Blades v. Morgalo
| Decision Date | 21 October 2010 |
| Docket Number | Civil No. 07–1380 (JA). |
| Citation | 743 F.Supp.2d 85 |
| Parties | Rubén BLADES, Cross–Plaintiffv.Roberto MORGALO, in his personal capacity, and as owner and member of Martínez, Morgalo & Associates, LLC; Martínez, Morgalo & Associates, LLC, Cross–Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
OPINION TEXT STARTS HERE
Pamela D. Gonzalez–Robinson, Eduardo J. Corretjer–Reyes, Roberto Corretjer Piquer Law Office, San Juan, PR, for Cross–Plaintiff.Israel O. Alicea–Luciano, Juan M. Frontera–Suau, Frontera Suau Law Office, San Juan, PR, for Cross–Defendants.
This matter is before the court on motion to join pursuant to Federal Rules of Civil Procedure 17(a)(3) and 19, filed by cross-plaintiff, Rubén Blades, on September 8, 2010. (Docket No. 246.) The motion was opposed by cross-defendants Roberto Morgalo, in his personal capacity, and as owner and member of Martínez, Morgalo & Associates, LLC; Martínez, Morgalo & Associates, LLC, on September 9, 2010. (Docket No. 248.) Cross-defendants also filed a motion to alter or amend the order entered against their motion for summary judgment on September 9, 2010. (Docket No. 247.) For the reasons set forth below, cross-plaintiff's motion is hereby DENIED. The cross-defendants' motion is also DENIED.
On September 2, 2010, this court issued an Opinion and Order denying cross-defendants' motion for summary judgment. Colón v. Blades, Civil No. 07–1380(JA), 2010 WL 3490172 (D.P.R. Sept. 2, 2010). The court found that cross-plaintiff lacked standing to sue cross-defendants. Id. at *6. As a result, the court determined that Rubén Blades Productions, Inc. (“RBP”), not cross-plaintiff, was the real party in interest in this case. Id. Despite the court's findings the amended cross-claim was not dismissed and cross-plaintiff was allowed to amend the pleadings so that RBP may substitute him. ( Id. at *19.) Notwithstanding the court's order, cross-plaintiff moves to join RBP as a co-plaintiff. (Docket No. 246.) According to plaintiff, RBP has to be joined in order to avoid a potential miscarriage of justice, and to obtain complete and final relief. ( Id. at *2.) Cross-defendants, however, oppose cross-plaintiff's request. (Docket No. 247.) They argue that because it was determined that cross-plaintiff did not possess standing to sue, the court does not have the authority to allow cross-plaintiff to amend the pleadings. ( Id. at 5, ¶ 10.) Cross-defendants further argue that even if it was assumed that the court had said authority, allowing an amendment to the pleadings would divest it of diversity jurisdiction because Mr. Morgalo and RBP are citizens of the State of Florida. ( Id. at 6 & 7, ¶¶ 12–13.) Also, cross-defendants find that the court erred by stating in the Opinion and Order that allowing an amendment to the pleadings would not require re-opening discovery, create additional costs and make substantial changes to the course of the case. ( Id. at 9, ¶ 17.) According to cross-defendants, allowing RBP to enter the case would not only require them to conduct depositions and request additional documents but also it would multiply the litigation costs. ( Id. at 9, ¶ 18 & at 10, ¶ 20.) Cross-defendants also claim that the court was mistaken in holding that an amendment to the pleadings would not cause any prejudice and that it would prevent subsequent similar actions against them. ( Id. at 10, ¶ 21.) They argue that by allowing cross-plaintiff, who does not have standing to sue, to amend the pleadings would artificially keep alive a cause of action that is time barred and divested of diversity jurisdiction. ( Id.) Moreover, cross-defendants argue that the court erred in stating that not including RBP originally as the real party in interest was an honest mistake. ( Id. at 11, ¶ 23.) They claim that because cross-plaintiff did not even insinuate that such a mistake was made, the court was precluded from raising and/or accepting the affirmative defense. ( Id.) Finally, cross-defendants request that if cross-plaintiff is allowed to amend the pleading, they should also be allowed to bring into the case Ariel Rivas, César Sainz, Rompeolas, Dissar Productions and Arturo Martínez as third-party defendants. ( Id. at 12–13, ¶ 27.)
“In order to maintain an action in federal court based upon diversity jurisdiction, the plaintiff must be diverse from the defendant in the case.” Colón v. Blades, 570 F.Supp.2d 204, 213 (D.P.R.2008) (quoting Gorfinkle v. U.S. Airways, Inc., 431 F.3d 19, 22 (1st Cir.2005)). In other words, diversity jurisdiction only exists when plaintiff and defendant are citizens of different states. Lincoln Prop. Co. v. Roche, 546 U.S. 81, 89, 126 S.Ct. 606, 163 L.Ed.2d 415 (2005). “The complete diversity rule ‘is most inflexibly applied at the time of filing, for it has long been settled that “the jurisdiction of the court depends upon the state of things at the time of the action brought.” ’ ” Inter Am. Builders Agencies Co. v. Sta–Rite Indus., Inc., 602 F.Supp.2d 306, 308 (D.P.R.2009) (quoting In re Olympic Mills Corp., 477 F.3d 1, 8 (1st Cir.2007)) (quoting Grupo Dataflux v. Atlas Global Grp., L.P., 541 U.S. 567, 570, 124 S.Ct. 1920, 158 L.Ed.2d 866 (2004)). Nevertheless, “[t]he post-filing context is more elastic.” Id. “As a general matter, ‘if jurisdiction exists at the time an action is commenced, such jurisdiction may not be divested by subsequent events.’ ” Inter Am. Builders Agencies Co. v. Sta–Rite Indus., Inc., 602 F.Supp.2d at 308 (quoting Freeport–McMoRan, Inc. v. K N Energy, Inc., 498 U.S. 426, 428, 111 S.Ct. 858, 112 L.Ed.2d 951 (1991)).
