IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE COMMONWEALTH OF PUERTO RICO, et 

al.,

Debtors. 1

In re:

THE FINANCIAL OVERSIGHT AND 

MANAGEMENT BOARD FOR PUERTO RICO,

as representative of

THE EMPLOYMENT RETIREMENT SYSTEM 

OF THE COMMONWEALTH OF PUERTO RICO 

(“ERS”),

Debtor.

PROMESA

Title III

No. 17 BK 03283-LTS

(Jointly Administered)

PROMESA

Title III

No. 17 BK 03566-LTS

MEMORANDUM OF LAW IN SUPPORT OF ERS INDIVIDUAL PLAINTIFF’S OPPOSITION TO 

UBS’ MOTION TO ENFORCE THE PLAN OF ADJUSTMENT 

1 The Debtors in these Title III cases, along with each Debtor’s respective Title III case number and the last four (4) digits of each Debtor’s 

federal tax identification number, as applicable, are the (i) Commonwealth of Puerto Rico (Bankruptcy Case No. 17-BK-3283 (LTS)) (Last 

Four Digits of Federal Tax ID: 3481); (ii) Employees Retirement System of the Government of the Commonwealth of Puerto Rico (“ERS”) 

(Bankruptcy Case No. 17-BK-3566 (LTS)) (Last Four Digits of Federal Tax ID: 9686); (iii) Puerto Rico Highways and Transportation 

Authority (Bankruptcy Case No. 17-BK-3567 (LTS)) (Last Four Digits of Federal Tax ID: 3808); (iv) Puerto Rico Sales Tax Financing 

Corporation (Bankruptcy Case No. 17-BK-3284 (LTS)) (Last Four Digits of Federal Tax ID: 8474); and (v) Puerto Rico Electric Power 

Authority (Bankruptcy Case No. 17-BK-4780 (LTS)) (Last Four Digits of Federal Tax ID: 3747) (Title III case numbers are listed as 

bankruptcy case numbers due to software limitations). 

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TO THE HONORABLE COURT:

Individual Plaintiffs, the Estate of Pedro José Nazario Serrano; the Estate of Juanita 

Sosa Pérez2; Joel Rivera Morales; María de Lourdes Gómez Pérez; Héctor Cruz Villanueva; 

Lourdes Rodríguez and Luis M. Jordán Rivera, all of them Retirees/Beneficiaries of the ERS 

and Plaintiffs in a claim for damages described below that is currently pending in the 

Commonwealth of Puerto Rico Court of First Instance, San Juan Part (the “Commonwealth 

Court”), without submitting to the jurisdiction of this Court, very respectfully STATE and 

PRAY as follows:

1. The ERS Individual Plaintiff’s Commonwealth Action is based on Article 1802 of 

the Puerto Rico Civil Code of 1930, as amended, P.R. Laws Ann. tit. 31, § 5141. In Puerto Rico, 

said article serves as the legal basis to determine if the actor of certain conduct that causes 

damages is responsible for extra-contractual civil liability. It establishes that: “A person who 

by act or omission causes damage to another through fault or negligence shall be obliged to 

repair the damage so done.” P.R. Laws Ann. tit. 31, § 5141. It further provides that 

“[c]oncurrent imprudence of the party aggrieved does not exempt from liability, but entails 

a reduction of the indemnity." Id.

2. To that end, the Supreme Court of Puerto Rico has held that for a cause of action 

to prosper under Art. 1802, supra, three elements must be present, namely: (1) a culpable or 

negligent act or omission; (2) causal relationship between the culpable or negligent act or 

omission and the damage being claimed, and (3) an actual damage. Nieves Diaz v. González 

Massas, 178 DPR 820, 843 (2010); López v. Porrata Doria, 169 DPR 135, 150 (2006). No 

2 Pedro José Nazario and Juanita Sosa Pérez are deceased. Once their respective declaration of heirs is available, 

we will make the substitution. 

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contractual relationship between plaintiffs and defendants is required for a valid cause of 

action to exist under Article 1802.

3. As for the first element, the Supreme Court of Puerto Rico has established that 

"the concept of fault... is as infinitely broad as the conduct of human beings and includes any 

fault of a person that produces harm or damages." Lopez v. Porrata Doria, supra, p. 150. 

Likewise, the Supreme Court of Puerto Rico has held that the concepts of fault and negligence 

are equivalent to non-compliance with the duty of care. Which in turn concerns, in essence, 

not anticipating or foreseeing the likely consequences of acts, which would have been 

foreseen by a prudent and reasonable person. Nieves Diaz v. González Massas, supra, p. 844; 

Lopez v. Porrata Doria, supra, p. 151; Valle v. E.L.A., 157 DPR 1, 18 (2002); Ramos vs. Carlo, 

85 DPR 353, 358 (1962). The foregoing does not require precisely imagining the universality 

of consequences that may arise from a certain conduct. Pons v. Engebretson, 160 DPR 347, 

355 (2003). “The essential thing is that there is a duty to foresee, in a general way, the 

consequences of a certain class." Id. For such purposes, the Supreme Court of Puerto Rico 

has resorted to the figure of the good father of the family, or the prudent and reasonable 

person, for purposes of determining how a person of normal or ordinary diligence should 

act, by virtue of particular circumstances. Nieves Diaz v. González Massas, supra, p. 844; 

Lopez v. Porrata Doria, supra, pp. 150-151. Therefore, if the damage caused was foreseeable, 

there will be liability; if it was not, it will be considered a fortuitous event. Pons v. 

Engebretson, supra. The Supreme Court of Puerto Rico has also indicated that the duty of 

care and to foresee possible damages does not extend to any imaginable danger that could 

cause damage, but rather must be based on probabilities, not mere possibilities. Lopez v. 

Porrata Doria, supra, pp. 164-165.

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4. On the other hand, the second element requires that there be a causal link 

between the damage caused and the culpable or negligent act or omission, that is, adequate 

cause. The theory of adequate cause provides that “not every condition without which the 

result would not have been produced is a cause, but the one that ordinarily produces it 

according to general experience." Colon Santos v. Coop. Sec. Mult. PR, 173 DPR 170, 186 

(2008). That is, “damage may be considered the probable and natural result of a negligent 

act or omission if after the event, in retrospect, the damage appears to be the reasonable and 

common consequence of the act or omission." Pons v. Engebretson, supra, pp. 355-356; 

Hernández Vélez v. Televicentro, 168 DPR 803, 815 (2006). To that effect, the Supreme Court 

of Puerto Rico has held that “[t]he doctrine of adequate causality requires indices or criteria 

based on experience and knowledge of causes and effects to give it content." Lopez v. Porrata 

Doria, supra, pp. 166-67.

5. Lastly, for a cause of action under Article 1802, supra, to prosper in our legal 

system, it is necessary that a damage actually occurs. This, for non-contractual purposes, 

refers to “any material or moral impairment caused in contravention of a legal norm, 

suffered by one person and for which another has to respond." J. Puig Brutau, Fundamentals 

of Civil Law, Barcelona, Ed. Bosch, 1983, T. 2, Vol. 3, p. 92. See also Sagardía De Jesús v. 

Hospital Aux. Mutuo, 177 DPR 484, 505 (2009). In the absence of a damage, there is no 

obligation to indemnify. Lopez v. Porrata Doria, supra, p. 151.

6. UBS, in its capacity as financial consultant and investment adviser, had the 

obligation and fiduciary duty to alert the members of the System's Board of Trustees about 

the risks inherent in the issuance and proposed use of the proceeds of the 2008 POB’s. By 

failing to do so, UBS breached that duty. Said conduct not only harmed the ERS itself, but 

directly inflicted foreseeable damages upon the ERS beneficiaries. Such damages consist 

inter alia of the ERS Individual Plaintiffs losing part of their pensions, higher age criteria to 

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qualify for pensions, loss of their marginal benefit to take loans originated by the ERS, as well 

as mental anguish and suffering. 

7. If as UBS claims, the individual Plaintiffs cannot prove their damages and 

the causal relationship between those damages and UBS’s errors, omissions, fault or 

negligence, that is something for the Commonwealth Court to decide after the 

Individual Plaintiffs have had their day in court. In other words, UBS cannot shield 

itself from liability towards the Plaintiffs by simply arguing that it has to defend itself 

in another case, against other parties, and in another jurisdiction.

8. Lastly, it cannot be ignored, that on August 30, 2013, the Commonwealth Court 

of Appeals, at Pedro José Nazario v. UBS, KLAN201300738, ruled that the ERS Individual 

Plaintiffs have legal standing to prosecute the Commonwealth Action pro se, because they 

are the beneficiaries of the ERS. While doing so, the Court of Appeals referred to the ERS 

Individual Plaintiffs as the "people of flesh and bones who directly hold the right they claim”. 

THEREFORE, the ERS Individual Plaintiffs respectfully request this Honorable Court 

to: TAKE NOTICE of this memorandum of law in support of ERS Individual Plaintiff’s 

Opposition, at Docket No. 22175, with respect to UBS Financial Services Inc.’s Motion to 

Enforce the Plan of Adjustment and for Related Injunctive Relief, at Docket No. 21651; and, 

consequently DENY UBS Financial Services Inc.’s Motion to Enforce the Plan of Adjustment 

and for Related Injunctive Relief, at Docket No. 21651

RESPECTFULLY SUBMITTED.

WE HEREBY CERTIFY: That on this same date a true and exact copy of this motion was filed 

with the Clerk of Court using CM/ECF system, which will notify a copy to counsel of record. 

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In San Juan, Puerto Rico, this 4th day of October 2022.

VICENTE & CUEBAS PUJOL LAW OFFICES, PSC

P.O. Box 11609 P.O. Box 363042

San Juan, PR 00910-1609 San Juan, PR 00936-3042

Phone No. (787) 751-8000 Phone No. (787) 724-0900

Fax No. (787) 756-5250 Fax No. (787) 724-1196

/s/Harold D. Vicente /s/Francisco Pujol Meneses 

Harold D. Vicente, Esq. Francisco Pujol Meneses, Esq.

USDC-PR Bar No. 117711 USDC-PR Bar No. 212706

hvicente@vclawpr.com fpujol@pujollawpr.com

/s/Harold D. Vicente-Colón BUFETE ANDRÉU & SAGARDÍA

Harold D. Vicente-Colón, Esq. 261 Avenida Domenech

USDC-PR Bar No. 211805 San Juan, Puerto Rico 009718

hdvc@vclawpr.com Phone No. (787) 754-1777/763-8044

Fax No. (787) 763-8045

 

 /s/José A. Andréu Fuentes

 José A. Andréu Fuentes, Esq. 

USDC-PR Bar No. 204409

 jaf@andreu-sagardia.com

Counsel for Individual Plaintiffs, Beneficiaries of the Retirement System

of the Commonwealth of Puerto Rico

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