AT & T MOBILITY PUERTO RICO INC v. PULSAR PUERTO RICO INC et al

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IN THE UNITED STATES BANKRUPTCY COURT FOR
THE DISTRICT OF PUERTO RICO
IN RE:
PULSAR PUERTO RICO INC 	CASE NO. 08-07557 BKT
CHAPTER 7
Debtor(s) 	ADVERSARY NO. 11-0042
AT & T MOBILITY PUERTO RICO INC
Plaintiff
PULSAR PUERTO RICO INC
WILFREDO 	SEGARRA MIRANDA
,TRUSTEE
WILFREDO RODRIGUEZ FLORES
FILED & ENTERED ON 04/05/2012
Defendant(s)
OPINION AND ORDER
Before 	the 	court 	is 	AT&T 	Mobility 	Puerto 	Rico, 	Inc.’s 	(“AT&T”)
Motion for Partial Summary Judgment (Dkt. No. 80), Trustee’s opposition
(Dkt. 	No. 	100),AT&T’s 	Reply 	to 	the 	Trustee’s 	Opposition 	to 	Partial
Summary Judgment (Dkt No. 112) and the Trustee’s Sur-Reply (Dkt No. 123).
For 	the 	reasons 	stated 	herein 	AT&T’s 	motion 	for 	summary 	judgment 	is
hereby GRANTED.
I. 	JURISDICTION
This Court has jurisdiction over the subject matter and the parties
pursuant to 28 U.S.C. §§1334 and 157(a) and the General Order of referral
of 	Title 	11 	Proceedings 	to 	the 	United 	States 	Bankruptcy 	Court 	for 	the
District of Puerto Rico dated July 19, 1984 (Torruella, C.J.).
II. 	BACKGROUND
The controversy in this case originates from two prepetition lease
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agreements 	under 	which 	AT&T 	installed 	and 	operates 	cellular
telecommunication antennae on the rooftop of the former Diamond Palace
Hotel 	& 	Casino 	(the 	“Hotel”), 	a 	hotel 	complex 	owned 	by 	Pulsar 	Puerto
Rico, 	Inc. 	(“Debtor”).The 	first 	of 	the 	lease 	agreements 	was 	executed
between CCPR Services, Inc. (now AT&T) and Debtor on July 29, 2003, and
amended on August 1, 2008 (the “AT&T Lease Agreement”). The second lease
agreement was executed between Centennial Puerto Rico Operations Corp.
(now 	AT&T) 	and 	Wilfredo 	Rodríguez 	Flores 	(“Rodríguez 	Flores”)d/b/a
Rodríguez International Corp. on October 13, 2008 (the “Centennial Lease
Agreement”).
On November 7, 2008, Debtor filed a voluntary petition under Chapter
11 	of 	the 	Bankruptcy 	Code. 	On 	September 	13, 	2010, 	Debtor’s 	bankruptcy
case 	was 	converted 	to 	Chapter 	7 	and 	Wilfredo 	Segarra 	Miranda 	was
appointed as Chapter 7Trustee(the “Trustee”).
On February 14, 2011, AT&T filed the Interpleader that initiated the
adversary 	proceeding 	at 	bar 	(Dkt 	No. 	1).Among 	other 	things, 	the
interpleader seeks to join codefendants, Debtor and Rodríguez Flores, in
a single proceeding to determine who has the rightful claim to the rent
payments under the aforementioned lease agreements. On March 25, 2011,
the Trustee filed an Answer to Interpleader Complaint which also included
a 	Counterclaim 	against 	AT&T(the 	“Counterclaim”) 	(Dkt 	No. 	16). 	In 	the
Counterclaim, the Trustee asserts three causes of action:
1. 	That the Court issue a declaratory judgment naming Debtor as
the real party in interest or the real lessor in the Centennial Lease
Agreement;
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2. 	A 	collection 	action 	against 	AT&T 	for 	$190,296.00 	of 	rent
allegedly 	owedand/or 	wrongfully 	paid 	under 	both, 	the 	AT&T 	and 	the
Centennial Lease Agreements;
3. 	Damages caused by AT&T for allegedly “aiding and abetting” in
supposedly illegal and willful acts by Rodríguez Flores to divest Debtor
of the rights and payments due under the Centennial Lease Agreement in
breach of Rodríguez Flores’ fiduciary duties.
On April 14, 2011, AT&T filed an answer to the Counterclaim and a
cross 	claim 	against 	Wilfredo 	Rodríguez 	and/or 	Rodríguez 	International
Corp. (Dkt no. 22). 	Also, on October 24, 2011,AT&T filed the Motion for
Partial 	Summary 	Judgment 	(the 	“Motion 	for 	Summary 	Judgment”) 	(Dkt 	No.
