Nieves Domenech v. Dymax Corp.

• Decision Date: 22 December 1996
• Docket Number: Civil No. 95-2226 (HL).
• Parties: Sixto A. NIEVES DOMENECH, et al., Plaintiffs, v. DYMAX CORPORATION, Defendant.
• Court: U.S. District Court — District of Puerto Rico

Page 57

952 F.Supp. 57

Sixto A. NIEVES DOMENECH, et al., Plaintiffs, v. DYMAX CORPORATION, Defendant.

Civil No. 95-2226 (HL).

United States District Court, D. Puerto Rico.

December 22, 1996.

COPYRIGHT MATERIAL OMITTED

Javier A. Morales-Ramos, Hato Rey, PR, for plaintiffs.

William E. Estrella-Lopez-De-Vi, San Juan, PR, William H. Bright, Eric Watt-Wiechmann, Cummings & Lockwood, Hartford, CT, for defendant.

OPINION AND ORDER

LAFFITTE, District Judge.

Before the Court is Defendant Dymax Corporation's motion for partial summary judgment¹ in this action for damages under Puerto Rico's Sales Representatives Act commonly known as "Law 21."² Dymax is a corporation engaged in the manufacture of industrial products, including "UV adhesives" which are used in the manufacture of computers and the assembly of medical devices. Plaintiffs are Sixto Nieves Domenech ("Nieves"), his wife Rosa Quiñones Cecilio ("Quiñones"), and their conjugal partnership. Plaintiffs are also bringing claims for breach of contract and for damages pursuant to the Puerto Rico Civil Code's Article 1802 on negligence.³ This Court's jurisdiction is based on diversity of the parties.⁴

The Court reviews the record in the light most favorable to Plaintiffs and draws all reasonable inferences in their favor. See LeBlanc v. Great American Ins. Co., 6 F.3d 836, 841 (1st Cir.1993). In their complaint, Plaintiffs allege that on August 15, 1986, Nieves — under ERO Technology — entered into a sales agreement ("the Agreement") with Dymax; that the Agreement appointed Nieves as Dymax's sole agent for certain of the company's products in Puerto Rico; that starting in 1986 Nieves visited prospective clients to promote Dymax's products; that at the end of 1988, Nieves, now doing business as "Engineering Consulting Group," continued to be the Puerto Rico sales agent for Dymax; that Nieves' efforts to promote Dymax's products had developed large sales volumes by 1995; and that Dymax terminated the Agreement in 1995 without just cause, in violation of Law 21.⁵

After Dymax filed its motion for partial summary judgment, Plaintiffs filed an opposition on July 12, 1996.⁶ In their opposition — which was filed five months after the Court's deadline⁷ for amending the complaint — Plaintiffs claimed that the complaint was mistaken. In the complaint, Plaintiffs had alleged that in 1988 Nieves, now doing business as Engineering Consulting Group, continued to be a sales agent for Dymax. In their opposition, Plaintiffs claimed that the correct date is 1991.⁸ They also claimed that the Agreement of August 15, 1986, was between Dymax and ERO Technology. Plaintiffs further claimed in their opposition that at an unspecified date between 1986 and 1991, ERO Telecom & Industrial Supplies, Inc. became Dymax's exclusive sales agent under the Agreement.⁹ Plaintiffs also claimed in their opposition that at the end of 1991, Nieves became Dymax's exclusive Puerto Rico sales agent under the Agreement "under the same terms as the Agreement dating back to 1986 between Dymax and ERO Technology."¹⁰ Nieves was president and manager of ERO Technology.¹¹ He was also, along with three other individuals, a shareholder of ERO Technology.¹² He was also the company manager of ERO Telecom and a shareholder with an unspecified share in the corporation.¹³ According to Plaintiffs, then, the only difference in the Agreement since it was first entered into in 1986 is the identity of the Puerto Rico sales agent.

In its motion for partial summary judgment, Dymax argues that Law 21 does not cover the Agreement; that therefore Plaintiffs do not have a claim under that statute; and that accordingly, Plaintiffs' claim under Article 1802 must also fail. Plaintiffs have opposed the motion. For the reasons set forth below, the Court grants Dymax's motion.

DISCUSSION

1. The Law 21 claim

Summary judgment is appropriate if "there is no genuine issue as to any material fact and ... the moving party is entitled to a judgment as a matter of law." See Fed. R.Civ.P. 56(c). The party moving for summary judgment bears the initial responsibility of demonstrating the absence of a genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 2553, 91 L.Ed.2d 265 (1986). Once the moving party has satisfied this requirement, the nonmoving party has the burden of presenting any facts that demonstrate a genuine issue for trial. Fed.R.Civ.P. 56(e); LeBlanc, 6 F.3d at 841. The nonmovant must do more than show "some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 1356, 89 L.Ed.2d 538 (1986). An issue is genuine when, based on the evidence, a reasonable jury could return a verdict for the nonmoving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 106 S.Ct. 2505, 2510, 91 L.Ed.2d 202 (1986). "The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient; there must be evidence on which the jury could reasonably find for the plaintiff." Id. at 252, 106 S.Ct. at 2512.

