Parker Waichman LLP v. Salas LC

• Decision Date: 13 July 2017
• Docket Number: Civil No. 16–1333 (FAB)
• Citation: 263 F.Supp.3d 369
• Parties: PARKER WAICHMAN LLP, Plaintiff, v. SALAS LC, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

263 F.Supp.3d 369

PARKER WAICHMAN LLP, Plaintiff,

v.SALAS LC, et al., Defendants.

Civil No. 16–1333 (FAB)

United States District Court, D. Puerto Rico.

Signed July 13, 2017

Jay L. Breakstone, Parker Waichman LLP, Port Washington, NY, Jay P. Dinan, Pro Hac Vice, Parker Waichman, LLP, Bonita Springs, FL, Richard Schell–Asad, San Juan, PR, for Plaintiff.

Guillermo J. Ramos–Luina, San Juan, PR, Eric M. Quetglas–Jordan, Quetglas Law Office PSC, Guaynabo, PR, for Defendants.

OPINION AND ORDER¹

Francisco A. Besosa, United States District Judge

Before the Court is defendants John F. Nevares and Associates, P.S.C. ("Nevares")'s, Salas LC ("Salas")'s, and Eric J. Quetglas–Jordan d/b/a Quetglas Law Firm ("Quetglas")'s² motion to dismiss plaintiff Parker Waichman LLP ("Parker")'s second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). (Docket No. 125.) For the reasons set forth below, defendants' motion is DENIED .

I. BACKGROUND

Parker alleges that it, as the successor to Parker Waichman Alonso LLP ("Parker Waichman Alonso"), is entitled to relief pursuant to a contract with defendants Salas, Nevares, and Quetglas. (Docket No. 93.)

Plaintiff and defendants executed a contract³ titled "Confidential Operating Agreement for Plaintiff Attorney Group in Caribbean Petroleum Oil and Fire Litigation" ("CAPECO Agreement"). Id. at p. 2. Parker Waichman Alonso is a party to the contract. (Docket No. 125–1 at pp. 2 and 5.) Parker is the successor to Parker Waichman Alonso LLP. (Docket No. 93 at p. 1.) All parties to the CAPECO Agreement are legal entities "dedicated to the practice of law." Id. The parties to the CAPECO Agreement agreed to prosecute collectively for clients, bringing claims arising out of an explosion and subsequent fire that occurred on October 23, 2009 at the Caribbean Petroleum Corporation, an oil refinery and depot in Bayamon, Puerto Rico. Id. at pp. 2–3. The CAPECO Agreement stipulated that all parties would participate on behalf of, and cooperate with, one another to the benefit of the clients. Id. at p. 3. Parker Waichman Alonso agreed to advance the "[c]apital expenditures necessary to fund the prosecution of the actions on behalf of the clients of the group [i.e. plaintiff and defendants.]"⁴ (Docket No. 125–1 at p. 2.)

The CAPECO Agreement provides for an ordered process of distributing attorney's fees resulting from the underlying litigation. Id. The parties to the CAPECO Agreement agreed to prioritize the reimbursement of member firms' capital expenditures. Id. Next, they agreed to allocate fees to reimburse out of pocket expenses "not for specific cases." Id. The parties agreed to distribute the remaining fees among themselves equally. Id.

Pursuant to the CAPECO Agreement, Parker allegedly invested $188,586.50 in capital expenditures necessary to prosecute the clients' claims. (Docket No. 93 at p. 3.) Parker also "invested a substantial amount of ‘man hours’ in attorneys and paralegal time" to prosecute the claims contemplated by the CAPECO Agreement. Id. Parker alleges that it fully complied with all of its obligations under the CAPECO Agreement at all times. Id. at p. 4.

Later, defendants unilaterally terminated the CAPECO Agreement. Id. The CAPECO Agreement did not permit unilateral termination but rather, provided for termination upon a vote of all signatories. Id. After terminating the contract with Parker, defendants allegedly have or will receive "substantial sums in compensation to the damages claimed by the clients." Id. at p. 5. Defendants have allegedly refused to pay Parker either to reimburse capital expenditures or to compensate net attorney's fees. Id. Defendants have allegedly breached their obligations by distributing attorney's fees among themselves without considering all contracting parties. Id.

In a second amended complaint against Salas, Nevares, and Quetglas, Parker seeks the following relief: (1) specific performance of the CAPECO Agreement, (2) rescission of the CAPECO Agreement, (3) recovery under the doctrine of quantum meruit , and (4) attorney's fees and prejudgment interest due to the defendants' obstinacy in prosecuting the Parker's claims. (Docket No. 93.)

