CCR International, Inc. v. Elias Group, LLC et al, No. 1:2015cv06563 - Document 106 (S.D.N.Y. 2018)
Court Description: OPINION. For the foregoing reasons, Elias Group's motion to consolidate is granted. It is so ordered. re: (94 in 1:15-cv-06563-RWS) MOTION to Consolidate Cases 16-cv-6280, 17-cv-6697 filed by Elias Group, LLC. (Signed by Judge Robert W. Sweet on 6/26/2018). Filed In Associated Cases: 1:15-cv-06563-RWS, 1:17-cv-06697-RWS. (rjm)
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CCR International, Inc. v. Elias Group, LLC et al Doc. 106 UNITED STATE S DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK . ---------------------- - ------ ----- --- x CCR INTERNATIONAL, IN C., 15 Civ . 6563 - against - (RWS) OP INI ON THE ELIAS GROUP, LLC, Defendant . --------------------------------- ----x THE ELIAS GROUP, LLC , s1 •··... _ ., USDC \..,.. LJ.!..'-; , DOC Ut¼i.Ei''-JT ELECTRONICALLY FILED DOC#: DATE Fl-LE_D_:__,6 ..,.,.;fd€,..,,._..,...,....._ __ -against - 't CCR DEVELOPMENT GROU P, JOSE FUERT ES , INC . and Defendants . ------------------------------------- x BANCO COOPERATIVO DE PR , Plaintiff, -against THE ELIAS GROUP , LLC , Defendant/ Third-Par ty Plaintiff , -a gainst CCR INTERNATIONAL , INC. , CCR DEVELOPMENT GROUP , INC. , and JOSE FUERTES Third - Party Defendants . ----------------------------- - --- ----x 1 Dockets.Justia.com APPEARANCES: Attorneys for CCR International, CCR Development Group , Inc. , and Jose Fuertes LAW OFFICES OF JANE BECKER WHITAKER P . O. Box 9023914 San Juan , PR 00902 By : Jane Becker , Esq . Attorneys for Elias Group SHERMAN , SILVERSTEIN , KOHL , ROSE & PODOLSKY , P . A. 308 Harper Drive , Suite 200 Moorestown , NJ 08057 By: Jeffrey P. Resnick , Esq . Attorneys for Banco Cooperativo de Puerto Rico FRIEDMAN SANCHEZ , LLP 16 Court Street , Suite 2600 Brooklyn , New York 11241 By: Andrew M. Friedman, Esq. ADSUAR MUNIZ GOYCO SEDA & PEREZ - OCHOA , PSC P.O . Box 70294 San Juan , PR 00936 By : Sarika J. Angulo , Esq. Eric Perez-Ochoa, Esq . 2 Sweet, D.J. Defendant and Third-Party Plaintiff the Elias Group, LLC ("Elias Group") has moved , pursuant to Federal Rule o f Civil Procedure 42(a ) , to consolidate this action, CCR International, Inc . v . The Elias Group , LLC , 15 Ci v . 6563 (RWS) 1, with Banco Cooperativo de Puerto Rico v . Elias Group, LLC , 17 Civ . 6697 (RWS). See Fed. R. Civ . P . 42(a). Th ese actions emerge from the agreements relating to the ownership and transfer of the facilities and trademarks of the carbonated soda Coco Rico ("Coco Rico " ) and the actions taken by the parties t o those agreements. Based upon the conclusions set forth below, the motion is granted . I. Facts & Prior Proceedings Prior to March 31 , 2008 , CCR International , Inc. (" CCR" ) was the owner of the soda brand Coco Rico . On March 3 1, 2008 , CCR and CCR Development Group, In c . (" CCRDG") entered into an Asset Purchase Agreement (t he "March 2008 Asset Purchase The Elias Group , LLC v . CCR Development Group , Inc ., 16 Civ . 6280 (RWS) was consolidated with CCR International , Inc . v . The Elias Group , LLC, 15 Civ . 6563 (RWS) pursuant to this Court ' s order dated January 11 , 2017 . See Order on Motion to Consolidate , ECF No. 81 . 