Puerto Rico: Condominium Repair Negotiations vs. Unjust Enrichment

Feb 14, 2018 By Julitza Perez Insurance

After Hurricane Irma and Maria caused damage to many condominiums in Puerto Rico, it is the Board of Directors’ job to search for estimates and determine how the damage will be repair. Many will be limited by the amount of compensation approved by their insurers and will be forced to repair only the necessary parts of the common areas. It is important for any decision to be clear, in good faith and not exceed the authorization of the Board of Directors in the repair of damage caused by the hurricane.

In Garriga, Hijo, Inc. v. Condominio Marbella,1 after Hurricane Hugo affected Puerto Rico in 1989, the Marbella del Caribe Condominium suffered damage directly to the ventilation equipment of the basement and on the roof. After reviewing several quotes, the Board of Directors chose Mr. Garriga’s quote and included it with its insurance claim. The insurer granted a lower amount of compensation and it was not enough to cover all the work planned for repairs. Therefore, Mr. Garriga was informed he would only be hired to repair the ventilation equipment in the basement. The Board of Directors decided not to fix the roof ventilation equipment. On the date of the repairs, a group of employees of Mr. Garriga insisted on installing the roof equipment, contrary to the agreement with the Board of Directors. Mr. Cancel, the condominium administrator, did not allow them to proceed with the work, and after contacting Mr. Garriga’s office, the group of employees did not install the roof equipment.

Months later, the administrator of the Marbella condominium was replaced and Mr. Garriga’s employees returned to the condominium to work on the roof. The new administrator was unaware of the issue and allowed the employees to enter and install the equipment on the roof. When the Board of Directors received an invoice from Mr. Garriga, they refused to pay and required the removal of the roof equipment.

The issue led to a lawsuit and the Court of First Instance dismissed the claim and required Mr. Garriga to pay three thousand dollars for attorney fees, plus costs. Mr. Garriga appealed. The Court of Appeal determined that Marbella condominium had benefited from the installation of the roof equipment and therefore an unjust enrichment2 had occurred.

The Supreme Court of Puerto Rico held that for the doctrine of unjust enrichment to apply it requires:3

  • The existence of an enrichment;
  • the existence of a loss;
  • the connection between the loss and the enrichment;
  • lack of cause that justifies enrichment;
  • the existence of a law that excludes the application of enrichment without cause.

In this case, the Supreme Court of Puerto Rico determined that Mr. Garriga had caused this situation, even though he suffered a loss by not getting paid for the equipment installed that benefited Marbella. Mr. Garriga knowingly and with intention acted stubbornly (bad faith) by installing the equipment even when Marbella’s Board of Directors had informed him they did not want the roof equipment. The Court held that the doctrine of unjust enrichment did not apply to this case and that Mr. Garriga could remove his equipment from the roof of Marbella at his own risk.

1 Garriga, Hijo, Inc. v. Cond. Marbella, 143 D.P.R. 927 (1997).
2 Unjust enrichment (definition) a benefit by chance, mistake or another’s misfortune for which the one enriched has not paid or worked and morally and ethically should not keep. https://dictionary.law.com/Default.aspx?selected=2197
3 Garriga, at 934.

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