Hamdallah v. CPC Carolina PR, LLC
| Decision Date | 20 August 2021 |
| Docket Number | CIVIL ACTION NO. 19-1287-WGY, CIVIL ACTION NO. 19-1288-WGY, CIVIL ACTION NO. 19-1289-WGY, CIVIL ACTION NO. 19-1776-WGY, CIVIL ACTION NO. 18-CV-01555-WGY |
| Parties | Khadijah AHMAD HAMDALLAH, Plaintiff, v. CPC CAROLINA PR, LLC, Puerto Rico CVS Pharmacy, LLC, KRB Universal Investments, LLC, Insurance Companies A, B, and C, John Doe, and Jane Doe, Defendants. Ricardo Nieves Acevedo, Janet Marie Vega Rodriguez, and the conjugal partnership constituted between them, Plaintiffs, v. CPC Carolina PR, LLC, Puerto Rico CVS Pharmacy, LLC, KRB Universal Investments, LLC, Insurance Companies A, B, and C; John Doe, and Jane Doe, Defendants. Edward Nieves Roman, Plaintiff, v. CPC Carolina PR, LLC, Puerto Rico CVS Pharmacy, LLC, KRB Universal Investments, LLC, Insurance Companies A, B, and C; John Doe, and Jane Doe, Defendants. María Teresa Cruz Marrero, individually, and the Estate of Ramón Fernández Delgado Composed of Ramón Fernández Cruz, Edgardo José Fernández Cruz, Lisa María Fernández Cruz, Javier Francisco Fernández Cruz, Wanda Ivelisse Fernández Cruz, and María Teresa Cruz Marrero, Plaintiffs, v. CPC Carolina PR, LLC, Puerto Rico CVS Pharmacy, LLC, KRB Universal Investments, LLC, Insurance Companies A, B, and C; John Doe, and Jane Doe, Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
Jose L. Novas-Debien, San Juan, PR, for Plaintiff.
Arlyn Gonzalez-Diaz, Fernando J. Valderrabano-Marina, Cancio, Nadal, Rivera & Diaz, San Juan, PR, Jesus E. Cuza-Abdala, Rebecca J. Canamero, Holland & Knight LLP, Miami, FL, for Defendants.
YOUNG, D.J.1
As these cases prove, commercial real estate transactions are inherently risky ventures. This memorandum and order addresses the remaining individual seller Consolidated Actions concerning the real estate development of a CVS Pharmacy in Carolina, Puerto Rico that unwound after four years of preparation. Had all gone according to plan, the defendant CPC Carolina PR, LLC ("CPC Carolina") was to acquire certain contiguous pieces of property, including parcels from the Sellers, aggregate the properties, and lease the aggregated property to the defendant Puerto Rico CVS Pharmacy, LLC ("CVS") (CPC Carolina and CVS are collectively "the Defendants"), which would then construct and operate the pharmacy.2 The deal fell through, and CPC Carolina sued CVS and its parent. CVS counterclaimed. The Sellers sued CPC Carolina and CVS in the Consolidated Actions. The Defendants settled their differences on the eve of a bench trial, which also resolved the Sellers’ conditional claims in the Consolidated Actions for specific performance.
The Sellers in the Consolidated Actions seek tort damages against CVS and CPC Carolina for breaching a general duty of care under Puerto Rico law by charging into a real estate development that, they claim, CPC and CVS Carolina should have known was doomed from the start -- or at least before the Sellers purportedly incurred damages.
As to CPC Carolina, the terms of the Sellers’ contracts with CPC Carolina control, and there is no viable Article 1802 claim. The alternative claim for specific performance was resolved with the settlement of the CPC Carolina - CVS Action.
As to CVS, the Sellers’ claims under Article 1802 fail on statute-of-limitations grounds. For the reasons stated below, summary judgment shall enter in favor of the Defendants and the Consolidated Actions shall each be dismissed.
