fernandez avilez v. miranda aviles
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
ROLANDO FERNANDEZ-AVILES,
and MIGUEL FERNANDEZ-RIOS
PLAINTIFFS
V.
ELMER O. MIRANDA-AVILES,
DEFENDANT;
and PUERTO RICO SURGICAL
TECHNOLOGIES, INC.,
NOMINAL DEFENDANT.
CIVIL NO.
RE:
TRADEMARK INFRINGEMENT, UNFAIR
COMPETITION, TRADEMARK DILUTION,
TEMPORARY RESTRAINING ORDER,
PRELIMINARY AND PERMANENT
INJUNCTION; DECLARATORY JUDGMENT;
BREACH OF FIDUCIARY DUTY;
DAMAGES.
DEMAND FOR JURY TRIAL.
VERIFIED COMPLAINT
TO THE HONORABLE COURT:
COME NOW Plaintiffs, Rolando Fernandez Aviles (hereinafter
referred to as Fernandez) and Miguel Fernandez Rios
(hereinafter referred to as Fernandez-Rios), through the
undersigned counsel, and respectfully state, allege, and pray as
follows:
I. Jurisdiction and Venue1. This Honorable Court has jurisdiction because:
(a) this is a civil action arising under the Lanham Act of the
United States, 15 U.S.C. 1051 et seq., subject matter
jurisdiction being conferred under 15 U.S.C. 1121 and 1116(a),
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and 28 U.S.C. 1331 and 1338. The state and common law claims
are joined pursuant to 28 U.S.C. 1367 and 1338, in as much as
those claims are related to the claims in the action within this
Honorable Courts original jurisdiction and form a part of the
same case or controversy.
2. Venue is proper in this Court pursuant to 28 U.S.C. 1391(b), since Defendants reside in the Commonwealth of Puerto
Rico and a substantial amount of the events giving rise to the
claims occurred in the Commonwealth of Puerto Rico.
II. Parties3. Defendant, Puerto Rico Surgical Technologies, Inc.
(hereinafter referred to as Surgical), is a close corporation
organized and existing under the laws of the Commonwealth of
Puerto Rico. Surgical was created with the purpose of importing
branded medical equipment from the United States and foreign
countries for their distribution and sale in the territory of
Puerto Rico.
4. Plaintiff, Fernandez, has been a stockholder ofSurgical since its incorporation. He currently serves as
President of Surgical and its Board of Directors. He currently
holds thirty percent (30%) of Surgical stock.
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5. Plaintiff, Fernandez-Rios, has been a stockholder ofSurgical since its inception. He currently holds forty percent
(40%) of Surgical stock.
6. Defendant, Elmer O. Miranda-Aviles (hereinafterreferred to as Miranda), has been a stockholder of Surgical
since its incorporation. He is the former Vice-President and
Treasurer of Surgical. He currently holds thirty percent (30%)
of Surgical stock.
III.Nature of the Action7. This is a civil action to recover for Mirandas
willful acts of trademark infringement, trademark dilution, and
unfair competition for misrepresentation in commercial promotion
under 15 U.S.C. 1114(1), 1125(a), and 1125(c) (Sections
32(1), 43(a), and 43(c) of the Lanham Act), violations of the
Puerto Rico law unfair competition doctrines, Article 3 of Act
No. 77 of June 25, 1964, as amended, 10 LPRA 259(a), Article 3
of Act No. 169 of Dec. 16, 2009, 10 LPRA 223a, Article 1802 of
the Civil Code of Puerto Rico, 31 L.P.R.A. 5141, and common
law trademark infringement and unfair competition.
8. Specifically, Mirandas continuing operation ofSurgical, in defiance with the express consent to order his
removal by a majority of Surgical stockholders, infringes the
federally registered trademarks distributed by Surgical and
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Surgicals service mark because of his unauthorized
representation of Surgical and the registered marks distributed
by the corporation.
9. Surgical is the person authorized to import, market,promote, distribute, and sell the federally trademarked products
at issue. Miranda is no longer authorized to continue to act as
manager or representative of Surgical. His continuing operation
infringes the protections afforded by the law against the harms
caused by misrepresentation in promotion, false designation of
origin, and passing off.
