Court filing
Exhibit A - Tendered Reply — Oto Analytics, LLC v. Benworth Capital Partners PR LLC (Dkt. 165.1)
No. 3:23-cv-01034-GMM · Doc. 165-1 · Docket on CourtListener
Summary
Exhibit A, filed September 30, 2024 as Doc. 165-1 in Oto Analytics, LLC v. Benworth Capital Partners PR, LLC, No. 3:23-cv-01034-GMM, consolidated with Civil No. 24-01313 (GMM), in the U.S. District Court for the District of Puerto Rico, is plaintiff Oto Analytics, LLC's tendered reply in further support of its motion to strike defendants' affirmative defenses of unclean hands, set off and public policy. Answering the joint opposition (ECF No. 163), Womply argues that the defenses seek to relitigate the existence and amount of Benworth FL's debt, which it says the arbitrator resolved in the Final Award. It contends that attachment is a prejudgment remedy under Fed R. Civ. P. 64(b), not a cause of action open to affirmative defenses, and that the setoff defenses fail because Womply owes no debt to Benworth FL. The reply is signed by Alejandro J. Cepeda Diaz of McConnell Valdés LLC.
Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used
Full text
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 1 of 18
EXHIBIT A
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 2 of 18
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
OTO ANALYTICS, LLC, §
§
Plaintiff, §
§
v. §
§
BENWORTH CAPITAL PARTNERS PR, §
LLC; BENWORTH CAPITAL PARTNERS, §
LLC; BERNARDO NAVARRO and § Civil No. 23-01034 (GMM) cons. Civil
CLAUDIA NAVARRO, § No. 24-01313 (GMM)
§
Defendants.
§
FEDERAL RESERVE BANK OF SAN §
FRANCISCO, §
§
Plaintiff-Intervenor, §
§
v. §
§
OTO ANALYTICS, LLC; BENWORTH §
CAPITAL PARTNERS PR, LLC; §
BENWORTH CAPITAL PARTNERS, LLC; §
BERNARDO NAVARRO and CLAUDIA §
NAVARRO, §
§
Defendants in Intervention. §
PLAINTIFF OTO ANALYTICS, LLC’S REPLY IN FURTHER SUPPORT OF ITS
MOTION TO STRIKE DEFENDANTS’ AFFIRMATIVE DEFENSES OF
UNCLEAN HANDS, SET OFF, AND PUBLIC POLICY
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 3 of 18
Alexander L. Cheney (admitted pro hac vice) Alejandro J. Cepeda Diaz
333 Bush St USDC-PR 222110
San Francisco, CA 94104 McConnell Valdés LLC
(415) 858-7400 270 Muñoz Rivera Ave.
acheney@willkie.com Hato Rey PR 00918
Tel: (787) 250-5637
Stuart R. Lombardi (admitted pro hac vice) Email: ajc@mcvpr.com
Willkie Farr & Gallagher LLP
787 7th Avenue
New York, NY 10019 Attorneys for Plaintiff and Defendant in
(212) 728-8000 Intervention Oto Analytics, LLC
slombardi@willkie.com
Joshua S. Levy (admitted pro hac vice)
