USCA1 Opinion

April 26, 1993

[NOT FOR PUBLICATION]
[NOT FOR PUBLICATION]
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 92-2372
CONSULTANTS IN TECHNOLOGY, INC.,
FERNANDO SULSONA-NIEVES,
ROSA MERCEDES RAMIREZ-FREYRE AND THE
CONJUGAL PARTNERSHIP COMPOSED BY THEM,
Plaintiffs, Appellants,
v.
ELIAS CRUZ-FERNANDEZ,
FLORENCIO BRITO-MONTERO, AND JANE DOE
AND THE CONJUGAL PARTNERSHIP COMPOSED BY THEM,
Defendants, Appellees.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jaime Pieras, Jr., U.S. District Judge]
___________________
____________________
Before
Breyer, Chief Judge,
___________
Bownes, Senior Circuit Judge,
____________________
and Boudin, Circuit Judge.
_____________

____________________

Wallace Vazquez Sanabria, on brief for appellants.

________________________
Enrique G. Figueroa Llinas, Jos F. Cardona Jimenez and
____________________________
________________________
Rivera Iturbe & Cardona Jimenez, on brief for appellee Elias
_________________________________
Cruz-Fernandez.
Manuel Moreda-Toledo, Marisa Rivera-Barrera and Sweeting
_____________________
______________________
________
Gonzalez Cestero & Bruno, on brief for appellee Florencio Brito_________________________
Montero.
____________________
____________________

BOWNES,
Consultants in
Nieves

Technology,

("Sulsona")

("Ramirez"), appeal
judgment

Senior
Circuit
Judge.
________________________

entered

and

Inc. ("CTI"),
Rosa

the district
against

them

defendants Elias Cruz Fernandez

Montero ("Brito")
and

various

laws

Fernando

Sulsona

Mercedes

Ramirez

Freyre

court's

order of

summary

in

their

Puerto

judgment motion was unopposed.

suit

against

("Cruz") and Florencio Brito

for violations of federal

of

Plaintiffs,

Rico.

securities laws

Defendants'

We affirm.

summary

I.
I.
Background
Background
__________
CTI,
Sulsona
Mater,

Puerto

and Ramirez,
Inc. ("Alma

Rico

acquired
Mater"),

wholesale and retail

corporation
the stock

controlled

of Libreria

a corporation

engaged in

distribution of textbooks.

by
Alma
the

Plaintiffs

also engaged in negotiations with defendants for the purchase

of two other corporations engaged in the publication and sale
of

textbooks,

Librotex,
Librotex

Librotex,

Inc. ("Editorial
and

Editorial

brought suit for alleged

"the

Securities

Security's

Inc.

and

[sic] Laws

("Librotex")

Librotex").

Librotex

fell

and

When

the sale

of

through, plaintiffs

violations of "the Securities Act,"

Exchange
of Puerto

Act,"

and

Rico," and

"the

Uniform

sought further

relief under Puerto Rico tort and contract laws.

alleged that they were

Editorial

Plaintiffs

fraudulently induced to purchase Alma

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Mater's stock

by defendants' promise to

sell plaintiffs the

stock of the other two publishing companies.

Plaintiffs
which motion was
plaintiffs'

the

facts of

311.2

which

partial

failed to:

(1)

the relevant substantive

this case;"
in

`motions shall
a

for

opposed by defendants

motion

statement of

moved

its

and (2)

pertinent

summary

judgment,

on the grounds
"present an

that

adequate

law to be

applied to

"comply with

Local Rule

portion

establishes

that

be accompanied by a brief which shall contain

concise statement of reasons in support of the motion, and

citations of authorities upon which the movant relies.'"

The

district

for

court agreed

and

struck

plaintiffs'

motion

summary judgment from the record.

Defendants
grounds that:

moved

for

securities;"

(2) "the

78(j)(b), [17] CFR

is limited to the
private
[sic]

on

Security

Exchange

[240], Rule 10[]b[][-][]5,

Act, 15

cases where an

stocks is not consummated.

USCA

No

offer to sale

In this case, the offer to

was not consummated;"

and (3) there were, in any event, no facts

could find to support

sale

fraud action

actual sale or purchase of securities.

action is provided in

the

77[q](a), does

action for fraud in the

sell Librotex and Editorial [Librotex]

jury

judgment

(1) "the Security Act, 15 USCA

not provide a private cause of

of

summary

that a reasonable

the contention that

the sale of

Alma Mater was fraudulently induced by promises that the sale

-3-

of

Librotex

and

Editorial

Librotex would

closely

follow

plaintiffs' purchase of Alma Mater.

