Professional Documents
Culture Documents
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 TECHNOLOGIES, INC., SURGICAL 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. NOMINAL DEFENDANT. CIVIL NO.
VERIFIED COMPLAINT TO THE HONORABLE COURT: COME NOW Plaintiffs, Rolando Fernandez Aviles (hereinafter referred to as Fernandez) to as and Miguel Fernandez through Rios the
(hereinafter
referred
Fernandez-Rios),
undersigned counsel, and respectfully state, allege, and pray as follows: I. 1. This Jurisdiction and Venue Court has jurisdiction because:
Honorable
(a) this is a civil action arising under the Lanham Act of the United States, 15 U.S.C. 1051 et seq., subject matter
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. 3. Defendant, Puerto Parties 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. Surgical Plaintiff, since its Fernandez, has been He a stockholder serves of as
incorporation.
currently
President of Surgical and its Board of Directors. He currently holds thirty percent (30%) of Surgical stock.
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5.
Surgical since its inception. He currently holds forty percent (40%) of Surgical stock. 6. Defendant, Elmer O. Miranda-Aviles (hereinafter
referred 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 Action 7. 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. Surgical, Specifically, in defiance Mirandas with the continuing consent operation to order of his
express
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 fiduciary
duties perpetrated by Miranda, former manager of Surgical, that directly Surgical, rights, in harm for Fernandez violations of and of the Fernandez-Rios, their Puerto stockholders of
fundamental Rico
stockholder Act
violation
Corporations
(hereinafter referred to as Corporations Act). 11. Also, this is a derivative claim against Miranda (and
Surgical 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 order, and Fernandez-Rios also seek and a a temporary permanent
restraining
a preliminary
injunction,
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injunction, pursuant to Rule 65 of the Federal Rules of Civil Procedure and to 15 U.S.C. 1116(a), to enjoin Miranda from
illegally continuing to act as manager and agent of Surgical in order to prevent further violations of Fernandezs franchises and and
Fernandez-Rios
fundamental
stockholder
violations under 15 U.S.C. 1125(a) & (c). 13. Fernandez also seeks declaratory relief which may be
granted under the Declaratory Judgment Act, 28 U.S.C. 22012202, and under Rule 57 of the Federal Rules of Civil Procedure, in order to declare that Mirandas removal from the management of Surgical is valid and enforceable under the Corporations Act and, as such, Miranda has no legal right to continue in the management of Surgical. IV. A. 14. Relevant Facts
Creation and Growth of Surgical Surgical is a Puerto Rico corporation dedicated to the
importation of medical products and equipment from the United States and other countries for their distribution and sale in the Commonwealth of Puerto Rico. 15. Before the incorporation of Surgical, Miranda went to
Venezuela to work for Fernandez and the corporation Meditech Venezuela, C.A. (hereinafter referred to as Meditech).
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as a result Fernandez decided to start a new medical products distribution [Exhibit 1, operation Job in the sent Commonwealth by Miranda of to Puerto Rico. on
proposal
Fernandez
ownership 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 of
(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 remained
unchanged since its incorporation and the holders of Surgicals stock maintain the original distribution of ownership. 20. control Since then and to this date, the majority group or group of Surgical is composed of Fernandez and his
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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 of capital one structure of Surgical shares of is composed stock
exclusively
thousand
(1,000)
common
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 classified
in groups or in staggered terms, neither has Surgical authorized cumulative voting as its method of voting. [Exhibit 4,
Surgicals Bylaws] 23. Nothing of in the bylaws of Surgical the use or of in its
certificate
incorporation
proscribe
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 and
Meditech 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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5,
Summary
of
wire
transfers
between
Meditech
and
This for
investment the
was
used and
by
Surgical
to
develop from
client-base
products
services
imported
the
United States and other countries to be sold by Surgical in Puerto Rico. 26. Miranda was the person in charge of managing and
administering maintained a
Surgicals supervisory
daily role
operation. with
However, and
Surgical,
decisions required Fernandezs approval. 27. This is shown the by the he fact that Miranda His receives were
commissions
for
sales
completes.
profits
supposed to mainly be derived from such commissions. 28. two By the end of 2009, Surgical total revenues exceeded dollars it was ($2,000,000.00). during this same However, year as recently personal
million
discovered,
when
withdrawals started forming part of Surgicals balance sheet. [Exhibit 6, Surgicals Unaudited Financial Statements 2007-2011] 29. Fernandez and Fernandez-Rios have not received any
money attributable to a declaration of dividends. The only money received by Fernandez were payments to Meditech for its
investment in Surgical. [Exhibit 5, Summary of wire transfers between Meditech and Surgical]
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30. 2009.
