Matinez et al v. Law Offices of Johne Nevares & Associates, P.S.C. et al

Filing 35

MEMORANDUM AND ORDER re 16 Motion to Dismiss for Lack of Jurisdiction and Motion to Dismiss for Failure to State a Claim; re 18 Motion to Dismiss for Lack of Jurisdiction and Motion to Dismiss for Failure to State a Claim; and re 27 Supplementa l Motion. The motions to dismiss filed at Docket Nos. 16 and 18 are GRANTED, and the supplemental motion to dismiss filed at Docket No. 27, is VACATED AS MOOT. This case is DISMISSED without prejudice. Judgment shall be entered accordingly. Signed by Judge Francisco A. Besosa on 01/10/2020. (brc)

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

HÉCTOR MARTÍNEZ, CRUCITA PAGÁN
and RONALDO ROBLES-MENÉNDEZ, on
behalf of themselves and all
others similarly situated,
Plaintiffs,
v.

Civil No. 18-1400 (FAB)

LAW OFFICES OF JOHN F. NEVARES
& ASSOCIATES, P.S.C.; SALAS,
LC,
Defendants.

MEMORANDUM AND ORDER
BESOSA, District Judge.
Héctor Martínez, Crucita Pagán, and Ronaldo Robles-Menéndez
commenced a class action on behalf of themselves and all others
similarly situated (“plaintiffs”).

(Docket No. 1.)

Defendants Law Offices of John F. Nevares & Associates, P.S.C.
(“Nevares”) and Salas & Co., L.C. (“Salas,” and together with
Nevares, “defendants”) moved to dismiss the complaint.

(Docket

Nos. 16, 18 and 27.) Defendants seek dismissal pursuant to Federal
Rules of Civil Procedure 12(b)(1) and 12(b)(6).

(Docket Nos. 16,

18 and 27.)
As discussed below, plaintiffs have not demonstrated that
this Court has subject matter jurisdiction over the claims.

See

Civil No. 18-1400 (FAB)
Docket No. 1.

2

Accordingly, the complaint, (Docket No. 1,) is

DISMISSED WITHOUT PREJUDICE.
I.

Background
Defendants represented plaintiffs in a prior class action

litigation.

(Docket No. 1 at p. 2.)

on a class-wide basis.

Id.

That litigation was settled

The settlement funds were deposited

into Nevares’ trust account.

Id.

Defendants were entitled to

reimbursement of their litigation-related expenses to be paid from
the settlement funds before distributions to plaintiffs.
II.

Id.

Discussion
Federal courts are courts of limited jurisdiction.

Destek

Grp., Inc. v. State of N.H. Pub. Utils. Comm’n, 318 F.3d 32, 38
(1st

Cir.

2003).

The

party

invoking

the

burden

federal
of

subject

establishing

matter

jurisdiction

shoulders

that

jurisdiction.

See Bank One, Tex., N.A. v. Montle, 964 F.2d 48, 50

(1st Cir. 1992).
Subject matter jurisdiction over plaintiffs’ claims cannot be
established pursuant to federal question jurisdiction.
§ 1331.

28 U.S.C.

None of the claims arises under the Constitution, laws,

or treaties of the United States.
Subject

matter

jurisdiction

diversity of citizenship.

See Docket No. 1 at pp. 6–11.
also

cannot

28 U.S.C. § 1332(a).

plaintiffs are citizens of Puerto Rico.

be

premised

on

The three named

(Docket No. 1 at p. 1.)

Civil No. 18-1400 (FAB)
So is Nevares.

3

See id.

Diversity jurisdiction pursuant to 28

U.S.C. § 1332 “requires complete diversity between the plaintiffs
and defendants in an action.”

Picciotto v. Cont’l Cas. Co., 512

F.3d 9, 17 (1st Cir. 2008).
Plaintiffs

attempt

to

invoke

federal

subject

matter

jurisdiction through the Class Action Fairness Act (“CAFA”), 28
U.S.C. § 1332(d).

See Docket No. 1 at p. 6.

CAFA requires that

“the matter in controversy exceeds the sum or value of $5,000,000,
exclusive of interest and costs.”
In

suits

initially

filed

28 U.S.C. § 1332(d)(2).
in

federal

court,

“the

amount

specified by the plaintiff controls, as long as that amount is
asserted in good faith.”

Amoche v. Guar. Tr. Life Ins. Co., 556

F.3d 41, 49 n.3 (1st Cir. 2009) (internal quotation marks omitted).
“Once the damages allegation is challenged, however, the party
seeking to invoke jurisdiction has the burden of alleging with
sufficient particularity facts indicating that it is not a legal
certainty that the claim involves less than the jurisdictional
amount.”
meet

this

Id. (internal quotation marks omitted).
burden

affidavits.”
Here,

by

amending

the

pleadings

or

“A party may
by

submitting

Id. (internal quotation marks omitted).

plaintiffs

assert

(Docket No. 1 at pp. 6–11.)

five

claims

against

defendants.

