Gonzalez v. Hurley Int'l LLC.

• Decision Date: 31 January 2013
• Docket Number: Civil No. 10–1919 (SEC).
• Citation: 920 F.Supp.2d 243
• Parties: Lara GONZALEZ, Plaintiff, v. HURLEY INTERNATIONAL LLC., Defendant.
• Court: U.S. District Court — District of Puerto Rico

920 F.Supp.2d 243

Lara GONZALEZ, Plaintiff,

v.HURLEY INTERNATIONAL LLC., Defendant.

Civil No. 10–1919 (SEC).

United States District Court, D. Puerto Rico.

Jan. 31, 2013.

Eugenio C. Romero, Eugenio C. Romero Law Office, Roberto Boneta, Munoz, Boneta, Benitez, Peral & Brugueras, San Juan, PR, for Plaintiff.

Anabel Rodriguez–Alonso, Schuster & Aguilo LLP, San Juan, PR, for Defendant.

OPINION AND ORDER

SALVADOR E. CASELLAS, Senior District Judge.

Before the Court are the defendant's motion for summary judgment (Docket # 91), the plaintiff's opposition thereto (Docket # 102), and the defendant's reply (Docket # 109). After reviewing the filings and the applicable law, the defendant's motion is GRANTED in part and DENIED in part.

Factual and Procedural Background

In this diversity suit, Lara González sues Hurley International LLC. (“Hurley” or the “Company”), alleging that Hurley terminated her in contravention of Puerto Rico's Sales Representative Act, commonly known as Law 21, P.R. Laws Ann. tit. 10, § 279. The material, uncontested facts, follow.

González currently is (and has been) an independent sales representative who works with surfing wear companies, while Hurley is a company that manufactures clothing, wetsuits, shoes, accessories and related products throughout the United States and the Caribbean via a network of distributors and independent sales representatives. Docket # 96–1 (“SUF”), ¶ 1. Hurley sells its products in the territory of Puerto Rico and the Caribbean (the “Territory”) through several channels of distribution, including in-house national accounts, licensee agreements with third parties, and independent sales representatives. Docket # 91–4, p. 1, ¶ 3. Hurley's in-house national accounts are those maintained with certain retail chains and are sold directly without the intervention of a sales representative. Such accounts include general department stores and specialty stores, such as Macy's, Marshall's, and Costco. Id. ¶ 4.¹

In 2004, González began her business relationship with Hurley, being appointed as Hurley's independent sales representative for its women's line. Docket # 103 (“ASUF”), ¶ 7. Hurley had no line for women's wear at that time, so it had been looking for sales representatives in its territories to help in the development of a brand new line for women's wear. Docket # 103–2, p. 27:1–19. González was the only representative that managed the women's line in the Territory. Id., p. 23:1–6. Although in the very beginning, the parties' relationship appeared to have been embodied in a verbal agreement, id., p. 22:18–25, at some point before 2007, González signed several agreements with Hurley. Id., p. 28:22–25.²

After González started selling the women's line, Hurley decided to transfer the men's line—which had been hitherto managed by another sales representative—to her. Id., p. 37:5–10. According to González's deposition, because of her “good performance,” id., p. 37:12–14, Hurley decided that she was the “best person to represent both lines.” Id. In fact, it was Bob Hurley, the Company's founder, who “congratulated” her for becoming the representative for both lines. Id., p. 38:7–8. Bob Hurley, González testified under oath, also told her that, as long as she did a “great job,” id., p. 38:17–25, she would be “the only person selling those lines.” Id. Bob Hurley also mentioned to her that she would be “exclusive” in selling those lines, and that nobody else could sell them in Puerto Rico. Id., p. 39:1–3.

As soon as she was awarded the men's line, González (without Hurley's financial assistance) “built” a showroom to “impress” her clients. Id., p. 40:1–17. She also hired a staff to aid her in the sales of Hurley products. Id., p. 41:4–25. During the entire period of the parties' relationship, the Company neither appointed another sales representative nor sold directly to her accounts. ASUF ¶ 26. González was also required by Hurley to exclusively represent its products in the Territory, to the exclusion of other competing brands. Id. ¶ 40.

The financial arrangements between the parties consisted in González receiving a six percent commission on her net sales. Id., p. 43:5–22. In 2007, Hurley increased her commission to eight percent. Id., p. 48:6–16. Such an increase was embodied in a signed document, the 2007 Sales Representative Agreement between Hurley and González (the “Agreement”). Docket # 91–3, Exh. 1, pp. 1–14. The Agreement, which regulated the parties' relationship from August 1, 2007 until July 31, 2008, provided in pertinent part:

[The] Company hereby appoints Representative [González] as Company's nonexclusive independent sales representative to promote and disseminate information and solicit orders from approved accounts in ... [the Territory] for the products identified in Exhibit “B”.... Representative hereby accepts such non-exclusive appointment .... Company shall have the right, in its sole discretion on thirty (30) days written notice, to appoint other sales representatives or to make accounts within the Territory house accounts for which Representative shall not be identified not be entitled to a Commission ... Id., p. 1 (emphasis added).

