Fernandez Avilez v. Miranda Aviles

7/31/2019 Fernandez Avilez v. Miranda Aviles

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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 SURGICAL

TECHNOLOGIES, INC.,

NOMINAL DEFENDANT.

CIVIL NO.

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.

VERIFIED COMPLAINT

TO THE HONORABLE COURT:

COME NOW Plaintiffs, Rolando Fernandez Aviles (hereinafter

referred to as Fernandez) and Miguel Fernandez Rios

(hereinafter referred to as Fernandez-Rios), through the

undersigned counsel, and respectfully state, allege, and pray as

follows:

I. Jurisdiction and Venue1. This Honorable Court has jurisdiction because:

(a) this is a civil action arising under the Lanham Act of the

United States, 15 U.S.C. 1051 et seq., subject matter

jurisdiction being conferred under 15 U.S.C. 1121 and 1116(a),

Case 3:12-cv-01505-JAF Document 1 Filed 06/25/12 Page 1 of 40


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and 28 U.S.C. 1331 and 1338. The state and common law claims

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. Parties3. Defendant, Puerto 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. Plaintiff, Fernandez, has been a stockholder ofSurgical since its incorporation. He currently serves as

President of Surgical and its Board of Directors. He currently

holds thirty percent (30%) of Surgical stock.



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5. Plaintiff, Fernandez-Rios, has been a stockholder ofSurgical since its inception. He currently holds forty percent

(40%) of Surgical stock.

6. Defendant, Elmer O. Miranda-Aviles (hereinafterreferred 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 Action7. 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. Specifically, Mirandas continuing operation ofSurgical, in defiance with the express consent to order his

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 fiduciaryduties perpetrated by Miranda, former manager of Surgical, that

directly harm Fernandez and Fernandez-Rios, stockholders of

Surgical, for violations of their fundamental stockholder

rights, in violation of the Puerto Rico Corporations Act

(hereinafter referred to as Corporations Act).

11. Also, this is a derivative claim against Miranda (andSurgical 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 and Fernandez-Rios also seek a temporaryrestraining order, a preliminary injunction, and a permanent



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as a result Fernandez decided to start a new medical products

distribution operation in the Commonwealth of Puerto Rico.

[Exhibit 1, Job proposal sent by Miranda to Fernandez on

November 1, 2005]

16. Fernandez offered Miranda a participation in theownership 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 ofhis sales performance.

18. The stockholders of the corporation were:(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 remainedunchanged since its incorporation and the holders of Surgicals

stock maintain the original distribution of ownership.

20. Since then and to this date, the majority group orcontrol group of Surgical is composed of Fernandez and his

father, Fernandez-Rios, together owning seventy percent (70%) of



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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 capital structure of Surgical is composedexclusively of one thousand (1,000) shares of common stock

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 classifiedin groups or in staggered terms, neither has Surgical authorized

cumulative voting as its method of voting. [Exhibit 4,

Surgicals Bylaws]

23. Nothing in the bylaws of Surgical or in itscertificate of incorporation proscribe the use of 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 andMeditech 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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30. The illegal implicit dividend payments started on2009. [Exhibit 6, Surgicals Unaudited Financial Statements

2007-2011]

31. In this same year, Miranda admitted he paid himselfadvanced commissions. Exhibit 7, Letter dated on June 28, 2012,

sent by Miranda to Fernandez]

32. Since then, Surgical also started sufferingsignificant 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 ResourcesCorporation (hereinafter referred to as Applied Medical),

terminated Surgical as a Puerto Rico distributor of their

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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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 havebeen invested in developing the Surgical service mark and the

federally registered trademarks distributed and represented by

Surgical in Puerto Rico.

43. The marks distributed by Surgical are registered withthe United States Patent and Trademark Office (hereinafter

referred to as USPTO), and to this day, the represented

federally registered marks are as follows: (a) MAQUET,

registered on November 3, 1998 and with USPTO registration

number 2,201,054; (b) GETINGE, filed for registration on October

30, 2009 and with USPTO serial number 77861251; and (c)

SPACELABS and SPACELABS MEDICAL, registered on February 19, 1985



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and on August 13, 1996, with registration numbers 1320540 and

1993012, respectively.

44. Surgical holds the right to distribute these marks inthe Puerto Rico market, pursuant to several distribution

agreements with the owners of these registered marks.

