Renaissance Marketing, Inc. vs. Monitronics International Inc., et al

Filing 42

OPINION AND ORDER. GRANTED 6 MOTION to dismiss; DENIED 10 MOTION to Remand to State Court. Signed by Judge Salvador E Casellas on 3/31/2009.(LB) Modified on 4/2/2009 to correct filing date. (ni).

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IN THE UNITED STATES DISTRICT COURT F O R THE DISTRICT OF PUERTO RICO

R E N A IS S A N C E MARKETING, INC. P la in tif f v. MONITRONICS INTERNATIONAL, IN C ., ALPHA ONE SECURITY SOLUTIONS, INC., JORGE JAVIER M A R R E R O , JANE DOE, JOHN DOE, ABC COMPANY, XYZ INSURANCE COMPANY D e f e n d a n ts Civil No. 08-1823 (SEC)

O P I N I O N AND ORDER T h is case is before the Court pursuant to a Notice of Removal filed by Co-defendant M o n itro n ic s International, Inc. ("Monitronics") in the above captioned case, which was filed b e f o re the Puerto Rico Court of First Instance, San Juan Part. Docket # 1. Monitronics also filed a motion to dismiss the case pursuant to FED. R. CIV. P. 12(b)(6). Docket # 6. Plaintiff R e n a is s a n c e Marketing, Inc. ("Renaissance") opposed Monitronics' motion to dismiss (Docket # 12), and moved to remand the case arguing that the notice of removal was untimely filed. Docket # 10. After reviewing the filings and the applicable law, Renaissance's Motion to Remand is h e re b y DENIED, and Monitronics' Motion to Dismiss is GRANTED. Standard of Review S e c tio n 1441 states that "any civil action brought in a State court of which the district

23 c o u rts of the United States have original jurisdiction, may be removed by the defendant or the 24 25 26 d e f e n d a n ts , to the district court of the United States for the district and division embracing the

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p la c e where such action is pending. For purposes of removal under this chapter, the citizenship o f defendants sued under fictitious names shall be disregarded." 28 U.S.C. § 1441(a). The removal statute also provides that (a) A defendant or defendants desiring to remove any civil action or criminal p ro s e c u tio n from a State court shall file in the district court of the United States f o r the district and division within which such action is pending a notice of re m o v a l signed pursuant to Rule 11 of the Federal Rules of Civil Procedure and c o n ta in in g a short and plain statement of the grounds for removal, together with a copy of all process, pleadings, and orders served upon such defendant or d e f e n d a n ts in such action. (b ) The notice of removal of a civil action or proceeding shall be filed within th ir ty days after the receipt by the defendant... of a copy of the initial pleading s e ttin g forth the claim for relief upon which such action or proceeding is based.... If the case stated by the initial pleading is not removable, a notice of removal may b e filed within thirty days after receipt by the defendant... of a copy of an a m e n d e d pleading, motion, order or other paper from which it may first be a s c e rta in e d that the case is one which is or has become removable.... 2 8 U.S.C. § 1446 (a)& (b). T h a t is, ordinarily, for a Defendant to remove an action from state c o u rt to federal court, it must file a timely notice of removal in the district court within thirty (3 0 ) days after the service of summons upon the defendant of the complaint, or after the receipt b y the defendant of any pleading from which it may be first ascertained that the case is re m o v a b le . Id. The above mentioned statutory period is not jurisdictional. See Fristoe v. Reynolds M e ta ls Co., 615 F. 2d 1209, 1212 (9th Cir. 1980) (finding that the "statutory time limit for re m o v a l petitions is merely a formal and modal requirement and is not jurisdictional."); see also S t . Louis Home Insulators v. Burroughs Corp., 597 F. Supp. 98, 99 (E. D. Miss. 1984). Notwithstanding, since federal courts are courts of limited jurisdiction, removal statutes are

22 s tric tly construed, and must be strictly complied with. Cervantes v. Allegheny Ludlum, 90 23 24 25 26 F .R .D . 163, 165 (D.P.R. 1981); Syngenta Crop. Prot., Inc. v. Henson, 537 U.S. 28 (2002); S h a m ro c k Oil & Gas Corp. v. Sheets, 313 U.S. 100, 108 (1941); JJJ Constructora v. U.S. F id e lity and Guarantee Co., 554 F. Supp. 2d 100, 101 (D.P.R. 2006); Rosello-Gonzalez v.

