Tc Investments v. Becker, Civil No. 08-1320 (FAB)

CourtUnited States District Courts. 1st Circuit. District of Puerto Rico
Writing for the CourtBESOSA
Citation733 F.Supp.2d 266
PartiesTC INVESTMENTS, CORP., et al., Plaintiffs, v. Sydney BECKER, et al., Defendants.
Decision Date28 June 2010
Docket NumberCivil No. 08-1320 (FAB)
733 F.Supp.2d 266

TC INVESTMENTS, CORP., et al., Plaintiffs,
Sydney BECKER, et al., Defendants.

Civil No. 08-1320 (FAB).

United States District Court,
D. Puerto Rico.

June 28, 2010.

733 F.Supp.2d 271

Jose A. Hernandez-Mayoral, Hernandez Mayoral Law Office, Juan H. Saavedra-Castro, Juan H. Saavedra Castro Law Office, San Juan, PR, for Plaintiffs.

Fernando E. Agrait-Betancourt, Fernando E. Agrait Law Office, Orlando H. Martinez-Echeverria, Orlando H. Martinez Law Office, San Juan, PR, for Defendants.


BESOSA, District Judge.

Before the Court is the motion of plaintiffs TC Investments, Corp. ("TCI") and Caribbean Property Group, L.L.C. ("CPG") to dismiss the counterclaim filed by co-defendants Sydney Becker, Wilma Becker Shapiro and Judith Becker Rubin

733 F.Supp.2d 272
(collectively, "defendants"), (Docket No. 25), as well as defendants' motion to dismiss the amended complaint. (Docket No. 45.)

For the reasons discussed below, the Court hereby DISMISSES WITHOUT PREJUDICE defendants' counterclaim and DENIES defendants' motion to dismiss the amended complaint.



Plaintiff TCI is "a Puerto Rico corporation with its principal place of business in Puerto Rico." (Docket No. 36 at 2.) Jorge Torres-Caratini ("Mr. Torres-Caratini") is TCI's sole shareholder and president. Id. at 4. Involuntary plaintiff CPG "is a limited liability corporation organized and existing under the laws of the state of Delaware[,] ... [and its] principal place of business is New York, New York." Id. at 2. Defendants Sydney Becker, Wilma Shapiro, and Judith Becker are residents and citizens of Pennsylvania, Georgia, and Maryland, respectively. Id. at 2-3.

Together, defendants own shares in four limited liability companies (collectively, "the LLC's") in Puerto Rico. (Docket No. 36 at 3.) Plaintiffs allege that the principal place of business of the LLC's is Puerto Rico, where they have conducted business exclusively for many years, and that defendants own shopping centers as well as residential and commercial properties. Id. Defendants' investments in two of the LLC's "generated millions of dollars in dividends and benefits, all of which have been paid in Puerto Rico." Id.

Beginning in 2003, defendants expressed a willingness to sell their business interests in the Puerto Rico LLC's, and Mr. Torres-Caratini and CPG made offers to purchase the LLC's. (Docket No. 36 at 3-4.) After CPG offered to purchase defendants' shopping center operations in or about August of 2007, defendants sent a facsimile dated August 15, 2007, from Pennsylvania to Puerto Rico indicating that they would entertain the offer to sell if the offer included all of their Puerto Rico holdings. Id. at 4. In October of 2007, TCI and CPG offered to purchase defendants' Puerto Rico holdings in compliance with the defendants' August facsimile conditions. Id. Defendants, via a letter dated November 22, 2007, made a counter-offer to TCI and CPG indicating that they would sell the Puerto Rico holdings to CPG and TCI provided that the net proceeds from the sale of all the properties were $27,650,000, and that the buyers would indemnify the sellers against any further liabilities. (Docket No. 36-2 at 2.)

In response, TCI and CPG sent a letter dated December 4, 2007, to defendants agreeing to the terms and conditions set forth by defendants:

After proper review and consulting with First Bank and [CPG], I am pleased to inform you that your counter offer for the sale of your 95% equity interest in [two of defendants' LLC's] and 100% equity interest in [one LLC] ... is accepted. This acceptance is made together with CPG's acceptance ... adding up a total net proceeds of $27,650,000.00 for all your Puerto Rico properties, as you requested.
As part of our acceptance to your offer, we agree to assume all the liabilities of [the LLC's] and to release you from any further business liabilities....
Upon your execution of this letter of intent, we will prepare and submit for your revision a draft of the Agreement of Purchase and Sale of Equity Interests in [three of the LLC's], after which we will enter into a due diligence period of 60 days to complete the revision and
733 F.Supp.2d 273
preparation of all the documentation needed for closing, which shall occur not later than 30 days after expiration of the due diligence.
Please execute and return this original at the bottom to acknowledge your acceptance of the terms of this offer, and keep a copy for your records.
(Docket No. 36-2 at 3.)

