Bonner v. Triple S Vida

• Court: District Court, D. Puerto Rico
• Decided: March 30, 2020
• Docket: 3:19-cv-01228
• Status: Unknown

Opinion

| IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

3 DORA L. BONNER

4 Plaintiff, Civil No. 19-1228 (GAG)

5 ||

6 TRIPLE S MANAGEMENT

7 CORPORATION & TRIPLE S VIDA INC.,

g Defendants.

OPINION AND ORDER 10 On March 13, 2019, Dora L. Bonner (“Bonner” or “Plaintiff’) filed the above-captioned IT |) action against insurance companies Triple-S Management Corporation (‘“Triple-S 12 Management”) and Triple-S Vida Inc. (“Vida”), collectively Defendants, alleging they incurred 13 |) in civil violations, under the Racketeer Influenced and Corrupt Organizations Act (RICO), 18 14 Vus.c. §§ 1961 et seq., fraud, breach of contract and fiduciary duty, under Texas state law. 15 (Docket Nos. 5; 17). Plaintiff seeks treble damages and damages for the remaining claims. Id. 16 Defendants move to dismiss Bonner’s claims arguing that she fails to state a claim upon 17 || which relief can be granted, pursuant to FED. R. Civ. P. 12(b)(6). (Docket Nos. 12; 18). 18 Specifically, Defendants contend that: (1) its companies and subsidiaries have never entered in 19 || a contractual, or otherwise, relationship with Plaintiff; (2) Bonner’s civil RICO claims fail to 20 || meet the express distinctness requirement, and (3) Plaintiff's complaint ignores that enterprises 21 || cannot be held liable under 18 U.S.C. §1962(c). Id. 22 After reviewing the parties’ submissions, record and applicable law, this Court DENIES 23 || Defendants’ motions to dismiss for failure to state a claim at Docket Nos. 12 and 18. 24

Civil No. 19-1228 (GAG)

| 1. Relevant Factual and Procedural Background 2 For purposes of this motion to dismiss, the Court accepts as true all the factual 3 allegations in the Complaint and construes all reasonable inferences in favor of Plaintiff. See 4 Beddall v. State St. Bank & Trust Co., 137 F.3d 12, 16 (1st Cir. 1998). 5 a. The Alleged Fraud Scheme 6 On March 11, 2015, Bonner received a call, originating in Costa Rica, from Albert 7 Gamboa Spencer, who identified himself as a Vida employee that had previously worked at 8 Atlantic Southern Insurance (ASI), a company Plaintiff had been trying to contact for months. ? (Docket No. 17 §§ 8-10). Spencer told Bonner that someone had attempted to change the 10 beneficiary on her investment certificates held by Vida. Id. Plaintiff alleges, Spencer explained to her that Vida had originally been purchased by Triple-S Management, on or about 2013, and V2 later relocated the company to its wholly owned subsidiary, after it went through a name change 13 to Vida. Id. 9. Following this initial conversation, Spencer promised Plaintiff to call back the 14 next day with an investigator present who would assist and advise her on how to proceed with Is the investments. Id. § 12. 16 Between March 11, 2015 and until about September 1, 2015, Bonner engaged in phone VY conversations, originating from Costa Rica, Nicaragua and the Commonwealth of Puerto Rico, 18 with several individuals that purportedly worked for Triple-S Management and were going to 19 assist with her investment situation. Id. § 13. These individuals also exchanged emails and 20 documents with Bonner bearing Triple-S Management’s name and supposed email address. Id. 21 These individuals allegedly included: (1) Albert Gamboa Spencer, an attorney for Vida; (2) 22 Feliciano Zelaya, a Triple-S Financial Manager; (3) Ramon Ruiz Comas, Triple-S 23 Management’s CEO; (4) Eugenio Cerra, Jr., Triple-S Management’s chairman, and (5) Emilio 24