The
illegal 6,
implicit
dividend Unaudited
payments Financial
started
on
[Exhibit
Surgicals
Statements
advanced commissions. Exhibit 7, Letter dated on June 28, 2012, sent by Miranda to Fernandez] 32. Since then, Surgical also started suffering
significant 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 Resources (hereinafter Surgical as a referred Puerto to Rico as Applied distributor Medical), of their
Corporation terminated
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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35.
Additionally,
the
corporation
Vascutek,
Terumo
Company (hereinafter referred to as Vascutek) also terminated Surgical absence as of their sales Puerto on Rico distributor part. due to 9, a complete
Mirandas
[Exhibit
Vascuteks
Termination E-mail sent to Fernandez on February 24, 2011] 36. This also created unexpected expenditures for
Fernandez and Meditech, which moved to restore the goodwill and reputation created through sales in the established Venezuela distribution. [Exhibit 9, Vascuteks Termination E-mail sent to Fernandez on February 24, 2011] B. 37. Marks Distributed by Surgical In Puerto Rico Surgical and Fernandez have become household names
within the Puerto Rico medical products and equipment industry. 38. that Surgical represents presence are federally and a registered number from of trademarks products States
enjoy
nationwide by
the
distributed
Surgical
imported
the
United
across interstate lines. 39. allowed Fernandez Surgical involvement to begin and success with in the industry and a
operations
goodwill
reputation that other start-ups do not immediately enjoy. 40. The Puerto Rico Surgical Technologies, Inc. service
mark is inherently distinctive and unique. Surgicals graphic logo design is made up by its wordmark, the corporations full
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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 have
been invested in developing the Surgical service mark and the federally registered trademarks distributed and represented by Surgical in Puerto Rico. 43. the The marks distributed by Surgical are registered with States as Patent and and Trademark to are 1998 this as and Office day, the (hereinafter represented (a) MAQUET,
United to
referred federally
USPTO),
registered on November
marks 3,
registered
registration
number 2,201,054; (b) GETINGE, filed for registration on October 30, 2009 and with USPTO serial number 77861251; and (c)
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and on August 13, 1996, with registration numbers 1320540 and 1993012, respectively. 44. the Surgical holds the right to distribute these marks in Rico market, pursuant to several distribution
Puerto
agreements with the owners of these registered marks. 45. A significant number of consumers of medical products
and 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. 47. Mirandas Removal from the Management of Surgical 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 become
upset 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. signed a To achieve this, Fernandez and Fernandez-Rios, each, 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 corporate
resolutions 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,
stockholder, 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.
expressing 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 sent
Fernandez 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. e-mail Moreover, on May 22, 2012, Miranda sent Fernandez an 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
stockholder 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, Email dated on May 22, 2012, sent by Miranda to Fernandez] 56. Miranda Notwithstanding the above, Fernandez sent a letter to 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 Surgical stockholders. Fernandez the holding of a majority of 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 harm
and 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. manager Since then, Miranda still maintains his position as 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 who of the prerogative their of a majority to vote, of in
stockholders
validly
exercised
right
accordance with the applicable law. 59. Also, Miranda has since continued the unauthorized
operation, representation, and management of Surgical. 60. After his removal, Miranda lost the authority to
operate 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. express These acts of are performed by Miranda to against end the
intention
Surgical
stockholders
Mirandas
authorization to represent these marks. 62. Since, Miranda has continued to represent himself as
manager and/or agent of Surgical albeit the removal, has made misrepresentations Surgical, regarding has his as to his tenure in the management and of
deceived
Surgicals to act
clients in
suppliers of
authorization
representation
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prospective
clients
without
authorization,
all
in
connection
with the continuous operation of Surgical product distribution. 63. equipment Mirandas refusal to stop promoting the products and 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. acting Also, Miranda has represented to suppliers that he is 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. 65. Fernandezs Inquiry of Surgicals Financial State 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. notify On April 7, 2011, Miranda sent Fernandez an e-mail to him about Miranda made the status of the the a requested requested from financial information the e-mail.
statements. would be
asserted
that
available
within
week
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Mirandas
to
Fernandez
dated
on
On June 16, 2011, Fernandez held a meeting with Mr. 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. Miranda On this same day, after the meeting, Fernandez sent 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. hired After a hostile meeting on June 17, 2011, Fernandez services of an independent certified public
the
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.
a 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. findings affairs. Although that preliminary, a grim Colon Colon of was able to report
showed
outlook found
Surgicals
financial in
Specifically,
several
inconsistencies
revenue reporting, depletion of Surgicals capital structure and continuous Preliminary withdrawals examination of report company and funds. [Exhibit by 22, CPA
invoice
submitted
Arnaldo Colon] 72. its These findings show damages both to Surgical and to The personal [Exhibit withdrawals 22, are nothing but
stockholders. in
dividends
disguise.