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C a ld e ro n -S e rra , 398 F.3d 1, 25-26 (1st Cir. 2004). Moreover, the party requesting removal bears 3 t h e burden of showing that removal is proper. Vigier v. Marin, 568 F. Supp. 2d 193 (D.P.R. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 R e n a is s a n c e , whatever the reasons stated by Monitronics for removal, remand is proper because 21 M o n itro n ic s failed to file their notice of removal within the thirty (30) day statutory period 22 23 24 25 26 p ro v id e d by 28 U.S.C. § 1446(b). In support of this argument, Renaissance alleges that pursuant to Section 13.15 of Puerto Rico's Law of Corporations, P.R. Laws Ann. tit. 14, § 3174 (2000), M o n itro n ic s was served with process on June 24, 2008. Thus, according to Renaissance, M o n itro n ic s had until July 24, 2008 to give notice of removal. Nevertheless, Monitronics filed 2 0 0 8 ). A p p lic a b le Law and Analysis S ta tu to r y period for removal under 28 U.S.C. § 1446(b) R e n a iss a n c e sued Monitronics, Alpha One Security Solutions, Inc. ("Alpha One"), and J o rg e Javier Marrero ("Marrero"), and various unnamed defendants, in the Puerto Rico Court o f First Instance, San Juan Part, seeking declaratory judgment under Puerto Rico's Dealer C o n tra c t Law, P.R. Laws Ann. tit. 10, § 278 et seq. ("Law 21"), Civil No. KAC 08-0862 (803). A c c o rd in g to the complaint, Renaissance, doing business in Puerto Rico as Alarmex, is a c o m p a n y which sells, markets, provides services, and monitors residential and commercial s e c u rity systems in Puerto Rico. They allege that, Monitronics, a foreign company, sold its p ro d u c ts in Puerto Rico exclusively through Renaissance. Renaissance further argues that M o n itro n ic s breached their exclusivity agreement by directly selling its products to Alpha One a n d Marrero, Renaissance former Vice-President, for distribution in Puerto Rico. As a result, R e n a is s a n c e moves this Court to enter declaratory judgment, holding that they are Monitronic's e x c lu siv e distributor in Puerto Rico. On July 30, 2008, Monitronics filed a notice of removal in this Court under diversity ju ris d ic tio n (Docket # 1), and Renaissance moved to remand (Docket # 10). According to

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its request for removal on July 30, 2008, as such, their request for removal was untimely, and 3 th e case must be remanded to state court. 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 re q u e ste d . 21 The thirty-day statutory period for removal has not been subject of extended discussion 22 23 24 25 26 b y the First Circuit. However, other district courts have consistently held that in cases in which s e rv ic e is made on a statutory agent, such as the Secretary of State, the thirty-day statutory p e r i o d for removal runs from the day the defendant receives notice of summons and the c o m p la in t. Otherwise, the defendant's right to pursue his or her case in federal court would In opposition, Monitronics argues that Section 1446(b)'s thirty day period must be c o m p u te d from the date of the actual receipt of the summons and the complaint by the d e f e n d a n t. Monitronics admits that the Secretary of State was served on June 26, 2008, per S e c tio n 13.15 of Puerto Rico's Law of Corporations, and that said documents were sent to M o n itro n ic s via certified mail on June 28, 2008. Notwithstanding, Monitronics argues that it re c e iv e d a copy of the complaint and summons on July 1, 2008 and, therefore, the notice of re m o v a l was timely filed on July 30, 2008. S e c tio n 13.15 provides that any foreign corporation conducting business in Puerto Rico w i t h o u t obtaining authorization of law pursuant to Section 13.05, "shall be deemed to have d e s ig n a te d and constituted the Secretary of State as its agent for purposes of being served with p ro c e ss in case of any action, complaint or procedure filed against it before any court in the C o m m o n w e a lth arising or growing out of any business transacted by it in the Commonwealth. T h e transaction of business in the Commonwealth shall evidence the agreement of such c o rp o ra tio n that process served in such manner shall have the same legal force and validity as if an officer or agent had been served personally with process in the Commonwealth." Pou v. A m e ric a n Motors Corp., 127 P.R. Dec. 810 (1991). Upon receiving service of process, the S e c re ta ry of State shall immediately notify the corporation via certified mail, return receipt

