Colon v. Blades, No. 3:2007cv01380 - Document 235 (D.P.R. 2010)
Court Description: OPINION AND ORDER denying re 221 MOTION for Attorney Fees / Memorandum of Law and Cost Report filed by Ruben Blades Signed by Chief Mag. Judge Justo Arenas on 7/14/2010.(nydi)
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Colon v. Blades Doc. 235 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 RUBà N BLADES, ROBERTO MORGALO, MARTà NEZ MORGALO & ASSOCIATES, 9 10 11 12 Defendants RUBà N BLADES, CIVIL 07-1380 (JA) 13 Cross-Plaintiff 14 v. 15 18 ROBERT MORGALO, in his personal capacity and as owner and member of MARTà NEZ, MORGALO & ASSOCIATES, LLC; MARTà NEZ, MORGALO & ASSOCIATES, LLC, 19 Cross-Defendants 16 17 20 21 OPINION AND ORDER 22 23 This matter is before the court on motion for costs and attorney s fees filed 24 by the defendant, Rubén Blades. (Docket No. 221.) The motion was not opposed 25 by plaintiff, William A. Colón. For the reasons set forth below Mr. Blades s motion 26 27 is DENIED. 28 Dockets.Justia.com 1 CIVIL 07-1380 (JA) 2 2 3 I. BACKGROUND 4 5 On May 4, 2007, Mr. Colón filed a complaint for breach of contract and 6 collection of monies against Mr. Blades. (Docket No. 1.) The complaint was later 7 amended on April 29, 2008, to include Roberto Morgalo and Morgalo, MartÃnez and 8 Associates ( M.M.A. ) as defendants. (Docket No. 45.) According to Mr. Colón, 9 10 in January, 2003, he and Mr. Blades agreed to perform at a musical concert in San 11 Juan, Puerto Rico. (Id. at 2, ¶ 9.) The fee for the concert was $350,000 to be 12 spilt evenly between Mr. Colón and Mr. Blades. (Id.) Mr. Colón claimed that 13 pursuant to the agreement, Mr. Blades was in charge of the business aspects of 14 15 the concert, including collecting the fee and making payments to him. (Id. ¶ 10.) 16 Mr. Colón, in turn, claimed that he was only in charge of the concert s production. 17 (Id.) 18 Mr. Colón alleged that in order to handle the business aspects of the concert, Mr. Blades contracted the services of M.M.A. (Id. ¶ 11.) Also, Mr. Colón 19 20 claimed that according to the agreement his fee for the concert had to be paid in 21 full prior to traveling from New York to San Juan, Puerto Rico. 22 However, Mr. Colón claimed that a few days prior to the concert Mr. Blades 23 informed him that one of the partners of M.M.A., Arturo MartÃnez, had disappeared 24 (Id. ¶ 13.) with the money. (Id. at 2-3, ¶ 13.) Mr. Colón claimed that after telling Mr. Blades 25 26 that he would not perform at the concert, Mr. Blades told him that he was going 27 to pay him the money that was owed to him. (Id. at 3, ¶¶ 14 & 15.) As a result, 28 1 CIVIL 07-1380 (JA) 3 2 3 Mr. Colón performed at the concert. (Id. ¶ 15.) Mr. Colón claimed that despite 4 5 his efforts he was not able to collect from Mr. Blades the money that was owed 6 to him. (Id. ¶ 17.) 7 8 On June 5, 2008, Mr. Blades filed a cross-claim against Mr. Morgalo and M.M.A. (Docket No. 49.) The cross-claim was amended on July 29, 2009. 9 10 (Docket No. 56.) In essence, Mr. Blades claimed that Mr. Morgalo and M.M.A. 11 engaged in fraud, conspiracy to defraud, breach of contract and breach of 12 fiduciary duties by failing to pay the amounts owed in connection with the concert. 13 (Id. at 2, ¶ 1.) Consequently, Mr. Morgalo filed a defamation claim against Mr. 14 15 Blades and Rubén Blades Productions ( RBP ) in the United States District Court 16 for the Southern District of New York. (Docket No. 58-3.) On August 12, 2008, 17 the defamation claim was consolidated with the present case but was later 18 dismissed on March 31, 2010. Colón v. Blades, F.R.D. , No. 07-1380 19 20 (JA), 2010 WL 1235848 (D.P.R. Mar. 31, 2010). As for the cross-claim, the court 21 entered default judgment against M.M.A. on June 15, 2010. Colón v. Blades, 22 F. Supp. 2d 23 24 , No. 07-1380 (JA), 2010 WL 2365448 (D.P.R. June 15, 2010). On May 6, 2010, after reaching a settlement agreement with Mr. Morgalo, Mr. Colón filed a motion dismissing all claims against both Mr. Morgalo and Mr. 25 26 Blades without the imposition of costs, expenses and attorney s fees. (Docket No. 27 188.) 28 On May 7, 2010, the court granted Mr. Colón s motion for voluntary 1 CIVIL 07-1380 (JA) 4 2 3 dismissal. (Docket No. 193.) However, Mr. Colón s request that dismissal be 4 5 without the imposition of costs and attorney s fees was denied. (Id.) On June 1, 6 2010, Mr. Blades filed a motion requesting the court to order Mr. Colón to pay the 7 costs and attorney s fees incurred by him in defending himself against his claims. 