William Contractor, Inc. v. Juan R. Zalduondo, et al.

Opinion

1 UNITED STATES BANKRUPTCY COURT DISTRICT OF PUERTO RICO 2

3 IN RE: Case No. 15-06311 BKT 4 WILLIAM CONTRACTOR, INC. Chapter 11 5 Debtor 6

7 WILLIAM CONTRACTOR, INC. Adversary No. 15-00263 BKT 8 9 Plaintiff

10 v. FILED & ENTERED ON 06/30/2016

11 JUAN R. ZALDUONDO, et al. 12 Defendants 13 14

15 OPINION AND ORDER

16 Before this Court is a Motion to Dismiss [Dkt. No. 51] filed by Defendants, Juan R. 17 Zalduondo (“Mr. Zalduondo”) and Magdalena Machicote (“Ms. Machiote” or collectively with 18 Mr. Zalduondo, “Defendants”), and the Opposition to Motion to Dismiss [Dkt. No. 59] filed by 19 20 Debtor, William Contractor, Inc. (“Plaintiff”). For the reasons set forth below, the Motion to 21 Dismiss [Dkt. No. 51] is DENIED. 22 I. Factual Background 23 The facts are as follows: On August 18, 2015, Plaintiff filed for relief under chapter 11 of 24 25 the Bankruptcy Code. [Case No. 15-06311, Dkt. No. 1]. On November 4, 2015, Plaintiff filed a complaint commencing the present adversary proceeding. [Dkt. No. 1]. The complaint listed 1 1 Juan R. Zalduondo, Magdalena Machicote, and the Conjugal Partnership constituted by them 2 (“Conjugal Partnership”), as well as several others as defendants. [Dkt. No. 1]. The complaint 3 presented nine causes of action in relation to alleged breaches of contract in a construction 4 project by Multiplaza de Puerto Rico, Inc. 5 On April 1, 2016, in response to the complaint [Dkt. No. 1], Defendants filed Motion to 6 7 Dismiss [Dkt. No. 51] challenging the legal feasibility of the complaint. The Defendants argue 8 that, while the pleadings allege the Defendants are shareholders of Multiplaza de Puerto Rico, 9 Inc., the fact is they never were. Furthermore, Defendants argue that the complaint should be 10 dismissed on res judicata grounds. Defendants allege that Plaintiff filed a complaint in the San 11 12 Juan Superior Court on similar grounds, and that a judgment was entered on September 14, 2010, 13 against Multiplaza de Puerto Rico, Inc. Because the breach of fiduciary duties as officers and 14 shareholders was never alleged in the state court case, Defendants argue that res judicata applies 15 and the above captioned matter should be dismissed. 16 In its Opposition to Motion to Dismiss [Dkt No. 59], Plaintiff argues that its complaint 17 18 states 27 well-pleaded allegations that involve the Defendants in their fiduciary and personal 19 capacity. Plaintiff further argues that Defendants acted as shareholders, signed the contract at 20 issue, and that they always presented themselves as shareholders and owners of the construction 21 project at issue. Plaintiff does not contest there is state court judgment involving the alleged debt, 22 23 however, it states that said judgment did not involve damages caused by the Defendants for the 24 breach of fiduciary duties. Essentially, Plaintiff relies on its principal argument that the 25 complaint contains sufficient well pleaded factual allegations that gives the Defendants sufficient

information and notice of the basis of the claims against them. 2 1 II. Standard of Review 2 Motions to dismiss for failure to state a claim are governed by Fed. R. Civ. P. 12.1 Under 3 Fed. R. Civ. P. 12(b)(6), dismissal is proper for “failure to state a claim only if it clearly appears, 4 according to the facts alleged, that the plaintiff cannot recover on any viable theory.” Gonzalez- 5 Morales v. Hernandez-Arencibia, 221 F.3d 45, 48 (1st Cir. 2000) (citing Correa–Martinez v. 6 7 Arrillaga–Belendez, 903 F.2d 49, 52 (1st Cir.1990)). Specifically, to survive a motion to dismiss, 8 a complaint must “state a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. 9 Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility when the pleaded factual 10 content allows the court to draw the reasonable inference that the defendant is liable for the 11 12 misconduct alleged.” In re Acosta, 464 B.R. 86, 90 (Bankr. D.P.R. 2011) (citing Twombly, 550 13 U.S. at 556). Furthermore, “determining whether a complaint states a plausible claim for relief 14 will . . . be a context-specific task that requires the reviewing court to draw on its judicial 15 experience and common sense.” Ashcroft v. Iqbal, 556 U.S. 662 (2009). 16 As to the res judicata affirmative defense, the Court notes that “an affirmative defense 17 18 may be adjudicated on a motion to dismiss for failure to state a claim.” In re Colonial Mortg. 19 Bankers Corp., 324 F.3d 12, 16 (1st Cir. 2003) (citations omitted). The res judicata affirmative 20 defense is no exception. Id. “[A] court on notice that it has previously decided an issue may 21 dismiss the action . . . consistent with the res judicata policy of avoiding judicial waste,” even 22 23 without a motion. Id. (citing Bezanson v. Bayside Enterps., Inc., 922 F.2d 895, 904 (1st 24 Cir.1990)). 25

