Colon v. Blades, No. 3:2007cv01380 - Document 107 (D.P.R. 2009)

Court Description: OPINION AND ORDER denying re 95 MOTION for Summary Judgment For Lack of Subject Matter Jurisdiction filed by Ruben Blades Signed by Chief Mag. Judge Justo Arenas on 8/21/2009.(nydi)

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1 IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO 2 3 4 WILLIAM ANTHONY COLà N, 5 6 Plaintiff 7 v. 8 CIVIL 07-1380 (JAG)(JA) 10 RUBà N BLADES, ROBERTO MORGALO, MARTà NEZ, MORGALO & ASSOCIATES, et al., 11 Defendants 9 12 13 OPINION AND ORDER 14 15 16 This matter is before the court on motion for summary judgment for lack of subject matter jurisdiction pursuant to Rule 56 of the Federal Rules of Civil 17 18 Procedure and section 1332 of Title 28 of the United States Code, filed on April 2, 19 2009, by defendant Rubén Blades. (Docket No. 95.) Plaintiff William Anthony 20 Colón filed a response on May 28, 2009, (Docket No. 104), to which Rubén Blades 21 replied on June 3, 2009. (Docket No. 105.) For the reasons set forth below, the 22 23 24 motion for summary judgment is DENIED. I. FACTUAL AND PROCEDURAL BACKGROUND 25 In 2002, Roberto Morgalo (hereinafter Morgalo ), Arturo Martínez 26 (hereinafter Martínez ), and their company, Martínez, Morgalo & Associates 27 28 (hereinafter M.M.A. ) entered into negotiations to book a concert featuring a 1 CIVIL 07-1380 (JAG) (JA) 2 2 3 collaborated musical performance between plaintiff William Anthony Colón 4 5 (hereinafter plaintiff ) and defendant Rubén Blades (hereinafter defendant ) 6 (Docket No. 95, at 6, ¶ 3 and Docket No. 104, at 3, ¶ 3.) 7 8 On or about January, 2003, Morgalo s company acting as an agent on behalf of the plaintiff and the defendant, entered into an Engagement Contract with 9 10 DISSAR Productions to hold the event on May, 2003, at the Estadio Hiram Bithorn 11 in San Juan, Puerto Rico. (Docket Nos. 14-5 and 48, at 4-5.) According to the 12 terms of the contract, the plaintiff and the defendant were to receive a $350,000 13 all-inclusive guarantee as compensation for their performance. (Docket No. 95, 14 15 at 6, ¶ 4 and Docket No. 104, at 3, ¶ 3.) 16 The all inclusive designation signified that DISSAR was to provide sound 17 and lighting while the rest of the concert s production and promotion costs were 18 to be divided between the plaintiff and the defendant through the guaranteed 19 20 funds. (Docket No. 48, at 4-5.) 21 Plaintiff asserts that he and the defendant had an agreement in which he 22 agreed to manage the production aspects of the concert while the defendant 23 would manage the business aspects, and that while acting in this capacity 24 defendant arranged for M.M.A. to act as managers on behalf of them. (Docket No. 25 26 45, at 2, ¶¶ 10 and 11.) Nevertheless, the defendant denies the existence of said 27 agreement. (Docket No. 48, at 5-6, ¶¶ 10 and 11.) 28 1 CIVIL 07-1380 (JAG) (JA) 3 2 3 After only receiving a partial payment, plaintiff grew concerned and 4 5 contacted the defendant. Plaintiff asserts that a few days prior to the concert the 6 defendant informed him that he was unable to locate anyone from M.M.A. 7 Specifically, the defendant could not locate Martínez, whom he believed was in 8 possession of the remainder of the funds. (Docket No. 45, at 2-3, ¶ 13.) 9 10 Plaintiff further claims that on May 3, 2003, the day of the concert, the 11 defendant told him he would personally take full responsibility and that he would 12 pay him any amounts due. (Docket No. 45, at 3, ¶ 15.) However, the defendant 13 denies that he made such a promise and in turn claims that he also did not receive 14 15 full payment for the performance. (Docket No. 48, at 8, ¶ 15.) 16 On May 4, 2007, seeking the collection of monies owed to him, plaintiff filed 17 a complaint in this court against the defendant which alleged that the defendant 18 was solely responsible for breaching the contract. (Docket No. 1.) Defendant 19 20 responded and subsequently moved to dismiss for failure to join a necessary and 21 indispensable party pursuant to Federal Rule of Civil Procedure 12(b)(7) on 22 October 22, 2007. (Docket No. 13.) 