| Aponte, a member Triple-S Management board of directors who worked at Puerto Rico’s 2 Treasury Department. (Docket No. 17 ff 17; 19). 3 Plaintiff's allegations lay out a detailed explanation of the alleged fraud scheme 4 committed against her. Id. §§ 15-81. In general terms, Bonner was asked to pay thousands of 5 dollars in transfer fees to wire transfer to her bank account a judgment award. She alleges having 6 paid the fees, but never received the money judgment. During Plaintiff's exchanges with these 7 individuals, Bonner was told not to talk to representatives from her bank, that the initial 8 management fees invested were intercepted by the Federal Bureau of Investigation (FBI) and ? that the FBI had requested Triple-S Management to turn over the certificates. Id. 42; 45; 47. 10 Plaintiff also allegedly engaged directly with an FBI agent who advised her that the funds had not been intercepted but were rather blocked from being deposited on her account. 12 Id. § 48. After the initial amount of money, $10,000, was sent to the individuals, a new 13 “strategy” was developed to help Bonner recover her investments, Id. Jj 50-51; 53-54, sending 14 more money for management fees, including requesting a quick loan, or otherwise the funds Is would be turned over to the FBI. Id. 99] 54; 56-59. At this point, Plaintiff opposed, stating that 16 sending additional money was not an option and eventually filed suit in Texas state court against Triple-S Management for breach of contract. Id. J 58. 18 To support these allegations, Bonner posits that she received over fifty phone calls and 19 one-hundred fifty emails from these individuals -representing Defendants- to execute several 20 schemes to defraud her. Id. § 60. Plaintiff’s complaint includes as exhibits, nineteen of the most 21 relevant email conversations to her claims, which show the receipts of disbursement contracts 22 copies concerning the certificates Triple-S Management allegedly possessed, written 23 agreements between Bonner and Triple-S Management, wiring instructions, and copies of 24

| payments actually sent to Triple-S Management and her compliance with those requests. 2 || Docket No. 17 99 61-81). 3 In sum, Bonner posits that these conversations demonstrate that Triple-S Management, 4 through and in association with its employees and agents, collected unlawful debts in 5 furtherance of the scheme to defraud her. Id. 61. 6 b. The Texas case 7 In the Texas case proceedings, Bonner sued Triple-S Management for breach of 8 contract, alleging it had promised to transfer certain funds to her account and failed to do so. ? See Bonner v. Triple-S Mgmt. Corp., 181 F. Supp. 3d 371 (S.D. Tex. 2016).! 10 Triple-S Management, the sole defendant in that case, moved to dismiss for lack of personal jurisdiction under FED. R. CIv. P. 12(b)(2). Id. After an evidentiary hearing, the District V2 Court dismissed and held that “Bonner has failed to demonstrate that Triple-S [Management] 13 has sufficient contacts to support the exercise of specific jurisdiction.” Id. at 375. Plaintiff 14 appealed and the Fifth Circuit affirmed the lower court’s decision. See Bonner v. Triple-S 15 || Memt. Corp., 661 F. App’bx 820 (5th Cir. 2016). The Court of Appeals for the Fifth Circuit 16 affirmed the District Court’s determination stating: “we don’t doubt that Bonner was defrauded, VY the evidence unfortunately reveals that Bonner was not in contact with the actual Defendant in 18 this case.” Id. at 823 (citations and internal quotation marks omitted). Noteworthy, the Fifth 19 Circuit stated that “[t]he facts alleged by Bonner suggest that she was the victim of a 4-1-9 20 scam, where scammers, posing as agents of a known entity, offer the victim a large sum of 71 money in exchange for a smaller transaction fee.” Id. at 821, n. 2. 22 23 ' Plaintiff originally filed suit at the Texas state court and was later removed to federal district court. Id.

