Citrus World Inc. v. Ferraiouli, Torres Marchand & Rovira, P.S.C. et al
Filing
83
OPINION AND ORDER granting in part and denying in part 45 Motion for Summary Judgment; granting in part and denying in part 47 Motion for Summary Judgment; denying 51 Motion for Summary Judgment; denying 79 Motion for Hearing; noted 80 Informative Motion; granting 81 Motion for Joinder; finding as moot 82 Motion for Hearing. By 3/31/2014, the parties must file a joint motion informing the Court of: (1) three dates before November 1, 2014, on which all are available to begin a jury trial; and (2) three dates before the end of April 2014 on which all are available for a settlement conference. Signed by US Magistrate Judge Silvia Carreno-Coll on 3/14/2014. (NBB)
IN THE UNITED STATES COURT
FOR THE DISTRICT OF PUERTO RICO
CITRUS WORLD, INC.,
Plaintiff,
v.
CIV. NO.: 11-2118(SCC)
FERRAIUOLI, TORRES,
MARCHAND & ROVIRA,
P.S.C., ET AL.,
Defendant.
OPINION AND ORDER
Plaintiff filed this suit seeking legal malpractice damages
from several defendants, Ferraiuoli, Torres, Marchand &
Rovira, P.S.C., its successor Ferraiuoli LLC, and two attorneys
of those firms Eugenio Torres-Oyola and Laura BelendezFerrero, as well as those attorneys’ conjugal partnerships.1
Plaintiff also sues the firm’s professional liability insurer, AIG.
1.
Throughout this opinion, we will refer collectively to the law firms and
their counsel as “Ferraiuoli.”
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Page 2
Now, Ferraiuoli and Plaintiff have filed cross-motions for
summary judgment, and AIG has filed a partial motion for
summary judgment on a matter of policy interpretation. For
the reasons we explain below, we grant Ferraiuoli’s and AIG’s
motions in part, and we deny Plaintiff’s.2
I. Factual Background
A. Florida Natural and Méndez
Plaintiff Citrus World, Inc., doing business as Florida’s
Natural Growers (“Florida Natural”), is a cooperative of citrus
growers that produces and sells not-from-concentrate juices.
Docket No. 50, ¶¶ 1, 9; Docket No. 59, ¶¶ 1, 9. On September
22, 2004, Florida Natural executed a letter agreement with
Méndez & Co., pursuant to which Florida Natural appointed
Méndez as a non-exclusive distributor of Florida Natural’s
products; the agreement was effective as of September 1, 2003,
2.
The parties have requested oral argument on their motions. See Docket
Nos. 79–81. However, our opinion is that these are matters more easily
handled on the papers, and so we DENY the parties’ motions. See Bratt
v. IBM, 785 F.2d 352, 363–64 (1st Cir. 1986) (providing that district
courts have the discretion to deny requests for oral argument on
motions for summary judgmnet); PRTC v. Municipality of Guyanilla, 354
F. Supp. 2d 107, 108 n.1 (D.P.R. 2005) (denying request for oral
argument where “the facts and legal arguments have been adequately
presented in the parties’ briefs and . . . the decisional process would not
be significantly aided by oral argument”); see also LOC. CIV. R. 7(f).
CITRUS WORLD v. FERRAIUOLI
Page 3
and it had a duration of two years. Docket No. 48, ¶ 1; Docket
No. 62, ¶ 1.1; see also Docket No. 50-3. When the agreement
expired in 2005, no new agreement was executed between
Florida Natural and Méndez, who nonetheless kept doing
business as they had during the agreement’s term. Docket No.
48, ¶ 2; Docket No. 62, ¶ 1.1; see also Docket No. 50, ¶ 13;
Docket No. 59, ¶ 13.
During its relationship with Florida Natural, Méndez
submitted annual marketing plans, the primary role of which
was to “sell more product when on shopper.” Docket No. 48,
¶¶ 27–28 (quoting Docket No. 48-14, at 4);3 Docket No. 62,
¶ 1.1. These plans were developed by Méndez and submitted
to Florida Natural, which would review, negotiate, and
ultimately approve the plans. Docket No. 48, ¶ 29; Docket No.
62, ¶ 1.1. Specifically, Florida Natural approved the plan and
the budget for marketing expenses. Docket No. 48, ¶ 30;
Docket No. 62, ¶ 1.1. Marketing performance information had
3.
These facts are based on Sellers’s deposition, which repeatedly uses the
phrase “shopper” to refer to a noun other than a person who shops. See
Docket No. 48-14. Ferraiuoli repeats this phrase without attempting to
explain the jargon. See Docket No. 48, ¶¶ 27–28. But suffice it to say that
the surrounding testimony confirms the obvious: that the marketing
plans’ point was to sell more Florida Natural product.
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not been included in the agreement originally signed by
Florida Natural and Méndez.4 Docket No. 48, ¶ 26; Docket No.
62, ¶ 1.1; see also Docket No. 48-15, at 9 (confirming that
marketing performance information was not included in the
original contract).
Marketing plans were also not included in the distribution
agreement originally signed by Florida Natural and Méndez.
Docket No. 48, ¶ 37; Docket No. 62, ¶ 1.1. The agreement
provides, however, that Florida Natural would occasionally
offer promotions, discounts, and allowances, subject to the
parties’ agreement. Docket No. 48, ¶¶ 32–33; Docket No. 62,
¶ 1.1. Indeed, Méndez could not go ahead with marketing
expenses that had not been approved by Florida Natural.
Docket No. 48, ¶ 34; Docket No. 62, ¶ 1.1. Florida Natural
likewise controlled the marketing budget that Méndez could
4.
Ferraiuoli submits that the original agreement between Florida Natural
and Méndez was not a “partial distribution agreement.” Docket No. 48,
¶ 31. For this, Ferraiuoli relies on Sellers’s deposition, where he
testified that the original agreement was not titled a partial distribution
agreement, nor did it have a clause identifying itself as such. Docket
No. 48-16, at 18. But Sellers repeatedly refers to the agreement that way,
and we don’t think his testimony as to the agreement’s title really
answers the question one way or another. In this sense, Ferraiuoli’s
proposed fact is more argument than fact.
CITRUS WORLD v. FERRAIUOLI
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use for promotions, and it thus decide what would and would
not be funded. Docket No. 48, ¶ 35; Docket No. 62, ¶ 1.1. And
Florida Natural determined the marketing budget for any
given market. Docket No. 48, ¶ 36; Docket No. 62, ¶ 1.1.
B. Florida Natural Hires Ferraiuoli
Sometime in 2006, Florida Natural became concerned about
Méndez’s handling of its account. Docket No. 50, ¶ 14; Docket
No. 59, ¶ 14.5 Sometime in August 2009, Florida Natural sent
Méndez a new proposed distribution and marketing agreement; Méndez countered with a proposal that Florida Natural
found unacceptable. Docket No. 50, ¶ 15; Docket No. 59, ¶ 15.
The, in October 2009, Florida Natural, through its outside
counsel David Latham, retained Ferraiuoli for the purposes of
advising Florida Natural regarding its business relationship
with Méndez. Docket No. 50, ¶ 16; Docket No. 59, ¶ 16.
Ferraiuoli represented that it had knowledge of Law 75 and its
5.
Throughout its statement of uncontested facts, Florida Natural fails to
strictly comply with Local Civil Rule 56. Instead of citing a page or
paragraph number, it simply cites entire exhibits, some of which are
quite lengthy. Ferraiuoli asks that we strike a large portion of Florida
Natural’s statement for this reason. But while we are frustrated with
Florida Natural’s flouting of the Rule, we will accept its citations so
long as we can easily find the portion of the exhibit to which it is
referring—and so long as it appears that Ferraiuoli was able to as well.
CITRUS WORLD v. FERRAIUOLI
Page 6
nuances. Docket No. 50, ¶ 17; Docket No. 59, ¶ 17.
On October 27, 2009, Florida Natural sent an email to its
counsel at Ferraiuoli. Docket No. 48, ¶ 3; Docket No. 62, ¶ 1.1.
In that email, which was apparently written after a meeting
between representatives of Florida Natural and Méndez, Florida Natural asks “[t]hrough what means can we get out of the
current agreement” with Méndez?” Docket No. 48-2.6 The
email further proposes three ideas for getting out of the
contract, including the institution of legal action based on
Méndez’s poor performance. Id. The email also asks whether,
in the event that Florida Natural cannot get out of the agreement, it could nonetheless give business to other distributors.
Id. The email did not provide any information about Méndez’s
allegedly poor performance in handling Florida Natural’s
account. Docket No. 48, ¶ 5; Docket No. 62, ¶ 1.1.
On November 16, 2009, Ferraiuoli attorney Laura Beléndez
issued a memorandum responding to Florida Natural’s
6.
Here and elsewhere, the parties’ statements of facts make conflicting
claims regarding the central points of various communications. See
Docket No. 48, ¶ 4; Docket No. 62, ¶ 1.2. Rather than referee these
disputes, we will simply describe the documents, all of which are in the
record.
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questions.7 Docket No. 48, ¶ 6; Docket No. 62, ¶ 1.1. After a
discussion of whether Florida Natural’s and Méndez’s
relationship was exclusive, the memo turns to the questions
asked in Latham’s October 27 email. Id. As to the question of
whether Florida Natural could unilaterally terminate the
agreement, Beléndez writes that where a contract does not
specify its term, the parties remain at liberty to rescind it. Id. at
3 (citing Castillo v. Smart Prod., 289 F. Supp. 138 (D.P.R. 1968)).
