The Supreme Court Civil Chamber dismissed Pollo Rey's cassation for failing to identify the misapplied norm and confirmed that exclusion-based damages require the exclusion agreement to be final.

Case Background

Pollo Rey, S.A. filed a summary damages proceeding on March 27, 2012 against Lisa, S.A., alleging that Lisa should be held liable for damages caused by the acts that motivated its exclusion as a shareholder. Lisa, S.A. raised six preliminary defenses. The Order of February 28, 2014 by the Ninth Civil Court of First Instance declared the condition defense with place, finding that Lisa, S.A. had filed opposition to the exclusion agreement before the Second Civil Court of First Instance (Expediente 01047-2012-00112), which prevented the agreement from taking effect. The remaining defenses were declared without place.

The Appeal Ruling of the Second Chamber of the Court of Appeals, dated December 18, 2014, confirmed the first-instance order in its entirety, declaring both Pollo Rey's appeal and Lisa, S.A.'s cross-appeal without place.

Sub-grounds Invoked by Pollo Rey

Pollo Rey, S.A. filed cassation on substantive grounds, raising two sub-grounds:

• Violation of law by non-application of Article 1648 of the Civil Code. Pollo Rey argued that this provision establishes only two conditions for the viability of a damages claim (the continued iuris tantum presumption of fault and proof of the damage suffered) and that the appellate court added a third, non-statutory condition by requiring the exclusion agreement to be final.
• Erroneous interpretation of Article 228 of the Commercial Code. Pollo Rey contended that the appellate court attributed to this provision a meaning it does not possess, by conditioning the damages claim on the finality of the exclusion agreement, when Article 228 merely states that the excluded shareholder shall be liable for damages caused by the acts that motivated the exclusion.

Defense of Lisa, S.A.

Lisa, S.A. requested dismissal of the cassation appeal, pointing to technical deficiencies in its formulation. Lisa argued that the cassation memorial contained an internal inconsistency, referencing the procedural ground (motivo de forma) before switching to the substantive ground (motivo de fondo). On the violation-of-law sub-ground, Lisa noted that Pollo Rey failed to identify how application of the invoked norm would have changed the outcome, and which norm was erroneously applied instead. On erroneous interpretation, Lisa highlighted that Pollo Rey reused the same arguments from the prior sub-ground, compounding the technical deficiency.

Chamber's Analysis

On violation of law. The Civil Chamber held that when invoking violation of law by non-application, the cassation petitioner must identify not only the omitted norm but also the norm that was misapplied in its place, as this is the norm that served as the basis for the challenged ruling. Pollo Rey, S.A. failed to meet this requirement. Given the extraordinarily formalistic nature of cassation, the Chamber could not supply the deficiency ex officio. This sub-ground was dismissed for defect of form.

On erroneous interpretation. The Chamber conducted an independent analysis of Article 228 of the Commercial Code and concluded that the appellate court's interpretation was correct. For damages against an excluded shareholder to be viable, there must be a causal link between the shareholder's acts and the exclusion, and the exclusion agreement must have taken effect. Since the opposition to the exclusion agreement remained pending, the excluded shareholder's liability could not be enforced. This sub-ground was dismissed on the merits.

Ruling

• The cassation appeal was dismissed in its entirety.
• Pollo Rey, S.A. was condemned to costs and a fine of Q500.00, payable to the Treasury of the Judicial Branch within three days of the ruling becoming final.

Legal Basis

• Article 228 of the Commercial Code — establishes the excluded shareholder's liability for damages caused by the acts that motivated the exclusion, interpreted by the Chamber as conditioned on the finality of the exclusion agreement.
• Article 1648 of the Civil Code — invoked by Pollo Rey as violated by non-application, concerning the presumption of fault and burden of proof in damages claims.
• Article 621(1) of the Civil and Commercial Procedure Code — substantive cassation sub-grounds (violation of law and erroneous interpretation).
• Article 633 of the Civil and Commercial Procedure Code — mandatory condemnation to costs and imposition of fine upon dismissal of a cassation appeal.

Signatories

• Douglas René Charchal Ramos, Fifth Chamber Justice, Acting President of the Civil Chamber
• Sergio Amadeo Pineda Castañeda, Seventh Chamber Justice
• Msc. Nester Mauricio Vásquez Pimentel, Eleventh Chamber Justice
• José Antonio Pineda Barales, Thirteenth Chamber Justice
• Lcda. María Cecilia De León Terán, Clerk of the Supreme Court of Justice

Subsequent Proceedings

Pollo Rey, S.A. challenged this ruling via amparo before the Constitutional Court, which denied relief in its Amparo Ruling of September 27, 2016, confirming the legal soundness of the cassation dismissal and condemning Pollo Rey to costs and its sponsoring attorney to a fine of Q1,000.00.