1 Fed. R. Bankr. P. 7012(b) applies Fed. R. Civ. P. 12(b)(6) to adversary proceedings. 3 1 That being said, the Court “accepts all well-pleaded factual allegations as true, and draws 2 all reasonable inferences in plaintiff's favor.” Grillasca-Palou v. U.S. Postal Serv., 573 F. Supp. 3 2d 493, 495 (D.P.R. 2008) (citing Correa–Martinez v. Arrillaga–Belendez, 903 F.2d 49, 51 (1st 4 Cir.1990)). However, in an opposition to a Rule 12(b)(6) motion, “a plaintiff cannot expect a 5 trial court to do his homework for him.” McCoy v. Massachusetts Institute of Tech., 950 F.2d 13, 6 7 22 (1st Cir.1991). The Court will not credit “bald assertions, unsupportable conclusions, 8 periphrastic circumlocutions, and the like” in the plaintiff’s favor. Aulson v. Blanchard, 83 F.3d 9 1, 3 (1st Cir.1996). 10 III. Legal Analysis 11 12 A. Dismissal on general grounds 13 First and foremost, the Court notes that “the parties here were not of great help and the 14 proffer was no model of sparkling clarity.” Rivera-Gomez v. de Castro, 843 F.2d 631, 635 (1st 15 Cir. 1988). While the Defendants raise general arguments that the above captioned matter should 16 be dismissed, they do not specify which Fed. R. Civ. P. 12 subsection they rely on for their 17 18 argument. As it appears that the Defendants argue that Plaintiff fails “to state a claim . . . 19 [whereby it appears that it] cannot recover on any viable theory[,]” the Court will treat this 20 motion as if it were filed under Fed. R. Civ. P. 12(b)(6). Gonzalez-Morales, 221 F.3d at 48. 21 Without citing any rule, section, case law, or exhibits demonstrating the contrary, 22 23 Defendants argue that they simply never were shareholders of Multiplaza de Puerto Rico, Inc. In 24 turn, Plaintiff argues that Defendants acted as shareholders, signed the contract at issue, and that 25 they always presented themselves as shareholders and owners of the construction project at issue.

When considering these woefully undeveloped arguments, the Court is compelled to note the 4 1 “[i]t is not enough merely to mention a possible argument in the most skeletal way, leaving the 2 court to do counsel's work, create the ossature for the argument, and put flesh on its bones[;] . . . 3 Judges are not expected to be mindreaders.” U.S. v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990); 4 McDonough v. Donahoe, 673 F.3d 41, 49 n. 14 (1st Cir. 2012) (holding that conclusory and 5 woefully undeveloped arguments are deemed as waived). Without any case law or structured 6 7 argument against the Plaintiff’s pleadings, the Court is left with a classic “he said, she said” 8 dispute. As the Court “draws all reasonable inferences in plaintiff's favor,” we have no choice 9 but to DENY Defendant’s request for dismissal under Fed. R. Civ. P. 12(b)(6). Grillasca-Palou, 10 573 F. Supp. 2d at 495. 11 12 B. The Res Judicata Affirmative Defense 13 The doctrine of res judicata “generally binds parties from litigating or relitigating any 14 [claim] that was or could have been litigated in a prior adjudication.” Puerto Ricans For Puerto 15 Rico Party v. Dalmau, 544 F.3d 58, 69 (1st Cir. 2008) (citing Futura Dev. Corp. v. Centex Corp., 16 761 F.2d 33, 42 (1st Cir.1985)). Under Puerto Rico law, the party asserting res judicata must 17 18 prove the following three requirements: 19 “(i) the existence of a prior judgment on the merits that is ‘final and unappealable’; (ii) a perfect identity of thing or cause between both actions; and 20 (iii) a perfect identity of the parties and the capacities in which they acted.” 21 Id. (citing R.G. Fin. Corp. v. Vergara–Nunez, 446 F.3d 178, 183 (1st Cir.2006)). In the matter at 22 23 hand, Defendants have failed to provide any evidence to support even the first requirement. 24 As the “party asserting the res judicata defense, [D]efendants bear the burden of 25 demonstrating that [Plaintiff’s] claims were raised or could have been raised in the state

proceedings.” Id. at 70. While Defendants allege that a judgment was entered against Multiplaza 5 1 |/de Puerto Rico, Inc. in state court, they failed to provide evidence of said judgment for thi 2 Court’s consideration. Therefore, because the Defendants fail to meet the first requirement of th 3 res judicata affirmative defense, the Court need not consider the latter requirements, an 4 5 DENIES the Defendant’s request for dismissal for failure to state a claim. 6 Conclusion 7 WHEREFORE, IT IS ORDERED that Defendants’ Motion to Dismiss [Dkt. No. 51] shal 8 be, and it hereby is, DENIED. 9 10 In San Juan, Puerto Rico this 30th day of June, 2016.

12 13 Brian K. Tester 14 U.S. Bankruptcy Judge 15 16 17 18 19 20 21 22 23 24 25