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Benworth FL motion for joinder to motion to dismiss — OTO Analytics v. Benworth

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Court	U.S. District Court for the District of Puerto Rico
Filed	2023-03-29

U.S. District Court for the District of Puerto Rico · No. 3:23-cv-01034-GMM · Doc. 35 · 2023-03-29 · Docket on CourtListener

Summary

A motion by defendant Benworth Capital Partners, LLC (Benworth FL), appearing specially, for joinder to co-defendant Benworth Capital Partners PR LLC's Motion to Dismiss or Stay Proceedings pending the Outcome of Arbitration [D.E. 34] in Oto Analytics, LLC v. Benworth Capital Partners PR, LLC, Civil No. 23-01034 (GMM), in the U.S. District Court for the District of Puerto Rico, filed March 29, 2023 as Document 35. It describes Womply's complaint as seeking rescission of an alleged $171 million transfer and alter-ego and veil-piercing declarations while an arbitration begun in August 2021 is pending, and says Benworth FL has a counterclaim there. It incorporates Benworth PR's arguments that the four counts lack ripeness and standing absent an arbitration award. It asks for dismissal under Rule 12(b)(1) or, alternatively, a stay under 9 U.S.C. §3.

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

OTO ANALYTICS, LLC,

Plaintiff,

BENWORTH CAPITAL PARTNERS PR,
LLC;
BENWORTH
CAPITAL
PARTNERS,
LLC;
BERNARDO
NAVARRO and CLAUDIA NAVARRO,

Defendants.

Civil No. 23-01034 (GMM)

MOTION FOR JOINDER TO THE “MOTION TO DISMISS OR STAY PROCEEDINGS
PENDING OUTCOME OF ARBITRATION” [D.E. 34]

TO THE HONORABLE COURT:

COMES NOW Defendant Benworth Capital Partners, LLC (“Benworth FL”), by special
appearance and without submitting to the jurisdiction or venue of this Honorable Court nor
waiving any defense, through the undersigned counsel, and very respectfully requests the dismissal
of the Complaint [D.E. 1] substantially for the reasons advanced by co-defendant Benworth Capital
Partners PR LLC (“Benworth PR”) in its “Motion to Dismiss or Stay Proceedings pending the
Outcome of Arbitration” [D.E. 34], and as grounds therefore STATES and PRAYS as follows:
The Complaint filed by the Plaintiff Oto Analytics, LLC f/k/a Oto Analytics, Inc. d/b/a
Womply (“Womply”) [D.E. 1] stems from an arbitration proceeding initiated by Womply against
Benworth FL in August 2021 (“Arbitration Proceedings”), in which Womply seeks to recover from
Benworth FL millions of dollars in fees that Plaintiff claims are owed to it under their agreements.
Despite what the Plaintiff would have this court believe, the existence of the debt and the
amount Womply seeks to collect from Benworth FL is in controversy and currently being disputed
Case 3:23-cv-01034-GMM Document 35 Filed 03/29/23 Page 1 of 6

Motion for Joinder to the “Motion to Dismiss or Stay Proceedings …” [D.E. 34]
OTO Analytics, LLC v. Benworth Capital Partners, LLC; Benworth Capital Partners PR, LLC; et als.
Civil No. 23-01034 (GMM)
Page 2 of 6

in the ongoing Arbitration Proceedings. There is no binding, final, or enforceable arbitration award
against Benworth FL, and this litigation is Womply’s attempt to put the cart before the horse.
According to Womply, Benworth FL owes it millions of dollars in fees for the services
rendered and technology provided to Benworth FL for the processing, management and tracking
of the federal loans that Benworth FL granted to eligible borrowers under the Paycheck Protection
Program created by Congress under the Coronavirus Aid, Relief, and Economic Security Act
(commonly known as the “CARES Act”), Pub. L. No. 116-136, 134 Stat. 281 (Mar. 27, 2020) in
response to the COVID-19 pandemic. Womply further contends that, to avoid its payment
obligations toward Womply, Benworth FL fraudulently transferred $171 million to Benworth PR,
an entity allegedly created by Defendants Bernardo and Claudia Navarro to facilitate the fraudulent
transfer from Benworth FL to Benworth PR and, consequently, to assist Benworth FL to avoid its
payment obligations.
Womply, however, omits the fact that Benworth FL has filed a counterclaim in arbitration
that substantially exceeds any claim by Womply and that this counterclaim is pending adjudication
as well. [D.E. ¶¶ 157–64]. Indeed, in its counterclaim, Benworth FL alleges that Womply was an
“agent” under the SBA regulations, which, in turn, limits Womply’s fees to a 1% referral fee. As
a result, Womply has grossly overcalculated the fees it claims Benworth FL owes it by over $150
million, if they are owed at all.1

