Hello, Paloma,
Here is your case, but please note that the cite that you were given
is slightly in error; it should properly read 35 F. Supp. 2d 171.
Best, weisstho-ga
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IN RE Rio Piedras Explosion Litigation
United States District Court for the District of Puerto Rico
35 F. Supp. 2d 171 (1998)
The Court has before it the Motion in Request for Consolidation filed
by the Manager of the State Insurance Fund Corporation (SIF) in Civil
Action 97-1739(CCC) on April 3, 1998 (docket entry 698), the Motion
Regarding the Legal Representation of Ms. Alicia Pacheco-Narvaez filed
by plaintiffs in Civil Action 97-1806(CCC) on April 24, 1998 (docket
entry 723), the Opposition to Request For Consolidation of Civil
Actions Nos. 97-1739 and 97-1806 and Motion to Dismiss Alicia
Pacheco-Narvaez's Claims Alleged in Civil Action No. 97-1806 filed by
Enron Corp. on May 15, 1998 (docket entry 751) and the Motion in
Opposition to Dismiss filed by plaintiffs in Civil Action 97-1806(CCC)
on June 2, 1998 (docket entry 785). n1
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n1 Although Enron tendered a reply to the opposition to its motion to
dismiss on July 16, 1998, no leave to file it was obtained from the
Court as required by Local Rule of Procedure 311(7). Accordingly, the
reply brief will not be considered by the Court.
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The motion for consolidation filed by the Manager of the SIF informs
that on May 9, 1997 a complaint was filed by him on behalf of insured
workers Alicia Pacheco-Narvaez and Miriam Vazquez-Leon, Civil Action
97-1739(CCC), and that on May 23, 1997 a separate action in which Ms.
Pacheco-Narvaez also appears as a plaintiff was filed by private
attorneys, Civil Action 97-1806(CCC). Claiming that both cases involve
a "common question of law or fact," the SIF requests consolidation of
both cases.
The motion regarding the legal representation of Ms. Pacheco-Narvaez
filed in Civil Action 97-1806(CCC) is, in essence, a motion in support
of the SIF's motion for consolidation. Movants claim that "the
procedural situation is that Ms. Alicia Pacheco is represented in two
different actions by two different attorneys with allegations that,
though similar in nature, are not identical." Docket entry 723, at p.
2. Movants further allege that "consolidation of the above actions
would allow the Manager to recover any amounts expended by it due to
the alleged fault of third parties and, at the same time, allow that
plaintiff's total damages be tried through the privately retained
counsel." Docket entry 723, at p. 3.
Defendant Enron has opposed both motions, and also seeks dismissal of
the claim brought by Ms. Pacheco-Narvaez in Civil Action 97-1806(CCC)
asserting that "11 LP.R.A. § 32 is a statutory bar to a separate
action by the wife of a deceased workman once the Fund subrogates in
her rights." Docket entry 751, at p. 3. Plaintiffs in Civil Action
97-1806(CCC) have opposed Enron's dismissal request, claiming that
neither Article 31 of the Puerto Rico Workmen's Accident Compensation
Act (PRWACA) (11 L.P.R.A. § 32) nor its case law mandates said result.
In addition, they contend that dismissal of Ms. Pacheco-Narvaez' claim
in Civil Action 97-1806(CCC) would unduly benefit Enron, as "the
allegations therein protect better plaintiff's interest and, secondly,
institutionally the SIF' expertise, resources and custom are generally
directed to recover its expenses, not to fully litigate the damages
claims against third parties on behalf of injured beneficiaries."
Docket entry 785, at p. 3.
The issue before us, thus, is whether the beneficiary of a deceased
workman insured by the SIF, on whose behalf the SIF has already filed
suit to recover damages against the third party allegedly responsible
for the insured workman's death, as permitted by law, can file a
separate suit for damages against the third party while the SIF's
action is pending adjudication. We hold that it may not.
