REPORT AND RECOMMENDATION INTRODUCTION
CAMILLE L. VELEZ RIVE UNITED STATES MAGISTRATE JUDGE
Plaintiffs
Brian Healy (“Healy”), Bruce Lee Andrade
(“Lee Andrade”) and Circo Group, LLC
(“Circo Group” collectively
“Plaintiffs”) brought the present suit against
Defendant Jose M. Martmez Rivera (“Defendant” or
“Martmez”) seeking damages for malicious
prosecution and libel. Plaintiffs also requested a finding of
temerity and attorney's fees, expenses and punitive
damages. Plaintiffs' claims arose from a civil case
Martmez filed against them in the Puerto Rico Court of First
Instance, which was ultimately voluntarily dismissed.
Plaintiffs
were unable to effect service of process personally and
Defendant was served by publication on February 10 and 13,
2020 in Texas and Puerto Rico. Defendant failed to respond or
otherwise plead to the Complaint. On February 2, 2021, the
Court entered default against Defendant. (Docket No. 29).
On June
3, 2021, Plaintiffs petitioned for a default judgment, which
the Court granted in part. (Docket Nos. 38 and 44). The case
was then referred to the undersigned for a damages hearing
and Report and Recommendation. (Id.).
On May
5, 2022, the damages hearing was held remotely. (Docket No.
58). The
Court heard testimonies from Plaintiffs Healy and Lee
Andrade, as well as expert witness Vicente Feliciano
(“Feliciano”).
The
following exhibits were entered into evidence, all of which
were identified by Plaintiff Healy and Feliciano:
Exhibit 1. Complaint filed in the Court of First Instance,
San Juan part, Civil No. KPE2014-0885.
Exhibit 2. Primera Hora news article dated April 22,
2014.
Exhibit 3. El Nuevo Dia news article.
Exhibit 5. Judgment issued by the Court of First Instance,
San Juan part, in Civil No. KPE2014-0885.
Exhibit 6. Ferraiouli Law Firm billings (list).
Exhibit 7. Letter to Advantage Business Consulting signed by
Attorney Edgar Sanchez dated August 9, 2021.
Exhibit 8. Several invoices from Agustin Collazo Law Offices.
Exhibit 10. Invoice from All Texas Process Servers dated
March 4, 2019.
Exhibit 10-A. Texas Server Proof of Service documents
(summons returned unexecuted).
Exhibit 11. Affidavit of Tom Morin for publishing of edict in
the Daily Court Review dated February 10, 2020.
Exhibit 11-A. Proof of publishing of edict in the Daily
Court Review dated February10, 2020.
Exhibit 12. Invoice for publishing of edict in El
Vocero dated February 13, 2020.
Exhibit 12-A. Affidavit of Mayda Rodriguez and proof of
publishing of edict in El Vocero dated February 13,
2020.
Exhibit 13. Invoice from Advantage Business Consulting dated
April 1, 2022, for $2,000 and showing a balance of $1,0001.
Exhibit 13-A. Feliciano's Curriculum Vitae.
Exhibit 13-B. Expert Report by Feliciano of Advantage
Business Consulting dated July 2021.
Exhibit 14. USPS certified mail tracking for letter sent to
Houston, Texas dated October 19, 2020.
Exhibit 14-A. Certified mail stub for letter addressed to
Jose Martinez in Houston, Texas.
Exhibit 15. Marsh Saldana insurance proposal for Circo Group
dated August 14, 2018.
Rule 55
of Fed.R.Civ.P. reads in pertinent part:
(a) Entering a Default. When a party against whom a judgment
for affirmative relief is sought has failed to plead or
otherwise defend, and that failure is shown by affidavit or
otherwise, the clerk must enter the party's
default.[1]
(b) Entering a Default Judgment.........
(2) By the Court. In all other cases, the party must apply to
the court for a default judgment. A default judgment may be
entered against a
minor
or incompetent person only if represented by a general
guardian, conservator, or other like fiduciary who has
appeared. If the party against whom a default judgment is
sought has appeared personally or by a representative, that
party or its representative must be served with written
notice of the application at least 7 days before the hearing.
The court may conduct hearings or make referrals-preserving
any federal statutory right to a jury trial-when, to enter or
effectuate judgment, it needs to:
(A) conduct an accounting;
(B) determine the amount of damages;
(C) establish the truth of any allegation by evidence; or
(D) investigate any other matter.
Fed.R.Civ.P. 55.