1875 K Street, N.W.
Washington, D.C. 20006
(202) 303-1000
jlevy@willkie.com
Dated: September 30, 2024
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 4 of 18
TABLE OF CONTENTS
PRELIMINARY STATEMENT .....................................................................................................1
ARGUMENT ...................................................................................................................................1
I. This Court Should Strike Defendants’ Affirmative Defenses. ............................................1
A. Defendants Admit That The Affirmative Defenses Seek To “Eliminate Or
Reduce” The Debt Owed To Womply, Which Was Already Resolved In The
Arbitration. ...............................................................................................................1
B. Permitting The Affirmative Defenses To Survive Would Be Prejudicial To
Womply....................................................................................................................8
II. Benworth PR And Mrs. Navarro’s Contingent Theory Of Standing Fails. .........................9
CONCLUSION ..............................................................................................................................10
CERTIFICATE OF SERVICE ......................................................................................................12
i
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 5 of 18
TABLE OF AUTHORITIES
Cases Page(s)
Am. Bd. of Internal Medicine v. Salas-Rushford,
2021 WL 2892837 (D.P.R. July 9, 2021) ................................................................................10
Asphaltos Trade, S.A. v. Bituven P.R., LLC,
2021 WL 965645 (D.P.R. Mar. 15, 2021) .............................................................................8, 9
Compton v. Swanson,
57 F. App’x 302 (9th Cir. 2003) ................................................................................................9
Dialysis Access Ctr., LLC v. RMS Lifeline, Inc.,
932 F.3d 1 (1st Cir. 2019) ......................................................................................................6, 7
Glassman v. Safeco Ins. Co. of Am.,
90 Cal. App. 5th 1281 (2023) ....................................................................................................4
Gomez v. Bird Auto., LLC,
411 F. Supp. 3d 1332 (S.D. Fla. 2019) ......................................................................................6
Manganella v. Evanston Ins. Co.,
700 F.3d 585 (1st Cir. 2012) ......................................................................................................2
Marrero-Rolon v. Autoridad de Energia Electrica de P.R.,
2017 WL 3584890 (D.P.R. Jan. 3, 2017)...................................................................................9
Mathew Enterp., Inc. v. Chrysler Grp, LLC,
250 F. Supp. 3d 409 (N.D. Cal. 2017) .......................................................................................6
Ribadeneira v. New Balance Athletics, Inc.,
65 F.4th 1 (1st Cir. 2023) ...........................................................................................................2
Safeguard Props. Mgmt., LLC v. MidFirst Bank,
2017 WL 4541592 (N.D. Ohio Oct. 11, 2017) ..........................................................................7
Silva v. Manley Berenson Bontehiedra Mgmt.,
2005 WL 8167859 (D.P.R. Apr. 25, 2005)..............................................................................10
Teamsters Local Union No. 42 v. Supervalu, Inc.,
212 F.3d 59 (1st Cir. 2000) ........................................................................................................7
Statutes and Rules
9 U.S.C. § 9 ......................................................................................................................................7
9 U.S.C. § 10 ....................................................................................................................................7
ii
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 6 of 18
Fed R. Civ. P. 64(b) .........................................................................................................................4
P.R. Code of Civ. P. R. 56.1 ............................................................................................................4
iii
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 7 of 18
Womply respectfully submits this Reply to Defendants’ Joint Opposition (“Opposition” or
“Opp.”; ECF No. 163) to Womply’s Motion To Strike Defendants’ Affirmative Defenses Of
Unclear Hands, Set Off, And Public Policy (“Motion” or “Mot.”; ECF No. 162). 1
PRELIMINARY STATEMENT
Defendants admit that they seek to use the Affirmative Defenses “to either eliminate or
reduce the purported debt owed to Womply” by Benworth FL, which was the subject of the
Arbitration. (Opp. at 10.) Benworth FL either made the same arguments underlying the
Affirmative Defenses in the Arbitration, and had them rejected by the Arbitrator, or it failed to
raise them. Either way, Defendants are not permitted to relitigate in this action the existence or
amount of Benworth FL’s debt when that issue has already been resolved by the Arbitrator.
Allowing Defendants to relitigate that issue here would not only prejudice Womply, it also would
violate the binding arbitration agreement and the Federal Arbitration Act.
ARGUMENT
I. The Opposition Confirms That This Court Should Strike the Affirmative Defenses.
A. Defendants Admit That The Affirmative Defenses Seek To “Eliminate Or
Reduce” The Debt Owed To Womply, Which Was Already Resolved In The
Arbitration.
Defendants concede that the Affirmative Defenses do not relate to any of Womply’s causes
of action in this case. In their Opposition, Defendants admit that the Affirmative Defenses are
“alleged to either eliminate or reduce the purported debt owed to Womply.” (Opp. at 10.) But the
existence and amount of Benworth FL’s debt to Womply was the subject of and resolved in the
Arbitration. Defendants admit this as well. In their failed motions to dismiss this action during
the pendency of the Arbitration, Defendants represented to this Court that “whether Benworth FL
1
All capitalized terms have the same meanings as in Womply’s Motion, unless otherwise indicated.
