Nieves-Roman v. CPC Carolina PR ( 2024 )

United States Court of Appeals
For the First Circuit
No. 21-1791
KHADIJAH AHMAD HAMDALLAH,
Plaintiff, Appellant,
JANET MARIE VEGA-RODRÍGUEZ; EDWARD NIEVES-ROMAN; MARÍA TERESA
CRUZ MARRERO; RAMÓN FERNÁNDEZ CRUZ; EDGARDO JOSÉ FERNÁNDEZ CRUZ;
LISA MARÍA FERNÁNDEZ CRUZ; JAVIER FRANCISCO FERNÁNDEZ CRUZ;
WANDAIVELISSE FERNÁNDEZ CRUZ; RICARDO NIEVES-ACEVEDO; CONJUGAL
PARTNERSHIP NIEVES-VEGA,
Plaintiffs,
v.
CPC CAROLINA PR, LLC; PUERTO RICO CVS PHARMACY, LLC,
Defendants, Appellees.
KRB UNIVERSAL INVESTMENTS, LLC; INSURANCE COMPANIES A, B AND C;
JOHN DOE; JANE DOE,
Defendants.
_____________________
CPC CAROLINA PR, LLC,
Plaintiff,
v.
PUERTO RICO CVS PHARMACY, LLC; CVS PHARMACY, INC.,
Defendants.
__________________
21-1794
EDWARD NIEVES-ROMAN,
Plaintiff, Appellant,
JANET MARIE VEGA-RODRÍGUEZ; MARÍA TERESA CRUZ MARRERO; RAMÓN
FERNÁNDEZ CRUZ; EDGARDO JOSÉ FERNÁNDEZ CRUZ; LISA MARÍA
FERNÁNDEZ CRUZ; JAVIER FRANCISCO FERNÁNDEZ CRUZ; WANDA IVELISSE
FERNÁNDEZ CRUZ; RICARDO NIEVES-ACEVEDO; KHADIJAH AHMAD
HAMDALLAH; CONJUGAL PARTNERSHIP NIEVES-VEGA,
Plaintiffs,
v.
CPC CAROLINA PR, LLC; PUERTO RICO CVS PHARMACY, LLC,
Defendants, Appellees,
KRB UNIVERSAL INVESTMENT, LLC; INSURANCE COMPANIES A, B AND C;
JOHN DOE; JANE DOE,
Defendants.
_____________________
CPC CAROLINA PR, LLC,
Plaintiff,
v.
PUERTO RICO CVS PHARMACY, LLC; CVS PHARMACY, INC.,
Defendants.
__________________
No. 21-1795
RICARDO NIEVES-ACEVEDO; JANET MARIE VEGA-RODRÍGUEZ; CONJUGAL
PARTNERSHIP NIEVES-VEGA,
Plaintiffs, Appellants,
EDWARD NIEVES-ROMAN; MARÍA TERESA CRUZ MARRERO; RAMÓN FERNÁNDEZ
CRUZ; EDGARDO JOSÉ FERNÁNDEZ CRUZ; LISA MARÍA FERNÁNDEZ CRUZ;
JAVIER FRANCISCO FERNÁNDEZ CRUZ; WANDA IVELISSE FERNÁNDEZ CRUZ;
KHADIJAH AHMAD HAMDALLAH,
Plaintiffs,
v.
CPC CAROLINA PR, LLC; PUERTO RICO CVS PHARMACY, LLC,
Defendants, Appellees,
KRB UNIVERSAL INVESTMENTS, LLC; INSURANCE COMPANIES A, B AND C;
JOHNDOE; JANE DOE,
Defendants.
_____________________
CPC CAROLINA PR, LLC,
Plaintiff,
v.
PUERTO RICO CVS PHARMACY, LLC; CVS PHARMACY, INC.,
Defendants.
__________________
No. 21-1805
MARÍA TERESA CRUZ MARRERO; RAMÓN FERNÁNDEZ CRUZ; EDGARDO JOSÉ
FERNÁNDEZ CRUZ; LISA MARÍA FERNÁNDEZ CRUZ; JAVIER FRANCISCO
FERNÁNDEZ CRUZ; WANDA IVELISSE FERNÁNDEZ CRUZ,
Plaintiffs, Appellants,
JANET MARIE VEGA-RODRÍGUEZ; EDWARD NIEVES-ROMAN; RICARDO NIEVES-
ACEVEDO; CONJUGAL PARTNERSHIP NIEVES-VEGA; KHADIJAH AHMAD
HAMDALLAH,
Plaintiffs,
v.
CPC CAROLINA PR, LLC; PUERTO RICO CVS PHARMACY, LLC,
Defendants, Appellees,
CVS PHARMACY, INC.; KRB UNIVERSAL INVESTMENTS, LLC; INSURANCE
COMPANIES A, B AND C; JOHN DOE; JANE DOE,
Defendants.
_____________________
CPC CAROLINA PR, LLC,
Plaintiff,
v.
PUERTO RICO CVS PHARMACY, LLC; CVS PHARMACY, INC.,
Defendants.
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. William G. Young,* U.S. District Judge]
Before
Kayatta, Lipez, and Thompson,
Circuit Judges.
José Luis Novas Debién for appellants in Nos. 21-1791, 21-
1794, and 21-1795.
Jeannette López de Victoria, with whom Oliveras & Ortiz, PSC
was on brief, for appellants in 21-1805.
José L. Ramírez-Coll, with whom Carolina V. Cabrera Bou and
Antonetti Montalvo & Ramirez Coll were on brief, for appellee CPC
Carolina PR, LLC.
Jesus E. Cuza Abdala, with whom Holland & Knight LLP and
Rebecca J. Canamero were on brief, for appellee Puerto Rico CVS
Pharmacy, LLC.
January 12, 2024
* Of the District of Massachusetts, sitting by designation.
THOMPSON, Circuit Judge.
PROLOGUE
These consolidated appeals tell the tale of a commercial
real estate deal gone sideways. Certain that a few torts were
committed along the way, the Sellers (and owners) of the relevant,
individual pieces of land ("the Parcels") sued the would-be
purchaser and lessor of the Parcels, CPC Carolina PR, LLC ("CPC"),
and the would-be lessee of the Parcels, Puerto Rico CVS Pharmacy,
LLC ("CVS"). Unfortunately for the Sellers, they lost on summary
judgment at the district court. Undeterred, they brought the case
to our bench. We'll provide the remaining details as we go, but
we won't bury the lede as to how this story ends: after thoughtful
consideration of the parties' arguments (or, at least, what we
understand those arguments to be), we affirm the lower court's
decision across the board.
SETTING THE (FACTUAL) SCENE1
Chapter 1: The Parcels
This story opens nearly sixty years ago in Carolina,
Puerto Rico. There, on October 16, 1964, a developer encumbered
a residential area known as Valle Arriba Heights with certain
1 Unless otherwise noted, we set the scene with uncontested
facts. In any event, we (as always) summarize the facts in the
light most agreeable to the Sellers, as they did not move for
summary judgment below, and we make "all reasonable inferences in
[their] favor, consistent with record support." Johnson v.
Johnson, 23 F.4th 136, 139 (1st Cir. 2022) (citation omitted).
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restrictive covenants. Pursuant to these pesky restrictive
covenants, all properties within Valle Arriba Heights could only
be used for residential purposes. Of significance, the Parcels
are all located in Valle Arriba Heights and are, thus, subject to
these same covenants.
Chapter 2: The Agreements Between the Sellers and CPC
The story picks back up several decades later. On
October 3, 2013, the Sellers2 agreed to sell their respective
Parcels to KRB Universal Investments, LLC ("KRB") pursuant to four
identical Purchase Agreements ("the Agreements"). Upon
acquisition of all the Parcels, KRB would aggregate them into one
larger plot of land that would then be developed for commercial
use -- a fact to which all the Sellers were privy. KRB later
2 Two quick notes on the who's who of these consolidated
appeals. First, our use of "the Sellers" (both so far and through
the "Epilogue") refers collectively to the Appellants in the
following consolidated appeals: (1) Hamdallah v. CPC Carolina PR,
LLC, 21-1791; (2) Nieves-Roman v. CPC Carolina PR, LLC, 21-1794;
(3) Nieves-Acevedo v. CPC Carolina PR, LLC, 21-1795; and (4) Cruz
Marrero v. CPC Carolina PR, LLC, 21-1805. And second, to
facilitate the telling of this story, we must at certain points
identify a particular Seller for clarity, which we will identify
as the "Hamdallah Seller," "Nieves-Roman Seller," "Nieves-Acevedo
Sellers," and "Cruz Marrero Sellers." Along these same lines, we
will at times need to refer collectively to a subset of the
Sellers. This will most often be the case for the Hamdallah
Seller, Nieves-Roman Seller, and Nieves-Acevedo Sellers because
they are represented by the same counsel. We will refer to them
collectively as "the Hamdallah/Nieves-Roman/Nieves-Acevedo
Sellers," and other variations of the Sellers will likewise be
referred to in this same format.
