Ruiz v. Ambush

25 F. Supp. 3d 211, 2014 WL 2611190
CourtDistrict Court, D. Puerto Rico
DecidedJune 12, 2014
DocketCivil No. 12-2046 (JAF)
StatusPublished
Cited by1 cases

This text of 25 F. Supp. 3d 211 (Ruiz v. Ambush) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ruiz v. Ambush, 25 F. Supp. 3d 211, 2014 WL 2611190 (prd 2014).

Opinion

OPINION AND ORDER

JOSE ANTONIO FUSTE,-District Judge.

We must decide whether a claim is time-barred under relevant provisions of Commonwealth law.

I.

Background

This case has its origin in the 1972 terrorist attack at Lod Airport in Tel Aviv, Israel, where several Puerto Ricans were killed. Plaintiff Rubén Vivas-Ruiz sustained life threatening injuries in that attack.

The American Center for Civil Justice, which sponsors litigation by victims of terrorism, recruited . potential plaintiffs to sign a “Claimant and Center Agreement,” under which the Center would cover all costs of investigating and litigating the potential plaintiffs’ cases in return for twenty percent of any proceeds from litigation related to the Lod Airport attack. The potential plaintiffs also signed a power of attorney in favor of Michael Engelberg, the director of the Center. The Claimant and Center Agreement was not a retainer agreement, but it did obligate the Center to secure counsel to commence litigation.

In furthering its duties under the agreements, .the Center asked Joshua Ambush to draft and file a complaint, which he did in April 2006. Without assistance from other attorneys, Ambush began to litigate the case, known as Franqui v. Syrian Arab Republic, No. 1:06-cv-00734-RBW (D.D.C., filed Apr. 21, 2006), in which Ru-bén Vivas-Ruiz was a named plaintiff.

In August 2008, as the Franqui litigation progressed, the United States and Libya signed a settlement agreement that foreclosed terrorism-related suits against Libya. In exchange, Libya would compensate victims of terrorist acts it sponsored, by contributing to a settlement fund to be administered by the United States Department of State. The fund would pay $10 Million to the estate of each person killed in an act of Libyan-sponsored terrorism.

In December 2008, Ambush traveled to Puerto Rico and presented plaintiffs, including Vivas-Ruiz, with a retainer agreement that revoked Engelberg’s power of attorney, retroactively retained Ambush as the heirs’ counsel for the Franqui litigation and for the administration of their claims in the Libyan settlement, and [213]*213awarded Ambush ten percent of any recovery.

Ambush then worked to obtain settlement funds for the Franqui plaintiffs. He dismissed the Franqui litigation as the settlement agreement required, and he gathered the documents that the State Department requested. By April 2009, the State Department paid $10 Million to Ambush’s trust account for each of the two estates. Of this $10 Million, Ambush sent $2 Million to the Center pursuant to the Claimant and Center Agreements, kept $1 Million pursuant to the retainer agreements, and sent $7 Million to the heirs.

The heirs alleged that the retainer agreements were void because Ambush secured their consent by deceit, known in Spanish as dolo. Puerto Rico law provides that “dolo” is one reason to set aside a contract. See 31 L.P.R.A. § 3404. According to the heirs’ complaint, Ambush failed to disclose at their meeting that the Center had paid him for his work, falsely told them that the Center had done nothing on the estates’ behalf, and misrepresented that the estates’ compensation was contingent on the heirs’ signature of the retainer agreements. The First Circuit ultimately agreed. See Estate of Berganzo-Colón v. Ambush, 704 F.3d 33 (1st Cir.2013).

Vivas-Ruiz filed this suit alleging that he was falsely induced to sign a retainer agreement for attorney’s fees. (Docket No. 1.) On June 26, 2012, Ambush moved to dismiss the suit under Rule 12(b)(6), asserting insufficient service of process. We denied Ambush’s motion. (Docket No. 19.) Ambush filed a subsequent motion to dismiss under Rule 12(b)(6). (Docket No. 20.) We grant the motion.

II.

Legal Standard

A plaintiffs complaint will survive a motion to dismiss if it alleges sufficient facts to establish a plausible claim for relief. See Fed. R.Civ. P. 12(b)(6); Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). In assessing a claim’s plausibility, the court must construe the complaint in the plaintiff’s favor, accept all non-conelusory allegatioxfs as true, and draw any reasonable inferences in favor of plaintiff. San Geronimo Caribe Project, Inc. v. Acevedo-Vila, 687 F.3d 465, 471 (1st Cir.2012) (citation omitted).

III.

Discussion

A few principles guide our resolution of the statute-of-limitations question at issue here. Under Commonwealth law, an action for nullification of a contract cannot be brought once four years have passed since the execution of the contract. 31 L.P.R.A. § 3512; Rivera v. Heirs of Díaz, 70 P.R.R. 168, 172-73 (1949); see also Almodóvar v. Méndez Román, 125 P.R. Offic. Trans. 218, 125 D.P.R. 218 (1990). In the Civil Code, this principle is known as caducity. See Ortega Candelaria v. Orthobiologics LLC, 661 F.3d 675, 678 n. 4 (1st Cir.2011) (discussing principle of caducity.); see also J. Puig Brutau, Fundamentos de Derecho Civil Vol. II No. 1, p. 323 (Bosch, Barcelona, 1971).

Caducity does not allow for a reasonable period for discovery, nor will any other event toll the statute of limitations. In other words, lapse of time extinguishes the right to a cause of action precluding even judicial tolling. Ortiz Rivera v. Heirs of González Martínez, 93 P.R.R. 549, 552-56, 93 D.P.R. 562 (1966); see also Farnsworth & Co. v. P.R. Urban Renewal [214]*214& Housing Corp., 289 F.Supp. 666 (D.P.R.1968) (a caducity term (1) has the effect of extinguishing the right to a cause of action; (2) admits no interruption; it can be raised as a defense by the court ex-officio judiéis; and (3) the cause of action is barred forever once the caducity period has elapsed.). Caducity is conceptually distinct from prescription. See Muñoz Rodriguez v. Ten General, 167 D.P.R. 297 (2006).1 Prescription, unlike caducity, can be interrupted as provided by law. See 31 L.P.R.A. § 5303. Within prescription, interruption can occur through the institution of an action before the courts; by the extrajudicial claim of a creditor; and by any act of acknowledgment of the debt by the debtor. Id.; see also Fireman’s Ins. Co. of Newark, N.J. v. Gulf Puerto Rico Lines, 349 F.Supp. 952 (D.P.R.1972).

Here, Vivas-Ruiz executed the retainer agreement with Ambush on December 15, 2008. Accordingly, an action to nullify the agreement should have been brought on or before December 15, 2012. Vivas-Ruiz filed suit on December 26, 2012. It follows that the action for nullification is time-barred.

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25 F. Supp. 3d 211, 2014 WL 2611190, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ruiz-v-ambush-prd-2014.