Parker Waichman LLP v. Salas LC et al
Filing
309
OPINION AND ORDER denying 267 motion for summary judgment; denying 269 motion for summary judgment. Signed by Judge Francisco A. Besosa on 8/12/2019. (grf)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
PARKER WAICHMAN LLP,
Plaintiff,
v.
Civil No. 16-1333 (FAB)
SALAS LC, et al.,
Defendants.
OPINION AND ORDER
BESOSA, District Judge.
Before
the
Court
are
co-defendant
Eric
Quetglas-Jordán
(“Quetglas”)’s motion for summary judgment against defendants John
F. Nevares and Associates, P.S.C.’s (“Nevares”), and Salas &
Company, L.C.’s (“Salas”) (collectively, “defendants”) pursuant to
Federal Rule of Civil Procedure 56 (“Rule 56”) (Docket No. 267),
and the defendants’ cross-motion for summary judgment against
Quetglas and plaintiff Parker Waichman LLP (“Parker”) pursuant to
Rule 56 (Docket No. 269).
For the reasons set forth below, the
Court DENIES Quetglas’ motion for summary judgment (Docket No.
267) and the defendants’ cross-motion for summary judgment (Docket
No. 269).
Civil No. 16-1333 (FAB)
2
I.
Background
In
November
2009,
Quetglas,
the
defendants,
and
Parker
Waichman Alonso LLP (“Parker Waichman Alonso”) 1 (collectively,
“parties”)
executed
a
“Confidential
Operating
Agreement
for
Plaintiff Attorney Group in Caribbean Petroleum Oil and Fire
Litigation” (“CAPECO Agreement,” or “Agreement”).
Ex. 1.)2
(Docket No. 14,
The CAPECO Agreement created a “Plaintiff Attorney Group”
for the parties to prosecute collectively claims arising from the
October 2009 explosion at the Caribbean Petroleum Corporation tank
farm in Bayamón, Puerto Rico.
(Docket No. 14, Ex. 1 at p. 1.)
The Agreement stipulated that all parties “shall commit to actively
participate” and “fully cooperate with one another for the common
benefit” of the claimants.
advance
the
prosecution.”
“[c]apital
Id.
Parker Waichman Alonso agreed to
expenditures
necessary
to
fund
the
Id. at p. 2.3
The Agreement set forth a process by which to reimburse the
parties’ expenses and distribute attorney’s fees.
Ex. 1 at p. 2.)
(Docket No. 14,
The parties agreed to first, reimburse member
1
Parker is the successor to Parker Waichman Alonso.
(Docket No. 93 at p. 1.)
2
Becnel Law Firm LLC (“Becnel”) and Douglas and London (“Douglas”) were also
parties to the CAPECO Agreement but are not parties to this dispute. (Docket
14, Ex. 1 at p. 2.) All parties to the Agreement are entities “dedicated to
the practice of law.” (Docket No. 93 at p. 1.)
3
Becnel and Douglas also agreed to advance capital expenditures to fund the
prosecution. (Docket 14, Ex. 1 at p. 2.)
Civil No. 16-1333 (FAB)
3
firms’
capital
expenditures,
and
second,
allocate
fees
to
reimburse out of pocket expenses “that [were] not for specific
cases.”
Id.
The parties agreed to share the remaining fees among
themselves equally.
Id.
In February 2016, Parker commenced this action, contending
that the defendants and Quetglas “unilaterally terminated the
CAPECO Agreement” without reimbursing Parker for its “capital
contributions,” or distributing “the net amount of attorney’s fees
to
which
[Parker]
is
entitled
(Docket No. 2 at p. 5.)
$188,586.50
in
capital
under
the
CAPECO
Agreement.”
Parker allegedly “invested the sum of
expenditures
necessary
for
the
prosecution,” including $86,499.39 in advertising for the joint
venture.
(Docket No. 186 at p. 2.)
Parker also purportedly
“invested a substantial amount of ‘man hours’ in attorneys and
paralegal time” to prosecute the claims.
3.)4
(Docket No. 93 at p.
Parker sought specific performance of the CAPECO Agreement
and, alternatively, recovery pursuant to the doctrine of quantum
meruit.
In
See id.
July
2017,
the
Court
found
the
CAPECO
Agreement
unenforceable and dismissed Parker’s specific performance claim.
