Casco, Inc. v. John Deere Construction Company & Forestry Company

Filing 52

ORDER: Denying 39 motion to deposit funds. Signed by Judge Gustavo A. Gelpi on 8/1/2013.(TC)

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

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CASCO, INC.,

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Plaintiff,

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v.

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JOHN DEERE CONSTRUCTION
COMPANY & FORESTRY COMPANY,

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Defendant.

Civil No. 13-1325 (GAG)

MEMORANDUM, OPINION AND ORDER

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Presently before the court is CASCO’s motion to deposit funds pursuant to Federal Rule of

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Civil Procedure 67. (Docket No. 39.) John Deere (“JD”) opposed, claiming Rule 67 is inapplicable

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in this instance. (See Docket No. 45 at 2.) For the following reasons, the court agrees and DENIES

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CASCO’s motion at Docket No. 39.

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I.

Pertinent Background

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CASCO brought this action against JD primarily for violation of P.R. Law 75’s protection

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against unilateral contract termination. See P.R. LAWS ANN. tit. 10, §§ 278 et seq. The complaint

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seeks damages and injunctive relief for violations of the covenant of good faith and fair dealings in

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P.R. LAWS ANN. tit. 31 §§ 2294 and 3375 and Puerto Rico’s tort statute for various tortious actions

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of JD, P.R. LAWS ANN. tit 31, §§ 5141 and 5142. The damages CASCO seeks reach into the

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millions. (See Docket No. 1.) JD counterclaimed, seeking payment for outstanding invoices totaling

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$137,337. (See Docket No. 28.) CASCO filed its response to this counterclaim and denied the

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collection claim, disputing the actual total. Subsequently, CASCO filed its motion to deposit funds

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with the court. (Docket No. 39.)

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II.

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Discussion
Rule 67(a) states,
If any part of the relief sought is a money judgment or the disposition of a
sum of money or some other deliverable thing, a party--on notice to every
other party and by leave of court--may deposit with the court all or part of the
money or thing, whether or not that party claims any of it. The depositing
party must deliver to the clerk a copy of the order permitting deposit.

Civil No. 13-1325 (GAG)
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FED. R. CIV. P. 67(a). The First Circuit stated, “The core purpose of Rule 67 is to relieve a party

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who holds a contested fund from responsibility for disbursement of that fund among those claiming

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some entitlement thereto.” Alstom Caribe, Inc. v. George P. Reintjes Co., Inc., 484 F.3d 106, 113

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(1st Cir. 2007) (citing 12 CHARLES ALAN WRIGHT, ARTHUR R. MILLER & RICHARD L. MARCUS,

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FEDERAL PRACTICE & PROCEDURE § 2991 (2d ed. 1997)). The Alstom Caribe court cautioned

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district courts to only grant a Rule 67 motion when the question of entitlement is genuinely disputed.

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See id. The Fifth Circuit came to a similar conclusion when faced with the same question. In Gulf

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States Utilities Co. v. Alabama Power Co., the Fifth Circuit upheld a district court’s approval of a

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Rule 67 deposit because the parties disputed ownership of the funds due to contract disputes. 824

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F.2d 1465, 1475 (5th 1987). The crux of the matter is whether ownership of the funds is in dispute.

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In the present case, there is no sum-certain the parties agree is disputed. Each party

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recognizes that funds are in dispute, but they disagree over whether the invoice total, the invoice

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total minus a credit, or the invoice total minus both the credit and the value of the outstanding

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inventory should be used. (See Docket Nos. 39 at 2 (stating invoice amount minus credit and value

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of outstanding inventory); 45 at 2 (stating total invoice amount).) The court cannot ascertain which

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funds which parties shall unequivocally be entitled to at the end of this litigation. Partly, this is due

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to the need for the jury to determine whether CASCO is entitled to have JD buy back the remaining

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inventory, a proposition JD denied. Rule 67 is a useful tool in circumstances when a third party,

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such as a bank, holds a sum-certain to which multiple parties dispute ownership. Certainly the Rule

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can be applied in other circumstances, but not in the present case. The two parties have multiple

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claims and counterclaims against each other. The jury must determine the facts surrounding the

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dissolution of this contractual relationship and the consequences thereof. Rather than disputing the

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ownership of one account, CASCO attempts to deposit with the court an amount it might have to

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pay at the end of the litigation, if the jury ultimately sides with JD.

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The court finds Rule 67 to be inapposite in this instance. While it is clear there is an invoice

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balance, it is unclear what that balance is and whether that balance will ever be paid. For these

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Civil No. 13-1325 (GAG)
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reasons, the court DENIES CASCO’s motion to deposit funds pursuant to Rule 67(a) at Docket No.

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39.

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SO ORDERED.

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In San Juan, Puerto Rico this 1st day of August 2013.

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s/Gustavo A. Gelpí

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GUSTAVO A. GELPI
United States District Judge

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