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assigned its rights under the Agreements to CPC on February 24,
2015.
Several provisions of the Agreements are crucial to this
tale's trajectory and are worth introducing now. First, Section
5 of the Agreements provided that the "Closing" "shall [occur]
. . . within thirty (30) days after expiration of the Inspection
Period." Section 11, in turn, defined the "Inspection Period" as
365 days after the date the Agreements became effective (which was
December 11, 2013), subject to any extensions agreed upon by the
parties.3
The second set of provisions that bears emphasizing
relates to the possession, condition, and maintenance of the
Parcels through Closing. Pursuant to Section 5, each Parcel was
to be conveyed "[a]t Closing" and "[p]ossession of the [Parcel]"
was to "be delivered to [CPC] upon Closing." Section 7 provided,
in relevant part, that "[c]ommencing upon the date of this
Agreement and extending through Closing hereunder, the [Parcel]
and title to the [Parcel] shall remain in the same condition as on
the date hereof, except, however, for natural wear and tear."
3It is worth noting that, according to Section 5, the Closing
"shall [occur] . . . within thirty (30) days after expiration of
the Inspection Period provided in Section 10," not Section 11.
This appears to be a typographical error because Section 10 refers
to an "Evaluation Period," not the "Inspection Period," and all
parties agree that the Agreements require the Closing to occur
within 30 days of the end of the Inspection Period.
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Furthermore, according to Section 7, "all risk of loss to the
[Parcel] for any casualty or otherwise shall remain upon Seller."
Third, the Agreements provided for an "Earnest Money"
deposit of $5,000.00 that would function as liquidated damages:4
If the sale and purchase of the [Parcel] as
contemplated by this Agreement is not
consummated for any reason other than [CPC]'s
default, the Earnest Money and all interest
earned thereon, except as herein expressly
provided to the contrary, shall be refunded to
[CPC] on demand. If the sale and purchase is
not consummated because of [CPC]'s default,
then Seller shall have the right to retain the
Earnest Money and all interest earned thereon,
as full liquidated damages for such default of
[CPC], the parties hereto acknowledging that
it is impossible to more precisely estimate
the damages to be suffered by Seller upon
[CPC]'s default. The parties expressly
acknowledge that retention of the Earnest
Money and all interest earned thereon, is
intended not as a penalty, but as full
liquidated damages. In the event the purchase
and sale contemplated in this Agreement is not
consummated because of [CPC]'s default, [CPC]
hereby waives and releases any right to (and
hereby covenants that it shall not) sue Seller
to recover the Earnest Money, and all interest
earned thereon, or any part thereof on the
grounds that it is unreasonable in amount or
that its retention by Seller is a penalty and
4 For the reader less well-versed in contract terminology,
"[a] liquidated damages clause is one that provides in advance
that a breaching defendant will pay a specific amount for a
specific breach. The purpose of such a clause is to provide
parties with a reasonable predetermined damages amount where
actual damages may be difficult to ascertain. At least in theory,
such provisions minimize uncertainty and reduce litigation costs,
easing the burden on both the parties and the judicial system."
John Hancock Life Ins. Co. v. Abbott Lab'ys, 863 F.3d 23, 40 (1st
Cir. 2017) (internal citations and quotation marks omitted).
- 8 -
not agreed upon and reasonable liquidated
damages.
(emphases ours). In other words, in the event that CPC defaulted
and failed to purchase the Parcels, the Sellers would each only be
entitled to a maximum of $5,000.00 as damages and could not sue
for more. Indeed, the Sellers explicitly agreed to this in the
Agreements, which state that the "Seller hereby covenants and
agrees not to sue [CPC] for specific performance of this Agreement
or for damages other than the liquidated damages set forth above."
Fourth, the Agreements set forth several conditions
precedent5 before CPC's obligation to close on the Parcels came
into effect. These conditions precedent included (among other
things):
(b) [CPC] obtaining all necessary and final
zoning and governmental permits,
Anteproyecto, ARPE Approvals, site plan
approvals, tenant approval, access curb cuts,
traffic controls, licenses, and approvals, for
the site construction and operation of the
proposed improvements on the [Parcel] along
with any other required and non-appealable
government requirements.
. . .
(e) Prime User and Financing Commitments have
been received by [CPC].
5 Again, for the reader less well-versed in contract
terminology, "[a] condition precedent is 'an event which must occur
before a contract becomes effective or before an obligation to
perform arises under the contract.'" Am. Private Line Servs.,
Inc. v. E. Microwave, Inc., 980 F.2d 33, 36 (1st Cir. 1992)
(quoting Mass. Mun. Wholesale Elec. Co. v. Danvers, 411 Mass. 39,
45 (1991)).
- 9 -
. . .
(f) No casualty, natural event or condemnation
has occurred.6
(emphases ours).
And last, but certainly not least, the Agreements also
established that CPC could "deliver[] written notice to the Seller
on or before [the expiration of the Inspection Period] that [CPC]
has determined that the . . . conditions [precedent] are not met,
to [CPC's] sole satisfaction . . . in [CPC]'s sole discretion."
If CPC delivered such notice, it was "not . . . obligated to
close."
Chapter 3: The Ground Lease Between CPC and CVS
At the time the Sellers entered into the Agreements in
2013, CVS had not yet entered the picture. Rather, it joins this
tale approximately one month after KRB assigned its rights to CPC
under the Agreements. On March 30, 2015, CPC and CVS executed a
lease ("the Ground Lease"), which would allow CVS to lease the
aggregated Parcels and construct and operate a CVS pharmacy.7
Several provisions of the Ground Lease, however, gave
CVS outs if, in its sole discretion, it was not satisfied with any
6 As will soon become clear, CVS eventually became the
"tenant" and "Prime User" referenced in this provision.
7 The record reflects that only certain Sellers were aware of
CVS's lease at this time, but, by 2017, all the Sellers were aware
of it.
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condition of the Parcels. For example, the Ground Lease provided
CVS with an "Evaluation Period," during which it could "terminate
th[e] Lease by written notice to [CPC] . . . if . . . in [CVS's]
sole discretion, [CVS was] not satisfied with . . . any other
condition relating to the [Parcels], including, without
limitation, title, zoning laws, land use laws, or status of permits
or approvals." Even outside of the Evaluation Period, CVS was not
"obligated to accept possession of the [Parcels] until [CVS] shall
have . . . received a leasehold policy of title insurance with
respect to the [Parcels], which policy shall be satisfactory to
[CVS]; and . . . received and recorded a Deed of Constitution of
Lease pursuant to Section 29 [of the Ground Lease]."
The Ground Lease's Evaluation Period ended on August 26,
2015. At some point prior to the Evaluation Period's expiration,
both CPC and CVS became aware of the restrictive covenants
prohibiting non-residential use of the Parcels.
Chapter 4: The May/June 2017 Closing Falls Through
Over the ensuing years, the Sellers and CPC agreed to
several extensions of the Agreements' Inspection Period -- thereby
also extending the Closing date. That all seemed to change on
April 17, 2017, when CPC's attorney, Loyda Rivera ("Rivera"),
informed the Sellers by letter that the Closing had been set for
May 19, 2017. This letter requested that each Seller make
arrangements to terminate any operations on or leases of their
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respective Parcel and to remove therefrom any equipment or
occupants, "by or before May 19th."8
Rivera followed up via letter dated May 16, 2017,
informing the Sellers that the Closing had been moved and would
now occur sometime between May 31 and June 5, 2017. This letter,
like the first one, requested that the Sellers vacate the Parcels
(this time though) "by or before May 31st."9 May 31, however, came
and went with no Closing. In the end, the Closing did not take
place in May or June 2017 because a seller (not one of the Sellers
in these consolidated appeals) failed to disclose that a member of
that seller's estate was a minor, therefore requiring court
approval of the transaction ("Minor's Title Issue").10
In response to this blip -- one which all the Sellers
were aware of -- the Sellers agreed to a final extension of the
At the time, the Nieves-Acevedo Sellers leased the rooftop
8
of their Parcel to a third-party for the use of antennas. Rivera's
April 17, 2017 letter requested that the Nieves-Acevedo Sellers
terminate this contract and remove any related equipment "on or
before May 19th."
Rivera's May 16, 2017 letter to the Nieves-Acevedo Sellers
9
uses slightly different language, "on or before May 31st."
In response to Rivera's letters, the Hamdallah/Cruz Marrero
10
Sellers vacated their respective Parcels in May 2017 and did not
re-occupy them following the May/June 2017 Closing failing to occur
due to the Minor's Title Issue. The Nieves-Roman/Nieves-Acevedo
Sellers did not vacate their respective Parcels at this time. None
of the Sellers, however, gave CPC the keys to their respective
Parcels at this time (or at any other time).
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Inspection Period to October 30, 2017, thereby once again extending
the Closing date.
