MCDP Phx. Servs. PTE. v. First Fin. Int'l Bank

• Decision Date: 26 October 2021
• Docket Number: CIVIL 20-1538 (RAM)
• Parties: MCDP PHOENIX SERVICES PTE. LTD. Plaintiff v. FIRST FINANCIAL INTERNATIONAL BANK INC., ET AL. Defendants
• Court: U.S. District Court — District of Puerto Rico

MCDP PHOENIX SERVICES PTE. LTD. Plaintiff v. FIRST FINANCIAL INTERNATIONAL BANK INC., ET AL. Defendants

CIVIL No. 20-1538 (RAM)

United States District Court, D. Puerto Rico

October 26, 2021

OPINION AND ORDER

RAÚL M. ARIAS-MARXUACH UNITED STATES DISTRICT JUDGE

Pending before the Court is Plaintiff MCDP Phoenix Services PTE LTD's (“Plaintiff” or “MCDP”) Response to Motion for Compliance (Docket No. 74) And Motion: (1) To Bifurcate Case Into Separate Determinations Of Liability And Damages; (2) For Judgment On The Pleadings As To Defendant's Liability To Plaintiff; (3) For An Order Requiring Defendant To Complete The “Deposit” (4) For Prompt Disbursement Of Funds On Deposit With The Clerk Of The Court; (5) For Sanctions Pursuant To Applicable Law; And (6) To Extend The Deadlines In The Rule 16 Scheduling Order (“Omnibus Motion”). (Docket No. 77). Defendant First Finance International Bank (“Defendant” or “FFIB”) subsequently filed an Opposition to MCDP'S Omnibus Motion at Docket No. 77 (“Opposition”). (Docket No. 98). For reasons set below, the Court DENIES the pending Omnibus Motion.

I. BACKGROUND

On October 8, 2020, MCDP filed suit against FFIB and other defendants (“Complaint”). (Docket No. 1). It averred FFIB froze money in MCDP's account without prior written notice. Id. at 6. The freeze affected inbound and outbound wire transfers to several of MCDP's clients and receiving entities. Id. at 5-6. Thus, MCDP had to pay out of pocket to honor its commitments with them. Id. at 6. The Complaint alleges the following causes of action against FFIB: (1) breach of contractual and fiduciary obligations; (2) negligence under article 1802 of the Puerto Rico Civil Code; (3) pre-judgment attachment pursuant to Fed.R.Civ.P. 64(B); and (4) costs and attorney's fees due to FFIB's temerity. Id. at 8-12. On November 20, 2020, FFIB answered the Complaint. (Docket No. 20).

On June 11, 2021, MCDP filed the pending Omnibus Motion. (Docket No. 77). MCDP requested that the Court: (1) bifurcate the case into separate actions for liability and damages; (2) enter judgment of liability against FFIB on the pleadings; (3) issue an order instructing FFIB to deposit $12, 409.25 with the Clerk of the Court; (4) direct the Clerk to disburse $608, 058.34 and the $12, 409.25 to MCDP; (5) impose sanctions on FFIB by striking its affirmative defenses; (6) impose sanctions on FFIB, B High House International, PTE, LTD.'s (“BHHI”), and their counsel by ordering them to pay MCDP's attorneys' fees regarding the return of the funds and in defending itself against BHHI's intervention effort; and (7) affirm the Fed.R.Civ.P. 16 Scheduling Order but limiting it to matters of damages and postponing its deadlines by thirty (30) days after the Court rules on the pending Omnibus Motion. Id.^[1]

On July 15, 2021, FFIB filed its Opposition. (Docket No. 98). It argues MCDP's request for judgment as to liability is improper because Fed.R.Civ.P. 12(c) does not permit judgment on part of a claim. Id. at 4. As to sanctions under Fed.R.Civ.P. 37(a), FFIB alleges they are improper because it did not refuse to meet with MCDP; allegedly it was MCDP who refused to meet with the attorneys of record, including counsel for then proposed intervenor BHHI. Id. at 7. Likewise, sanctions under 28 U.S.C. § 1927 are uncalled for because MCDP did not explain how FFIB “multipl[ied] the proceedings” as required by this Section. Id. at 8-9. Lastly, FFIB alleges MCPD failed to properly develop any of its remaining requests, thus they should be denied. Id. at 11.

II. DISCUSSION

A. Judgment on the Pleadings Under Fed.R.Civ.P. 12(c) Solely as to Liability is Improper

Under Fed.R.Civ.P. 12(c), a party may move for judgment

“[a]fter the pleadings are closed - but early enough not to delay trial.” This motion “bears a strong family resemblance to” a Fed. R. Civ. P. 12(b)(6) motion to dismiss, thus they “are treated in much the same way.” Kando v. R.I. State Bd. of Elections, 880 F.3d 53, 58 (1st Cir. 2018) (citation omitted). First, the Court must “isolate and ignore statements in the complaint that simply offer legal labels and conclusions or merely rehash cause-of-action elements.” Ojeda-Resto v. Blankenship, 2018 WL 4657191, at *2 (D.P.R. 2018) (quotation omitted). Second, it “take[s] the complaint's well-pled (i.e., nonconclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor, and see if they plausibly narrate a claim for relief.” Id. “[T]here is no resolution of contested facts” and judgment is apt “only if the properly considered facts conclusively establish the movant's point.” Ortiz-Vazquez v. Aon Risk Servs. of Puerto Rico, Inc., 2021 WL 2221591, at *1 (D.P.R. 2021) (quotation omitted). Dismissal is proper “if it appears that the nonmovant could prove no set of facts that would entitle” them to relief. Díaz-Nieves v. United States, 858 F.3d 678, 689 (1st Cir. 2017) (citation omitted).