23 24 In his motion, the defendant asserted that Martínez, Morgalo and M.M.A. were necessary and indispensable parties whom he believed were domiciled in 25 26 New York, and that joinder of these parties was therefore infeasible because it 27 would defeat the court s diversity jurisdiction given that plaintiff was also a 28 1 CIVIL 07-1380 (JAG) (JA) 4 2 3 resident of New York. (Docket No. 13-2, at 3, ¶ 2.) However, upon further 4 5 discovery it was revealed that the court s subject matter jurisdiction could still 6 stand. The court held that although Martínez was not an indispensable party, 7 Morgalo and M.M.A. were to be joined. (Docket No. 24, at 23-24.) See Colón v. 8 Blades, 570 F. Supp. 2d 204, 217 (D.P.R. 2008). 9 10 Then on April 29, 2008, plaintiff filed an amended complaint to which 11 defendant replied on May 9, 2008. (Docket Nos. 45 & 48.) 12 defendant sought indemnification from Morgalo by filing a cross claim which was 13 On June 5, 2008, amended on July 29, 2008. (Docket Nos. 49 & 56.) 14 15 In response to comments allegedly made by the defendant to the media, 16 Morgalo filed a defamation claim against him and his company, Blades 17 Productions, Inc., in the United States District Court for the Southern District of 18 New York on May 2, 2008. This claim was consolidated into the present case on 19 20 August 12, 2008. (Docket No. 58-2.) 21 Shortly after, on September 2, 2008, Morgalo answered plaintiff s amended 22 complaint as well as the defendant s amended cross claim (Docket Nos. 66 & 67) 23 and on October 17, 2008, defendant answered Morgalo s defamation claim. 24 25 26 27 28 (Docket No. 73.) 1 CIVIL 07-1380 (JAG) (JA) 5 2 3 II. SUMMARY JUDGMENT STANDARD 4 5 Summary judgment is appropriate when the pleadings, the discovery and 6 disclosure materials on file, and any affidavits show that there is no genuine issue 7 as to any material fact and that the movant is entitled to judgment as a matter 8 of law. Fed. R. Civ. P. 56(c). The intention of summary judgment is to pierce 9 10 the pleadings and to assess the proof in order to see whether there is a genuine 11 need for trial. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 12 587 (1986) (quoting Fed. R. Civ. P. 56(e)). Once the moving party has properly 13 supported [its] motion for summary judgment, the burden shifts to the nonmoving 14 15 party, with respect to each issue on which [it] has the burden of proof, to 16 demonstrate that a trier of fact reasonably could find in [its] favor. Santiago- 17 Ramos v. Centennial P.R. Wireless Corp., 217 F.3d 46, 52 (1st Cir. 2000) (quoting 18 DeNovellis v. Shalala, 124 F.3d 298, 306 (1st Cir. 1997)). 19 20 [T]he mere existence of some alleged factual dispute between the parties 21 will not defeat an otherwise properly supported motion for summary judgment; 22 the requirement is that there be no genuine issue of material fact. Anderson v. 23 Liberty Lobby, Inc., 477 U.S. 242, 247-48 (1986); see also Carrol v. Xerox Corp., 24 294 F.3d 231, 236-37 (quoting J. Geils Band Employee Benefit Plan v. Smith 25 26 Barney Shearson. Inc., 76 F.3d 1245, 1251 (1st Cir. 1996)) ( [N]either 27 conclusory allegations [nor] improbable inferences are sufficient to defeat 28 1 CIVIL 07-1380 (JAG) (JA) 6 2 3 summary judgment. ). The nonmoving party must produce specific facts 4 5 showing that there is a genuine issue for trial. Matsushita Elec. Indus. Co. v. 6 Zenith Radio Corp., 475 U.S. at 587 (quoting Fed. R. Civ. P. 56(e)); see also 7 López Carrasquillo v. Rubianes, 230 F.3d 409, 413 (1st Cir. 2000). 