Chapter 5: Cancellation of the Closing
In the wake of the failed May/June Closing, a flurry of
events brings this tale to its climax: the cancellation of the
Closing altogether.
After vacating her Parcel in response to Rivera's
letters, the Hamdallah Seller returned to it several times between
June and August 2017 to check on the premises -- only to find that
her Parcel had been vandalized. Troubled by her discovery and
concerned about further vandalism, the Hamdallah Seller contacted
Rivera in June to request that a security guard be placed at the
Parcel, to which Rivera responded that there was no need for a
security guard because the Parcels would be demolished.
Also in June 2017, an electrical transformer that
provided power to the Parcels was removed. There's disagreement
among the Sellers and CVS as to the circumstances surrounding the
removal of the transformer, with the Sellers stating that it was
removed upon CVS's request to the Autoridad de Energía Eléctrica
de Puerto Rico ("AEE") and CVS stating it made no such request and
had no involvement whatsoever in its removal. Regardless, everyone
- 13 -
agrees that the Sellers did not look into the transformer's removal
at this time.11
At some point prior to August 2017, CVS's outside
engineer, Carlos Sanchez ("Sanchez"), posted signage on the
Parcels that stated (among other things) CVS was the owner of the
Parcels. These signs were posted in accordance with and as
required by local municipal regulations.
With these (what will later prove to be) important plot
points squared away, this story reaches the pivotal month of August
2017. On August 4, Rivera informed the Sellers by letter that the
Closing had been scheduled for August 14, 2017 at her office. This
letter noted that an inspection would occur on August 13 and, like
all the letters before it, requested that the Sellers completely
vacate the Parcels by that date. The Closing was moved shortly
thereafter to August 16, 2017.
On August 9, Arnaldo Villamil ("Villamil"), CVS's
attorney for this transaction, received from Popular Insurance, a
title insurance company, a draft insurance policy that excluded
from coverage claims relating to the enforcement of the restrictive
11 In fact, the record shows that the first inquiry on the
part of any of the Sellers occurred in May 2018, when the Nieves-
Acevedo Sellers, through their electrician, contacted the AEE to
reinstall the power to the Parcels. According to the Nieves-
Acevedo Sellers, their electrician was told by an unidentified
person at the AEE that CVS had requested the removal of the
transformer. Of course, as mentioned above, CVS flatly denies
this allegation and provides some record support for its denial.
- 14 -
covenants. Accordingly, Villamil, on behalf of CVS, notified
Rivera the following day that CVS would not accept the Parcels,
relying on the Ground Lease provision that stated CVS was not
obligated to accept possession of the Parcels if it did not receive
a satisfactory insurance policy. The August 13 inspection of the
Parcels, nevertheless, proceeded as originally planned, with
Rivera, Sanchez, and Villamil all in attendance. And the last two
holdouts to vacate the Parcels -- the Nieves-Roman/Nieves-Acevedo
Sellers -- finally vacated by August 14.12
Two days later, the long-awaited August 16 Closing
finally arrived. That morning, though, CVS informed CPC that it
was backing out of the transaction because of the non-satisfactory
insurance policy and the restrictive covenants. In the dark about
these goings-on between CVS and CPC, the Sellers arrived, as
instructed, to Rivera's office for the Closing, where she
ultimately informed the Sellers that the Closing would not take
place due to an issue between CVS and CPC.
Everything came to a head on August 25, 2017, when Rivera
sent a letter ("the August 25, 2017 Letter"), the full contents of
12 At some point after this, the Parcels belonging to the
Nieves-Roman/Nieves-Acevedo/Cruz Marrero Sellers were vandalized.
- 15 -
which is reproduced below, informing the Sellers that CVS had
backed out of the deal:13
Many of you have contacted me asking
about the status of the [C]losing on the
[Parcels] in question. As you all know, on
August 16, 2017 we had to stop the [C]losing
because CVS informed us that it was not ready
to sign the deed instrument containing the
lease contract at that time nor to accept
delivery of the [Parcels]. Since it was
crucial to my client's purchase that the lease
contract be signed and the [Parcels] be
transferred, the [C]losing was stopped.
As you know, from the time negotiations
with you began, this transaction was
structured so that the purchase of all nine
[Parcels], consolidation of the [Parcels],
signing of the lease contract and delivery of
the [Parcels] would occur simultaneously.
This process was explained to you from the
start, as negotiated with CVS.
Around the end of April this year, and
then formally in mid-May, my client notified
all of you of his intention to close at the
end of that month. However, after the
[C]losing notice was issued, we learned that
one of you had concealed a succession
involving minor children as heirs. The
discovery of that information required us to
suspend the [C]losing scheduled for late May
in order to obtain judicial authorization to
purchase the affected [Parcel], as required by
law. As my client was unable to fulfill its
obligation to close and transfer the [Parcels]
as agreed in the contract with CVS, CVS
notified my client of its refusal to extend
delivery of the [Parcels], and the contract
was terminated on July 5, 2017.
13 Note, gentle reader, that the August 25, 2017 Letter was
sent prior to the expiration of the Agreements' Inspection Period,
which was extended to October 30, 2017.
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After several negotiations with CVS we
(i) helped the seller obtain proper judicial
authorization and (ii) convinced CVS to extend
the [Parcel] delivery date until August 17
this year. Once the sale was authorized by
the Court, we prepared for the [C]losing,
notifying you of a new [C]losing date.
On Thursday August 10, just two (2)
working days before the scheduled [C]losing
date of August 14, CVS informed us that it
needed time to review an issue related to
restrictive conditions affecting the
[Parcels] in the Registry. They knew that
these conditions had affected the [Parcels]
since it was developed in 1964 and that all
the title searches reviewed and approved by
CVS reflected the same. These restrictive
conditions were never a matter of concern for
CVS, which had plenty of time to inform us
since signing the [Ground Lease] in 2015 if
they had been concerned about them. In good
faith, and to give them time to evaluate this
issue, we postponed the original [C]losing
date of August 14 to Wednesday August 16, one
day before the deadline given by CVS for
delivery of the [Parcels]. It should be noted
that CVS inspected the [Parcels] on Sunday
August 13 and found [them] in satisfactory
condition for delivery.
On Wednesday August 16, at approximately
11:30 am, I was instructed to halt the
[C]losing. The reason for this was that CVS
notified that it would not be issuing the
lease agreement, nor accepting delivery of the
[Parcels], because it was not satisfied with
the lease insurance policy that it would
receive from its insurer at [C]losing, which
had excluded the restrictive conditions from
the coverage. The deadline for our client to
deliver the [Parcels] was the next day,
Thursday August 17. Therefore, on August 16
and also on August 17, we requested in good
faith that the date for [C]losing on and
delivering the [Parcels] be extended to give
CVS time to review the matter, a request they
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refused. We had no other option than to notify
CVS of its breach of contract on August 17.
On August 22, 2017, CVS replied that it
was my client and not CVS that had breached
the [Ground Lease] by not "purchasing and
trying to deliver" the [Parcels]. However,
the agreement was always to purchase,
consolidate, sign the lease contract, and
deliver and receive the letter of transfer at
[C]losing.
My client is exploring all options at
this time, including hiring litigation
attorneys to handle the matter from now on.
As soon as we have more news, we will inform
you.
(emphases ours).
Chapter 6: The Aftermath
Following receipt of the August 25, 2017 Letter, the
Sellers, expecting the transaction to eventually take place,
called Rivera "all the time" to inquire about the status of the
Closing. There is conflicting evidence on the Sellers' expectation
that the Closing would still occur. For example, Rivera testified
during her deposition to the following:
Uff! [The Sellers] used to call me all the
time, even after this [August 25, 2017
Letter]. "Do you have any notice? Do you
know what's going on?", and I said, "Well, you
know, as I told you in the . . . [August 25,
2017 Letter] the deal fell through. CVS
didn't want to sign the lease. I know that
CPC is trying to, you know, w[eigh] [its]
options." You know, they still want to close.
And that was it.
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On the other hand, the Hamdallah Seller testified at her deposition
that, following the failed Closing, Rivera told her that Rivera
was waiting for the issue to be resolved. The Nieves-Roman Seller
also testified at his deposition that, some days after the Closing,
he called and asked Rivera when the Closing would take place, to
which she responded, "[S]he was dealing with the papers, she was
talking to . . . CPC and she [would] notify [them]," and that was
the only time he spoke with Rivera after the August 25, 2017
Letter.14
Jumping ahead several months to May 2018: the
Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers sent CPC an
extrajudicial claim letter on May 18, requesting damages for CPC's
alleged negligent and tortious behavior during the transaction, up
through the failed Closing.15 Three days later, on May 21, 2018,
the Municipality of Carolina ("the Municipality"), owner of a road
that was also to be acquired as part of this transaction, wrote to
Rivera to inquire about "the status of the" Closing, because it
had "not received any communication whatsoever from [CPC]" and it
had "received information that the" Closing would not occur. CPC
responded to both the Hamdallah/Nieves-Roman/Nieves-Acevedo
14 We take a beat here to also note that, in the weeks
following the August 25, 2017 Letter, Puerto Rico was hit by two
serious hurricanes, Hurricane Irma and Hurricane Maria.