1
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 8 of 18
owes a debt to Womply is the controversy at the heart of the pending Arbitration.” (Benworth
PR’s Mot. to Dismiss (“MTD”; ECF No. 34) at 8; see also id. at 6; Benworth FL’s Mot. for Joinder
to Mot. to Dismiss (ECF No. 35) at 4; Joint Reply in Support of Mot. to Dismiss (“MTD Reply”;
ECF No. 61) at 3; Navarros’ Mot. for Joinder to Mot. to Dismiss and Joint Reply (ECF No. 90) at
4.) What is more, Benworth FL raised in that Arbitration the same Fee Cap Argument, Lender
Service Provider Argument, and Fraudulent Loan Argument that underlie the Affirmative
Defenses here. (See Mot. at 4–6.) The Arbitrator rejected all of those arguments. 2
In their Opposition, Defendants now argue that they are not estopped from raising those
same arguments here, because Benworth FL did not actually litigate to resolution some of the
arguments made in the Affirmative Defenses. (See Opp. at 7–8.) Benworth FL did unsuccessfully
raise those same arguments in the Arbitration. (See infra at 8.) But, in any event, Defendants
misunderstand issue preclusion. The analysis here is not whether Defendants raised in the
Arbitration the precise arguments they now make in the Affirmative Defenses; it is “whether a
party has had a full and fair opportunity for judicial resolution of” the issues the Affirmative
Defenses seek to address—that is, the existence and amount of the debt owed to Womply.
Manganella v. Evanston Ins. Co., 700 F.3d 585, 591 (1st Cir. 2012) (cleaned up; collecting cases).
Benworth FL had a full and fair opportunity to litigate the existence and amount of the debt,
including the opportunity to raise the same arguments it is raising now, so it would “be unfair” to
Womply, which “shouldered the effort and expense of the arbitration proceedings until their
conclusion, only to find that [it] still face[s] the risk of having to relitigate the same issues in a
2
Benworth FL also pursued its Loan File Claim, in response to which the Arbitrator granted
Benworth FL the declaratory relief it sought. Womply complied with the Arbitrator’s order by
producing loan files to Benworth FL, which Defendants do not dispute. (See Mot. at 5–6.)
2
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 9 of 18
judicial forum.” Ribadeneira v. New Balance Athletics, Inc., 65 F.4th 1, 16 (1st Cir. 2023)
(collecting cases).
Notably, in asking this Court to dismiss or stay this action during the Arbitration,
Defendants agreed that this Court cannot resolve issues concerning the existence or amount of
Benworth FL’s debt to Womply. In asking this Court to dismiss this action pending the outcome
of the Arbitration, Defendants argued that this Court “is barred from side-stepping the Arbitration
and adjudicating the merits of whether Benworth FL is indebted to Womply.” (MTD at 2; see also
id. at 7 (“this Court cannot rule on the merits of the underlying debt claimed by Womply”); MTD
Reply at 3.) Defendants also recognized that the determination of the existence and amount of
Benworth FL’s debt in the Arbitration would have a “preclusive” effect and would “undoubtedly
clarify and perhaps simplify the remaining issues which must be litigated.” (MTD at 8–9 (cleaned
up).)
Now that Benworth FL lost the Arbitration, Defendants have changed their tune. With the
Affirmative Defenses, Defendants now seek to have this Court “eliminate or reduce the purported
debt owed to Womply” (Opp. at 10), which is precisely what Defendants acknowledged repeatedly
that this Court cannot do. Defendants rely on a limited carveout in the Arbitration Agreement
between Benworth FL and Womply allowing the parties to “seek injunctive or other equitable
relief,” and claim that the Affirmative Defenses “seek[] equitable or injunctive relief from
Womply’s request for the equitable remedy of an attachment of Defendants’ assets.” (Opp. at 4–
5.) In addition to contradicting Defendants’ earlier position that the Arbitration Agreement
precluded this Court from addressing the existence or amount of the debt owed to Womply, this
argument suffers from at least five additional fatal deficiencies.