She writes that because Florida Natural and Méndez had been
working past the specified term of their agreement, their
relationship as of the memo’s writing might be described as
indefinite and therefore terminable. Id. “Nonetheless,” says
Beléndez, fixed-term contracts, as well as contracts providing
for renewals, can only be terminated with just cause. Id. In that
case, Florida Natural would need to “prove that Méndez has
performed poorly on its obligations.” Id. at 5. If it did not do so,
Méndez could claim damages, and Florida Natural would have
to consider its willingness to pay those damages to get out of
the contract. Id. at 5–6. As to whether, if the relationship
continued, Florida Natural could take actions to Méndez’s
7.
On the same day, the memo was sent to David Latham. Docket No. 50,
¶ 21; Docket No. 59, ¶ 21.
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detriment, the memo states that Florida Natural could not. Id.
at 6–7. Finally, the memo ends with a recommendation: “[W]e
recommend that you confirm in writing that Méndez acknowledges that the original agreement is still in place, thereby
continuing the non-exclusiv[e] nature of the agreement.” Id. at
7.8 Beléndez testified during her deposition that the memo had
offered, as one line of defense and based on her reading of
Castillo, that Florida Natural could terminate its agreement
with Méndez without just cause. Docket No. 62, ¶ 2.2.9 Sellers
8.
During Joel Sellers’s deposition, he was asked whether he “knew that
[Florida Natural] had to have just cause in order to terminate Méndez’s
distribution contract?” Docket No. 48-15, at 5. Sellers answered yes, “as
related to [Beléndez’s] opinion.” Id. But during that same deposition,
Sellers also testified that Beléndez’s memo said that the agreement
could be terminated either because of just cause or because of its
expiration. Docket No. 62-2, at 2. Because we think Sellers’s latter
statement is an accurate characterization of the memo’s content, we
reject Ferraiuoli’s proposed uncontested fact that Sellers knew that
Florida Natural needed to have just cause to terminate its agreement
with Méndez. At best, Sellers’s testimony shows that he knew that just
cause was required if the 2004 agreement was deemed to be in effect,
something Beléndez’s letter suggested might not be the case.
9.
Ferraiuoli purports to deny this fact, see Docket No. 72, ¶ 2, but given
that it is an accurate representation of her testimony, we hardly see how
it can do so. Moreover, our own reading of the memo confirms that this
was a line of defense offered. We note, however, that Beléndez
elsewhere testified that she “emphasized” that Florida Natural needed
CITRUS WORLD v. FERRAIUOLI
Page 9
likewise testified that he understood her memo to mean that
Florida Natural could terminate the contract either because it
had expired or for just cause.10 Docket No. 62, ¶ 2.3.11
Ferraiuoli’s Eugenio Torres-Oyola reviewed the memorandum.
Docket No. 50, ¶ 20; Docket No. 59, ¶ 20.12
just cause to terminate the agreement. Docket No. 70-1, at 2.
10. Florida Natural also proposes a fact regarding the understanding that
another of its attorneys, David Latham, had of the Beléndez memo. See
Docket No. 62, ¶ 2.4. But the deposition testimony on which the fact is
based relates to Latham’s impression of the situation after reading the
memo and attending a subsequent memo. See Docket No. 62-3, at 2. On
the record before us, we have no way of separating his impressions of
the memo from his impressions of the meeting.
11. Ferraiuoli purports to deny this fact, see Docket No. 72, ¶ 2; see also
Docket No. 48, ¶ 14, because it conflicts with Sellers “previous”
testimony that he knew Florida Natural needed to have just cause to
terminate the agreement. First of all, both of these statements were
made in the same deposition, and so the latter statement can easily be
read as a clarification of the former, not as a later, contradictory
statement. Moreover, the statement offered by Florida Natural is simply
a fairer characterization of the Beléndez memo, which indisputably
does suggest that Florida Natural might be able to terminate the
agreement without just cause. We believe that there is an issue of fact
as to what Sellers actually understood based on the Beléndez memo.
12. Florida Natural suggests that Torres was in agreement Beléndez’s
opinions, see Docket No. 50, ¶ 20, but the deposition transcript that it
cites does not support that statement. Instead, it only shows that Torres
reviewed the memorandum. See Docket No. 50-9, at 2. There is then a
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Page 10
On November 18, 2009, David Latham and several other
representatives of Florida Natural met with Beléndez to
discuss her memorandum (including the Castillo case) and
Florida Natural’s options. Docket No. 50, ¶ 22; Docket No. 59,
¶ 22; see also Docket No. 50-7, at 7–8. During her deposition,
Beléndez admitted that she knew that Florida Natural would
rely on her opinions in making their decision about what to do
regarding Méndez. Docket No. 50, ¶ 23; Docket No. 59, ¶ 23.
And based on the memo and the meeting, Florida Natural
resolved to terminate its relationship with Méndez. Docket
No. 50, ¶ 24; Docket No. 59, ¶ 24. So later that same day,
Latham and several other Florida Natural representatives met
with Méndez and terminated their agreement. Docket No. 50,
¶ 25; Docket No. 59, ¶ 25. On November 19, 2009, Latham
emailed Beléndez about that meeting. Docket No. 62-4.
According to the email, Florida Natural’s representative made
three points: (1) that there was no contract, and so there was
nothing to cancel; (2) that a new contract had been offered and
rejected; and (3) that Florida Natural was dissatisfied with
Méndez’s performance. Id. The email mentions that Latham
question posed to Torres about whether he approved the memo, but the
answer is not provided in the exhibit. See id.
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could not gauge Méndez’s opinion of the meeting but that he
did not think it would file suit. Id.
C. The Méndez Lawsuit
But Latham judged wrong, and Méndez sued Florida
Natural on December 16, 2009, alleging unjust termination of
their distribution relationship. Docket No. 48, ¶ 16; Docket No.
62, ¶ 1.1. Florida Natural entrusted its defense to Ferraiuoli.
Docket No. 50, ¶ 27; Docket No. 59, ¶ 27. As part of that
representation, on January 14, 2010, Ferraiuoli issued a memo
to Florida Natural regarding its legal opinion on the case.
Docket No. 50, ¶ 27; Docket No. 59, ¶ 27.13 After rehearsing the
factual background, the memo begins by discussing whether
the agreement expired in September 2005. Docket No. 50-8, at
38. The memo reiterates the analysis of Beléndez’s previous
memo, and it again cites Castillo for the proposition that a
contract without a fixed length is terminable at will. Id. at
13. Ferraiuoli purports to object to this fact because the memo has a
heading indicating that it is a draft for discussion purposes. See Docket
No. 59, ¶ 27; see also Docket No. 50-8, at 31. The heading
notwithstanding, the document—which was sent to Florida
Natural—expressly purports to “furnish [Ferraiuoli’s] legal opinion
regarding” Méndez’s complaint. Docket No. 50-8, at 31. We therefore
deem the fact admitted.
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38–39. This time, however, the memo adds a footnote to its
discussion of Castillo in which it says that that case is “distinguishable” because there, the contract had no fixed length, but in
this case, it had a two-year term that had expired. Id. at 39 &
n.3. The memo also suggests that the original contract ceased
to exist in 2005, and that after that point, the parties’ relationship was governed by a verbal agreement. Id. at 40. But with
regard to this analysis, the memo notes that “given the
protective nature of Act 75, we will have to aggressively argue
this issue before the Court.” Id. The memo then concludes that
Law 75 is probably applicable to the relationship between
Méndez and Florida Natural. Id. at 41–42. As a line of defense,
it then offers that Florida Natural could argue just cause for
termination based on (1) Méndez’s failure to comply with
Florida Natural’s invoicing procedures, (2) its failure to create
a favorable market for Florida Natural’s products, and (3) its
“extreme overspending” with regard to marketing. Id. at 44.
Finally, the memo discusses damages and the litigation
strategy. Id. at 46–47. Among other things, Ferraiuoli wrote
that Florida Natural “can and should file a Counterclaim
against Méndez seeking a declaratory judgment declaring
that” (1) Florida Natural could terminate the relationship with
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Méndez at will because their agreement was indefinite in term,
and/or (2) Florida Natural could terminate the agreement for
just cause. Id. at 47.
On February 19, 2010, Ferraiuoli filed an answer on Florida
Natural’s behalf, but it did not file the counterclaim that it had
recommended. Docket No. 50, ¶ 31; Docket No. 59, ¶ 31.
Indeed, Florida Natural never filed a counterclaim, though
Ferraiuoli did include just cause as an affirmative defense in
the answer. Docket No. 48, ¶¶ 17–18; Docket No. 62, ¶ 1.1. The
affirmative defense alleged that Méndez had failed to create a
market or acquire clients for Florida Natural’s products, and
that Méndez had failed to comply with marketing and reporting requirement. Docket No. 48, ¶¶ 19–21; Docket No. 62, ¶ 1.1.
In an email to Latham, Beléndez explained that she would
not be filing a counterclaim regarding a claim for money owed,
as it did not meet the threshold amount to trigger diversity
jurisdiction.
Docket No. 50, ¶ 33; Docket No. 59, ¶ 33.
Beléndez’s email made no mention of a declaratory judgment
counterclaim. See Docket No. 50-8, at 48. Nonetheless, Latham
acceded to Beléndez’s judgment. Docket No. 50, ¶ 34; Docket
No. 59, ¶ 34. Later, another Ferraiuoli attorney prepared a
counterclaim, which included a request for a declaratory
CITRUS WORLD v. FERRAIUOLI
Page 14
judgment and a claim for collection of monies, as well as a
trademark infringement claims. Docket No. 62, ¶ 2.6; Docket
No. 70, ¶ 6. No counterclaim was ever filed.