15The Cruz Marrero Sellers sent CPC their own extrajudicial
claim letter months later on August 14, 2018.
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Sellers and the Municipality on June 7, 2018. It informed the
Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers that, on August 25,
2017, they "were notified by . . . Rivera that, for reasons not
attributable to CPC, . . . the [C]losing . . . would not occur"
and that CPC did not "have any duties or obligations in connection
with [their Parcels]."16 And, as for the Municipality, CPC informed
it that, "for reasons not attributable to CPC, the construction of
the CVS pharmacy . . . [would] not be carried out."
SETTING THE (PROCEDURAL) SCENE
Chapter 7: The Lawsuits
Needless to say, with CVS's eleventh-hour back-out,
neither CPC nor the Sellers left this failed transaction
particularly content with its outcome. Accordingly, both CPC and
the Sellers decided to take legal action, but the first to make a
move was CPC. On August 8, 2018, CPC filed a complaint against
CVS ("the Lead Case").17 Many months later, on April 1, 2019,
16CPC responded to the Cruz Marrero Sellers' August 14, 2018
extrajudicial claim letter on August 21, 2018, denying all
liability.
17 We pause here to quickly note that these consolidated
appeals arise under our diversity jurisdiction, so we apply the
substantive law of the local jurisdiction. Baum-Holland v. Hilton
El Con Mgmt., LLC, 964 F.3d 77, 87 (1st Cir. 2020). In these
consolidated appeals, that local jurisdiction is Puerto Rico, so
we apply Puerto Rico's substantive law to our review of both CPC's
and CVS's motions for summary judgment against the Sellers. Id.(applying Puerto Rico substantive law under diversity
jurisdiction).
- 20 -
the Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers each followed up
with their own lawsuit against CPC and CVS, asserting negligence
claims and seeking damages. Determined not to be left out of these
legal skirmishes, the Cruz Marrero Sellers filed their own lawsuit
on August 13, 2019, asserting, like the Hamdallah/Nieves-
Roman/Nieves-Acevedo Sellers, negligence claims and seeking
damages from CPC and CVS. And by October 1, 2019, all the Sellers'
cases were consolidated with the Lead Case.
Chapter 8: The Lead Case Settles
Convinced of the other's fault for the failed Closing,
CPC and CVS filed cross-motions for summary judgment against each
other on June 8, 2020. On this date as well, both CPC and CVS
filed motions for summary judgment against each of the Sellers.
After giving everyone an opportunity to respond (both in writing
and at oral argument), the district court, on September 30, 2020,
issued a decision only in the Lead Case, choosing to put on hold
CPC's and CVS's motions for summary judgment against the Sellers
until the Lead Case was fully resolved. CPC Carolina PR, LLC v.
P.R. CVS Pharmacy, LLC, 494 F. Supp. 3d 144, 157 (D.P.R. 2020).
In short, the district court denied summary judgment as to the
vast majority of claims CPC and CVS raised against each other,
concluding that there were genuinely disputed issues of material
- 21 -
facts (more on what this legal standard means later) regarding the
reasons behind the Closing's failure.18 Id. at 152–57.
After several scheduling hiccups, the Lead Case was set
for a bench trial on January 25, 2021. But on the eve of trial,
CPC and CVS reached a settlement agreement, and the Lead Case was
dismissed by March 5, 2021.
Chapter 9: The Sellers' Summary-Judgment Loss and Appeal
With the Lead Case now resolved, the district court
turned its attention back to the pending motions for summary
judgment against the Sellers. After hearing additional oral
argument and receiving additional briefing, the district court
issued a decision on August 20, 2021, granting CPC's and CVS's
respective motions for summary judgment against all the Sellers
18 We won't get into the nitty gritty of this decision, but
we will presume the reader's familiarity with the facts found and
conclusions drawn in this decision for the remainder of this story.
For our less enterprising readers, though, we highlight certain
facts found by the district court, namely that (1) "[i]n July 2015,
the business environment in Puerto Rico became less favorable to
CVS, and the outlook for the [CVS pharmacy] less profitable.
Between November 2016 and March 2017, CVS decided to pull out of
all Puerto Rico deals, subject to legal approval, when recommended
by senior management;" and (2) by late-June 2017, "CVS was taking
steps to extract itself from the [Ground Lease]." CPC Carolina
PR, LLC, 494 F. Supp. 3d at 148–49. We mention these factual
findings not because we review them here (we have no occasion to
do so as the district court's decision in that case was not
appealed to us and the parties in these consolidated appeals did
not raise these facts in their statements of undisputed facts).
Rather, we mention these factual findings as a general heads-up to
the reader that the Sellers make some arguments down the line which
rely upon these findings.
- 22 -
and dismissing the consolidated cases. More specifically, as to
CPC, the district court concluded that the Sellers could not raise
negligence claims against CPC because a valid contract existed
between them and their claims against CPC arose exclusively out of
the Agreements. And, as to CVS, the district court concluded that
the Sellers' lawsuits were too little, too late because their
negligence claims were time-barred by the relevant statute of
limitations.
The Sellers (as the reader might have guessed by now)
timely appealed their summary-judgment loss.
THE MAIN ACT
Up top we gave a sneak peek as to this story's end --
namely, with an affirmance of the district court's judgment in
favor of CPC and CVS. Our resolution of the issues on appeal
follows and explains how our story reaches that particular end.
We first, however, make a brief pitstop to explain our standard of
review.
Chapter 10: Standard of Review
We review the district court's summary-judgment decision
de novo, which, for those unfamiliar with Latin, simply means that
we give the decision a completely fresh look. Delgado-Caraballo
v. Hosp. Pavía Hato Rey, Inc., 889 F.3d 30, 34 (1st Cir. 2018).
In doing so, we "ask[] whether the summary-judgment winners (here,
[CPC and CVS]) are entitled to judgment as a matter of law because
- 23 -
there is no genuine dispute as to any material fact -- even after
taking all facts and inferences in the light most flattering to
the summary-judgment losers (here, [the Sellers])," as the parties
responding to the motions for summary judgment. Id. at 34–35
(internal citations and quotation marks omitted). A genuine
dispute is one where "the evidence is such that a reasonable jury
could resolve the point in the favor of the non-moving party," and
a material fact is, as the name suggests, a fact that "has the
potential of affecting the outcome of the case." Taite v.
Bridgewater State Univ., Bd. of Trs., 999 F.3d 86, 93 (1st Cir.
2021) (internal citations and quotation marks omitted). While CPC
and CVS have the initial burden as the moving parties, the Sellers
cannot just rest on their laurels, meaning that they must present
"specific facts showing that a trier of fact could reasonably find
in [their] favor." Johnson, 23 F.4th at 141 (citation and internal
quotation marks omitted). To do so, the Sellers must be careful
not to "rely on conclusory allegations, improbable inferences, and
unsupported speculation" -- all of which don't make the cut on
summary judgment. Id. (citation and internal quotation marks
omitted).
Chapter 11: CPC's Motions for Summary Judgment Against the
Sellers
With this standard of review at top of mind, we turn
first to CPC's motions for summary judgment against the Sellers.
- 24 -
As we previewed above, the Sellers raise various
negligence claims against CPC, all under Article 1802 of Puerto
Rico's Civil Code, 31 P.R. Laws Ann. § 5141. Article 1802 is
Puerto Rico's negligence statute and provides, in relevant part,
that "[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 P.R. Laws Ann. § 5141. And the Sellers contend
several of CPC's actions (which we'll describe in detail in just
a moment) amount to negligence that caused them damages. There
is, nevertheless, a small wrinkle in their plan, because, as CPC
points out, Article 1802 "does not apply in the context of a
commercial transaction," Isla Nena Air Servs. v. Cessna Aircraft
Co., 449 F.3d 85, 88 (1st Cir. 2006) (quoting Betancourt v. W.D.
Schock Corp., 907 F.2d 1251, 1255 (1st Cir. 1990)), and here there
is no dispute that the Sellers and CPC were involved in a
commercial transaction under the Agreements.
No matter, say the Sellers, because they have the Puerto
Rico Supreme Court's decision in Ramos Lozada v. Orientalist Rattan
Furniture Inc., 130 D.P.R. 712, 1992 WL 755597 (P.R. 1992), in
their back pocket, which they argue controls here. There, a
lessee's negligence resulted in a fire, which destroyed the leased
property. In an attempt to sidestep the one-year statute of
limitations under Article 1802, "[t]he lessor sued under a theory
of breach of contract (the lease agreement), which had a longer
- 25 -
statute of limitations," but the trial court applied Article 1802's
statute of limitations "because the lessor's theory was that the
fire was the result of the lessee's negligence" (making the claim
one based squarely on negligence and not contract) and dismissed
the lawsuit. Isla Nena Air Servs., 449 F.3d at 89–90.