3
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 10 of 18
First, the Affirmative Defenses assert defenses to Benworth FL having to pay Womply the
debt owed under their contracts, but that is not the debt at issue in this case. Rather, now that the
Arbitrator has conclusively resolved the underlying contract dispute, Benworth FL’s debt to
Womply has been finally determined and set in the Final Award. Under California law, which
undisputedly governed the Arbitration (see Mot. at 4, 13), the Final Award represents a new debt
that Womply seeks to recover. See Glassman v. Safeco Ins. Co. of Am., 90 Cal. App. 5th 1281
(2023), as modified (May 17, 2023) (holding that, “in matters subject to contractual arbitration,”
the “final award[] itself becomes a new contractual obligation or fixed liability regardless of the
individual elements that comprised that liability”) (collecting cases). The only question in this
case is whether Womply can recover that debt from Defendants under fraudulent transfer, veil
piercing, or alter ego theories.
Defendants can (and have) asserted other affirmative defenses to the fraudulent transfer
and declaratory judgment claims that Womply asserts in this litigation. Womply has not moved
to strike those affirmative defenses, which include (among others) reasonable actions and good
faith, lack of insolvency, ordinary course of business, lack of fraudulent intent, subsequent good
faith transferee, payment of legitimate debt, separate financial records, and no commingling of
assets. (Benworth FL’s Answer at 36–41.) But what Defendants cannot do is assert the
Affirmative Defenses that ask this Court to reconsider whether and to what extent Benworth FL
must pay Womply under the Agreements. Defendants do not (and cannot) cite any authority
providing that a defendant can assert affirmative defenses regarding an issue that has already been
resolved in arbitration.
Second, Defendants mischaracterize the nature and import of Womply’s reference to an
“attachment” of assets in the prayer for relief of its Complaint. Attachment is not a cause of action
4
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 11 of 18
against which affirmative defenses can be raised. It is a prejudgment remedy that Womply could,
but has not, moved for. See Fed R. Civ. P. 64(b); P.R. Code of Civ. P. R. 56.1 (P.R. Laws Ap. tit.
32A, § III, Rule 56.1). Defendants know this. In earlier briefing to this Court, Defendants
explained that prejudgment attachment “is not a claim in itself, but rather a provisional remedy to
secure a potential judgment in this case, the issuance of which would be discretionary under
applicable law.” (MTD Reply at 2.) Defendants further noted that, because Womply had not
moved for prejudgment attachment, “Womply has not properly requested prejudgment attachment
in this case pursuant to Federal Rule of Civil Procedure 64(b) or, consequently, Puerto Rico Rule
of Civil Procedure 56, P.R. Laws Ann. Tit. 32, Ap. V, § 56.” (Id. at 2–3.) And Defendants
explained that, if Womply were to move for prejudgment attachment in this case, this Court would
have to evaluate the merits of Womply’s claims, except that it could not evaluate whether
Benworth FL owed Womply a debt:
Under the applicable Puerto Rico rules, the lawfulness of a
prejudgment attachment depends on the validity of the plaintiff’s
claim against the defendant-attachee. The Court would be called to
determine whether Womply’s claims have sufficient merit to
warrant awarding the provisional remedy of prejudgment
attachment. The existence of any debt owed to Womply is an
element crucial to the validity of each of the claims asserted in the
Complaint, and a matter entirely subject to arbitration that
perforce cannot be adjudicated by this Court.
(Id. at 3 (cleaned up; emphasis added).) For these reasons, in March 2023, while the Arbitration
was pending, Defendants argued in this case that, even if Womply were to move for prejudgment
attachment, this case nevertheless should be stayed until the Arbitrator resolved the preliminary
issue of whether and to what extent Benworth FL must pay Womply—an issue that Defendants
admitted this Court could not resolve. (See MTD at 8–10.) In response, Womply consented to
Defendants’ request for a stay (ECF Nos. 49, 91, 95), and this Court stayed this case pending the
outcome of the Arbitration (ECF No. 96).
