Deutsche Bank Trust Company Americas v. Doral Financial Corporation
OPINION AND ORDER granting in part and denying in part 22 Motion to Dismiss. Signed by Judge Salvador E. Casellas on 1/26/12. (PR)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
DEUTSCHE BANK TRUST COMPANY
Civil No. 11-1344 (SEC)
DORAL FINANCIAL CORPORATION,
OPINION and ORDER
Before the Court are defendants’ motion to dismiss under Fed. R. Civ. P. 12(b)(6)
(Dockets # 22 and 41), and plaintiff’s opposition thereto (Dockets # 29 and 47). After
reviewing the filings and the applicable law, defendants’ motion is GRANTED in part and
DENIED in part.
The present suit stems from the alleged mishandling of a $658,874 check (the
“Check”) and is premised on 12 C.F.R. § 229.32(c) as well as under Puerto Rico’ Civil Code
and Law of Negotiable Instruments. Plaintiff is Deutsche Bank Trust Company Americas
(“Deutsche”), a New York chartered bank headquartered in Manhattan, New York. Docket
# 16, ¶ 4. Defendants, on the other hand, are Doral Financial Corporation (“DFC”) and its
wholly owned subsidiary Doral Bank (“Doral”) (collectively, “Defendants”), two Puerto
Rico chartered banking enterprises. The events underlying Deutsche’s claims, as averred in
the complaint, follow.1
In November 2007, Deutsche received the Check for collection from a non-United
Rather than setting forth individual allegations for each defendant, Deutsche refers to
Defendants conjunctively by using the prepositions “and/or.” The following quote from the
complaint illustrates Deutsche’s pleading strategy: “Plaintiff’s counsel contacted . . . Doral
Financial Corporation and/or Doral bank to follow up . . . .” Docket # 16, ¶ 35.
States customer. The Check was drawn on a Bank of America account, makers Nasser Ghazi
and Erym Khan Ghazi, for payee Vista Real Estate, Ltd. Deutsche, who was the bank of first
deposit, processed the Check and presented it to the Federal Reserve Bank for payment from
Bank of America. The latter, however, refused payment on the Check due to insufficient
funds in the Ghazi account. Things unraveled thereafter.
Upon returning the Check to the Federal Reserve, Bank of America mistakenly
identified Defendants as the bank of first deposit, so the Federal Reserve sent the Check to
them. Defendants then sat on the Check for several weeks. Thus, unaware of the issues with
the Check, Deutsche incorrectly credited its customer’s account for $658,874 on December
On January 23, 2008, Defendants submitted a “Not Our Item” adjustment claim on
the Check to the Federal Reserve. The claim, however, was denied because the 20-day
deadline for its filing had expired. The same day, Defendants notified Deutsche about the
Check and requested a reimbursement, alleging that their account had been incorrectly
debited for the Check amount. Deutsche refused. Nevertheless, the Federal Reserve
eventually reimbursed Defendants and, on February 21, 2008, debited Deutsche’s account
Immediately, Deutsche began efforts with the Federal Reserve to obtain additional
information regarding the Check and continued trying to resolve the dispute with Defendants.
On May 5, 2008, the Federal Reserve sent a letter to Deutsche explaining the reasons behind
the $658,874 debit and Defendants’ actions in connection with it.2
Deutsche refers to this information on paragraph No. 23 of the complaint. The actual
letter was provided in Docket # 29-8. Although Defendants object, this practice is routinely
allowed by the courts. See 5C Wright and Miller, Federal Practice and Procedure § 1364, n. 38
(3d ed. Rev. 2011). Moreover, in examining a motion to dismiss, courts may consider documents
whose authenticity the parties do not dispute, official public records, documents central to
plaintiff’s claims, and documents sufficiently referred to in the complaint. Mississippi Public
Employees’ Retirement System v. Boston Scientific Corp., 523 F.3d 75, 86 (1st Cir. 2008). The
On July 25, 2008, Deutsche sent a letter to Defendants, claiming that they had
negligently mishandled the Check and requesting a reimbursement.3 Defendants nonetheless
denied any wrongdoing, and a second collection letter followed on September 25, 2008. Still
unable to collect the Check, Deutsche’s counsel continued pressing Defendants for payment,
contacting them in February, April, June, and July of 2009.4 Defendants remained
unyielding. So, on May 5, 2010, Deutsche informed them that it would file suit if payment
was not forthcoming before May 20, 2010. Docket # 29-16.