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" d e p e n d upon the rapidity and accuracy with which statutory agents inform their principals of th e commencement of litigation against them." Calderon v. Pathmark Stores, Inc., 101 F. Supp. 2 d 246, 247 (S.D.N.Y. 2000).1 T h is Court agrees. The amount of cases decided in support of said conclusion is highly p e rs u a s iv e . Moreover, in holding that a defendant's time to remove a case is triggered by formal s e rv ic e of summons and complaint, the U.S. Supreme Court has upheld the importance of s e rv ic e of process in our system of justice. Murphy Brothers, Inc. V. Michetti Pipe Stringing, In c ., 526 U.S. 344 (1999). Furthermore, in the absence of service of process, the Court may not e x e rc is e its power over a party. As such, a named defendant officially becomes a party when s e rv e d and given the opportunity to appear and defend him or herself. Id. Albeit laws allowing s e rv ic e of process upon foreign corporations through statutory agents are valuable tools, the c o u rts cannot ignore the possible prejudicial effects upon defendants if the period for removal w o u ld begin before the defendant has learned of the claims against him or her. As a result, this C o u r t finds that the thirty-day statutory period for removal starts running when defendant

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See also Cox v. Sprung's Transport & Movers Ltd., 407 F. Supp. 2d 754, 756 (D.S.C. 2006) (holding that service upon statutory agent insufficient to begin period for removal); White v. Lively, 304 F. Supp. 2d 829 (D.C.Va. 2004) (finding that the removal period started running with defendant's actual receipt of summons and complaint, rather than statutory agent's receipt of suit); Lilly v. CSX Transp., Inc., 186 F. Supp. 2d 672 (D.C.W.Va. 2002) (holding that the thirty-day clock starts with defendant's actual receipt of notice of the suit, not at the time plaintiff served statutory agent); Hibernia Cmty. Dev. Corp. V. U.S.E. Cmty. Servs. Group, Inc., 166 F. Supp. 2d 511 (D.C. La. 2001) (finding that statutory agents are not actual agents of defendants); Monterey Mushrooms, Inc. v. Hall, 14 F. Supp. 2d 988, 991 (S.D. Tex. 1998) (holding that, where service was properly made on a statutory agent, the removal period began when defendant actually received the process, not when the statutory agent received it); Wilbert v. Unum Life Ins. Co., 981 F. Supp. 61, 63 (D.R.I. 1997) (finding that "[w]hen a statutory agent is served, the clock for removal does not begin ticking as it would if defendant itself had been served but rather starts when defendant receives actual notice of the service from the statutory agent."); Pilot Trading Co. v. Hartford Ins. Group, 946 F. Supp. 834, 839 (D. Nev. 1996) (holding that, where service is effected through a statutory agent, the time for removal starts running at the time of defendant's actual receipt of the complaint); Medina v. Wal-Mart Stores, Inc., 945 F. Supp. 519, 520 (W.D.N.Y. 1996) (noting that "`the time for removal, in cases in which service is made on a statutory agent, runs from receipt of the pleading by the defendant rather than the statutory agent.'")(citations omitted); Taphouse v. Home Ins. Co., 885 F. Supp. 158, 161 (E.D. Mich. 1995) (holding that the time limit for removal does not begin with service on a statutory agent, but when the defendant actually receives the pleading).
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re c e iv e s service of summons and a copy of the complaint, because only then can the defendant a s se rt his or her rights. B a s e d on the foregoing, Monitronics' notice of removal was timely filed. However, this d o e s not dispose of Renaissance's request for remand. Renaissance also avers that remand is f u rth e r warranted because complete diversity is lacking, and the amount in controversy re q u ire m e n t is not satisfied. This Court will discuss each argument separately. Diversity Jurisdiction When a removal is premised on diversity jurisdiction, defendants may remove a case f ro m state to federal court only when none of the named defendants is a citizen of the state in w h ic h the action was originally brought. Wright, Miller & Cooper, Federal Practice and P ro c e d u re : Jurisdiction, 3d § 3723; see also 28 U.S.C. § 1441(b). Historically, diversity ju ris d ic tio n requires complete diversity of citizenship between all plaintiffs and all defendants. C o n n e c tu LLC v. Zuckerberg, 522 F.3d 82, 91 (1st Cir. 2008). Furthermore, under 28 U.S.C. § 1332, the court loses its subject matter jurisdiction if any plaintiff is a citizen of the same state

