Bianchi-montaÑa v. Crucci-silva

• Decision Date: 30 June 2010
• Docket Number: Civil No. 09-1409 (FAB).
• Citation: 720 F.Supp.2d 159
• Parties: Marcelo Federico BIANCHI-MONTAÑA, Plaintiff, v. Pablo CRUCCI-SILVA, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

720 F.Supp.2d 159

Marcelo Federico BIANCHI-MONTAÑA, Plaintiff,

v.Pablo CRUCCI-SILVA, et al., Defendants.

Civil No. 09-1409 (FAB).

United States District Court,D. Puerto Rico.

June 30, 2010.

Carlos E. Aguilar-Perez, Woods and Woods, San Juan, PR, for Plaintiff.

Eduardo A. Vera-Ramirez, Luis A. Rodriguez-Munoz, Landron & Vera LLP, Guaynabo, PR, for Defendants.

OPINION & ORDER ¹

BESOSA, District Judge.

Before the Court is a motion by defendants Alvardo Nazor-Verdi (“Nazor”) and A.P.G.M. Restaurant Holdings, Corp. (“APGM”) to dismiss plaintiff's claims for breach of contract and mental anguish. Pursuant to Federal Rule of Civil Procedure 12(b)(6) (“Rule 12(b)(6)”), Nazor and APGM assert that all of plaintiff's viable claims are barred by a statute of limitations. (Docket No. 16.)

On May 5, 2009, plaintiff Marcelo Federico Bianchi-Montaña (“Bianchi”) filed a claim for breach of contract and mental anguish under Puerto Rico Civil Code, P.R. Laws Ann. tit. 31, §§ 3052 and 5141. (Docket No. 7.)

Bianchi alleges that he entered into a contract with Nazor, APGM, and three other defendants in this case, ² by which, in exchange for Bianchi managing the establishment of a restaurant, Ummo Argentinian Grill, in San Juan, Puerto Rico, Bianchi was entitled to: (1) twenty percent of the restaurant's net profits, and (2) a position as manager at the restaurant with a four thousand dollar monthly salary. Bianchi claims that Nazor, APGM, and the other defendants breached the contract by never providing him this compensation. (Docket No. 7 at 23.)

I. BACKGROUND

A. BIANCHI'S ALLEGATIONS

In his complaint, Bianchi alleges that the following events occurred.

In July 2007, Bianchi, Nazor, Crucci, and Figoli began to discuss the prospect of establishing an Argentine-style restaurant in San Juan, Puerto Rico. (Docket No. 7 at 9.) In August 2007, the discussions had culminated into a business plan and agreements for labor and compensation among the participants. (Docket No. 7 at 10-11.) Nazor had agreed to secure a loan for six hundred thousand dollars, the estimated capital needed for initial restaurant operations. (Docket No. 7 at 10.) In exchange for procuring the financing, Nazor would be entitled to forty percent of the restaurant's profits. (Docket No. 7 at 10.) Crucci, Figoli, and Bianchi agreed to each provide fifty thousand dollars' worth of labor, namely the “required project management, design construction, and other required services.” (Docket No. 7 at 10.) They would provide these services by acting through Neo, a corporation they formed in January 2006 to do business jointly (Docket No. 7 at 6). In exchange for these services, “[r]ather [than] NEO receiving any payment,” the agreement provided that Bianchi, Crucci and Figoli would each be compensated with twenty percent of the restaurant's profits. (Docket No. 7 at 10.) In addition, Nazor, Bianchi, Crucci and Figoli agreed that “if either CRUCCI, FIGOLI, or BIANCHI decided to work as managers of the restaurant operation they would receive a salary of $4,000.00 a month as compensation.” (Docket No. 7 at 10-11.)

On September 11, 2007, Nazor, Crucci, Figoli and Bianchi formed APGM ³ “for the construction and operation of the restaurant.” (Docket No. 7 at 12.) By the third week of November 2007, the restaurant project was “well under way” with construction of the restaurant's interior, the filing of permit applications, the recruiting of personnel, and the development of procedures for the restaurant's operation. (Docket No. 7 at 14.) Among other things, Bianchi asserts that he developed customer protocols, recruited personnel, including the head chef, and collaborated with Nazor in several areas, including human resources, marketing, and development of the restaurant's operating procedures. (Docket No. 7 at 14.)

The situation turned on December 11, 2007, when Crucci and Figoli informed Bianchi that Bianchi “no longer would own ... [his share] of Neo,” ⁴ and that the corporation was “dissolved.” (Docket No. 7 at 16.) Crucci and Figoli also stated that they informed Nazor that they did not want Bianchi to be involved in any way with APGM. (Docket No. 7 at 16-17.) On December 17, 2007, Nazor told Bianchi that he had no objections to Bianchi participating in APGM, but “if CRUCCI and FIGOLI did not want to honor their agreement, there was nothing that [Nazor] could do to force them to comply.” (Docket No. 7 at 16-17.) The next day, Bianchi discovered that all the documentation related to Neo and APGM had been removed from Neo's designated office. (Docket No. 7 at 17.)

Ummo Argentinian Grill opened in February 2008, and Bianchi estimates that its profits exceed four hundred thousand dollars per month and would likely increase ⁵ .

