Ochoa v. Interbrew America, Inc.
| Decision Date | 20 July 1993 |
| Docket Number | No. 851,D,851 |
| Citation | 999 F.2d 626 |
| Parties | 125 Lab.Cas. P 57,433 Valentin D. OCHOA, Plaintiff-Appellant, v. INTERBREW AMERICA, INC., Defendant-Appellee. ocket 92-7953. |
| Court | U.S. Court of Appeals — Second Circuit |
Joseph E. Gasperetti, New York City (Shannon P. O'Neill, Coleman & Rhine, of counsel), for plaintiff-appellant.
James E. Brandt, New York City (Stanley A. Walton, III, Seyfarth, Shaw, Fairweather & Geraldson, Chicago, IL, of counsel), for defendant-appellee.
Before: PIERCE, WALKER and McLAUGHLIN, Circuit Judges.
Valentin D. Ochoa appeals from a judgment of the United States District Court for the Southern District of New York (Mary Johnson Lowe, Judge ), dismissing his diversity suit for lack of subject matter jurisdiction. We reverse and remand because, on the present record, based upon our reading of Texas law it does appear that the jurisdictional amount was satisfied.
On July 1, 1991, plaintiff-appellant Valentin D. Ochoa ("Ochoa") filed a complaint in the United States District Court for the Southern District of New York against defendant-appellee Interbrew America, Inc. ("Interbrew"). The complaint invoked diversity jurisdiction, 28 U.S.C. § 1332, and alleged that "the amount in controversy, exclusive of interest and costs, exceeds $50,000." According to the complaint, Ochoa is a natural person and a resident of the State of New York, who is engaged in the business of providing consulting services concerning the import and export of goods to and from the United States. Interbrew is a corporation organized under the laws of a state other than New York, having its principal place of business in Dallas, Texas. Interbrew is a wholly-owned subsidiary of Interbrew, S.A., a foreign corporation organized under the laws of Belgium, which is in the brewery business.
Asserting two claims for relief, the complaint alleged that on June 4, 1990, Ochoa and Interbrew entered into a written contract, which was drafted by Interbrew. Ochoa alleged that he had satisfied all obligations imposed upon him pursuant to the contract, but that Interbrew had breached the contract in refusing to pay him $4,000 per month as provided therein, and in refusing to reimburse him for his reasonable business expenses, which amounted to $14,380.57, despite due demand for each. In his first claim for relief, Ochoa sought damages of $62,380.57, plus interest from June 30, 1990. In his second claim for relief, Ochoa sought $20,000, as the fair and reasonable value of services he performed from June 1990 through August 1990, plus reimbursement of $14,380.57 for reasonable business expenses, for a total of $34,380.57, plus interest from June 30, 1990.
Attached to the complaint was a copy of the June 1990 contract. Paragraphs Three through Five of the contract provide:
3. The term of this Agreement shall be for a period of twelve (12) month [sic] commencing on the 1st day of June 1990, unless sooner terminated as later provided. At its termination date, the present agreement will be automatically null and void.
4. For the services to be rendered by you as consultant, [Interbrew] hereby agrees to pay consultant the sum of four thousand Dollars ($4,000) per month, during the term of this agreement. Consultant's fee shall be due and payable on the last day of each consecutive month commencing June 30, 1990. Notwithstanding paragraph 5 herein, each compensation includes all taxes, other costs and expenses consultant could incur.
5. [Interbrew] shall reimburse consultant for his reasonable business expenses, as prior approved in writing by [Interbrew], incurred in performing his duties pursuant to this Agreement. Reimbursable expenses shall include, but not necessarily be limited to, reimbursement for travel expenses, including air fare, meals, lodging and transportation. Reimbursement of priorly approved expenses will be made upon presentation of the related invoices.
The contract states that it shall be construed and enforced according to the laws of the State of Texas.
In its answer, Interbrew denied liability and asserted a counterclaim for $5,000 allegedly wrongly paid to Ochoa. At a pre-trial conference, the district judge raised the issue of whether the jurisdictional amount of $50,000 had been satisfied, since the contract at issue might be read as terminable at will by either party. Under such an interpretation, Ochoa's damages would not be in excess of the jurisdictional amount of $50,000 since he was terminated after four months of service and would be entitled to, at most, approximately $31,000. Ochoa was directed to file a brief on the issue by November 25, 1991, and Interbrew to file a response by December 30, 1991.
In his brief, Ochoa argued that under Texas law, the contract should be read as having a one-year term. Under that interpretation, he would be entitled to money damages of $48,000, plus reimbursement for his reasonable business expenses of $14,380.57, for a total award of $62,380.57. Interbrew filed its brief timely, as directed, arguing that the contract was terminable at will and that a reasonable method of termination was to be utilized.
In an opinion dated July 22, 1992, relying upon the complaint and upon Interbrew's brief, the district court observed that Interbrew gave notice to Ochoa of his termination, and thereafter unilaterally terminated his employment after four months and that Interbrew had made no payments to Ochoa. The district court then noted that, for it to conclude that it had no jurisdiction over the case, it had to find, based upon the complaint, that it appeared to a legal certainty that Ochoa could not recover sufficient damages to invoke federal jurisdiction, and that this determination required a resolution of whether the contract was, as a matter of law, terminable at will. The court disagreed with Ochoa's contention that the contract was ambiguous, and stated that, under the contract, Ochoa was to be hired for not longer than one year, but that the contract could be terminated earlier. Instead of being found ambiguous, the contract was found to be lacking, "in that it fails to 'provide later' the manner in which the contract may be terminated." The court stated that, under Maxwell v. Lake, 674 S.W.2d 795 (Tex.Ct.App.Dallas [5th Dist.] 1984, no writ), if an unambiguous written contract is silent on a certain matter, the court must determine the legal effect of the writing, and, thus, the district court reasoned that though there was no specific method of termination provided for in the contract, a reasonable method of termination was required. It then found that the method of termination employed by Interbrew was reasonable and concluded therefore that the district court lacked subject matter jurisdiction because, under the contract, Ochoa could recover no more than $31,000, since he was terminated after only four months of service. A judgment dismissing the complaint for lack of subject matter jurisdiction was entered. This appeal followed.
On appeal, Ochoa claims that the district court erred in concluding to a legal certainty that he could recover no more than $31,000 ($16,000 for four months at $4,000 per month, plus incurred business expenses of $14,380.57). He contends that the contract is ambiguous, because it stated both that it was for a term of twelve months and that it was terminable as later provided. According to Ochoa, since the contract made no provision for termination, under Texas law, the parties are entitled to adduce evidence as to the meaning of the missing provision. He argues that the "words 'as later provided' need not, and indeed should not, be read as referring solely to the means or manner of notifying a party signatory that the agreement is being terminated." Ochoa claims that nothing in the text of the contract warrants the district court's reading and "[t]hese words could just as readily refer to the reasons justifying termination by either party" and that "[o]nly imagination limits the possible interpretations and only the facts will give meaning, if any there is, to this missing provision."
Under 28 U.S.C. § 1332 (1988), federal district courts have jurisdiction over civil...
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