45. A significant number of consumers of medical productsand 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. Mirandas Removal from the Management of Surgical47. 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 becomeupset 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. To achieve this, Fernandez and Fernandez-Rios, each,signed a 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 corporateresolutions 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,

2012]

51. A notification was sent to Miranda, as minoritystockholder, 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. But, on May 12, 2012, Miranda wrote Fernandez a letterexpressing 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 sentFernandez 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. Moreover, on May 22, 2012, Miranda sent Fernandez ane-mail 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 astockholder 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, E-

mail dated on May 22, 2012, sent by Miranda to Fernandez]

56. Notwithstanding the above, Fernandez sent a letter toMiranda 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 the holding of a majority of

Surgical stockholders. Fernandez 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 harmand 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. Since then, Miranda still maintains his position asmanager 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 of the prerogative of a majority of

stockholders who validly exercised their right to vote, in

accordance with the applicable law.

59. Also, Miranda has since continued the unauthorizedoperation, representation, and management of Surgical.

60. After his removal, Miranda lost the authority tooperate 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. These acts are performed by Miranda against theexpress intention of Surgical stockholders to end Mirandas

authorization to represent these marks.

62. Since, Miranda has continued to represent himself asmanager and/or agent of Surgical albeit the removal, has made

misrepresentations as to his tenure in the management of

Surgical, has deceived Surgicals clients and suppliers

regarding his authorization to act in representation of

Surgical, has influenced the purchasing decisions of current and



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prospective clients without authorization, all in connection

with the continuous operation of Surgical product distribution.

63. Mirandas refusal to stop promoting the products andequipment 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. Also, Miranda has represented to suppliers that he isacting 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. Fernandezs Inquiry of Surgicals Financial State65. 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. On April 7, 2011, Miranda sent Fernandez an e-mail tonotify him about the status of the requested financial

statements. Miranda asserted that the requested information

would be made available within a week from the e-mail.



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[Exhibit 20, Mirandas e-mail to Fernandez dated on

April, 7, 2011]

67. On June 16, 2011, Fernandez held a meeting with Mr.William 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. On this same day, after the meeting, Fernandez sentMiranda 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. After a hostile meeting on June 17, 2011, Fernandezhired the services of an independent certified public

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. The examination was preliminary and based solely upona 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. Although preliminary, Colon was able to reportfindings that showed a grim outlook of Surgicals financial

affairs. Specifically, Colon found several inconsistencies in

revenue reporting, depletion of Surgicals capital structure and

continuous withdrawals of company funds. [Exhibit 22,

Preliminary examination report and invoice submitted by CPA

Arnaldo Colon]

72. These findings show damages both to Surgical and toits stockholders. The personal withdrawals are nothing but

dividends in disguise. [Exhibit 22, Preliminary examination

report and invoice submitted by CPA Arnaldo Colon

73. Specifically, these personal withdrawals" wereunknown to Fernandez and Fernandez-Rios and they did not receive

payment as dividends for their participation in Surgical.

[Exhibit 22, Preliminary examination report and invoice

submitted by CPA Arnaldo Colon]



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74. Surgicals capital structure is not complex. It iscomposed exclusively of one classification of voting 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 and stockholders of Surgical dated on

September 6, 2006 and minutes of first meeting of the

stockholders held on August 17, 2006]

75. These personal withdrawals caused a depletion ofSurgicals funds and capital base. It injured Surgical by

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. Mirandas Fraudulent Representations Before His Removal76. On January 11, 2010, Mr. Arnaldo Miranda-Aviles,

Secretary of Surgicals Board of Directors, signed a sworn

corporate resolution that appointed Miranda as President of

Surgical. [Exhibit 23, Surgicals document titled Corporate

Resolution of January 11, 2010]

77. However, Fernandez was never removed as President ofSurgical prior to the appointment of Miranda to such position.



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94. Mirandas unauthorized representation of Surgicalinfringes the federally registered trademarks distributed by

Surgical and the Puerto Rico Surgical Technologies, Inc

service mark.

95. They constitute unauthorized acts of representationand sale of protected trademarks and service marks with the

intent to profit and benefit from the goodwill and reputation of

the marks at issue.

96. Unless Miranda is restrained from continuing tooperate the business of Surgical, these 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 fromirreparable dilution and tarnishment, since distinctive and

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. As stated before, Fernandez and Fernandez-Rios are themajority stockholders of Surgical and have been since its

incorporation.



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103. A temporary restraining order, as well as preliminaryand permanent injunction should be issued immediately, enjoining

Miranda from continuing to sell and distribute the federally

registered trademarks distributed by Surgical, dilute the

Puerto Rico Surgical Technologies, Inc. service mark,

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 1 to 103 are hereby incorporated byreference.