On June 9, 2010, Deutsche made good on its word; it filed suit against Doral in New
York’s Supreme Court under the Uniform Commercial Code and New York’s general tort
statute. Docket # 1-9. That suit, however, ended on January 6, 2011 through a stipulation of
dismissal without prejudice. Docket # 29-2. This case began three months later. Docket #
As stated above, Deutsche’s complaint is premised on both federal and state law. And,
in pertinent part, it states that “had [Defendants] properly handled the Check as a Not Our
Item when [they] received the same, the Check would have been properly researched and
returned . . . in a timely manner [which] would have enabled Plaintiff to charge the Check
to its Customer.” Docket # 16, ¶ 21. After preliminary procedural nuances, Defendants
moved to dismiss, claiming that Deutsche’s complaint as drafted fails the pleading standards
imposed in Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), and Ashcroft v. Iqbal, 556
U.S. 662 (2009). Alternatively, Defendants also contend that all causes of action are time
Federal Reserve letter could be classified under any of those classes of documents.
Deutsche also sought redress from Bank of America; a $175,000 settlement was
eventually reached. Docket # 16, ¶ 37. Deutsche’s complaint provides no information about the
collection efforts made with the Ghazis or with Vista Real Estate, Ltd.
Paragraph No. 38 of the complaint alludes to these communications, which Deutsche
evinced with attachments to its opposition memoranda. See Docket # 16, ¶ 38 and Docket # 22.
The discussion at note 2 above also applies to these communications.
barred. Id. Deutsche timely opposed each contention. Docket # 29.
Standard of Review
To survive a Rule 12(b)(6) motion to dismiss, Plaintiffs’ “well-pleaded facts must
possess enough heft to show that [they are] entitled to relief.” Clark v. Boscher, 514 F. 3d
107, 112 (1st Cir. 2008).5 In evaluating whether Plaintiffs are entitled to relief, the court must
accept as true all “well-pleaded facts [and indulge] all reasonable inferences” in plaintiff’s
favor. Twombly, 550 U.S. 544. The First Circuit has held that “dismissal for failure to state
a claim is appropriate if the complaint fails to set forth factual allegations, either direct or
inferential, respecting each material element necessary to sustain recovery under some
actionable legal theory.” Gagliardi v. Sullivan, 513 F. 3d 301, 305(1st Cir. 2008). Courts
“may augment the facts in the complaint by reference to documents annexed to the complaint
or fairly incorporated into it, and matters susceptible to judicial notice.” Id. at 305-306.
Nevertheless, in judging the sufficiency of a complaint, courts must “differentiate between
well-pleaded facts, on the one hand, and ‘bald assertions, unsupportable conclusions,
periphrastic circumlocution, and the like,’ on the other hand; the former must be credited, but
the latter can safely be ignored.” LaChapelle v. Berkshire Life Ins., 142 F.3d 507, 508
(quoting Aulson v. Blanchard, 83 F.3d 1, 3 (1st Cir.1996)); Buck v. American Airlines, Inc.,
476 F. 3d 29, 33 (1st Cir. 2007); see also Rogan v. Menino, 175 F.3d 75, 77 (1st Cir. 1999).
Thus, Plaintiffs must rely on more than unsupported conclusions or interpretations of law,
as these will be rejected. Berner v. Delahanty, 129 F.3d 20, 25 (1st Cir. 1997) (citing Gooley
v. Mobil Oil Corp., 851 F.2d 513, 515 (1st Cir. 1988)).
