Padilla Rosa, Efrain v. Velez Morales, Carmen
KLAN202401044
| Tribunal De Apelaciones De Pue... | May 8, 2025Background
- The dispute arose from an attempted joint venture to operate a Taco Maker franchise in Hatillo, Puerto Rico, through the LLC "Velz & Pad Group, LLC" composed of Efraín Padilla Rosa (plaintiff/appellant) and defendants Carmen L. Vélez Morales and Arleen Rivera Vélez.
- The parties agreed verbally to each contribute funds; Padilla Rosa claimed he invested $167,212.32 and sought the defendants’ matching investment, plus additional damages.
- Defendants asserted their contribution was conditional on securing a commercial loan, for which they needed Padilla Rosa's financial statements; these were allegedly never provided.
- The franchise and lease agreements were cancelled when the company failed to secure financing, leading to the dissolution suit and claims for damages by both sides.
- At trial, most evidence was oral testimony with limited documentation; the trial court found Padilla Rosa's testimony not credible and insufficient to prove his investment or entitlement to damages.
- All claims (including crossclaims and third-party complaints) were dismissed; Padilla Rosa appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Responsibility for Investment | Defendants liable for not matching investment as agreed. | Contribution was conditional on commercial loan, thwarted by plaintiff’s inaction. | Defendants not responsible; loan was never obtained due to lack of plaintiff's financials. |
| Proof of Plaintiff’s Investment | Padilla made substantial investment for business setup. | Investment not sufficiently proven; much evidence was unreliable. | Plaintiff's proof was insufficient and not credible. |
| Causation of Damages | Defendant’s failure caused plaintiff’s losses and business failure. | No causal link; business failed for lack of financing, not defendants' fault. | Plaintiff failed to prove causal link between defendants’ conduct and his damages. |
| Breach of Agreement | Defendants breached by not contributing as promised. | No breach; their contribution was conditional and agreement was verbal/undocumented. | No breach; the agreement’s terms were unfulfilled conditions, not breached duties. |
Key Cases Cited
- Pueblo v. Hernández Doble, 210 DPR 850 (P.R. 2022) (appellate deference to trial court fact-finding and credibility determinations)
- Santiago Ortiz v. Real Legacy, 206 DPR 194 (P.R. 2021) (standard for reviewing trial court's factual findings)
- Dávila Nieves v. Meléndez Marín, 187 DPR 750 (P.R. 2013) (burden of proof and appellate review of evidence)
- Hernández Maldonado v. Taco Maker, 181 DPR 281 (P.R. 2011) (trial judge’s discretion in assessing evidence)
- SLG Rivera Carrasquillo v. AAA, 177 DPR 345 (P.R. 2009) (limited intervention by appeals court absent manifest error)