Casco, Inc. v. John Deere Constr. & Forestry Co.

Decision Date30 March 2017
Docket NumberCIVIL NO. 13-1325 (PAD)
CourtU.S. District Court — District of Puerto Rico

Delgado-Hernández, District Judge.

Casco Inc. sued John Deere Construction & Forestry Company under the Puerto Rico Dealers Act, P.R. Laws Ann. tit. 10 §§ 278, et seq. ("Law 75"), and the Puerto Rico Civil Code, P.R. Laws. Ann. tit. 31. John Deere answered the complaint denying liability and counterclaimed against Casco for collection of unpaid invoices due (Docket No. 28). During trial, the court granted John Deere's request under Fed. R. Civ. P. 50(a) to dismiss Casco's Civil Code claims and to enter judgment on its counterclaim (Docket No. 235). The jury awarded Casco $1,763,934.00 under Law 75 (Docket No. 243). The court entered judgment for Casco accordingly, together with $216,912.92 for John Deere's counterclaim. Before the court are:

• Casco's "Verified Post-Judgment Application of Fees, Costs and Interest" (Docket Non. 251) and "Memorandum of Law In Support of Motion and Verified Post-Judgment Application of Attorney's Fees, Expert Witness Fees, Taxable Costs, and Prejudgment Interest" (Docket No. 253).
John Deere's Bill of Costs (Docket No. 260), which Casco opposed (Docket No. 267). John Deere replied (Docket No. 280).
John Deere's "Motion to Dismiss, Without Prejudice, Plaintiff's Application for Fees, Costs and Interest" (Docket No. 263), which Casco opposed (Docket No. 266). John Deere replied (Docket No. 274), following up with a "Motion Reiterating 'John Deere's Motion to Dismiss Without Prejudice, Plaintiff's Application for Fees, Costs and Interests' and For Further Extension of Time" to file response/reply to Casco's motion and verified post-judgment application of attorney's fees (Docket No. 287).
"Plaintiff Casco Inc.'s Motion and Memorandum of Law to Alter or Amend Order and Judgment, for Partial New Trial, and for Entry of Judgment on the Counterclaim as a Matter of Law" (Docket No. 264), which John Deere opposed (Docket No. 286). Casco replied (Docket No. 293) and John Deere sur-replied (Docket No. 299).
• "John Deere Construction & Forestry Company's Consolidated Motion and Memorandum of Law Pursuant to Rules 50 and 59 of the Federal Rules of Civil Procedure (Docket No. 269), which Casco opposed (Docket No. 277). John Deere replied (Docket No. 294).

For the reasons explained below, the requests at Docket Nos. 251 and 253 are DENIED WITHOUT PREJUDICE; the motion to dismiss without prejudice at Docket No. 263 is GRANTED; the motion at Docket No. 287 is DENIED AS MOOT; the motion at Docket No. 264 is DENIED; the motion at Docket No. 269 is GRANTED IN PART AND DENIED IN PART; and the Bill of Costs at Docket No. 260 is DENIED.


Casco and John Deere were parties to a distribution agreement, pursuant to which Casco distributed John Deere products in Puerto Rico and the U.S. Virgin Islands. The relationship deteriorated, and in 2009, Casco initiated an action against John Deere asserting Law 75 violations. That case was settled. In 2013, however, John Deere terminated the distributor contract. This action ensued.

Motions for summary judgment were filed, opposed, replied to and denied (Docket Nos. 64, 66, 74, 77, 85, 103, and 117). Contested motions in limine (Docket Nos. 156, 162, 163, 164, 177, 180, 185, 186, 187, and 188), were granted in part and denied in part (Docket No. 193). Additional disputes followed with respect to pretrial stipulations, disclosures, the counterclaim, and on whether witnesses should testify in the English language rather than through an interpreter (Docket Nos. 198, 200, 201, 202, 203, 208, 206, 213, 218, 228, 235 and 236). The jury trial lasted nine days (Docket Nos. 222 223, 226, 227, 235, 237, 238 239, and 241). Judgment was entered on March 11, 2016 (Docket No. 249).

A. Standard of Review.

The parties have filed motions to alter or amend judgment, for judgment as a matter of law, for remittitur and new trial (Docket Nos. 264, 269, 277, 286, 293, 294, 299). Rule 50(a) of the Federal Rules of Civil Procedure allows a party during a jury trial to move for judgment as a matter of law if the opposing party has been fully heard on an issue and there is no legally sufficient evidentiary basis for a reasonable jury to find for that party on that issue. Fed. R. Civ. P. 50(a). Rule 50(b) provides that if the court does not grant the motion, then no later than 28 days after the entry of judgment, the movant may file a renewed motion for judgment as a matter of law and may include an alternative or joint request for a new trial under Rule 59 of the Federal Rules of Civil Procedure. Fed. R. Civ. P. 50(b).