Preliminary
examination
report and invoice submitted by CPA Arnaldo Colon 73. Specifically, these personal withdrawals" were
unknown to Fernandez and Fernandez-Rios and they did not receive payment [Exhibit as dividends for their participation report in and Surgical. invoice
22,
Preliminary
examination
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74. composed
Surgicals exclusively
capital of one
structure
is
not of
complex. voting
It
is
classification
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 6, 2006 and and stockholders minutes of of Surgical meeting dated of on the
September
first
stockholders held on August 17, 2006] 75. Surgicals These personal and withdrawals base. caused It a depletion Surgical of by
funds
capital
injured
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. 76. Secretary corporate Surgical. Mirandas Fraudulent Representations Before His Removal On of January 11, 2010, Board of Mr. Arnaldo Miranda-Aviles, signed as a sworn of
Surgicals
Directors, Miranda
resolution [Exhibit
that
appointed
President
23,
Surgicals
document
titled
Corporate
Resolution of January 11, 2010] 77. However, Fernandez was never removed as President of
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78.
Fernandez
never
quit
his
position
of
President
of
Surgical and was never notified of the board meeting required to complete his removal as President, necessary step before a new appointment to the same position. 79. to inform After these acts, Miranda met with Surgical employees the staff about the change in management and the
removal of Fernandez as President of Surgical. 80. Miranda knew or should have known his appointment was
not valid since Fernandez was never removed and never resigned; therefore, Miranda knew or should have known that this
representation was false. 81. The purpose of these misrepresentations were to induce
its employees and third parties from providing Fernandez access to Surgical, as he has always been entitled to as President and President of the Board of Directors, and for Miranda to entrench himself in the management of Surgical. 82. These fraudulent and false representations constitute
gross negligence in Mirandas behalf and breached the fiduciary duties owed by him to Surgical. G. 83. Gross negligence by Miranda The personal withdrawals made by Miranda, as seen in
Surgicals financial statements, are nothing more than dividends paid out only to Miranda and not to Fernandez or to Fernandez-
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Rios.
[Exhibit
6,
Surgicals
Unaudited
Financial
Statements
law or to Surgical ownership structure, these dividends create a liability in detriment to Surgical and its creditors. 85. Moreover, these payments deplete Surgicals funds to a
point where it may become impossible for Surgical to meet future payment terms of suppliers and other creditors. 86. depleting Mirandas its self-dealing base 6, in caused detriment harm to to Surgical, and
capital [Exhibit
creditors
stockholders.
Surgicals
Unaudited
Financial
Statements 2007-2011] H. 87. Request for Inspection of Surgicals Books and Records On April 26, 2012, Fernandez and Fernandez-Rios sent
Surgical a sworn request for inspection of Surgicals books and records. [Exhibit 24, Fernandezs Request for Inspection of
Corporate Books and Records of April 26, 2012] 88. and to The request was made in accordance with applicable law inspect by documents reasonably in his related to the findings
reported
accountant
Colon
preliminary
examination.
Also, in order to determine the value of Fernandezs stock. 89. Upon receipt, Miranda responded to the request
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almost one month after the request. [Exhibit 25, Mirandas reply to Fernandezs inspection request, dated on May 3, 2012 and May 8, 2012] 90. This letter was replied by Miguel Fernandez asking for
immediate action to provide the necessary accommodations for the inspection. This letter was also disregarded and to this date Fernandez [Exhibit has 26, received Fernandezs no further response response to from Miranda. reply to
Mirandas
inspection request, letter dated on May 11, 2012] 91. Mirandas refusal to afford the requested inspection
of Surgical books and records and the defiance to abide by the valid injure vote of a majority and of Surgical stockholders breaches directly Mirandas
Fernandez
Fernandez-Rios
and
fiduciary duties owed directly to stockholders. 92. as Mirandas acts of gross negligence and self-dealing, though his and fraudulent the representations of implicit Mirandas regarding dividends fiduciary
depicted
Fernandez
resignation injure
payment
derivatively
Surgical
and
breaches
duties owed to Surgical and its stockholders. V. First Claim for Relief: Temporary Restraining Order; Preliminary and Permanent Injunction 93. reference. Paragraphs 1 to 92 are hereby incorporated by
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unauthorized
representation trademarks
of
Surgical by
federally the
registered Rico
distributed
Puerto
Surgical
Technologies,
Inc
service mark. 95. and sale They of constitute protected unauthorized and acts of representation marks with the
trademarks
service
intent to profit and benefit from the goodwill and reputation of the marks at issue. 96. operate Unless the Miranda of is restrained these from continuing to
business
Surgical,
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 from dilution and tarnishment, since distinctive and
irreparable
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. majority As stated before, Fernandez and Fernandez-Rios are the stockholders of Surgical and have been since its
incorporation.