On June 16, 1992, when plaintiffs failed to respond
to defendants'

summary judgment

motion,

granted two extensions of time in

deemed

defendants' motion

ruling,

to

after having

been

which to do so, the

be unopposed.

court

Despite

that

plaintiffs filed a response on July 10 in which they

claimed that their complaint relied not only on section 17 of

the Securities Act of 1933,
The

district

court

but also on sections 12 and

disregarded

the

plaintiffs'

15.

untimely

response.
The

district

court

agreed

with

defendants'

characterization of the complaint, and, in an order issued on

July 31, held that:
action in section
U.S.C.

77q(a);

(1) there is no implied private right of

17(a) of

and (2) plaintiffs

under Rule 10b-5 because

either

Librotex

the Securities Act

or

of 1933,

lacked standing to

15
sue

plaintiffs were not "purchasers" of

Editorial

Librotex.

After

granting

summary judgment, the court dismissed the pendent Puerto Rico

law

claims, and

awarded costs

and

attorney's fees

on the

ground that plaintiffs

had failed to file

a timely response

to defendants' summary judgment motion.

The
costs
motion

in the

court subsequently
amount

ordered plaintiffs

of $3,425.01,

for attorney's fees in

but denied

to pay

defendants'

the amount of $28,745 because

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the submitted bill was

it

prepared

contemporaneously

Defendants filed
denying

neither sufficiently detailed nor was

a motion

with

the

work

performed.

for reconsideration of

the order

the award of attorney's fees and to amend the motion

for attorney's fees.

The record does

not indicate whether,

when or how the district court disposed of that motion.

Plaintiffs
summary

judgment,

appeal
dismissal

the district
of

pendent

court's
Puerto

grant of
Rico

law

claims, and the award of attorney's fees.

II.
II.
Standard of Review
Standard of Review
__________________
Review

of

summary judgment

order

places this

court on

a well-worn and familiar

Federal

Rules

judgment

is

of

Civil

appropriate

path.

Procedure
"if

Rule

provides

the

with

the affidavits, if any,

issue as to any

show that there

material fact and

summary

depositions,
file, together
is no genuine

that the moving party

entitled to a judgment as a matter of

56(c).

that

pleadings,

answers to interrogatories, and admissions on

56(c) of the

law."

is

Fed. R. Civ. P.

Interpreting this rule, the Supreme Court held that

the plain language of Rule 56(c) mandates
the entry of summary judgment, after
adequate time for discovery and upon
motion, against a party who fails to make
a showing sufficient to establish the
existence of an element essential to that
party's case, and on which that party
will bear the burden of proof at trial.

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Celotex Corp. v.
_____________

Catrett, 477
_______

U.S. 317, 322

(1986).

56(e) provides that

[w]hen a
made and
rule, an
the mere

motion for summary judgment is

supported as provided in this
adverse party may not rest upon
allegations or denials of the

Rule

adverse
party's
pleadings, but
the
adverse party's response must set forth
specific facts showing that there is a
genuine issue for trial. If the adverse
party does not
so respond,
summary
judgment,
if
appropriate, shall
be
entered against the adverse party.
Fed. R. Civ. P. 56(e).
Review of a district court's summary judgment order
is plenary, and we review the entire record in the light most
favorable
2046,

to the nonmoving party.

slip op.

at 18 (1st

General Elec. Co., 950

_________________
denied, 112
______
F.2d

Fragoso v. Lopez, No. 92_______

_____

Cir. April 5,

1993); Mesnick v.
_______

F.2d 816, 822 (1st Cir.

S. Ct. 2965

112, 115 (1st Cir.

(1992); Griggs-Ryan
___________
1990); Garside v.
_______

1991), cert.
_____
v. Smith,
_____

904

Osco Drug, Inc.,

_______________

895 F.2d 46, 48 (1st Cir. 1990).

In
unusual
nonmoving
motion.
Court for

this

case,

we

are faced

with

the

somewhat

circumstance of an appeal of a summary judgment by a

party who
Local

failed to

Rule 311.12

oppose the

of the

the District of Puerto Rico

summary judgment

United States

provides, in relevant

part:
Upon any motion for summary judgment,
there shall be served and filed annexed
to the motion a separate, short, and
concise statement of the material facts
-6-

District

as to which the moving party contends

there is no genuine issue to be tried and
the basis of such contention as to each
material fact,
properly supported by
specific reference to the record.
All material facts set forth in the
______________________________________
statement required to be served by the
_________________________________________
moving party
will be deemed
to be
_________________________________________
admitted
unless controverted
by the
_________________________________________
statement required to be served by the
_________________________________________
opposing party.
______________
(Emphasis
Local

supplied.)

This

Rule 311.12.

Rivas v.
_____

Pecurias, 929 F.2d 814,

________

has consistently

upheld

Federacion de Associaciones
____________________________

816 n.2 (1st Cir. 1991);

v. Chase Manhattan Bank, 891

_____________________
Alvarado-Morales v.
________________

court

F.2d 17, 19

Laracuente
__________

(1st Cir.