15 a s any defendant. The Supreme Court has held that "[i] a case with multiple plaintiffs and 16 m u ltip le defendants, the presence in the action of a single plaintiff from the same State as a 17 18 19 20 21 22 23 24 25 26 s in g le defendant deprives the district court of original diversity jurisdiction over the entire a c tio n ." Exxon Mobil Corp. v. Allapattah Servs., 545 U.S. 546, 553 (2005); see also

B a e lla -S ilv a v. Hulsey, 454 F.3d 5, 9 (1st Cir. 2006). The party who invokes "the jurisdiction o f the federal court carries the burden of proving its existence." Coventry Sewage Associates v . Dworkin Realty Co., 71 F.3d 1, 4 (1st Cir. 1995)(citations omitted); see also Topp v. C o m p A ir, Inc, 814 F.2d 830, 839 (1st Cir. 1987). As such, the removing party must show that n o plaintiff is a citizen of the same state as any of the defendants, and that the matter in c o n tro v e rs y exceeds $75,000, excluding interests and costs. See 28 U.S.C. § 1332. F irs t, Renaissance argues that this Court lacks subject-matter jurisdiction pursuant to the " w e ll-p le a d e d complaint" rule, insofar as it is apparent from the complaint that complete

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d iv e rs ity is lacking. This Court has held that "[n]ormally, removal is based on the face of a `w e ll-p le a d e d complaint.'" Able Sales Co v. Mead Johnson P.R. Inc., 420 F. Supp. 2d 1, 16 (D .P .R . 2006)(citations omitted). Said doctrine requires that the federal claim or rights arise f r o m the complaint, "unaided by the answer or petition for removal." Id.; See also Vigier v. M a rin , 568 F. Supp. 2d 193, 195 (D.P.R. 2008). A review of the complaint reveals that R e n a is s a n c e 's claims arise exclusively under state contract law and P.R R. CIV. P. 59, and that M o n itro n ic s seeks to remove the case under diversity jurisdiction. However, the complaint also s h o w s that co-defendant Marrero is a Puerto Rico citizen, and although Alpha One is a foreign c o rp o ra tio n , it has its main place of business in Puerto Rico. Therefore, on its face, complete d iv e rs ity is lacking. Notwithstanding, in its notice of removal, Monitronics argues that c o m p le te diversity exists because Alpha One and Marrero are not real parties in interest, but w e re fraudulently joined in an effort to preclude removal to federal court. In support of said argument, Monitronics avers that Renaissance's "sole cause of action in its Complaint before the Commonwealth Court herein sought to be removed, is for

15 d e c la ra to ry judgment under Puerto Rico Rule of Civil Procedure 59...," and all remedies sought 16 a re exclusively against Monitronics. According to Monitronics, Renaissance seeks that the state 17 18 19 20 21 22 23 24 25 26 c o u rt declare that Renaissance is the exclusive sales representative of Monitronics in Puerto R ic o under Law 21, and that Monitronics' business dealings with Alpha One and Marrero are a violation of the alleged exclusivity contract entered upon between Monitronics and R e n a is s a n c e . Monitronics also argues that insofar as Alpha One and Marrero are not parties to s a id contract, they are not necessary parties to the state suit. Moreover, Monitronics notes that A lp h a One nor Marrero have been served with process in the state action, and the complaint is d e v o id of causes of action against said co-defendants. Finally, Monitronics notes that R e n a is s a n c e filed a prior suit against Alpha One and Marrero in the Court of First Instance, C a ro lin a Part, for preliminary and permanent injunction, seeking to recover damages for the a lle g e d tortious interference of said parties in violation of the exclusivity contract between

