Xynergy Healthcare Capital II LLC v. Municipality of San Juan

516 F.Supp.3d 137

XYNERGY HEALTHCARE CAPITAL II LLC, Plaintiff,

v.MUNICIPALITY OF SAN JUAN, et al., Defendants.

CIVIL NO.: 18-1208 (MEL)

United States District Court, D. Puerto Rico.

Signed January 29, 2021

Juan C. Salichs-Pou, Salichs Pou & Assoc, Ramon L. Ramos-Aponte, San Juan, PR, for Plaintiff.

Victor D. Candelario-Vega, Quinones & Arbona, PSC, San Juan, PR, for Defendants.

OPINION AND ORDER

Marcos E. López, U.S. Magistrate Judge

I. Procedural Background

Xynergy Healthcare Capital II LLC ("Xynergy") filed an amended complaint against the Municipality of San Juan ("the Municipality" or "MSJ") and GEODATAPR International, Inc. ("Geodata") on August 26, 2018. ECF No. 20. In the amended complaint, Xynergy alleges that Geodata is liable to Xynergy for breach of contract damages under the Healthcare Receivables Master Purchase and Sale Agreement ("Master Agreement"). Id. at 11-12, 15-16. It is also alleged by Xynergy that it has a valid and enforceable security interest over all assets of Geodata. Additionally, Xynergy seeks a declaratory judgment that the Municipality and Geodata are jointly and severally liable for certain unpaid payment obligations under the Master Agreement and Chapter 9 of Title 19, Annotated Laws of Puerto Rico, Section 2211, et. seq. ("the Commercial Transactions Act"). Id. at 11, 15-16.

On September 14, 2018, the Municipality filed a motion to dismiss the complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 35. The Municipality's motion to dismiss was denied on September 19, 2019. ECF No. 136. The Municipality answered the complaint on September 26, 2019. ECF No. 138. Pending before the court is a motion for summary judgment filed by Xynergy against the Municipality. ECF No. 143. Xynergy requests that the Court enter a summary judgment:

(1) ordering the Municipality to pay to Xynergy the amount of $1,019,499.19, as it failed to discharge its payment obligations under the accounts receivable claimed in this case;

(2) decreeing that under the law, Xynergy has a valid and enforceable security interest over all assets of Geodata, now existing or hereafter arising, wherever located, including and not limited to all of Geodata's receivables from the Municipality;

(3) decreeing that any amount due or to become due by the Municipality to Geodata, is an asset of Xynergy and consequently, ordering the Municipality to pay Xynergy any amount to be paid by the Municipality for any invoiced amount due to Geodata, until all the amounts owed to Xynergy by Geodata are paid;

(4) granting all other further relief that is necessary or proper to effectuate the judgment.

ECF No. 143, at 18-19. The Municipality subsequently filed a response in opposition. ECF No. 152.

II. Standard of Review

A. Summary Judgment Standard

The purpose of summary judgment "is to pierce the boilerplate of the pleadings and assay the parties’ proof in order to determine whether trial is actually required." Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st Cir. 1992) (citations omitted). Summary judgment is granted when the record shows that "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). "A dispute is genuine if the evidence about the fact is such that a reasonable jury could resolve the point in the favor of the non-moving party. A fact is material if it has the potential of determining the outcome of the litigation." Farmers Ins. Exch. v. RNK, Inc., 632 F.3d 777, 782 (1st Cir. 2011) (quoting Rodríguez-Rivera v. Federico Trilla Reg'l Hosp., 532 F.3d 28, 30 (1st Cir. 2008) ).

The party moving for summary judgment bears the burden of showing the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the movant presents a properly focused motion "averring ‘an absence of evidence to support the nonmoving party's case[,]’ [t]he burden then shifts to the nonmovant to establish the existence of at least one fact issue which is both ‘genuine’ and ‘material.’ " Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir. 1990) (quoting Garside v. Osco Drug, Inc., 895 F.2d 46, 48 (1st Cir. 1990) ). For issues where the nonmoving party bears the ultimate burden of proof, the party cannot merely "rely on an absence of competent evidence, but must affirmatively point to specific facts [in the record] that demonstrate the existence of an authentic dispute." McCarthy v. Nw. Airlines, Inc., 56 F.3d 313, 315 (1st Cir. 1995) (citation omitted). The party need not, however, "rely only on uncontradicted evidence .... So long as the [party]’s evidence is both cognizable and sufficiently strong to support a verdict in her favor, the factfinder must be allowed to determine which version of the facts is most compelling." Calero-Cerezo v. U.S. Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004) (emphasis in original) (citation omitted).

