BELFOR USA Group Inc. v. ESJ Resort LLC, No. 3:2018cv01048 - Document 76 (D.P.R. 2018)
Court Description: OPINION AND ORDER denying 46 Motion to Dismiss for Failure to State a Claim. Signed by Judge Juan M. Perez-Gimenez on 12/14/2018. (NNR)
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BELFOR USA Group Inc. v. ESJ Resort LLC Doc. 76 Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 1 of 8 IN TH E U N ITED S TATES D ISTRICT COU RT FOR TH E D ISTRICT OF PU ERTO RICO BELFOR U SA GROU P, IN C., Plaintiff, v. ESJ RESORT LLC; an d MAPFRE, CIV. NO. 18 -10 48 (PG) Defendants. ESJ RESORT LLC, Counterclaim ant, v. BELFOR U SA GROU P, IN C., Counterdefendant. OPIN ION AN D ORD ER Before the court is codefendant MAPFRE’s m otion to dism iss, and plaintiff BELFOR USA Group’s (“BELFOR” or “plaintiff”) opposition thereto. See Docket Nos. 46 and 51. For the reasons specified below, defen dant’s m otion is D EN IED . I. BACKGROU N D On J anuary 30 , 20 18, BELFOR filed suit against ESJ Resort LLC (“ESJ ”). 1 See Docket No. 1. On April 15, BELFOR am ended its com plaint to include two claim s against the hotel’s insurer, MAPFRE. 2 See Docket No. 18 (counts five and six). Specifically, BELFOR brought one claim for breach of contract and another under Puerto Rico’s general tort statute. See id. at 9-10 . The am ended com plaint alleges that BELFOR and ESJ entered into a Disaster Recovery an d Em ergen cy Services Agreem ent (“the contract”) on Septem ber 22, 20 17, pursuant to which 1 BELFOR, a corporation based in Colorado, provides disaster recovery and property restoration services. ESJ is a Delaware lim ited liability com pany that owns El Hotel San J uan (“the hotel”). See Docket No. 18 at 1. 2 MAPFRE is a Spanish corporation. See Docket No. 18 at 2. Dockets.Justia.com Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 2 of 8 Page 2 CIV. NO. 18-10 48 (PG) BELFOR provided em ergency m itigation and restoration services to the hotel following dam ages caused by Hurricane Maria. See id. at 3; Exhibit No. 1. BELFOR m ain tains that it com plied with the term s of the contract, but ESJ has yet to pay for the work com pleted. See Docket No. 18 at 3. The am ended com plaint further avers that “on or about March 19, 20 18,” BELFOR and MAPFRE entered into a settlem ent agreem ent (“the agreem ent”) pursuant to which MAPFRE would pay BELFOR $ 10 ,10 0 ,0 0 0 .0 0 in com plete satisfaction of all billed and unbilled services rendered. See id. However, BELFOR asserts that MAPFRE has refused to satisfy the agreem ent. See id. BELFOR appended a series of e-m ails to the am ended com plaint. See Docket No. 18, Exhibits No. 2 and 3. It contends the e-m ails m em orialize the term s of the agreem ent and MAPFRE’s confirm ation thereof. See Docket No. 18 at 4. The content of those e-m ails will be discussed in detail infra. II. STAN D ARD OF REVIEW Federal Rule of Civil Procedure 12(b)(6) authorizes the dism issal of a com plaint that fails to state a claim upon which relief could be granted. “To avoid dism issal, a com plaint m ust provide ‘a short and plain statem ent of the claim showin g that the pleader is entitled to relief.’” Garcia-Catalan v. United States, 734 F.3d 10 0 , 10 2 (1st Cir. 20 13) (quoting Fed. R. Civ. P. 8 (a)(2)). When ruling on a m otion to dism iss for failure to state a claim , a district court m ust “ask whether the com plaint states a claim to relief that is plausible on its face, accepting the plaintiff’s factual allegations and drawing all reasonable inferences in the plaintiff’s favor.” Cooper v. Charter Com m unication s Entertainm ents I, LLC, 760 F.3d 10 3, 10 6 (1st Cir. 20 14) (citing Maloy v. Ballori-Lage, 744 F.3d 250 , 252 (1st Cir. 20 14)) (internal quotations m arks om itted). Additionally, courts “m ay augm ent these facts and inferen ces with data points gleaned from docum ents incorporated by referen ce into the com plaint, m atters of public record, an d facts susceptible to judicial notice.” A.G. ex rel. Maddox v. v. Esevier Inc., 732 F.3d 77, 80 (1st Cir. 20 13) (citing Haley v. City of Boston, 657 F.3d 39, 46 (1st Cir. 20 11). Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 3 of 8 Page 3 CIV. NO. 18-10 48 (PG) “To cross the plausibility threshold, the plaintiff m ust ‘plead factual content that allows the court to draw the reasonable inference that the defendant is liable for the m isconduct alleged.’” Cooper, 760 F.3d at 10 6 (citing Maloy 744 F.3d at 252). See also Ashcroft v. Iqbal, 556 U.S. 662, 678 (20 0 9). That is, “[f]actual allegations m ust be enough to raise a right to relief above the speculative level, … , on the assum ption that all the allegations in the com plaint are true (even if doubtful in fact) … .” Bell Atlantic Corp. v. Twom bly, 550 U.S. 544, 555 (20 0 7) (internal citations om itted). “Non-conclusory factual allegations in the com plaint m ust then be treated as true, even if seem ingly incredible.” Ocasio-Hernandez v. Fortuno-Burset, 640 F.3d 1, 12 (1st Cir. 20 11). III. D ISCU SSION MAPFRE m oves to dism iss BELFOR’s am ended com plaint against it, on the grounds that its settlem ent offer expired when BELFOR responded to it with a counteroffer. See Docket No. 46. However, MAPFRE’s position fails at this stage. The am ended com plaint’s allegations plausibly plead the existence of a valid contract. Furtherm ore, the appended exhibits do not support an inference to the contrary. A. Bre a ch o f Co n tract ( Co u n t Five ) Pursuant to local law, 3 a breach of contract claim requires a valid contract, a breach of that contract by one of the parties, and dam ages consequent to that breach. See Markel Am . Ins. Co. v. Diaz-Santiago, 674 F.3d 21, 31 (1st Cir. 20 12); R & T Roofing Contractor, Corp. v. Fusco Corp., 265 F. Supp. 3d 145, 154 (D.P.R. 20 17). A valid contract, in turn, requires consent, object and cause. See P.R. LAWS ANN . tit. 31, § 3391; Soto v. State Indus. Prod., Inc., 642 F.3d 67, 73 (1st Cir. 20 11). MAPFRE argues, in a nutshell, that the agreem ent is not valid. See Docket No. 46. It points to the am ended com plaint’s appended e-m ails in an attem pt to show that the parties never consented to the agreem ent. See id. at 5; Docket No. 18, Exhibit 2. 3 Because this is a diversity jurisdiction case, Puerto Rico substantive law applies. See Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 417 (20 10 ) (quoting Hanna v. Plumer, 380 U.S. 460 , 465 (1965)). Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 4 of 8 CIV. NO. 18-10 48 (PG) Page 4 i. Pleading Consent As a threshold m atter, the court finds that BELFOR sufficiently pleads the existence of a valid contract in the am ended com plaint. See Twom bly, 550 U.S. at 555 (“Factual allegations m ust be enough to raise a right to relief above the speculative level…”). See also Iqbal, 556 U.S. at 678 . Indeed, it posits that “BELFOR and MAPFRE entered into [the agreem ent] … whereby MAPFRE agreed to pay BELFOR [$ 10 ,10 0 ,0 0 0 .0 0 ] in total and com plete satisfaction of all outstanding invoices and of any unbilled work…” Docket No. 18 at 3 (em phasis added). Even a cursory reading of that allegation is enough to determ ine that BELFOR pleads consent between the contracting parties (as well as object and cause). See Ocasio-Hernandez, 640 F.3d at 12 (“Non-con clusory factual allegations in the com plaint m ust … be treated as true...”). To boot, BELFOR also alleges that MAPFRE later “reconfirm ed its obligations under [the agreem ent].” Docket No. 18 at 4. Still, while the Rule 12(b)(6) inquiry usually focuses on the allegations pleaded in the com plaint, and stops short of considering record evidence, “[i]t is a well-settled rule that when a written instrum ent contradicts allegations in the com plaint to which it is attached, the exhibit trum ps the allegation.” Yacubian v. United States, 750 F.3d 10 0 , 10 8 (1st Cir. 20 14) (quotations om itted). The court m ust then turn to the appended exhibits to determ ine if they contradict, and thus trum p, BELFOR’s plausible allegations. ii. E-Mails 1-3: Consent and Counteroffers Exhibit 2 to the am ended com plaint includes four e-m ails. 4 See Docket No. 18, Exhibit 2. MAPFRE sent the first (“e-m ail 1”), containing a settlem ent offer to BELFOR, on March 16, 20 18. See id. at 2. The second (“e-m ail 2”), sent on the sam e date by BELFOR in response to e-m ail 1, “confirm s that [BELFOR] will agree to settle the pending claim s,” but later m odifies the term s of the settlem ent offer originally tendered by MAPFRE in e-m ail 1. Id. at 1. In the third e-m ail (“e-m ail 4 All e-m ails referenced herein consist of communications between representatives of BELFOR and MAPFRE. For brevity’s sake, the court will specify only if either BELFOR or MAPFRE sent the e-m ail. It is to be understood that the opposing party was the recipient of the e-m ail being discussed. Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 5 of 8 CIV. NO. 18-10 48 (PG) Page 5 3”), sent on March 19 th , BELFOR “withdraws and am ends” its response in e-m ail 2 and accepts the offer MAPFRE tendered in e-m ail 1. See id. Now, “consent is shown by the concurrence of the offer and acceptance of the thing and the cause which are to constitute the contract.” P.R. LAWS ANN . tit. 31, § 340 1. In order for an acceptance to operate as contractual consent, it m ust be “pure” and “sim ple.” See Kansas Milling Co. v. Royal Bank of Canada, 52 P.R. Dec. 10 1 (1937) 5; CRM Contractors, Inc. v. Matcor, Inc., 20 0 6 WL 1761962 at *4-5 (P.R.C.A. 20 0 6) (quoting J osé Ram ón Vélez Torres, CURSO DE DERECHO CIVIL, T. IV, V. II DERECHOS DE CONTRATOS, 1990 , pag. 38) (also citing L. Diez-Picazo, F UNDAMENTOS DEL D ERECHO CIVIL P ATRIMONIAL, Madrid, Ed. Tecnos, 1979, Vol I, pag. 193; etc.) (translation supplied by MAPFRE in Docket No. 46, Attachm ent 1). That is, it m ust accept the tendered offer in its entirety without m odifying it or adding new term s. See id. On the other hand, an “acceptance” that m odifies or adds to the considered offer is a counteroffer (i.e. N OT and acceptance that form s consent). See id. See also Restatem ent, Second, Contracts § 39. In term s of consent, a counteroffer operates as a rejection. See id. Pursuant to Puerto Rico law, a rejection extinguishes the original offer. See id. Thus, when a party responds to an offer with a counteroffer, the original offer ceases to exist. See id. Instead, the counteroffer takes its place, and m ust then be accepted by the other party for a valid contract to be perfected. See id. MAPFRE exten ded a settlem ent offer in e-m ail 1. In e-m ail 2, BELFOR m odified the term s of the offer, adding the requirem ent of “full m utual release.” BELFOR did not accept MAPFRE’s offer in e-m ail 2. Instead, BELFOR m ade a counteroffer, which operatively rejected MAPFRE’s original offer, thereby extinguishing it. Thus, when BELFOR attem pted to accept the origin al offer “as is” in e-m ail 3, there was no longer an offer to accept because the original offer had ceased to exist. MAPFRE is accordingly correct in asserting that these three e-m ails do not evince the 5 The Puerto Rico Supreme Court has not reconsidered this issue since 1937. Still, the local court of appeals followed that holding as recently as 20 12. See R & J Consulting Corporation v. Schering Plough Products, LLC, 20 12 WL 1697229 (P.R.C.A. 20 12). Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 6 of 8 CIV. NO. 18-10 48 (PG) Page 6 form ation of valid consent to the agreem ent, as they lack a “pure” and “sim ple” acceptance of the term s originally tendered by MAPFRE. MAPFRE would have the court end the inquiry here and dism iss BELFOR’s claim s. As the court will explain below, MAPFRE’s position is nonetheless debatable at this stage. iii. E-Mails 4-5: The W hole N ine Yards BELFOR does not purport that the appended e-m ails evin ce, in and of them selves, the form ation of consent and the perfection of a valid contract. See Docket No. 18 at 4 (“A copy of the e-m ails m em orializing the term s of [the agreem ent] is attached hereto…” (em phasis added)). See also Docket No. 51 at 3 (“the em ails attached to the Am ended Com plaint m erely m em orialized the term s of the Settlem ent Agreem ent—they do not represent the entire sequence of events form ing the basis of the instant action” (em phasis added)). More im portantly, the three e-m ails discussed above do not exist in a vacuum , nor are they the only e-m ails before the court. BELFOR also appended two m ore e-m ails to the am ended com plaint. Both e-m ails reference conversations between the parties that took place on March 21st and 23 rd , the contents of which are not in the appended exhibits nor available for this court’s review. The two e-m ails also allude to a paym ent scheduled to be m ade by MAPFRE to BELFOR on March 26 th . The fourth e-m ail (“e-m ail 4”), sent on Monday, March 26 th , by