Defendants filed a motion to dismiss, Docket No. 125, Parker opposed, Docket No. 131, and Nevares replied, Docket No. 139. The moving defendants argue that the Court should dismiss Parker's claims against them because: (1) Parker is not a signatory to the CAPECO Agreement and, thus, cannot claim anything pursuant to it; (2) the CAPECO Agreement is unenforceable; (3) the doctrine of exceptio non adimpleti contractus precludes Parker from compelling specific performance of the CAPECO Agreement; and (4) the quantum meruit claim is time barred. (Docket No. 125.)

II. LEGAL STANDARD

To survive a Rule 12(b)(6) motion to dismiss, a complaint must contain sufficient factual matter "to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). Resolving a motion to dismiss requires a two-step approach. First, a Court "isolate[s] and ignore[s] statements in the complaint that simply offer legal labels and conclusions or merely rehash cause-of-action elements." Schatz v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012). Second, a Court "take[s] the complaint's well-pled (i.e. , non-conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader's favor, and see[s] if they plausibly narrate a claim for relief." Id."The relevant question for a district court in assessing plausibility is not whether the complaint makes any particular factual allegations but, rather, whether ‘the complaint warrant[s] dismissal because it failed in toto to render plaintiffs' entitlement to relief plausible.’ " Rodriguez–Reyes v. Molina–Rodriguez, 711 F.3d 49, 55 (1st Cir. 2013) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 569 n.14, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007).

III. DISCUSSION

A. Signatories to the CAPECO Agreement

Parker seeks relief pursuant to the CAPECO Agreement, which was executed by a signatory different from it. Pursuant to Article 1209 of the Puerto Rico Civil Code, only contracting parties can bring actions that arise out of a contract. P.R. Laws Ann. tit. 31, § 3374 ("Contracts shall only be valid between the parties who execute them and their heirs."); see also Torres v. Bella Vista Hosp., Inc., 523 F.Supp.2d 123, 152 (D.P.R. 2007) (McGiverin, J.). For this reason, defendants argue that Parker cannot bring claims pursuant to the CAPECO Agreement, which was signed by Parker Waichman Alonso, not by Parker. (Docket No. 125 at p. 7.)

Parker, however, can claim that it is a party to the CAPECO Agreement signed by Parker Waichman Alonso. In considering a motion to dismiss, a Court may consider additional documents, such as official public records. Watterson v. Page, 987 F.2d 1, 3 (1st Cir. 1993) (in a motion to dismiss, courts make exception for certain documents including those that are "official public records; for documents central to plaintiffs' claim; or for documents sufficiently referred to in the complaint"). Parker submitted two official public documents to the Court showing that "Parker Waichman Alonso LLP" changed its official entity name and registration to "Parker Waichman LLP" on February 27, 2012. (Docket Nos. 18–1 and 18–2.) In addition, the second amended complaint includes a clear statement that Parker is the successor to Parker Waichman Alonso. (Docket No. 93 at p. 1.) The motion to dismiss does not acknowledge this. (Docket No. 125 at p. 7.) The moving defendants merely refer the Court to the CAPECO Agreement as proving that Parker is not a signatory to it. Id. The stability of contracts would be eviscerated if a party to a contract could, as defendants suggest, be dismissed from all obligations and claims under a contract by merely changing its name.

Defendants do not develop any legal argument for their charge that Parker cannot recover pursuant to the CAPECO Agreement, which was executed under its former name. Defendants failed to provide the Court with any controlling legal authority to support their argument. The Court is under no obligation to create legal arguments for the parties before it. U.S. v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (A party may not merely "mention a possible argument in the most skeletal way, leaving the Court to do the counsel's work, create the ossature for the argument, and put flesh on its bones.") The Court will not dismiss a case pursuant to Rule 12(b)(6) based on groundless conjecture that is devoid of legal argument.

It can be inferred from the second amended complaint and the CAPECO Agreement that the parties treated Parker as a party to the agreement signed under its previous name. Parker alleges that it continued fulfilling its obligations under the contract after the firm changed its name. (Docket No. 93 at p. 4.) The complaint states: "[a]t all relevant times, Parker Waichman LLP fully complied with all of its obligations under the CAPECO Agreement, including those towards the ... defendants." Id. The contract included a confidentiality clause in which the parties agreed that their work "be kept strictly confidential and not disclosed to anyone other than the attorney and firms belonging to the Group." (Docket No. 125–1 at p. 3.) Parker, therefore, continued to fulfill its obligations with the defendants under a contract that explicitly limited participation to parties to the agreement.

For those reasons, Parker has sufficiently shown that the firm is a party to the contract in order to survive a motion to dismiss.

B. Exceptio non adimpleti contractus

The Puerto Rico Civil Code implicitly includes the doctrine of exceptio non adimpleti contractus. FDIC v. Empresas Cerromonte Corp., No. 10–1623, 2013 U.S. Dist. LEXIS 138794, at *15 (D.P.R. May 29, 2013) (López, M.J.) ("the doctrine of exceptio non adimpleti contractus [is] implicit within...