4
In the first amended complaint, Parker detailed the amount of hours worked by
each of its attorneys and paralegals in furtherance of the CAPECO Agreement.
(Docket No. 2 at p. 4.) Parker nevertheless failed to assert the precise number
of hours for which it seeks compensation in the second amended complaint.
(Docket No. 93 at p. 7.)
Civil No. 16-1333 (FAB)
4
Parker Waichman LLP v. Salas LC, 263 F. Supp. 3d 369, 380 (D.P.R.
2017) (Besosa, J.).
The Court nonetheless allowed Parker to
pursue equitable relief through the doctrine of quantum meruit.
Id.; see also Parker Waichman LLP v. Salas LC, 320 F. Supp. 3d
327, 336-37 (D.P.R. 2018) (Besosa, J.).
Quetglas asserted a crossclaim against the defendants in
April 2017, an amended crossclaim in May 2018, and a second amended
crossclaim in August 2019.
(Docket Nos. 124, 228, 308.)
Quetglas
claimed that he “was not responsible for the fault the [sic] led
the Court to nullify the [CAPECO] Agreement,” and that he “is
entitled to collect against the [] defendants an equal share of
the fees received by each of them” pursuant to Article 1258 of the
Puerto Rico Civil Code (“Article 1258”).
8.)
(Docket No. 308 at p.
Quetglas also alleged that he entered into a fee agreement
with the defendants “relying upon the accuracy and veracity of the
accounting and disbursement information provided verbally to him
by Nevares,” and that “Nevares either knew or should have known
that the information was not correct at the time he made the
foregoing material representations to Quetglas.”
According
to
Quetglas,
“[h]ad
[he]
known
that
Id. at p. 7.
the
foregoing
information was not accurate or correct Quetglas would not have
entered
into
referenced
agreement,”
and
therefore
the
fee
agreement is “null and void” and he “is entitled to receive from
Civil No. 16-1333 (FAB)
5
Nevares and Salas the balance owed to him of his share in the fees
produced by the Cruz-Aponte action on the basis of work performed
or quantum meruit.”
Id. at pp. 7-8.
On Decemeber 22, 2018, Quetglas filed a motion for summary
judgement against the defendants.
(Docket No. 267.)
Four days
later, the defendants filed a cross-motion for summary judgment
against Quetglas and Parker.
II.
(Docket No. 269.)
Jurisdiction
The Court has jurisdiction over this civil action because the
dispute is between citizens of different states and the matter in
controversy exceeds $75,000, exclusive of interest and costs.
See
28 U.S.C. § 1332(a)(1).
III. Standard of Review
A court will grant summary judgment if “there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law.”
Fed. R. Civ. P. 56(a).
“A dispute
is genuine if the evidence about the fact is such that a reasonable
jury could resolve the point in the favor of the non-moving party.
A fact is material if it has the potential of determining the
outcome of the litigation.”
Dunn v. Trs. of Bos. Univ., 761 F.3d
63, 68 (1st Cir. 2014) (internal citation omitted).
The role of summary judgment is to “pierce the boilerplate of
the pleadings and assay the parties’ proof in order to determine
Civil No. 16-1333 (FAB)
6
whether trial is actually required.”
Tobin v. Fed. Exp. Corp.,
775 F.3d 448, 450 (1st Cir. 2014) (internal citation omitted).
The party moving for summary judgment has the initial burden of
“demonstrat[ing] the absence of a genuine issue of material fact”
with definite and competent evidence.
Celotex, 477 U.S. at 323;
Maldonado-Denis v. Castillo-Rodríguez, 23 F.3d 576, 581 (1st Cir.
1994).
The movant must identify “portions of ‘the pleadings,
depositions, answers to interrogatories, and admissions on file,
together with the affidavits, if any’” which support its motion.
Celotex, 477 U.S. at 323 (citing Fed. R. Civ. P. 56(c)).
Once a properly supported motion has been presented, the
burden shifts to the nonmovant “to demonstrate that a trier of
fact reasonably could find in [its] favor.”
Santiago-Ramos v.
Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000)
(internal citation omitted).
“When the nonmovant bears the burden
of proof on a particular issue, [he or] she [or it] can thwart
summary judgment only by identifying competent evidence in the
record sufficient to create a jury question.”
450-51.