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M o n itro n ic s and Renaissance. Based on the foregoing, Monitronics alleges that Alpha One and M a rre ro were fraudulently joined as parties to the instant suit for the sole purpose of destroying d i v e r s i t y. In opposition, Renaissance argues that Monitronics has failed to meet the heavy burden o f demostrating that Alpha One and Marrero's joinder was fraudulent. Moreover, Renaissance a v e rs that the absence of specific claims against Alpha One and Marrero in the prayer for relief w a s due to a clerical mistake. As such, Renaissance insists that remand is warranted. If this Court finds a joinder fraudulent, Alpha One and Marrero are dropped as parties, a n d this Court would proceed to address Monitronics' motion to dismiss. However, if M o n itro n ic s ' arguments about fraudulent joinder fail, the case is remanded to state court for la c k of subject matter jurisdiction, and their motion to dismiss will be rendered moot. As such, th is Court will first address whether Alpha One and Marrero were fraudulently joined. D is tric t courts "will not allow removal jurisdiction to be defeated by the plaintiff's d e s tru c tio n of complete diversity of citizenship by the collusive or improper joinder of parties

15 o r the assignment of claims." Pastrana v. Solstar, 46 F. Supp. 2d 101, 103 (D.P.R. 1999). 16 H o w e v e r, a defendant seeking to prove that a co-defendant was fraudulently joined bears an 17 18 19 20 21 22 23 24 25 26 e x tre m e ly heavy burden. See Ponce Super Center, Inc. v.Glenwood Holdings, Inc., 359 F. Supp. 2 d 27, 30 (D.P.R. 2005) (citing Chesapeake & Ohio Rv. Co. v Cockrell, 232 U.S. 146, 152 (1 9 1 4 ) (holding that the showing of fraudulent joinder must be such to compel the conclusion th a t joinder is without right and made in bad faith))). The First Circuit has held that "a finding o n fraudulent joinder bears an implicit finding that the plaintiff has failed to state a cause of a c tio n against the fraudulently joined defendant." Polyplastics, Inc v. Transconex, Inc., 713 F.2d 8 7 5 , 877 (1st Cir. 1983). Other Circuit Courts have concluded that in order to prove a fraudulent jo in d e r, the movant must show, by clear and convincing evidence, that (1) there was actual f ra u d in the pleading of jurisdictional facts, or (2) that the plaintiff is unable to establish a cause o f action against the non-diverse party in state court. Smith v. Petsmart, Inc., 278 Fed. Appx.

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3 7 7 , 379 (5th Cir. 2008); Gasch v. Hartford Accident & Indem. Co., 491 F.3d 278, 281 (); P o n c e Super, 359 F. Supp. 2d at 30. When defendants rely on the second prong of this test, the C o u rt must determine if "there is no reasonable basis for the district court to predict that the p la in tif f might be able to recover against an in-state defendant."Gasch, 491 F.3d at 281. All c o n te st e d factual issues and any doubt as to the propriety of the removal must be resolved in f a v o r of remand. Id. at 281-282. U p o n examination of the complaint filed before the state court, we note that R e n a is s a n c e 's requests for relief refer only to the alleged breach of the contract between said p a rty and Monitronics. Albeit Renaissance mentions Alpha One and Marrero in its factual a lle g a tio n s , no cause of action is expressly stated nor any relief for damages or otherwise is re q u e ste d . Additionally, Alpha One and Marrero have not been served with process in said suit. T h is Court concedes that any relief may be granted to which a party is entitled, even if the party h a s not demanded such relief in its pleadings. However, in determining whether the plaintiff is a b le to establish a cause of action against the non-diverse parties in state court, this Court must

15 a ls o take into consideration if plaintiff might be able to recover against them in state court. See 16 G a s c h , 491 F.3d at 281. The complaint whose removal is now sought only seeks a declaratory 17 18 19 20 21 22 23 24 25 26 ju d g m e n t against Monitronics as to paragraphs 7.07 and 7.12 of the contract, and moves the s ta te court to "decree that Renaissance is the `exclusive representative of Monitronics in Puerto R ic o , and that Monitronic's action of contracting another `dealer' in Puerto Rico is prima facie a violation of Law 21." See Docket #1, Exh. 1. Therefore, taking into consideration the totality of the factual allegations and the relief re q u e ste d , Renaissance's only cause of action is against Monitronics under Law 21. R e n a is s a n c e 's complaint does not adequately establish a claim against any party, other than M o n itro n ic s . Albeit Renaissance makes general allegations as to Alpha One and Marrero's in te rf e re n c e with Renaissance's contract with Monitronics, their claims focus on the alleged b re a c h of contract by Monitronics. As such, if the case were to continue, the state court can only