BELFOR, reads as follows: “J ust touching base after our call Friday night. I’d like to understand where [MAPFRE] stands with regard to the w ire pay m ent scheduled to be issued to BELFOR today .” Docket No. 18, Exhibit 2 at 1 (em phasis added). The fifth e-m ail (“e-m ail 5”), predates e-m ail 4. MAPFRE sent it on Thursday, March 22 nd , and it reads, in relevant part: As discussed y esterday , we are waiting for the insured to execute the Proof of Loss and Acknowledgem ent. We cannot release any paym ents until they do so. We provided the inform ation requested by them yesterday, so I would expect this m atter to be resolved today. Due to this delay, I am uncertain if w e w ill be able to pay by March 26. We should know m ore by this afternoon. Docket No. 18, Exhibit 3 (em phasis added). Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 7 of 8 CIV. NO. 18-10 48 (PG) Page 7 It is patently clear from these e-m ails that (1) settlem ent discussions – in which consent could have been form ed and a valid contract perfected 6 – were not lim ited to the e-m ails appended to BELFOR’s am ended com plaint, and (2) the parties had agreed to, and even scheduled, a paym ent to be m ade by MAPFRE to BELFOR on March 26 th . 7 Moreover, courts presum e the validity of a contract, and the consent thereof. See Citiban k Glob. Markets, Inc. v. Rodriguez Santana, 573 F.3d 17, 24 (1st Cir. 20 0 9) (quoting Capo Caballero v. Ram os, 83 P.R. Dec. 650 , 673 (1961)) (noting the im portant social interest in holding parties to their contracts, which the Puerto Rico Suprem e Court has repeatedly recognized). While the appended e-m ails m ay be suggestive, at this stage, the court is not yet able to determ ine whether a valid contract existed between BELFOR an d MAPFRE. 8 As a result, the court finds that the parties should proceed with discovery, and the court m ay subsequently revisit the issue, with the ben efit of further briefing and a m ore developed record. 9 Thus, MAPFRE’s m otion to dism iss count five of the am en ded com plaint is DENIED. B. Article 18 0 2 – Pu e rto Rico ’s Ge n e ral To rt Statu te ( Co u n t Six) MAPFRE also requests to dism iss BELFOR’s Article 180 2 claim . See Docket No. 46. See also P.R. LAWS ANN . tit. 31, § 5141. However, MAPFRE lodges no intelligible argum ents against it, aside from those already discussed above. As such, MAPFRE’s m otion to dism iss count six of the am ended com plaint is DENIED. 6 Even if these discussions were conducted orally, a valid contract could have still been formed. “Verbal contracts are valid and enforceable.” Rojas-Buscaglia v. Taburno-Vasarhelyi, 897 F.3d 15, 27 (1st Cir. 20 18) (citing P.R. LAWS ANN . tit. 31, § 3451). 7 That the parties scheduled a payment heavily suggests that they indeed had agreed to term s. 8 See MMB Dev. Grp., Ltd. v. Westernbank Puerto Rico, 762 F. Supp. 2d 356, 367– 68 (D.P.R. 20 10 ). (where the existence of a contract was in controversy, a “com plaint's repeated reference to documents and conversations m em orialized in electronic exchanges” was sufficient to defeat rule 12(b)(6) m otion). It must be noted that MMB Dev. Grp. dealt with a contract under the Puerto Rico Comm ercial Code, P.R. LAWS ANN . tit. 10 , § 10 0 1, et seq., rather than the Civil Code. 9 The am ended com plaint’s factual allegations raise a reasonable expectation that discovery will reveal evidence of the agreem ent’s existence. See Cardigan Mountain Sch. v. New Ham pshire Ins. Co., 787 F.3d 82, 88 (1st Cir. 20 15) (quoting Twom bly, 550 U.S. at 556); Garcia-Catalan v. United States, 734 F.3d 10 0 , 10 4 (1st Cir. 20 13) (“the plausibility inquiry properly takes into account whether discovery can reasonably be expected to fill any holes in the pleader's case”). Case 3:18-cv-01048-PG Document 76 Filed 12/14/18 Page 8 of 8 Page 8 CIV. NO. 18-10 48 (PG) IV. CON CLU SION For the foregoing reasons, MAPFRE’s m otion to dism iss is D EN IED , insofar as the am ended com plaint plausibly pleads the existence of a valid contract and the appended exhibits do not support an inference to the contrary. IT IS SO ORD ERED . In San J uan, Puerto Rico, Decem ber 14, 20 18. S/ J UAN M. PÉREZ-GIMÉNEZ JU AN M. PERÉZ-GIMÉN EZ SEN IOR U .S. D ISTRICT JU D GE
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