105. Miranda continues to sell and distribute the federallyregistered trademarks distributed by Surgical; continues to

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 aforesaid acts tend to represent falselythat he represents and manages Surgical, the Puerto Rico

Surgical Technologies, Inc. service mark and the federally

registered trademarks distributed by Surgical constitute a

violation of Section 43(a) of the Lanham Act, 15 U.S.C.

1125(a).



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107. The aforesaid acts of Miranda are greatly andirreparably 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


109. Miranda is using the Puerto Rico SurgicalTechnologies, Inc. service mark; is representing himself to be

a Surgical representative and manager; and is promoting and

advertising Surgicals business and the federally registered

trademarks it distributes without authorization.

110. The promotion and marketing of the Puerto RicoSurgical 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,

Surgicals legitimate manager.



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111. Mirandas aforesaid acts constitute trademarkinfringement 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 andirreparably 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


115. In the present case, a majority of stockholders ofSurgical, 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.



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116. Considering the above, Mirandas removal and order tosurrender 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 Surgicaland 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 Dutyof Protecting Fernandezs Right to Vote


119. Fernandez exercised his right to vote, as stockholderof Surgical, with a corporate resolution by written consent in

lieu of meeting that approved, by a majority of its

stockholders, the removal of Miranda as manager of Surgical. It

also ordered Miranda to surrender control of Surgical over to

Fernandez.

120. Subsequently, a majority of consents of outstandingshares of Surgical was received on May 11, 2012, at the

principal place of business of Surgical, where the book in which

proceedings of this nature are recorded and by means of

certified mail with return receipt.



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121. On the other hand, Miranda does not hold a vestedright in the office of director of Surgical. 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. 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 directorof 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 thoseinflicted 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 aregreat and irreparable. No monetary damage could restore

Fernandezs right to vote in connection with the ordered

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


126. Stockholders enjoy a personal right to inspectcorporate books and records as a matter of self-protection,

because a stockholder is entitled to know how directors are

conducting the affairs of the corporation of which he or she is

a part owner.

127. This right is exercised upon written demand, underoath, 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 Fernandezand Fernandez-Rios to Miranda, as director and manager of

Surgical. The request stated the purpose of the inspection and



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identified with specificity the documents required for the

inspection.

129. However, Miranda completely disregarded the rights ofSurgical 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 Dutiesfor the payment of illegal implicit dividends

in detriment to similarly situated stockholders


131. As previously stated, a preliminary examination ofSurgicals 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 tostatutory requirements or in accordance with Surgicals

ownership and capital structure.

133. This breach of fiduciary duties constitutes an act ofself-dealing, which must be reviewed under the entire fairness

standard and the applicable law.



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entering a temporary restraining order, a preliminary and

permanent injunction, and a declaratory judgment as herein

detailed and other available remedies:

1. Enjoining Miranda from continuing to represent himselfas 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 the federally registered trademarks distributed by

Surgical and the Puerto Rico Surgical Technologies, Inc.

service mark, as well as its reputation and goodwill;

instructing Miranda to immediately surrender all real and

personal property of Surgical, including access to

electronically stored information and to the website

www.puertoricosurgical.com.

2. Enjoining Miranda from continuing to interfere withFernandezs rights as stockholder of Surgical, specifically,

with the holding decided by the majority stockholders of



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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 perfectingtransactions 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, checks, money orders, credit cards, promissory notes

and/or any other negotiable instruments; participating in

meetings of the Board of Directors of Surgical; using and

representing himself as an authorized representative of the

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 aspeedy 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. Fernandez hereby requests an entry of a declaratoryjudgment declaring that the corporate resolution by written

consent in lieu of meeting of the stockholders, signed, dated



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and sent via certified mail to Surgicals principal offices, and

thereupon received on May 11, 2012, is valid, legal, and

enforceable under the Corporations Act and Surgicals

Certificate of Incorporation and by-laws.

6. Fernandez requests the entry of an order wherebyMiranda is required to indemnify, reimburse and/or compensate

Fernandez, directly, for the breach of Mirandas fiduciary

duties directly held against Fernandez, specifically, such

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.


Fernandez, directly, for the breach of Mirandas fiduciary

duties directly held against Fernandez, specifically, such

duties in connection with Fernandezs right to inspect corporate

books and records in an amount not less than $200,000.00.


Surgical, derivatively, for the breach of Mirandas fiduciary

duties held against Surgical, specifically, such duties in

connection with the illegal payment of implicit dividends 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.


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 theaward 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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CERTIFICATE OF SERVICE

It is hereby certified in compliance with Fed.R.Civ.P.

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 [email protected].

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 [email protected]

[email protected]


Fernandez Avilez v. Miranda Aviles

Documents