1 Should the Court require it to adjudicate this motion, Benworth FL can file the counterclaim in the Arbitration
Proceedings under seal. The Court can consider the counterclaim in its adjudication of Benworth FL’s motion to
dismiss because Womply has incorporated it by reference in Paragraphs 157 through 164 of the Complaint. See Cortes-
Ramos v. Martin-Morales, Case No. 21-1374 (SCC), 2022 WL 3156500, at *1 (D.P.R. Aug. 8, 2022) (“But because
a Rule 12(c) motion implicates the pleadings as a whole, we may supplement these facts with documents fairly
incorporated by the pleadings and facts susceptible to judicial notice. These documents include the ones that the parties
agree are authentic, even those incorporated into the movant’s pleadings; documents central to the plaintiff’s claim;
and documents sufficiently referred to in the complaint.” (cleaned up)).
Case 3:23-cv-01034-GMM Document 35 Filed 03/29/23 Page 2 of 6

Even though Womply’s collection claim and Benworth FL’s counterclaim are currently
being arbitrated in the ongoing Arbitration Proceedings in accordance with the parties’ express
agreement to arbitrate, Womply has brought “this action for an order rescinding the Fraudulent
Transfer and for other purported equitable relief so that Womply can recover the fees and interest
it earned under its contracts with Benworth FL.” [D.E. 1 ¶ 20]. Womply’s claims are without merit
and, more importantly, premature.
Womply thus asks this Court (i) to rescind the alleged actual fraudulent transfer between
Benworth FL and Benworth PR (“Count I”); (ii) to rescind the alleged constructive fraudulent
transfer between Benworth FL and Benworth PR (“Count II”); (iii) a declaration that Benworth
PR is the alter ego or successor of Benworth FL (“Count III”); and (iv) a declaration to pierce the
corporate veil of Benworth PR and hold the Defendants Bernardo and Claudia Navarro personally
liable for the money allegedly owed to Womply (“Count IV”). These claims are being made
against all defendants without any final determination in the ongoing Arbitration Proceedings
which would entitle Womply to seek the relief requested and which, simply put, means that
Womply wishes for this Court to render an advisory opinion.
On March 24, 2023, Benworth PR filed a “Motion to Dismiss or Stay Proceedings pending
the Outcome of Arbitration” (“Motion to Dismiss”) [D.E. 34]. In its Motion to Dismiss, Benworth
PR argues that Womply jumped the gun and that its claims in the Complaint lack ripeness, hinge
on the outcome of the Arbitration Proceedings, and that Womply cannot sufficiently allege an
injury or substantial injury without first prevailing in the Arbitration Proceedings. Id. Benworth
PR is correct.
For the sake of judicial economy and to avoid needlessly duplicating the arguments made
by Benworth PR, Benworth FL hereby incorporates by reference, as if argued herein, all the
Case 3:23-cv-01034-GMM Document 35 Filed 03/29/23 Page 3 of 6

arguments, citations, and prayers for relief made by Benworth PR in its Motion to Dismiss [D.E.
34]2. Benworth PR’s arguments in its Motion to Dismiss are readily transferrable to Benworth
FL’s instant motion for the following reasons.
First, Womply’s claims are not yet ripe for adjudication by this Court. Under Counts I and
II, Womply seeks to rescind the alleged actual and constructive fraudulent transfer made by
Benworth FL to Benworth PR. As Benworth PR correctly stated in its Motion to Dismiss, under
Puerto Rico law, a transaction executed “in fraud of creditors” may be rescinded when a creditor
cannot recover what is due. P.R. Laws Ann. tit. 31, §§ 6231 & 6233. Therefore, to the extent that
the debt allegedly owed by Benworth FL to Womply is pending adjudication in the Arbitration
Proceedings, Counts I and II can only ripen after (and if) Womply obtains a favorable arbitration
award against Benworth FL. Put differently, without an arbitration award in favor of Womply,
there is no debt owed to it by Benworth FL, let alone a debt that Womply has not recovered from
Benworth FL. Relatedly, because an adjudication on the merits of Counts I and II requires a
determination of Benworth FL’s indebtedness to Womply, the parties’ valid arbitration agreement
bars this Court from adjudicating disputes that are subject to arbitration.
Likewise, Counts III and IV (under which Womply asserts its corporate alter-ego and veil-
piercing claims) are entirely contingent on a favorable outcome for Womply in the Arbitration
Proceedings because this Court would first have to determine that Benworth FL is indebted to
Womply to determine that Benworth PR is liable for Benworth FL’s debt to Womply. Therefore,