* * *

Representative is an independent contractor.... Company is only interested in the results obtained by the Representative who shall have the sole control of the manner and means of performing under this Agreement. Nothing contained in this Agreement shall be construed to give the Company the right to direct or control the day-to-day activities of Representative. Company shall not have the right to require Representative to conform to any fixed or minimum number of hours, follow prescribed itineraries, or do anything that would jeopardize the independent contractor status of Representative. Id., p. 6.

The Agreement was in turn extended until July 31, 2009, when it expired by its own terms. Docket # 91–5, Exh. 2, pp. 16–19. There were no further written agreements. Docket # 103–3, p. 109:5–22. The parties relationship, however, “continued the same way,” until it concluded on December 1, 2009. Docket # 103–3, p. 115:13–18. That day, González testified in her deposition, John Heelan, Hurley's Eastern Regional Sales Manager (and González's sales manager), called her to say that, “due to the lack of communication,” the Company was “letting her go.” Id., p. 116:11–25. González later testified, however, that she “was let go because of performance.” Id., p. 174:4–5.

Unhappy with her termination, González filed this suit on September 23, 2010, alleging that Hurley had violated Law 21 when it terminated her without “just cause.” Docket # 1. Under the Agreement's mandatory arbitration clause, Hurley moved to compel arbitration (Docket # 6), which González opposed (Docket # 10). Because the Agreement had expired in July 2009, the Court reasoned, Hurley had failed “to meet one of the essential elements that compel arbitration, to wit, the existence of a valid agreement to arbitrate.” González v. Hurley Int'l, Inc., 763 F.Supp.2d 288, 294 (D.P.R.2011). The Court thus denied the Company's motion to compel arbitration on February 9, 2011.

Hurley then moved to dismiss, assailing the sufficiency of González's factual allegations. In opposing Hurley's motion, González requested leave to amend the complaint in order to cure any factual deficiencies, which the Court granted. González v. Hurley Intern., Inc., No. 10–1919, 2011 WL 1404916, at *2 (D.P.R. Apr. 12, 2011). Then, González filed an amended complaint on April 12, 2011, which stated in pertinent part that “[a]fter July 31, 2009, Lara became Hurley's exclusive sales representative for the Products in Puerto Rico.” Docket # 52, ¶ 5. According to the amended complaint, prior to that date, she had been “Hurley's sole sales representative....” Id. Hurley renewed its motion to dismiss, which the court denied. González v. Hurley Intern., Inc., No. 10–1919, 2011 WL 4856454, at *4 (D.P.R. Oct. 13, 2011). Nevertheless, the Court “reiterate[d] its previous finding that, before the expiration of the Agreement, [González] was a non-exclusive sales representative.” Id. at *3 n. 2.

After a heated discovery and other procedural nuances, González sought leave to file a second amended complaint. But the Court denied the motion, holding, inter alia, that “the plaintiff ha[d] been far from diligent in moving to amend, .... failing to show good cause ....” González v. Hurley Intern., Inc., No. 10–1919, 2012 WL 1577572, at *3 (D.P.R. May. 4, 2012).

Finally, Hurley filed the instant motion for summary judgment, alleging that González has failed to satisfy the exclusivity requirement of Law 21. In the alternative, Hurley posits that it had good cause for terminating González. González timely opposed, maintaining that genuine issues of material fact preclude such determinations.

Standard of Review

The Court may grant a motion for summary judgment when “the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(c); see also Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); Avery v. Hughes, 661 F.3d 690, 693 (1st Cir.2011). In reaching such a determination, the Court may not weigh the evidence. Casas Office Machs., Inc. v. Mita Copystar Am., Inc., 42 F.3d 668 (1st Cir.1994). At this stage, the court construes the record in the “light most flattering” to the nonmovant, resolving all reasonable inferences in that party's favor. Soto–Padro v. Public Bldgs. Authority, 675 F.3d 1 (1st Cir.2012).

The summary judgment inquiry is grounded in the factual evidence available, since “[o]ne of the principal purposes of the summary judgment rule is to isolate and dispose of factually unsupported claims or defenses.” Celotex Corp. v. Catrett, 477 U.S. 317, 323–24, ...