8 A genuine issue exists when there is evidence sufficient to support rational 9 10 resolution of the point in favor of either party. Nereida González v. Tirado 11 Delgado, 990 F.2d 701, 703 (1st Cir. 1993) (citing Anderson v. Liberty Lobby, 12 Inc., 477 U.S. at 248; United States v. One Parcel of Real Prop., 960 F.2d 200, 13 204 (1st Cir. 1992)). In this context, genuine means that the evidence about 14 15 the fact is such that a reasonable jury could resolve the point in favor of the 16 nonmoving party. . . . Burke v. Town of Walpole, 405 F.3d 66, 75 (1st Cir. 17 2005) (quoting United States v. One Parcel of Real Prop., 960 F.2d at 204). Rule 18 56(e) requires the nonmoving party to go beyond the pleadings and by her own 19 20 affidavits, or by depositions, answers to interrogatories, and admissions on file, 21 designate specific facts showing that there is a genuine issue for trial. Celotex 22 Corp. v. Catrett, 477 U.S. 317, 324 (1986). 23 24 However, a moving party may move for summary judgment with or without supporting affidavits. Id. at 323 (quoting Rules 56(a) and (b)). The 25 26 evidence of the non-movant is to be believed, and all justifiable inferences are to 27 be drawn in his favor. Anderson v. Liberty Lobby, Inc., 477 U.S. at 255 (citing 28 1 CIVIL 07-1380 (JAG) (JA) 7 2 3 Adickes v. S. H. Kress & Co., 398 U.S. 144, 158-59 (1970)); see also Patterson 4 5 v. Patterson, 306 F.3d 1156, 1157 (1st Cir. 2002) (quoting Griggs-Ryan v. Smith, 6 904 F.2d 112, 115 (1st Cir. 1990)) ( [the court] must view the entire record in 7 the light most hospitable to the party opposing summary judgment, indulging all 8 reasonable inferences in that party s favor. ). 9 10 Puerto Rico Local Rule 56 11 In the District of Puerto Rico, Local Rule 56(b), previously Local Rule 311 12 (12), imposes additional requirements on the party filing for summary judgment 13 as well as the party opposing the motion. A motion for summary judgment has 14 15 to be accompanied by a separate, short, and concise statement of material facts, 16 set forth in numbered paragraphs, as to which the moving party contends there 17 is no genuine issue of material fact to be tried. 18 Each fact asserted in the statement shall be supported by a record citation as required by subsection (e) 19 20 of this rule. Local Rules of the United States District Court for the District of 21 Puerto Rico, Local Rule 56(b) (2004). When filing a motion in opposition the 22 opposing party must include a separate, short, and concise statement admitting, 23 denying or qualifying each fact set out by the moving party. Local Rules 56(c); 24 see Morales v. A.C. Orssleff s EFTF, 246 F.3d 32, 33 (1st Cir. 2001); Ruiz Rivera 25 26 27 28 v. Riley, 209 F.3d 24, 27-28 (1st Cir. 2000); Domínguez v. Eli Lilly & Co., 958 F. 1 CIVIL 07-1380 (JAG) (JA) 8 2 3 Supp. 721, 727 (D.P.R. 1997); see also Corrada Betances v. Sea-Land Serv., Inc., 4 5 248 F.3d 40, 43 (1st Cir. 2001). 6 These facts must be supported by specific reference to the record, thereby 7 pointing out to the court any genuine issues of material fact and eliminating the 8 problem of the court having to ferret through the Record. Domínguez v. Eli Lilly 9 10 & Co., 958 F. Supp. at 727; see Carmona Ríos v. Aramark Corp., 139 F. Supp. 2d 11 210, 214-15 (D.P.R. 2001) (quoting Stepanischen v. Merch. Despatch Transp. 12 Corp., 722 F.2d 922, 930-31 (1st Cir. 1983)); Velázquez Casillas v. Forest Lab., 13 Inc., 90 F. Supp. 2d 161, 163 (D.P.R. 2000). Any statement of fact provided by 14 15 any party which is not supported by citation to the record may be disregarded by 16 the court, and any supported statement which is not properly presented by the 17 other party shall be deemed admitted. See Local Rule 56(e). Failure to comply 18 with this rule may result, where appropriate, in judgment in favor of the opposing 19 20 21 22 23 24 party. Morales v. A.C. Orssleff s EFTF, 246 F.3d at 33; Stepanischen v. Merch. Despatch Transp. Corp., 722 F.2d at 932. III. DISCUSSION Congress has granted subject matter jurisdiction to district courts over all civil actions where the matter in controversy exceeds the sum or value of 25 26 27 28 $75,000" provided that complete diversity exists between the parties. 28 U.S.C. 1 CIVIL 07-1380 (JAG) (JA) 9 2 3 § 1332(a); see Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806); Alexandrino 4 5 v. Jardín de Oro, Inc., 573 F. Supp. 2d 465, 469 (D.P.R. 2008). 