Carreras v. Pmg Collins Llc

Decision Date29 September 2010
Docket NumberCivil No.: 08–1827 (DRD).
Citation741 F.Supp.2d 375
PartiesLuis A. CARRERAS, et al., Plaintiffs,v.PMG COLLINS, LLC, et al., Defendants.
CourtU.S. District Court — District of Puerto Rico

OPINION TEXT STARTS HERE

Richard Schell–Asad, San Juan, PR, for Plaintiffs.Daniel F. Blonsky, Coffey Burlington Office, Miami, FL, Edward W. Hill–Tollinche, San Juan, PR, for Defendants.

OPINION AND ORDER

DANIEL R. DOMINGUEZ, District Judge.

I. PROCEDURAL BACKGROUND

The instant case, which is brought in diversity, alleges four causes of action 1 arising under the laws of Puerto Rico and relating to contracts to purchase condominium units in “MEI, a Condominium” (“MEI”) in Miami, Florida from Defendant PMG Collins, LLC (PMG) and Defendant International Sales Group, LLC (“ISG”), who acted as PMG's sales representative. (Docket No. 1). Currently before the Court are two motions to dismiss under Federal Rule of Civil Procedure 12(b)(2) for lack of personal jurisdiction or, in the alternative, for change of venue, filed by Defendant ISG (Docket No. 38) and Defendant PMG (Docket No. 37). These motions were both filed on October 14, 2009. Therein, both Defendants asserted that there are insufficient minimum contacts between each Defendant and Puerto Rico to warrant personal jurisdiction in the instant case.

Plaintiffs opposed Defendants' motions to dismiss or for change of venue on November 9, 2009 (Docket No. 45). Plaintiffs asserted that an application of the Gestalt factors weighs in favor of finding that the Court indeed may exercise personal jurisdiction over Defendants as Defendants “engaged in Puerto Rico in the brokerage, marketing and sale of real estate property outside of Puerto Rico” and, in the process, established sufficient minimum contacts to warrant a finding that the Court exercises personal jurisdiction over them.

On December 4, 2009, Defendants ISG and PMG both filed their replies to Plaintiffs' oppositions to the motions to dismiss (Docket Nos. 50 & 52). In ISG's reply, it asserted that Plaintiff misrepresented the facts relevant to ISG's contacts in Puerto Rico by focusing on events that occurred after the relevant dates in the instant case. Further, ISG noted that, contrary to Plaintiff's assertions, ISG and ISG, S en C are distinct entities which may not be substituted for each other in order to assess personal jurisdiction. Further, ISG argued that it may not be considered PMG's agent in any matters other than contractual matters.

In turn, PMG asserted that, when Plaintiffs opposed its motion to dismiss, they misrepresented facts pertaining to publications in which PMG placed advertisements. Further, PMG argued that Plaintiffs' position regarding the significance of these publications is unsupported by the law in the First Circuit. PMG also argued that ISG may not be considered its agent for any noncontractual matters.

On December 29, 2009, Plaintiffs filed their sur-reply (Docket No. 56) to Defendant ISG's motion. Therein, Plaintiffs disputed several of the factual predicates for ISG's replies. Among Plaintiffs' assertions are allegations that Lillybeth Rosario (“Rosario”), ISG's alleged co-broker, is a biased witness as she has a financial interest in the litigation and that ISG, rather than ISG, S. en C., marketed the Trump International Golf Course Club in Puerto Rico (“Trump Puerto Rico property”), which constitute bald allegations not properly supported by any evidence on the record. Plaintiffs averred that their allegations show that the Court may exercise in personam jurisdiction over ISG. Plaintiffs supplemented this motion with further evidentiary support (Docket No. 57) on March 11, 2010.

On April 12, 2010, the Court referred (Docket No. 59) the pending motions to dismiss, along with all related motions, to Magistrate Judge Lopez for his recommendation. On September 13, 2010, the Magistrate Judge entered his Report and Recommendation (Docket No. 61) that the Court grant the motions to dismiss. Magistrate Judge Lopez found that Plaintiff showed that Defendants offered for sale Florida properties in Puerto Rico, thus meeting the first prong of the specific jurisdiction test. The Magistrate Judge then found that Plaintiffs' argument for specific jurisdiction over PMG and ISG failed on the second prong. Specifically, Magistrate Judge Lopez found that the act of working with Rosario as a co-broker, joined with calls to Plaintiffs in Puerto Rico in relation to the sale of the MEI apartments, as well as other related phone calls, and the act of sending the agreements to Puerto Rico for Plaintiffs' signature was insufficient to constitute purposeful availment.

The Magistrate Judge then assessed whether it could exercise general jurisdiction over either PMG or ISG. As to PMG, Magistrate Judge Lopez determined that the sale of three MEI properties in Florida to three individuals in Puerto Rico as well as an advertisement and a feature in magazines were insufficient to merit the exercise of general jurisdiction. The Magistrate Judge then carefully scrutinized ISG's ties to Puerto Rico, particularly noting ISG's relationship to Rosario, the two visits made by an ISG sales agent to Puerto Rico in 2007 (including one visit which ISG's president and director of sales joined), an unspecified number of emails and phone calls to six residents of Puerto Rico and seven ISG sales to five Puerto Rican residents. Magistrate Judge Lopez found that none of these factors imparted general jurisdiction and concluded that, [e]ven assuming that Rosario is a broker [rather than a client] with an ongoing relationship with ISG, the business she generates and the evidence of other ISG marketing and sales efforts in Puerto Rico do not suffice to show ‘continuous and systemic pursuit of general business activities' in Puerto Rico.” ( Id. at 15).