On May 4, 2007, plaintiff, William Anthony Colón, filed a complaint against Mr. Blades. (Docket No. 1.) The complaint was later amended on April 29, 2009 to include Mr. Morgalo and MM & A as co-defendants. (Docket No. 45.) Mr. Colón alleged that he and Mr. Blades had agreed to give a concert in San Juan, Puerto Rico for a $350,000 fee to be evenly split between them. ( Id. at 2, ¶ 9.) To manage the business aspects of the concert, Mr. Blades contracted the services of MM & A and its partners Arturo Martínez and Mr. Morgalo. ( Id. at 2, ¶ 10.) According to plaintiff, the day before the concert Mr. Blades told him that Mr. Martínez had disappeared with their money. ( Id. at 2–3, ¶ 13.) After hearing this, Mr. Colón told Mr. Blades that he was not going to perform at the concert. ( Id. at 3, ¶ 14.) However, Mr. Colón claimed that Mr. Blades allegedly told him that he was going to pay him so that the concert could go on as scheduled. ( Id. at 3, ¶ 15.) Mr. Colón accepted Mr. Blades' offer and performed at the concert. ( Id.) As a result of the foregoing, Mr. Colón demanded from Mr. Blades, Mr. Morgalo and MM & A the $115,000 that was owed to him plus interest, costs and attorney's fees. ( Id. at 3, ¶ 18.) On June 5, 2008, Mr. Blades filed a cross-claim against Mr. Morgalo and MM & A. (Docket No. 49.) The cross-claim was amended on July 29, 2008. (Docket No. 56.) The amended cross-claim is an action for damages that exceed $75,000, exclusive of interests, costs and attorney's fees. ( Id. at 2, ¶ 1.) In the amended cross-claim, Mr. Blades essentially alleges that Mr. Morgalo and MM & A engaged in fraud by failing to pay amounts owed in connection with the concert which is the subject matter of this case, conspiracy to defraud, breach of contract, and breach of fiduciary duties, and that they are liable vicariously and jointly and severally to him for damages, and in the event of adverse judgment, by way of indemnity and/or contribution in relation to the claims made against him in the original action. ( Id.) On April 2, 2009, Mr. Blades moved for summary judgment for lack of subject matter jurisdiction. (Docket No. 95.) According to Mr. Blades, Mr. Colón's complaint had to be dismissed because the amount in controversy did not meet, nor exceed the jurisdictional amount of $75,000. ( Id.) The court concluded that Mr. Colón had averred sufficient facts that indicated that his claim exceeded the jurisdictional amount required by 28 U.S.C. § 1332. Colón v. Blades, Civil No. 07–1380(JA), 2009 WL 2612523, at *6 (D.P.R. Aug. 21, 2009). As a result, the motion for summary judgment was denied. Id. On August 31, 2009, Mr. Blades moved for reconsideration. (Docket No. 108.) The motion was denied on October 14, 2009. Colón v. Blades, Civil No. 07–1380(JA), 2009 WL 3347627 (D.P.R. Oct. 14, 2009). On May 6, 2010, Mr. Colón filed a motion requesting dismissal with prejudice of his claims against Mr. Blades, Mr. Morgalo and MM & A pursuant to Federal Rule of Civil Procedure 41(a)(2). (Docket No. 188.) Mr. Colón's motion for voluntary dismissal was granted the following date. (Docket No. 193.) On June 17, 2010, default judgment was entered in favor of Mr. Blades and against MM & A in the amount of $133,168.16 plus interest. (Docket Nos. 228 & 229.)
Based on the foregoing, it is evident that at the time that this case commenced complete diversity existed. Thus, the amended cross-claim filed by Mr. Blades against Mr. Morgalo and MM & A falls “within the ancillary jurisdiction of the court and need not present independent grounds of federal jurisdiction.” 6 Charles Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure § 1433 (3d ed. 2010); see Atl. Corp. v. United States, 311 F.2d 907, 910 (1st Cir.1962) (). Furthermore, the court finds that Mr. Blades, at the time the amended cross-claim was filed, had the right to proceed with his claims against Mr. Morgalo and MM & A because they arise “out of the [same] transaction or occurrence that is the subject matter of the original action ... [and/or] relates to [the] property that is the subject matter of the original action.” Balerna v. Gilberti, 266 F.R.D....
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