10. Also, this is a direct claim for breach of fiduciaryduties perpetrated by Miranda, former manager of Surgical, that
directly harm Fernandez and Fernandez-Rios, stockholders of
Surgical, for violations of their fundamental stockholder
rights, in violation of the Puerto Rico Corporations Act
(hereinafter referred to as Corporations Act).
11. Also, this is a derivative claim against Miranda (andSurgical as a nominal defendant) arising out of Mirandas gross
negligence in managing the operations of Surgical, including
false representations and the payment of implicit dividends, in
violation of the Corporations Act.
12. Fernandez and Fernandez-Rios also seek a temporaryrestraining order, a preliminary injunction, and a permanent
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as a result Fernandez decided to start a new medical products
distribution operation in the Commonwealth of Puerto Rico.
[Exhibit 1, Job proposal sent by Miranda to Fernandez on
November 1, 2005]
16. Fernandez offered Miranda a participation in theownership of the new venture. Specifically, Miranda was offered
thirty percent (30%) of the stock of the new corporation.
17. Miranda was also offered commissions on the basis ofhis sales performance.
18. The stockholders of the corporation were:(a) Fernandez, who owns thirty percent (30%) of Surgical stock;
(b) Miranda, cousin of Fernandez, who owns thirty percent (30%)
of Surgical stock; and (c) Fernandez-Rios, who owns forty
percent (40%) of the stock. They decided to organize Surgical as
a close corporation, as it is stated in Surgicals Certificate
of Incorporation. In this manner, Surgical was created on August
21, 2006. [Exhibit 2, Surgicals Certificate of Incorporation]
19. The ownership structure of Surgical has remainedunchanged since its incorporation and the holders of Surgicals
stock maintain the original distribution of ownership.
20. Since then and to this date, the majority group orcontrol group of Surgical is composed of Fernandez and his
father, Fernandez-Rios, together owning seventy percent (70%) of
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Surgical common stock. [Exhibit 3, Summary of Surgical Board of
Directors and stockholders of Surgical dated on September 6,
2006 and minutes of first meeting of the stockholders held on
August 17, 2006]
21. The capital structure of Surgical is composedexclusively of one thousand (1,000) shares of common stock
without par value. These shares were distributed according to
the previously referred proportion of ownership. [Exhibit 2,
Surgicals Certificate of Incorporation]
22. The board of directors of Surgical is not classifiedin groups or in staggered terms, neither has Surgical authorized
cumulative voting as its method of voting. [Exhibit 4,
Surgicals Bylaws]
23. Nothing in the bylaws of Surgical or in itscertificate of incorporation proscribe the use of written
consents in lieu of meeting to order actions that would normally
require a meeting of the stockholders. [Exhibits 4 & 2,
Surgicals Bylaws & Surgicals Certificate of Incorporation]
24. The initial investments were made by Fernandez andMeditech by means of cash, equipment and product to be sold by
Surgical in Puerto Rico. Meditech is a Venezuela corporation
owned and operated by Fernandez out of Caracas, Venezuela.
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30. The illegal implicit dividend payments started on2009. [Exhibit 6, Surgicals Unaudited Financial Statements
2007-2011]
31. In this same year, Miranda admitted he paid himselfadvanced commissions. Exhibit 7, Letter dated on June 28, 2012,
sent by Miranda to Fernandez]
32. Since then, Surgical also started sufferingsignificant harm in its relationship with suppliers, which in
turn adversely affected Fernandezs and Surgicals reputation
and goodwill created within this industry.
33. For instance, the supplier Applied Medical ResourcesCorporation (hereinafter referred to as Applied Medical),
terminated Surgical as a Puerto Rico distributor of their
products. [Exhibit 8, Communications between Surgical, Fernandez
and Applied Medical]
34. This caused several problems for Fernandez;specifically, it generated a desire in Applied Medical to stop
doing business with Fernandez in Venezuela and Surgical could
only make purchase through Meditech in Venezuela, both of which
resulted in unexpected expenditures by Meditech and Fernandez.