3 Agreement " ) in which CCR sold , transferred , and assigned to CCRDG all rights , title , and interest in the Coco Rico brand , including all trademark rights . In return , CCRDG agreed to provide CCR monies to be paid over time . After CCRDG defaulted in its obligations to make payment to CCR of at least $9 , 000 , 000 , Elias Group began discussions regarding the possibility of acquiring all rights , title , and interest in the Coco Ri co brand from CCRDG and provid i ng CCRDG and CCR with consideration sufficient to terminate CCRDG ' s obligations to CCR . On January 30 , 2013 , CCR and Elias Group entered into the Assignment Agreement (the "Assignment Agreement " ) , in which CCR assigned CCRDG ' s purchase obligations to Elias Group in exchange for Elias Gr oup ' s agreement to pay CCR pursuant to a formula centered on Elias Group ' s efforts to purchase the Coco Rico brand from CCRDG. Pursuant to the Assignment Agreement , Elias Group was to make an init i al payment amount up to $300 , 000 to CCR , and then , subject to certa i n terms and conditions set forth in the Assignment Agreement , make mont h ly payments for some period of time in a sum not to exceed $400 , 000 per year. In the event that Elias Group purchased the rights to the Coco Rico brand from CCRDG , the Assignment Agreement provided that Elias Group ' s monthly payment obligation to CCR terminated and Elias 4 Group would make either a year l y paymen t of $450 , 000 to CCR (the " Yearly Payment " opt i on) , o r El ias Group wo u ld prov i de CCR with a one - time payment of $5 , 000 , 000 , l ess t h e initia l payment to CCR by Elias Group , l ess monies previously paid to CCR by Elias Group , less any other payments or other consideration paid by Elias Group to CCRDG and/or th i rd parties pursuant to El ias Group ' s acquisit i on of the Coco Rico brand , as we l l as a possib l e deduction pursuant to a sales fo rmula set for t h i n t h e Ass i gnment Ag r eement (t h e " Bu yout Payment " optio n ) . On Apr i l 15 , 2015 , CCRDG , as seller of the r i ghts , tit l e and interest in the Coco Rico brand , and Elias Group , as buyer , entered into an Asset Purchase Agreement (" Apri l 2015 Asset Purchase Agreement " ) in which Elias Group purchased all of CCRDG ' s rights , title and i nterest in the Coco Rico brand for consideration of over $6 , 000 , 000 and a re l ease of CCRDG ' s obl i gation to pay any outstanding mon i es owed to Eli as Gro u p pursuant to CCR ' s ass i gnment of CCRDG ' s purchase ob li gations under the March 2008 Asset Pu rchase Agreement to Elias Group . Purs u a n t to the Apri l 20 1 5 Asset Purchase Agreement , on May 2 1, 2015 , Elias Group executed a promisso r y note in the amount of one million dollars in favor of CCRDG (the " Note " ) . 5 By letter dated June 9 , 2015 , Elias Group advised CCR that it elected to pay CCR pursuant to the Buyout Payment option and that based upon the formulas in the Assignment Agreement , Elias Group did not owe CCR any further monies . CCR then filed suit against El ias Group on August 19 , 201 5 , alleging monies owed under the Assignment Agreement . See CCR International, Inc. v . The Elias Group , LLC , 15 Civ . 6563 (RWS) , ECF 0kt . No . 1. Elias Group filed a counterclaim and third - party complaint al l eging conspiracy to frustrate the Assignment Agreement , the Asset Purchase Agreement and an Independent Contractor Agreement , as well as breach of contract and fraud. Moreover , the Elias Group filed suit against CCRDG on August 8 , 2016 , alleging breach of the Asset Purchase Agreement and material misrepresentations . See Elias Group , LLC v . CCR Development Group, Inc ., 16 Civ . 6280 (RWS) , ECF Dkt. No . 1. CCRDG and Defendant Jose Fuertes ("Fuertes") counterclaimed. By order of January 12 , 2017 , the CCR Action and the Elias Group Action were consolidated, and a joint discovery p l an was adopted on February 22 , 2017. On September 1, 2017 , Banco Cooperativo de PR ( " Ban Coop " ) filed a complaint , 17 Civ . 6697 (the " Ban Coop Action " ) , which was assigned to the Honorable Alvin Hellerstein , alleging 6 breach of contract based on the Note executed by Elias Group in favor of CCRDG on May 21 , 2015 , and assigned to Ban Coop at that time. See Banco Co operativo de PR v. Elias Group, LLC, 17 Civ . 