Moreover, “even under the liberal pleading standards of Fed R. Civ. P. 8, the Supreme
Court has recently held that to survive a motion to dismiss, a complaint must allege ‘a
“Fed. R. Civ. P. 8(a)(2) requires only a short and plain statement of the claim showing
that the pleader is entitled to relief, in order to give the defendant fair notice of what . . . the
claim is and the grounds upon which it rests.” Twombly, 550 U.S. at 555 (internal quotation
plausible entitlement to relief.’” Twombly, 550 U.S. at 559, cited in Rodríguez-Ortíz v.
Margo Caribe, Inc., 490 F.3d 92 (1st Cir. 2007). Although complaints do not need detailed
factual allegations, the plausibility standard is not akin to a “probability requirement,” but
it asks for more than a sheer possibility that a defendant has acted unlawfully. Twombly,
550 U.S. at 556.
In Iqbal, 556 U.S. 662, the Supreme Court reaffirmed Twombly and clarified that two
underlying principles must guide a court’s assessment of the adequacy of pleadings when
evaluating whether a complaint can survive a Rule 12(b)(6) motion. First, the court must
identify any conclusory allegations in the complaint as such allegations are not entitled to an
assumption of truth. Id., at 1949. Specifically, the court is not compelled to accept legal
conclusions set forth as factual allegations in the complaint. Id. Further, “threadbare recitals
of the elements of a cause of action, supported by mere conclusory statements, do not
suffice.” Id. (citing Twombly, 550 U.S. at 555); see also Peñalbert-Rosa v. Fortuño-Burset,
631 F.3d 592, 595 (1st Cir. 2011) (“[S]ome allegations, while not stating ultimate legal
conclusions, are nevertheless so threadbare or speculative that they fail to cross the line
between the conclusory to the factual.”). In other words, “[a] plaintiff is not entitled to
‘proceed perforce’ by virtue of allegations that merely parrot the elements of the cause of
action.” Ocasio-Hernandez v. Fortuño-Burset, 640 F.3d 1,12 (1st Cir. 2011).
Second, a complaint survives only if it states a plausible claim for relief. Twombly,
550 U.S. at 556. Thus, any nonconclusory factual allegations in the complaint, accepted as
true, must be sufficient to give the claim facial plausibility. Id. A claim has facial plausibility
when the pleaded facts allow the court to reasonably infer that the defendant is liable for the
specific misconduct alleged. Id., at 1949, 1952. Such inferences must amount to more than
a sheer possibility and be as plausible as any obvious alternative explanation. Id., at 1949,
1951. Plausibility is a context-specific determination that requires the court to draw on its
judicial experience and common sense. Id., at 1950.
The aforementioned requirements complement a bedrock principle of the federal
judicial system: a complaint must contain enough detail to give “a defendant fair notice of
the claim and the grounds upon which it rests.” Ocasio-Hernandez, 640 F.3d at 8 (citing Fed.
R. Civ. P. 8(a)(2)). Accordingly, “[w]hile a plaintiff’s claim to relief must be supported by
sufficient factual allegations to be plausible under Twombly [and Iqbal], nothing requires a
plaintiff to prove her case in the pleadings.” Chao v. Ballista, 630 F.Supp. 2d 170, 177
(D.Mass. 2009). Put differently, even after Twombly and Iqbal, “[d]ismissal of a complaint
under Rule 12(b)(6) is inappropriate if the complaint satisfies Rule 8(a)(2)’s requirement of
a short and plain statement of the claim showing that the pleader is entitled to relief.” OcasioHernandez, 640 F.3d at 11.
A different standard applies when dismissal is sought under Rule 12(b)(6) pursuant
to a statute of limitations affirmative defense. Under this scenario, dismissal may be
appropriate if “the facts that establish the defense . . . [are] definitively ascertainable from
the allegations of the complaint, the documents (if any) incorporated therein, matters of
public record, and other matters of which the court may take judicial notice.” In re Colonial
Mortgage Bankers Corp., 324 F.3d 12, 16 (1st Cir. 2003); Jones v. Bock, 549 U.S. 199, 215
(2007). Thus, even though a complaint need not plead facts to avoid potential affirmative
defenses, plaintiffs could plead themselves “out of court by alleging facts that are sufficient
to establish the defense.” Hollander v. Brown, 457 F.3d 688, 691 n. 1 (7th Cir. 2006).