During discovery, Florida Natural reviewed the requests
for admission and supplied much of the information that
Ferraiuoli requested as part of its defense of Florida Natural.
Docket No. 48, ¶ 22; Docket No. 62, ¶ 1.1. Florida Natural
reviewed Ferraiuoli’s drafts of written discovery; it also
answered interrogatories and provided the documentation
needed for its answers. Docket No. 48, ¶ 23; Docket No. 62,
¶ 1.1. On October 20, 2010, Beléndez sent Florida Natural a
draft of the answers to requests for admission notified by
Méndez. Docket No. 48, ¶ 24; Docket No. 62, ¶ 1.1. As part of
those answers, Ferraiuoli did not admit that the September
2003 letter agreement was the complete and only agreement
between the parties. Docket No. 48, ¶ 25; Docket No. 62, ¶ 1.1.
It did, however, admit that during the course of their business
relationship, Méndez always met or exceeded the annual
minimum requirements for the purchase of Florida Natural
products. Docket No. 62, ¶ 2.7; Docket No. 70, ¶ 7.
On November 23, 2010, Ferraiuoli sent Florida Natural a
letter outlining its views of the discovery process. Docket No.
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50, ¶ 35; Docket No. 59, ¶ 35.14 The email is rather pessimistic.
It describes Méndez’s deposition of a representative of Vaquería Tres Monjitas, to whom Florida Natural had transferred its
business; the deposition was bad for Florida Natural’s position.
See Docket No. 50-8, at 50–51. Additionally, Méndez had
indicated its intent to file suit against Tres Monjitas, whom
Florida Natural might be obligated to indemnify. See id. at 51.
Moreover, Ferraiuoli had come across electronic correspondence in which Florida Natural had described the 2004
agreement as being “in place,” meaning that they had treated
it as un-expired. Id. Finally, the email notes that most of the
evidence in favor of Florida Natural’s just cause defense did
not go to essential elements of its relationship with Méndez,
and therefore probably would not persuade the court. Id. at 52.
The memo ends by apprising Florida Natural of the damages
it might have to pay. Id. at 53–54.
D. Florida Natural Seeks New Counsel and Settles with
Méndez
14. Ferraiuoli purports to deny this fact, but we fail to understand the basis
for its denial. See Docket No. 59, ¶ 35. In any case, the existence of the
email is supported by the record, see Docket No. 50-8, at 50, and we will
describe its contents below rather than accept the parties’
characterizations of it.
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After receiving the November 23 email, Florida Natural’s
stateside counsel began looking for a second opinion. Docket
No. 50, ¶ 36; Docket No. 59, ¶ 36. Meanwhile, Ferraiuoli
informed Florida Natural that it had brought on Rafael
Escalera, an expert on Law 75, to assist in the just cause
analysis.
Docket No. 50, ¶ 37.15 Florida Natural did not
authorize the retention of Escalera, see Docket No. 50-14, at 1,
and it soon retained a new firm, Goldman Antonetti &
Córdova, P.S.C. (“Goldman Antonetti”), to help with its
defense. Docket No. 50, ¶ 39; Docket No. 59, ¶ 39. Goldman
Antonetti’s position was that a defense premised on the alleged
expiration of the agreement was untenable. Docket No. 50,
¶ 40.16 Goldman Antonetti appeared in the underlying case on
15. Ferraiuoli purports to deny this fact, stating that the email on which
Florida Natural relies “does not state that Mr. Rafael Escalera was
brought to assist in the defense of the Méndez lawsuit.” Docket No. 59,
¶ 37. Ferraiuoli’s position is frivolous; the email states very clearly that
Escalera was brought in to help with the just cause analysis. See Docket
No. 50-14, at 1 (“Also that in order to further perform the just cause
analysis . . . we have brought to our litigation team attorney Rafael
Escalera who teaches Act 75 seminars and courses in Puerto Rico and
is one of our foremost authorities in the matter.”).
16. Ferraiuoli purports to deny this fact because it is not supported by the
cited record evidence. See Docket No. 59, ¶ 40. However, the deposition
transcript on which the proposed fact is based says explicitly that
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January 18, 2011, one day after Méndez had filed its motion for
partial summary judgment. Docket No. 50-11, at 4.
According to the motion, the agreement between Florida
Natural and Méndez was extended indefinitely by the operation of Law 75, and it was therefore in effect when Florida
Natural unilaterally terminated their relationship. MÉNDEZ &
CO.’S MOTION FOR PARTIAL SUMMARY JUDGMENT, Méndez & Co.
v. Citrus World Inc., Civ. No. 09-2251(JAF) (D.P.R. filed Jan. 17,
2011). Goldman Antonetti filed Florida Natural’s opposition to
the motion for partial summary judgment on February 7, 2011.
Id. On March 24, 2011, the court granted Méndez’s motion and
held that the 2004 agreement was in force as of Méndez’s
termination on November 18, 2009. Docket No. 50, ¶ 43;
Docket No. 59, ¶ 43. The court also ordered the parties to
engage in mediation. Docket No. 50, ¶ 43; Docket No. 59, ¶ 43.
On April 11, 2011, Jennifer Eden, of Latham’s lawfirm,
wrote to Beléndez and Torres to tell them that it intended to
engage in the court-ordered mediation, where it hoped to
Florida Natural’s new counsel said that Ferraiuoli’s previous advice
had been wrong and that “you could never have a contract under Act
75 expire on its own terms.” Docket No. 50-13, at 6. The fact is therefore
deemed admitted in this regard.
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reach a settlement. Docket No. 50, ¶ 47; Docket No. 59, ¶ 47; see
also Docket No. 50-8, at 58. In the latter, Eden asks Ferraiuoli
for a contribution “to any settlement offer in return for a
release from [Florida Natural] for any negligence” or malpractice on its part. Docket No. 50-8, at 58. None of the recipients of
Eden’s letter responded to her, Docket No. 50, ¶ 48; Docket No.
59, ¶ 48, but Torres did write to Florida Natural’s Walt Lincer
asking him to withdraw the letter or else Ferraiuoli would be
forced to withdraw from its representation of Florida Natural
in the Méndez case. Docket No. 50-9, at 7. When the letter was
not withdrawn, Ferraiuoli withdrew from the underlying case
on April 19, 2011. Docket No. 50, ¶ 50; Docket No. 59, ¶ 50.
On April 15, 2011, mediation proved fruitful, and the
parties agreed to a settlement dispositive of all claims asserted.
JOINT MOTION FOR LEAVE TO FILE STIPULATION OF DISMISSAL,
Mendez & Co., Civ. No. 09-2251(JAF) (D.P.R. filed Apr. 19,
2011). As part of the settlement, Florida Natural paid Méndez
$862,500. Docket No. 50, ¶ 44; Docket No. 59, ¶ 44. Florida
Natural also incurred a large amount of legal fees, including:
$160,094.24 to Ferraiuoli; $182,761.03 to Goldman Antonetti;
$102,083.71 to Zayas Morazzini & Co.; and $95,238.09 to
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Latham’s firm. Docket No. 50, ¶ 45.17 Florida Natural also
payed Tres Monjitas $24,043.64 to indemnify it for the expenses
it occurred as a result of Méndez’s lawsuit. Docket No. 50,
¶ 46.18
E. Florida Natural Discovers Ferraiuoli’s Alleged Negligence
Once litigation started, Atty. Carlos Rodríguez-Vidal of
Goldman, Antonetti & Córdova made an assessment regarding
Florida Natural’s available defenses, concluding that some had
been made unavailable by the termination of Méndez. Docket
No. 48, ¶ 38; Docket No. 62, ¶ 1.1. It was Rodríguez—and not
Ferraiuoli—that told Florida Natural that it could not prevail
17. Ferraiuoli purports to deny this fact on the grounds that Florida
Natural has not established the reasonableness of these fees. See Docket
No. 59, ¶ 45. Though the reasonableness of the fees might be relevant
to the question of whether the fees could be imputable to Ferraiuoli as
damages should Florida Natural prevail, this is not a basis for denying
that the costs were in fact incurred by Florida Natural. The fact is
deemed admitted.
18. Ferraiuoli purports to deny this fact, but it does so by reference to a
settlement amount requested by Méndez to settle a potential claim
against Tres Monjitas. See Docket No. 59, ¶ 46. But this settlement
request was never agreed to, and Ferraiuoli fails to explain its relevance
to the fact proposed by Florida Natural, which we therefore deem
admitted.
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in the lawsuit with Méndez. Docket No. 48, ¶ 39; Docket No.
62, ¶ 1.1. And after partial summary judgment was granted in
the Méndez suit, it was Rodríguez who told Florida Natural
that its ability to rely on the Méndez’s alleged incompetence in
the handling of reimbursement of advertising and promotional
expenses was limited by that ruling. Docket No. 48, ¶ 40;
Docket No. 62, ¶ 1.1. Rodríguez also told Florida Natural that
the partial summary judgment precluded it from “claiming
matters outside the agreement between” Florida Natural and
Méndez. Docket No. 48, ¶ 41; Docket No. 62, ¶ 1.1. According
to Rodríguez, at trial Florida Natural would only be able to
rely on evidence tied to the written agreement that it had
executed with Méndez. Docket No. 48, ¶ 42; Docket No. 62,
¶ 1.1.