Article 31 of the P.R.W.A.C.A. (11 L.P.R.A. § 32), as amended,
provides as follows:
In case where the injury, the professional disease, or the death
entitling the workman or employee or his beneficiaries to compensation
in accordance with this chapter has been caused under circumstances
making a third party responsible for such injury, disease, or death,
the injured workman or employee or his beneficiaries may claim and
recover damages from the third party responsible for said injury,
disease or death, within one year following the date of the final
decision of the case by the Manager of the State Insurance Fund, who
may subrogate himself in the rights of the workman or employee or his
beneficiaries to institute the same action in the following manner:
When an injured workman or employee, or his beneficiaries in the case
of death, may be entitled to institute an action for damages against a
third party in cases where the State Insurance Fund, in accordance
with the terms of this chapter, is obliged to compensate in any manner
or to furnish treatment, the Manager of the State Insurance Fund shall
subrogate himself in the rights of the workman or employee or of his
beneficiaries, and may institute proceedings against such third party
in the name of the injured workman or employee or his beneficiaries,
within the ninety (90) days following the date of the final and
enforceable decision of the case, and any sum which as a result of the
action, or by virtue of a judicial or extra-judicial compromise, may
be obtained in excess of the expenses incurred in the case shall be
delivered to the injured workman or employee or to his beneficiaries
entitled thereto. The workman or employee or his beneficiaries shall
be parties in every proceeding instituted by the Manager under the
provisions of this section, and it shall be the duty of the Manager to
serve written notice on them of such proceedings within five (5) days
after the action is instituted.
If the Manager should fail to institute action against the third
person responsible as provided in the preceding paragraph, the workman
or employee or his beneficiaries shall be fully at liberty to
institute such action in their behalf, without being obliged to
reimburse the State Insurance Fund for the expenses incurred in the
case.
Neither the injured workman or employee nor his beneficiaries may
institute any action, nor may compromise any cause of action they may
have against the third party responsible for the damages until after
the expiration of ninety days from the date of the final and
enforceable decision of the case by the Manager of the State Insurance
Fund.
No compromise between the injured workman or employee, or his
beneficiaries in case of death, and the third party responsible within
the ninety (90) days subsequent to the date in which the decision is
final and enforceable, or after the expiration of said term if the
Manager has filed his complaint, shall be valid or effective in law
unless the expenses incurred by the State Insurance Fund in the case
are first paid. No judgment shall be entered in suits of this nature,
and no compromise whatsoever as to the rights of the parties to said
suits shall be approved, without making express reserve of the right
of the State Insurance Fund to reimbursement of all expenses incurred;
Provided, That the secretary of the part taking cognizance of any
claim of the nature above described shall notify the Manager of the
State Insurance Fund of any order entered by the court which affects
the rights of the parties to the case, as well as the final
disposition thereof.
The Manager of the State Insurance Fund may compromise as to his
rights against a third party responsible for the damages; it being
understood, however, that no extra-judicial compromise shall affect
the rights of the workman or employee, or of his beneficiaries,
without their express consent and approval.
Any sum obtained by the Manager of the State Insurance Fund through
the means provided in this section shall be covered into the State
Insurance Fund for the benefit of the particular group into which the
occupation was classified or the industry in which the injured or dead
workman or employee was employed.
The Supreme Court of Puerto Rico, in Negron v. Industrial Comm'n, 76
D.P.R. 301, 76 P.R.R. 301 (1954), aptly summarized and explained the
provisions of Article 31 as follows:
Section 31, as amended by Act No. 16 of April 12, 1948, provides that
in cases of compensable labor accidents caused under circumstances
making third persons responsible, the workman or employee, or the
presumptive beneficiaries under the Workmen's Accident Compensation
Act, may not, in the event of death, institute action against the
third person, or compromise their rights of action until after the
Manager of the State Insurance Fund has entered final decision and
until after the expiration of ninety days counted from the Manager's
decision, and within the year following the date the final decision is
rendered by the Manager. The latter, subrogating himself in the rights
of the workman or employee, or of the beneficiaries, may bring action
against a third person, in the name of the workman or employee, or his
beneficiaries, within ninety days counted from the date of the final
decision in the case. If the Manager files such action within the
stated period, and as a result of that action or some judicial action
a sum is obtained in excess of the sums already allowed by the Manager
by way of compensation, or in excess of the expenses incurred, the
Manager shall deliver such excess to the workman or employee, or his
legal beneficiaries. The workman or employee, or his beneficiaries,
shall be parties in the proceeding instituted by the Manager, and it
shall be the duty of the Manager to serve written notice on such
workman or employee, or his beneficiaries, within the period of five
days after the action is instituted. If the Manager shall fail to
institute action against the third person responsible within the said
ninety-day period, the workman or employee, or his beneficiaries, may
then bring an action against the third person, in their behalf,
without being obligated to reimburse the State Insurance Fund for the
expenses incurred by the Fund. The implication is that the failure of
the Manager to bring an action within the ninety-day period following
his final decision, entails a waiver by the Manager of his right of
subrogation.
