Heriberto MEDINA-PADILLA; L & M Cоrp., d/b/a Emmanuel Travel and Tours, Plaintiffs, Appellants, v. UNITED STATES AVIATION UNDERWRITERS, INC.; United States Aircraft Insurance Group, Defendants, Appellees, Piedmont Aviation Services, Inc., Defendant.
No. 15-1467.
United States Court of Appeals, First Circuit.
March 4, 2016.
83
Tomas A. Roman-Santos and Roman Santos, LLC on brief for appellees.
Before LYNCH, SELYA, and LIPEZ, Circuit Judges.
This is the second time the plaintiffs have brought the same claims before the federal courts. This time, they characterize the claims as sounding in tort rather than sounding in contract, as they had claimed earlier. This they cannot do.
In 2005, Lopez & Medina Corp. (“L & M“) brought suit against a number of insurers, claiming that the insurers were liable for L & M‘s breach of contract claims against a company, Patriot Air, LLC (“Patriot Air“), that had an insurance policy with those insurers. In 2010, the district court dismissed the case on the basis that the insurance policy did not provide coverage for contract claims. Lopez & Medina Corp. v. Marsh USA, Inc., 694 F.Supp.2d 119, 121 (D.P.R.2010). This court affirmed. Lopez & Medina Corp. v. Marsh USA, Inc., 667 F.3d 58, 69 (1st Cir.2012).
L & M and its owner now bring tort-based claims arising out of the same set of underlying facts. The district court dismissed the action on the ground of res judicаta. Medina-Padilla v. Piedmont Aviation Servs., Inc., No. 3:14-cv-01048, 2015 WL 1033918 (D.P.R. Mar. 10, 2015). We affirm.
I.
The background facts and procedural history of this case are recounted in detail in our previous opinion. Lopez & Medina Corp., 667 F.3d at 60-63. We briefly recount the facts underlying this appeal.
On June 3, 2005, L & M filed a diversity complaint in the District of Puerto Rico against a number of insurers1 for Patriot Air.2 The complaint alleged that L & M had entered into a Passenger Aircraft Charter Agreement with Patriot Air and that Patriot Air had breached that agreement in June and July 2002. But Patriot Air had filed for bankruptcy in September 2002, and L & M did not name Patriot Air as a defendant. Rather, the complaint sought recovery from Patriot Air‘s insurers under Puerto Rico‘s direct action statute,
On March 18, 2010, L & M filed a motion to alter or amend judgment. L & M argued that the district court erred in understanding its complaint as advancing only a breach of contract action and claimed that it was also seeking “concomitant tort damages.”
The district court denied the motion. Lopez & Medina Corp. v. Marsh USA, Inc., No. 3:05-cv-01595, 2010 WL 1508502 (D.P.R. Apr. 12, 2010). The district court noted that “the Complaint does not once allege a tort violation and is entirely based on the claim that the alleged breach оf contract is a covered insurable risk under the co-defendants’ insurance policies.” Id. at *2.
On January 26, 2012, this court affirmed. Lopez & Medina Corp., 667 F.3d at 69. We first determined that “[t]here can be no doubt that L & M‘s allegations here sound in contract.” Id. at 66. We agreed with the district court that recovery by L & M depended on whether the relevant insurance policy language, “which usually covers only tort claims, also provides coverage for claims in an underlying action arising out of and related to a contract between the parties.” Id. at 59. This was a question of first impression in our circuit, id., which we answered by сoncluding that the insurance policy‘s “express terms ... provide no coverage for L & M‘s contract-based claims.” Id. at 69.
On January 21, 2014, Heriberto Medina-Padilla and L & M, undaunted, filed the complaint in this action. Medina-Padilla, who was not a plaintiff in the first lawsuit, was а travel agent and the sole owner and principal of L & M. The complaint sought recovery in tort for Patriot Air‘s “negligent refusal and withholding of transportation” arising from the same series of events that underlay the previous suit‘s breach of contract claims.
USAUI and USAIG moved to dismiss on the grounds of res judicata and statute of limitations. On March 10, 2015, the district court granted the motion to dismiss on the ground of res judicata. Medina-Padilla, 2015 WL 1033918, at *1.
This appeal followed.
II.
An affirmative defense such as res judicata may be raised in a motion to dismiss under
Under Puerto Rico‘s statutory definition of res judicata, “it is necеssary that, between the case decided by the sentence and that in which the same is invoked, there be the most perfect identity between the things, causes, and persons of the litigаnts, and their capacity as such.”
A party asserting claim preclusion under Puerto Rico law must establish three elements: “(i) there exists a prior judgment on the merits that is ‘final and unappealable‘; (ii) the prior and current actions share a perfect identity of both ‘thing’ and ‘cause‘; and (iii) the prior and current actions share a perfect identity of the parties and the capacities in which they acted.” Garcia Monagas, 674 F.3d at 51.
All three elements are met here. First, the prior district court decision, affirmed by this court, is a final judgment on the merits.
Second, there is a perfect identity of “thing” and “cause.” Two actions share a рerfect identity of “thing” if they involve the same “object or matter.” Garcia Monagas, 674 F.3d at 51 (quoting Lausell Marxuach v. Diaz de Yanez, 3 P.R. Offic. Trans. 742, 745 (1975)). Two actions share a perfect identity of “cause” if “they flow from the same principal ground or origin,” id. (citing Lausell Marxuach, 3 P.R. Offic. Trans. at 746), or they “dеrive from a common nucleus of operative facts,” id. (quoting Silva v. City of New Bedford, 660 F.3d 76, 79 (1st Cir.2011)). These requirements are met. The complaint in this case and the complaint in the prior action are based оn the same factual predicates. “[A] mere difference in the legal theories on which two causes of action are grounded does not destroy the identity of thing or causе that otherwise exists between two suits arising out of a common nucleus of operative fact.” R.G. Fin. Corp., 446 F.3d at 184.
Third, there is perfect identity of the parties. Under Puerto Rico law, two actions share a perfect identity of the parties “if either (1) the parties in the current action were also parties in the prior action or (2) the parties in the current action are in ‘privity’ with the parties in the prior action.” Garcia Monagas, 674 F.3d at 51 (citing
First, L & M argues that the dеfendants took inconsistent positions during the prior litigation that prevented the prior action from being fully and fairly litigated. But the district court in the prior action, correctly, as we hеld, rejected L & M‘s contract claim on the merits and rejected on the merits its argument that a tort cause of action had also been pleaded. Lopez & Medina Corp., 694 F.Supp.2d at 128. Nothing about the defendаnts’ alleged “inconsistent procedural conduct” calls the fairness of those decisions into doubt.4
Second, L & M argues that our 2012 decision changed the applicable law so as to mаke available a tort cause of action that had not been available when it initiated the prior lawsuit. That is a misstatement of our decision. After all, our opinion recognized that the insurance policy “usually covers only tort claims” and went on to decide, as a matter of first impression, whether the insurance policy also covered cоntract claims against the insured. Lopez & Medina Corp., 667 F.3d at 59. In other words, our 2012 decision took as a given that tort actions were covered by the insurance policy. Nothing prevented L & M from pleading a tort cause of action in its 2005 complaint. Indeed, L & M attempted to add a claim for recovery in tort to its complaint in the previous action, but did so only belatedly, in its 2010 motion to alter or amend judgment. That action by L & M cuts against its argument that a tort cause of action was not available until 2012.
Pouring old wine into a new bottle does not make the wine into new wine. The district court correctly invoked res judicata in dismissing the action.5
We affirm.