80), 	seeking 	dismissal 	of 	the 	Trustee’s 	Third 	Cause 	of 	Action 	against
AT&T 	for 	the 	purported 	liability 	and 	damages 	caused 	by 	AT&T’s 	alleged
“aiding and abetting” practices. AT&T’s arguments in favor of dismissal
are based upon the following: (i) neither federal law nor Puerto Rico law
provides 	a 	private 	cause 	of 	action 	for 	“aiding 	and 	abetting” 	tort
liability; (ii) even assuming that such a cause of action existed, the
Trustee 	cannot 	provide 	evidence 	that 	AT&T 	knew 	and/or 	substantially
assisted or encouraged Rodríguez Flores’s allegedly illegal actions; and
(iii) 	such 	a 	cause 	of 	action 	would 	be 	time-barred 	under 	Puerto 	Rico’s
applicable one year statute of limitations.
In his Opposition to AT&T’s Motion for Partial Summary Judgment,
filed on December 21, 2011(the “Opposition”) (Dkt No. 100), the Trustee
avers 	that 	the 	facts 	upon 	which 	AT&T 	moves 	for 	summary 	judgment 	are
subject to controversy. 	The Trustee also argues that AT&T has failed to
establish 	the 	legal 	basis 	upon 	which 	summary 	judgment 	can 	be 	granted.
Specifically, 	the 	Trustee 	alleges 	that:(i) 	AT&T 	entered 	into 	a 	lease
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agreement with Rodríguez International Investment Corp. and/or Rodríguez
Flores despite knowing that Debtor was the owner of the leased premises;
and (ii) that AT&T facilitated and furthered a breach of fiduciary duty
by 	directing 	monthly 	rent 	payments 	under 	multiple 	lease 	agreements 	to
Rodríguez 	Flores 	when 	it 	knew 	that 	Debtor 	had 	the 	right 	to 	such
payments.In support of his Third Cause of Action, the Trustee asks the
Court 	to 	look 	into 	Delaware 	corporate 	law 	and 	adopt 	its 	doctrine 	on
aiding and abetting a breach of fiduciary duty.
On January 26, 2012, AT&T filed a Reply to the Trustee’s Opposition
to Partial Summary Judgment (the “Reply”) (Dkt No. 112)reiterating that
the Trustee’s Opposition lacked merits, and therefore, summary judgment
as 	to 	the 	“aiding 	and 	abetting” 	cause 	of 	action 	should 	be 	granted.
Specifically, 	AT&T 	refutes 	the 	Trustee’s 	connection 	to 	Delaware’s
corporate 	law, 	insofar 	as 	the 	Counterclaim 	raises 	a 	damages 	and 	torts
claim based on “aiding and abetting” that does not concern any of Puerto
Rico’s 	corporate 	statutes. 	In 	fact, 	the 	Trustee 	does 	not 	cite 	any
corporate law statute under Puerto Rico’s General Corporations Law that
supports an “aiding and abetting” action in Puerto Rico. 	The remaining
statements 	put 	forth 	by 	AT&T 	in 	the 	Reply 	are 	a 	repetition 	of 	the
arguments raised in the Motion for Summary Judgment.
On February 10, 2012 (Dkt No. 123), the Trustee filed a Sur-Reply to
AT&T’s Reply (the “Sur-Reply”) to substantiate its claim against AT&T for
the 	aiding 	and 	abetting 	breach 	of 	fiduciary 	duty 	claim. 	The 	Sur-Reply
further discusses the potential wrongdoings of Rodríguez Flores and the
Trustee’s 	claim 	of 	breach 	of 	fiduciary 	duty 	against 	him. 	The 	Trustee
argues conclusively that AT&T substantially assisted Rodríguez Flores in
breaching his fiduciary duties to the Debtor by restating that: (i) the
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named 	lessor 	under 	the 	Centennial 	Lease 	Agreement 	was 	Rodríguez
International and/or Rodríguez Flores, when Rodríguez Flores had no right
to lease the premises, and (ii) all the checks that AT&T issued to pay
the rent under the Centennial Lease Agreement were made jointly to the
order of Rodríguez International and/or Rodríguez Flores.
III. 	ANALYSIS AND DISCUSSION
A. Summary Judgment Standard
Under 	Federal 	Rule 	of 	Civil 	Procedure 	56(c), 	made 	applicable 	in
bankruptcy by Federal Rule of Bankruptcy Procedure 7056, summary judgment
is available if the pleadings, depositions, answers to interrogatories,
and admissions on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and that the moving
party is entitled to judgment as a matter of law. 	Fed. R. Civ. P. 56(c);
Borges ex rel. S.M.B.W. v. Serrano-Isern, 605 F.3d 1, 4 (1st Cir. 2010).