Applicable Law and Analysis
The Twombly and Iqbal Challenge
In this case, Defendants argue that Deutsche’s pleading strategy of using the
prepositions “and/or” to refer interchangeably to Defendants, “without any reasoning or
specificity for such amalgamation fails to meet the Twombly and Iqbal specificity standards.”
Docket # 22, p. 24. Deutsche’s strategy, however, falls squarely within the contours of Fed.
R. Civ. P. 20(a)(2)(A). Among other things, this rule allows the joinder of defendants if “any
right to relief is asserted against them . . . in the alternative with respect to or arising out of
the same transaction, occurrence, or series of transactions or occurrences.” Id. Rule 20
comes into play, when, as here, “the substance of plaintiff’s claim indicates that plaintiff is
entitled to relief from someone, but the plaintiff does not know which of two or more
defendants is liable under the circumstances set forth in the complaint.” 7 Wright, Miller &
Kane, Federal Practice and Procedure § 1654 (3d ed. 2011).
Defendants see matters differently. They believe that Twombly and Iqbal require
Deutsche to plead the specific circumstances warranting the application of Rule 20. Docket
# 22, pgs 7-9. According to Defendants, Twombly and Iqbal require Deutsche “to do more
than just say that DFC and/or Doral wrong it; Deutsche must state in its pleadings that there
are doubts as to which defendant is liable and give a factual and plausible underpinning for
such doubts.” Docket 41, ¶ 13. To support this contention, Defendants cite four cases, the
two latest ones dating back to the 1970's, and the other two, to the 1940's. Id., ¶ 12. The first
flaw in Defendants’ argument is therefore obvious—their supporting case law was written
several decades before the introduction of either Twombly or Iqbal and thus have nothing to
do with the exigencies those cases imposed.
The second problem was described fitly in Koch v. I-Flow Corp., 715 F.Supp. 2d 297
(D.R.I. 2010). There, in denying a motion to dismiss in which defendants challenged the
sufficiency of the complaint on the same grounds advanced in this case, the court remarked:
Plaintiffs who plead against alternative defendants sometimes state and
restate each claim repeatedly, each time naming an alternate defendant.
To insist that this redundant format be followed would be to elevate
technical form over substance, and would be contrary to the intent of the
Federal Rules’ liberal pleading requirements.
Id., at 302 n.2. Defendants’ incantation of the Twombly and Iqbal standard would produce
such an effect. And they have conceded the point by suggesting that the alleged defects in
Deutsche’s complaint may be cured by making the same allegations with regard to each
defendant without the “and/or.” See Docket # 22, at p. 9.
In any event, Defendants’ argument misses the mark for yet a more pivotal reason.
The relevant inquiry under Twombly and Iqbal is limited to whether the complaint affords
each named defendant with proper notice of the actionable facts, regardless of the form in
which those facts are presented. See Ocasio-Hernandez, 640 F.3d at 12-13. Deutsche’s
complaint easily satisfies this threshold. It contains specific factual allegations regarding (1)
the mishandling of the Check; (2) the consequences of the mishandling; and (3) the parentsubsidiary relationship of Defendants. True, at this stage of the proceedings, Deutsche has
long ways to go in order to prove its “and/or” allegations. But Defendants cannot claim to
be in the dark as to the factual issues at stake in the case or as to the direction in which to aim
discovery. Indeed, the vigorous motion practice Defendants have put forth at this stage
evince the contrary; therefore, their motion to dismiss under Twombly and Iqbal is DENIED.
Deutsche’s Federal-Law Claim
Deutsche premises its federal-law claims on 12 C.F.R. § 229.32(c). In pertinent part,
§ 229.32(c) provides:
If a bank receives a returned check . . . on the basis that it is the
depository bank, and the bank determines that it is not the depository
bank . . . it shall either promptly send the returned check . . . to the
depository bank . . . or send the check . . . back to the bank from which
it was received.
