Palacios v. Cupples
1:17-cv-00430
W.D. La.Feb 9, 2018Background
- Plaintiff Juan Pablo Palacios sued Defendant Thomas F. Cupples II to collect on a promissory note Cupples signed on April 10, 2012 for $218,218.84; Palacios alleges $197,208.22 remains unpaid.
- The note requires five equal $40,000 payments and a final $18,218.84 payment beginning September 20, 2012.
- Palacios alleges Cupples signed the note as guarantor of a debt owed by Agencia Independiente de Seguros y Fianzas Grupo Aseso, S.A., but the note itself does not reference any guaranty or third-party loan.
- Cupples moved to dismiss under Fed. R. Civ. P. 12(b)(6), arguing (1) the note does not show he was a guarantor, (2) Louisiana law (not Florida) should govern, and (3) the note fails Louisiana statutory suretyship requirements.
- The Magistrate Judge reviewed choice-of-law rules under Louisiana law and Florida law on promissory notes, and concluded the complaint states a plausible claim; the motion to dismiss was recommended to be denied.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Enforceability of the promissory note | Palacios: the executed note itself is prima facie evidence of indebtedness and supports recovery for unpaid principal | Cupples: the note does not reference a guaranty or underlying loan and thus cannot bind him as guarantor | Held: Note is enforceable; under Florida law a signed note establishes a prima facie right and Cupples bears burden of affirmative defenses |
| Choice of law | Palacios: note contains a Florida choice-of-law clause and Florida law should apply | Cupples: Louisiana contacts predominate; Florida clause is invalid | Held: Florida choice-of-law clause is enforceable under Louisiana law absent showing it violates a strong Louisiana public policy |
| Requirement to reference consideration or guaranty in the note | Palacios: no reference required; a note given in satisfaction of antecedent obligation is enforceable | Cupples: lack of reference to guaranty or contingency means no obligation exists | Held: No requirement that consideration or guaranty be referenced; Florida statutes/case law permit enforcement of the note as written |
| Sufficiency of complaint under Rule 12(b)(6) | Palacios: pleadings and the note plausibly state a claim for unpaid debt | Cupples: complaint fails to state a claim because it does not show guaranty or applicable law | Held: Complaint survives 12(b)(6); motion to dismiss recommended to be denied |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (facial plausibility standard for pleading)
- Legate v. Livingston, 822 F.3d 207 (5th Cir. 2016) (applying Iqbal/Twombly standard)
- Yumilicious Franchise, L.L.C. v. Barrie, 819 F.3d 170 (5th Cir. 2016) (pleading facts viewed in plaintiff's favor)
- Curtis Callais Welding, Inc. v. Stolt Comex Seaway Holdings, Inc., [citation="129 F. App'x 45"] (5th Cir. 2005) (Louisiana enforces contractual choice-of-law provisions)
- Delhomme Industries, Inc. v. Houston Beechcraft, Inc., 669 F.2d 1049 (5th Cir. 1982) (courts favor upholding interstate choice-of-law clauses)
- Paladin Shipping Co. Ltd. v. Star Capital Fund, LLC, [citation="491 F. App'x 42"] (11th Cir. 2012) (a promissory note establishes prima facie case of indebtedness)
- Mesa Petroleum Co. v. Coniglio, 629 F.2d 1022 (5th Cir. 1980) (note given in satisfaction of antecedent obligation is enforceable)
- Equity Investment Partners, LP v. Lenz, 594 F.3d 1338 (11th Cir. 2010) (application of commercial paper principles to notes)