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g ra n t relief as to Monitronics. Furthermore, although Renaissance alleges that the absence of s p e c if ic claims as to Alpha One and Marrero are due to a clerical mistake, they did not request le a v e to amend the complaint. Moreover, said complaint is very detailed as to facts and the c a u s e s of action against Monitronics, whereas it lacks the same accurateness in regards to Alpha O n e and Marrero's possible liability. Renaissance may have a number of viable claims against A lp h a One and Marrero, including claims for tortious interference and damages, but there does n o t appear to be any reasonable possibility that they could prevail, in state court, on any of the c la im s that they have asserted against Alpha One and Marrero in this particular case. More so w h e n Alpha One and Marrero have never been served. F u rth e rm o re , prior to the instant case, Renaissance filed a separate suit against Alpha O n e and Marrero. In said suit, Renaissance requests injunctive relief, as well as compensation f o r the alleged damages caused by Alpha One and Marrero's tortious interference with the " e x c lu s iv ity contract" between Monitronics and Renaissance. See Docket #1, Exh. #3. R e n a is s a n c e 's allegations against Alpha One and Marrero in said complaint, and its requests for

15 re lie f to the state court thereto, are very detailed and specific. This Court further notes that 16 M o n itro n ic s is not a party to said suit. Therefore, Renaissance chose to file separate suits 17 18 19 20 21 22 23 24 25 26 s e e k in g different remedies against each party, and now seeks to use Alpha One and Marrero's jo in d e r as a tool to avoid diversity jurisdiction. Courts cannot allow a party to litigate s im u lta n e o u s ly against the same defendants, in different suits, arising from the same facts. Moreover, Renaissance has not shown that Alpha One and Marrero were duly served in the p re s e n t case. Thus, this Court is unpersuaded by Renaissance's arguments. Although the f ra u d u le n t joinder doctrine is indeed an exception to the rule, and imposes a heavy burden on th e moving party, it has been satisfied here. Holding otherwise would render said doctrine moot. S in c e Renaissance fails to establish any cause of action against Alpha One and Marrero in the present suit, we find that their joinder was fraudulent. A party fraudulently joined to

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d e f e a t removal is disregarded in determining diversity of citizenship. Polyplastics, 713 F.2d at 8 7 7 . Therefore, complete diversity is present in the instant case. Amount in controversy requirement R e n a iss a n c e also alleges that Monitronics has not met the $75,000.00 jurisdictional a m o u n t, depriving this Court of subject-matter jurisdiction. In opposition, Monitronics asserts th a t although the amount in controversy has not been specifically states, it does exceed $ 7 5 ,0 0 0 .0 0 . In support of said argument, Monitronics points out that the proceeds stemming f ro m the contracts entered into with Renaissance exceed $9.3 million dollars. Taking into c o n s id e ra tio n that Renaissance's claim seeks to recover monies under Law 21, Monitronics a v e rs that the amount in controversy is well above the jurisdictional amount. W hen determining whether a party meets the amount-in-controversy minimum, the Court m u s t apply the long standing test established in St. Paul Mercury Indemnity Co. v. Red Cab Co., 3 0 3 U.S. 283 (1938). See Spielman v. Genzyme Corp., 251 F. 3d 1, 5 (1st Cir. 2001). The test re q u ire s that in performing this inquiry, the court use the sum claimed by the plaintiff "if the

15 c la im is apparently made in good faith." Spielman, 251 F. 3d at 5; see also Stewart v. 16 17 18 19 20 21 22 23 24 25 26 T u p p e r w a re Corp., 356 F. 3d 335 (1st Cir. 2004). This general allegation "suffices unless q u e s ti o n e d by the opposing party or the court." Stewart, 356 F. 3d at 338. If the defendant c h a lle n g e s the damages allegation, then "the party seeking to invoke jurisdiction has the burden o f alleging with sufficient particularity facts indicating that it is not a legal certainty that the c la im involves less than the jurisdictional amount." Id. This can be done by amending the p le a d in g s or by submitting affidavits. Spielman, 251 F. 3d at 5. Although the party may meet th is burden by amending the pleadings, "jurisdiction is not conferred by the stroke of a lawyer's p e n stroke... [w]hen challenged it must be adequately founded in fact." Diefenthal v. C.A.B., 6 8 1 F. 2d 1039, 1052. Notwithstanding this rule, when a plaintiff does not allege a specific amount of damages, th e "legal certainty test has limited utility - in fact is inapplicable- when the plaintiff has alleged

