The Puerto Rico Court of Appeals recently ruled on a case involving a contract dispute between two buyers and two sellers regarding a property in Ponce. The court upheld a lower court's decision to dismiss the case without imposing costs or attorney fees on the buyers. This ruling affects the parties involved and clarifies how dismissals in contract disputes can be handled in Puerto Rico.

The case, titled David Emilio Kerr Selgas and José Gabriel Emilio Fagot Díaz v. Richard Charles De Howitt Pérez, Alberto Constantino De Howitt Pérez, Marisol Bermúdez De León Y Otros, was filed under docket number TA2026AP00492. The dispute began when the buyers claimed they had a contract to purchase a property for $40,000, but the sellers later indicated they would not complete the sale.

The buyers, Selgas and Fagot, initiated the lawsuit in July 2023, seeking specific performance of the contract and damages. The sellers, De Howitt Pérez and De Howitt Pérez, denied the existence of a contract, stating that negotiations had not resulted in a final agreement. The case progressed through the courts, with various motions and amendments filed by both parties.

In June 2024, the sellers informed the court that the property had been sold to third parties. Following this, the buyers sought to amend their complaint to include the new buyers as defendants. The court allowed this amendment, and the new buyers responded to the complaint.

As the case moved forward, the buyers filed a motion to dismiss their case with prejudice, meaning they could not bring the same claim again. The court granted this motion on March 30, 2026, without imposing costs or attorney fees on the buyers. The sellers then filed motions seeking to recover costs and attorney fees, claiming the buyers acted in bad faith and had filed a frivolous lawsuit.

The Puerto Rico Court of Appeals, led by Judge Sánchez Ramos, reviewed the case and confirmed the lower court's decision. The court stated, "The court ruled that the lower court did not abuse its discretion or commit an error in law by denying the imposition of costs and attorney fees." The judges on the panel included Judge Pérez Ocasio and Judge Trigo Ferraiuoli.

The court emphasized that the dismissal of the case meant there was no prevailing party, and thus, the sellers could not claim costs. The court also noted that the buyers did not act with temerity, which would justify imposing attorney fees. The ruling clarified that a party is not considered to have acted in bad faith simply because their claims are ultimately unsuccessful.

This ruling has implications for future contract disputes in Puerto Rico. It reinforces the idea that dismissals with prejudice can occur without the imposition of costs or fees if the court finds no wrongdoing by the dismissing party. It also highlights the importance of the court's discretion in determining the appropriateness of awarding costs and fees in such cases.

Looking ahead, the sellers may have the option to appeal this decision to the Supreme Court of Puerto Rico. However, details regarding any potential appeal or related cases were not available in the court filing. The outcome of this case may influence how similar disputes are handled in the future, particularly regarding the dismissal of cases and the awarding of costs and fees.