6 However, a court s subject matter jurisdiction may be challenged through 7 Federal Rule of Civil Procedure 12(b)(1). See Valentín v. Hospital Bella Vista, 254 8 F.3d 358, 362-63 (1st Cir. 2001); see also Hernández-Santiago v. Ecolab, Inc., 9 10 397 F.3d 30, 33 (1st Cir. 2005) (discussing application of Rule 12(b)(1) challenge 11 in cases where the court allegedly has diversity jurisdiction). When the court s 12 subject matter jurisdiction is challenged on a claim that the matter in controversy 13 does not exceed the jurisdictional minimum required in diversity action, it must 14 15 then apply the legal certainty test established by the Supreme Court in St. Paul 16 Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 289 (1938). Therein the court 17 held that the sum claimed by the plaintiff controls if the claim is apparently made 18 in good faith and that [i]t must appear to a legal certainty that the claim is really 19 20 21 for less than the jurisdictional amount to justify dismissal. Id. at 288-89; Stewart v. Tupperware Corp., 356 F.3d 335, 338 (1st Cir. 2004). 22 In other words, [t]he amount in controversy requirement is ordinarily 23 determined from the plaintiff s complaint. Soto-Vélez v. BCBG Max Azria, Inc., 24 589 F. Supp. 2d 147, 149 (D.P.R. 2008) (citing Coventry Sewage Assoc. v. 25 26 Dworkin Realty Co., 71 F.3d 1, 4 (1st Cir. 1995)). Thus, the allegation made by 27 plaintiff to this effect suffices unless questioned by the opposing party or the 28 1 CIVIL 07-1380 (JAG) (JA) 10 2 3 court. Stewart v. Tupperware Corp., 356 F.3d at 338 (quoting Spielman v. 4 5 Genzyme Corp., 251 F.3d 1, 5 (1st Cir. 2001) (citing Dep t of Recreation & Sports 6 v. World Boxing Ass n, 942 F.2d 84, 88 (1st Cir. 1991)). 7 8 If the defendant challenges the amount of the allegation, the party seeking to invoke jurisdiction has the burden of alleging with sufficient particularity facts 9 10 indicating that it is not a legal certainty that the claim involves less than the 11 jurisdictional amount. Stewart v. Tupperware Corp., 356 F.3d at 338 (quoting 12 Spielman v. Genzyme Corp., 251 F.3d at 5) (quoting Dep t of Recreation & Sports 13 v. World Boxing Ass n, 942 F.2d at 88). This can be done by amending the 14 15 pleadings or by submitting affidavits. Spielman v. Genzyme Corp., 251 F.3d at 16 5 (quoting Dep t of Recreation & Sports v. World Boxing Ass n, 942 F.2d at 88). 17 In sum, [i]f the face of the complaint reveals, to a legal certainty, that the 18 controversy cannot involve the requisite amount, jurisdiction will not attach. 19 20 Soto-Vélez v. BCBG Max Azria, Inc., 589 F. Supp. 2d at 149 (citing Coventry 21 Sewage Assoc. v. Dworkin Realty Co., 71 F.3d at 6 (citing St. Paul Mercury Indem. 22 Co. v. Red Cab. Co., 303 U.S. at 291). 23 24 The defendant seeks dismissal of the amended complaint because the amount in controversy does not match, nor exceed the jurisdictional minimum of 25 26 27 28 $75,000. (Docket No. 95.) 1 CIVIL 07-1380 (JAG) (JA) 11 2 3 Plaintiff s claim is for $115,000 from the defendants, plus interest and 4 5 attorneys fees. (Docket No. 1, at 3, ¶ 16 and Docket No. 43-3, at 3, ¶ 16.) The 6 court must then apply the legal certainty test in order to determine if in fact 7 plaintiff s claim meets the jurisdictional minimum of $75,000. 8 On or about January 22, 2003, the plaintiff and the defendant agreed to 9 10 perform at the Siembra: 25 Años Después concert in Puerto Rico for an all- 11 inclusive fee of $350,000 to be equally divided among them after all costs and 12 expenses had been deducted. (Docket No. 95, at 6, ¶¶ 3 and 4 and Docket No. 13 104, at 3, ¶ 3.) 14 15 The defendant claims that plaintiff had already received $72,917.10 of the 16 $138, 668.16 to which he was entitled under the agreement, and believes that 17 plaintiff is entitled, if anything, to $65,751.06, an amount below the statutory 18 limit.1 (Docket No. 95, at 9, ¶ 6.) The calculations for the defendant s numbers 19 20 21 22 23 24 are as follow: Original Contract Fee: Expenses: M.M.A Commission Airfare Expenses$ Hotel Expenses$ Musician Payroll $350,000.00 -$ 35,000.00 -$ 10,549.60 -$ 5,815.79 -$ 12,650.00 25 1 26 27 28 The original contract amount and related expenses are recorded in a submitted copy of the original contract and in Mr. Blades accounting for the concert, which details various expenses related to the concert such as flight expenses, hotel accommodations, musician s salaries, rehearsals, etc. (Docket Nos. 95-2 to 95-14, Exhibits 1 to 14.) 