Atty. Jennifer Eden told Florida Natural that the failure to
include a counterclaim against Méndez precluded Florida
Natural from employing the just cause defense. Docket No. 48,
¶ 44; Docket No. 62, ¶ 1.1. And it was Eden and Rodríguez
who represented Florida Natural during settlement negotiations, which eventually led to a settlement. Docket No. 48,
¶¶ 45–46; Docket No. 62, ¶ 1.1. Ferraiuoli was not involved in
the settlement negotiations. Docket No. 48, ¶ 47; Docket No.
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Page 21
62, ¶ 1.1. Florida Natural did not appeal the partial summary
judgment entered against it. Docket No. 48, ¶ 43; Docket No.
62, ¶ 1.1.
II. Summary Judgment Standard
A motion for summary judgment will be granted “if the
pleadings, the discovery and disclosure material on file, and
any affidavits show that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” FED. R. CIV. P. 56(a). A fact is in genuine dispute
if it could be resolved in favor of either party, and it is material
if it potentially affects the outcome of the case. Calero-Cerezo v.
U.S. Dep’t of Justice, 355 F.3d 6, 19 (1st Cir. 2004).
The movant carries the burden of establishing that there is
no genuine dispute as to any material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 325 (1986). This burden may be satisfied
by “citing to particular parts of materials in the record,
including depositions, documents, electronically stored
information, affidavits or declarations . . . or other materials.”
FED. R. CIV. P. 56(c)(1)(A). The movant may also point to a lack
of evidence supporting the nonmovant’s case. See FED. R. CIV.
P. 56(c)(1)(B); see also Celotex, 477 U.S. at 325. Once the movant
makes a preliminary showing that no genuine issues of
CITRUS WORLD v. FERRAIUOLI
Page 22
material fact exist, “the nonmovant must produce specific facts,
in suitable evidentiary form, to establish the presence of a
trialworthy [dispute].” Clifford v. Barnhart, 449 F.3d 276, 280
(1st Cir. 2006) (internal quotation marks omitted); see also FED.
R. CIV. P. 56(c)(1).
In evaluating a motion for summary judgment, we view the
record in the light most favorable to the nonmovant. See Reeves
v. Sanderson Plumbing Prods., 530 U.S. 133, 150-51 (2000). “The
court need consider only the cited materials, but it may
consider other materials in the record.” FED. R. CIV. P. 56(c)(3).
III.
Florida Natural’s and Ferraiuoli’s Cross-Motions
for Summary Judgment
Under Puerto Rico law, legal malpractice claims proceed
just like any other claims for professional negligence. See Colon
Prieto v. Geigel, 15 P.R. Offic. Trans. 313, 321 (1984) (“The
person who engages in a liberal profession, regardless of the
type, and offers and renders his services to the public, is
obliged to be adequately informed to do so . . . .” (internal
quotations omitted)). There are four elements to such a claim:
(1) there must be an attorney-client relationship giving rise to
a duty; (2) the attorney must be shown to have breached that
duty; (3) the attorney’s breach must proximately cause the
CITRUS WORLD v. FERRAIUOLI
Page 23
client’s injury; and (4) the client must sustain actual damages.
Id.; see also Portugues-Santana v. Rekomdiv Int’l Inc., 725 F.3d 17,
25 (1st Cir. 2013) (following Colon Prieto). The duties that an
attorney has to his client are those found in the Canons of
Professional Ethics, and they include a duty to “be skil[l]ful
and careful” and “to protect the interests of his client.” Colon
Prieto, 15 P.R. Offic. Trans. at 322. Where an attorney acts
without diligence, he acts with negligence. Id. (“Any conduct
at variance with diligence is considered negligent.” (internal
quotations omitted)).
The parties dispute the level of causation that must be
proved in a legal malpractice claim. According to Ferraiuoli, a
plaintiff must show that the attorney’s negligence was either
the “but for” or proximate cause of the plaintiff’s injury. See
Docket No. 49, at 6. Of those two choices,19 proximate cause is
19. In its motion for summary judgment, Ferraiuoli is not clear about
whether it favors a proximate or “but for” causation analysis. It
acknowledges that Puerto Rico generally follows a proximate causation
rule, but it goes on to note that “courts often use ‘but for’ analys[e]s” in
legal malpractice cases. Docket No. 49, at 6. In its reply brief, however,
Ferraiuoli comes out clearly in favor of a “but for” causation standard.
See Docket No. 71, at 3. But beyond string citing cases from other
jurisdictions, Ferraiuoli makes no effort to explain why “but for”
causation is the better standard, especially given Puerto Rico’s general
CITRUS WORLD v. FERRAIUOLI
Page 24
plainly more appropriate; after all, the official translation of
Colon Prieto uses the term. 15 P.R. Offic. Trans. at 321 (requiring
that the attorney’s breach be “the proximate cause of the injury
to the client”).20 Florida Natural, however, argues that it must
prove that Ferraiuoli’s negligence was the “adequate cause” of
its damages. See Docket No. 63, at 5. But the difference between
that standard and the proximate causation standard is illusory.
As the First Circuit has noted, adequate cause is “a concept
similar to proximate cause that permits more than one person
to be found to have ‘caused’ the harm.” Tokyo Marine & Fire
Ins. Co., Ltd. v. Perez & Cia. de P.R., Inc., 142 F.3d 1, 6 n.5 (1st
Cir. 1998); see also, e.g., Echevarria v. Robinson Helicopter Co., 824
causation law, and though Ferraiuoli cites Mallen’s treatise, it fails to
acknowledge that treatise’s view that proximate cause is the better
standard. Ferraiuoli’s insistence on “but for” causation is especially
curious, moreover, given that proximate causation is a more demanding
standard. See, e.g., Cardenas Mazan v. Rodriguez Rodriguez, 125 D.P.R.
702, 710 (1990) (explaining that it is not sufficient that a cause have been
necessary to produce a result, but that the result must also have been the
foreseeable consequence of that result); see also 1 RONALD E. MALLEN, ET
AL., LEGAL MALPRACTICE § 8.5 (2014 ed.) (explaining that proximate
causation requires proof of both “but for” causation and foreseeability).
20. In the original Spanish, Colon Prieto requires that “esa violación sea la
causa próxima del daño al cliente.” Colon Prieto v. Geigel, 115 D.P.R. 232,
239 (1984).
CITRUS WORLD v. FERRAIUOLI
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F. Supp. 2d 275, 280 (D.P.R. 2011) (“Adequate cause is a
concept similar to proximate cause.”). But proximate cause, as
a general matter, acknowledges the possibility of multiple
proximate causes of an injury. See, e.g., Staub v. Proctor Hosp.,
131 S. Ct. 1186, 1192 (2011) (“[I]t is common for injuries to have
multiple proximate causes.”); In re N-500L Cases, 691 F.2d 15,
28 (recognizing that, under Puerto Rico law, “it is not necessary
that [the defendant’s] conduct be the sole proximate cause of
the [plaintiff’s] injury as long as it is a proximate cause” (citing
Widow of Andino v. P.R. Water Resources Auth., 93 P.R.R. 168, 178
(1966))). And the leading treatise recognizes that “proximate
causation” is the proper test—and that it permits multiple
causation. 1 RONALD E. MALLEN, ET AL., LEGAL MALPRACTICE
§ 8.5 (2014 ed.) (noting that the “major failing” of a “but for”
causation rule is that it does not account for the possibility of
“multiple causes of the loss,” and concluding that the “prevailing view” holds that proximate causation “is the proper
analysis”). For these reasons, we will follow the proximate
causation standard here.
The parties also dispute whether the “suit within a suit”
doctrine is applicable to this case. According to Ferraiuoli, part
of proving causation in a legal malpractice case is showing that
CITRUS WORLD v. FERRAIUOLI
Page 26
the plaintiff’s original case “was a valid one and that it got
frustrated by the attorney’s negligence.” Docket No. 49, at 5.
This requirement finds support in Colon Prieto and Portugues
Santana, both of which discussed the “case within a case”
doctrine in the context of causation. But both of those cases
dealt with alleged malpractice occurring in the context of
litigation or pre-litigation activities. Here, by contrast, Florida
Natural’s primary claim relates to allegedly incorrect legal
advice that induced it to sever its business relationship with
Méndez. No litigation was on-going, and, therefore, there is no
“case within a case” for Florida Natural to prove that it would
have won. See Labair v. Carey, 291 P.2d 1160, 1166 (Mont. 2012)
(explaining that the “suit within a suit” framework “calls upon
the trier of fact in a legal malpractice case to decide what the
outcome for the plaintiff would have been in the underlying
case if it had been tried properly”). We do not believe that this
should bar Florida Natural’s claim however. If Ferraiuoli acted
without diligence and gave Florida Natural an incorrect legal
opinion, and if Florida Natural acted on that opinion to its
detriment, we see no reason why that incorrect opinion could
not be the proximate cause of Florida Natural’s damages. Cf.
Labair, 291 P.2d at 469 (noting that “[d]ifferent types of legal
CITRUS WORLD v. FERRAIUOLI
Page 27
malpractice cases will require different types of evidence and
presentation”); Basic Food Indus., Inc. v. Grant, 310 N.W.2d 685,
693 (Mich. App. 1981) (noting that “the ‘suit within a suit’
concept has vitality only in a limited number of situations, such
as where an attorney’s negligence prevents the client from
bringing a cause of action . . . , where the attorney’s failure to
appear causes judgment to be entered against his client or
where the attorney’s negligence prevents an appeal from being
perfected”); see also 1 LEGAL MALPRACTICE § 37:15 (“[I]f the
attorney failed to file or pursue a lawsuit . . . the plaintiff will
be required to recreate, i.e., litigate, an action that was never
tried.”). In considering Florida Natural’s claims, therefore, we
will use the “case within a case” doctrine only insofar as it is
required by the claims actually being brought. See 1 LEGAL
MALPRACTICE § 37:15 (“Where the injury claimed does not
depend on the merits of the underlying action or matter, the
case-within-a-case methodology is not applicable.”).