Before the Court are two sets of four virtually identical motions for summary judgment bought by CPC Carolina and CVS. CPC Carolina PR, LLC's Mot. & Mem. Law Supp. Summ. J., Nieves Acevedo Action ("CPC Carolina Mot."), ECF No. 65; CPC Carolina PR, LLC's Mot. & Mem. Law Supp. Summ. J., Cruz Marrero Action, ECF No. 67; CPC Carolina PR, LLC's Mot. & Mem. Law Supp. Summ. J., Hamdallah Action, ECF No. 69; CPC Carolina PR, LLC's Mot. & Mem. Law Supp. Summ. J., Nieves Roman Action, ECF No. 71; Def. Puerto Rico CVS Pharmacy, LLC's Corrected Mot. Summ. J., Nieves Acevedo Action ("CVS Mot."), ECF No. 92; Def. Puerto Rico CVS Pharmacy, LLC's Corrected Mot. Summ. J., Cruz Marrero Action, ECF No. 93; Def. Puerto Rico CVS Pharmacy, LLC's Mot. Summ. J., Hamdallah Action, ECF No. 90; Def. Puerto Rico CVS Pharmacy, LLC's Corrected Mot. Summ. J., Nieves Roman Action, ECF No. 91.
The motions for summary judgment are opposed. Pls.’ Opp'n Co-Def. Puerto Rico CPC Carolina PR LLC's Mot. Summ. J. Filed at Docket No. 65, Nieves Acevedo Action ("Hamdallah/Nieves Acevedo/Nieves Roman Sellers’ Opp'n CPC Carolina Mot."), ECF No. 101; Pls.’ Opp'n Co-Def. Puerto Rico CPC Carolina PR LLC's Mot. Summ. J. Filed at Docket No. 67, Cruz Marrero Action ("Cruz Marrero Opp'n CPC Carolina Mot."), ECF No. 113; Pls.’ Opp'n Co-Def. Puerto Rico CPC Carolina PR LLC's Mot. Summ. J. Filed at Docket No. 69, Hamdallah Action, ECF No. 103; Pls.’ Opp'n Co-Def. Puerto Rico CPC Carolina PR LLC's Mot. Summ. J. Filed at Docket No. 71, Nieves Roman Action, ECF No. 108; Pls.’ Opp'n Co-Def. Puerto Rico CVS Pharmacy, LLC's Mot. Summ. J. Filed at Docket No. 92 ("Hamdallah/Nieves Acevedo/Nieves Roman Sellers’ Opp'n CVS Mot."), Nieves Acevedo Action, ECF No. 95; Pls.’ Opp'n Co-Def. Puerto Rico CVS Pharmacy, LLC's Mot. Summ. J. Filed at Docket No. 92 ("Cruz Marrero Opp'n CVS Mot."), Cruz Marrero Action, ECF No. 131; Pls.’ Opp'n Co-Def. Puerto Rico CVS Pharmacy, LLC's Mot. Summ. J. Filed at Docket No. 90, Hamdallah Action, ECF No. 97; Pls.’ Opp'n Co-Def. Puerto Rico CVS Pharmacy, LLC's Mot. Summ. J. Filed at Docket No. 91, Nieves Roman Action, ECF No. 99.
CPC Carolina and CVS filed reply briefs. CPC's Omnibus Reply Pls.’ Opp'n CPC's Mot. Summ. J. Filed Cases 19-1287 (Docket No. 103), 19-1288 (Docket No. 101), 19-1289 (Docket No. 108), 19-1776 (Docket No. 113), ECF No. 146; Reply Opp'n CVS's Mot. Summ. J., Nieves Acevedo Action ("Hamdallah/Nieves Acevedo/Nieves Roman Sellers’ CVS Reply"), ECF No. 153; Reply Opp'n CVS's Mot. Summ. J., Cruz Marrero Action ("Cruz Marrero CVS Reply"), ECF No. 155; Reply Opp'n CVS's Mot. Summ. J., Hamdallah Action, ECF No. 149; Reply Opp'n CVS's Mot. Summ. J., Nieves Roman Action, ECF No. 151.