The Puerto Rico Supreme Court was unconvinced, as it
held "that a claim for noncontractual damages resulting from the
breach of a contract lies if the act that caused the damage
constitutes a breach of the general duty not to injure anyone and,
at the same time, a breach of contract." Ramos Lozada, 130 D.P.R.
712, 1992 WL 755597. According to the Puerto Rico Supreme Court,
a plaintiff can choose whether to bring a contract-based or torts-
based lawsuit (but not both) if certain conditions were met:
1. The event that caused the damage must be,
at the same time, a breach of a contractual
obligation and a violation of the general duty
not to cause harm to another; that is, the
breach of a duty, abstractedly from the
contractual obligation that would arise even
if it had not existed.
2. The person aggrieved as a result of the
double (contractual and delictual) violation
must be the same person, that is, the
contractual creditor.
[. . .]
3. Finally, the double violation must also
have been committed by the same person, the
contractual debtor [. . . .] It is not a
matter of claiming two liabilities in any
case, but of choosing between actions that
pursue the same end.
- 26 -
Id.Put plainly, under Puerto Rico law, "[a] plaintiff may
bring a negligence claim based on a contractual relationship when
there is both an alleged breach of contract and an alleged breach
of the general duty not to negligently cause injury."19 Nieves
Domenech v. Dymax Corp., 952 F. Supp. 57, 65–66 (D.P.R. 1996)
(citing Ramos Lozada, 130 D.P.R. 712, 1992 WL 755597). Heeding
the Puerto Rico Supreme Court's warning, though, the general duty
not to negligently cause injury "must arise out of conditions
separate from the parties' contract," because "[i]f a plaintiff's
damages arise exclusively from a defendant's alleged breach of
contract, the plaintiff does not have a separate cause of action
for negligence." Id. at 66 (citing Ramos Lozada, 130 D.P.R. 712,
1992 WL 755597).
Applying Ramos Lozada here means that, to avoid a
summary-judgment loss, the Sellers must demonstrate that at least
one of CPC's alleged negligent actions here was (among other
things, but most relevant to our purposes today) a breach of the
general duty not to negligently cause harm or injury, and that any
such duty would have arisen even if the Agreements did not exist.
As we understand it, the Sellers argue CPC committed four negligent
We don't decide whether this is the only scenario in which
19
a plaintiff may bring a negligence claim.
- 27 -
acts that satisfy Ramos Lozada's requirements: (1) CPC induced
the Sellers into an impossible contract; (2) CPC failed to timely
take action to cancel the restrictive covenants or, alternatively,
cancel the Agreements, and therefore induced the Sellers into
believing the Closing would occur; (3) CPC required the Sellers to
prematurely vacate the Parcels, leaving them particularly
susceptible to vandalism; and (4) CPC told the Sellers there was
no need to safeguard the Parcels, as they would be demolished.20
We'll address each alleged act in turn.
Chapter 11.A: Inducing the Sellers into an Impossible Contract
In the minds of the Hamdallah/Nieves-Roman/Nieves-
Acevedo Sellers, they were induced by CPC into the Agreements,
which could never have come to fruition because of the restrictive
covenants (but nowhere do they explain how exactly CPC induced
them into the Agreements). This act of inducing them into the
Agreements -- the argument goes -- satisfies Ramos Lozada's
requirements and, therefore, summary judgment against them was
inappropriate.21 We can give this argument short shrift because
the record does not support the idea that CPC induced any of the
20 Atthe outset, we note that not every Seller properly raised
each of these acts in their briefing to us, which (as we will
discuss below) means that the Sellers who did not do so waive any
arguments regarding them.
21 The Cruz Marrero Sellers did not raise this argument in
their briefing to us and so we deem it waived as to them. United
States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
- 28 -
Sellers into the Agreements. To be sure, CPC did not enter the
picture until almost two years after the Agreements were signed
with KRB (because KRB later assigned its rights under the
Agreements to CPC),22 and no facts suggest that CPC was involved
in the original negotiations between the Sellers and KRB.
Chapter 11.B: Failing to Cancel the Restrictive Covenants
and/or the Agreements
The second alleged negligent act requires a bit more
analysis. The Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers seem
to argue that CPC failed to timely address the restrictive
covenants, either by having them fully cancelled or by cancelling
the Agreements altogether. Despite knowing about the existence of
these restrictive covenants and their potential effect on CVS's
planned use of the land, CPC did nothing to address the deed
restrictions and induced the Hamdallah/Nieves-Roman/Nieves-
Acevedo Sellers into believing that the Closing would (and indeed
could) occur, in spite of them. According to them, CPC's failure
"to cancel the covenants, or, if not possible or practicable,
There's also not even a whiff of an argument in the
22
Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers' briefing that KRB
tortiously induced them into the Agreements and that CPC was
somehow in privity with KRB or its successor in interest, such
that any actions taken by KRB should be ascribed to CPC.
- 29 -
timely desist[] of the project" satisfies Ramos Lozada's
requirements.23 We don't see it that way, and here's why.
Even were we to assume that CPC's failure to timely
cancel the restrictive covenants and/or the Agreements constituted
a breach of duty, we are left puzzled as to how this duty and its
breach "would [have] arise[n] even if [the Agreements] had not
existed." Ramos Lozada, 130 D.P.R. 712, 1992 WL 755597. Indeed,
without the Agreements, CPC would have had no connection or
obligations whatsoever to the Parcels or the Sellers. In the same
vein, we are left equally puzzled as to how the Hamdallah/Nieves-
Roman/Nieves-Acevedo Sellers would have suffered damages based on
the title defects without the Agreements. See Isla Nena Air
Servs., 449 F.3d at 90–91 (concluding Ramos Lozada did not apply
because "the damages would not have occurred without the existence
of a contract"); Nieves Domenech, 952 F. Supp. at 66 ("If a
plaintiff's damages arise exclusively from a defendant's alleged
breach of contract, the plaintiff does not have a separate cause
of action for negligence."). And without any argumentation from
the Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers on this point,24
23 As before, the Cruz Marrero Sellers did not raise this
argument in their briefing to us and so we deem it waived as to
them.
24 The only argumentation the Hamdallah/Nieves-Roman/Nieves-
Acevedo Sellers make as to this particular Ramos Lozada requirement
is in reference to CPC's alleged inducement of the Sellers into
- 30 -
we simply cannot conclude that CPC's alleged failure to timely
cancel the restrictive covenants and/or the Agreements satisfies
Ramos Lozada's requirements.
Chapter 11.C: Requiring the Sellers to Vacate the Parcels
Prematurely
Third in line for our review is the Sellers' contention
that CPC allegedly forced them to prematurely vacate the Parcels,
leaving them at a heightened risk for vandalism. And here's the
rundown of that argument from the Sellers' point-of-view: Rivera
required that the Sellers vacate the Parcels in April 2017 for a
May 2017 Closing that would never occur; this request to
prematurely vacate the Parcels violated Section 5 of the
Agreements, which required that possession of the Parcels be
delivered at Closing free of occupants and equipment; and by
complying with CPC's request to vacate and leave the Parcels
vacant, they became prone to vandalism. We find, though, that the
Sellers' view of these events and their theory of CPC's negligence
are completely belied by the record.
To start off, there is no support in the record for the
proposition that Rivera "require[d] that the [S]ellers physically
vacate the property together with their furnishings and
belongings, [two months] in advance of the [C]losing." While it
the Agreements and to CPC's alleged requiring of the Sellers to
vacate the Parcels prematurely.
- 31 -
is true that she sent a letter on April 17, 2017 requesting that
the Sellers vacate the Parcels, the letter stated explicitly that
this was to be done "by or before May 19th," the anticipated date,
at that time, that the Closing would occur. This letter hardly
required the Sellers to vacate the Parcels "two months prior" to
the Closing. The same is true for the letter Rivera sent on May
16, 2017 moving the Closing to sometime between May 31 and June 5,
2017, because that letter similarly required that the Sellers
vacate the Parcels "by or before May 31st."
The Sellers also say that Rivera's request to
prematurely vacate the Parcels resulted in "the entire block
bec[oming] vacant at the same time" and becoming "besieged by
vandalism, squatters, and theft of fixtures, among others." As we
noted above, however, the block did not become vacant at the same
time because the Nieves-Roman/Nieves-Acevedo Sellers did not end
up vacating their Parcels until mid-August 2017.
Neither does the record support the Sellers' theory that
CPC acted tortiously when it directed them to vacate their Parcels
for a Closing that never happened. As the Sellers tell it, CPC
knew or should have known that an eventual Closing would be
impossible given the existence of the restrictive covenants. By
failing to communicate this detail to the Sellers and requiring
them to vacate their Parcels regardless, CPC negligently
- 32 -
misrepresented relevant information on which the Sellers relied to
their detriment.