With these principles in mind, we will proceed to consider
Florida Natural’s three claims of malpractice: (1) that
Ferraiuoli’s incorrect statements of law led it to terminate its
agreement with Méndez; (2) that Ferraiuoli failed to file a
compulsory counterclaim; and (3) that Ferraiuoli’s negligent
CITRUS WORLD v. FERRAIUOLI
Page 28
answers to written discovery led to the evisceration of Florida
Natural’s just cause defense at trial. As to claims (1) and part
of claim (2), the parties have submitted cross-motions for
summary judgment; as to claim (3), Ferraiuoli has filed a
motion for summary judgment asking that it be dismissed.21
A. Méndez’s Termination
Florida Natural claims that Ferraiuoli negligently suggested, in Beléndez’s November 16, 2009, memo, that Florida
Natural’s relationship with Méndez could be terminated at
will, as it was expired. It says, furthermore, that in reliance on
this negligence, it did in fact terminate its relationship with
Méndez, which led to a lawsuit and an expensive settlement.
Ferraiuoli’s position is that there was no negligence in the
Beléndez memo, which “extensively and cautiously advised on
the elements of just cause to terminate an agreement” under
21. We do not agree with Ferraiuoli’s suggestion that because Florida
Natural has not affirmatively sought summary judgment as to claim (3)
and part of claim (2) it has therefore abandoned such a claim. Ferraiuoli
cites to nothing in support of such a proposition, and we are inclined
to see Florida Natural’s decision as a recognition that there is not
sufficient evidence in the record at this stage for it to win on that claim
at this stage of the proceedings; we would, therefore, construe Florida
Natural’s motion as one for partial summary judgment, especially
given that it has defended against Ferraiuoli’s motion for summary
judgment on these same grounds.
CITRUS WORLD v. FERRAIUOLI
Page 29
Law 75.
Docket No. 49, at 9. Essentially, Ferraiuoli’s claim is that the
memo was clear that Florida Natural needed to have just cause
to terminate Méndez.
This presents a close question. On the one hand, Ferraiuoli
was surely mistaken in relying on Castillo for the proposition
that Florida Natural might be able to get out of the agreement
because it is indefinite. In Castillo, a distributor sued a principal
under Law 75 for terminating their exclusive relationship
without just cause. See 289 F. Supp. at 139. The principal
counterclaimed, alleging that it was the distributor that had
terminated the relationship, causing damages to the principal.
See id. The distributor moved to dismiss the counterclaim on
the grounds that the agreement lacked a fixed term or a
requirement that it could only be terminated for just cause. See
id. The court granted the distributor’s motion and dismissed
the counterclaim, holding that because the contract lacked a
fixed term, “the two parties to the same remained at liberty to
rescind the agreement and bring to an end the commercial
relationship established thereunder at any time that they might
wish to do so.” Id. at 140.
The Castillo court did not purport to be applying Law 75 in
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Page 30
reaching its holding. This makes sense, as the law, by its terms,
only acts as a limitation on distributors’ rights to terminate
distributorship agreements. See P.R. LAWS ANN. tit. 10, § 278a
(providing that “no principal or grantor” may act to the
detriment of a distributorship agreement without just cause).
As Ferraiuoli would have noticed if it had researched Castillo’s
citation history, at least one other court has thus noted that
Castillo’s holding applies only to the termination of contracts
without fixed terms by distributors. See Nike Int’l Ltd. v. Athletic
Sales, Inc., 689 F. Supp. 1235, 1239 (D.P.R. 1988) (“Dealers have
a recognized right to rescind a distributorship agreement if
they so desire.” (emphasis added)).22
More to the point, further research on Ferraiuoli’s part
would have revealed that the cases have applied Law 75's
protections to contracts without fixed terms. The First Circuit,
relying on precedent from the Puerto Rico Supreme Court, has
recognized that distributors under Law 75 may include those
who have continuing but indeterminate-length relationships
with a principal. Triangle Trading Co. v. Robroy Indus., Inc., 200
22. To the extent that Nike suggests that Castillo was decided under Law 75,
we think it both incorrect and in tension with later, controlling
precedent from the First Circuit and the Supreme Court of Puerto Rico.
CITRUS WORLD v. FERRAIUOLI
Page 31
F.3d 1, 4 (1st Cir. 1999) (noting that the Puerto Rico Supreme
Court had “restrict[ed] the definition of a dealer to ‘an independent entrepreneur who has established a continuing
relationship, either fixed or indeterminate, with another principal
for the distribution of a product or service’” (quoting Roberco,
Inc. v. Oxford Indus., Inc., 122 D.P.R. 115, 131 (1988)) (emphasis
added)). Triangle Trading and Roberco23 thus stand for the
proposition that a distributor with a continuing relationship
lacking a fixed term may qualify for the protections of Law 75.
Courts in this district have explicitly recognized as much. See,
e.g., A.M. Capen’s Co. v. Am. Trading & Production Corp., 200 F.
Supp. 2d 34, 37 n.3 (“Under Law 75, the lack of termination
date in the dealer contract does not create any problems
because said law protects all agreements, even those lacking a
fixed term.”).
This interpretation is confirmed by the Puerto Rico Supreme Court’s opinion in Lorenzana Torres v. Gen. Accident Ins.
Co., 154 D.P.R. 547 (2001). There, a putative distributor sued a
principal under Law 75. See id. at 551. The primary dispute
23. As stated in Oliveras, Inc. v. Univeral Ins. Co., 141 D.P.R. 900, 915 n.14
(1996), Roberco was superseded by statute as to matters not relevant to
our discussion here.
CITRUS WORLD v. FERRAIUOLI
Page 32
before the Court was whether the putative distributor qualified
as a dealer under the Law. See id. at 552 (“One of the central
questions in the application of Law 75 is the definition of
‘distributor.’”) (translation ours). Based on the factors elucidated in Roberco and Triangle Trading, the Court concluded that
the plaintiff was not a dealer for the purposes of Law 75, and
that he was therefore not entitled to the Law’s protections. See
id. at 565 (concluding that “Law 75 is not applicable to this
case”). Notably, the contract between the parties in Lorenzana
Torres lacked a fixed term, see id. (noting that the agreement
“did not establish the duration of said contractual relationship”), but the Court found that fact of no relevance to the Law
75 analysis. However, it concluded that the lack of a fixed term
was of critical importance once it was determined that Law 75's
protections didn’t apply, because in such a case the contract
was terminable at will by either party. Id. at 566 (holding that
because a “service contract with no fixed term of duration may
be terminated by any of the contracting parties,” the defendant
“was free to terminate the contractual relationship without just
cause” (citing Figueroa Piñero v. Miranda & Eguía, Inc., 83 D.P.R.
554 (1961))). This confirms that indeterminate-length contracts
fall within the ambit of Law 75. Moreover, it confirms that
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Page 33
Castillo correctly applied general contract law principles in the
absence of Law 75 protections, holding that in such a case, the
contract was terminable at will. Cf. Quality Constr. Chem., Corp.
v. Sika Corp., 389 F. Supp. 2d 246, 252 (D.P.R. 2005) (recognizing
that outside the Law 75 context, contracts without fixed terms are
terminable at will);24 A.M. Capen’s Co., 200 F. Supp. 2d at 48–49
(same).
We must find, therefore, that in suggesting that Castillo—or,
for that matter, whether or not the agreement had a fixed
term—was applicable to the question of whether Méndez
could be terminated, Ferraiuoli was negligent insofar as it
failed to correctly apprise Florida Natural of the correct state
of the law.25 Thus, when Ferraiuoli suggested that Florida
Natural “would be able to terminate the relationship” because,
arguably, the relationship lacked a fixed term, see Docket No.
24. We note that although Quality Construction involved the termination of
an exclusive distributorship relationship, the plaintiff’s claim was only
for breach of contract, not for a violation of Law 75. See Quality Constr.
Chem., Corp. v. Sika Corp., 389 F. Supp. 2d 246, 247 (D.P.R. 2005).
25. Notably, at no point during the briefing of the motions for summary
judgment in this case has Ferraiuoli even attempted to defends its
reliance on Castillo or the distinction between fixed and indeterminate
length contracts in the Law 75 context.