(Docket No. 7 at 19-20.) As of the date of the complaint, defendants had not provided any of the allegedly agreed-upon compensation to Bianchi. (Docket No. 7 at 20.)

B. PROCEDURAL HISTORY

On May 5, 2009, Bianchi filed his claim for breach of contract and mental anguish pursuant to articles 1077 and 1802 of the Puerto Rico Civil Code, P.R. Laws Ann. tit. 31, §§ 3052 and 5141. (Docket No. 7.)

On June 30, 2009, Nazor and APGM filed a motion to dismiss pursuant Rule 12(b)(6), asserting that all claims against them are not in contract, but in tort and are thus barred by the statute of limitations for tort claims pursuant to article 1868(2) of the Civil Code, P.R. Laws Ann. tit. 31, § 5298(2). (Docket No. 16.) First, they assert that neither Nazor nor APGM made final agreements with Bianchi, and thus, because no contract was ever formed, the plaintiff's claim to employment compensation falls under the Puerto Rico tort doctrine of culpa in contrahendo, which requires parties to negotiate in good faith. See, e.g., Ysiem Corp. v. Commercial Net Lease Realty, Inc., 328 F.3d 20 (1st Cir.2003). Second, Nazor and APGM argue that the claim of mental anguish is a tort and time-barred. Bianchi, Nazor, and APGM agree that the events giving rise to the claim took place in December 2007. ⁶ Bianchi did not file his claim until approximately one year and five months after these events took place. (Docket No. 7.)

On July 15, 2010, Bianchi filed an opposition to Nazor and APGM's motion to dismiss, averring that he did not allege pre-contractual negotiations, but sufficiently pleaded “ actual agreements ” showing that a valid contract was executed; thus, Bianchi claims that the applicable statute of limitations is found under contract law, and the claim is not time-barred. (Docket No. 20.) Bianchi did not address Nazor and APGM's claim for dismissal of Bianchi's mental anguish claim.

On July 27, 2010, Nazor and APGM filed a reply to Bianchi's opposition to the motion to dismiss. In their reply, Nazor and APGM addressed two aspects of the alleged employment agreement. First, Nazor and APGM claim that they had only made an agreement with Bianchi's employer, Neo, to compensate Bianchi with twenty percent of the restaurant's profits. (Docket No. 25 at 3.) Second, Nazor and APGM claim that they made no final agreement with Bianchi to employ him as a manager at the restaurant. (Docket No. 25 at 3-5.) It is unclear from their reply whether they concede that they negotiated directly with Bianchi, instead of with Neo, for the management position at the restaurant.

II. CHOICE OF LAW

As an initial matter, the Court finds that Puerto Rico law applies to the claims raised in this case. Pursuant to the holding in Erie R.R. Co. v. Tompkins, 304 U.S. 64, 78, 58 S.Ct. 817, 82 L.Ed. 1188 (1938), matters of tort and contract are state substantive law, which must be applied when the federal court is sitting in diversity jurisdiction. See, e.g., Crellin Tech., Inc. v. Equipmentlease Corp. 18 F.3d 1, 4 (1st Cir.1994) (applying state substantive law to determine whether a contract was enforceable); Sylvania Elec. Prod. v. Barker, 228 F.2d 842, 848 (1st Cir.1956) (applying state substantive law to a tort personal injury claim). ⁷ Statute of limitations for civil suits is also a question of substantive law, so the applicable state law controls whether Bianchi's claim is time-barred. Rodriguez v. Suzuki Motor Corp., 570 F.3d 402, 406 (1st Cir.2009) (“In Puerto Rico, the prescription of civil actions is a question of substantive rather than procedural law ... [therefore] we must apply Puerto Rico substantive law to resolve the statute of limitations issue”); Montalvo v. Gonzalez-Amparo, 587 F.3d 43, 46 (1st Cir.2009) (“When applying Puerto Rico law to substantive matters, Puerto Rico courts also apply Puerto Rico's statute of limitations, as well as the concomitant tolling provisions of those statutes”); Valedon Martinez v. Hosp. Presbiteriano de la Comunidad, Inc., 806 F.2d 1128, 1133 (1st Cir.1986)(same).

For substantive matters, a federal court presiding over a diversity case must apply the choice of law doctrine of the forum territory. New Ponce Shopping Center, S.E. v. Integrand Assur. Co., 86 F.3d 265, 267 (1st Cir.1996) (citing Klaxon Co. v. Stentor Elec. Mfg. Co., 313 U.S. 487, 496, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941)). Puerto Rico, the forum territory in this case, applies the “dominant or significant contacts” test for contract and tort actions, by which the law of the jurisdiction with the most significant contacts to the claim is applied to the case. New Ponce Shopping Center, 86 F.3d 265 at 267 (citing A.M. Capen's Co. v. American Trading & Prod. Corp., 74 F.3d 317, 320 (1st Cir.1996)). Based on the record available, the Court finds that essentially all the significant contacts related to the present claim were made in Puerto Rico. There appears to be no dispute that all discussions and work related to the joint projects among the parties, including the execution of the alleged employment compensation agreement, took place in Puerto Rico. In addition, these joint projects were to be executed in Puerto Rico. ( See Docket No. 1, 16.) The only other jurisdiction...