USCA1 Opinion

March 31, 1994

[NOT FOR PUBLICATION]

UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
___________________

No. 93-2263

SURFACT, INC.,
Plaintiff, Appellant,
v.
SOUTH PEARL CHEMICAL, INC.,
Defendant, Appellee.
__________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gilberto Gierbolini, U.S. District Judge]
___________________
___________________
Before
Breyer, Chief Judge.
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Selya and Boudin, Circuit Judges.
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___________________
David Efon and Kevin G. Little on brief for appellant.
__________
_______________
Gloria L. Lebron Nieves and Cobian & Valls, on brief
________________________
______________

for

appellee.

__________________
__________________

Per Curiam.
___________

Appellant

corporation, appeals

the

jurisdiction

action

of its

Chemical, Inc.

Surfact,

dismissal for

Inc.,
lack

a
of

against appellee,

Florida
diversity

South

Pearl

We affirm.
I

On February 1, 1988,
exclusive
Inc.

dealership

According

agreement with

to appellant,

terminated on January 31,

Law 75,
United

appellant Surfact, entered into an

10 L.P.R.A.

South

the agreement

Pearl Chemical,
was illegally

1990, in violation of Puerto

278.

Appellant

brought suit in

Rico
the

States District Court for the District of Puerto Rico

and invoked
1332.

diversity jurisdiction

Appellee

diversity.

in

turn

magistrate

recommendation

that

because

parties

both

corporations.

moved

the

to

dismiss

judge

motion
to

pursuant to 28

the

issued

for
a

lack

report

for dismissal
agreement

U.S.C.

be

were

of
and

granted
Florida

The district court affirmed.

II

The dispute in
that

there have been

Pearl Chemical,

this case

arises out

two corporations with

Inc."

of the

the name "South

One corporation [South

Pearl Puerto

Rico] was incorporated in 1984 in the Commonwealth of

Rico.

South Pearl Puerto

in July

fact

Puerto

Rico amended its corporate charter

1987 to change its corporate name to Ole South Pearl

Chemical, Inc.

The other corporation

[South Pearl Florida]

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was incorporated
1987,

Ole

South

business" to South
of

South

Pearl

in 1987 in
Pearl

the state of

transferred

all

Florida.
its

Pearl Florida in exchange

Florida

common

stock.1

In May

"assets

and

for 800 shares

However,

the

corporations
dealership
Chemical,
transfer

remained

separate

entities.

agreement

between

Surfact

Inc. was entered into

of assets between

The
and

exclusive

South

Pearl

almost ten months after the

Ole South Pearl

and South Pearl

Florida.
Surfact asserts that it entered into the
dealership

agreement with

court, however,
had

Ole

South Pearl.

into by Surfact

Hence, diversity of
of jurisdictional

and South

parties was absent.

facts only for

district

1178 (11th

Pearl Florida.

We review findings

clear error.

Marshall County Bd. of Educ. v.

____________________________
1171,

The

found that the exclusive dealership contract

been entered

992 F.2d

exclusive

See,
___

e.g.,
___

Marshall County Gas Dist.,

_________________________

Cir. 1993);

Rocovich v.
________

United
______

States, 933 F.2d 991, 993 (Fed. Cir. 1991).

______
The district
record.

Prior to

agreement, all

court's finding is supportable in the

the signing of

Ole South Pearl's "assets

transferred

to South

could

inferred that,

have

the exclusive

Pearl Florida.
at

the

dealership

and business" were

From this,
time of

the

the court
exclusive

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1. The transfer agreement, dated May 31, 1987, refers to Old
South Pearl, Inc., even though the amendment to the corporate
charter changing the name was not filed until July 24, 1987.
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dealership agreement, South Pearl Florida was the only active

corporation

and thus the

only one which

into the agreement with Surfact.

not

only by

the fact that,

South Pearl Puerto

Pearl,

Rico had

but also by tax

transfer

of

corporation

assets,

reports

having

South

South

been filed

Pearl

stating that he
Florida.
support a
not

Chemical,
did so

Although

time of

clearly erroneous.

Pearl

Florida

of over

by Ole

South

that, after the

was

an

is no record

active
1988 and

of any

South Pearl

tax

after 1987.

signed the agreement on behalf

Inc., filed

other evidence

F.2d 8,

to Old

$1,600,000 in

sworn

as a representative

See
___

the agreement,

changed its name

Lundquist v.
_________
11 (1st

affidavit

of South

in the

contrary finding, the district

Aviation, Inc., 946

______________
error

by the

whereas there

Finally, Heraclio Prieto, who

of

This inference is confirmed

records, which show

with net sales

$4,000,000 in 1989,

would have entered

Pearl

record might

court's finding is
Precision Valley
________________

Cir. 1991)

(no clear

where factfinder chooses between two permissible views

of the evidence).2

____________________

2. Appellant also contends that the district court erred in

dismissing the case before granting appellant an adequate
opportunity to conduct discovery relevant to the motion to
dismiss.
However, this objection was not raised before the
magistrate judge or
in appellant's
objection to
the
recommendation and report of the magistrate judge.
It,
therefore, cannot be raised before this court. See Borden v.
___ ______
Secretary of Health & Human Services, 836 F.2d 4, 6 (1st Cir.
____________________________________
1987) (argument which could have been but was not presented
to magistrate in first instance is waived on review).
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Affirmed.
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