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99.
resolutions by written consent that were sent to Surgical in order remove Miranda as administrator of Surgical. These
consents add up to a majority (70%) of the total stockholders of Surgical and were received by the corporation on May 11, 2012. Additionally, a notification was sent to the remaining minority stockholders. 100. However, Miranda has consistently and vehemently
refused to comply with the desire of the stockholders to remove him as director. Still, to this day, Miranda has failed to
surrender control of Surgical over to Fernandez, as ordered by a majority of stockholders. 101. Mirandas refusal to comply with the held removal, as well as his refusal to surrender control of Surgical, is causing Fernandez their and Fernandez-Rios rights. Also, great and irreparable continuous injury refusal to to
voting
Mirandas
surrender control is causing irreparable harm to Surgical, which is currently under control by a person without legal authority to manage Surgical. 102. Because a monetary award cannot fully and adequately compensate Surgical or its stockholders, Fernandez and
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103. A temporary restraining order, as well as preliminary and permanent injunction should be issued immediately, enjoining Miranda from continuing to sell and distribute the federally registered Puerto trademarks Surgical distributed by Surgical, Inc. dilute the mark,
Rico
Technologies,
service
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 reference. 105. Miranda continues to sell and distribute the federally registered trademarks distributed by Surgical; continues to 1 to 103 are hereby incorporated by
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 that he represents aforesaid and acts tend to represent the and falsely Rico
manages
Surgical, mark
Puerto the
Surgical
Technologies, trademarks of
Inc.
service by the
federally a
distributed of
Surgical Lanham
constitute
Section 43(a)
Act,
15 U.S.C.
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107. The
aforesaid
acts
of
Miranda
are
greatly
and
irreparably 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 reference. 109. Miranda is using the Puerto Rico Surgical 1 to 107 are hereby incorporated by
Technologies, Inc. service mark; is representing himself to be a Surgical representative Surgicals and manager; and the and is promoting and
advertising
business
federally
registered
trademarks it distributes without authorization. 110. The promotion and marketing of the Puerto Rico
Surgical 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,
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111. Mirandas
aforesaid
acts
constitute
trademark
infringement 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 and
irreparably 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 reference. 115. In the present case, a majority of stockholders of Surgical, 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. 1 to 113 are hereby incorporated by
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116. Considering the above, Mirandas removal and order to surrender 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 Surgical
and 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 Duty of Protecting Fernandezs Right to Vote 118. Paragraphs reference. 119. Fernandez exercised his right to vote, as stockholder of Surgical, with a corporate resolution by written consent in lieu of meeting that approved, by a majority of its 1 to 119 are hereby incorporated by
stockholders, the removal of Miranda as manager of Surgical. It also ordered Miranda to surrender control of Surgical over to Fernandez. 120. Subsequently, shares of Surgical a majority received of on consents May 11, of outstanding at the
was
2012,
principal place of business of Surgical, where the book in which proceedings of this nature are recorded and by means of
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the
other
hand,
Miranda of
does
not
hold The
vested of in
office
of
Surgical. in
Board or
Directors staggered
Surgical
classified Surgical
groups
terms,
neither
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 director of 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 those
inflicted 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 are great and irreparable. right to No monetary in damage could the restore ordered
Fernandezs
vote
connection
with
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
to
124
are
hereby
incorporated
by
enjoy records is
a as
right of
to
inspect
stockholder
entitled
how
conducting the affairs of the corporation of which he or she is a part owner. 127. This right is exercised upon written demand, under
oath, 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 Fernandez and Fernandez-Rios to Miranda, as director and manager of
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identified inspection.
with
specificity
the
documents
required
for
the
129. However, Miranda completely disregarded the rights of Surgical 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 Duties for the payment of illegal implicit dividends in detriment to similarly situated stockholders 130. Paragraphs reference. 131. As previously stated, a preliminary examination of 1 to 129 are hereby incorporated by
Surgicals 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 to statutory requirements or in accordance with Surgicals
ownership and capital structure. 133. This breach of fiduciary duties constitutes an act of self-dealing, which must be reviewed under the entire fairness standard and the applicable law.