But regardless of whether this theory of harm satisfies
the Ramos Lozada requirements, there are several, record-related
problems in the Sellers' theory, to which they seem to be turning
a blind eye. While the evidence shows that CPC knew CVS may not
be able to obtain satisfactory title insurance because of the
restrictive covenants, it does not indicate that CPC knew with
absolute certainty that a Closing would not take place, when it
requested that the Sellers vacate their Parcels. Rivera, for
example, testified that even after the August 25, 2017 Letter
explaining to the Sellers that CVS was definitively out of the
deal, CPC "[was] trying to, you know, w[eigh] [its] options. You
know, they still want to close." Similarly, when CPC filed the
Lead Case a year later, one of the remedies it sought was specific
performance of the Ground Lease, which also would have resulted in
a successful Closing.
This all means that the Sellers cannot demonstrate that
CPC misrepresented any relevant information to them when it
directed them at various points throughout the summer of 2017 to
vacate their Parcels in anticipation of the Closing that CPC always
thought would occur. As far as the record shows, CPC was still
hopeful that the Closing would take place. It therefore did not
violate any duty of care owed to the Sellers when it, in accordance
- 33 -
with the terms of the Agreements, instructed them to vacate their
Parcels ahead of the anticipated Closing date(s). And in the
absence of any factual support, the Sellers' theory fails.
Chapter 11.D: Telling the Sellers Security Was Unnecessary
Not to be outdone, the Cruz Marrero Sellers have one
more argument. They argue that, under Ramos Lozada, they have a
valid negligence claim because, in June 2017, CPC "induced [the
Cruz Marrero Sellers] [in]to believ[ing] that they had no need to
physically safeguard [their Parcel]," when Rivera told the
Hamdallah Seller that there was no need to safeguard the Parcels
because all the structures were to be razed.25 Color us unpersuaded
for several reasons.
First, the record does not support the proposition that
Rivera induced the Cruz Marrero Sellers into deciding not to
physically safeguard their Parcel. As an initial matter, the
Hamdallah Seller (not the Cruz Marrero Sellers) made the request
in June 2017 to Rivera for the security guard. Nothing in the
record suggests that the Cruz Marrero Sellers also made a similar
request, that they were present when the Hamdallah Seller made her
25 While the Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers
mention the Hamdallah Seller's request for a security guard in the
procedural history and facts section of their opening brief, they
offer no actual argumentation on this point, which means it is
waived as to them. Zannino, 895 F.2d at 17. In their reply brief,
they offer some argumentation but, as we've said time and time
again, "arguments not made in an opening brief on appeal are deemed
waived." Brox v. Hole, 83 F.4th 87, 97 n.2 (1st Cir. 2023).
- 34 -
request, that the Hamdallah Seller informed them of Rivera's
response, or that the Cruz Marrero Sellers changed their behavior
in any way in reliance on Rivera's statement. Indeed, the
Hamdallah Seller's request to Rivera is not even mentioned in
either of the Cruz Marrero Sellers' statements of undisputed
material facts. This all makes good sense because another record
dig on our part shows that the only Parcel that was vandalized in
June 2017 was the Hamdallah Seller's. Per their own admission,
the Cruz Marrero Sellers' Parcel was not vandalized until sometime
after mid-August 2017.
Second, even if there was adequate record support for
the Cruz Marrero Sellers' version of events, their argument fails
on the merits. Nowhere in their opening brief do they explain in
any way how Rivera's actions here satisfy Ramos Lozada's
requirement that the duty not to cause harm would have arisen even
if the Agreements had not existed. At this stage in litigation,
we cannot simply rely on the Cruz Marrero Sellers' nebulous say-
so and the lack of actual evidence means that their negligence
claim cannot proceed.
To sum up, the Sellers collectively proffer several
alleged negligent acts on CPC's part, but they either lack record
support, do not meet Ramos Lozada's requirements, or both.
- 35 -
Accordingly, the district court was right to grant CPC's motions
for summary judgment against the Sellers.26
Chapter 12: CVS's Motions for Summary Judgment Against the
Sellers
And with that, this story reaches its final chapter,
where we address CVS's motions for summary judgment against the
Sellers.
As they did with CPC, the Sellers raise Article-1802
negligence claims against CVS, but their theories of negligence
differ somewhat from those they proposed against CPC. While not
a beacon of clarity, the Sellers appear to renew the two theories
of CVS's negligence that they raised below: (1) CVS acted
negligently when it removed the transformer and placed signage at
the Parcels, leaving the Parcels particularly vulnerable to
vandalism; and (2) CVS acted negligently by failing to terminate
the Ground Lease upon learning of the restrictive covenants and by
There's one stray argument left for us to address before
26
turning to CVS's motions for summary judgment against the Sellers.
The Sellers take issue with certain statements made by the district
court in granting summary judgment to CPC. Specifically, the
district court stated that "[w]hile a close call, the Sellers'
arguments are misplaced: their tort claims fail against CPC . . .
because the damages are, ultimately, a result of the failure of
the parties to Close under the Agreements." (emphasis ours).
According to the Sellers, the "while a close call" statement and
others like it suggest that the district court improperly engaged
in credibility determinations and did not otherwise follow the
proper summary judgment standard. We don't agree that the district
court erred in this way but, even if it did, our review is de novo
and we employ the correct summary judgment standard.
- 36 -
waiting until August 2017 to refuse to accept possession of the
Parcels, thereby inducing the Sellers into believing the Closing
would occur and into vacating the Parcels. CVS argues that the
Sellers' theories fail on multiple grounds, but we need not address
all of them. Rather, as we will show, resolution of the Sellers'
claims against CVS depends entirely on whether the Sellers
satisfied Article 1802's one-year statute of limitations. Tokyo
Marine & Fire Ins. Co. v. Perez & Cia. de P.R., Inc., 142 F.3d 1,
3 (1st Cir. 1998) ("Tort claims under [A]rticle 1802 are subject
to the one-year statute of limitations provided by [A]rticle
1868(2) of the Civil Code." (citing 31 P.R. Laws Ann. § 5298(2))).
(Hint, hint, they did not.)
Let's start by laying out the appropriate framework for
this statute-of-limitations analysis. Under Puerto Rico law, this
one-year clock starts ticking when the injured party has knowledge
"of the injury and of the likely identity of the tortfeasor." Id.
And two types of knowledge can trigger the ticking of the clock:
actual knowledge and deemed knowledge. Alejandro-Ortiz v. P.R.
Elec. Power Auth., 756 F.3d 23, 27 (1st Cir. 2014). Actual
knowledge is rather self-explanatory. It "occurs when a plaintiff
is aware of all the necessary facts and the existence of a
likelihood of a legal cause of action." Id. (citation and internal
quotation marks omitted).
- 37 -
Deemed knowledge, on the other hand, requires a bit more
explanation. It is "an objective inquiry where the plaintiff,
while not having actual knowledge, is deemed to be on notice of
her cause of action if she is aware of certain facts that, with
the exercise of due diligence, should lead her to acquire actual
knowledge of her cause of action." Id. Under this "deemed
knowledge" standard, "[o]nce a plaintiff is made aware of facts
sufficient to put her on notice that she has a potential tort
claim, she must pursue that claim with reasonable diligence, or
risk being held to have relinquished her right to pursue it later,
after the limitation period has run." Rodríguez-Surís v.
Montesinos, 123 F.3d 10, 16 (1st Cir. 1997). "In other words, the
statute of limitations begins running at the time a reasonably
diligent person would discover sufficient facts to allow her to
realize that she'd been injured and to identify the party
responsible for that injury. The rationale being, of course, that
once a plaintiff comes into such knowledge, she can file suit
against the tortfeasor." Rivera-Carrasquillo v. Centro Ecuestre
Madrigal, Inc., 812 F.3d 213, 216 (1st Cir. 2016).
Reasonable diligence "is usually a jury question
. . . so long as the outcome is within the range where reasonable
men and women can differ." Villarini-Garcia v. Hosp. del Maestro,
8 F.3d 81, 86-87 (1st Cir. 1993) (internal citations and quotation
marks omitted). That's not necessarily always the case, though,
- 38 -
because the court may "determin[e] that the evidence of record is
so one-sided as to compel a finding . . . that the plaintiff was
aware of enough facts to constitute notice and to satisfy the
deemed knowledge rule of the Puerto Rico law of limitation of tort
actions." Rodríguez-Surís, 123 F.3d at 14.
Putting everything together, this all means that the
one-year statute of limitations begins to run "when the injured
party knew or should have known of the injury and of the likely
identity of the tortfeasor." Tokyo Marine & Fire Ins. Co., 142
F.3d at 3 (emphasis ours). And, normally, the burden of a statute-
of-limitations defense lies with the defendant. Rivera-
Carrasquillo, 812 F.3d at 216. But that normal burden allocation
goes out the window and shifts to the plaintiff when they "sue[]
more than one year after the date of injury." Id. "If this burden
is not met the statute of limitations will then start to run from
the day of the injury regardless of whether or not there is actual
knowledge." Fragoso de Conway v. Lopez, 794 F. Supp. 49, 51
(D.P.R. 1992), aff'd, 991 F.2d 878 (1st Cir. 1993).