[Exhibit 8, Communications between Surgical, Fernandez and
Applied Medical]
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name (Puerto Rico Surgical Technologies, Inc.) digitally
written in blue turquoise, a pictogram, composed of a square
with a blue turquoise background and depicting a heart monitor
with the capital letters PRST centered inside the square, and,
lastly, Surgicals tagline features at the bottom of the logo
with the slogan: focusing on surgical quality. [Exhibit 10,
Surgicals service mark logo]
41. The federally registered trademarks promoted,marketed, sold and serviced by Surgical are also distinctive and
unique. [Exhibit 11, Federally registered trademarks represented
by Surgical]
42. Considerable and substantial monetary resources havebeen invested in developing the Surgical service mark and the
federally registered trademarks distributed and represented by
Surgical in Puerto Rico.
43. The marks distributed by Surgical are registered withthe United States Patent and Trademark Office (hereinafter
referred to as USPTO), and to this day, the represented
federally registered marks are as follows: (a) MAQUET,
registered on November 3, 1998 and with USPTO registration
number 2,201,054; (b) GETINGE, filed for registration on October
30, 2009 and with USPTO serial number 77861251; and (c)
SPACELABS and SPACELABS MEDICAL, registered on February 19, 1985
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and on August 13, 1996, with registration numbers 1320540 and
1993012, respectively.
44. Surgical holds the right to distribute these marks inthe Puerto Rico market, pursuant to several distribution
agreements with the owners of these registered marks.
45. A significant number of consumers of medical productsand equipment purchase from Surgical under the assumption that
it is the authorized distributor of these brands and that its
employees and representatives are authorized to promote, offer,
advertise, sell, and service these goods.
46. The purpose of the Puerto Rico Surgical Technologies,Inc. service brand is to identify the corporation as the source
of these products, by virtue of its employees and representative
who develop clients and provide services in connection with the
authorized distribution. In essence, it is used to establish a
symbol of quality and goodwill that consumers of medical
products and equipment can continue to trust.
C. Mirandas Removal from the Management of Surgical47. As a result of discussions between Fernandez and
Fernandez-Rios regarding Mirandas recent performance as manager
of Surgical, they decided it was proper to complete his removal.
48. For example, Fernandez and Fernandez-Rios have becomeupset of the fact that since 2009, Miranda has paid himself
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advanced commissions. [Exhibit 7, Letter dated on June 28, 2012,
sent by Miranda to Fernandez]
49. To achieve this, Fernandez and Fernandez-Rios, each,signed a corporate resolution on May 1, 2012, which stated
Mirandas removal effective within five (5) days of receipt of a
majority of written consents at the principal offices of
Surgical. [Exhibit 12, Corporate Resolution by Written Consent
received at Surgical on May 11, 2012]
50. Both Fernandez and Fernandez-Rios signed corporateresolutions by written consent, which were sent by certified
mail and were received on May 11, 2012. The removal became
effective on May 21, 2012. [Exhibit 13, Certified mail receipts
for Corporate Resolutions by Written Consent sent on May 9,
2012]
51. A notification was sent to Miranda, as minoritystockholder, on May 14, 2012, with the determination held by the
majority of stockholders in the corporate resolution by written
consent received at Surgical on May 11, 2012. This notification
was received at Mirandas address on May 17, 2012. [Exhibit 14 &
15, Notification to Surgical minority stockholders dated on May
14, 2012, in relation to Corporate Resolution by Written Consent
of May 11, 2012; Certified mail receipt for Notification of
Corporate Resolution]
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52. But, on May 12, 2012, Miranda wrote Fernandez a letterexpressing his disapproval of the holding made by the majority
of Surgical stockholders and expressing his intention to act in
defiance of the removal. However, in such letter, Miranda
acknowledged receipt of enough consents to conform a majority of
stockholders of Surgical, a statutory requirement to act by
written consent without a meeting. [Exhibit 16, Letter dated on
May 12, 2012, sent by Miranda to Fernandez]
53. On the same token, dated on May 21, 2012, Miranda sentFernandez a letter to reiterate his dismissal of the corporate
resolution of May 11, 2012 and the notification he received, as
Surgical minority stockholder. However, the letter serves as
acknowledgement of the receipt of such notification, as required
by the Corporations Act to act in lieu of meeting of the