Plaintiffs are bringing a claim under Puerto Rico's Law 21. This statute prohibits a principal from terminating its agreement with a sales representative without just cause. P.R.Laws Ann. tit. 10, § 279a. Law 21 took effect on December 5, 1990, and it does not apply to agreements that were entered into prior to that date. See 1990 Acts and Resolutions of Puerto Rico, December 5, 1990, No. 21, sec. 10, at 1501; Tavarez v. Champion Products, Inc., 903 F.Supp. 268, 272 (D.P.R.1995). In their complaint, Plaintiffs allege that on August 15, 1986, Nieves — under ERO Technology — entered into the Agreement with Dymax; that the Agreement made Nieves the sole agent of Dymax in Puerto Rico; and that starting in 1986 Nieves visited prospective clients to promote Dymax's products.¹⁴ A litigant's assertions of fact in a pleading constitutes a judicial admission by which the party is normally bound throughout the proceeding. Schott Motorcycle Supply v. Am. Honda Motor Co., 976 F.2d 58, 61 (1st Cir.1992); Davis v. A.G. Edwards and Sons, Inc., 823 F.2d 105, 107-08 (5th Cir.1987) (Holding that plaintiffs were bound by the assertions of the complaint even though plaintiffs subsequently submitted documentary evidence that contradicted these assertions). Therefore, in the present case Plaintiffs are bound by their version in the complaint that Nieves' relationship with Dymax dated back to 1986. Because the agreement was entered into in 1986, it is not covered by Law 21.

In their opposition to Dymax's motion for partial summary judgment, Plaintiffs claim that the allegation in the complaint that in 1988 Nieves was doing business as Engineering Consulting Group continued to be Dymax's sales agent is a "mistake."¹⁵ Plaintiffs allege that the correct date is 1991, not 1988. In their opposition Plaintiffs request that the complaint be amended accordingly. Plaintiffs filed their opposition with this allegation of the mistaken date on July 12, 1996. In a scheduling order issued on December 20, 1995, the Court set February 5, 1996, as the deadline for amending the complaint.¹⁶ It is essential that a court's deadlines be followed in order to allow for the proper management of the court's caseload. See Serrano-Perez v. FMC Corp., 985 F.2d 625, 628 (1st Cir.1993) (expert witness obtained beyond deadline excluded from case); Thibeault v. Square D Co., 960 F.2d 239, 247 n. 7 (1st Cir.1992) ("we heartily endorse the utilization of discovery closure dates ... as a case management tool."); Riofrio Anda v. Ralston Purina, Co., 959 F.2d 1149, 1149, 1154-55 (1st Cir.1992) (denial of motion to amend complaint because plaintiff moved to amend the complaint two months after deadline in the scheduling order had passed); Barreto v. Citibank, N.A., 907 F.2d 15, 16 (1st Cir.1990) ("discovery orders, other pre-trial orders, and, indeed, all orders governing the management of a case are enforceable under pain of sanction for unjustifiable violation"); Corretjer Farinacci v. Picayo, 149 F.R.D. 435, 438 (D.P.R.1993) (disregard of judge's scheduling order and local rules of the district justifies sanctions). Because Plaintiffs' request to amend the complaint through their opposition of July 12, 1996, was not filed until more than five months after the Court's deadline for amending the complaint had passed, the Court hereby denies it.

Even if the Court were to consider Plaintiffs' claim that in 1991 — not 1988 — Nieves continued to be Dymax's sales agent, the Court would still find that Law 21 does not apply. Plaintiffs argue that in 1991 there was a novation of the Agreement and that therefore Law 21 does apply to the present case. The Civil Code recognizes two types of novations: extinctive and modificatory. See Warner Lambert Co. v. Tribunal Superior, 101 P.R.Dec. 378, 390-91, 1 Official Translations 527, 545-47 (1973); Blasini v. Beech-Nut Life Savers, 104 P.R.Dec. 570, 580, 4 Official Translations 796, 809 (1976) (Trías Monge, C.J., concurring); 3 José Castán Tobeñas, Derecho Civil Español, Comun y Foral, at 483-84 (16th ed. 1992); I-2 José Puig Brutau, Fundamentos de Derecho Civil, at 458-60 (2d ed. 1976). An extinctive novation extinguishes the old obligation and creates a new one. Warner Lambert, 101 P.R.Dec. at 391, 1 Official Translations at 546-47. In contrast, a modificatory novation simply modifies, but does not extinguish, the original agreement. Teachers Annuity v. Sociedad de Gananciales, 115 P.R.Dec. 277, 285-86, 15 Official Translations 372, 382 (1984); Warner Lambert, 101 P.R.Dec. at 390-91, 1 Official Translations at 546-47; Miranda Soto v. Mena Eró, 109 P.R.Dec. 473, 478, 9 Official Translations 628, 634-35 (1980); see also Irma Alicia Rodríguez, La Novación Objetiva entre la Extinción y la Modificación en la Jurisprudencia Puertorriqueña, 49 Revista del Colegio de Abogados de Puerto Rico, No. 2, at 3-4 (1988).

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