The Court heard oral argument on the motions for summary judgment on July 30, 2020, which was continued to July 31, 2020. Minute Order, ECF No. 159; Minute Entry, ECF No. 160; Tr. Proceedings Held July 30, 2020 ("July 30, 2020 Tr."), ECF No. 164; Tr. Proceedings Held July 31, 2020 ("July 31, 2020 Tr."), ECF No. 163.
The parties were permitted leave to brief questions concerning Article 1802. Pls. Mem. Law, ECF No. 172; CPC's Opp'n Pls.’ Mem. Law Docket No. 172, ECF No. 174; Resp. Pls.’ Mem. Law, ECF No. 175; Pls. Obj. CPC & CVS Reply Pls. Mem. Law, ECF No. 176; Obj. CPC & CVS Reply Pls. Mem. Law, ECF No. 178.
On March 30, 2021, after resolution of the CPC Carolina – CVS Action, the Court heard further argument on the remaining summary judgment motions pertaining to the Consolidated Actions. Minute Order, ECF No. 234; Tr. Proceedings Held March 30, 2021, ECF No. 242. The parties filed further supplemental briefing. Suppl. Br. Oral Arg., ECF No. 233; Suppl. Br. Supp. Oral Arg., ECF No. 236; Resp. Pls.’ Suppl. Br. Oral Arg., ECF No. 238; CVS Resp. Pls.’ Suppl. Br. Oral Arg., ECF No. 243; CPC's Omnibus Resp. Suppl. Brs. Supp. Oral Arg., ECF No. 244.
The properties in the Consolidated Actions are all located in Valle Arriba Heights, a residential area located in Carolina, Puerto Rico. CPC SAUMF ¶ 1. On October 16, 1964, the developer of Valle Arriba Heights encumbered these properties with restrictive covenants prohibiting non-residential use. Id. ¶¶ 2-3.
On October 3, 2013, the Sellers entered into four Purchase Agreements (the "Agreements"), each identical in all relevant respects, with KRB Universal Investments, LLC ("KRB") concerning the Sellers’ real properties located Valle Arriba Heights, Carolina, Puerto Rico (the "Parcels"). CPC SUMF ¶ 1; see generally CPC SUMF, Ex. 2, Purchase Agreement, ECF No. 64-2; Statement Undisputed Material Facts Supp. Mot. Summ. J. Case No. 19-1776, Ex. 2, Purchase Agreement, ECF No. 66-2; Statement Undisputed Material Facts Supp. Mot. Summ. J. Case No. 19-1287, Ex. 2, Purchase Agreement, ECF No. 68-2; Statement Undisputed Material Facts Supp. Mot. Summ. J. Case No. 19-1289, Ex. 2, Purchase Agreement, ECF No. 70-2 (collectively, the "Agreements"). The purpose of the Agreements was to aggregate a number of properties, including the Parcels, into one property, and then to develop the aggregated property. CPC SUMF ¶¶ 5, 9; see generally Agreements. On February 24, 2015, KRB assigned its rights under the Agreements to CPC Carolina. CPC SUMF ¶ 3.
The Agreements define the "Closing" as the "close [of] the sale contemplated by [the] Agreement[s] ...." Agreements ¶ 5. The Agreements require that possession of the Parcels remains with the Sellers until the Closing:
At Closing hereunder, Seller shall convey the Property to Purchaser by a Purchase and Sale Deed.... Possession of the Property shall be delivered to Purchaser upon Closing.
Id. (emphasis added). The Agreements also contained the following provision requiring the Sellers to maintain the Parcels:
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...court, in what it described as a “close call,” dismissed the plaintiffs' tort claims as arising out of their original contract claim. Id. at 49. Hamdallah, the defendant was to acquire several contiguous pieces of property from the plaintiffs and lease the entire property to Puerto Rico CVS......
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