2 Benworth FL only adds that, in a manner consistent with the Civil Justice Reform Act of 1990 that encourages the
“just, speedy and inexpensive resolutions of civil disputes.” 28 U.S.C. §§ 471 et seq., and that empowers the Judicial
Conference of the United States to follow the travel of cases before its Districts, this Court is well within its discretion
to, instead of staying the captioned matter until a final determination is made in arbitration at an uncertain period in
the future, administratively dismiss this case and issue the corresponding judgment pending such outcome subject to
re-opening of the case if the need arises.
Case 3:23-cv-01034-GMM Document 35 Filed 03/29/23 Page 4 of 6

Counts III and IV also lack ripeness for adjudication by this Court.
Second, to the extent that all of Womply’s claims are premised in the determination of
Benworth FL’s indebtedness to Womply, which is pending adjudication in the ongoing Arbitration
Proceedings, Womply cannot sufficiently allege an impending injury or substantial risk of injury
to meet the standing requirements to bring its claims in the captioned Complaint. Thus, if and until
an arbitration award is entered in favor of Womply, all of its four counts in the Complaint are
hypothetical and lack ripeness, and Womply thus lacks standing to bring them.
Alternatively, as a signatory to the agreement containing the arbitration clause by which
Womply commenced the Arbitration Proceedings, Benworth FL is entitled to request the stay of
the instant proceedings under Section 3 of the Federal Arbitration Act until an award is entered in
the Arbitration Proceedings. See 9 U.S.C. §3. Under the clear mandate of Section 3, where certain
issues before a court are arbitrable, the court must stay the trial until such arbitration has been
completed in accordance with the arbitration agreement. Id. Here, the determination of Benworth
FL’s indebtedness is the central controversy at issue in the ongoing Arbitration Proceedings.
Accordingly, a stay of the instant proceedings will promote judicial economy and avoid potentially
inconsistent determinations.
Consequently, given that all of Benworth PR’s arguments presented in its Motion to
Dismiss [D.E. 34] are also applicable to Benworth FL’s case, the latter is joining Benworth PR in
moving this Court for a dismissal under Rule 12(b)(1) of the Federal Rules of Civil Procedure and
it is not waiving any of its rights, defenses, arguments, and positions, including its substantial
counterclaim asserted against the Plaintiff in the Arbitration Proceedings.
WHEREFORE, Benworth FL respectfully requests this Honorable Court to grant this
motion, allow Benworth FL to join Benworth PR’s “Motion to Dismiss or Stay Proceedings
Case 3:23-cv-01034-GMM Document 35 Filed 03/29/23 Page 5 of 6

pending the Outcome of Arbitration” [D.E. 34] in its entirety as reproduced herein and,
consequently, dismiss or alternatively stay the Complaint [D.E. 1].
CERTIFICATE OF SERVICE: We hereby certify that on this same date the foregoing
motion was filed with the Clerk of the Court using the CM/ECF system, which will send
notification of such filing to all attorneys and participants of record.
RESPECTFULLY SUBMITTED.
In San Juan, Puerto Rico, this 29th day of March 2023.
Counsel for Benworth Capital Partners LLC:

PO Box 195168
San Juan, PR 00919-5168
Tel.: 787.766.7000
Fax: 787.766.7001

/s/ Roberto A. Cámara-Fuertes
Roberto A. Cámara-Fuertes
USDC-PR 219002
Email: rcamara@ferraiuoli.com

/s/ Mónica Ramos Benítez
Mónica Ramos-Benítez
USDC-PR 308405
Email: mramos@ferraiuoli.com

Case 3:23-cv-01034-GMM Document 35 Filed 03/29/23 Page 6 of 6

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Benworth FL motion for joinder to motion to dismiss — OTO Analytics v. Benworth

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