Court Opinion

ID: 2963916
Source: CourtListenerOpinion
Date Created: 2015-09-21 21:17:22.642755+00
Date Added: 2024-06-11T11:42:48.399011
License: Public Domain

USCA1 Opinion

	

          March 6, 1996         [NOT FOR PUBLICATION]

                            United States Court of Appeals
                                For the First Circuit
                                 ____________________

          No. 95-1892

                      MIGUEL SUCH-GONZALEZ AND BARBARA TERNOSKY,

                               Plaintiffs, Appellants,

                                          v.

               ADMINISTRACION DE FOMENTO Y DESAROLLO AGRICOLA, ET AL.,

                                Defendants, Appellees.

                                 ____________________

                     APPEAL FROM THE UNITED STATES DISTRICT COURT

                           FOR THE DISTRICT OF PUERTO RICO

                   [Hon. Gilberto Gierbolini, U.S. District Judge]
                                              ___________________

                                 ____________________

                                Boudin, Circuit Judge,
                                        _____________

                      Coffin and Rosenn*, Senior Circuit Judges.
                                          _____________________

                                 ____________________

               Fernando L. Gallardo for appellants.
               ____________________
               Ernesto Hernandez  Milan for Commercial and  Farm Credit and
               ________________________
          Development Corporation of Puerto Rico.
               Wally de la Rosa Vidal for Puerto Rico Land Authority.
               ______________________

                                 ____________________

                                 ____________________

                              
          ____________________

               *Of the Third Circuit, sitting by designation.

               COFFIN, Senior Circuit Judge.  This is the culmination of an
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          aging  lawsuit brought by a  pioneer Puerto Rico  rice farmer and

          his  then wife against the Commonwealth  sponsor, the Puerto Rico

          Land Authority (Authority), and financer, the Commercial and Farm

          Credit  Development  Corporation  (CFCDC),  arising  out  of what

          proved to be an ill-fated rice growing program. 

               Appellants,  having  filed   in  bankruptcy,  brought   this

          adversary proceeding  under  11  U.S.C.     1334.    The  amended

          complaint, so  far as we  are presently concerned,  alleged three

          causes  of action:  breach of  contract, defamation,  and "lender

          liability."    The district  court  granted  summary judgment  to

          defendants on all counts.  We affirm.

               In April of  1980, appellants entered into a lease agreement

          with the Authority in which they leased 325.60 cuerdas of land in

          Manati  for rice growing purposes  at an annual  rent, payable in

          advance,  of $40 per cuerda,  less property taxes.   Under clause

          27, the Authority was to deliver the land "duly razed and leveled

          for the harvesting of rice  and with the canals for  flooding and

          draining  said  lands duly  constructed."    Clause 34,  however,

          "expanded"  clause 27 to provide both that the leveling should be

          "precise" and that, if the lessor could not deliver any land with

          precise leveling, "the  parties will renegotiate in order to make

          an adjustment in the lease payments."  

               Clause 32  provided that the lease  agreement contained "all

          covenants  and  stipulations agreed  upon by  the parties."   And

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          clause  33  provided  that  the  lease  payment  was  subject  to

          renegotiation after the first year.

               In  September  of  1980,  CFCDC  made  its  first   loan  to

          appellants, in  the amount  of $200,000.    In 1981  there was  a

          refinancing  loan of $285,000; in  1984, one of  $410,000; and in

          1985, one of $457,609.  Appellants made a first payment of $3,300

          for  approximately half of the first semester.  No other payments

          were made.

               While the first  harvest of  rice, in October  of 1980,  was

          excellent, the rest of the story is one of continual problems and

          frustrations.     At   some  point,   two  fields   were  leveled

          "backwards," and had to  be releveled by  the Authority.  A  well

          was  dug too deep, allowing seepage of  salt water.  The solitary

          airplane  available  for seeding  flew too  late  in the  day for

          effective work.   There was trouble in getting equipment released

          and delay in decisions.  Experts were called in but allegedly not

          listened to.  Blast (a disease) afflicted the rice  at one point;

          at another,  the digging of a  ditch across some  of the property

          hindered  operations.  And appellants were moved from one farm to

          another.

               Nevertheless, appellant  Such (his  wife having left  Puerto

          Rico in 1985) continued to farm the  property until July of 1986.

          Indeed, according to his deposition testimony, what  "cut off the

          head  of the  project" was  the coming  to power  of  the Popular

          Democratic Party in 1985. 

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               In  September of  1986,  the Authority  brought an  eviction

          proceeding in  superior court,  alleging a delinquency  in rental

          payments of over $120,000.  The court found that appellants, over

          the course of six  years, had not sought renegotiation,  and that

          the amount owed the Authority was $101,714.34.  In March of 1987,

          appellants  were  ordered  to  vacate.    In  February  of  1987,

          appellants filed in bankruptcy  and in December of the  same year

          brought this action.