Id., at pp. 286-87 (emphasis ours).
In similar terms, the Supreme Court in Gallart Mendia v. Gonzalez
Marrero, 95 D.P.R. 201, 95 P.R.R. 196 (1967), stated:
The Act grants the Manager 90 days to institute a proceeding when he
subrogates himself in the rights of the worker. If the Manager is
successful he will recover whatever sum the Fund has paid and the
remainder will go to the deceased worker's beneficiary or
beneficiaries. During said 90 days the beneficiaries may not sue. If
the Manager should fail to institute action within said 90 days then
the beneficiaries shall be free to sue on their own account. As may be
seen, the mechanism protects the Fund inasmuch as it affords the
latter the possibility of recovering what has been paid and at the
same time it protects the injured workers or their beneficiaries
because if the Manager does not sue, the former may always sue after
the lapse of said 90 days.
Id., at p. 201 (emphasis ours).
It is evident, under both Article 31 and its interpretation by the
Supreme Court of Puerto Rico, that an insured workman or his
beneficiaries, in case of the workman's death, may file a suit to
recover damages against a third party allegedly responsible for the
insured workman's injury or death, but ONLY after a period of ninety
(90) days has elapsed after the SIF's final decision in his case, and
then ONLY if the SIF has not instituted said action itself on behalf
of the insured workman or his beneficiaries. Inasmuch as in this
instance Ms. Pacheco-Narvaez instituted a separate action against the
third party while the SIF's action brought on her behalf against that
same party was still pending, her separate claim is barred by the
statute and must be DISMISSED.
That both plaintiffs in Civil Action 97-1806(CCC) and the SIF insist
that we reach a different result is disconcerting, not only because of
the clear language of Article 31 and its interpretative jurisprudence,
but also because of our prior pronouncements regarding this same
issue made in the course of this consolidated litigation. Previously,
in ruling on a motion filed by the attorney of the SIF seeking leave
to withdraw as counsel for Ms. Pacheco-Narvaez in Civil Action
97-1739(CCC), we stated that:
...no information has been provided to the Court as to the legal
foundation of that second claim filed by the deceased workman's
beneficiary [Civil Action 97-1806(CCC)], particularly in light of the
statutory bar to a separate action by the workman or his beneficiaries
once the SIF subrogates in their rights (see 11 L.P.R.A. § 32), nor is
it clear whether the SIF will in fact continue to prosecute the claim
filed on behalf of Ms. Pacheco-Narvaez. As the record stands now, and
in view of the subrogation made by the SIF, we do not see a right by
Ms. Pacheco-Narvaez to institute a separate action while said action
for subrogation is pending, nor, for that matter, a need for her to
retain counsel different from that of the SIF.
Order of March 16, 1998, docket entry 655, p. 1 (emphasis ours).
All the cases cited by plaintiffs in support of their position are
inapposite to the issue before us. Machado v. The American R. R. Co.
of P.R., 49 D.P.R. 843, 49 P.R.R. 823 (1936), interpreted provisions
of Act 85 of 1928, the workmen's compensation law then in effect,
which differed substantially from those contained in the present law,
Act 45 of 1935, as amended. In Manager of State Fund v. District
Court, 73 D.P.R. 949, 73 P.R.R. 884 (1952), the Supreme Court
interpreted Article 31 of the PRWACA as allowing the Manager of the
SIF and the deceased workman's beneficiaries, while represented by
different attorneys, to join as plaintiffs in the same lawsuit, which
is not the procedure plaintiffs and the Manager seek to follow in this
instance.
In Gallart, Mgr. v. Banco Popular, 91 D.P.R. 818, 91 P.R.R. 795
(1965), the Court stressed that "the action referred to in § 31 does
not belong to the Manager, but to the injured worker or his
beneficiaries, and in order that the cause of action may prosper it
must be acknowledged in favor of said worker or his beneficiaries,"
id., at p. 803, but also observed that Act 45 of 1935, in retaining
the right of subrogation, "provided more specifically as to the
exercise of the action against the third person..." id., at p. 800.