A new trial is appropriate if the verdict is against the weight of the evidence, such that upholding it will result in a clear miscarriage of justice. See, Jennings v. Jones, 587 F.3d 430, 436 (1st Cir. 2009)(stating test). Courts are empowered to grant a remittitur when the size of the verdict is against the weight of the evidence. See, Van Blargan v. Williams Hospitality Corp., 759 F.Supp. 940, 944 (D.P.R. 1991)(so recognizing). In such cases, the court grants the plaintiff an election to remit a stated portion of the amount awarded as damages or submit to a new trial. Id. A party may ask a court to amend its judgment under Rule 59(e) of the Federal Rules of Civil Procedure based on newly discovered material evidence or an intervening change in the law, or because the court committed a manifest error of law or fact. See, Bogosian v. Woloohojian Realty Corp., 323 F.3d 55, 72 (1st Cir. 2003)(setting forth grounds justifying relief under Rule 59(e)); Aybar v. Crispin-Reyes, 118 F.3d 10, 16 (1st Cir. 1997)(same).

B. Casco's Claims.

At the close of Casco's case, the court granted John Deere's Rule 50(a) motion for judgment as a matter of law, dismissing Counts 3 and 4 of the Verified Complaint and granting John Deere's counterclaim. Casco seeks post-trial relief under Fed. R. Civ. P. 59, arguing the court committed a manifest legal error justifying the relief sought.

1. Count 3.

In Count 3, Casco essentially claims that John Deere is liable for not giving Casco pre-termination notice (Docket No. 264 at pp. 3, 21-22). It argues the court erred in dismissing the claim because the principle of good faith applies in all commercial dealings, and that unilateral termination of a distribution contract must be done with prior notice to the dealer considering the nature and characteristics of the franchise. Id.

First, the Civil Code does not carry a pre-termination requirement for commercial relationships. And except in market withdrawal scenarios, Law 75 does not require pre-termination notice unless it is part of the distribution contract. See, Kemco Food Distribution, Inc. v. R.L. Schreibner, Inc., 2016 WL 814833, at *3 (D.P.R. February 29, 2016)(so acknowledging in non-withdrawal setting).1 The Dealer Agreement here did not require John Deere to provide Casco with pre-termination notice. Rather, termination would be effective upon John Deere's providing notice of termination.

Second, during argument on John Deere's Rule 50(a) motion at trial, Casco's counsel agreed there was no need to submit Count 3 to the jury:

THE COURT: I mean, how would the remedy differ under Count Three from the remedy under Count Two?2
MR. CASELLAS: It doesn't differ at all.
THE COURT: So it's the same thing.
MR. CASELLAS: Good faith is part of every contractual obligation.
THE COURT: So you do not get extra damages under Count Three.
MR. CASELLAS: Absolutely. There is no - THE COURT: You do not.
MR. CASELLAS: There is no independent measure of damages for Count Three. I am willing to stipulate to that.
MR. CASELLAS: The Court doesn't have to dismiss that claim for me to stipulate that we are not asking the jury for an independent damages determination on Count Three.
THE COURT: And then, what would be the basis of submitting Count Three to the jury, if we are not asking the jury to award damages in Count Three?
MR. CASELLAS: Well, Your Honor, except to note that the duty of good faith is inherent in every contractual obligation. There is no independent basis for recovery. And we're not seeking recovery for an independent breach of the duty of good faith.
In fact, Your Honor, if you could look at the Special Verdict Form, I did not include, for this particular count, an independent basis for recovery.
THE COURT: Right. And we can stipulate, at the same time, that the Puerto Rico Supreme Court has said that good faith is expected in all commercial relationships. It's a constant.3
But we've reached the point where I believe we, we have to be at in order to understand the difference between Count Three and Count Four. With regard to Count Three, Casco is not asking for damages.
MR. CASELLAS: That's correct.
THE COURT: So from my perspective, there would be no need to submit Count Three to the jury.
MR. CASELLAS: I agree.

Under these circumstances, Casco's request to vacate dismissal of Count 3 must be denied.

2. Count 4.

In Count 4, Casco states that John Deere acted with dolus to induce Casco to settle in 2009 a constructive termination claim under Law 75 (Docket No. 264 at pp. 4, 9-21). On this theory, had Casco not been deceived into settling the 2009 Lawsuit, it would have (a) pursued a claim for constructive termination; and (b) prevailed on such a claim, thus recovering benefits under Law 75 for the five-year period preceding 2009, which would have purportedly been higher than the benefits for the five-year preceding 2013, when the Dealer Agreement was actually terminated.4 To this end, the Verified Complaint states that:

55. Deere entered into the Settlement Agreement under false and misleading pretenses never intending in good faith to comply with its terms and looking for any excuse to terminate the Dealer Agreement[]. By dismissing the federal action, Casco relied to its

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