| I. Standard of Review 2 When considering a motion to dismiss for failure to state a claim upon which relief can 3 be granted, FED. R. Civ. P. 12(b)(6), the Court analyzes the complaint in a two-step process 4 under the context-based “plausibility” standard established by the Supreme Court. See Schatz 5 v. Republican State Leadership Comm., 669 F.3d 50, 55 (1st Cir. 2012); see also Ashcroft v. 6 Iqbal, 556 U.S. 662 (2009); Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007). First, the Court 7 must “isolate and ignore statements in the complaint that simply offer legal labels and 8 conclusions or merely rehash cause-of-action elements.” Schatz, 669 F.3d 50 at 55. A ? complaint does not need detailed factual allegations, but “[t]hreadbare recitals of the elements 10 of a cause of action, supported by mere conclusory statements, do not suffice.” Iqbal, 556 U.S. at 678-79. Second, the Court must then “take the complaint’s well-[pleaded]| (i.e., non- V2 conclusory, non-speculative) facts as true, drawing all reasonable inferences in the pleader’s 13 favor, and see if they plausibly narrate a claim for relief.” Schatz, 669 F.3d at 55. 14 Plausible, means something more than merely possible, and gauging a pleaded IS situation’s plausibility is a context-specific job that compels the court to draw on its judicial 16 experience and common sense. Id. (citing Iqbal, 556 U.S. at 678-79). This “simply calls for VY enough facts to raise a reasonable expectation that discovery will reveal evidence of” the 18 necessary element. Twombly, 550 U.S. at 556. “[W here the well-pleaded facts do not permit 19 the court to infer more than the mere possibility of misconduct, the complaint has alleged-but 20 it has not ‘show[n]’-’that the pleader is entitled to relief.’” Iqbal, 556 U.S. at 679 (quoting FED. 71 R. Civ. P. 8(a)(2)). If, however, the “factual content, so taken, ‘allows the court to draw the 22 reasonable inference that the defendant is liable for the misconduct alleged,’ the claim has 23 24

| facial plausibility.” Ocasio-Hernandez_v. Fortufio-Burset, 640 F.3d 1, 12 (1st Cir. 2011) 2 || (quoting Iqbal, 556 U.S. at 678). 3 iI. Discussion 4 Defendants primarily posit that they have never entered into a contractual relationship 5 || with Bonner. (Docket No. 12 at 8-9). To support this claim, Triple-S Management and Vida put 6 || forward their own statement of facts. Id. at 4-8. These factual allegations are partially based on 7 affidavit filed during the Texas case proceedings by Triple-S Management’s then legal 8 || counsel Gilberto R. Negron Rivera. Id. at 5. He declared that: (1) Neither Triple-S Management, 9 || Vida, nor any another Triple-S Management’s subsidiary invests assets on behalf of individuals 10 || and (2) ASI, similarly, does not offer financial services to individuals seeking to invest large 11 ||sums of money. Id. Based on these assertions, Defendants argue that it does “not offer the 12 || products or services that Bonner claims were the object of her agreement with [Triple-S 13 ||Management] [and thus] it is impossible for Defendants to be parties to the referenced 14 || agreements and letters.” Id. 15 Likewise, Defendants allege that, pursuant to a World Intellectual Property 16 || Organization (“WIPO”) Arbitration and Mediation Center’s Administrative Panel Decision, the 17 || domain name used to contact Bonner is not a valid Triple-S Management or Vida e-mail address 18 || and was not owned by Triple-S Management during the relevant period. Id. at 5-7. Finally, 19 || Defendants posit that except for former Triple-S Management President and CEO Ramon Ruiz 20 ||Comas, the individuals Bonner names in her Complaint are not and have never been Triple-S 21 Management or Vida employees. (Docket No. 12 at 7-8). Specifically, Ruiz Comas stated in an 22 affidavit during the Texas case proceedings that he had never met or spoken, either by 23 || telephone, in person or written communication, with anyone named Dora Bonner. Id. 24