CITRUS WORLD v. FERRAIUOLI
Page 34
48-3, at 3, it did so in contravention of controlling precedent, of
which it should have been aware, from both the First Circuit
and Supreme Court of Puerto Rico, as well as on-point precedent from other courts in our district. Ferraiuoli is not saved by
the fact that, after suggesting that the contract was terminable,
it wrote: “Nonetheless, when contracts provide a term, and/or
provide for renewals, principals can only terminate the
agreements based on ‘just cause.’” Id. This sentence repeats the
memo’s original error by suggesting that whether or not the
contract has a fixed term is a relevant consideration.26 In truth,
26. Moreover, and contrary to the inference that Ferraiuoli would have us
draw, the sentence does not actually state that Florida Natural’s
agreement with Méndez, as of the time of the memo’s drafting, was for
a fixed term. The memo, in fact, explicitly states that it might not be. We
therefore flatly reject Ferraiuoli’s suggestion, in its opposition to
Florida Natural’s motion for summary judgment, that Beléndez’s memo
“stated that just cause was needed for a contract such as the one
[Florida Natural] had with Méndez.” Docket No. 60, at 6. It is beyond
dispute that the memo suggested that Florida Natural might have the
right to terminate the agreement at will. See Docket No. 48-3, at 3 (“It
can be argued that since the relationship has continued without any
additional agreement being executed, that as of today, the Contract
does not specify the term, thus, it is indefinite. As such, [Florida
Natural] would be able to terminate the relationship . . . .”); see also
Docket No. 50-8, at 47 (recommending that a counterclaim be filed
arguing that the agreement had “an indefinite term and therefore could
have been terminated at will”). Indeed, the only reason that it would
CITRUS WORLD v. FERRAIUOLI
Page 35
whether the contract was for a fixed or indefinite term, Law 75
applied so long as theirs was a “dealer’s contract” under the
law. See P.R. LAWS ANN. tit. 10, § 278 (defining “dealer’s
contract”). Put simply, the only fair reading of the memo is that
it suggests that Florida Natural’s contract with Méndez might
be indefinite, and, because of this fact, it might be terminable
at will.27 See Docket No. 48-3, at 3. The memo is very clear that,
if these things were true, just cause was not necessary to
terminate the contract. In making these suggestions, the memo
was incorrect.
Because we reject its reading of the memo, and because we
have made sense to discuss the supposed distinction between
indeterminate and fixed length contracts was to suggest that the former,
but not the latter, were terminable at will. If, as Ferraiuoli now
suggests, the memo was clear about the need for just cause in either
case, the Castillo section would have been nothing but surplusage.
27. We note that Ferraiuoli repeated this error in its January 10, 2014,
memo when it suggested that because the original agreement had
expired, the parties’ subsequent relationship was arguably indefinite
and, therefore, potentially terminable at will. See Docket No. 50-8, at
38–39. Though by January 2014 Ferraiuoli had recognized that Castillo
was factually distinguishable, see id. at 39 n.3, it still failed to recognize
the underlying error in relying on Castillo. By November 2010,
however, Ferraiuoli had ceased relying on Castillo at all. See id. at 50–54
(email of November 23, 2010).
CITRUS WORLD v. FERRAIUOLI
Page 36
find that the memo contains a significant error of law in
violation of its duty to Florida Natural, we must deny
Ferraiuoli’s motion for summary judgment as to this claim. But
we must deny Florida Natural’s as well, because we are unable
to hold, as a matter of law, that Ferraiuoli’s negligence proximately caused Florida Natural’s damages. The Beléndez memo
erred in suggesting that Castillo might have relevance to
Florida Natural’s relationship with Méndez, but it did so in
language that was far from forceful. Rather than state directly
that the agreement was indefinite, Beléndez wrote that “[i]t can
be argued” that the agreement was indefinite after the original
agreement’s expiration in 2005. Docket No. 48-3, at 3. This
language lacked certainty, a fact that is significant given what
immediately followed: a lengthy discussion of the need for just
cause in terminating distributorship contracts under Law 75.
See id. at 3–6. We therefore read the memo as suggesting that
while Florida Natural might be entitled to terminate the
contract without just cause, it also might need to be prepared to
show just cause for that termination—the memo suggests that
the question was unsettled. Furthermore, the memo’s recommendation was not that Florida Natural go out and unilaterally
and without notice cancel its contract with Méndez. To the
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Page 37
contrary, the much more conservative course suggested by
Beléndez was that Florida Natural “confirm in writing that
Méndez acknowledges that the original agreement is still in
place, thereby continuing the non-exclusiv[e] nature of the
agreement. That way, contracting with other distributors
would be permitted without [Florida Natural] incurring any
liability.” Id. at 7.
Given the measured tone of Ferraiuoli’s memo, it is far from
certain that it could have reasonably foreseen Florida Natural’s
decision to rely on one portion of the memo as the basis for
immediately terminating its relationship with Méndez. That
said, we would not grant summary judgment in favor of
Ferraiuoli on these grounds because it was its error that created
the false impression in the mind of Florida Natural’s representatives that the contract might be terminable at will. Had
Ferraiuoli been more diligent in drafting its memo, such an
impression would never have arisen in the first place. And
Latham’s email, to which the memo responded, did mention
the possibility of litigation. For these reasons, we conclude that
the question of proximate cause should be decided by a jury
after hearing evidence regarding the memo and Florida
Natural’s reliance on it. Moreover, it could be argued that
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Page 38
Florida Natural was contributorily negligent in relying on the
memo as its sole legal basis for terminating its relationship
with Méndez. See, e.g., Arnav Indus., Inc. Ret. Trust v. Brown,
Raysman, Millstein, Felder & Steiner, L.L.P., 751 N.E.2d 936, 939
(N.Y. 2001) (holding that contributory negligence may be
pleaded “as a mitigating factor in the attorney’s negligence”),
overruled on other grounds by Oakes v. Patel, 988 N.E.2d 488 (N.Y.
2013). In such a case, a jury, rather than this court, would be
required to apportion liability. See Alejandro-Ortiz v. P.R. Elec.
Power Auth., 908 F. Supp. 2d 290, nn.8–9 & accompanying text
(D.P.R. 2012) (noting that the apportionment of liability is a
question for a jury).
To the extent that Ferraiuoli argues that Florida Natural’s
settlement with Méndez precludes a finding of damages, see
Docket No. 49, at 21, we disagree. This is not a case where the
attorney’s error caused a risk of loss, inducing the client to
settle even though he would have won on appeal. See, e.g.,
Nielson v. Eisenhower & Carlson, 100 Wash. App. 584, 599 (2000)
(holding that because the plaintiffs would have won on appeal
“with or without” their attorney’s negligence, that negligence
was not the cause-in-fact of the plaintiffs’ loss). The fact of
settlement is not an absolute bar to recovery in legal malprac-
CITRUS WORLD v. FERRAIUOLI
Page 39
tice cases. See id. at 590–91 (holding that settlement does not
bar recovery, so long as the plaintiffs can show that the attorney’s negligence proximately caused their loss). Here, the
allegation is that Ferraiuoli gave Florida Natural negligent
advice, and that, in acting on that advice, Florida Natural
became involved in expensive litigation that it otherwise could
have avoided. We conclude that such expenses are recoverable
as damages if proximate cause is proved. See 1 LEGAL MALPRACTICE
§ 8.5 (“[E]rroneous advice can involve the client in
litigation or prolonged litigation. Those expenses may be the
only damages sustained and can be recoverable as direct
damages.”); see also 3 LEGAL MALPRACTICE § 21:6 (“A frequent
result of negligent advice is that the client is sued, incurs the
cost of defense, and, of course, liability. The cost of avoidable
litigation or unnecessary legal services, ultimately, may be
chargeable to the attorney as damages.”).
For all of these reasons, the parties cross-motions for
summary judgment are denied with regard to this claim.
B. The Counterclaims
The motions discuss two separate counterclaims, both of
which went unfiled. The first was to be a counterclaim seeking
a declaration that Florida Natural either had a right to termi-
CITRUS WORLD v. FERRAIUOLI
Page 40
nate the agreement at will or had sufficient just cause to do so.
This counterclaim was specifically recommended by Ferraiuoli
in its January 14, 2010, memo. See Docket No. 50-8, at 47. The
second counterclaim was for collection of monies, and it was
discussed in an email from Beléndez to Latham on February 18,
2010. See id. at 48. It is undisputed that both counterclaims
were written but never filed.
As to the decision not to file the declaratory judgment
counterclaim, Ferraiuoli’s position is that the filing was
unnecessary because the result that would have been achieved
through the counterclaim was sufficiently accomplished
through Ferraiuoli’s pleading of just cause and expiration as
affirmative defenses in the answer to the complaint. See
ANSWER, Méndez & Co., Civ. No. 09-2251(JAF), ECF No. 9, at
7–10 (D.P.R. filed Feb. 19, 2011) (outlining affirmative defense
of just cause). In opposing Ferraiuoli’s motion, the only injury
alleged to have been suffered by Florida Natural as a result of
Ferraiuoli’s failure to file a counterclaim relates solely to the
collection of monies claim. See Docket No. 63, at 6 (“As a result
of not filing the counterclaim . . . [Florida Natural] was
precluded from recouping from Méndez the monies that
Méndez owed [Florida Natural] . . . .”). As we see it, the
CITRUS WORLD v. FERRAIUOLI
Page 41
decision by Ferraiuoli not to file the declaratory jugdment
action was a reasonable exercise of its judgment, one that was
not even incorrect, to say nothing of negligent, and one that
seems not to have even allegedly injured Florida Natural.28 As
such, we would grant Ferraiuoli’s motion for summary
judgment as to the declaratory judgment counterclaim.
As to the failure to file the collection of monies counterclaim, however, Ferraiuoli acted negligently. In Beléndez’s
February 18, 2010, email, she writes that Ferraiuoli would not
be filing the collection of monies counterclaim because the
amount in controversy in the claim—$22,491.00—was too low
to create federal jurisdiction; the claim, she wrote, would have
to be brought in state court. See Docket No. 50-8, at 48.
