Rehabilitation, LLC v. Rodriguez Toro, 4:20-cv-02132

Inland Pipe (Georgia LLC) leased a wet-out trailer from ER&A (Puerto Rico LLC) in June 2016 for a specific Houston project (the Woodlands Project). The written lease stated the term would expire only when the equipment was returned to ER&A in Juana Díaz, Puerto Rico, and designated Puerto Rico law.
Inland Pipe used the equipment on the Woodlands Project from June–November 2016; ER&A invoiced monthly rent ($5,000) during that period and Inland Pipe paid $30,000 in total.
After project completion in November 2016 ER&A stopped sending invoices or payment demands; the parties had no meaningful contact for ~42 months and ER&A did not request return of the equipment during that time.
Inland Pipe stored the equipment in Texas at its cost and ultimately arranged return in late 2020/2021; ER&A later (May 2020) claimed substantial unpaid rent and counterclaimed for damages (~$280,000).
Plaintiffs sued for a declaratory judgment that they owed no rent after project completion; the court granted summary judgment to Plaintiffs, declaring no liability for rent after November 2016.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Contract duration — whether lease continued until physical return to PR	Lease was project-specific; intro and parties' conduct show agreement ended at project completion	Contract language unambiguously runs until equipment received by Lessor in Puerto Rico	Court found ambiguity in light of intro/intent and extrinsic evidence; construed intent to favor Plaintiffs — no rent after Nov 2016
Waiver / estoppel ("one's own acts") — effect of ER&A stopping invoices	ER&A’s silence and cessation of invoices for four years manifested intent and induced reliance; ER&A is estopped from claiming rent	Non-waiver clause in contract preserves ER&A’s right despite not invoicing	Court applied Puerto Rico doctrine of one’s own acts: ER&A’s conduct defeated its later claim to ongoing rent
Mitigation of damages — did ER&A fail to mitigate?	ER&A never sought return, never followed up for years, and delayed return logistics — so it failed to mitigate	ER&A argues contractual rights preserved and absence of invoices doesn’t bar recovery	Court held ER&A failed to mitigate; its long inaction and delays undermine claim to accrued rent
Summary judgment posture	Plaintiffs: undisputed facts entitle them to judgment as a matter of law	Defendants: contract text entitles them to judgment for unpaid rent	Court denied Defendants’ motion and granted Plaintiffs’ summary judgment declaratory relief

Fordoche, Inc. v. Texaco, Inc., 463 F.3d 388 (5th Cir. 2006) (summary judgment standard)
Engstrom v. First Nat’l Bank of Eagle Lake, 47 F.3d 1459 (5th Cir. 1995) (burden shifts to nonmovant after initial showing on summary judgment)
First Medical Health Plan, Inc. v. CaremarkPCS Caribbean, Inc., 681 F. Supp. 2d 111 (D.P.R. 2010) (elements required for breach of contract under Puerto Rico law)
Puerto Rico Tel. Co. v. SprintCom, Inc., 662 F.3d 74 (1st Cir. 2011) (courts may examine extrinsic circumstances to determine parties’ intent under Puerto Rico law)
Autogermana, Inc. v. BMW of N. Am., Inc., 38 F. Supp. 3d 230 (D.P.R. 2014) (contract terms read as a whole; reconcile conflicts to effectuate intent)
Gener–Villar v. Adcom Group, Inc., 560 F. Supp. 2d 112 (D.P.R. 2008) (mitigation/avoidable-consequences doctrine in damages)
Rojas-Buscaglia v. Taburno-Vasarhelyi, 113 F. Supp. 3d 534 (D.P.R. 2015) (examining contemporaneous and subsequent acts to discern contracting parties’ intent)