stockholders. [Exhibit 17, Letter dated on May 21, 2012, sent by
Miranda to Fernandez]
54. Moreover, on May 22, 2012, Miranda sent Fernandez ane-mail where he acknowledged he fraudulently conveyed to
Surgical employees that Fernandez had resigned as President of
Surgical, a fact Miranda knew to be false. Miranda also
acknowledged that Surgical maintains a debt with Fernandez and
Fernandezs Venezuela corporation. [Exhibit 18, E-mail dated on
May 22, 2012, sent by Miranda to Fernandez]
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55. Miranda also admitted that Fernandez is still astockholder of Surgical and that the value of Surgical stock is
still undetermined. However, Miranda still refuses to allow the
inspection of Surgical corporate books and records in order to
make a proper determination of Surgicals value. [Exhibit 18, E-
mail dated on May 22, 2012, sent by Miranda to Fernandez]
56. Notwithstanding the above, Fernandez sent a letter toMiranda on May 28, 2012, restating the validity of the
stockholders action that ordered his removal and that Miranda
had opted to act in defiance of the holding of a majority of
Surgical stockholders. Fernandez requested compliance from
Miranda in order to avoid judicial intervention. However, as a
result from Mirandas obstinacy, Fernandez is left with no other
options but to seek equitable relief to enforce the removal.
[Exhibit 19, Letter dated on May 28, 2012, sent by Fernandez to
Miranda]
57. This noncompliance is causing Fernandez serious harmand continues to threaten the well being of Surgical. Moreover,
neglecting his right to vote causes Fernandez a direct and
individual harm, separate to any harm possibly conceived to be
suffered by Surgical.
58. Since then, Miranda still maintains his position asmanager of Surgical, still controls the real and personal
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property of Surgical, has access to bank accounts, is in charge
of the daily administration of Surgical, all of this in direct
contempt and neglect of the prerogative of a majority of
stockholders who validly exercised their right to vote, in
accordance with the applicable law.
59. Also, Miranda has since continued the unauthorizedoperation, representation, and management of Surgical.
60. After his removal, Miranda lost the authority tooperate or act on behalf of the business of Surgical, which is
the distribution and sale of registered marks of medical
products and equipment. Miranda lost the authority to act as an
agent or associate of Surgical and its authorized distribution
of the previously mentioned registered marks.
61. These acts are performed by Miranda against theexpress intention of Surgical stockholders to end Mirandas
authorization to represent these marks.
62. Since, Miranda has continued to represent himself asmanager and/or agent of Surgical albeit the removal, has made
misrepresentations as to his tenure in the management of
Surgical, has deceived Surgicals clients and suppliers
regarding his authorization to act in representation of
Surgical, has influenced the purchasing decisions of current and
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prospective clients without authorization, all in connection
with the continuous operation of Surgical product distribution.
63. Mirandas refusal to stop promoting the products andequipment distributed by Surgical cause confusion within the
Puerto Rico medical products and equipment market. Clients and
suppliers will continue to do unauthorized business with Puerto
Rico Surgical Technologies, Inc. by virtue of Mirandas
unauthorized involvement.
64. Also, Miranda has represented to suppliers that he isacting with authority from the corporation to purchase,
distribute, and represent their registered marks. These actions
will likely injure, dilute, and tarnish Surgical and the Puerto
Rico Surgical Technologies, Inc. service mark.
D. Fernandezs Inquiry of Surgicals Financial State65. Early in 2011, Fernandez held a meeting with Miranda
and Mr. Arnaldo Miranda (hereinafter referred to as Arnaldo)
to request Surgicals financial statements in order to develop a
future plan for himself and for Surgical.
66. On April 7, 2011, Miranda sent Fernandez an e-mail tonotify him about the status of the requested financial
statements. Miranda asserted that the requested information
would be made available within a week from the e-mail.
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[Exhibit 20, Mirandas e-mail to Fernandez dated on
April, 7, 2011]
67. On June 16, 2011, Fernandez held a meeting with Mr.William Rodriguez, accountant for Surgical, to review the
requested and submitted financial information. Fernandez was not
pleased with the report because he was only presented with
income tax returns and not with financial statements. At the end
of this meeting, Fernandez was provided with additional
financial information.
