Buigas v. LM Waste Servs. Corp.

• Decision Date: 29 March 2022
• Docket Number: CIVIL 19-1044 (DRD)
• Parties: ROBERTO ROCA BUIGAS, et al., Plaintiffs, v. LM WASTE SERVICES CORP., et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

ROBERTO ROCA BUIGAS, et al., Plaintiffs, v. LM WASTE SERVICES CORP., et al., Defendants.

CIVIL No. 19-1044 (DRD)

United States District Court, D. Puerto Rico

March 29, 2022

OPINION AND ORDER

DANIEL R. DOMÍNGUEZ, UNITED STATES DISTRICT JUDGE

Pending before the Court is Plaintiffs' Motion for Summary Judgment and Incorporated Memorandum of Law (Docket No 160)^[1]. The Defendants filed a Response in Opposition thereto. See Docket No 166^[2]. A Reply ensued shortly thereafter. See Docket No. 183.

For the reasons stated herein, the Court GRANTS Plaintiffs' Motion for Summary Judgment and Incorporated Memorandum of Law (Docket No. 160). See Docket No. 160.

I. FACTUAL AND PROCEDURAL BACKGROUND

On January 16, 2019, Plaintiffs, Roberto Roca-Buigas, Katya Molero-Rabassa, and the Conjugal Partnership formed between them (hereinafter, “Roca-Buigas, ” “Molero-Rabassa, and collectively, “Plaintiffs”) filed a Complaint against the Defendants, LM Waste Services, Corp.^[3](hereinafter, “LM Waste”) and Francisco J. Rivera-Fernández (hereinafter, “Rivera-Fernández” and collectively, “Defendants”) for an alleged breach of contract. Essentially, Plaintiffs seek specific performance under Article 1044 of the Puerto Rico Civil Code. P.R. Laws Ann, tit. 31, § 2294; redress for damages under Article 1802 of the Puerto Rico Civil Code, P.R. Laws Ann., tit. 31 § 5141; and collection of monies under Article 1111 of the Puerto Rico Civil Code, P.R. Laws Ann., tit. 31, § 3161. See Docket No. 1.

The instant case stems from an alleged breach of contract in which Plaintiffs seek specific compliance with a Private Settlement Agreement entered between Roca-Buigas, LM Waste and Rivera-Fernández on December 5, 2012. Complaint, Docket No. 1, ¶ 1. Plaintiffs further request collection of monies owed under the aforementioned agreement by Defendants to Plaintiffs in the amount of $1, 771, 513.29, plus interest. Id., ¶ 2. Finally, Plaintiffs are seeking damages resulting from Defendants' alleged failure to comply with the agreement. Id., ¶ 3.

The Complaint stems from a Professional Services Agreement between LM Waste and Roca-Buigas which dates back to April 9, 2010. Id., ¶ 9. By virtue of the Professional Services Agreement, LM Waste retained the services of Roca-Buigas as an independent contractor to provide consulting services on waste management, administration, operation, and counseling in related areas of the company. Id., ¶ 10. In return, LM Waste agreed to pay Roca-Buigas the sum of $1, 100, 000.00 for his services, which would be paid over the course of five (5) years. Id., ¶ 12. Rivera-Fernández “personally guarantee[d] the obligations of the Company in th[e] Agreement.” Docket No. 109, Exhibit No. 1 at p. 6. According to Roca-Buigas, although he complied with all his obligations under the Professional Services Agreement, LM Waste and Rivera-Fernández failed to do so. Id., ¶ 16. Despite several collection efforts, Roca-Buigas claims that the Defendants failed to comply with all the other payments. Comp., ¶ 18. Therefore, two separate complaints were filed before the Puerto Rico Court of First Instance, San Juan Part civil numbers K AC 2011-0217 (508) and K AC2011-1104 (908).

After several procedural events, related to the second complaint, on December 5, 2012, the parties reached an agreement to settle all claims between them. Id., ¶ 28. Essentially, Roca-Buigas and Rivera-Fernández agreed that LM Waste owed Roca-Buigas the principal amount of $1, 470, 000.00, plus a negotiated interest amount of $352, 000.00. Id., ¶ 29. Rivera-Fernández agreed to “guarantee that the payment of the same will be $1, 470, 000.00. Id., see also, Opinion and Order, Exhibits No. 1 & 1-A^[4]. In exchange thereof, the parties would waive each other from all other claims, including claims Roca-Buigas' claims against Barandas-Alonso in his personal capacity. Id.

After the agreement was reached, the Defendants made three (3) payments. Comp., ¶¶ 37-38. No. other payments were made by the Defendants thereafter. Id., ¶ 39. As such, on March 20, 2013, Roca-Buigas filed a motion seeking the execution of judgment in civil case number K AC2011-1104. Id., ¶ 40. The court denied the request premised on the fact that the agreement's terms and conditions were not made part of the Judgment, due to its private nature. Therefore, an independent action had to be filed. Id., ¶ 42.

Considering that no other payments were made by LM Waste and Rivera-Fernández after August 14, 2013, Plaintiffs argue that the complete amount of $1, 470, 000.00, plus the balance of the negotiated interest in the amount of $301, 513.29 is due and payable. Therefore, according to Plaintiffs, LM Waste and Rivera-Fernández have an outstanding debt with Roca-Buigas of $1, 771, 513.29.