8 (Docket No. 221.) According to Mr. Blades, the amount incurred in litigation 9 10 expenses and attorney s fees total $229,784.84. (Id. at 2.) Mr. Blades argues 11 that he is entitled to costs and attorney s fees because Mr. Colón s claims were 12 factually frivolous, brought for improper purpose and obstinately maintained 13 against him. (Id. at 12.) 14 15 II. ANALYSIS 16 Under federal common law the parties in a federal question case bear their 17 own costs and attorney s fees. Renaissance Mktg., Inc. v. Monitronics Int l, Inc., 18 673 F. Supp. 2d 79, 81 (D.P.R. 2009) (quoting Buckannon v. W. Va. Dep t of 19 20 Health, 532 U.S. 598, 602 (2001)); Davison v. P.R. Firefighters Corps., 479 F. 21 Supp. 2d 243, 246 (D.P.R. 2007) (citing Home Sav. Bank v. Gillam, 952 F.2d 22 1152, 1162 (9th Cir. 1991)). Therefore, a plaintiff s voluntary dismissal with 23 prejudice does not entitle a defendant to attorney s fees. Nippy, Inc. v. Pro Rok, 24 Inc., 932 F. Supp. 41, 43 (D.P.R. 1996) (citing Colombrito v. Kelly, 764 F.2d 122, 25 26 133-34 (2d Cir. 1985); Cauley v. Wilson, 754 F.2d 769, 772 (7th Cir. 1985); 27 Smoot v. Fox, 353 F.2d 830, 833 (6th Cir. 1965); Esquivel v. Arau, 913 F. Supp. 28 1 CIVIL 07-1380 (JA) 5 2 3 1382, 1388 (C.D. Cal. 1996)). However, in cases such as this wherein the 4 5 jurisdiction is premised on to diversity of citizenship, the applicable standard of 6 law for the determination of attorney s fees is state law. RodrÃguez-López v. 7 Institución Perpetuo Socorro, Inc., 616 F. Supp. 2d 200, 202 (D.P.R. 2009); see 8 Intimate Fashions, Inc. v. El Telar, Inc., 570 F. Supp. 2d 225, 229 n.8 (D.P.R. 9 10 2008). 11 Puerto Rico s Civil Procedure Rule 44.1(d) provides that [i]n the event any 12 party or its lawyers has acted obstinately or frivolously, the court shall, in its 13 judgment, impose on such person the payment of sum for attorney s fees which 14 15 the court decides corresponds to such conduct. Camacho-Albert v. Méndez & 16 Co., 589 F. Supp. 2d 141, 146 (D.P.R. 2008) (quoting P.R. Laws Ann. tit. 32, App. 17 III, R. 44.1(d), cited in Top Entm t, Inc. v. Torrejón, 351 F.3d 531, 533 (1st Cir. 18 2003)). The main purpose of awarding attorney's fees in cases of obstinacy is to 19 20 impose a penalty upon a losing party that because of his stubbornness, obstinacy, 21 rashness, and insistent frivolous attitude has forced the other party to needlessly 22 assume the pains, costs, efforts, and inconveniences of a litigation. Top Entm t, 23 Inc. v. Torrejon, 351 F.3d at 533 (quoting Fernández Mariño v. San Juan Cement 24 Co., 118 D.P.R. 713, 718 (1987), 18 P.R. Offic. Trans. 823, 830 (1987)). 25 26 In determining whether a party or its lawyer was obstinate, a court must 27 examine whether a litigant was unreasonably adamant or stubbornly litigious, 28 1 CIVIL 07-1380 (JA) 6 2 3 beyond the acceptable demands of the litigation, thereby wasting time and 4 5 causing the court and the other litigants unnecessary expense and delay. Correa 6 v. Cruisers, a Div. of KCS Int l, Inc., 298 F.3d 13, 30 (1st Cir. 2002) (quoting De 7 León López v. Corporación Insular de Seguros, 931 F.2d 116, 126 (1st Cir. 8 1991)). [O]nce the court makes a finding of obstinacy the award for attorney s 9 10 fees . . . is mandatory. Nuñez-Santiago v. P.R. Elec. Power Auth., 206 F. Supp. 11 2d 231, 232-33 (D.P.R. 2002) (citing Fajardo Shopping Ctr. v. Sun Alliance Ins. 12 Co. of P.R., Inc., 167 F.3d 1, 14 (1st Cir. 1999)). Also, in making a determination 13 of obstinacy courts take into account several factors including: (1) the complexity 14 15 of the issues, the clarity of the law, and the disposition of the litigants-in short, 16 the personality of the case; (2) the delay and stubbornness in discovery, 17 including a disregard for court orders; (3) temerity in settlement negotiations; and 18 (4) the novelty of the claim. Colón v. Rinaldi, Md., 547 F. Supp. 2d 122, 125 19 20 21 (D.P.R. 2008) (citations omitted); see also Correa v. Cruisers, a Div. of KCS Int l, Inc., 298 F.3d at 31. 