Mr. Torres-Caratini's signature appears on the bottom of the letter of intent, but the signature line for co-defendant Sydney Becker is blank. See id. According to the terms of the acceptance and counter-offer, CPG was to purchase the real estate of one LLC and TCI would purchase the equity interest of the other three LLC's. (Docket No. 36 at 5.)


Jorge Torres-Caratini is a resident and businessman of San Juan, Puerto Rico, and TC Investments Corp. is his alter ego. (Docket No. 22 at 7.) TCI was "organized under the laws of Puerto Rico with [its] principal place of business in Puerto Rico." Id. Co-defendant Sydney Becker is a resident of Pennsylvania, Wilma Becker Shapiro is a resident of Georgia, and Judith Becker Rubin is a resident of Florida. Id. at 8. Defendants own 95% of Plaza San Francisco Investments, LLC and Las Piedras Investments, LLC, and Mr. Torres-Caratini owns the remaining 5%. Id. Defendants also own 100% of Rio Grande Investments, LLC and Las Piedras Development, LLC (collectively, the four companies hereinafter "the LLC's"). Id. The LLC's are "Limited Liability Companies created under the Delaware Limited Liability Company Act." Id.

Co-defendant Sydney Becker requested in 1997 that Mr. Torres-Caratini serve as administrator of Plaza San Francisco Investments, LLC. (Docket No. 22 at 8-9.) In 1997 and 1998, Mr. Torres-Caratini recommended that defendants acquire land in Las Piedras and Rio Grande, Puerto Rico, respectively, for development of two shopping centers. Id. at 9. Las Piedras Investment, LLC and Rio Grande Investments, LLC, two of defendants' LLC's, were created under Delaware law to acquire and develop the shopping centers in Las Piedras and Rio Grande. Id. Mr. Torres-Caratini was in charge of the acquisition, development, and operations and had absolute control of the LLC's and properties. Id.

"[T]he shopping centers were not adequately kept and consequently devalued" because of acts, omissions and results under Mr. Torres-Caratini's supervision and control at San Francisco and Las Piedras Shopping Centers. (Docket No. 22 at 10.) From the acts, omissions, and results listed in defendants' counterclaim, defendants contend that Mr. Torres-Caratini "mismanaged the shopping centers, incurred in numerous conflicts of interests [sic] and continuously failed to exercise the due care and the good business person judgment which he was obligated to exercise." Id. at 9. Furthermore, the Rio Grande shopping center's development was delayed, incurring "huge cost overruns and interest expenses." Id. at 11.

Additionally, Mr. Torres-Caratini fraudulently received commissions of over $350,000 for leases obtained for the shopping centers, (Docket No. 22 at 11), and he used the LLC's and defendants' information to entice a third party to combine with him to acquire defendants' properties. Id. at 12. He also failed to provide "adequate information to [defendants], refused to comply with specific orders and requests of [defendants], and outright lied to them about the status of the operations." Id. at 11. Defendants contend that Mr. Torres-Caratini "devaluated the [defendants']

733 F.Supp.2d 274
properties to try to acquire them ... at a cheap price," id., and that the projects that Mr. Torres-Caratini mismanaged "resulted in serious losses and/or made a very low return on the [defendants'] investment." Id.



Plaintiffs contend that they entered into a contract with defendants to buy their equity interest in the Puerto Rico LLC's and that defendants "walked away" from the agreement. (Docket No. 36 at 5.) The amended complaint alleges a breach of contract claim for damages of more than ten million dollars ($10,000,000). Id. Plaintiffs also assert a second claim, for a bad faith withdrawal or termination of negotiations, or in the alternative, "for the wrongful and bad faith failure to negotiate," that calculates no damages. Id. at 6.

On March 1, 2010, defendants moved to dismiss plaintiffs' amended complaint, arguing that: (1) plaintiffs' culpa in contrahendo claim fails to satisfy the amount in controversy required for diversity jurisdiction; and (2) the amended complaint fails to state a claim under Rule 12(b)(6) for breach of contract and for culpa in contrahendo. (Docket No. 45.) Plaintiffs opposed the motion. (Docket No. 48.)


Defendants' counterclaim alleges that Mr. Torres-Caratini, the alter ego of plaintiff TCI, breached his fiduciary duties owed directly to the defendants, took negligent actions that devalued defendants' properties, and thus defrauded the defendants. (Docket No. 22 at 10-12.)

Plaintiffs cite two grounds for dismissing defendants' counterclaim: (1) failure to state a claim upon which relief can be granted pursuant to Federal Rule of Civil Procedure 12(b)(6); and (2) failure to join an indispensable party as required by Federal Rule of Civil Procedure 19 pursuant to Federal Rule of Civil Procedure 12(b)(7). (Docket No. 25.) Plaintiffs contend that defendants' counterclaim endeavors to redress a "laundry list" of injuries that Mr. Torres-Caratini caused to defendants' LLC's. (Docket No. 25 at 3.) As such, plaintiffs argue that shareholders have no cause of action for damages caused to a corporation in either Delaware or Puerto Rico and the counterclaim should be dismissed. Id....

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