52 F.R.D. 348 (D. Puerto Rico 1971), C. A. 644-68, Suchem, Inc. v. Central Aguirre Sugar Co.

Docket NºCiv. A. 644-68.
Citation52 F.R.D. 348
Opinion JudgeTOLEDO, District Judge.
Party NameSUCHEM, INC., Plaintiff, v. CENTRAL AGUIRRE SUGAR CO., Defendant.
AttorneyPatrick J. Wilson, Jos
Case DateMarch 29, 1971
CourtUnited States District Courts, 1st Circuit, District of Puerto Rico

Page 348

52 F.R.D. 348 (D. Puerto Rico 1971)

SUCHEM, INC., Plaintiff,

v.

CENTRAL AGUIRRE SUGAR CO., Defendant.

Civ. A. No. 644-68.

United States District Court, D. Puerto Rico.

March 29, 1971

Action against an unincorporated business association established by declaration of trust. On plaintiff's motion to amend its complaint so as to convert action into a class action, and on defendant's motion to dismiss complaint for lack of diversity jurisdiction, the District Court, Toledo, J., held that 11 individuals who composed board of trustees of defendant were not sufficient to justify a class action since they were not so numerous that it would be impracticable to join them as defendants. The Court also held that where plaintiff was a corporation existing and organized under laws of Commonwealth of Puerto Rico with principal offices in Puerto Rico, and defendant, an unincorporated business association, consisted of a group of 11 persons acting as trustees under a declaration of trust, 5 of which were, at time of filing of complaint, residents of Puerto Rico, there was no diversity jurisdiction.

Plaintiff's motion denied, and defendant's motion granted.

Page 349

Patrick J. Wilson, José M. González Romanace, Ponce, P. R., for plaintiff.

Baragaño, Trías, Saldaña & Francis, San Juan, P. R., for defendant.

MEMORANDUM AND ORDER

TOLEDO, District Judge.

I.-INTRODUCTION AND FACTS

The complaint in this case was filed on October 7, 1968 and in it the plaintiff asserts two counts against the defendant which are first, that defendant's refusal to make an offer to either purchase or lease plaintiff's contrivance (known as a sugar cane diffuser) was wrongful, and second, that the defendant did not fulfill its contractual obligations, as these were agreed to in the contract entered into by the parties on November 28, 1966 and subsequently amended on June 19, 1967, and which was incorporated in the complaint as filed by the plaintiff.

On August 4, 1969, the defendant answered plaintiff's complaint and raised, as an affirmative defense, the allegation that said complaint failed to state a claim for which relief could be granted and, furthermore, that the plaintiff had waived all of its rights under the alleged

Page 350

agreement to buy or lease and was, therefore, estopped from claiming damages for the alleged nonperformance.

The plaintiff initiated its discovery proceedings through the use of written interrogatories submitted by it which were duly answered in every occasion by the defendant within the limits of time required by Rule 23 of the Federal Rules of Civil Procedure. On February 24, 1970, the plaintiff took the deposition of the Vice President and General Manager of the defendant, being the attorneys for the defendant present and given the opportunity to cross-examine. The defendant, on April 7, 1970, initiated its discovery proceedings by serving upon the plaintiff written interrogatories, pursuant to Rule 23 of the Federal Rules of Civil Procedure. Furthermore, on the 28th day of April, 1970, the defendant took the deposition to the President of the plaintiff and plaintiff's attorneys attended and cross-examined the deponent.

On May 29, 1970, the defendant filed a Motion to Dismiss the complaint in this case, pursuant to Rule 37(d) of the Federal Rules of Civil Procedure. Defendant's Motion to Dismiss came up for argument on June 12, 1970, at which time, plaintiff did not appear and this Court, after hearing arguments made on behalf of the defendant, dismissed the complaint as filed with prejudice under Rule 37(d).

On June 18, 1970, the plaintiff filed a motion requesting that this Court vacate its prior Order of June 12 and that it grant to plaintiff such other relief as would be just and reasonable. On August 26, 1970, this Court, through Chief United States District Judge, Hiram R. Cancio, denied plaintiff's Motion To Vacate Judgment filed on June 18, 1970 and ordered that judgment be entered for the defendant in accordance with this Court's prior Order of June 12, 1970. On September 1, 1970, judgment was entered by the Clerk of this Court, pursuant to this Court's Order of August 25, 1970, dismissing this action in accordance with this Court's prior Order of June 12, 1970. On September 2, 1970, the plaintiff filed a motion to vacate this Court's Orders of June 12 and August 25, 1970. Extensive memoranda of law were filed by both parties in support of their respective positions. After hearing argument of counsel, this Court, on September 25, 1970, vacated its Orders of June 12, August 25 and also vacated its judgment of September 1, 1970. Additional discovery proceedings were initiated by the defendant and were duly complied with by the plaintiff. On October 8, 1970, this Court amended its prior Order of September 25, 1970 and awarded the defendant the sum of $3,675 as attorney's fees expended by the defendant during the proceedings involving Rule 37(d).

The defendant filed on October 13, 1970, a motion requesting that this Court dismiss plaintiff's complaint for lack of diversity jurisdiction. On November 25, 1970, an amended motion to dismiss was filed by the defendant as a consequence of plaintiff's motion to strike of October 30, 1970. The plaintiff, on November 30, 1970, filed a motion wherein it sought to amend its complaint so as to convert this action into a class action, pursuant to Rule 23.2 of the Federal Rules of Civil Procedure. The plaintiff has admitted that there is no diversity jurisdiction in this case pursuant to Section 1332 of Title 28, or to Section 863 of Title 48, and, therefore, petitioned this Honorable Court, on November 30, 1970, that it grant defendant's motion and dismiss the complaint, but that it grant plaintiff's Leave to File an Amended Complaint converting this case into a class suit.

Therefore, the only issue now before this Court is whether or not plaintiff's motion to amend its complaint, so as to convert this action into a class action, pursuant to

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Rule 23.2 of the Federal Rules of Civil Procedure is proper. This Court is of the opinion that this motion must be denied for the following reasons:

1.-This action does not meet the prerequisites to a class action as these are provided in Rule 23 of the Federal Rules of Civil Procedure.

2.-This case cannot be converted into a class action by way of Rule 23.2, since the mechanism provided by Rule 23.2 only comes into operation when the state substantive law grants capacity to the named representatives of the unincorporated association to sue and to be sued and denies such capacity to the association, all in accordance with Rule 17(b) of the Federal Rules of Civil Procedure.

3.-This action cannot be converted into a class action pursuant to Rule 23.2 because being the defendant an unincorporated...

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