22 Mr. Blades argues that the complaint filed by Mr. Colón was frivolous 23 because the allegations contained in it had no basis in fact and law. (Docket No. 24 221, at 2.) According to Mr. Blades, the amount demanded by Mr. Colón in the 25 26 complaint would have never exceeded the jurisdictional minimum of $75,000 if 27 half of the commission that was paid to M.M.A. had not been included. (Id. at 7 28 1 CIVIL 07-1380 (JA) 7 2 3 & 8.) Also, Mr. Blades contends that the evidence produced by him showed that 4 5 the money that was paid by the promoters was used by Mr. MartÃnez and Mr. 6 Morgalo to settle other debts. (Id. at 8.) Notwithstanding the above, Mr. Blades 7 claims that Mr. Colón prevented him from having access to evidence that showed 8 the extent of Mr. Morgalo s participation and responsibility for the missing funds, 9 10 and that he stubbornly insisted in pointing the accusatory finger at him. (Id. at 9.) 11 Furthermore, Mr. Blades argues that Mr. Colón s allegation that he was jointly 12 responsible for M.M.A. s conduct was not only conclusory but also meritless and 13 unsubstantiated. (Id.) According to Mr. Blades, he was never a joint or co-obligor 14 15 with respect to Mr. Colón because he was not a member, shareholder or a partner 16 in M.M.A. (Id.) Mr. Blades, therefore, claims that for the last three years Mr. 17 Colón s purpose in continuing with the complaint has been to extract a settlement 18 by forcing him to run up litigation expenses. (Id. at 10.) 19 20 Despite these allegations, Mr. Blades has failed to show that Mr. Colón s 21 conduct was obstinate. First, this case presented complex issues of both facts and 22 law involving numerous parties. Colón v. Blades, 23 1380 (JA), 2010 WL 1914213, at *2 (D.P.R. May 13, 2010) (holding that stay of 24 F. Supp. 2d , No. 07- proceedings pending appeal was not warranted under the collateral order 25 26 doctrine); Colón v. Blades, No. 07-1380 (JA), 2009 WL 3347627 (D.P.R. Oct. 14, 27 2009) (denying motion for reconsideration and request for 28 U.S.C. § 1292(b) 28 1 CIVIL 07-1380 (JA) 8 2 3 certification filed by Mr. Baldes); Colón v. Blades, No. 07-1380 (JA), 2009 WL 4 5 2612523 (D.P.R. Aug. 21, 2009) (denying motion for summary judgment for lack 6 of subject matter jurisdiction filed by Mr. Blades). Besides Mr. Colón s complaint 7 and amended complaint, a cross-claim and amended cross claim was filed by Mr. 8 Blades as well as a third-party complaint and an amended third-party complaint 9 10 filed by Mr. Morgalo. Colón v. Blades, F.R.D. , No. 07-1380 (JA), 2010 11 WL 1731666 (D.P.R. Apr. 29, 2010) (striking third-party complaint, amended 12 third- party complaint); (Docket Nos. 1, 45, 49, 56, 13 156, 157.) Also, the complaint filed by Mr. Morgalo against Mr. Blades and RBP for defamation was 14 15 consolidated with the instant case. Colón v. Blades, F.R.D. , No. 07-1380 16 (JA), 2010 WL 1235848 (D.P.R. Mar. 31, 2010). Second, since the inception of 17 this case Mr. Colón has not delayed or demonstrated stubbornness in discovery. 18 It is important to point out that even though Mr. Blades filed a motion to compel 19 20 against Mr. Colón to produce a box of documents containing financial information 21 of M.M.A., Mr. Morgalo was the one who was ordered to provide the documents 22 requested. Colón v. Blades, 23 (D.P.R. Mar. 19, 2010). Also, Mr. Morgalo was precluded from presenting as 24 F.R.D. , No. 07-1380 (JA), 2010 WL 986704 evidence any of the documents requested by Mr. Blades or any testimony related 25 26 to them, and was ordered $1,000 in attorney s fees. Id. at *6. Third, the record 27 shows that Mr. Colón has not disregarded any of the court s orders. Although Mr. 28 1 CIVIL 07-1380 (JA) 9 2 3 Morgalo was ordered to produce the documents requested by Mr. Blades, Mr. 4 5 Colón informed the court that the missing box containing the documents had been 6 discovered and that they were available for immediate review and delivery. 7 (Docket No. 152.) 8 Fourth, there is no indication that Mr. Colón acted with temerity in settlement negotiations. (Docket No. 219.) Therefore, since Mr. 9 10 11 Colón did not incur in obstinacy, Mr. Blades cannot recover costs and attorney s fees pursuant to Rule 44.1(d) of the Puerto Rico Rules of Civil Procedure. 12 13 III. CONCLUSION For the reasons set for above, Mr. Blades s motion for costs and attorney s 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 fees is hereby DENIED. At San Juan, Puerto Rico, this 14th of July, 2010. S/ JUSTO ARENAS Chief United States Magistrate Judge
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