Digital Equip. Corp., 843

____________________

1989);

F.2d 613, 615

(1st Cir. 1988).

It is
pursuant to

firmly established

Fed. R. Civ. P. 56(c) that there is

of evidence to support
477

U.S.

that after

at 325,

movants aver
"an absence

the nonmoving party's case," Celotex,

_______

the burden

shifts

to the

nonmovants to

establish the

existence

material fact.
read

the

of at

least one

Garside, 895 F.2d

_______

record

in

the

the

exception

at 48.

light

most

plaintiffs,

with

asserted by

defendants in support of

motion

which facts

failed to

were

of

of

On this appeal, we
favorable

those

to

material

the
facts

their summary judgment

admitted by

timely respond

genuine issue

plaintiffs when

to defendants' motion

they

for summary

judgment.

-7-

III.
III.
Discussion
Discussion
__________
Based on

defendants' recitation of

which accompanied their motion

rest of

the record

granted

summary

securities

fraud.

before it,
judgment
The

as

material facts

for summary judgment, and the

the district
to

district

court properly

plaintiffs'
court

found

claims

of

that

the

following evidence was uncontested:

1.
The offer to sell the stock of
Librotex
and Editorial
Librotex was
limited to those two companies and was
independent of the sale of Alma Mater.
2.
Plaintiffs
have admitted
on
several different
occasions that the
purchase
of
Librotex and
Editorial
Librotex was
not consummated because
plaintiffs
lacked
the financing
to
purchase the two companies.
3. In the agreement which consummated
the sale of Alma Mater to plaintiffs, no
representation was made by defendants
regarding the future sale of Librotex and
Editorial Librotex; in fact, in clause 17
of the agreement, the parties stated
without
limitation
that
no
other
agreements existed between them as of
that date.
The
documentary
their

court

reached

evidence provided

motion

for

demonstrated that the

summary

these

conclusions

by defendants
judgment.

based

on

in support

of

That

Alma Mater transaction was

evidence
completely

independent of any contemplated sale of Librotex or Editorial

Librotex.
was

Defendants' statement of undisputed material facts

adequately supported by defendants' sworn statements and

-8-

deposition

testimony.

conference,

the

parties

agreement "embodied
and

that

there

understandings
parties."

Indeed,

at

the

stipulated

initial scheduling

that

the

the entire understanding

were

no

written

further

or

oral

or

The Alma Mater agreement

Mater

of the parties

other

in

Alma

agreements or

effect

between

the

contained no mention of

the prospective sale of Librotex or Editorial Librotex.

Plaintiffs offered no facts to
that

defendants falsely represented

Alma

Mater

Editorial
their

sale was
Librotex.

56(e).

the

Therefore

plaintiffs

We see

court's findings
the district
however,

of undisputed

our

sales of

decision

that the

Librotex and

failed to

claim as required

no reason to

court's grant of

that

to plaintiffs

linked to

burden to support their

Civ. P.

support their claim

by Fed. R.

disturb the

facts, and

not

district

therefore affirm

summary judgment.
should

meet

be

We

taken

affirmance of the district court's holding regarding

note,
as

an

private

rights of action under section 17(a) of the Securities Act of

1933,

15

decided by

U.S.C.

77q(a).

either the

See Eichler v. Berner,

___ _______
______

That

Supreme Court or

case,

need not have

especially

when

not

yet been

the First

Circuit.

472 U.S. 299, 304 n.9

v. Perfecture, Inc., 700 F.2d 774,

________________
district court

issue has

(1985); Cleary
______

779 (1st Cir. 1983).

reached that question

plaintiffs

failed

to

The

in this

identify the

-9-

specific

sections of

the federal

securities laws

on which

they based their claims.

The

district

pendent state law

court

claims.

appropriately

As the Supreme

"when the federal-law claims have

in its

early stages, and

Univ.
_____

the

case

Court has

held,

remain, the

the exercise of jurisdiction by

without

v. Cohill, 484 U.S.

______

the

dropped out of the lawsuit

only state-law claims

federal court should decline

dismissing

dismissed

prejudice."

343, 350 (1987);

Carnegie-Mellon
_______________
see also United
___ ____ ______

Mine Workers v. Gibbs, 383 U.S. 715 (1966).

____________
______
We

decline to

court's award of

discuss plaintiffs' claim

attorney's fees was improper.

that the

Under Local

Rule 11 of the First Circuit Court of Appeals, "[i]n addition

to an appellant's

duties under FRAP 11(a),

responsibility

to

complete."

the absence of a complete record, we lack any

basis

to

In
set

see that

aside

the

the district

record,

it is appellants

court's

as certified,

order

attorney's fees, assuming such an order was entered.

is

awarding

Affirmed.
Affirmed.
________

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