Tobin, 775 F.3d at
A court draws all reasonable inferences from the record
in the light most favorable to the nonmovant, but it disregards
unsupported and conclusory allegations.
F.3d 20, 25 (1st Cir. 2014).
McGrath v. Tavares, 757
Civil No. 16-1333 (FAB)
7
When parties file cross-motions for summary judgment, a court
must “consider each motion separately, drawing all inferences in
favor of each non-moving party in turn.”
AJC Int’l, Inc. v.
Triple-S Propiedad, 790 F.3d 1, 3 (1st Cir. 2015) (internal
quotation marks and citation omitted).
“Cross-motions for summary
judgment do not alter the summary judgment standard, but instead
simply ‘require [the Court] to determine whether either of the
parties deserves judgment as a matter of law on the facts that are
not
disputed.’”
Wells
Real
Estate
Inv.
Tr.
II,
Inc.
v.
Chardón/Hato Rey P’ship, 615 F. 3d 45, 51 (1st Cir. 2010) (citation
omitted).
IV.
Applicable Law
The Court applies Puerto Rico contract law to this diversity
suit.
See Quality Cleaning Prod. R.C., Inc. v. SCA Tissue N. Am.,
LLC, 794 F.3d 200, 204 (1st Cir. 2015) (“Federal courts sitting in
diversity apply the substantive law of the state and, pursuant to
statute,
Puerto
purposes.”).
Rico
is
treated
as
a
state
for
diversity
Article 1473 of the Puerto Rico Civil Code governs
Civil No. 16-1333 (FAB)
8
actions based on quantum meruit.
Pérez-Marrero, 131 D.P.R. at 557
(citing P.R. Laws Ann. tit. 31, § 4111).5
Article 1473 states,
Professional services, as regards the remuneration
therefor, shall be subject to the agreement of the
parties; and where there is no agreement as to
remuneration, and a disagreement should arise respecting
the same, the party entitled to such remuneration may
sue and recover from the adverse party the reasonable
value of such services in any court of competent
jurisdiction.
P.R. Laws Ann. tit. 31, § 4111.
doctrine,
attorneys
are
thus
Pursuant to quantum meruit
“entitled
to
receive
reasonable
compensation” for their rendered professional services.
Marrero, 131 D.P.R. at 559.
Pérez-
“In the absence of an explicit pact,
the Courts are called upon to set the reasonable value of the
services rendered.”
Comité Pro Defensa Ambiental v. Compañía de
Aguas, 2009 WL 4059966, *2 (P.R. Cir. Aug. 27, 2009) (citing Méndez
Rodríguez v. Morales Molina, 142 D.P.R. 26 (P.R. 1996)) (official
5
In contrast to the United States common law system, where law is developed
through judicial decisions with precedential authority, Puerto Rico contract
law follows a civil law system, where core principles are codified and the code
serves as the primary source of law. See generally, Liana Fiol Matta, Civil
Law and Common Law in the Legal Method of Puerto Rico, 40 Am. J. Comp. L. 783
(1992). Puerto Rico judicial opinions resolving contract disputes do not bind
subsequent contract cases. See generally, David C. Indiano, Federal District
Court in Puerto Rico: A Brief Look at the Court and Federal Handling of
Commonwealth Civil Law in Diversity Cases, 13 Case W. Res. J. Int'l L. 231
(1981). Accordingly, in applying the Puerto Rico Civil Code, the Court sets
forth two distinct, yet coexisting ways in which Puerto Rico judges have
construed quantum meruit doctrine.
See id.
One application focuses on
services rendered, while the other interpretation centers on “unjust
enrichment.”
Compare Fernández-Sánchez, 2002 WL 31661971 (TCA), at *4
(official translation at Docket No. 222, Ex. 1 at p. 30) with Ramos-Rivera v.
González-Hernández, 2014 WL 7398737, at *6 (P.R. Cir. Oct. 31, 2014) (official
translation at Docket No. 226 at p. 3).
Civil No. 16-1333 (FAB)
9
translation at Docket No. 222, Ex. 1 at p. 14).
To determine the
reasonable value of the services rendered,
the courts may take into account the following factors:
(1) the difficulty and complexity of the issues
involved; (2) the time and work required; (3) the fees
that are usually charged in the judicial district for
similar services; (4) the experience and prestige of the
attorney.