As to issues on which the movant, at trial, would be compelled to carry
the 	burden 	of 	proof, 	it 	must 	identify 	those 	portions 	of 	the 	pleadings
which it believes demonstrates that there is no genuine issue of material
fact. 	In re Edgardo Ryan Rijos & Julia E. Cruz Nieves v. Banco Bilbao
Vizcaya 	& 	Citibank 	(In 	re 	Rijos), 	263 	B.R. 	382, 	388 	(B.A.P. 	1st 	Cir.
2001). 	A fact is deemed "material" if it potentially could affect the
outcome 	of 	the 	suit. 	Borges 	at 	5. 	Moreover, 	there 	will 	only 	be 	a
"genuine" or "trial worthy" issue as to such a "material fact," "if a
reasonable fact-finder, examining the evidence and drawing all reasonable
inferences helpful to the party resisting summary judgment, could resolve
the dispute in that party's favor." 	Id. at 4. 	The Court must view the
evidence in a light most favorable to the nonmoving party. 	Alt. Sys.
Concepts, 	Inc. 	v. 	Synopsys, 	Inc., 	374 	F.3d 	23, 	26 	(1st 	Cir. 	2004).
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Therefore, summary judgment is “inappropriate if inferences are necessary
for the judgment and those inferences are not mandated by the record.”
Rijos at 388.
B. 	Aiding and abetting theory
The question is whether the alleged theory of “aiding and abetting”
is cognizable under state law. 	The Counterclaim cites no controlling law
in support of the Third Cause of Action on “aiding and abetting” and, in
his Opposition, the Trustee relies on Delaware’s corporate law provisions
for aiding and abetting a breach offiduciary duty.
In 	general, 	under 	Puerto 	Rico 	law, 	a 	person 	who 	by 	an 	act 	or
omission causes damage to another through fault or negligence shall be
obliged 	to 	repair 	the 	damage 	so 	done. 	31 	LPRA 	§ 	5141. 	All 	damages,
whether moral or material, give rise to a remedy if the following three
elements 	are 	met: 	(1) 	a 	real 	damage 	or 	injury 	occurred; 	(2) 	there 	is
causal nexus between injury and act or omission of another; and the (3)
act 	or 	omission 	was 	culpable 	or 	negligent. 	Bonilla 	v. 	Chardón, 	118
D.P.R. 599 (1987). 	“[T]here is fault when one does not act as a man of
normal or ordinary diligence would, a good father of a family, according
to the circumstances of the case.”Gierbolini v. Employers Fire Ins. Co.,
104 D.P.R. 853 (1976).
This Court concludes that the “aiding and abetting” theory is not
recognized under Puerto Rico law as a right to recover damages. 	In fact,
with very few exceptions provided by legislation, the right to recover
damages in Puerto Rico is governed --both in form and in content--by the
civil law system. Valle v. Amer. Inter. Ins. Co., 108 D.P.R. 692 (1979);
Gierbolini v. Employers Fire Ins. Co., supra. 	Accordingly, the Trustee’s
claim 	against 	AT&T 	for 	“aiding 	and 	abetting” 	is 	improper 	and 	legally
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unsupported.
Moreover, taking into account all facts proffered by the parties and
extending the Trustee every reasonable inference in his favor, there is
no basis to conclude that AT&T assisted Rodríguez Flores in the allegedly
dubious activities investigated and asserted by the Trustee. It has not
been 	proven 	that 	AT&T 	had 	actual 	knowledge 	of 	any 	wrongdoings 	by
Rodríguez 	Flores. 	Even 	if 	the 	Trustee 	were 	to 	establish 	a 	breach 	of
fiduciary 	duty 	by 	Rodríguez 	Flores, 	no 	evidence 	has 	been 	provided 	to
establish 	that 	AT&T 	knew, 	assisted, 	participated 	and/or 	encouraged
Rodríguez 	Flores 	to 	commit 	any 	illegal 	acts. 	With 	the 	considerable
evidence 	submitted 	so 	far, 	it 	appears 	reasonable 	to 	conclude 	that 	the
Trustee cannot support his “aiding and abetting” claim, and therefore he
would not be entitled to a relief for damages.
IV. 	CONCLUSION
WHEREFORE, 	IT 	IS 	ORDERED 	that 	in 	light 	of 	the 	foregoing 	legal
conclusions, 	AT&T’s 	Motion 	for 	Partial 	Summary 	Judgment 	shall 	be, 	and
hereby is, GRANTED. Judgment will be entered accordingly.
A separate order will be entered scheduling a status conference to
consider the course of action to resolve remaining controversies.
SO ORDERED.
San Juan, Puerto Rico, this 05 day of April, 2012.
Brian K. Tester
U.S. Bankruptcy Judge
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