Finally, the Magistrate Judge specifically debunked Plaintiffs' reliance on the sale of the Trump Puerto Rico property by ISG S en C in support of its contention that the sale of this property provides general jurisdiction over ISG. The Court noted that these two entities constitute separate companies and that Plaintiffs have provided the Court with no reason to pierce the corporate veil in the instant case.

On September 16, 2010, Plaintiff filed its objections (Docket No. 62) to the Magistrate's Report and Recommendation. First, Plaintiffs objected to the Magistrate Judge's application of facts to the second prong of the specific jurisdiction inquiry. In this first objection, Plaintiffs primarily highlighted ISG's practice of contacting five residents of Puerto Rico in order to offer them properties which it marketed throughout the world. Plaintiffs also objected to the Magistrate Judge's determination that the publication of an ad in American Way did not support a finding that the Court may exercise specific jurisdiction over ISG, stating that this magazine is “present and almost forced reading to (sic) anyone that boards an American Eagle or American Airlines flight to and from Puerto Rico.” ( Id. at 7). Plaintiffs also highlighted that ISG requested that potential clients in Puerto Rico send them a copy of their deposit checks from Puerto Rico, and that it mailed the purchase agreement to the clients in Puerto Rico for their signature. Finally, Plaintiffs alleged that ISG's agent made presentations regarding projects, including the MEI apartments, to residents of Puerto Rico during a trip in October of 2007. Thus, Plaintiffs argued that the Magistrate Judge erred when he determined that the Court may not exercise specific jurisdiction over ISG.

Plaintiffs also objected to Magistrate Judge Lopez' determination that the Court could not exercise general jurisdiction over ISG. Plaintiffs relied primarily on the actions of ISG, S. en C. to justify the imposition of general jurisdiction on ISG. However, Plaintiffs proffered only bald legal arguments for piercing ISG, S. en C.'s corporate veil to impose personal jurisdiction on ISG, which are supported solely by conjecture, an advertisement on ISG's website and a shared Florida address.2

On September 24, 2010, Defendant PMG filed an opposition to Plaintiffs' objection (Docket No. 63). This opposition was filed seven days after entry of Plaintiffs' objections, which were due five calendar days after entry of the Report and Recommendation. Further, PMG failed to request the leave of the Court to file this document, which is not specifically authorized by the Local Rules or the Federal Rules of Civil Procedure. Accordingly, the Court shall not consider this filing herein.

II. REFERRAL TO THE MAGISTRATE JUDGE

The Court may refer dispositive motions to a United States Magistrate Judge for a Report and Recommendation pursuant to 28 U.S.C. § 636(b)(1)(B). See also Fed.R.Civ.P. 72(b); see also Local Rule 72(a); see also Mathews v. Weber, 423 U.S. 261, 96 S.Ct. 549, 46 L.Ed.2d 483 (1976). An adversely affected party may contest the Magistrate's Report and Recommendation by filing its objections. Fed. R.Civ.P. 72(b). Moreover, 28 U.S.C. § 636(b)(1), in pertinent part, provides that

any party may serve and file written objections to such proposed findings and recommendations as provided by rules of court. A judge of the court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made. A judge of the court may accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate.

“Absent objection, ... [a] district court ha[s] a right to assume that [the affected party] agree[s] to the magistrate's recommendation.” Templeman v. Chris Craft Corp., 770 F.2d 245, 247 (1st Cir.1985), cert. denied, 474 U.S. 1021, 106 S.Ct. 571, 88 L.Ed.2d 556 (1985). Moreover, “failure to raise objections to the Report and Recommendation waives that party's right to review in the district court and those claims not preserved by such objections are precluded upon...

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2 cases
  • Clearwater Rei, LLC v. Focus Consulting Advisors, LLC
    • United States
    • U.S. District Court — District of Arizona
    • July 22, 2011
    ...prepare the case, the individual attorneys had not purposefully availed themselves of California law); Carreras v. PMG Collins, LLC, 741 F. Supp. 2d 375, 382-83, 385-86 (D.P.R. 2010) (where defendants in Florida contacted plaintiffs in Puerto Rico regarding property, plaintiffs signed purch......
  • Clearwater REI, LLC v. Focus Consulting Advisors, LLC
    • United States
    • U.S. District Court — District of Idaho
    • July 22, 2011
    ...prepare the case, the individual attorneys had not purposefully availed themselves of California law); Carreras v. PMG Collins, LLC, 741 F. Supp. 2d 375, 382-83, 385-86 (D.P.R. 2010) (where defendants in Florida contacted plaintiffs in Puerto Rico regarding property, plaintiffs signed purch......

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