Applying this statute-of-limitations framework to the
facts here, there are a few things that are clear right out of the
gate. First, we know that the injuries caused by CVS's alleged
negligence all occurred by the end of summer 2017: (1) the
transformer was removed in June; (2) the signage was posted by
- 39 -
Sanchez at some point before August;27 and (3) CVS backed out of
the Ground Lease because of the restrictive covenants and
unsatisfactory insurance policy in August. Second, the
Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers initiated their
lawsuits on April 1, 2019 and the Cruz Marrero Sellers initiated
theirs on August 13, 2019. And third, because all the Sellers
sued more than one year after the end of August 2017, they "bear[]
the burden of proving that [they] lacked the requisite knowledge
at the relevant times." Rivera-Carrasquillo, 812 F.3d at 216(citation and internal quotation marks omitted).
So, in light of all this, the operative question is
whether the Sellers can shoulder their burden that they did not
have the requisite knowledge of their injuries and CVS's identity
prior to one year before they filed their lawsuits. CVS argues
that the Sellers cannot meet their burden because they received
actual or deemed knowledge of their injuries and CVS's identity
through Rivera's August 25, 2017 Letter -- an argument which the
district court accepted. Upon review of the record and the
parties' arguments, we agree with CVS and the district court.
A simple onceover of the August 25, 2017 Letter (which
all the Sellers concede they received) explains why. That letter
The vandalism, which, in the Sellers' minds, was caused in
27
part by the removal of the transformer and the posting of the
signage, also occurred in the summer of 2017.
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informed the Sellers that (1) CVS backed out of the Ground Lease
and refused to grant an extension to CPC to deal with the
restrictive-covenants issue:
CVS notified that it would not be issuing the
lease agreement, nor accepting delivery of the
[Parcels], because it was not satisfied with
the lease insurance policy that it would
receive from its insurer at [C]losing, which
had excluded the restrictive conditions from
the coverage. . . . [W]e requested in good
faith that the date for [C]losing on and
delivering the [Parcels] be extended to give
CVS time to review the matter, a request they
refused;
(2) CVS knew of the restrictive covenants for years and did nothing
about them:
CVS informed us that it needed time to review
an issue related to restrictive conditions
affecting the [Parcels] in the Registry. They
knew that these conditions had affected the
[Parcels] since [they were] developed in 1964
and that all the title searches reviewed and
approved by CVS reflected the same. These
restrictive conditions were never a matter of
concern for CVS, which had plenty of time to
inform us since signing the [Ground Lease] in
2015 if they had been concerned about them;
and (3) CPC and CVS had accused each other of breaches of contract
and CPC was contemplating initiating a lawsuit against CVS:
We had no other option than to notify CVS of
its breach of contract on August 17. On August
22, 2017, CVS replied that it was my client
and not CVS that had breached the [Ground
Lease] by not "purchasing and trying to
deliver" the [Parcels]. . . . My client is
exploring all options at this time, including
hiring litigation attorneys to handle the
matter from now on.
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Accordingly, by August 25, 2017, the Sellers had knowledge that,
as far as CVS was concerned, the deal was dead. And because the
Agreements required "tenant [(i.e., CVS)] approval" -- a
requirement of which the Sellers were aware -- CPC was not
obligated to close on the Parcels.
This necessarily means that the Sellers had actual
knowledge by August 25, 2017 of both their theories of CVS's
alleged negligence. Take first the Sellers' theory of negligence
regarding the transformer and signage and their alleged
contribution to the vandalism of the Parcels. The Sellers knew
that the transformer was removed in June 2017; that Sanchez, CVS's
outside engineer, posted the signage by August 2017; and that the
Parcels had all been vandalized by late August 2017. Therefore,
when CVS backed out of the deal, and the Sellers were informed of
this on August 25, 2017, they were necessarily informed that they
would now have to shoulder the responsibility for any damage to
the Parcels and that CVS was the blame-worthy culprit.
The Sellers argue that they did not have actual knowledge
that CVS was responsible for the transformer's removal until May
26, 2018, when the Nieves-Acevedo Sellers, through their
electrician, contacted the AEE to reinstall the power to the
Parcels -- a fact with which the district court agreed. That's a
fair point, and the record supports it. However, the Sellers at
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least had deemed knowledge that CVS was at fault for the removal
of the transformer. Remember, deemed knowledge requires
reasonable due diligence on the Sellers' part and reasonable due
diligence means "reasonable, active efforts to seek answers and
clarify doubts." Est. of Alicano Ayala v. Philip Morris, Inc.,
263 F. Supp. 2d 311, 317 (D.P.R. 2003). Here, the Sellers made no
active efforts to clarify who removed the transformer (and recall
it's their burden). Rather, the record shows that they made no
effort to identify the culprit, as the Nieves-Acevedo Sellers
simply asked their electrician to contact the AEE to reinstall the
power, not to identify who removed the transformer to begin with.
Moreover, this is a scenario where minimal efforts would have
revealed the culprit. As the record shows, a call to the AEE would
have sufficed. Such "[f]ailure to . . . conduct . . . investigative
efforts constitutes lack of diligence." Id.Take second the Sellers' theory of negligence regarding
CVS's failure to terminate the Ground Lease upon learning of the
restrictive covenants. The August 25, 2017 Letter explicitly gave
the Sellers actual knowledge of this potential claim for
negligence, as it stated that CVS "knew that these [restrictive
covenants] had affected the [Parcels] since [they were] developed
in 1964 and that all the title searches reviewed and approved by
CVS reflected the same" and that "[t]hese restrictive conditions
were never a matter of concern for CVS, which had plenty of time
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to inform us since signing the [Ground Lease] in 2015 if they had
been concerned about them."
Even assuming that the August 25, 2017 Letter did not
give the Sellers actual knowledge of CVS's alleged negligence
(though such an assumption is hard to square), the Letter gave
them, at minimum, deemed knowledge. To explain, while the Sellers
emphasize that the August 25, 2017 Letter stated at the very end
that "[a]s soon as we have more news, we will inform you," which
the Sellers contend created doubt in their minds as to whether the
deal was dead-dead, the August 25, 2017 Letter at least gave the
clear and distinct impression that CVS had decided not to move
forward and, therefore, "create[d] a reasonable basis for concern
about negligence." Id. (citation and internal quotation marks
omitted). Saddled with these blaring doubts regarding CVS's
decision, it was on the Sellers to make "reasonable, active efforts
to seek answers and clarify doubts" from CVS, the alleged
tortfeasor. Id. Yet, at no point did any of the Sellers make any
attempt to contact CVS directly after receiving the August 25,
2017 Letter.28 Therefore, the Sellers had actual or deemed
knowledge of CVS's alleged negligence by August 25, 2017.
Resisting this conclusion, the Sellers offer two primary
counterarguments -- neither of which prove persuasive. First up,
Nothing in the Agreements
28 prevented the Sellers from
contacting CVS directly.
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they argue that the statute of limitations was tolled in this case
because of Rivera's post-August-25 statements to the Sellers,
allegedly assuring them that the Closing would still occur. It is
true that "[w]here the tortfeasor, by way of assurances and
representations, persuades the plaintiff to refrain from filing
suit, or otherwise conceals from the plaintiff the facts necessary
for her to acquire knowledge, the statute of limitations will be
tolled." Alejandro-Ortiz, 756 F.3d at 27 (emphasis ours). But
the statements the Sellers point to weren't made by CVS; they were
made by CPC. And "only the assurances of the tortfeasor, and not
those of a third party, . . . can lead to such tolling."29 Rivera-
Carrasquillo, 812 F.3d at 216 n.3 (citation and internal quotation
marks omitted). Without any statements made by CVS, the Sellers
cannot claim assurances tolled the one-year clock.30
29 The Sellers point to our decision in Rodríguez-Surís for
the proposition that third-party statements can toll the statute
of limitations. That's not correct. There, we stated that
"representations made by third-party doctors constitute another
factor to consider in determining whether a plaintiff's continued
reliance upon the reassurances of a tortfeasor is reasonable."
Rodríguez-Surís, 123 F.3d at 17. As such, third-party assurances
are only relevant where the tortfeasor also made assurances, which
is not the case here.