5
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 12 of 18
The Arbitrator has now resolved the issue of Benworth FL’s debt to Womply, which in
Defendants’ own words is “an element crucial to the validity of each of the claims asserted in the
Complaint, and a matter entirely subject to arbitration that perforce cannot be adjudicated by this
Court.” (MTD Reply at 3.) And it is settled law that “[f]inal arbitral award are afforded the same
preclusive effects as are prior court judgments.” (Mot. at 11 (quoting Manganella, 700 F.3d at
591).) Defendants do not and cannot offer any explanation for how this Court was precluded from
adjudicating the debt owed to Womply during the Arbitration, but can adjudicate that issue now,
after the Arbitration has concluded. Defendants’ argument should be seen for what it is: a total
about-face; a plea for a mulligan on an issue they already admitted would be (and now has been)
conclusively determined in the Arbitration.
Moreover, even if Womply were to move for prejudgment attachment, Defendants may
only invoke affirmative defenses directed at causes of action, not remedies. As Defendants admit,
“an affirmative defense is a defense that ‘precludes liability.’” (Opp. at 9 n.4 (emphasis added)
(quoting Asphaltos Trade, S.A. v. Bituven P.R., LLC, 2021 WL 965645, at *3 (D.P.R. Mar. 15,
2021))); see also Gomez v. Bird Auto., LLC, 411 F. Supp. 3d 1332, 1339 (S.D. Fla. 2019) (“An
affirmative defense does not negate the elements of the plaintiff’s claim, but instead precludes
liability even if all of the elements of the plaintiff’s claim are proven.”) (cleaned up) (quoting
Roberge v. Hannah Marine Corp., 124 F.3d 199, 199 (6th Cir. 1997)); Mathew Enterp., Inc. v.
Chrysler Grp, LLC, 250 F. Supp. 3d 409, 416 (N.D. Cal. 2017) (same). A so-called “defense that
points out a defect in the plaintiff’s prima facie case is not an affirmative defense.” Mathew
Enterp., 250 F. Supp. 3d at 416 (citing Zivkovic v. S. Cal. Edison Co., 302 F.3d 1080, 1088 (9th
Cir. 2002); Flav–O–Rich v. Rawson Food Serv., Inc., 846 F.2d 1343, 1349 (11th Cir. 1988);
Masuen v. E.L. Lien & Sons, Inc., 714 F.2d 55, 57 (8th Cir. 1983)).
6
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 13 of 18
Third, allowing Defendants to relitigate the debt owed to Womply would violate the
Federal Arbitration Act (“FAA”) and First Circuit precedent, which hold that a court’s review of
an arbitration award “is extremely narrow and exceedingly deferential.” Dialysis Access Ctr., LLC
v. RMS Lifeline, Inc., 932 F.3d 1, 9 (1st Cir. 2019) (cleaned up); see also Teamsters Local Union
No. 42 v. Supervalu, Inc., 212 F.3d 59, 61 (1st Cir. 2000) (“Arbitral awards are nearly impervious
to judicial oversight.”). “[C]ourts are not authorized to reconsider the merits of arbitration
awards.” Dialysis Access, 932 F.3d at 9 (cleaned up). The FAA “offers very limited reasons to
vacate an arbitration award,” id., and the proper procedural mechanism to obtain that review is a
petition to confirm or vacate an award. 9 U.S.C. §§ 9–10. Womply and Benworth FL have filed
competing petitions to confirm and to vacate, respectively, the Final Award in the United States
District Court for the Northern District of California. Case Nos. 3:24-cv-03975-AMO, 3:24-cv-
04840-AMO (N.D. Cal.). Therefore, to the extent the Arbitrator’s decision regarding the existence
or amount of the debt owed to Womply is subject to any judicial consideration, it is in that court.
Fourth, striking the Affirmative Defenses would not require this Court to dismiss this
action in favor of arbitration. (Opp. at 6.) Defendants rely on Safeguard Props. Mgmt., LLC v.