Id. Violations of these requirements are actionable under § 229.38, which states that “a bank
that fails to exercise ordinary care or act in good faith under this subpart may be liable to the
depository bank.” 12 C.F.R. § 229.38; see also, Bank One, N.A. v. Midwest Bank & Trust
Co., 516 U.S. 264, 268 (1996) (“Section 229.38 states standards governing interbank
liability. It instruct banks to exercise ordinary care and act in good faith in complying with
the requirements of Subpart C [of Tile 12 of the C.F.R.] . . . .”). The exposure created under
these sections is not eternal, however. Violations shall be brought forth “in any court of
competent jurisdiction . . . within one year after the date of the occurrence of the violation
involved.” § 229.38(g) (emphasis added).
Defendants’ motion to dismiss underscores the one-year statute of limitation just
described, and Deutsche’s opposition memoranda is silent about it. Such silence is
dispositive here, especially because (1) Deutsche’s compliant unequivocally establishes that
the actionable occurrence happened well over three years ago; and (2) § 229.38(g) has no
tolling provision. See Vogel v. Linde, 23 F.3d 78, 80 (4th Cir. 1994) (“The black-letter rule
. . . is that a statute of limitations runs against all persons unless the statute expressly provides
otherwise.”). Further, well-settled law establishes that when federal law “explicitly puts a
limit upon the time for enforcing a right which it created, there is an end of the matter.”
Holmberg v. Armbrecht, 327 U.S. 392, 395 (1946). For these reasons, Defendants’ motion
to dismiss Deutsche’s federal-law claim is GRANTED.
Deutsche’s State-Law Claims
Deutsche’s first state-law claim is premised on § 3-202 of Puerto Rico’s Law of
Negotiable Instruments, which, in pertinent part, requires collecting banks to “exercise
ordinary care in . . . sending notice of dishonor or nonpayment or returning an item other than
a documentary draft to the bank’s transferor after learning that the item has not been paid or
accepted.” P.R. Laws Ann. tit. 19, § 852. An action under this section must be commenced
within three years of its accrual. Id. § 811. The Court’s analysis must therefore begin by
determining when Deutsche’s claim under § 3-202 accrued. The statute, however, provides
no guidelines to conduct this inquiry, and the Court is aware of no case law establishing the
Without recognizing this issue, the parties invite the Court to rely on Article 1873 of
the Puerto Rico Civil Code, which applies in general tort cases and provides that a cause of
action accrues when the aggrieved has constructive notice of both the grievance and its
perpetrator. P.R. Laws Ann. tit. 31, § 5298; see also Colon-Prieto v. Geigel, 15 P.R. Offic.
Trans. 313 (1984). Nevertheless, the correct standard to use in this case lies elsewhere.
Article 1869 of Puerto Rico’s Civil Code provides that “[t]he time for the prescription of all
kinds of actions, when there is no special provision to the contrary, shall be counted from
the day on which they could have been instituted.” P.R. Law. Ann. tit. 31, § 5299 (emphasis
The application of Article 1869 requires a fact intensive case by case inquiry. Of
course, at the motion to dismiss stage, the inquiry revolves around the allegations in
plaintiff’s complaint. In this case, Deutsche alleges, among other things, that Defendants
wrote a letter on January 24, 2008 in connection with the Check and that the Federal Reserve
debited $658,874 from its account a month later. Defendants thus contend that Deutsche
“knew or should have known that something was afoot with the Check since Doral contacted
it on January 24, 2008 or since the Federal Reserve charged back its accounts for the face
value of the Check [on February 21, 2008]. Docket # 41, p. 10. Defendants argument may
be correct. But to file suit under § 3-202, Deutsche needed more than simply knowing that
something was “afoot.” It needed to know that Defendants’ had proceeded without ordinary
care when handling the Check. P.R. Laws Ann. tit. 19, § 852. And Deutsche contends that
“it was not until May 5, 2008, that a communication from the Federal Reserve informed [it]
of how [the Check] had been mishandled, thus providing Deutsche . . . with the information
that was necessary to assess what had happened.” Docket # 47, p. 7. The record before the
Court supports Deutsche’s position.