68. On this same day, after the meeting, Fernandez sentMiranda an e-mail expressing his worries with the financial
state of Surgical. Fernandez requested an additional meeting to
be held on the next day, June 17, 2011, to discuss his
appreciation of the entire state of affairs. [Exhibit 21, E-mail
sent by Fernandez to Miranda dated on June 16, 2011]
69. After a hostile meeting on June 17, 2011, Fernandezhired the services of an independent certified public
accountant, in order to perform a preliminary examination of
Surgicals financial state and with the limited documents
Miranda made available to Fernandez. [Exhibit 22, Preliminary
examination report and invoice submitted by CPA Arnaldo Colon]
E. Financial Examination of Surgical
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70. The examination was preliminary and based solely upona comparison between Surgicals corporate income tax returns and
a set of unaudited financial statements. Colon was also able to
meet and confer with Mr. William Rodriguez, accountant for
Surgical, and discuss the contents of these documents. [Exhibit
22, Preliminary examination report and invoice submitted by CPA
Arnaldo Colon]
71. Although preliminary, Colon was able to reportfindings that showed a grim outlook of Surgicals financial
affairs. Specifically, Colon found several inconsistencies in
revenue reporting, depletion of Surgicals capital structure and
continuous withdrawals of company funds. [Exhibit 22,
Preliminary examination report and invoice submitted by CPA
Arnaldo Colon]
72. These findings show damages both to Surgical and toits stockholders. The personal withdrawals are nothing but
dividends in disguise. [Exhibit 22, Preliminary examination
report and invoice submitted by CPA Arnaldo Colon
73. Specifically, these personal withdrawals" wereunknown to Fernandez and Fernandez-Rios and they did not receive
payment as dividends for their participation in Surgical.
[Exhibit 22, Preliminary examination report and invoice
submitted by CPA Arnaldo Colon]
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74. Surgicals capital structure is not complex. It iscomposed exclusively of one classification of voting common
stock and all stockholders share the same rights, including the
right to receive dividend payments, according to the previously
mentioned proportion of ownership of Surgical. [Exhibits 2 & 3,
Surgicals Certificate of Incorporation and Summary of Surgical
Board of Directors and stockholders of Surgical dated on
September 6, 2006 and minutes of first meeting of the
stockholders held on August 17, 2006]
75. These personal withdrawals caused a depletion ofSurgicals funds and capital base. It injured Surgical by
placing it in a precarious position in front of its suppliers
and creditors, which has already caused harm in the past, as it
was the case with suppliers Applied Medical and Vascutek.
[Exhibit 6, Surgicals Unaudited Financial Statements 2007-2011]
F. Mirandas Fraudulent Representations Before His Removal76. On January 11, 2010, Mr. Arnaldo Miranda-Aviles,
Secretary of Surgicals Board of Directors, signed a sworn
corporate resolution that appointed Miranda as President of
Surgical. [Exhibit 23, Surgicals document titled Corporate
Resolution of January 11, 2010]
77. However, Fernandez was never removed as President ofSurgical prior to the appointment of Miranda to such position.
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94. Mirandas unauthorized representation of Surgicalinfringes the federally registered trademarks distributed by
Surgical and the Puerto Rico Surgical Technologies, Inc
service mark.
95. They constitute unauthorized acts of representationand sale of protected trademarks and service marks with the
intent to profit and benefit from the goodwill and reputation of
the marks at issue.
96. Unless Miranda is restrained from continuing tooperate the business of Surgical, these federally registered
trademarks will be subject to irreparable harm because Mirandas
representation ceased to enjoy authorization from a majority of
Surgical stockholders.
97. Also, these protected marks will likely suffer fromirreparable dilution and tarnishment, since distinctive and
famous marks are being promoted, marketed, sold, and serviced
without the authorization of Surgical, authorized distributor of
these federally registered trademarks and owner of the Puerto
Rico Surgical Technologies, Inc. service mark, this diluting
its goodwill and reputation.