MidFirst Bank, 2017 WL 4541592, at *2 (N.D. Ohio Oct. 11, 2017), but in that case, the
affirmative defenses at issue were being litigated in a pending arbitration. The Safeguard court
held that the affirmative defenses were intertwined with the non-arbitrable claims, and therefore
the court ordered that the “case is dismissed without prejudice and may be re-filed, if appropriate,
following completion of arbitration.” 2017 WL 4541592, at *2. Here, unlike in Safeguard, the
Arbitrator has already resolved the arbitrable claims and defenses related to the debt owed to
Womply. In fact, Defendants already obtained a stay of this case while those issues were litigated
in the Arbitration. The Arbitration has concluded and the stay expired. Therefore, there is no
7
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 14 of 18
reason to dismiss this case in favor of any arbitration, and the non-arbitrable claims in this case
may proceed. But they should not proceed with Affirmative Defenses that seek to relitigate the
issues the Arbitrator already resolved.
Finally, at a minimum, Benworth FL and Mr. Navarro are collaterally estopped from
raising the Affirmative Defenses because they were already litigated and determined by the Final
Award. (See Opp. at 6–7; Mot. at 11.) The unclean hands defense (Second Affirmative Defense)
and first set off defense (Fourteenth Affirmative Defense) are both based on purportedly “missing
loan files” for “PPP loans that Womply referred.” (Benworth FL’s Answer at 37, 39–40;
Mr. Navarro’s Answer at 35–36, 38–39.) Defendants admit that “the Arbitrator determined that
Benworth FL was entitled to the loan files” (Opp. at 7), and therefore concede that these defenses
are precluded. Defendants do not dispute that the Final Award addressed their public policy
defense (Sixteenth Affirmative Defense) (id. at 8), which is likewise precluded.
B. The Motion Establishes That Permitting The Affirmative Defenses To Survive
Would Be Prejudicial To Womply.
Defendants argue that this Court need not even consider Womply’s Motion because
Womply failed to establish that the presence of the Affirmative Defenses would be “prejudicial”
to Womply. (Opp. at 3.) That argument does not pass the straight-face test. As Womply explained
in its Motion, the Affirmative Defenses do not relate to the causes of action in this case, but instead
seek to relitigate an issue that is subject to an Arbitration Agreement, was the subject of a more
than three-year-long Arbitration, and has been fully resolved in that Arbitration. (Mot. at 7, 13,
15–16.) It would be plainly prejudicial to require Womply to relitigate those issues in this Court.
None of the cases Defendants cite suggest that Womply must provide some further
explanation as to why the presence of the Affirmative Defenses would be prejudicial under these
circumstances. To the contrary, Defendants’ own authority confirms that affirmative defenses
8
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 15 of 18
that—like the Affirmative Defenses here—were already resolved or did not relate to the causes of
action in the case should be struck without requiring a showing of prejudice. See Asphaltos, 2021
WL 965645, at *5, *7 (striking affirmative defenses already considered and rejected by the court
“to avoid confusing already complex litigation,” and striking affirmative defenses to causes of
action not asserted in the complaint). Defendants’ authority also shows that courts will require a
showing of prejudice to strike affirmative defenses for reasons not at issue here. See id. at *2–4
(refusing to strike affirmative defenses that are “boilerplate,” “simply a denial” of an allegation,
or “redundant” where there is no prejudice to the moving party); Marrero-Rolon v. Autoridad de
Energia Electrica de P.R., 2017 WL 3584890, at *2–3 (D.P.R. Jan. 3, 2017) (refusing to strike
affirmative defenses that are “denials,” “bases upon which to file a motion to dismiss,” “pled in
boilerplate fashion,” and a “reservations [that] have no legal significance”).
II. Benworth PR And Mrs. Navarro’s Contingent Theory Of Standing Fails.
Benworth PR and Mrs. Navarro admit that “they are not parties to the Agreement,” and do
not dispute that nonparties ordinarily lack standing to assert claims under a contract. (Opp. at 8–
9; Mot. at 13–14.) They instead argue that “if Womply prevails on its claims to designate
Benworth PR and Mrs. Navarro as the alter egos of Benworth FL, then Benworth PR and
Mrs. Navarro have standing to assert the Affirmative Defenses.” (Opp. at 9 (emphasis added).)
Defendants are well aware that Benworth PR and Mrs. Navarro lack standing to bring such
contingent defenses. In their motion to dismiss briefing, Defendants argued that a party “lacks
standing” to bring claims or defenses based on “‘uncertain and contingent events’” or “‘a
hypothetical state of facts,’” that “‘may not occur as anticipated, or indeed may not occur at all.’”