The Court noted in particular that § 31 was amended by Act No. 16 of
April 12, 1948 to, among other things, "grant the Manager the first
opportunity to institute the proceeding against [a] third person
within the term of ninety days overruling the decision in Del Rio v.
Garcia, 71 D.P.R. 93 71 P.R.R. 86 (1950)...." Id., at p. 802. n2
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n2 The Court had ruled in Del Rio that Article 31 of Law 45, as it
then read, did not require the workman or his beneficiaries to wait
until the expiration of a determined period of time following the
award made by the Manager of the SIF before resorting to the courts
with a complaint for damages against the third person causing the
injury, disease or death. See Del Rio, 8= 71 D.P.R. 93, 71 P.R.R. at
p.91.
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Finally, in Alvarado v. Calaino Romero, 1975 PR Sup. LEXIS 2241, 104
D.P.R. 127 (1975), the Court reiterated what the statute plainly
provides: "the State Insurance Fund may, in the first place, institute
proceedings against the third party within the ninety days following
the date of its 'final and enforceable' decision, but, if it fails to
do so, the workman or his beneficiaries 'shall be fully at liberty to
institute such action in their behalf, without being obliged to
reimburse the State Insurance Fund for the expenses incurred in the
case." Id., at p. 132 (official translation) (emphasis ours).
Nor are the arguments raised by plaintiffs in an attempt to buttress
their posture convincing. Their assertion that the allegations of the
complaint in Civil Action 97-1806(CCC) better protect Ms.
Pacheco-Narvaez' interests is lame, as the First Amended Master
Complaint (docket entry 888) filed by the Plaintiffs' Steering
Committee in this consolidated litigation governs all of the
plaintiffs' claims, except for the particular damages each seeks to
recover. We have reviewed the damages allegations in both complaints,
and although the amounts claimed in each on behalf of Ms.
Pacheco-Narvaez do vary, the bases for those claims are basically the
same. In any event, the SIF, as any other litigant, has available the
mechanism of amendment to the complaint, as long as it complies with
Fed.R.Civ.P. 15. On the other hand, plaintiffs' depiction of the SIF
as being interested only in recovering its expenses and not in fully
litigating the damages' claims against third parties on behalf of
beneficiaries runs contrary to the law, which specifically provides
that the SIF's action of subrogation "does not belong to [the
Manager], 'but to the injured worker (who is the real party in
interest) and in order that the cause of action may prosper it must be
acknowledged in favor of said worker or his beneficiaries.'"
Administradora F.S.E. v. Maldonado, 107 D.P.R. 527, 529 (1978), citing
Gallart, Mgr. v. Banco Popular, 91 D.P.R. 818, 91 P.R.R. 795, 803
(1965). We are confident that the SIF will comply with its statutory
mandate and that it will protect the rights of Ms. Pacheco-Narvaez
during its litigation in Civil Action 97-1739(CCC).
We need not dwell further. For the reasons stated, we rule on the
above mentioned motions as follows:
1) The Motion in Request for Consolidation filed by the Manager of the
State Insurance Fund Corporation (docket entry 698) is DENIED.
2) The Motion Regarding the Legal Representation of Ms. Alicia
Pacheco-Narvaez filed by plaintiffs in Civil Action 97-1806(CCC)
(docket entry 723) is DENIED.
3) The Motion to Dismiss Alicia Pacheco-Narvaez's Claims Alleged in
Civil Action No. 97-1806 filed by Enron Corp. (docket entry 751) is
GRANTED.
4) Partial judgment shall be entered by separate order in Civil Action
97-1806(CCC) DISMISSING the claim of Alicia Pacheco-Narvaez.
SO ORDERED.
At San Juan, Puerto Rico, on November 5, 1998.
CARMEN CONSUELO CEREZO
Chief, U.S. District Judge
PARTIAL JUDGMENT
For the reasons stated in our Order entered on this date, the claim of
Alicia Pacheco-Narvaez in Civil Action 97-1806(CCC) is hereby
DISMISSED.
SO ORDERED AND ADJUDGED.
At San Juan, Puerto Rico, on November 5, 1998.
CARMEN CONSUELO CEREZO
Chief, U.S. District Judge |