98. As stated before, Fernandez and Fernandez-Rios are themajority stockholders of Surgical and have been since its
incorporation.
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103. A temporary restraining order, as well as preliminaryand permanent injunction should be issued immediately, enjoining
Miranda from continuing to sell and distribute the federally
registered trademarks distributed by Surgical, dilute the
Puerto Rico Surgical Technologies, Inc. service mark,
interfere with the rights of Surgical stockholder, specifically,
with the holding decided by the majority stockholders of
Surgical to remove Miranda as administrator of the corporation
and to surrender control of Surgical over to Fernandez.
VI. Second Claim for Relief:
Trademark Infringement and Unfair Competition
104. Paragraphs 1 to 103 are hereby incorporated byreference.
105. Miranda continues to sell and distribute the federallyregistered trademarks distributed by Surgical; continues to
represent himself to be a Surgical representative and manager;
and continues to promote and advertise the federally registered
trademarks distributed by Surgical without authorization.
106. Mirandas aforesaid acts tend to represent falselythat he represents and manages Surgical, the Puerto Rico
Surgical Technologies, Inc. service mark and the federally
registered trademarks distributed by Surgical constitute a
violation of Section 43(a) of the Lanham Act, 15 U.S.C.
1125(a).
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107. The aforesaid acts of Miranda are greatly andirreparably damaging to Fernandez, Fernandez-Rios, Surgical, and
the federally registered trademarks it distributes, and will
continue to be greatly and irreparably damaging unless enjoined
by this Court since Fernandez and Fernandez-Rios are without an
adequate remedy at law.
VII. Third Claim for Relief:
Trademark Dilution and Tarnishment
108. Paragraphs 1 to 107 are hereby incorporated byreference.
109. Miranda is using the Puerto Rico SurgicalTechnologies, Inc. service mark; is representing himself to be
a Surgical representative and manager; and is promoting and
advertising Surgicals business and the federally registered
trademarks it distributes without authorization.
110. The promotion and marketing of the Puerto RicoSurgical Technologies, Inc. service mark and color patterns is
causing confusion or mistake and is deceiving consumers of
medical products and equipment as to the origin, the licensing,
and the endorsing by Surgical of Mirandas misrepresentations,
which at this time is out of the control of Fernandez,
Surgicals legitimate manager.
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111. Mirandas aforesaid acts constitute trademarkinfringement in violation of Section 32(1) of the Lanham Act,
15 U.S.C. 1114(1).
112. Mirandas aforesaid acts have caused Fernandez,Fernandez-Rios, and Surgical to suffer injury and damages of
such a nature that monetary damages alone cannot adequately
compensate Surgical for the loss suffered.
113. The aforesaid acts of Miranda are greatly andirreparably damaging to Surgical and will continue to be greatly
and irreparably damaging to Surgical unless enjoined by this
Court since Fernandez and Fernandez-Rios are without control of
the corporation and without an adequate remedy at law.
VIII. Fourth Claim for Relief:Declaratory Judgment
114. Paragraphs 1 to 113 are hereby incorporated byreference.
115. In the present case, a majority of stockholders ofSurgical, adding up a total of seventy percent (70%) of the
total amount of outstanding common stock, have decided, through
a valid corporate resolution by written consent, that Miranda
was thereby removed as manager of Surgical. Since then, Miranda
has expressly refused to step down as manager of Surgical and
has refused to surrender Surgical to Fernandez, its President.
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116. Considering the above, Mirandas removal and order tosurrender the corporation over to Fernandez should be declared
valid, legal, and enforceable under Rule 57 of the Federal Rules
of Civil Procedure.
117. Subsequently, Mirandas current control of Surgicaland refusal to surrender Surgical to its stockholders should be
declared invalid, illegal, null void, and unenforceable under
Rule 57 of the Federal Rules of Civil Procedure.
IX. Fifth Claim for Relief:
Direct Claim for Breach of Fiduciary Dutyof Protecting Fernandezs Right to Vote
118. Paragraphs 1 to 119 are hereby incorporated byreference.
119. Fernandez exercised his right to vote, as stockholderof Surgical, with a corporate resolution by written consent in
lieu of meeting that approved, by a majority of its
stockholders, the removal of Miranda as manager of Surgical. It
also ordered Miranda to surrender control of Surgical over to
Fernandez.