(MTD at 4, 7 (quoting Lincoln House, Inc. v. Dupre, 903 F.2d 845, 847 (1st Cir. 1990); In re Fin.
Oversight & Mgmt. Bd. of P.R., 633 B.R. 463, 469 (D.P.R. 2021)). Even if Benworth PR and Mrs.
Navarro have standing to assert the Affirmative Defenses (which they do not), they cannot
9
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 16 of 18
challenge the Arbitrator’s decision regarding the existence and amount of the debt under the “law
of the case doctrine even though [they] were not parties to the earlier [arbitration].” Compton v.
Swanson, 57 F. App’x 302, 303 (9th Cir. 2003) (citing Disimone v. Browner, 121 F.3d 1262, 1266
(9th Cir. 1997)). In any event, the Affirmative Defenses should be stricken for the reasons
discussed in the Motion and above. 3
CONCLUSION
For the foregoing reasons, and the reasons set forth in Womply’s Motion, Womply
respectfully requests that this Court strike Defendants’ affirmative defenses of unclean hands, set
off, and public policy.
3
The Affirmative Defenses also fail as a matter of law. Defendants try to rewrite their unclean
hands defense to invent a “fraud issue[]” that “Womply deceiv[ed] Benworth FL regarding its
technology platform.” (Opp. at 10–11.) This appears nowhere in Defendants’ Answers and thus
“constitutes an impermissible attempt to amend [their] pleadings via [their] Opposition.” Am. Bd.
of Internal Medicine v. Salas-Rushford, 2021 WL 2892837, at *6 n.14 (D.P.R. July 9, 2021).
Defendants “setoff defenses fail” because Womply does not owe any debts to Benworth FL. (Opp.
at 11.) Defendants speculate that Womply could owe Benworth FL a debt in the future, but such
“speculative averments proposed by defendants under the premise of affirmative defenses” have
“no place in pleadings before this [C]ourt” and should be stricken. Silva v. Manley Berenson
Bontehiedra Mgmt., 2005 WL 8167859, at *1 (D.P.R. Apr. 25, 2005) (citing Alvarado-Morales
v. Digital Equip. Corp., 843 F.2d 613–18 (1st Cir. 1988)).
10
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 17 of 18
Dated: September 30, 2024
Of Counsel
Willkie Farr & Gallagher LLP Respectfully submitted,
Alexander L. Cheney (admitted pro hac vice) By: /s/ Alejandro J. Cepeda Diaz
333 Bush St
San Francisco, CA 94104 Alejandro J. Cepeda Diaz
(415) 858-7400 USDC-PR 222110
acheney@willkie.com McConnell Valdés LLC
270 Muñoz Rivera Ave.
Stuart R. Lombardi (admitted pro hac vice) Hato Rey PR 00918
Willkie Farr & Gallagher LLP Tel: (787) 250-5637
787 7th Avenue Email: ajc@mcvpr.com
New York, NY 10019
(212) 728-8000
slombardi@willkie.com Attorneys for Plaintiff and Defendant in
Intervention Oto Analytics, LLC
Joshua S. Levy (admitted pro hac vice)
1875 K Street, N.W.
Washington, D.C. 20006
(202) 303-1000
jlevy@willkie.com
11
Case 3:23-cv-01034-GMM Document 165-1 Filed 09/30/24 Page 18 of 18
CERTIFICATE OF SERVICE
The undersigned certifies that on September 30th, 2024 the foregoing document was filed
with the Clerk of the Court using CM/ECF, which sent notices to all parties receiving notifications
through the CM/ECF system.
Dated: September 30, 2024 By: /s/ Alejandro J. Cepeda Diaz
Attorney for Plaintiff Oto Analytics, LLC and
Defendant in Intervention Oto Analytics,
LLC
12
File and source
- File
- gov.uscourts.prd.175040.165.1.pdf
- Size
- 394,556 bytes
- SHA-256
- 625a852df4c0f6cb7967433358af5a1ac371f2fe9d2d97f3d2ba43b974856c6d
- Original
- PACER (login required)