| After amending the Complaint, Plaintiff opposed this argument stating that Defendants 2 attempt to set up impermissible affirmative defenses. (Docket No. 19 § 8). Relying on PPV 3 Connection, Inc. v. Rodriguez, et al., 607 F. Supp. 2d 301 (1st Cir. 2009), Bonner posits that 4 Defendants fail to point out pleading deficiencies in the Complaint. (Docket No. 19 9-10). 5 She further avers that this Court should disregard the Texas district court’s decision because it 6 only found that it lacked in personam jurisdiction over defendant Triple-S Management. Id. 7 11-14. As to the WIPO’s decision, Bonner contends that she was not a party to the decision and 8 is not bound by the findings of a world organization who has no personal jurisdiction over her ? or the person who was defaulted in the ruling. Id. 9 17-19. 10 Defendants filed a supplemental motion to dismiss (Docket No. 18) and replied thereafter to Plaintiff's opposition (Docket No. 20). Bonner replied to Defendants’ V2 supplemental motion to dismiss. (Docket No. 21). In all these motions, the parties reiterated 13 their position as to this issue. 14 The Court agrees with Plaintiff’s position and finds that Bonner is entitled to discovery IS in order to adequately respond Defendants’ proposed statement of facts and exhibits in support 16 thereof. VY It is well-established that affirmative defenses may be raised in a motion to dismiss for 18 failure to state a claim. See Keene Lumber Co. v. Leventhal, 165 F.2d 815, 820 (1st Cir. 1948); 19 see also LaChapelle v. Berkshire Life Ins. Co., 142 F.3d 507, 508 (1st Cir. 1998). However, “it 20 is equally well settled that, for dismissal to be allowed on the basis of an affirmative defense, 21 the facts establishing the defense must be clear ‘on the face of the plaintiff's pleadings.” 22 Blackstone Realty LLC v. F.D.LC., 244 F.3d 193, 197 (1st Cir. 2001) (citing Aldahonda-Rivera 23 v. Parke Davis & Co., 882 F.2d 590, 591 (1st Cir. 1989)). Moreover, when reviewing the 24

| complaint, along with any other documents properly considered under FED. R. Civ. P. 12(b)(6), 2 it must “leave no doubt” that plaintiff's action is barred by the asserted defense. LaChapelle, 3 142 F.3d at 508. 4 On the face of the Complaint, Plaintiff has established a plausible set of facts that show 5 a more than possible scenario where Defendants, in association with the alleged racketeers 6 named in the Complaint, incurred in RICO civil violations, fraud, breach of contract and 7 fiduciary duty. In other words, Bonner narrates a plausible claim for relief and there is a 8 reasonable expectation that discovery may reveal evidence of the necessary elements to prove ? her allegations. Twombly, 550 U.S. at 556; see also Ocasio-Hernandez v. Fortufio-Burset, 640 10 F.3d 1, 17 (ist Cir. 2011). Defendants’ contention as to the fact that Bonner never engaged in a contractual relationship with them, but rather with a third party, can be easily addressed V2 through discovery that would allow Plaintiff to fill-out any holes as to whether the individuals 13 described in the Complaint had any professional or work relationship with Defendants. See 14 Garcia-Catalan v. United States, 734 F.3d 100, 105 (1st Cir. 2013) (“I]t is reasonable to expect IS that modest discovery may provide the missing link’’) (citations and internal quotations marks 16 || omitted). VY After discovery, Defendants may renew its affirmative defenses and then the Court will 18 address them. As Plaintiff argues, moving the case forward allows her to have “one bite at the 19 apple” to litigate this matter. (Docket No. 19 § 15). 20 Lastly, this Court reminds the parties that a complaint should not be “dismissed merely 21 because [it] believes that the case is legally or factually doubtful or that it is unlikely that the 22 || plaintiff will prevail in the action on the merits.” Twombly, 550 USS. at 554. 23 24

| For the reasons abovementioned, this Court DENIES Defendants motions to dismiss at 2 Docket Nos. 12 and 18 as to the lack of contractual relationship claim. 3 a. Distinctness requirement and “enterprise” liability under RICO 4 As a threshold procedural matter, the Court notes that after Defendants filed their initial 5 motion to dismiss (Docket No. 12), Plaintiff amended her Complaint to specifically address 6 Defendants’ argument as to the distinctness requirement under RICO (Docket No. 17). Triple-S 7 Management and Vida renewed their motion to dismiss claiming that Plaintiff still failed to 8 plead this requirement. (Docket No. 18). ? Plaintiff then responded in opposition to Defendants first motion to dismiss (Docket No. 10 19); Defendants replied. (Docket No. 20). Later, Plaintiff responded to the supplemental motion to dismiss (Docket No. 21). The parties’ position as to these issues remains the same throughout V2 these motions. 13 In their submissions to the Court, Triple-S Management and Vida argue that Bonner 14 “misunderstands the relationship between ‘person’ and ‘enterprise’ in the RICO statutory IS context.” (Docket Nos. 12 at 9-10; 18 § 4; 20 § 4). According to Defendants’ position, under 16 RICO’s Section 1962(c), “the ‘person’ is he who is employed by or associated with the VY ‘enterprise’ and conducts or participates in the conduct of the enterprise’s affairs through a 18 pattern of racketeering or collection of unlawful debt.” (Docket No. 18 § 4). Thus, they aver 19 that Bonner has it “backwards” because if Plaintiffs allegations are taken as true, they “evince 20 that the ‘persons’ who are conducting the ‘enterprises’ through a pattern of racketeering are the 21 individuals she mentions as ‘employees’ [of Triple-S Management] and [Vida] and that the 22 ‘enterprises’ these individuals allegedly conduct the affairs of are [Triple-S Management] and 23 [Vida].” (Docket No. 20 §ff 4-55). Finally, under this analysis, Defendants posit that an 24