120. Subsequently, a majority of consents of outstandingshares of Surgical was received on May 11, 2012, at the
principal place of business of Surgical, where the book in which
proceedings of this nature are recorded and by means of
certified mail with return receipt.
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121. On the other hand, Miranda does not hold a vestedright in the office of director of Surgical. The Board of
Directors of Surgical is not classified in groups or in
staggered terms, neither has Surgical authorized cumulative
voting as its method of voting. Moreover, nothing in the bylaws
of Surgical or in its certificate of incorporation proscribe the
use of written consents in lieu of meeting to order actions that
would normally require a meeting of the stockholders.
122. Therefore, Mirandas refusal to step down as directorof Surgical and express defiance of the holding of a majority of
Surgical stockholders blatantly violates his stockholder
fundamental franchise to vote, to remove directors and to act by
written consent, as provided by the Corporations Act.
123. It is an independent and separate harm than thoseinflicted by Miranda upon the corporation, since the holder of
the right is Fernandez and he will be the person entitled to
relief.
124. The damages suffered by Fernandez for this breach aregreat and irreparable. No monetary damage could restore
Fernandezs right to vote in connection with the ordered
removal. However, a damages award of no less than $100,000.00 is
hereby requested to compensate for the lack of control that
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Fernandez is suffering and will continue to suffer until
otherwise enjoined by this Court.
X. Sixth Claim for Relief:
Direct Claim for Breach of Fiduciary Duty
of Protecting Fernandezs Right to Inspect
Corporate Books and Records
125. Paragraphs 1 to 124 are hereby incorporated byreference.
126. Stockholders enjoy a personal right to inspectcorporate books and records as a matter of self-protection,
because a stockholder is entitled to know how directors are
conducting the affairs of the corporation of which he or she is
a part owner.
127. This right is exercised upon written demand, underoath, stating a purpose that is reasonable related to a persons
interest as stockholder. Once this is established, the
corporation may not defeat the request alleging hidden agendas
or secondary purposes. Not even that the books and records to be
inspected are in possession of a third party. The corporation,
generally, must comply.
128. In this case, a sworn request was sent by Fernandezand Fernandez-Rios to Miranda, as director and manager of
Surgical. The request stated the purpose of the inspection and
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identified with specificity the documents required for the
inspection.
129. However, Miranda completely disregarded the rights ofSurgical stockholders to inspect Surgicals corporate books and
records, thus, infringing Fernandezs and Fernadez-Rios right
to inspect corporate books and records, entitling them to relief
on an amount not less than $100,000.00.
XII. Seventh Claim for Relief:
Derivative Claim for Breach of Fiduciary Dutiesfor the payment of illegal implicit dividends
in detriment to similarly situated stockholders
130. Paragraphs 1 to 129 are hereby incorporated byreference.
131. As previously stated, a preliminary examination ofSurgicals income tax returns and unaudited financial statements
showed substantial personal withdrawals. These disbursements
are nothing else but implicit dividends paid out by Surgical to
Miranda, in neglect of statutory requirements.
132. These dividend payments were not made in accordance tostatutory requirements or in accordance with Surgicals
ownership and capital structure.
133. This breach of fiduciary duties constitutes an act ofself-dealing, which must be reviewed under the entire fairness
standard and the applicable law.
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entering a temporary restraining order, a preliminary and
permanent injunction, and a declaratory judgment as herein
detailed and other available remedies:
1. Enjoining Miranda from continuing to represent himselfas manager or representative of Surgical and using the Puerto
Rico Surgical Technologies, inc. service mark to promote,
market, sale, and service the federally registered trademarks
imported and distributed by Surgical; instructing Miranda to
surrender all operating manuals, training manuals, sales manuals
and aids, advertising and promotional materials and all trade
secret and confidential and proprietary material delivered to
Miranda; instructing Miranda to stop infringing, diluting and
tarnishing the federally registered trademarks distributed by
Surgical and the Puerto Rico Surgical Technologies, Inc.
service mark, as well as its reputation and goodwill;
instructing Miranda to immediately surrender all real and
personal property of Surgical, including access to
electronically stored information and to the website
www.puertoricosurgical.com.
