Fifth Chamber upholds dismissal of Avícola Las Margaritas' damages claim against Lisa, S.A. for failure of proof
Jun 6 2022
Court of Appeals
The Fifth Chamber of the Court of Appeals, Civil and Commercial Division, upheld the dismissal of the damages lawsuit that Avícola Las Margaritas, S.A. (successor by merger of Importadora de Alimentos de Guatemala, S.A.) filed against Lisa, S.A. The Chamber corrected a legal error in the first-instance ruling by holding that a damages claim is not contingent on the finality of the shareholder exclusion, but concluded that the plaintiff failed to prove the existence, causation, or quantification of the alleged damages. The practical result for Lisa, S.A. is that the damages claim was definitively rejected on appeal.
Avícola Las Margaritas, S.A., acting as universal successor of Importadora de Alimentos de Guatemala, S.A. through a merger by absorption, sued Lisa, S.A. in an ordinary damages proceeding (Expediente 01044-2012-00229). The complaint alleged that Lisa, S.A. had committed fraudulent and wrongful acts that led to its exclusion as a shareholder of Importadora de Alimentos, and that those acts caused patrimonial and moral damages to the company.
The first-instance ruling of January 21, 2022, issued by the Eighth First-Instance Civil Court of the Department of Guatemala, dismissed the claim. The court sustained the peremptory exception that indispensable procedural prerequisites for the damages claim had not been met, reasoning that until Lisa, S.A.'s exclusion as shareholder became final through judicial proceedings, the damages arising from the acts underlying that exclusion could not be pursued. Lisa, S.A.'s remaining exceptions (lack of truthfulness, nonexistence of damages, extinction of the right to claim, and inadmissibility of damages for third-party acts) were denied, as was the exception of lack of standing.
Avícola Las Margaritas appealed. The case file was received by the Fifth Chamber on April 6, 2022.
Avícola Las Margaritas, S.A. argued that the first-instance ruling confused the act of exclusion with the wrongful acts that caused the damages. It maintained that exclusion of a shareholder and the claim for damages are legally independent: the law permits a damages claim without requiring the exclusion to be final. The appellant contended that the lower court committed an error of fact in reading paragraph 78 of the complaint, incorrectly concluding that the claimed damages derived from the exclusion itself when the text says no such thing. Finally, it argued that Article 228 of the Commercial Code was misinterpreted by conditioning the damages action on the finality of the exclusion.
Lisa, S.A. filed a negative answer and multiple peremptory exceptions at first instance: lack of truthfulness in the alleged facts, nonexistence of the claimed damages, extinction of the right to claim damages, and inadmissibility of damages for acts committed by third parties. Lisa, S.A. also raised the exception of failure to meet indispensable procedural prerequisites, which was the only one sustained by the first-instance court.
Lisa, S.A. submitted documentary evidence including, among others: the judgment of the Supreme Court of Bermuda in the proceedings brought by Lisa, S.A. against Leamington Reinsurance Company, Ltd. and Avícola Villalobos, S.A.; notices for 2012 ordinary shareholder assemblies from seven Avícola Group entities addressed to Lisa, S.A. (demonstrating that the exclusion was not final, as the companies continued to convene Lisa as a shareholder); sworn reports from multiple Avícola Group entities in amparo proceedings in which they acknowledged the exclusion was not final; and an economic study calculating the value of shares and retained dividends owed to Lisa, S.A. in the Avícola Villalobos Group at $334,578,171.00 (over 2.6 billion quetzales) as of January 2012.
The Chamber found that the first-instance court erred in conditioning the admissibility of the damages claim on the finality of the exclusion. Both the exclusion of a shareholder and the obligation to pay damages are independent consequences of the acts that gave rise to them. A shareholder may or may not be excluded, and may or may not be compelled to pay damages, without the exclusion being a prerequisite for the damages claim. The exception of failure to meet procedural prerequisites was therefore overturned.
However, the Chamber proceeded to analyze the merits and concluded that the plaintiff failed to meet its burden of proof. While the documentary evidence established that lawsuits, magazine articles, publications, and reports existed, it did not prove that those acts actually constituted compensable damage. The Chamber identified specific evidentiary deficiencies:
The damages claim against Lisa, S.A. was definitively rejected on appeal.
Avícola Las Margaritas, S.A. filed a cassation appeal, which was rejected by the Supreme Court of Justice in its cassation ruling of February 20, 2023.