| enterprise cannot be liable for the acts of the persons, pursuant to Schofield v. First Commodity 2 Corp. of Boston, 793 F.2d 28 (1st Cir. 1986). (Docket Nos. 12 at 10; 18 4 4). 3 In turn, Plaintiff contends that under the elements laid out in Libertad v. Welch, 53 F.3d 4 428 (1st Cir. 1995), she correctly identifies, for RICO statutory purposes, Triple-S Management 5 and Vida as “persons” and the individuals, e.g. Gamboa Spencer, Zelaya, Ruiz Comas, Cera, 6 Aponte and others, as the “enterprise” (Docket No. 19 9] 24-25). To further her contention, 7 Bonner discusses Corporacion Insular de Seguros v. Reyes-Mufioz, 826 F. Supp. 599 (D.P.R 8 1993), which, in her view, presents a similar procedural background to the present case. Id. 27-30. Finally, Bonner concludes that, similar to Corporacién Insular de Seguros, she “did not 10 sue both the corporations and the members of the enterprise, therefore, there is not issue of liability based on an enterprise.” Id. § 30. V2 The Court, once again, agrees with Plaintiff's position. RICO’s Section 1962 (c) states that: 13 (c) It shall be unlawful for any person employed by or associated with any 14 enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such 15 enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt. 16 U.S.C. § 1962. To state a civil RICO claim, a plaintiff must allege “four elements required 17 by the statute: (1) conduct, (2) of an enterprise, (3) through a pattern, (4) of racketeering 18 activity.” Kenda Corp. v. Pot O’Gold Money Leagues, Inc., 329 F.3d 216, 233 (1st Cir. 2003) 19 (citations omitted) or “a single collection of an unlawful debt.” United States v. Weiner, 3 F.3d 20 17, 24 (1st Cir.1993); see also Home Orthopedics Corp. v. Rodriguez, 781 F.3d 521, 528 (1st 21 |) Cir. 2015). 22 A RICO “enterprise” is defined broadly and includes any “individual, partnership, 23 corporation, association or other legal entity, and any union or group of individuals associated 24

| in fact although not a legal entity.” 18 U.S.C. § 1961(4). Such an enterprise need not be a formal 2 corporation, group or organization. Instead, the statute is satisfied by a showing a formal or 3 informal group of persons, “associated for a common purpose of engaging in a course of 4 conduct” which then functions as a “continuing unit.” United States v. Turkette, 452 U.S. 576, 5 583 (1981). In other words, there are two possible types of RICO enterprises: legal entities and 6 associations-in fact. Libertad, 53 F.3d at 44. See also Marrero-Rolén v. Autoridad de Energia 7 || Eléctrica de P.R., Civil No. 15-1167 (JAG/SCC), 2015 WL 5719801, at *10 (D.P.R. 2015). 8 However, before the discovery stage, when assessing an “enterprise” pleading under ? RICO, what ultimately matters is that plaintiff can sufficiently establish “the existence of two 10 distinct entities: (1) a ‘person;’ and (2) an ‘enterprise’ that is not simply the same ‘person’ referred to by a different name.” Cedric Kushner Promotions, Inc. v. King, 533 U.S. 158, 161 V2 (2001). The First Circuit has held that the so-called “distinctness or distinctiveness 13 requirement” entails that: 14 [T]he word “person,” as used in the statute to describe one who “conducts” an 15 “enterprise,” does not apply to the enterprise itself. An “enterprise” does not conduct or participate . . . in the conduct of’ that same enterprise’s affairs. 16 Rather, only some “person” other than the “enterprise” can conduct or help conduct that enterprise’s affairs. Hence the unlawful enterprise itself cannot also 7 be the person the plaintiff charges with conducting it.