6697 (AKH) , ECF 0kt . No. 1 . On October 18, 2017 , Ban Coop filed its amended complaint . On December 5, 2017 , the Elias Group filed its answer and third-party complaint ( " ATPC " ) realleging its causes of action against CCR , CCRDG , and Fuertes as set forth in the CCR and Elias Group Actions . See id ., ATPC , ECF 0kt . No . 18 . The ATPC also alleges that Section 3 of the Promissory Note provided that a claim for indemnification would reduce the principal of the Note and permit the Elias Group to hold back the amount of disputed funds . See id. 30 . The indemnification is provided in the Asset Purchase Agreement and is one of the subjects of the Elias Group Action. The Ban Coop Action was reassigned to this Court as related on Apri l 12, 2018 . The instant motion for consolidation by the Elias Group , opposed by Ban Coop , was taken on submission and marked fully submitted on March 7 , 2018 . 7 II . The Elias Group's Motion to Consolidate is Granted Federal Rule of Civil Procedure 42(a) provides that "[i]f actions before the court involve a common question of law or fact, the court may . . consolidate the actions. " Fed . R . Civ. P . 42(a) . When common issues of law and fact are present, the "trial court has broad discretion to determine whether consolidation is appropriate," and is empowered to find that "judi c ial economy favors consolidation." Johnson v . Celotex Corp. , 899 F.2d 1281 , 1285 (2nd Cir . 1990), cert . denied, S . Ct . 297 (1990) 110 (citations omitt ed) . While " the discretion to consolidate is not unfettered and considerations of convenience and economy must yield to a paramount concern for a fair and impartial trial," Primavera Familientstiftung v . Askin, 173 F . R . D. 115 , 12 9 ( S . D. N . Y . 1 9 9 7 ) at 1284 - 85) ( c i ting Ce 1 o t ex Corp . , 8 9 9 F . 2 d (alteration and internal quotation marks omitted ) , "s o long as any confus ion or prejudice does not outweigh efficiency concerns , consol idati on will generally be appropriate." See Primavera Familientstiftung , 173 F . R.D. at 129 (citing Int 'l Paving Sys., Inc. v . Van-Tulco, Inc ., 806 F . Supp . 17, 22 (E .D.N. Y. 1 992) . 8 The party seeking consolidation bears the burden of demonstrating that the interest of judicial economy is outweighed by the possibility of prejudice or delay . KGK Jewelry LLC v . ESDNetwork, at *2 No. 11 Civ. 9236 (LTS) (RLE), 2014 WL 7333291 , (S.D.N . Y. Dec . 24, 2014) Fee Antitrust Litigation , (citing In re Currency Conversion No. 01 MDL 1409 , 2009 WL 1834351 , at * 2 ( S . D. N. Y. June 18 , 2 0 0 9) ) . As evidenced by the pleadings as set forth above, both the CCR Action and the Ban Coop Action arise out of the same factual scenario and relate to the same agreements. Elias Group has alleged that under the terms of the Note on which Ban Coop has sued, it is entitled to withhold payment and t o reduce its principal to the amount of its losses and indemnification cla ims against CCR , CCRDG , the Fuertes brothers and others allegedly conspiring with them. Accordingly , there are common fa ctua l issues, such that consolidation of the CCR and the Ban Coop Actions for discovery purposes is proper . Subsequent motions may clarify the issues and require revisiting this determination. The order and priority of issues to be tried will be determined after the close of discovery . 9 III . Conclusion For the foregoing reasons , Elias Group's motion t o consolidate is granted. It is so ordered . New York, NY June 2018 1rJ, T U . S . D.J. 10
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