The
Federal Rules of Civil Procedure allow the Court to enter
default when, as here, a party against whom a judgment is
sought has failed to plead or otherwise defend. Following the
entry of default, a district court can enter a final default
judgment without requiring further proof of damages if the
claim is for a “sum certain.” See 10
Moore's Federal Practice ¶55.22[1] (2002) (“In
cases where the court has entered default judgment and the
claim is for a sum certain, the court can enter the default
judgment for the amount stated in the complaint.”);
see also KPS & Assocs., Inc. v. Designs By FMC,
Inc., 318 F.3d 1 (1st Cir. 2003). However, when the
amount is in dispute or is not readily ascertainable from the
pleadings, a hearing may be required to set damages. See
Fed.R.Civ.P. 55(b)(2); Ortiz-Gonzalez v. Fonovisa,
277 F.3d 59, 64 (1st Cir.2002).
Defendant
failed to answer the Complaint. Thus, default was entered
against him. The result of his failure to answer is that all
the allegations contained in the Complaint, except the amount
of damages, are deemed admitted as true. Fed.R.Civ.P.
8(b)(6); Brockton Sav. Bank v. Peat, Marwick, Mitchell
& Co., 771 F.2d 5, 13 (1st Cir. 1985).
Plaintiffs
included in their Complaint claims for malicious prosecution,
libel and temerity, and seek damages as a result thereof.
They also requested attorney's fees, costs and punitive
damages. For this reason, the matter was referred to this
Magistrate Judge for an evidentiary hearing to ascertain
these damages.
Pursuant
to the allegations in the Complaint, which stand uncontested
the following findings of fact are made:
1. Circo Group, LLC was a duly registered Limited Liability
Company within the Commonwealth of Puerto Rico, whose
holdings included Circo Bar, a prominent gay bar located at
#650 Condado Street, in San Juan, P.R. 00907.
2. Circo Bar hosted several international events throughout
its nine (9) year existence, and public attendance during a
regular week reached approximately three thousand (3,000)
guests.
3. Plaintiffs Healy and Lee Andrade were Managers/Supervisors
at Circo Bar and Puerto Rico residents at the time the
present Complaint was filed.
4. Defendant Martinez was hired as a Bartender at Circo Bar
in October 2013 and signed an employment agreement. His
duties included keeping his work area clean, serving drinks,
keeping inventory, charging clients for the prepared drinks,
tallying the cash register at closing and keeping a record of
the transactions performed.
5. Martinez received and signed a copy of the rules regarding
sexual harassment and other applicable rules of the
establishment at the beginning of his employment at Circo
Bar.
6. Martinez worked at Circo Bar for about four (4) months.
7. On February 6, 2014, Martinez became intoxicated while on
his shift, and voluntarily resigned after the bar's
security personnel and other employees stopped him from
violently attacking Plaintiff Lee Andrade, one of his
supervisors.
8. Martinez voluntarily resigned from his job on that day,
repeating the phrase “I fucking quit” multiple
times in front of other employees.
9. Defendant Martinez joined Jirafa Verde, one of Circo
Bar's direct competitors, within days after resigning.
Shortly thereafter, Martinez moved to Houston, Texas.
10. On April 2, 2014, Martinez brought suit against
Plaintiffs in the San Juan Court of First Instance, number
KPE2014-0885, claiming unjustified dismissal, sexual
harassment, unpaid salaries, and damages (the “Martinez
state court case”). Exhibit 1. Martinez also claimed
being publicly humiliated and harassed by Healy.
11. Martinez delivered a copy to reporter Mariana Cobian of
El Nuevo Dia and Primera Hora, newspapers
with island-wide circulation, prior to serving the lawsuit
papers on Circo Group and the individual Plaintiffs
(defendants
in that case).
12. Two articles were published bad-mouthing Plaintiffs and
Circo Bar, namely, one in Primera Hora and a second
one in El Nuevo Dia. Plaintiffs contend these two
articles caused irreparable damage to their image and
reputation. Exhibits 2 and 3.
13. Defendant Martinez conspired with Alexis Colon
(“Colon”) to file almost the exact same lawsuit
against Defendants (the “Colon state court case”)
on May 27, 2014.
14. Martinez and Colon were both represented by the same
lawyers in their respective state court cases against
Plaintiffs.[2]
15. The Colon state court case was dismissed by the state
court in August 2015. The Martinez state court case was
voluntarily dismissed by the state court on March 18, 2018.
Exhibit 5.
16. Martinez attempted to recruit other employees, after
leaving Circo Bar, to file similar lawsuits with the same
claims and even considered forming a union against
Plaintiffs, an idea which was unsuccessful.
17. Due to the filing of the Martinez state court case, Circo
Group claimed in the instant case loss of business revenue,
legal expenses, and damages for a tarnished reputation within
the community as a result of Defendant's
actions.
18. Healy claims damages in the case at bar for mental and
emotional distress he suffered as a result of the state court
case and seeks to recoup his legal expenses.
19. Lee Andrade claims damages in the instant case for mental
and emotional distress.
The
following additional findings of fact are made pursuant to
the uncontested testimonies presented during the...