2. Enjoining Miranda from continuing to interfere withFernandezs rights as stockholder of Surgical, specifically,
with the holding decided by the majority stockholders of
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Surgical to remove Miranda as manager of the corporation and to
surrender control of Surgical over to Fernandez.
3. Enjoining Miranda from fulfilling or perfectingtransactions on behalf of Surgical; accessing or retiring funds
from Surgical bank accounts; performing any acts reasonably
related to the finances of Surgical, such as making payments in
cash, checks, money orders, credit cards, promissory notes
and/or any other negotiable instruments; participating in
meetings of the Board of Directors of Surgical; using and
representing himself as an authorized representative of the
federally registered trademarks distributed by Surgical and the
Puerto Rico Surgical Technologies, Inc. service mark; and any
other acts reasonably related to the control or management of
Surgical.
4. Fernandez also requests that this Court orders aspeedy hearing of this action and advance it on the calendar in
accordance with Rule 57 of the Federal Rules of Civil Procedure,
in as much as it involves only issues of law on undisputed or
relatively undisputed facts that warrant the courts swift action
and grants the temporary restraining order requested herein.
5. Fernandez hereby requests an entry of a declaratoryjudgment declaring that the corporate resolution by written
consent in lieu of meeting of the stockholders, signed, dated
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and sent via certified mail to Surgicals principal offices, and
thereupon received on May 11, 2012, is valid, legal, and
enforceable under the Corporations Act and Surgicals
Certificate of Incorporation and by-laws.
6. Fernandez requests the entry of an order wherebyMiranda is required to indemnify, reimburse and/or compensate
Fernandez, directly, for the breach of Mirandas fiduciary
duties directly held against Fernandez, specifically, such
duties in connection with Fernandezs right to vote, right to
elect and remove corporate directors, and right to act by
written consent in lieu of meeting in an amount not less than
$100,000.00.
7. Fernandez requests the entry of an order wherebyMiranda is required to indemnify, reimburse and/or compensate
Fernandez, directly, for the breach of Mirandas fiduciary
duties directly held against Fernandez, specifically, such
duties in connection with Fernandezs right to inspect corporate
books and records in an amount not less than $200,000.00.
8. Fernandez requests the entry of an order wherebyMiranda is required to indemnify, reimburse and/or compensate
Surgical, derivatively, for the breach of Mirandas fiduciary
duties held against Surgical, specifically, such duties in
connection with the illegal payment of implicit dividends in
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violation of Surgicals proportion of ownership and the
statutory provisions related to the declaration of dividends in
an amount not less than $327,522.48, plus interests.
9. Fernandez requests the entry of an order wherebyMiranda is required to indemnify, reimburse and/or compensate
Surgical, derivatively, for the breach of Mirandas fiduciary
duties held against Surgical, specifically, such duties in
connection with the Mirandas fraudulent misrepresentations as
sole proprietor of Surgical and, currently, as incumbent
director of Surgical in an amount not less than $100,000.00.
10. Fernandez, directly and derivatively, requests theaward of such other and further relief as is just and equitable,
and the payment of costs, interest, and attorney fees.
11. Fernandez makes a demand of trial by jury.
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CERTIFICATE OF SERVICE
It is hereby certified in compliance with Fed.R.Civ.P.
65(b)(1)(B) that a copy of this Motion for Temporary Restraining
Order and Preliminary Injunction, will be served by hand upon
Defendant through an authorized person to receive legal
documents, as well as, all other initial pleading filed with the
Court at HC 72 Box 3766-213, Naranjito, PR 00719, and to
Defendants legal counsel, Mr. Ramn Walker Merino, Esq., by
electronic mail at [email protected].
SEPULVADO & MALDONADO, PSC
ATTORNEYS for Plaintiff
Citibank Towers, Suite 1900
252 Ponce de Leon Avenue
San Juan, PR 00918
Phone (787)765-5656
Fax (787)294-0073
/s/Lee Sepulvado-Ramos
USDC-PR [email protected]
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