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a n indeterminate amount of damages." St. Paul Reinsurance Co., Ltd. V. Greenberg, 134 F. 3d 1 2 5 0 , 1253 (5th Cir. 1998). When this happens, the Court must examine the complaint to d e te rm in e whether "it is facially apparent that the claims exceed the jurisdictional amount." Id.. If they do not, then the Court can rely on "summary-judgment type evidence to ascertain the a m o u n t in controversy." Id. Although Renaissance does not include a specific amount of damages for which they s e e k relief, they did state in their complaint that Monitronics has violated Law 21. Moreover, f a i lu re to include a specific amount of damages does not end the jurisdictional inquiry. The C o u rt must determine whether it is facially apparent from Plaintiffs' complaint that their claim e x c e e d s $75,000. As previously stated, this Court must review the complaint, and ask whether th e amount in controversy is likely to exceed $75,000. S in c e 2004, Renaissance has been the exclusive dealer in Puerto Rico for the sale of M o n itro n ic s ' alarm monitoring services. According to Monitronics, the proceeds from their c o n tra c t exceed $9.3 million dollars. Taking into consideration the factors set forth by Law 21

15 f o r determining damages2 , we believe that the facts indicate that it is more likely than not that 16 R e n a is s a n c e 's claim exceeds the $75,000 jurisdictional amount required by 28 U.S.C.A. § 17 18 19 20 21 22 23 24 25 26
Article 4 provides that damages shall be determined taking into consideration the actual value of all investments a n d expenses incurred by the sales representative in the performance of his or her duties, the benefits obtained from said r e p r e s e n ta tio n , and the good will of the business, such as the number of years that the sale representative has been in charge o f the representation, the volume of the representation of the merchandise and the proportion it represents in business, the P u e r to Rican market share represented by said volume, among other factors. P.R. Law 21, 10 P.R. Laws. Ann. § 279c.
2

1332. In light of the above discussion, this Court concludes that Monitronics properly removed th is case to this court. Therefore, Renaissance's motion to remand is DENIED, and must move o n to Monitronics' motion to dismiss.

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Civil Case No 08-1823 (SEC) M o n itr o n ic s ' Motion to Dismiss

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M o n itro n ic s moves to dismiss the complaint for failure to state a claim upon which relief c a n be granted, under Rule 12(b)(6). According to Monitronics, per the Alarm Monitoring P u rc h a s e Agreement, the courts of the state of Texas or the federal courts in Dallas County in T e x a s are the proper forum for any suit arising out of said agreement. In support of its argument, M o n itro n ic s avers that the intent of the parties and the clear language of the contract's p ro v is io n s disallow a different interpretation. Therefore, Monitronics requests that the instant c a s e be dismissed under Rule 12(b)(6), or in the alternative, that it be transferred to the United S ta te s District Court for the Northern District of Texas, Dallas Division. In Section 7.07 of the Alarm Monitoring Purchase Agreement, the parties agreed that s a id contract, and its addendums, "shall be governed by and construed in accordance with the la w s of the State of Texas (without regard to the choice of law provisions thereof)." Docket #1, E x h . # 2. Section 7.12 provides: [ s ]e lle r and purchaser agree that Dallas, Texas, is the place of making and the p la c e of performance of this Agreement and each Addendum. Seller hereby irre v o c a b ly submits to the non-exclusive jurisdiction of any court of the State of T e x a s or Federal Courts of the United States located in Dallas County, Texas, o v e r any suit, action or proceeding arising out of or relating to this Agreement or a n y Addendum. To the fullest extent it may effectively do so under applicable la w , Seller irrevocably waives and agrees not to assert, by way of motion, as a d e f e n s e or otherwise, any claim that it is not subject to the jurisdiction of any such c o u rt, any objection that it may now or hereafter have to the laying of the venue o f any such suit, action or proceeding brought in any such court and any claim th a t any suit, action or proceeding brought in any such court has been brought in a n inconvenient forum. Docket # 1, Exh # 2. Considering the similarities between federal and Puerto Rico law regarding the e n f o rc e m e n t of forum-selection clauses, the First Circuit has applied federal law when in te r p r e t i n g said clauses in a diversity context. D.I.P.R. MFG, Inc. v Perry Ellis Intl., 472 F. S u p p . 2d 151, 154 (D.P.R. 2007); Unysis Puerto Rico v. Ramallo Bros. Printing, Inc., 128 P.R. D e c . 842 (1991); Silva v. Encyclopedia Britannica, Inc., 239 F.3d 385, 386 (1 st Cir. 2001);

