The Puerto Rico Court of Appeals ruled on June 25, 2026, in the case of Banco Popular de Puerto Rico v. Christian Darcoli Parrella, et al., affecting how banks can pursue debts from personal guarantees. The court's decision partially reversed a previous ruling that ordered the defendants to pay $50,000 plus interest and attorney fees. This ruling impacts individuals and businesses across Puerto Rico who have taken loans and provided personal guarantees.

The case began when Christian Darcoli Parrella and María L. Serra Collazo, owners of the now-closed Italian restaurant Pinoli, faced a lawsuit from Banco Popular after failing to repay a commercial line of credit. The restaurant operated under a corporation called Don Minzoni, which had taken out a $50,000 line of credit in 2005. After the restaurant ceased operations following the devastation of hurricanes Irma and Maria in 2017, the bank converted the line of credit into a defaulted loan.

Banco Popular filed a lawsuit against the couple and their legal partnership, SLG Darcoli-Serra, in 2019, seeking repayment of the loan. The bank claimed the defendants owed $186,594.88, which included principal, interest, and legal fees. After various legal maneuvers, the lower court ruled in favor of Banco Popular, leading to the appeal.

The Court of Appeals, led by Judge Rodríguez Casillas and joined by Judges Marrero Guerrero, Campos Pérez, and Sánchez Báez, evaluated the case and ultimately decided to partially reverse the lower court's ruling. The court stated, "We revoke partially the challenged ruling and return the case to the lower court." This decision means that while the defendants still owe some debt, the amount may be reconsidered.

The court's ruling is significant because it clarifies the responsibilities of individuals who personally guarantee business loans. It highlights the importance of understanding the implications of such guarantees, especially in the wake of business failures. The court emphasized that the defendants could still contest the amount owed and the terms of the loan agreement.

This ruling may set a precedent for future cases involving personal guarantees in Puerto Rico. It indicates that courts may be willing to reconsider the amounts owed and the circumstances surrounding loan defaults, particularly in cases where businesses have faced unexpected hardships like natural disasters.

Moving forward, the defendants can appeal the decision to the Supreme Court of Puerto Rico if they choose. Additionally, the case may influence how banks structure loan agreements and pursue collections in the future, especially regarding the treatment of personal guarantees in commercial loans.