Garita Hotel v. Ponce Federal Bank
This text of Garita Hotel v. Ponce Federal Bank (Garita Hotel v. Ponce Federal Bank) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
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Garita Hotel v. Ponce Federal Bank, (1st Cir. 1997).
Opinion
USCA1 Opinion
UNITED STATES COURT OF APPEALS UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT FOR THE FIRST CIRCUIT
____________________
No. 97-1293
GARITA HOTEL LIMITED PARTNERSHIP d/b/a
GARITA HOTEL CORPORATION,
Plaintiff, Appellant,
v.
PONCE FEDERAL BANK,
Defendant, Appellee.
____________________
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Daniel R. Dominguez, U.S. District Judge] ___________________
____________________
Before
Boudin, Circuit Judge, _____________
Gibson,* Senior Circuit Judge, ____________________
and Pollak,** Senior District Judge. _____________________
____________________
Eric A. Tulla with whom Rivera Tulla & Ferra was on brief for _____________ _____________________
appellant.
J. Anthony Downs with whom A. Lauren Carpenter, Goodwin, Procter ________________ ____________________ _________________
& Hoar, Harold D. Vicente and Vicente & Cuebas were on brief for ______ __________________ _________________
appellee.
____________________
September 5, 1997
___________________
_____________________
*Hon. John R. Gibson, of the Eighth Circuit, sitting by designation.
**Of the Eastern District of Pennsylvania, sitting by designation.
Per Curiam. In the district court, Garita Hotel claimed __________
that Ponce Federal Bank had unconditionally contracted to
lend Garita $6 million for the expansion, renovation and
operation of a hotel complex in Carolina, Puerto Rico, and
that the bank breached that contract when it refused to
advance funds unless Garita obtained a casino license. The
district court, acting after a remand from this court, Garita ______
Hotel L.P. v. Ponce Fed. Bank, 958 F.2d 15 (1st Cir. 1992) , __________ _______________
granted summary judgment to Ponce Federal. Garita's appeal
to this court followed.
We review the district court's grant of summary judgment
de novo, drawing reasonable inferences in Garita's favor. _______
Grenier v. Vermont Log Bldgs., Inc., 96 F.3d 559, 562 (1st _______ _________________________
Cir. 1996). On the record before the district court, most of
the undisputed facts strongly suggested that approval of the
casino license had been an understood condition of the loan.
Garita's main argument to the contrary rests on an alleged
oral statement to Garita representatives, by a Ponce Federal
agent in September 1986, that the bank had "approved" the
loan. Internal bank documents arguably corroborate the
making of this statement.
Under Puerto Rico law, a commercial contract must be
corroborated, and this requirement extends not just to the
existence of an agreement but also to its essential terms.
Vila & Hnos, Inc. v. Owens Ill. de Puerto Rico, 17 P.R. ___________________ ___________________________
-2- -2-
Offic. Trans. 987, 997-1000 (1986). The district court
invoked this requirement, holding that there was certainly no
corroboration for the claim that the bank had agreed to make
the loan unconditionally and without regard to the approval
of the casino license. On appeal, Garita argues that the
loan agreement should not have been classified as a
commercial contract.
A Puerto Rican statutory provision defines a loan as
commercial if (1) at least one party is a "merchant" and (2)
the loan proceeds "are destined to commercial transactions."
10 L.P.R.A. 1651; see id. 1001 (defining merchant). ___ ___
Here, where an established bank proposed to extend a sizable
loan to an experienced hotel and casino management company
for the purpose of renovating and operating a luxury hotel-
casino complex, we agree with the district court that
whatever contract the parties may have formed is commercial
in nature under Puerto Rican law. See FDIC v. Consolidated ___ ____ ____________
Mortgage & Fin. Corp., 805 F.2d 14, 18 (1st Cir. 1986). _____________________
Garita contends that the loan was not commercial because
it was extended for a purpose (hotel renovation) that
differed from Garita's traditional business (hotel
management). It is true that courts have found noncommercial
transactions where borrowed funds were used for personal
purposes, see, e.g., FDIC v. Martinez Almodavar, 671 F. Supp. ___ ____ ____ __________________
851, 868-70 (D.P.R. 1987); or where the loan was apparently
-3- -3-
made for largely personal reasons, see, e.g., Barcel & Co. ___ ____ ______________
v. Olmo Reyes, 48 P.R.R. 239, 241-42 (1935). But any loan __________
agreement between Garita and Ponce Federal was for the
clearly commercial purpose of real estate development. See ___
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Related
Federal Deposit Insurance Corporation v. Consolidated Mortgage and Finance Corporation
805 F.2d 14 (First Circuit, 1986)
Garita Hotel Limited Partnership, Etc. v. Ponce Federal Bank, F.S.B.
958 F.2d 15 (First Circuit, 1992)
Robert B. Grenier v. Vermont Log Buildings, Inc., Third-Party v. Dap, Inc. And Champion International Corp., Third-Party
96 F.3d 559 (First Circuit, 1996)
Federal Deposit Insurance v. Francisco Investment Corp.
638 F. Supp. 1216 (D. Puerto Rico, 1986)
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