18 Arzuaga-Collazo v. Oriental Fed. Sav. Bank, 913 F.2d 5, 6 (1st Cir. 1990) (emphasis in

19 original). 20 After carefully reviewing Plaintiffs allegations, the Court finds that Plaintiff meets the

distinctness requirement under RICO and has plausibly plead RICO civil violations pursuant to

Section 1962(c) and the applicable case law. The statute requires that the “person” (i.e. Triple-

73 S Management and Vida) engaged in racketeering be distinct from the “enterprise” (in this case,

| Gamboa Spencer, Zelaya, Ruiz Comas, Cera, Aponte and others, which are not a defendant) 2 whose activities they seek to conduct through racketeering. See Miranda v. Ponce Federal 3 Bank, 948 F.2d 41, 44-45 (1st Cir. 1991) (“the same entity cannot do double duty as both the 4 RICO defendant and the RICO enterprise”); see_also Compagnie De Reassurance D’lle de 5 France v. New England Reinsurance Corp., 57 F.3d 56, 92 (1st Cir. 1995). In other words, 6 Triple-S Management and Vida (the named defendants) cannot be the entities that conduct its 7 own affairs through a pattern of racketeering activity. See Odishelidze v. Aetna Life & Cas Co., 8 |] 353 F.2d 21, 23 (Ast Cir. 1988). ? Plaintiff explicitly makes a distinction in her Amended Complaint as to the role the 10 “individuals” (which seem to fit the category of “association-in-fact enterprise”) and “Triple-S Management and Vida” (the “persons”) played in the alleged racketeering scheme and she was V2 further cognizant from the beginning to not name these “individuals” as Defendants in the 13 present case. (Docket Nos. 5; 17). The Court finds these allegations meet the RICO distinctness 14 requirement at this stage of the proceedings. IS After discovery, the Court may revisit this argument, if Defendants so request it during 16 the summary judgment stage, given that the enterprise “is proved by evidence of an ongoing VY organization, formal or informal, and by evidence that the various associates function as a 18 continuing unit.” Ponce Fed. Bank, F.S.B. v. Ramiro Colon, Civil No. 92-1331 (DRD), 1996 19 590274, at *17 (D.P.R. Sept. 26, 1996) (citing Libertad, 53 F.3d at 26). Finally, 20 | | ao * The Court is also acquainted with the fact that: 22 If the plaintiff chooses to identify the corporation as the enterprise through which its 3 employees, as persons, conducted the RICO activity, the corporation is insulated from liability. It is for this reason that plaintiffs often try to prove the more intricate association-in-fact, in order to save as defendants all the corporate entities in the

| Defendants do not contest whether Plaintiff failed to plead the remaining elements required to 2 establish civil RICO claims and hence, the Court need not address them. 3 Consequently, given that Bonner meets the RICO distinctness requirement, the Court 4 also finds that she has sufficiently alleged the existence of defendants (Triple-S Management 5 and Vida), whom could be found lable for racketeering activity. See 18 6 U.S.C. §1962(c) (establishing liability for “any person employed by or associated with” the 7 enterprise) (emphasis added). 8 For these reasons, this Court DENIES Defendants motions to dismiss at Docket Nos. ? 12 and 18 as to their claims concerning the distinctness requirement and “enterprise” liability 10 under RICO’s section 1962 (c). IV. Conclusion V2 Accordingly, the Court holds that this case should proceed forward with discovery and 13 thus, DENIES Defendants’ motions to dismiss for failure to state a claim at Docket Nos. 12 14 and 18. 1p SO ORDERED. 16 In San Juan, Puerto Rico this 30th of March, 2020. 17 s/ Gustavo A. Gelpi GUSTAVO A. GELPI 18 United States District Judge 19 20 21 2 scheme, often the deep pockets. The association-in-fact route, however, provides its own hazards. 23 Rodriguez v. Banco Cent., 777 F. Supp. 1043, 1054 (D.P.R. 1991) (citations omitted). 24