) that punitive damages are not available to the Plaintiff as a matter of law under 31 L.P.R.A. § 5141. 14 The Court rejects the first two grounds. Although 18 U.S.C. § 500 is acriminal statute that does 15 || not provide for a private action for recovery of damages, the Plaintiff can use said statute to establish 16 |} fault and/or illegal activity. Pursuant to Article 1802 of Puerto Rico’s Civil Code: 17 A person who by an act or omission causes damage to another through fault or negligence 18 shall be obliged to repair the damage so done. Concurrent imprudence of the party aggrieved does not exempt from liability, but entails a reduction of the indemnity. 31 19 L.P.R.A. § 5141. 20 || Three elements must be established to prevail in a tort claim under this Article: “(7) a compensable 21 || injury; (7) a wrongful act on the defendant’s part; and (iii) a sufficiently tight causal nexus between the 22 || injury and the wrong.” Gonzalez Figueroa v. J.C. Penney P.R., Inc., 568 F.3d 313, 319 (1* Cir. 2009). 23 || Said Article 1802 is “infinitely embracing” as it “encompasses an array of actions as diverse as human 24 || conduct itself.” Rodriguez Narvaez v. Nazario, 895 F.2d 38, 44 (1* Cir. 1990); Gonzalez-Perez v. 25 || Gomez-Aguila, 312 F. Supp. 2d 161, 173 (D.P.R. 2004). 26 The Plaintiff's Amended Complaint and Second Amended Complaint do not fail to state a 27 || plausible claim upon which relief can be granted regarding those two grounds. In both Complaints, the 28 || Plaintiff alleges that MCS altered a Money Order issued by the US Post Office to Oliveras, that said

1 || alteration is illegal pursuant to 18 U.S.C. § 500 and that due to that illegal alteration she suffered 2 || damages. MCS’ allegation that the Plaintiff cannot claim damages under 31 L.P.R.A. § 5141 because 3 | she caused her own damages when she sent the Money Order to a mistaken address is also flawed. 4 || Article 1802 specifically states that “[c]oncurrent imprudence of the party aggrieved does not exempt 5 || from liability, but entails a reduction of the indemnity”. This, of course, is subject to evidence. 6 || Likewise, MCS’ unsupported allegation that Banco Popular collects and deposits the payments received 7 in the mailbox where the Plaintiff addressed the Money Order to imply that it had no intervention with 8 || it cannot even be considered, for no evidence whatsoever was proffered to sustain it and mere 9 || allegations are not evidence. See Nisenbaum v. Milwaukee County, 333 F.3d 804, 810 (7" Cir. 2003). Also see Fantini v. Salem State College, 557 F.3d 22, 26 (1* Cir. 2009) (under Fed. R. Civ. P. 12(b)(6), 11 || “the Court shall not accept... bald assertions, periphrastic circumlocutions, unsubstantiated conclusions, 12 || or outright vituperation, or subjective characterizations, optimistic predictions, or problematic 13 || suppositions”). 14 In regards to MCS’ third ground for dismissal -the disallowance of punitive damages in Article 15 |] 1802 cases— it is well settled that “[a]lthough Puerto Rico law provides for broad recovery for all 16 || damage caused through fault or negligence, it does not allow punitive damages.” Ramirez de Arellano 17 | v. Eastern Airlines, Inc., 629 F. Supp. 189, 192 (D.P.R. 1985), quoting Ganapolsky v. Park Gardens 18 || Development Corp., 439 F.2d 844 (1" Cir. 1971) and Carrasquillo v. Lippitt & Simonpietri, Inc., 98 19 || P.R.R. 646 (1970). Also see Guardiola Alvarez v. Depto. de la Familia, 175 D.P.R. 668, 681 (2009) 20 || (ruling that punitive damages are generally disallowed in Puerto Rico unless special legislation 21 || expressly allow them); Cruz v. Molina, 788 F. Supp. 122, 128 (D.P.R. 1992); Riofrio Anda v. Ralston 22 || Purina Co., 772 F. Supp. 46, 53 (D.P.R. 1991), aff'd 959 F.2d 1149 (1* Cir. 1992); Computec Sys. Corp. 23 || v. Gen, Automation, Inc., 599 F. Supp. 819, 827 (D.P.R. 1984); Cooperativa de Seguros Multiples v. 24 || San Juan, 289 F. Supp. 858, 859 (D.P.R. 1968) (“damages to be awarded under the law of Puerto Rico 25 || should be of a compensatory nature, to make plaintiff whole for the damages and injuries suffered by 26 || him, and not in the manner of a punishment.”) The Plaintiff never disputed MCS’ argument for the 27 || disallowance of punitive damages under Puerto Rico law nor proffered any specific legislation that 28 || would allow them. Because the Plaintiff’ cause of action is strictly based in a tort claim under Article 10

1 || 1802, even assuming the veracity of her allegations, she is not entitled to punitive damages as a matter 2 || of law. Therefore, her request for punitive damages indeed fails to state a claim upon which relief can 3 || be granted and is hereby dismissed pursuant to Fed. R. Civ. P. 12(b)(6). Although MCS does not 4 || denominate Fed. R. Civ. P. 56’ as the springboard to partial summary judgment, it is warranted when 5 || the pleadings and admissions on file show that there is no genuine issue as to any material fact and 6 || that the moving party is entitled to a judgment as a matter of law. See Fed. R. Civ. P. 56; Celotex 7 || Corp. v. Catrett, 477 U.S. 317, 322-323 (1986); Pagan-Torres v. House of Representatives, 858 F. 8 || Supp. 2d 172, 179 (D.P.R. 2012); Villalobos v. N.C. Growers Ass’n, 252 F. Supp. 2d 1, 6 (D.P.R. 9 || 2001) (analyzing the standard for partial summary judgments). The 2010 amendments to Fed. R. 10 || Civ. P. 56(a) provide express authority for judgment on less than the entire case denominating it in 1] its subsection title as “Partial Summary Judgment”, which allows summary judgment “upon all or 12 || any part” of a claim or defense by any party. Fed. R. Civ. P. 56(a). Because in this case the Court 13 || ruling upon the Plaintiffs own admissions and allegations set forth in her Amended Complaint and 14 || Second Amendment Complaints, partial summary judgment dismissing her claim for punitive 15 | damages as a matter of law is warranted. 16 Conclusion 17 In view of the foregoing, MCS’ Motion to Dismiss (Docket No. 16) is hereby granted only 18 || as to the dismissal of the punitive damages claim and denied on all other grounds. Plaintiffs Motion 19 || for Leave to Amend Complaint (Docket No. 23) is hereby granted and her subsequent Motion [for] 20 || Leave to File Amended Complaint (Docket No. 31) is hereby denied. Thus, the Court only allows 21 || the Second Amended Complaint (Docket No. 23-1). A pre-trial conference is hereby scheduled for 22 || January 25, 2013 at 9:30a.m. The parties shall file proposed findings of fact and conclusions of law 23 || 10 days prior to the hearing. Each finding shall refer to a document or a witness indicating the 24 || proffered testimony. 25 SO ORDERED. 26 Partial judgment shall be entered accordingly. 27 28 ' Fed. R. Civ. P. 56 is applicable to this proceeding through Fed. R. Bankr. P. 7056. 11

In San Juan, Puerto Rico, this 2" day of November 2012. 2 3 Afarnarilc 6 7 8 9 10 11 . 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 12