Plaintiffs are now requesting summary judgment granting their claims against the Defendants. Roca-Buigas claims that “[s]ummary judgment should be issued as ‘there is no genuine dispute as to any material fact' that prevents this Court from entering Summary Judgment in favor of Plaintiffs and against LM Waste and Rivera who are jointly and severally liable to Roca for all amounts due under the PSA. Fed.R.Civ.P. 56(a). Motion for Summary Judgment (“MSJ”), Docket No. 160 at p. 3. Essentially, Plaintiffs argue that,

[t]he essential terms of the PSA [private settlement agreement] were handwritten on a yellow legal-pad sheet of paper and signed by Rivera, Roca and by Isidro Barandas's counsel José Luis Barrios Ramos. In the PSA, the parties agreed that LM Waste owed Roca the principal amount of $1, 470, 000.00. Roca and Rivera also agreed that Rivera would guarantee Roca the full amount owed of $1, 470, 000.00. Roca and Rivera further agreed that LM Waste would also pay 48 monthly installments of $7, 350.00 each, to exclusively cover the interest calculated at a rate of 6% payable on the 5th day of each month, starting on January 5, 2013[, ] and ending on January 5, 2017. When added, the total amount owed to Roca for the principal amount ($1, 470, 000.00) and negotiated interest ($352, 800.00) comes to $1, 822, 800.00.

MSJ at p. 16. Additionally, Roca-Buigas claims that “the Defendants admitted to the State Court that the parties had reached a private settlement agreement, not that they had reached a ‘preliminary agreement' and the State Court accordingly, “recognized that the parties ‘had reached a private settlement agreement' not a ‘preliminary' one.” Id. at p. 2. Simply stated, Plaintiffs claim that the essential terms of the agreement were written on a yellow legal-pad sheet of paper and signed by all parties. Hence, said document is the operative settlement agreement, which is now due and payable.

In turn, Defendants argue that “on December 5, 2012, Mr. Roca-Buigas and co-defendants Mr. Isidro Barandas-Alonso, on his personal behalf and as the representa[tive] of LM Waste, and Mr. Rivera Fernández as a guarantor of LM Waste drafted and signed a preliminary agreement in a handwritten piece of paper.” Opposition, Docket No. 166 at p. 4. Essentially, “[t]he signed handwritten piece of paper consisted only as a preliminary agreement to be used as a guide by the parties to draft and prepare the final ‘Confidential Settlement Agreement and General Release' that all the parties involved in the Complaint were still negotiating and would eventually sign in order to settle once and for good all the claims between them [arising] from the ‘Professional Services Agreement.” Id. Therefore, there are controversies as to material facts that impede summary judgment. See id.

Having the benefit of the parties' arguments, the Court is ready to rule upon this matter. However, a careful scrutiny of the underlying legal framework is required in order to rule upon the pending motion.

II. FACTUAL FINDINGS

The following factual findings are taken from the parties statements of undisputed facts, and supported documentation. Upon careful review of the record, the Court finds the following facts are undisputed:

1. Roca-Buigas is of legal age, married to Katya Molero-Rabassa, businessman, and resident of the State of Florida. See Docket No. 19, Exhibit No. 1.

2. LM Waste was a corporation organized under the laws of the Commonwealth of Puerto Rico. Its physical address is listed as 243 PR-2, Villa Caparra, Guaynabo, Puerto Rico 0096, and its postal address as PO Box 11852, San Juan, Puerto Rico 00922-1852. See Comp., ¶ 7; Rivera-Fernández's Answer to Complaint, Docket No. 104, ¶ 7.

3. Francisco J. Rivera Fernández is of legal age, a businessman, with residence and domicile in Puerto Rico. See Comp., ¶ 8; LM Waste's Answer to Complaint Docket No. 103, ¶ 8.

4. On April 9, 2010, Roca-Buigas, Molero-Rabassa, Vivian Roca-Buigas, Vivian Buigas de la Cruz, Reynaldo González-Irizarry, and Ivette Ortiz-Morales as shareholders of LM Waste and Rivera-Fernández executed a Stock Purchase Agreement wherein Rivera-Fernández acquired 100% of shares of LM Waste. See Pre-Attachment Hearing, Exhibit No. 24^[5].

5. On April 9, 2010, LM Waste, a company dedicated to the collection and disposal of solid waste and to the management of waste landfills, entered into a Professional Services Agreement with Roca-Buigas. See Docket No. 103, 2, ¶ 9; Docket No. 104, p. 2, ¶ 9.

6. By means of the Professional Services Agreement, LM Waste retained the services of Roca-Buigas as an independent contractor to provide consulting services on waste management, administration, operation, and counseling in related areas to the company. See Docket No. 103, at p. 2, ¶ 10; Docket No. 104, at p. 2, ¶ 10; see also Professional Services Agreement, Docket No. 109-1.

7. In return for the services Roca-Buigas was to provide, LM Waste agreed to pay Roca-Buigas the sum of $1, 100, 000.00...