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S te re o Gema, Inc. v. Magnadyne Corp., 941 F. Supp. 271, 276 (D.P.R. 1996); Stereo Gema, 941 F . Supp. at 274; see also Outek Caribbean Dist. V. Echo, Inc., 206 F. Supp. 2d 263, 267 (D.P.R. 2 0 0 2 ). A motion to dismiss based upon a forum-selection clause is considered as one alleging f a ilu re to state a claim for which relief can be granted, under Rule 12(b)(6), and not one for lack o f subject-matter jurisdiction. Silva, 239 F.3d at 386; Outek Caribbean, 206 F. Supp. 2d at 266. T h e First Circuit has "recognized the general importance of enforcing these clauses." O u te k Caribbean, 206 F. Supp. 2d at 270. Furthermore, the court has held that in the context o f a motion to dismiss based on a forum clause, the forum clause is prima facie valid, and must b e enforced, unless the opposing party can show the clause to be unreasonable, unjust, or invalid d u e to fraud. Silva, 239 F.3d at 386. Therefore, the burden shifts to the non-moving party to s h o w that "the particular clause: 1) was not `freely negotiated' or was the result of fraud; 2) c o n tra v e n e s a strong public policy of the forum where the suit is brought; or 3) the party c h a lle n g in g its enforceability shows that trial in the contractual forum will be so gravely d if f ic u lt that it will, for all practical purposes, be deprived of its day in court." Marrero v. A ra g u n d e , 537 F. Supp. 2d 305, 308 (D.P.R. 2008). Renaissance's only argument against enforcing the forum selection clause is that, since t h e Texas courts will not apply Puerto Rico law, "Law 21 would be rendered a nullity if litig a tio n is to be had in Texas." Docket # 32, pp. 3-4. As such, they assert that enforcing said

19 c la u s e would be contrary to the Commonwealth's public policy. However, this Court notes that 20 M o n itro n ic s ' central argument is that there is no exclusivity agreement with Renaissance, 21 22 23 24 25 26 w h ic h , if true, precludes the application of Law 21. Nonetheless, the validity of forum selection c la u s e s has been consistently upheld by the Puerto Rico Supreme Court, this district, and the F irs t Circuit. Outek Caribbean, 206 F. Supp. 2d at 270; Marrero v. Aragunde, 537 F. Supp. 2d 3 0 5 (D.P.R. 2008); Silva, 239 F.3d at 386; Perry Ellis Intl., 472 F. Supp. 2d at 155. This p re c e d e n t is so strong, that has been upheld even when a Puerto Rico law expressly proscribes

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th e enforcement of said types of clauses. Perry Ellis Intl., 472 F. Supp. 2d at 155 (citations o m itte d ). Absent a showing that enforcing the forum selection clause would be unreasonable, or th a t Renaissance was fraudulently induced to enter into such agreement, this Court finds that th e forum selection clause is valid. Furthermore, this ruling does not impede Renaissance from s e e k in g relief in the appropriate forum. Based on the foregoing, and Rule 12(b)(6), Monitronics' m o tio n to dismiss is GRANTED, and the instant case is DISMISSED without prejudice. Judgment will be entered accordingly. SO ORDERED. In San Juan, Puerto Rico, this 31st day of March, 2009. S /S A L V A D O R E. CASELLAS S a lv a d o r E. Casellas U .S . Senior District Judge