Under Rule 13, counterclaims are either compulsory or
permissive. Compulsory counterclaims are claims arising “out
of the transaction or occurrence that is the subject matter of the
opposing party’s claims” and which do “not require adding
another party over whom the court cannot acquire jurisdic-
28. In its opposition to Florida Natural’s motion for summary judgment,
Ferraiuoli points out this proximate cause problem. See Docket No. 60,
at 13. In its reply, however, Florida Natural fails to address the matter
of injury and causation at all. See Docket No. 76.
CITRUS WORLD v. FERRAIUOLI
Page 42
tion.” FED. R. CIV. P. 13(a)(1). A defendant is required to make
any compulsory counterclaims available to it. Id. It is well
established that compulsory counterclaims do not need
independent bases for jurisdiction. See 6 CHARLES ALAN
WRIGHT, ET AL., FEDERAL PRACTICE AND PROCEDURE § 1409 (3d
ed.) (“Because it is closely related to the subject matter of the
action, a counterclaim under Rule 13(a) is within the court’s
supplemental jurisdiction and an independent basis for federal
jurisdiction is not necessary.”). The term “permissive counterclaim” encompasses any other claim a party may have against
an opposing party. See FED. R. CIV. P. 13(b). Traditionally,
permissive counterclaims “require[d] their own jurisdictional
basis.” Iglesias v. Mutual Life Ins. Co. of N.Y., 156 F.3d 237, 241
(1st Cir. 1998).29 Here, Méndez sued Florida Natural for unjust
29. This was certainly the law in this jurisdiction at the time Beléndez
wrote her email. A month later, however, the First Circuit overruled
Iglesias and held that permissive counterclaims that were part of the
“same case or controversy” as the original action did not require their
own jurisdictional basis. Global NAPs, Inc. v. Verizon New England Inc.,
603 F.3d 71, 87 (1st Cir. 2010). In reaching this conclusion, the First
Circuit relied on a 1990 statute that expanded federal courts’
supplemental jurisdiction. Id. (citing 18 U.S.C. § 1367). However,
Iglesias was decided in 1998, well after § 1367 became law, and so we
cannot conclude that Beléndez should have anticipated the First
Circuit’s reversal.
CITRUS WORLD v. FERRAIUOLI
Page 43
termination under Law 75, which is effectively a special,
statutory breach of contract action. See, e.g., Basic Controlex
Corp. v. Klockner Moeller Corp., 202 F.3d 450, 454 (1st Cir. 2001)
(“The question thus becomes whether Act 75 governs Basic
Controlex’s ‘breach of contract’ claim. Clearly it does.”); A.M.
Capen’s Co. v. Am. Trading & Production Corp., 202 F.3d 469, 473
(1st Cir. 2000) (referring to Law 75 as creating “an additional
remedy for . . . breach of contract”); Triangle Trading Co. v.
Robroy Indus., Inc., 952 F. Supp. 75, 76 (D.P.R. 1997) (referring
to a plaintiff’s case for “breach of contract under Act[] 75").
Florida Natural’s unfiled counterclaim was for collection of
monies due under the same contract. It is well established “that
in a breach-of-contract action, a claim by defendant for . . .
overpayment . . . or for payments due” is compulsory. 6
FEDERAL PRACTICE AND PROCEDURE § 1410.1; cf. Bottero Enters.,
Inc. v. S. New England Production Credit Ass’n, 743 F.2d 57, 59
(1st Cir. 1984) (holding that a claim should have been brought
as a compulsory counterclaim when it related to the same
underlying agreement as the original claim); Brandt v. Advanced
Cell Tech., Inc., 349 F. Supp. 2d 54, 58 (D. Mass. 2003) (holding
that a breach of contract counterclaim was compulsory in
action for payment on notes arising out of same transaction or
CITRUS WORLD v. FERRAIUOLI
Page 44
occurrence).
We conclude that Florida Natural’s collection of monies
action needed to have been brought as a compulsory counterclaim to Méndez’s action. Contrary to Beléndez’s analysis,
moreover, it did not need an independent jurisdictional basis.
Her decision not to file the counterclaim on this basis was,
therefore, in error and negligent.30 Even so, several fact issues
remain. First, Beléndez gave a second reason for not filing the
counterclaim, and it would be for a jury to decide whether that
second justification was reasonable and controlling. Second,
the case-within-a-case framework is clearly applicable to this
claim, but neither party has given us enough information to
decide one way or the other whether Florida Natural would
have prevailed on its collection of monies action had it been
filed. And third, it is not at all clear to us that it was Beléndez’s
negligence—rather than Florida Natural’s own actions—that
resulted in the collection of monies claim being barred,
30. Ferraiuoli at no point defends the merits of Beléndez’s decision not to
file the collection of monies counterclaim. Beléndez, for her own part,
admitted during her deposition that she had not considered whether
the collection of monies counterclaim was permissive or compulsory,
nor had she researched the different jurisdictional demands of each. See
Docket No. 50-8, at 15–17.
CITRUS WORLD v. FERRAIUOLI
Page 45
meaning that conclusive evidence of proximate cause is
currently lacking in the record.31
Florida Natural’s motion is denied as to this claim;
Ferraiuoli’s is granted in part and denied in part.
C. The Just Cause Defense
31. What we mean is this. As a general matter, where an “action proceeds
to judgment without the interposition of a [compulsory counterclaim],
the counterclaim is barred.” FED. R. CIV. P. 13 advisory committee’s
note. The judgment in the underlying action here was not on the merits,
however; it was a voluntary dismissal on the stipulation of all parties,
negotiated by attorneys other than Ferraiuoli’s, which expressly barred
all claims that could have been brought. See SETTLEMENT AGREEMENT,
Méndez & Co., Inc. v. Citrus World Inc., Civ. No. 09-2251(JAF), ECF No.
65-1, at 1 (D.P.R. filed April 27, 2011); see also FED. R. CIV. P.
41(a)(1)(A)(ii). In similar circumstances, courts have recognized the
right of the settling defendant in the first action to reserve its right to
bring the counterclaim; others have held that non-merits judgments can
never preclude unfiled counterclaims. See 6 CHARLES ALAN WRIGHT, ET
AL., FEDERAL PRACTICE AND PROCEDURE § 1417 nn.14–15 &
accompanying text (3d ed.). The First Circuit, by contrast, has held that
at least in some circumstances, a settlement in the first action might bar
a later action asserting what should have been brought as a compulsory
counterclaim. See Dindo v. Whitney, 451 F.2d 1 (1st Cir. 1971). We see it
as an open question whether Florida Natural’s collection of monies
claim is barred because of Beléndez’s failure to file it or because of
Florida Natural’s subsequent decision, when otherwise represented, not
to bargain for its reservation. We also cannot know at this time whether
the settlement amount in the underlying case accounted for the monies
Florida Natural claims it was owed. Because the parties have not
briefed these questions, we will not decide them at this time.
CITRUS WORLD v. FERRAIUOLI
Page 46
According to Florida Natural, its just cause defense to
Méndez’s lawsuit was eviscerated by Ferraiuoli’s decision to
file answers to written discovery admitting that the 2004
agreement executed between Florida Natural and Méndez was
the complete agreement between the parties. According to
Florida Natural, that agreement was only “partial,” and there
was some other agreement that encompassed other duties that
Méndez owed to Florida Natural. Florida Natural’s contention
is that Ferraiuoli’s negligence resulted in the judge in the
underlying action granting partial summary judgment in favor
of Méndez and determining that the signed 2004 agreement
represented the entire agreement between the parties. See
Méndez, Civ. No. 09-2251(JAF) (D.P.R. March 24, 2011) (order
granting partial summary judgment).
There are several problems with Florida Natural’s theory.
First, Ferraiuoli did not admit that the 2004 agreement was the
complete and only distribution agreement between the parties.
What it admitted—and what Florida Natural also complains
about, see Docket No. 63, ¶ 5.2—is Ferraiuoli’s admission that
Méndez always met or exceeded the minimum annual sales
requirements under the agreement. But there is no suggestion
here by Florida Natural that this admission was factually
CITRUS WORLD v. FERRAIUOLI
Page 47
incorrect. Plus, Florida Natural and its outside counsel reviewed the discovery submissions, and they may have a
contributory role in any negligence for that reason.
More crucially, there is no evidence in the record before us
that supports the existence of an actual agreement outside of the
one executed in 2004. It is true that there was a course of
dealing that involved annual marketing plans and various
promotions, but the undisputed facts confirm that for the most
part these were one-off side agreements, implemented at
Florida Natural’s sole discretion. Moreover, in opposing partial
summary judgment in the underlying action, Goldman
Antonetti was able to argue that the annual marketing plans
constituted “essential obligations agreed to and executed by
the parties” that “supplement” the 2004 letter agreement.
FLORIDA NATURAL’S OPPOSITION TO MÉNDEZ’S MOTION FOR
PARTIAL SUMMARY JUDGMENT, Méndez, Civ. No. 09-2251(JAF),
ECF No. 41, at 2–4 (D.P.R. filed Feb. 7, 2011). The judge in the
underlying case did reject this argument, noting that the letter
had an integration clause and that, even if it didn’t, he would
not hold that the side agreements regarding marketing were
part of the contract. Méndez, Civ. No. 09-2251(JAF), ECF No. 60,
at 3 (D.P.R. March 24, 2011). He further found that there was
CITRUS WORLD v. FERRAIUOLI
Page 48
insufficient ambiguity to allow extrinsic evidence of Florida
Natural’s interpretation. But we fail to see any connection
between Ferraiuoli’s alleged negligence and the court’s
holding; indeed, given the letter agreement’s merger clause, we
do not see how the court could have held differently, even on
the facts before us. See Borschow Hosp. & Med. Supplies, Inc. v.
