494 F.Supp.3d 144
D.P.R.2020Background
- CPC Carolina acquired rights to purchase assembled parcels to lease to CVS under a March 30, 2015 Ground Lease; Section 2.1(e) required CVS to receive a satisfactory leasehold title insurance policy and a recordable Deed of Constitution of Lease before accepting possession.
- CPC’s inability to timely close was caused by a third party seller’s undisclosed minor‑title issue; CPC asked for extensions but CVS refused further extensions and issued cure/default notices in July 2017.
- On August 16, 2017 (end of the cure period), CVS counsel Kristine Donabedian told CPC counsel Will Lovell CVS would not accept possession without the satisfactory title policy and a recordable deed; CPC viewed this as CVS abandoning the lease and suspended seller closings.
- CVS personnel contemporaneously exchanged emails indicating a decision to terminate the deal and to stop proceeding with vendors and construction.
- CPC sued CVS for declaratory relief, specific performance, breach/anticipatory repudiation, tort (Art. 1802), estoppel (doctrina de actos propios), unjust enrichment, and fees; CVS counterclaimed for breach of the Ground Lease.
- The court denied cross‑motions for summary judgment on the core breach/anticipatory repudiation disputes (finding genuine issues of fact), but granted CVS summary judgment on CPC’s Article 1802, doctrina de actos propios, and unjust enrichment claims, dismissing those counts.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether CVS anticipatorily repudiated the Ground Lease on Aug 16, 2017 | Donabedian’s statement that CVS would not accept possession amounted to an unequivocal intent not to perform (anticipatory breach) | The statement merely invoked lease conditions; CVS was entitled to refuse possession until the title policy and recordable deed conditions were satisfied | Denied summary judgment to both sides—genuine dispute of material fact whether words/conduct constituted anticipatory repudiation; claim proceeds to bench trial |
| Whether CPC breached (failed to deliver possession) supporting CVS counterclaim | CPC: deed was recordable and conditions could be met; closing was set so CPC did not breach | CVS: CPC failed to acquire required parcels and did not satisfy Section 2.1(e) conditions | Denied summary judgment to both—factual disputes about delivery/conditions preclude resolution on papers |
| Whether CPC may recover under Article 1802 (tort/negligence) | CPC: CVS’s anticipatory breach caused tortious injury and damages | CVS: CPC’s alleged harms arise solely from contractual breach, so Article 1802 does not apply in commercial transactions | Article 1802 claim DISMISSED—Plaintiff's damages arise exclusively from contract, no separate tort duty shown |
| Whether estoppel (doctrina de actos propios) and unjust enrichment apply | CPC: CVS waived rights/should be estopped; alternatively unjust enrichment relief | CVS: Contract governs parties’ rights; equitable doctrines and unjust enrichment inapplicable where contract covers dispute | Both doctrines DISMISSED—contractual scheme governs; unjust enrichment inapplicable when a contract controls |
Key Cases Cited
- Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5 (1st Cir. 1990) (summary judgment: genuine dispute requires trial when evidence permits reasonable factfinder to favor either party)
- Mulvihill v. Top-Flite Golf Co., 335 F.3d 15 (1st Cir. 2003) (allocating burden on nonmovant to produce specific facts to defeat summary judgment)
- Cherkaoui v. City of Quincy, 877 F.3d 14 (1st Cir. 2017) (definition of material facts in summary judgment context)
- Isla Nena Air Servs., Inc. v. Cessna Aircraft Co., 449 F.3d 85 (1st Cir. 2006) (Article 1802 generally does not apply in commercial transactions)
- Linares-Acevedo v. Acevedo, 38 F. Supp. 3d 222 (D.P.R. 2014) (dismissing Article 1802 claim where alleged injuries arise from breach of contract)
- Burk v. Paulen, 100 F. Supp. 3d 126 (D.P.R. 2015) (Article 1802 applies only where a duty independent of contract is alleged)
- Puerto Rico Tel. Co. v. SprintCom, Inc., 662 F.3d 74 (1st Cir. 2011) (unjust enrichment doctrine unavailable where a contract governs the dispute)