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134. fiduciary
Since these implicit dividends constitute a breach of duties, the full amount must be returned to the
Surgical, with the applicable payment of interests, as provided by the Corporations Act, in an amount not less than $327,522.48, plus interests. XIII. Eighth Claim for Relief: Derivative Claim for Breach of Fiduciary Duties for fraudulent misrepresentations 135. Paragraphs reference. 136. As previously stated, Miranda fraudulently represented himself as the sole proprietor of Surgical to its employees and third parties. 137. To stockholders this right day, to his vote, refusal to comply exercised with to the order 1 to 134 are hereby incorporated by
specifically
Mirandas removal as director, constitutes further evidence of this fraudulent behavior. 138. Miranda knew that he was not the sole owner of
Surgical, in fact, he was the minority stockholder of Surgical. Therefore, communications on Mirandas behalf to try to induce employees and third parties to act as if Fernandez is not
involved in Surgicals affairs is a fraudulent misrepresentation that harms Fernandez and Surgical.
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139. This
constitutes
violation
of
Mirandas
fiduciary
duties with Surgical and a violation of the Corporations Act, which makes him liable to Surgical. Fernandez is hereby seeking relief to Surgical in the form of a derivative claim for his gross negligence arising out these fraudulent misrepresentations in an amount not less than $100,000.00 dollars. XIV. Ninth Claim for Relief: Treble damages, attorneys fees, and expenses 140. Paragraphs reference. 141. As a result of Mirandas willful and malicious 1 to 139 are hereby incorporated by
conduct, Fernandez and Fernandez-Rios are entitled to recover from Miranda actual damages, treble damages and the attorneys' fees and the expenses it has incurred in bringing this action, pursuant to 15 U.S.C. 1114(1) and 1117(a) and the Puerto Rico Civil Code. 142. Since Miranda has breached its contractual duties in an intentional and willful manner, Fernandez and Fernandez-Rios are entitled to recover any and all damages resulting from said breach and which include all attorneys fees incurred to
prosecute this case and which are estimated in an amount not less than $100,000.00. WHEREFORE, Plaintiff respectfully requests that this
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entering permanent
temporary
restraining and a
order,
preliminary as
and
injunction,
declaratory
judgment
herein
detailed and other available remedies: 1. Enjoining Miranda from continuing to represent himself
as 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 Surgical service the and mark, federally the as Puerto well to of registered Rico as trademarks distributed by
Surgical
Inc.
its
instructing personal
Miranda property
access the
electronically
stored
website
stockholder by the
Surgical,
specifically, of
decided
majority
stockholders
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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 perfecting
transactions 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, and/or meetings checks, any of money orders, negotiable Board as of an credit cards, promissory notes in and the
other the
instruments; of
participating using of
Directors
Surgical;
representing
himself
authorized
representative
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 a
speedy 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. judgment Fernandez hereby requests an entry of a declaratory declaring that the corporate resolution by written
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and sent via certified mail to Surgicals principal offices, and thereupon enforceable received under on the May 11, 2012, is Act valid, and legal, and
Corporations
Surgicals
Certificate of Incorporation and by-laws. 6. Fernandez requests the entry of an order whereby
Miranda is required to indemnify, reimburse and/or compensate Fernandez, duties directly, held for the breach of Mirandas fiduciary such
directly
against
Fernandez,
specifically,
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 whereby
Miranda is required to indemnify, reimburse and/or compensate Fernandez, duties directly, held for the breach of Mirandas fiduciary such
directly
against
Fernandez,
specifically,
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 whereby
Miranda is required to indemnify, reimburse and/or compensate Surgical, derivatively, for the breach of Mirandas fiduciary duties held against Surgical, specifically, such duties 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 whereby
Miranda 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 the
award 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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UNSWORN STATEMENT UNDER PENALTY OF PERJURY I, Rolando of Fernandez-Aviles, Puerto Rico Surgical of legal age, married, Inc., and
stockholder
Technologies,
resident of Caracas, Venezuela, hereby state under penalty of perjury, pursuant to the Laws of the United States of America, 28 U.S.C. 1746, that I have read the foregoing Verified
Complaint and its supporting exhibits and that, to the best of my knowledge and belief and/or pursuant to the information and documents in my possession, all allegations herein contained are true and correct. Executed in San Juan, Puerto Rico, on June 25, 2012.
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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 walker-merino@msn.com. 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 211912 lee_sepulvado@yahoo.com lsepulvado@smlawpr.com
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