Fernández-Sánchez, 2002 WL 31661971 (TCA), at *4 (citing PérezMarrero, 131 D.P.R. at 562 n.14) (official translation at Docket
No. 222, Ex. 1 at p. 30).
Ultimately, “[t]he principle of quantum meruit or reasonable
value is based on the doctrine of unjust enrichment and ‘is used
when dealing with an implicit obligation that arises when there
does not exist a valid agreement between the parties.’”
Ramos-
Rivera, 2014 WL 7398737, at *6 (citing Danosa Caribbean v. Santiago
Metal, 179 D.P.R. 40, 61 (P.R. 2010)) (official translation at
Docket No. 226 at p. 3).
Quantum meruit “means ‘as much as
deserved,’” and “[b]eing a principle based on the doctrine of
unjust enrichment, it is relevant to refer to what the [Puerto
Rico] Supreme Court has stated regarding” unjust enrichment: that
“not applying [the doctrine] would perpetuate the inequity of
someone unfairly enriching him or herself to the detriment of
another.”
Id. at *7 (citing Collazo Vázquez v. Huertas Infante,
Civil No. 16-1333 (FAB)
10
171 D.P.R. 84, 139 (P.R. 2007)) (official translation at Docket
No. 226 at p. 3).
Article
1258
governs
the
“[r]estoration
of
objects
of
contract” when the failing clause does not constitute a “crime or
misdemeanor.”
P.R. Laws Ann. tit. 31, § 3517.
According to
Article 1258:
If the fact of which the illicit consideration consists
does not constitute either a crime or misdemeanor . . .
when only one of the contracting parties is guilty, he
cannot recover what he may have given by virtue of the
contract, nor demand the fulfilment of what may have
been offered him. The other party, who has had nothing
to do with the illicit consideration, may reclaim what
he may have given without being obliged to fulfill what
he has offered.
Id.
V.
Discussion
The defendants’ and Quetglas’ motions for summary judgment
are
unavailing
because
Parker’s
and
Quetglas’
quantum
meruit
claims and Quetglas’ Article 1258 claim raise genuine issues of
material
facts.
See
Dunn,
761
F.3d
at
68.
The
parties’
statements of uncontested facts and supporting exhibits reveal
discrepancies regarding material questions of fact reserved for
the jury.
See Docket Nos. 268, 289, 290, 292, 295; Docket No.
267, Ex. 2; Docket No. 283, Ex. 1.
For example, the defendants
assert that “[t]he 326 Quetglas’ [sic] clients in the CAPECO
Litigation received net settlement proceeds in the total and
Civil No. 16-1333 (FAB)
11
aggregate amount of $341,747.99,” see Docket No. 268 at p. 5, while
Quetglas maintains that the defendants fail to include “at least
28 of Quetglas [sic] clients.”
(Docket No. 283, Ex. 1 at p. 9.)
The parties submit supporting evidence to substantiate their own
contentions and accuse each other of relying on “self-serving
evidence.”
See Docket No. 289 at p. 5, Docket No. 292 at p. 1.
Ultimately, the parties request that the Court render credibility
determinations to resolve the case.
The Court refuses to encroach on the domain of the jury.
“It
is the jury, not the court, which is the fact-finding body.”
Landrum Mills Hotel Corp. v. Ferhatovic, 317 F.2d 76, 77 (1st Cir.
1963).
It is the jury’s role to “weigh[] the contradictory
evidence and inferences, judge[] the credibility of witnesses,
receive[] expert instructions, and draw[] the ultimate conclusion
as to the facts.”
Id.
The “very essence” of the jury’s function
“is to select from among conflicting inferences and conclusions
that which is considers most reasonable.”
Id.
Evidence as to the
extent of Quetglas’ and Parker’s services, for example, “is such
that a reasonable jury could resolve the point in the favor of the
non-moving party” and “has the potential of determining the outcome
of the litigation.”
See Dunn, 761 F.3d at 68.
A reasonable jury
could find any of the parties’ testimony credible and award
compensation accordingly.
Civil No. 16-1333 (FAB)
12
VI.
Conclusion
For the reasons stated, Quetglas’ motion for summary judgment
(Docket No. 267) and the defendants’ cross-motion for summary
judgment (Docket No. 269) are DENIED.
IT IS SO ORDERED.
San Juan, Puerto Rico, August 12, 2019.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE
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