In assessing a motion for summary judgment, the court "must view the entire record in the light most hospitable to the party opposing summary judgment, indulging all reasonable inferences in that party's favor." Griggs-Ryan, 904 F.2d at 115. There is "no room for credibility determinations, no room for the measured weighing of conflicting evidence such as the trial process entails, [and] no room for the judge to superimpose his own ideas of probability and likelihood." Greenburg v. P. R. Mar. Shipping Auth., 835 F.2d 932, 936 (1st Cir. 1987). The court may, however, safely ignore "conclusory allegations, improbable inferences, and unsupported speculation." Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990) (citations omitted).

B. Declaratory Judgment Standard

"The merits of a declaratory judgment action may be properly asserted by the parties in a motion for summary judgment." Allstate Ins. Co. v. Martinez, Civ. No. 11-574, 2012 WL 1379666, at *4 (D. Conn. Apr. 20, 2012). "In determining a motion for summary judgment that is filed in the context of a declaratory judgment action, the same standard is applied as in any other action." Roe v. City of New York, 232 F. Supp. 2d 240, 252 (S.D.N.Y. 2002) ; Cloverland-Green Spring Dairies, Inc. v. Pa. Milk Mktg. Bd., 298 F.3d 201, 210 n.12 (3d Cir. 2002) ("The standard for granting summary judgment on a request for a declaratory judgment is the same as for any other type of relief"); American Family Mut. Ins. Co. v. Eagle General Contractors, Civ No. 6-993, 2007 WL 3090765, at *1 (D. Colo. Oct. 18, 2007).

"Declaratory judgment claims may properly coexist with breach of contract claims when they provide the plaintiff a form of relief unavailable under the breach of contract claim." Rausnitz v. Transamerica Life Ins. Co., Civ. No. 19-22894, 2019 WL 7643148, at *2 (S.D. Fla. Dec. 13, 2019) (citing Kenneth F. Hackett & Assoc., Inc. v. GE Capital Info. Tech. Solutions, Inc., 744 F. Supp. 2d 1305, 1311 (S.D. Fla. 2010) ); Vascular Imaging Prof'l, Inc. v. Digirad Corp., 401 F. Supp. 3d 1005, 1010 (S.D. Cal. 2019) ("declaratory relief is appropriate where a breach of contract claim will not settle all of the contractual issues concerning which plaintiff seeks declaratory relief."). "Such claims for declaratory judgment must be forward-looking, rather than retrospective, as any retrospective declaration would be equally solved by resolution of the breach of contract claim." Rausnitz, 2019 WL 7643148, at *2.

The Declaratory Judgment Act authorizes federal courts to declare the rights of interested parties in a case of actual controversy. See Almonte v. Administracion de Correccion, 15 F. Supp. 2d 180, 181 (D.P.R. 1998) ; 28 U.S.C. § 2201 ("In a case of actual controversy within its jurisdiction ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration, whether or not further relief is or could be sought."). An actual controversy is "a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment." Almonte, (quoting Diagnostic Unit Inmate Council v. Films Inc., 88 F.3d 651, 653 (8th Cir. 1996) ). Even if there is an actual controversy, "the granting of declaratory relief is within the discretion of the district court." Richmond Steel, Inc. v. Legal and General Assur. Soc., Ltd., 799 F. Supp. 234, 237 (D.P.R. 1992) ; see also El Dia, Inc. v. Hernández Colón, 963 F.2d 488 (1st Cir. 1992) ("declaratory relief, both by its very nature and under the plain language of 28 U.S.C. § 2201, is discretionary.").

In determining whether to grant declaratory relief, a court should consider whether a declaratory judgment would "clarify the legal questions at issue and expedite resolution of the controversy." Richmond Steel, Inc., 799 F. Supp. at 237 (citing Metro. Property & Liability Ins. Co. v. Kirkwood, 729 F.2d 61, 62 (1st Cir. 1984) ). "The two principal criteria guiding the policy in favor of rendering declaratory judgments are (1) when the judgment will serve a useful purpose in clarifying and settling the legal relations in issue, and (2) when it will terminate and afford relief from the uncertainty, insecurity, and controversy giving rise to the proceeding." Id. (citations omitted). "The remedy of a declaratory judgment ‘is intended to minimize the danger of avoidable loss and the unnecessary accrual of damages and to afford one threatened with liability an early adjudication without waiting until an adversary should see fit to begin an action after the damage has accrued.’ " Norton Lilly Int'l, Inc. v. Puerto Rico Ports Auth., Civ. No. 18-1012, 2018 WL 5099758, at *3 (D.P.R. Oct. 17, 2018) (quoting Wright & Miller, 10B Fed. Prac. & Proc. Civ. § 2751 (4th ed. 2018) ).

III. Uncontested Material Facts¹

Xynergy is a limited liability company organized under the laws of the state of Florida. ECF No. 143-1...