Cesar Castillo Inc., 96 F.3d 10, 15–16 (1st Cir. 1996) (holding that
under Puerto Rico law, merger clauses “bar consideration of
extrinsic evidence to vary the express, clear, and unambiguous
terms of a contract”); see also Executive Leasing Corp. v. Banco
Popular de P.R., 48 F.3d 66, 69 & n.5 (1st Cir. 1995) (rejecting
extrinsic evidence of the parties’ “actual practice” where the
contract was unambiguous and contained a valid merger
clause). Florida Natural fails to offer any evidence suggesting
that the result would have been different had Ferraiuoli
answered written discovery in a different manner, and we do
not believe it would have been. Ferraiuoli’s motion for summary judgment is granted as to this claim.
IV.
AIG’s Motion for Partial Summary Judgment
AIG, Ferraiuoli’s malpractice insurer, seeks a declaration
via a motion for partial summary judgment that it cannot be
liable for any damages owed to Florida Natural that take the
CITRUS WORLD v. FERRAIUOLI
Page 49
form of attorneys’ fees. AIG’s argument stems from language
in the insurance policy defining damages as
sums payable pursuant to judgment against the Insured
and/or settlements negotiated by the Company and
consented by the Insured and includes interest on any
judgment which accrues after the entry of a judgment
and before the Company has paid. Damages also
includes punitive and/or multiple/exemplary damages
to the extent such damages are insurable under the law
of any jurisdiction which has substantial relationship to
the Insured, the Company, this Policy, or the Claim and
which is most favorable to the insurability of such
damages.
Damages does not include fines, penalties or any form
of criminal sanction, taxes or the return of or reimbursement for legal fees, costs or expenses or any other
matter which is deemed to be uninsurable by law
governing the policy or subject jurisdiction.
Docket No. 45-2, at 21. According to AIG, this language
specifically releases it from the need to pay for damages in the
form of attorney’s fees. According to Florida Natural and
Ferraiuoli, by contrast, this exclusion applies only to a narrow
class of actions, such as those seeking the return of fees that
were overpaid.
CITRUS WORLD v. FERRAIUOLI
Page 50
We will begin with what the policy unambiguously does
cover, because we think it provides necessary context to a
discussion of the exclusion at issue. Under the policy, AIG will
pay for any amounts that Ferraiuoli becomes “legally obligated
to pay as damages because of any claim” for legal malpractice
against Feraiuoli. Docket No. 45-2, at 3 (emphasis added). The
specific endorsement regarding damages further defines it to
include sums payable because of “judgments against” or
“settlements . . . consented to by” Ferraiuoli. Id. at 21. What is
not included are sums that, traditionally, would not be
compensatory damages, awarded as a result of a judgment or
settlement: fines, penalties, criminal sanctions, taxes, costs, and
legal fees. Id.
In this vein, some courts have interpreted the exclusion for
the “return” of fees as relieving the insurer from the duty to
pay for, e.g., claims for excessive fees. See, e.g., NormanShabel,
P.C. v. Nat’l Union Fire Ins. Co., 923 F. Supp. 681, 684 (D.N.J.
1996) (finding no coverage where the claim was “merely an
attempt to recoup excessive fees paid to the attorney” (citing
Hofing v. CNA Ins. Cos., 588 A.2d 864 (N.J. App. 1991)). Other
courts have held that “return” or “restitution” language
permits recovery for “a judgment or settlement” but not for the
CITRUS WORLD v. FERRAIUOLI
Page 51
fees incurred by the plaintiff in securing that judgment or
settlement. Weisberger v. Home Ins. Co., 76 Ohio App. 391, 395
(1991). Thus at least certain categories of fees—like those
incurred because the malpractice plaintiff had to hire new
counsel in the underlying action—should not be construed as
a claim for the “return” of fees. See Hofing, 588 A.2d at 869; see
also Berkeley v. Home Ins. Co., 68 F.3d 1409, 1413 (D.C. Cir. 1995)
(following Weisberger and holding that at least some fee
requests are damages, not claims for “return” of fees).
With this background, we conclude that the exclusion from
the definition of damages of claims for the “return” of legal
fees does not limit in any way the extent of AIG’s coverage of
Ferraiuoli’s negligence. It seems to us beyond argument that if
Ferraiuoli’s negligence caused Florida Natural to incur legal
expenses to hire other counsel to fix Ferraiuoli’s mistakes,
those fees are, in fact, consequential damages covered under
the policy. Hofing, 588 A.2d at 869. At least within the facts of
this case, we think the same is true of the fees paid by Florida
Natural to Ferraiuoli.32 Keeping in mind that the claim alleges
damages, in terms of fees and costs, for having had to engage
32. To the extent that Hofing suggests a different result, we choose not to
follow it.
CITRUS WORLD v. FERRAIUOLI
Page 52
in needless litigation, we think that an action to recover for the
fees thus expended is one for consequential damages arising
from the underlying negligence. In each case, the fees would be
awarded as part of a judgment against Ferraiuoli for its
professional negligence; in neither case would Florida Natural
be seeking to recover excessive fees or fees incurred in prosecuting this action. The “return of fees” language therefore does
not preclude recovery.
The question is whether the result is altered by the language excluding from damages “reimbursement” of fees, as to
which we have found no on-point caselaw. Nonetheless, the
terms’ plain meaning tells us that “reimbursement” is a
broader term than “return.” Return implies an action to
recover fees actually paid to the insured; reimbursement might
include fees paid to other firms.33 Even so, and taking the term
in the context of the policy as a whole, we see no reason to
conclude that it excludes from payment anything other than
legal fees qua legal fees. This fits with the phrase’s surrounding
language, because attorney’s fees—like costs, penalties, and
33. That is, Florida Natural could not logically ask Ferraiuoli to “return”
the fees that it in incurred in hiring Goldman Antonetti, but it could ask
for reimbursement of those fees.
CITRUS WORLD v. FERRAIUOLI
Page 53
fines—are traditionally “not compensable damages.” Cordeco
Dev. Corp. v. Santiago-Vazquez, 539 F.2d 256, 262 (1st Cir. 1976);
see also Docket No. 45-2, at 21 (excluding “the return or
reimbursement of legal fees, costs or expenses”). But in a legal
malpractice case, fees paid in the underlying action can take on
a different character; they are compensable damages flowing
directly from the malpractice defendant’s negligence. See 3
LEGAL MALPRACTICE § 21:6 (defining as “direct damages” those
“legal expense[s] incurred as a consequence of the attorney’s
negligence”). For this reason, and considering that in many
malpractice cases attorneys’ fees “may be the only damages
sustained,” id., it would make little sense to read out coverage
of such claims from the professional liability policy. We
conclude instead that the policy’s unambiguous language
requires that AIG pay for fees chargeable to Ferraiuoli as
malpractice damages. Under this analysis, AIG will be require
to pay Ferraiuoli for any damages that it has to pay Florida
Natural regarding fees that Florida Natural incurred due to the
work of Ferraiuoli or other firms. It will not, however, have to
reimburse Ferraiuoli for any attorney fees awarded to Florida
Natural or incurred by Ferraiuoli in this action, unless that
CITRUS WORLD v. FERRAIUOLI
Page 54
payment is otherwise required by the policy.34 AIG’s motion is
accordingly granted in part and denied in part consistent with
this opinion.
V. Conclusion
For all of the reasons stated above, Ferraiuoli’s motion for
summary judgment is GRANTED IN PART and DENIED IN
PART. Florida Natural’s is DENIED. AIG’s is GRANTED IN
PART and DENIED IN PART. Specifically, we dismiss Florida
Natural’s claims regarding Ferraiuoli’s answers to written
discovery, as well as Ferraiuoli’s failure to file a declaratory
judgment counterclaim. However, we find that Ferraiuoli acted
negligently in its drafting of the November 16, 2009, memo, as
well as when it failed to file a collection of monies counterclaim. At trial, Ferraiuoli will not be permitted to dispute these
findings of negligence. Thus, trial as to those claims will focus
34. In its opposition to AIG’s motion for summary judgment, Florida
Natural suggests that AIG should be responsible for any attorneys’ fees
awarded to Florida Natural in this litigation. See Docket No. 61. As we
explain above, we agree with AIG’s position, see Docket No. 78, at 3,
that such fees are excluded by the policy’s damages definition. Thus,
we grant AIG’s motion for summary judgment insofar as it seeks a
declaration that is not responsible for any fees awarded against
Ferraiuoli for its actions in this litigation. The motion is otherwise
denied.
CITRUS WORLD v. FERRAIUOLI
Page 55
on proximate causation, contributory negligence, and damages.
The Court intends to go to trial by the end of September
2014. To that end, the parties must file, within ten days, a joint
motion proposing three dates before November 1, 2014, on
which all are available to begin trial. However, the Court is of
the opinion that trial is a dangerous option for all parties. On
the one hand, Ferraiuoli has surely acted negligently; on the
other, Florida Natural may have a hard road ahead in proving
that its damages were proximately caused by that negligence.
As such, the Court intends to quickly hold a settlement
conference in this case. Within ten days, the parties shall jointly
inform the Court of three dates before the end of April 2014 on
which they are available to hold a settlement conference.35
IT IS SO ORDERED.
In San Juan, Puerto Rico, this __________________.
S/ SILVIA CARREÑO-COLL
UNITED STATES MAGISTRATE JUDGE
35. Florida Natural’s motion for a status conference, Docket No. 82, is
therefore MOOT.
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