MCPD's Omnibus Motion requests this Court enter judgment on the pleadings of liability in its favor. (Docket No. 77 at 6). It avers there can be no valid argument that FFIB has alleged a tenable defense to the Complaint's allegations that FFIB improperly and illegally withheld MCDP's Deposit and the undeposited balance of the funds. Id. at 8. It also accuses FFIB of “false representations” as to its “justifications for withholding the deposit.” Id. Thus, it claims the Court should enter judgment as to: (1) FFIB's liability vis-à-vis the Complaint's claims, and (2) Plaintiff's entitlement to the funds currently with the Court and any funds withheld by FFIB. Id. at 9.

FFIB's Opposition posits the request should be denied because Fed.R.Civ.P. 12(c) does not permit judgment on the pleadings on part of a claim. (Docket No. 98 at 4). Alternatively, it avers MCDP fails to suitably argue why judgment as to liability is proper. Id. at 5-6. This, for example, considering the Complaint alleges a breach of contract claim, but the Omnibus Motion does not refer to a contract between MCDP and FFIB or how FFIB breached its terms. Id. It also argues MCDP fails to state the elements of a negligence claim under local law or how they are met here. Id. at 6. Finally, it asserts MCDP's claim about “false representations” raises a “contested fact” not subject to judgment on the pleadings. Id.

A leading treatise on federal procedure explains that “many federal courts have entertained a motion for partial judgment on the pleadings with respect to individual claims.” 5C Charles A. Wright and Arthur R. Miller, Federal Practice and Procedure, § 1369 (3d ed. 2021). However, courts have been reluctant to grant a judgment on the pleadings for part of a claim because Fed.R.Civ.P. 12(c) does not expressly allow it. See e.g., Kenall Mfg. Co. v. Cooper Lighting, LLC, 354 F.Supp.3d 877, 893-97 (N.D. Ill. 2018) (denying a partial judgment request for liability but not damages on breach of contract and patent infringement claims because Fed.R.Civ.P. 12(c) “does not explicitly authorize courts to carve up claims or defenses on a motion for judgment on the pleadings.”) Conversely, Fed.R.Civ.P. 56 allows parties to move for summary judgment on part of a claim or defense. See Fed. R. Civ. P. 56(a). Moreover, the fact that Fed.R.Civ.P. 56(a) authorizes judgment on part of a claim while Fed.R.Civ.P. 12(c) does not, “counsels strongly against reading Rule 12(c) to implicitly permit such judgments.” Munro v. Fairchild Tropical Botanic Garden, Inc., 2021 WL 894380, at *2 (S.D. Fla. 2021) (quotation omitted).

The Court is unmoved by MCDP's request for judgment on the pleadings as to liability. Therefore, it “aligns itself with those courts that have found judgment on the pleadings on something less than an entire cause of action to be inappropriate.” Bolender v. Carnival Corp., 2014 WL 12527190, at *1 (S.D. Fla. 2014) (citation omitted); see also Living on the Edge, LLC v. Lee, 2015 WL 12661917, at *4 (C.D. Cal. 2015) (denying a partial judgment motion because a party “cannot move for judgment on the pleadings with respect to less than a full cause of action”). Here, as in Kenall Mfg. Co., MCDP cannot use a Fed.R.Civ.P. 12(c) motion to obtain judgment solely on liability. See Kenall Mfg. Co., 354 F.Supp. at 896; see also Munro, 2021 WL 894380, at *2 (holding that partial judgment as to an element of defendants' (here plaintiff's) claim - remedies - would be inappropriate because it would not “dispose of any single claim.”).

The Court also rejects MCDP's request for partial judgment because MCDP did not properly sustain its request. Rather, it proffered conclusory assertions lacking any detailed discussion about the facts of the case or the merits of the Complaint and its causes of actions. This does not meet the Fed.R.Civ.P. 12(c) standard. Under this standard, when the complaint's “well-pleaded facts do not permit the court to infer more than the mere possibility of misconduct, the complaint has alleged - but it has not ‘show[n]'-‘that the pleader is entitled to relief.'” Ojeda-Resto, 2019 WL 4657191, at *2 (quoting Ashcroft v. Iqbal, 556 U.S. 662, 679 (2009)). So far, MCDP has only “shown” FFIB possibly engaged in misconduct. The request for judgment on the pleadings is DENIED.

B. Sanctions Under Fed.R.Civ.P. 37(a) are Improper

Under Fed. R Civ. P. 37(a), a party seeking discovery may move the Court for an order to compel discovery from another party. See Especias Montero, Inc. v. Best Seasonings Group Inc., 2021 WL 3609663, at *2 (D.P.R. 2021) (citing Fed.R.Civ.P. 37(a)). Local Rule 26(b) and Fed.R.Civ.P. 37(a)(1) require that, before filing a motion to compel, the moving party must certify it “made a reasonable and good-faith effort to [try and solve the discovery dispute] with...