1 CIVIL 07-1380 (JAG) (JA) 12 2 3 4 5 Rehearsal Payroll Rehearsal Space Transportation Expenses Other expenses -$ -$ -$ -$ 3,600.00 1,777.00 2,700.00 571.30 Total Expenses -$ 72,663.69 6 7 8 Net Profit $277,336.31 9 ½ entitled to plaintiff ½ entitled to defendant Money received by plaintiff $138,668.16 $138,668.16 $ 72,917.10 Plaintiff s remaining balance $ 65,751.06 10 11 12 13 Meanwhile, plaintiff claims that he had reached a new verbal contract, for 14 $175,000, with Mr. Blades when he refused to perform at the concert after being 15 informed that Mr. Martínez had disappeared with their payments. (Docket No. 45, 16 at 3, ¶¶ 15 and 16.) 17 18 Furthermore, plaintiff claims that in May, 2004, the defendant prepared an 19 accounting of the expenses incurred which amounted to $29,000.75, after 20 excluding $44,006.802 in expenses allegedly incurred by M.M.A. (Docket No. 104, 21 at 3, ¶¶ 4 and 5.) Mr. Colón claims that because Mr. Blades believed that M.M.A. 22 23 did not deserve to be paid anything, the sum that should be divided equally 24 between them is $320,999.25. Therefore, it would seem that plaintiff was entitled 25 to $160,499.62, of which he had already received $72,917.10 leaving an unpaid 26 27 28 2 This amount is the commission claimed by M.M.A. plus other expenses incurred by them. 1 CIVIL 07-1380 (JAG) (JA) 13 2 3 balance of $87,582.52. (Docket No. 104, at 3-4.) The calculations for plaintiff s 4 5 6 7 8 9 10 numbers are as follow: Original Contract Fee Expenses Incurred by plaintiff & defendant Net Profit Plaintiff s half Payments received by plaintiff Amount still owed M.M.A. s Disputed Expenses $350,000.00 $ 29,000.75 $320,999.25 $160,499.62 $ 72,917.10 $ 87,582.52 ($ 44,006.80) 11 In addition, the defendant contends that the remaining value of the contract 12 between the parties after deducting all fees and expenses is the correct figure 13 for the plaintiff s claim ($65,751.06) (Docket No. 95, at 9, ¶ 6), that the agent s 14 15 commission fee is manifestly insufficient to create a genuine issue of material fact, 16 and that they are also immaterial for calculating the amount in controversy in the 17 instant case, as it was already collected by M.M.A. (Docket No. 105, at 4, ¶¶ 18 1 and 2.) Plaintiff, on the other hand holds that he is owed $87,582.52, since the 19 20 21 defendant believes that M.M.A. s commission should not be paid. (Docket No. 104, at 3-4.) 22 It is clear that an issue of material fact between the two parties exists as to 23 the amount in controversy. There is also an issue as to verbal contract between 24 the plaintiff and the defendant. 25 26 Furthermore, Mr. Blades failed to point out any facts that would suggest that 27 the amount stated in the complaint was not claimed in good faith by Mr. Colón. 28 1 CIVIL 07-1380 (JAG) (JA) 14 2 3 Nonetheless, the circumstances in this case suggest that the amount claimed at 4 5 the time that the complaint was filed was made in good faith. It appears that 6 plaintiff acted under the belief that a new verbal agreement had been reached in 7 which the defendant would personally take responsibility for the plaintiff s full 8 payment. (Docket No. 1, at 3, ¶¶ 11-13 and Docket No. 45, at 3, ¶¶ 14-16.) 9 IV. CONCLUSION 10 11 The court believes that plaintiff has averred sufficient facts to indicate that 12 its claim exceeds the $75,000 jurisdictional amount required by 28 U.S.C. § 1332. 13 Therefore, the defendant s motion for summary judgment for lack of subject 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 matter jurisdiction is DENIED. At San Juan, Puerto Rico, this 21st day of August, 2009. S/ JUSTO ARENAS Chief United States Magistrate Judge

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