Three of the claims—breach of implied

contract, breach of contract on behalf of a retained subclass, and

Civil No. 18-1400 (FAB)

4

unjust enrichment—concern allegations that defendants withdrew
more

money

than

that

to

which

they

were

entitled

from

settlement amounts deposited into Nevares’ trust account.
pp. 6–7, 9–11.

the

Id. at

Plaintiffs assert that for each of these claims,

damages “should exceed the sum of $5,000,000.00, exclusive of
interest and attorney’s fees.”
Those

claims,

however,

controversy requirement.

See id.
do

not

satisfy

CAFA’s

amount-in-

The defendants note that, in another

proceeding, plaintiffs represented to this Court that the maximum
amount of money at issue in those claims is $607,356.40.
Docket

No. 16

at

p. 2;

Docket

No. 18

at

p. 2.

In

See

support,

defendants attach a deposition transcript and a motion from a
related proceeding.
Exs. 1–2.

See Docket No. 16, Exs. 1–2; Docket No. 18,

This Court can consider what both parties have shown.

Amoche, 556 F.3d at 51; González v. United States, 284 F.3d 281,
288 (1st Cir. 2002).
make

any

showing

$607,356.40.

Plaintiffs do not dispute this figure or

that

the

amount

at

issue

is

greater

than

See Docket Nos. 1 and 22.

Plaintiffs
fiduciary duty.

further

assert

Id. at pp. 7–9.

that

defendants

breached

a

Defendants did so, plaintiffs

allege, by (i) withdrawing from the settlement amounts more money
than that to which they were entitled (the same circumstances
discussed in the preceding paragraphs), and (ii) “surreptitiously

Civil No. 18-1400 (FAB)
and

improperly

5

settling

[plaintiffs’]

claims

without

their

expressed, or even implied consent, to enter into any settling
agreement[], all to further their own economic aims over those of
[plaintiffs].”
“sustained

Id.

damages

at

in

p. 8.

that

Plaintiffs

their

also

compensation

allege

from

they

the . . .

settlement was less tha[n] it should have been and would have been
if not for defendants’ improper self-dealing.”

Id.

The damages

for defendants’ breach of fiduciary duty, plaintiffs say, “should
exceed

the

sum

of

attorney’s fees.”
In

their

$5,000,000.00,

exclusive

of

interest

and

Id. at p. 9.

response

to

defendants’

motions

to

dismiss,

plaintiffs highlight the claim that defendants breached their
fiduciary duty by improperly settling the claims.
at pp. 3, 12–13.)

(Docket No. 22

They claim that the breach of fiduciary duty

justifies disgorging defendants’ attorney fees, and, because the
settlement was for $12,970,000.00, “[t]he full or partial return
of fees improperly obtained . . . would apply to 1/3 of the full
amount of the . . . settlement, or over approximately $4.3 million
alone.” Id. at pp. 3–4.
Plaintiffs

also

argue

in

their

responsive

filing

that

defendants “are liable for the difference between the amounts for
which their claims actually settled and the amounts for which they
should have been actually settled.”

Id. at p. 12.

Plaintiffs do

Civil No. 18-1400 (FAB)

6

not attach a dollar figure to that argument; instead, plaintiffs
engage a series of hypothetical calculations in arriving at the
conclusion that, if three thousand plaintiffs are each awarded
$1,666.67 for their damages, the amount in controversy requirement
would be met.

Id. at pp. 12–13.

Even assuming for current purposes that plaintiffs’ claims
associated with improper settlement satisfy pleading requirements,
see Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009); Bell Atl. Corp.
v. Twombly, 550 U.S. 544, 570 (2007), the claims fall short of the
amount-in-controversy requirement.

One-third of $12,970,000.00 is

$4,323,333.33. 1

Adding that amount and $607,356.40 adds up to

$4,930,690.73,

leaving

plaintiffs

still

short

of

the

$5,000,000,000 amount in controversy requirement in 28 U.S.C.
§ 1332(d)(2).

Even if the amount in controversy regarding the

difference between the settlement amount and the amounts for which
the claims should have been settled would reach the $5,000,000,000
benchmark, the record is silent as to how the amount would be
reached.

Plaintiffs have presented no facts on this matter.

Plaintiffs’ fifth claim asserts that “[d]efendants have been
obstinate in the prosecution in the prosecution of plaintiffs’

1 Plaintiffs’ assertions regarding the amount in controversy associated with
improper settlement were not made by amending the pleadings or through
affidavits. That showing is necessary. See Amoche, 556 F.3d at 49 n.3. This
makes no difference here, however, because even if the assertions were properly
presented the amount in controversy would still be insufficient.

Civil No. 18-1400 (FAB)

7

claim, and, as a result thereof, owe[] damages, attorney’s fees
and prejudgment interest.”

Id. at p. 11.

No dollar amount is

specified for these claims either.
III. Conclusion
Plaintiffs have not met their burden to show “with sufficient
particularity indicating that it is not a legal certainty that the
claim involves less than the jurisdictional amount.”
F.3d at 49 n.3 (internal quotation marks omitted).

Amoche, 556
Accordingly,

the motions to dismiss filed at Docket Nos. 16 and 18 are GRANTED,
and the supplemental motion to dismiss filed at Docket No. 27, is
VACATED AS MOOT.

This case is DISMISSED without prejudice.

Judgment shall be entered accordingly.
IT IS SO ORDERED.
San Juan, Puerto Rico, January 10, 2020.

s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE