ConstruTodo, S.A. De C.V. v. Conficasa Holdings, Inc.

CONSTRUTODO, S.A. DE C.V. d/b/a CONSTRUMEX, Plaintiff, v. CONFICASA HOLDINGS, INC., EDUARDO PEREZ ALDUNCIN, RICARDO PEREZ ALDUNCIN,and WALTER CHAN, Defendants.

CIVIL ACTION H-12-3026

UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF TEXAS HOUSTON DIVISION

SIGNED: January 31, 2014

OPINION AND ORDER OF DISMISSAL

Pending before the Court in the above referenced diversity action¹ alleging breach of contract, common law fraud, breach of fiduciary duty, and theft of property under the Texas Theft Liability Act, are (1) Defendants Conficasa Holdings, Inc., Educardo Perez Alduncin, Ricardo Perez Alduncin, and Walker Chan's Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction (instrument #17) on the grounds that Plaintiff Construtodo, S.A. de C.V. d/b/a Construmex is not a party to the Collaboration Agreement (the "Agreement") in dispute,² which wasbetween Construtodo, Inc. and Conficasa Holdings, Inc. and has no injury in fact, and therefore Plaintiff has no standing to bring this suit; and (2) Plaintiff's alternative motion for leave to amend under Federal Rule of Civil Procedure 17(a)(3)(#24).

In addition to claiming that Plaintiff lacks standing to sue on the Agreement, Defendants further assert that the correct contracting party and proper plaintiff, Construtodo, Inc., forfeited its corporate privileges over three years ago, so its claims are extinguished, and it is too late for it to revive its corporate privileges and claims.

Standard of Review

Rule 12(b)(1) allows a party to move for dismissal of an action for lack of subject matter jurisdiction. The party asserting that subject matter exists, here the plaintiff, must bear the burden of proof for a 12(b)(1) motion. Ramming v. United States, 281 F.3d 158, 161 (5^th Cir. 2001). In reviewing a motion under 12(b)(1) the court may consider (1) the complaint alone; (2) the complaint supplemented by undisputed facts evidenced in the record; or (3) the complaint supplemented by undisputed facts plus the court's resolution of disputed facts. Williamson v. Tucker, 645 F.2d 404, 413 (5^th Cir. 1981).

A motion to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1) is characterized as either a "facial" attack, i.e., the allegations in the complaint are insufficient to invokefederal jurisdiction, or as a "factual" attack, i.e., the facts in the complaint supporting subject matter jurisdiction are questioned. In re Blue Water Endeavors, LLC, Bankr. No. 08-10466, Adv. No. 10-1015, 2011 WL 52525, *3 (E.D. Tex. Jan. 6, 2011), citing Rodriguez v. Texas Comm'n of Arts, 992 F. Supp. 876, 878-79 (N.D. Tex. 1998), aff'd, 199 F.3d 279 (5^th Cir. 2000). A facial attack happens when a defendant files a Rule 12(b)(1) motion without accompanying evidence. Paterson v. Weinberger, 644 F.2d 521, 523 (5^th Cir. 1981). In a facial attack, allegations in the complaint are taken as true. Blue Water, 2011 WL 52525 at *3, citing Saraw Partnership v. United States, 67 F.3d 567, 569 (5^th Cir. 1995).

If it is a factual attack, the Court may consider any evidence (affidavits, testimony, documents, etc.) submitted by the parties that is relevant to the issue of jurisdiction. Id., citing Irwin v. Veterans Admin., 874 F.2d 1092, 1096 (5^th Cir. 1989). A defendant making a factual attack on a complaint may provide supporting affidavits, testimony or other admissible evidence. Patterson v. Weinberger, 644 F.3d 521, 523 (5^th Cir. 1981). The plaintiff, to satisfy its burden of proof, may also submit evidence to show by a preponderance of the evidence that subject matter jurisdiction exists. Id. The court's consideration of such matters outside the pleadings does not convert the motion to one for summary judgment under Rule 56(c). Robinson v. Paulson, H-06-4083, 2008 WL 4692392 at *10 (S.D. Tex. Oct. 28, 2008), citing Garcia, 104 F.3d at 1261. "Unlike in a facial attack where jurisdiction is determined upon the basis of allegations of the complaint, accepted as true[,] when a factual attack is made upon federal jurisdiction, no presumption of truthfulness attaches to the plaintiffs' jurisdictional allegations, and the court is free to weigh the evidence and satisfy itself as to the existence of its power to hear the case. In a factual attack, the plaintiffs have the burden of proving that federal jurisdiction does in fact exist." Evans v. Tubbe, 657 F.2d 661, 663 (5^th Cir. 1981). In resolving a factual attack on subject matter jurisdiction under Rule 12(b)(1), the district court, which does not address the merits of the suit,³ has significant authority "'to weigh theevidence and satisfy itself as to the existence of its power to hear the case.'" Robinson v. Paulson, No. H-06-4083, 2008 WL 4692392, *10 (S.D. Tex. Oct. 22, 2008), quoting Garcia v. Copenhaver, Bell & Assocs., 104 F.3d 1256, 1261 (11^th Cir. 1997), and citing Clark v. Tarrant County, 798 F.2d 736, 741 (5^th Cir. 1986).

Here Defendants have submitted copies of the Agreement (#18-1), of Plaintiff's June 12, 2013 Response to Request for Admission No. 1 and of Defendants' May 10, 2013 Request for Admission No. 1 (#18-2), and of the Texas Secretary of State's forfeiture of Construtodo, Inc.'s corporate charter as of July 24, 2009 (#18-3). Named Plaintiff, in opposition to the motion to dismiss, has submitted as Exhibit A, #27, a notarized document "drafted by Plaintiff's representatives" and signed by attorney Alberto Rendon Alanis, in-house counsel for CEMEX, claiming CEMEX is the real party in interest and that Plaintiff Construtodo, S.A. de C.V. is a Mexican corporation and wholly owned subsidiary of CEMEX. Thus the Court reviews the motion as a factual attack.

Federal Rule of Civil Procedure 17(a)(1) provides, "An action must be prosecuted in the name of the real party in interest." "The real party in interest is the person holding the substantive right sought to be enforced, and not necessarily the person who will ultimately benefit from the recovery." Wieburg v. GTE Sw. Inc, 272 F.3d 302, 306 (5^th Cir. 2001).

Rule 17(a)(3) states,

The court may not dismiss an action for failure to prosecute in the name of the real party in interest until, after an objection, a reasonable time has been allowed for the real party in interest to ratify, join, or be substituted into the action. After ratification, joinder, or substitution, the action proceeds as if it had been originally commenced by the real party in interest.

Defendants' Rule 12(b)(1) Motion to Dismiss (#18)

Defendants claim that the proper parties to a suit on a contract are the signatories to that document or those who have otherwise indicated that they consent to be bound by the contractual promises. Willis v. Donnelly, 199 S.W. 3d 262, 271 (Tex. 2009). The first sentence of the Agreement shows that Construtodo, Inc, and Conficasa Holdings, Inc. are the signatories and therefore the proper parties to this suit. (Hector Ureta signed the Agreement as the legal representative of Construtodo, Inc..) They argue that Construtodo, Inc. is a wholly owned subsidiary of Construmexcla S.A. Ex. C. Because this suit has not been brought by the real party in interest, Defendants insist that the Court must dismiss it. They point out that the Agreement, Ex. A, ¶ 13 expressly states, "PROHIBITION OF ASSIGNMENT AND/OR AMENDMENT: This Agreement may not be assigned or transferred in any way, either totally or partially, without the prior consent in writing of the Parties. Any assignment or transfer of the contents of this instrument[] shall be null and void and shall have no legaleffect whatsoever."

Defendants emphasize that in Farris v. Sambo's Restaurants, Inc., 498 F. Supp. 143, 145 (N.D. Tex. 1980), the district court, citing Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and progeny, held that if a state law bars a suit, that same suit could not be filed in federal court in that state under diversity jurisdiction. The Farris court wrote,

While technically the corporation may have capacity to sue in the federal court pursuant to Rule 17(b), it cannot recover where recovery would not be possible in the state court. Any valid state law closing its courts to a foreign corporation, which is not qualified to do business in the state must, therefore, be given effect in the federal courts of such state in a case based solely on diversity or alienage jurisdiction.

Id. at 145. See also Woods v. Interstate Realty Co., 337 U.S. 535, 538 (1949)(opining that "for purposes of diversity jurisdiction, a federal court is in effect only another court of the state."). In Farris, the district court held that where a Tennessee corporation, which was not registered to do business in Mississippi, attempted to file a federal diversity suit in Mississippi, the Mississippi disqualification statute barred it from doing so. 498 F. Supp. at 145.⁴

In Texas, under Texas Tax Code § 171.251,⁵ the Secretary of

State may forfeit the charter of authority of a corporation that fails to pay franchise taxes under the Texas Tax Code § 171.309.⁶

Once the corporate privileges are forfeited, "the corporation shall be denied the right to sue or defend in a court of this state." § 171.252. Nevertheless, Defendants observe that the Texas Business Organizations Code § 11.356(a)(1) permits a dissolved corporation to continue its existence for a period of three years for the purpose of prosecuting or defending any action by or against the dissolved corporation. In 1993 the Legislature amended the definition of "dissolved corporation" to include those corporations "whose charter was forfeited pursuant to the Tax Code." Former article 7.12(F)(1)(e) of the Texas Business Corporations Act; § 7.12 was replaced by the Texas Business Organizations Code § 11.356.

Construtodo, Inc. is a Delaware corporation, which, in 2004, applied for a Texas Certificate of Authority. Ex. C. In 2005 it entered into the Agreement in dispute with Conficasa. Ex. A. On July 24, 2009 the Texas Secretary of State forfeited Construtodo, Inc.'s...