                                      DISCUSSION

               Breach of Contract.    The  district court properly  invoked
               __________________

          the principle that "a party to a  bilateral contract who does not

          perform  his obligations under the contract may not sue the other

          contracting party for breach  of contract."  We quote some of the

          court's discussion: 

               Under the common law doctrine of exceptio non aditempli
                                                ______________________
               contractus, a  party to  a bilateral contract  who does
               __________
               not perform his obligations  under the contract may not
               sue the other contracting party for breach of contract.
               Constructora Bauza, Inc. v. Garcia Lopez, 91 JTS 99, p.
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               9077  (1991); Martinez v. Colon  Franco, 89 JTS 109, p.
                             _________________________
               7291 (1989);  Heirs of  Escalera v. Barreto,  81 P.R.R.
                             _____________________________
               580, 591 (1959).  This  doctrine provides a defense  to
               breach of  contract derived from the  Puerto Rico Civil
               Code.  [footnote and  citation  omitted]   If a  leasee
               [sic]  breaches a  material  clause of  the lease,  the
               defense  of exceptio  non aditempli  contractus clearly
                           ___________________________________
               applies to  shelter the  lessor from liability  for his
               own failure to perform.

               Appellants  challenge  the  application of  this  principle,

          claiming  that  the  Authority   early  and  often  breached  the

          contract, citing  the incidents  we have  summarized.   They also

          sketchily claim in their brief that they requested renegotiation.

          But   we  have   read  their   ill-assorted  appendix   and  have

                                         -4-

          meticulously reviewed  the excerpts  furnished us from  the three

          depositions they have included.   There is no hint of any request

          for renegotiation or of any indication that any of the trials and

          tribulations which they  faced were considered as breaches.  Non-

          payment  of rent for six years, during which CFCDC disbursed some

          $800,000 on appellants' account, under a lease which specifically

          allowed the possibility of  change in rent if  renegotiation were

          requested, and the total absence of any request for renegotiation

          dictate  our affirmance  of  summary judgment  on  the breach  of

          contract claim.

               Lender  Liability.   While the  complaint refers  to actions
               _________________

          generally  of both  the  Authority and  CFCDC as  supporting this

          claim,  paragraph 47 makes clear  that only Credito Agricola (the

          predecessor  of CFCDC) is  being charged.   Appellants'  brief on

          appeal also confines this issue to CFCDC.

               Appellants aver that, in  addition to tort bases  for lender

          liability,  breach of contract,  with its fifteen  year period of

          limitations,  may  also serve  as a  basis.   Our  discussion and

          ruling on the  breach of contract issue disposes of  any claim of

          such support for lender liability here.

               The district  court summarized appellants' tort based lender

          liability claims  as intentional  or negligent failure  to comply

          with obligations under the contract, "complete control" over rice

          operations, pressure  exerted because of such  control, breach of

          fiduciary  duties, and bad faith.    The court looked in vain for

          specific information about actions under these headings and times

                                         -5-

          when  they  were allegedly  committed.   It  ruled that  the only

          allegation approaching specificity, notice of a three month delay

          in  furnishing equipment, occurred in 1984,  far exceeding a year

          before filing of the complaint.  It held the claim time barred.

               The only specific conduct pointed to by  appellants in their

          brief  as evidence  of tortious  overreaching was  the deposition

          testimony  of   one  former  project  supervisor,  Barbosa,  that

          financial aid was "always  a problem because they wanted  to know

          everything  that was going to  be done."   Appellants complain in

          their brief that CFCDC's predecessor "went as far as to condition

          their financing to their adhering  strictly to the conditions and

          methods established by the Rice Project .  . . ."  But the  lease

          agreement itself  provided, in  clause 29:   "'The lessee'  binds

          itself  to  conduct  the  seeding  and  harvesting   of  rice  in

          accordance with the provisions of [the Rice Project]."

               We  find no suggestion of  a genuine issue  of material fact

          relevant to the lender liability claim, and certainly none within

          the one year limitations period.

               Defamation.    As for  the  defamation cause  of  action, it
               __________

          simply  is  not  supported  by  anything  in  the  record.    The

          allegations are  phrased in the  most general  terms: "false  and

          defamatory statements  during the  periods of  1983 and 1984  and

          continuing in 1987, among  various persons of the public,  and of

          the  business community, and of the press  . . . that coplaintiff

          Miguel   Such   was   deceitful,   fraudulent   and  made   false

                                         -6-

          representations of payment of  his obligations and  . . . was  in

          breach of his agreements with all the defendants . . . ."

               The  only  documentation  in  support of  these  allegations

          furnished  to  us  was an  excerpt  from  the  deposition of  co-

          appellant Barbara Ternosky.   Her testimony is exceedingly frail.

          She left Puerto Rico in 1985.  As concerns any statements in 1983

          and 1984, she  thought "there were,  like, negative things  going

          on, being  said  about the  rice project  .  . .  ."   She  later

          confessed that she did not recall anything that was said. 

               Appellant Such, in his deposition, said that he recalled one

          article in  some unmentioned publication  in which a  director of

          the Authority said some things damaging to him.  But, when asked,

          he could not recall what had been said.

               Such threads are  not even  gossamer.  We  see nothing  that

          happened in  1983 and 1984 that  rises to, or sinks  to the depth

          of,  defamation.   And  of course  there  is no  indication  that

          anything was said within the one year limitations period.

               This  has  been  a   history  inhospitable  to  all  parties

          concerned.   But they must be  left where they are.   We have not

          been able  to discern the faintest glimmer  of a genuine issue of

          material fact.

               Affirmed.  
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