Best Auto Repair Shop, Inc. v. Universal Insurance Group
875 F.3d 733
| 1st Cir. | 2017Background
- Plaintiffs Best Auto Repair Shop, Inc. and Elvis Martínez sued several insurance companies and employees under 42 U.S.C. § 1981 and Puerto Rico law, alleging race/national-origin discrimination that excluded Best Auto from insurer reimbursement networks and interfered with contracts.
- Defendants moved for summary judgment; the magistrate and district court characterized plaintiffs’ negligence claims as defamation claims and recommended/determined those claims failed on multiple grounds.
- The District Court initially denied summary judgment as to some § 1981 and state-law claims, then granted defendants’ motion for reconsideration and entered summary judgment for defendants on March 31, 2016.
- For § 1981 claims the District Court held plaintiffs failed to show defendants’ conduct prohibited plaintiffs’ right to “make and enforce contracts” because customers could have contracted with plaintiffs without insurer payment.
- For Puerto Rico claims the District Court dismissed negligence (treated as time-barred defamation) and concluded tortious-interference claims failed either as time-barred or because plaintiffs presented no admissible evidence of enforceable contracts (or showed contracts were subject to unmet conditions precedent).
- Plaintiffs appealed; the First Circuit affirmed primarily on waiver grounds for the § 1981 claim and on the merits for the Puerto Rico claims.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether plaintiffs’ § 1981 claims survive summary judgment | Martínez says defendants’ actions interfered with his and Best Auto’s right to make/enforce contracts because insurers excluded Best Auto from reimbursement lists | Defendants say customers were free to contract with plaintiffs without insurer payment, so no § 1981 interference | Affirmed: plaintiffs waived meaningful challenge on appeal; district court’s § 1981 ruling stands |
| Whether negligence claims must be treated as defamation and dismissed | Plaintiffs contend negligence claims are distinct from defamation (challenge characterization) | Defendants treat negligence claims as defamation and argue they are time-barred and unsupported | Affirmed: plaintiffs failed to contest characterization at summary judgment; claims dismissed |
| Whether tortious-interference claims are time-barred | Plaintiffs dispute statute-of-limitations rulings for certain contracts | Defendants show many interference claims fall outside the limitations period | Affirmed in part: district court’s statute-of-limitations rulings undisputed by plaintiffs |
| Whether plaintiffs provided admissible evidence of enforceable contracts (or that conditions precedent were satisfied) | Plaintiffs point to customer testimony that oral contracts existed (including Cardona) and invoke PR Civil Code § 3047 to argue conditions were prevented from being fulfilled | Defendants argue contracts were contingent on insurer inspection/authorization and plaintiffs presented no admissible evidence those conditions were met; also show Cardona paid privately so no prohibited interference | Affirmed: plaintiffs failed to identify admissible evidence showing enforceable contracts or that conditions precedent were met or were wrongfully impeded |
Key Cases Cited
- Díaz-Colón v. Fuentes-Agostini, 786 F.3d 144 (1st Cir. 2015) (appellate waiver doctrine; claims not raised in opening brief deemed waived)
- Sparkle Hill, Inc. v. Interstate Mat Corp., 788 F.3d 25 (1st Cir. 2015) (appellate court refuses to consider arguments not raised in opening brief)
- Schneider v. Local 103 I.B.E.W. Health Plan, 442 F.3d 1 (1st Cir. 2006) (issues ignored at summary judgment may be deemed waived on appeal)
- Wilber v. Curtis, 872 F.3d 15 (1st Cir. 2017) (standards for retaining pendent state claims after federal claims are dismissed)
- Desjardins v. Willard, 777 F.3d 43 (1st Cir. 2015) (factors guiding jurisdictional discretion over pendent claims)
- Terradata, Inc. v. Budget Rent-A-Car Int'l, Inc., 218 F. Supp. 2d 101 (D.P.R. 2002) (contract subject to condition precedent remains pre-contract until condition is met; no tortious interference if condition unmet)