Based on the foregoing discussion, May 5, 2011 marked the three year anniversary
of the date of accrual for Deutsche’s § 3-202 cause of action. Deutsche filed its complaint
on April 15, 2011. Therefore, Defendants’ motion to dismiss Deutsche’s § 3-202 lacks merit,
and it is DENIED.6
Defendants also raise a statute of limitation challenge on Deutsche’s second state-law
claim. Docket # 22, p. 13. This claim is premised on Puerto Rico’s general tort statute, P.R.
Laws Ann. tit. 31, § 5141, which, as stated above, has a one year statute of limitations,
If proper, Defendants may reassert their § 3-202 arguments at the summary judgment
stage, with the corresponding evidentiary support.
counted from the date in which the injured acquires constructive knowledge of both the harm
and the likely identity of the tortfeasor. Tolling this limitation period is possible in one of
three ways: (1) by the filing of a judicial claim; (2) by an extrajudicial claim; and (3) by an
act of acknowledgment of the debt by the debtor. P.R. Laws Ann. tit. 31 § 5303. Moreover,
“once the statute of limitations is tolled on an action, the one year period is reset and begins
to run again from the beginning.” Ramos v. Roman, 83 F.Supp. 2d 233, 241 (D.P.R. 2000).
On this point, the parties quarrel over whether their extrajudicial interactions tolled
the one year statute of limitations. Puerto Rico law imposes no formal requirements on
extrajudicial tolling, permitting both written and verbal tolling. Galib Frangie v. El Vocero
de Puerto Rico, 138 P.R. Dec. 560, 568 (1995). In fact, courts in this jurisdiction favor a
liberal approach to extrajudicial tolling, with the conservation of rights been regarded as the
norm. See e.g., Kery v. American Airlines, Inc., 931 F. Supp. 947, 952 (D.P.R. 1995)
(quoting Galib Frangie, 138 P.R. Dec. at 567)). This being said, to be effective for tolling
purposes, an extrajudicial claim must be an “unmistakable manifestation of one, who
threatened with the loss of his right, expresses his wish not to lose it.” Vargas-Ruiz v. Golden
Arch Dev., Inc., 283 F.Supp. 2d 450, 456 (D.P.R. 2003). An extrajudicial claim must
therefore “do something more than merely inform or remind . . . .” Galib Frangie, 138 P.R.
Dec. at 569.
Defendants position is that Deutsche’s extrajudicial communications “should be
disregarded as mere follow-ups or reminders that lack specificity requirements and that do
not serve to toll the period of limitations under Puerto Rico law.” Opposing, Deutsche points
the Court to letters and emails exchanged with Doral before the filing of this suit. Dockets
# 1 and 29. Deutsche sent the first of these communications in July 2008 (Docket # 1-5),
many other followed thereafter, including email exchanges in June 2009 (Docket # 29-14)
as well as another letter in May 2010 (Docket 29-16).
Among other things, the communication Deutsche sent in July 2008 stated that “Doral
Bank’s handling of the [C]heck upon its receipt from [Bank of America] was improper and
deficient in several respects . . . . Deutsche . . . hereby demands immediate payment of the
$658, 874 debited to Deutsche[’s] . . . account with the Federal Reserve . . . in connection
with the [C]heck.” Docket 1-5. The June 2009 communication, sent from Deutsche’s outside
counsel to Doral’s outside counsel, conveyed the following message: “I wanted to follow up
yet again. We are working hard to resolve this and thought we would have an answer from
Doral Bank by now. Please let me know what is happening.” Docket 29-14. The next day
Doral’s counsel retorted:
Doral continues to believe that its fulfilled its obligations with regard to
the mis-directed check and certainly denies any liability . . . . Doral
would in the context of a complete settlement and release, be prepared
to contribute an amount reflecting its wish to avoid paying fees and costs
associated with having to contest a claim.