30In a last-ditch effort on the assurances front, the Sellers
point to three pieces of evidence allegedly ignored by the district
court: (1) "prior correspondence from CPC to CVS, which suggests
that CPC's decision to refrain from purchasing the [S]ellers'
[Parcels] was anything but final;" (2) the fact that "CVS's Escrow
Agent was instructed to hold and refrain from releasing the
$300,000.00 held in escrow, which likewise creates the expectation
that the deal could possibly proceed at a future time;" and (3)
the Municipality also seemed to think the Closing was still on,
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And even if CPC's assurances were legally relevant
(they're not), the Sellers' reliance on those assurances must have
been reasonable and there's good reason to believe that any such
reliance stopped being reasonable by the end of 2017. Rodríguez-
Surís, 123 F.3d at 17 ("The reliance [on assurances], however,
must be reasonable."). The Agreements, as we discussed above,
required that the Closing occur within 30 days of the end of the
Inspection Period. Over the many years of the Sellers' contractual
relationship with CPC, the Inspection Period was extended several
times either before its expiration or within a few days of its
expiration, ostensibly in order for the parties to have more time
to close on the Parcels in accordance with the Agreements' terms.
The final extension of the Inspection Period extended it to October
30, 2017, but that date (plus thirty days) passed with no further
extension. As such, the Agreements' own terms and the parties'
usual course of dealing should have made it apparent to the Sellers
that the Closing was off (or at least that there was a high
probability that the Closing was off), despite CPC's months-old
assurances to the contrary.
because it reached out to CPC seeking clarification on the status
of the Closing. The problem is, though, the Sellers point to no
evidence that they were aware of either the correspondence or the
instructions to the Escrow Agent. And as for the Municipality's
expectations, that argument fails because any expectation the
Municipality might have had was generated by CPC, not by CVS.
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Moving onto the Sellers' second counterargument. They
contend next that their extrajudicial claim letters sent to CPC
tolled the statute of limitations as to CVS. Puerto Rico law does
allow for the tolling of the statute of limitations "by making an
extrajudicial claim." Alejandro-Ortiz, 756 F.3d at 29. That
extrajudicial claim, though, must be made to each joint tortfeasor,
because "the statute of limitations must be tolled separately for
each joint tortfeasor." Rivera-Carrasquillo, 812 F.3d at 217 n.4
(quoting Fraguada-Bonilla v. Hosp. Aux. Mutuo, 186 D.P.R. 365, 389
(P.R. 2012)). Here, the Sellers' extrajudicial claim letters were
only sent to CPC,31 not CVS. So, normally, the Sellers would be
out of luck.
There is, however, an exception to this rule, upon which
the Sellers attempt to rely. If there is "perfect solidarity"
between the joint tortfeasors, "tolling as to one co-tortfeasor
[such as through an extrajudicial claim] will toll [the statute of
limitations] as to the rest." Calderón Amézquita v. Rivera-Cruz,
483 F. Supp. 3d 89, 106 (D.P.R. 2020) (citation omitted). Perfect
solidarity sounds complicated, but it simply refers to
circumstances where "several persons [are] joined by a common
interest, [and] have frequent relations among themselves or know
31 The fact that the Sellers all sent CPC an extrajudicial
claim letter is why CPC, unlike CVS, did not have a statute-of-
limitations defense.
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each other." Id. (citation omitted). Courts have commonly found
perfect solidarity in certain relationships where a party is
vicariously liable for the acts of another, such as the employer-
employee, hospital-physician, or insurer-insured relationship.
See, e.g., Cruz Cedeño v. HIMA San Pablo Bayamón, No. 19-1477
(CVR), 2022 WL 17541923, at *4 (D.P.R. Dec. 7, 2022) ("The Puerto
Rico Supreme Court held that there is perfect solidarity between
joint tortfeasors who operate under an employer-employee
relationship because that relationship is 'about a liability
imposed on the principal based on the relationship he has with the
tortfeasor of the damage.'" (quoting Pérez-Hernández v. Lares Med.
Ctr., Inc., 207 D.P.R. 965, 984 (P.R. 2011))); Calderón Amézquita,
483 F. Supp. 3d at 106 (noting that "[s]everal judges in this
District have held that a perfect solidarity obligation arises in
medical malpractice cases where a hospital and physician are
jointly liable for a physician's negligent care pursuant to
[A]rticle 1803's vicarious liability doctrine" (citations and
internal quotation marks omitted)); Rivera-Carrasquillo v. Centro
Ecuestre Madrigal, Inc., No. 3:12-01862 (JAF), 2016 WL 1642627, *6
(D.P.R. Apr. 25, 2016) (noting that insurers are "solidarily liable
for the acts of the insured" and "share perfect solidarity" with
their insureds (citation and internal quotation omitted)). By
contrast, "imperfect solidarity" refers to "relationship[s] [that
are] merely accidental or sporadic, and the statute of limitations
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must be tolled as to each individual co-tortfeasor." Calderón
Amézquita, 483 F. Supp. 3d at 106.
As their final Hail Mary, the Sellers argue that perfect
solidarity existed between CPC and CVS because they shared a common
interest by virtue of the Ground Lease. Accordingly, the Sellers'
extrajudicial claim letters to CPC -- the argument goes -- tolled
the one-year clock as to CVS. We don't buy this argument for a
few reasons.
To start, there is no vicarious liability between CPC
and CVS and they never agreed to be jointly liable as to any
damages to the Sellers. This is important because, "pursuant to
Puerto Rico law, the Court must generally assume that the
relationship between the parties to an agreement is not of the
joint and several type." Tonge v. Drs.' Ctr. Hosp., San Juan,
Inc., 531 F. Supp. 3d 491, 500–01 (D.P.R. 2021) (citation omitted).
What's more, even taking the Sellers' shared-interest theory head
on, it leaves a bit to be desired.
Other than the Ground Lease, the only evidence the
Sellers rely upon to demonstrate CPC's and CVS's "frequent
relations" is one sentence in a letter from Rivera to CVS,
referring to "a prior CVS deal between affiliates of [CPC] and
[CVS]." But this sentence doesn't even identify when this deal
took place or what the nature of the deal was. Moreover, this
prior deal was not even between CPC and CVS, but rather between
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their affiliates. Additionally, to the extent CPC's and CVS's
lessor-lessee relationship can constitute perfect solidarity, CVS
never actually ended up leasing the Parcels because it determined
the Parcels did not satisfy the conditions precedent.
Significantly, the Sellers' only theory of perfect
solidarity (as we understand it) is that CPC and CVS shared a
common interest through the Ground Lease -- the argument being
that they shared a common goal of wanting the real estate
transaction to come to fruition. But this theory is belied by the
Sellers' briefing and remaining arguments. Elsewhere in the
Sellers' briefing, they urge us to remember that the district
court, in adjudicating CPC's and CVS's cross-motions for summary
judgment, made several factual findings that support their
contention that CVS acted tortiously towards them. These facts
relate to CVS's alleged behind-the-scenes efforts to extricate
itself, as early as 2015, from contracts based in Puerto Rico,
including the Ground Lease. Therefore, CPC and CVS did not even
share a common interest by virtue of the Ground Lease, because, by
the Sellers' own arguments, CVS had no plans to carry out the
contract. And with that, the Sellers have not met their burden of
demonstrating perfect solidarity between CPC and CVS.
In sum, having found that the Sellers had actual or
deemed knowledge of their injuries and CVS's identity by August
25, 2017, and having parried all of their counterarguments as to
- 50 -
tolling, we conclude their lawsuit as to CVS was filed too
late and summary judgment in CVS's favor was appropriate. 32
EPILOGUE
At long last, our story has reached its end,
resulting in a summary-judgment loss for the Sellers. We
recognize that this is not the fairy-tale ending for which the
Sellers yearned; their Parcels have been damaged and they have
little recourse to make them whole. Nevertheless, because we
conclude that the district court reached the right outcome,
we must affirm, with the parties to bear their own costs. 33
FIN
32 Two more stray points that need to be addressed. First,
as previewed above, the Hamdallah/Nieves-Roman/Nieves-Acevedo
Sellers argue that many of the facts found by the district court
in its decision on CPC's and CVS's cross-motions for summary
judgment preclude us from ruling for CVS now. Because the district
court found CVS was attempting to extricate itself from the Ground
Lease, the Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers contend
CVS made misrepresentations to them as to its intent to move
forward with the Ground Lease and acquisition of the Parcels. None
of the facts found by the district court, however, change our
statute-of-limitations analysis. Moreover, nowhere do the
Hamdallah/Nieves-Roman/Nieves-Acevedo Sellers try to explain (and
recall, it is their burden) how the one-year clock does not bar
this misrepresentation theory.
Second, the Cruz Marrero Sellers raise to us a tortious
interference claim against CVS, which they did not raise to the
district court. As always, that means this claim is waived. See
Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Flanders-Borden, 11
F.4th 12, 20 (1st Cir. 2021).
33 One final note before we part. The Hamdallah/Nieves-
Roman/Nieves-Acevedo Sellers raise a litany of material facts,
which they think the district court ignored and which they think
preclude summary judgment as to both CPC and CVS. We see no
evidence of that, but, to the extent the district court overlooked
any of these facts, our review as always is de novo and we have
considered the record as a whole (including the aforementioned
material facts).
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