Id. The May 2010 communication reads as follows: “As you may recall, we reached out to
you in an unsuccessful effort to resolve [Deutsche’s] claims against Doral. As a courtesy, I
am attaching a complaint in the above-referenced matter. I have been asked to file the action
if we do not receive payment by May 20, 2010.” Docket # 29-16.
Clearly, the foregoing communications are much more than the “follow-ups” or
“reminders” that Defendants paint them to be. They conveyed, unequivocally, the right
Deutsche sought to vindicate as well as the relief desired from Doral. The response Doral
sent in June 2009 denying liability and offering a settlement confirms this point.
Accordingly, each of the communications restarted Article 1802's one year limitation period,
with the May 2010 letter keeping Deutsche’s claim alive until at least May 2011. Deutsche
filed this suit well before May 2011; therefore, on this alone, Defendants’ contentions fail.
There is more, however. As stated above, in June 2010, Deutsche filed suit against
Doral in New York. That suit, which tolled Article 1802's statute of limitations while
pending, see Rodriguez v. Suzuki Motor, Corp., 570 F.3d 402, 407 (1st Cir. 2009), was
dismissed without prejudice in January 2011. Upon dismissal, a new one-year limitation
period began, January 2012 being its expiration date. Id. Deutsche’s April 2011 suit came
almost a year before that date. Accordingly, Deutsche’s cause of action against Doral under
Article 1802 is very much alive, and Defendants motion to dismiss is DENIED on this front.
Matters are different in connection with Deutsche’s Article 1802 claim against DFC.
None of the communications described above, nor any of the ones Deutsche alludes to in its
complaint and opposition memoranda, were addressed to DFC. Neither did Deutsche’s
complaint in New York include DFC as a party. Therefore, Deutsche cannot rest on these
events to withstand Defendants’ statute of limitation contentions as to DFC.
Deutsche refers to a so-called identity of interest doctrine as well as to a “share
attorney method” in an attempt to overcome this shortcoming. Docket # 29, pgs. 21-22.
Specifically, Deutsche argues that because Doral and DFC behave as a single unit and share
the same legal representation, “DFC has been on notice of [Deutsche’s] claims since the very
beginning,” even though all communications were sent exclusively to Doral. Id. Deutsche’s
argument, however, runs contrary to the well-settled principle that an extrajudicial claim only
tolls Article 1802's statute of limitations if it is “addressed to the debtor or passive subject
of the right, not to a third party . . . .” Rodriguez-Narvaez v. Nazario, 895 F.2d 38, 44 (1st
Cir. 1990) (citing Velilla v. Pueblo Supermarkets, Inc. 11 P.R. Offic. Trans. 904 (1981)).
Defendant’s motion to dismiss Deutsche’s Article 1802 claim against DFC is therefore
Deutsche’s last state-law claim is premised on § 1-203 of Puerto Rico’s Law of
Negotiable Instruments. P.R. Laws Ann. tit. 19, § 453. Defendants contend that Deutsche’s
action under this section is time barred but fail to point the Court into the applicable statute
of limitations. Docket # 22, pgs. 22-24. Deutsche, on the other hand, argues that the statute
lacks a limitation period, and thus, that it is governed by P.R. Laws Ann. tit. 31, § 5294,
which states that civil actions with no specifically applicable statute of limitations term must
be commenced within a period of 15 years. The Court concurs with Deutsche.
April 15, 2011, the filing date of this suit, fell within the 15-year mark by more than
11 years. Therefore, Defendants’ motion to dismiss this cause of action is DENIED.
For the foregoing reasons, Deutsche’s federal law claims are DISMISSED with
prejudice. Deutsche’s Article 1802 claim against DFC is also DISMISSED with prejudice.
Defendants’ motion to dismiss is DENIED as to Deutsche’s remaining claims.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 26th day of January, 2012.
s/ Salvador E. Casellas
SALVADOR E. CASELLAS
U.S. Senior District Judge
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