-
USCA1 Opinion
April 11, 1994 UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
____________
No. 93-1431
NEWELL PUERTO RICO, LTD.,
Plaintiff-Appellee,
v.
RUBBERMAID INCORPORATED,
Defendant-Appellant.
____________
No. 93-1451
93-1516
NEWELL PUERTO RICO, LTD.,
Plaintiff-Appellant,
v.
RUBBERMAID INCORPORATED,
Defendant-Appellee.
____________
ERRATA SHEET
The opinion of this Court issued on March 31, 1994, is
amended as follows:
Page 7, line 8, it should read "Mr. Villamil's testimony"
instead of "Mr. Newell's testimony."
Page 11, first line, insert after "1991)" and before the
period "(quoting Freeman v. Package Machinery Co., 865 F.2d 1331,
_______ _____________________
1340 (1st Cir. 1988))."
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
No. 93-1431
NEWELL PUERTO RICO, LTD.,
Plaintiff-Appellee,
v.
RUBBERMAID INCORPORATED,
Defendant-Appellant.
____________________
Nos. 93-1451
93-1516
NEWELL PUERTO RICO, LTD.,
Plaintiff-Appellant,
v.
RUBBERMAID INCORPORATED,
Defendant-Appellee.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jos Antonio Fust , U.S. District Judge]
___________________
____________________
Before
Torruella, Circuit Judge,
_____________
Coffin, Senior Circuit Judge,
____________________
and Boudin, Circuit Judge.
_____________
_____________________
Miguel E. Bonilla-Sierra, with whom Carlos T. Gonz lez-
_________________________ ____________________
Contreras, Maricarmen Almod var-D az and Gonz lez, Bonilla &
_________ __________________________ _____________________
Qui ones-Tridas, were on brief for Rubbermaid Incorporated.
_______________
Adri n Mercado, with whom Mercado & Soto, was on brief for
______________ ______________
Newell Puerto Rico, Ltd.
____________________
March 31, 1994
____________________
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TORRUELLA, Circuit Judge. Plaintiff-appellee, Newell
_____________
Puerto Rico, Ltd. ("Newell"), brought an action for damages
against Rubbermaid Incorporated ("Rubbermaid"), alleging that
Rubbermaid, without just cause, terminated and impaired the
exclusive distribution agreement between the two parties in
violation of the Puerto Rico Dealers' Act, commonly known as "Law
75." P.R. Laws Ann. tit. X, 278 et seq. (1989 Supp.). The
__ ____
action was tried before a jury. The jury found that Rubbermaid
terminated the distribution agreement without just cause and
awarded Newell $1,400,000 in damages. Rubbermaid then filed a
motion for a new trial. The district court denied Rubbermaid's
motion and entered judgment against Rubbermaid. Rubbermaid now
appeals the court's denial of its motion for a new trial.
Specifically, Rubbermaid argues that (1) the district court
abused its discretion in admitting certain testimony by one of
Newell's expert witnesses, and (2) the jury's finding on the
issue of just cause was against the clear weight of the evidence.
Newell also filed a motion requesting pre and post-
judgment interest and attorneys' fees. The court granted
Newell's motion for post-judgment interest but denied its motion
for pre-judgment interest and attorneys' fees. Newell appeals
the court's denial of pre-judgment interest and attorneys' fees.
BACKGROUND
BACKGROUND
We review the evidence and draw inferences therefrom in
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the light most favorable to the verdict winner in this case,
Newell. International Adhesive Coating Co. v. Bolton Emerson
____________________________________ ______________
Int'l, Inc., 851 F.2d 540, 542 (1st Cir. 1988).
___________
A. The Distribution Agreement
A. The Distribution Agreement
On May 31, 1968, Rubbermaid entered into an agreement
with Anchor Hocking Interamericana, Ltd. for the exclusive
distribution of the Rubbermaid Houseware Product Line in Puerto
Rico and the United States Virgin Islands ("Distribution
Agreement"). On March 28, 1972, Anchor Hocking Interamericana,
Ltd. assigned and transferred its rights in the Distribution
Agreement to Anchor Hocking Puerto Rico, Ltd. ("Anchor P.R.").1
From July 2, 1972 to July 1, 1987, Anchor P.R., became the
exclusive distributor of Rubbermaid Houseware Products in Puerto
Rico and the Virgin Islands. On July 2, 1987, Newell Company
acquired Anchor Hocking Corporation and its subsidiaries,
including Anchor P.R. and thereafter continued the distribution
of Rubbermaid products in Puerto Rico and the Virgin Islands.
On October 31, 1991, Rubbermaid notified Newell that it
was terminating the Distribution Agreement, effective in ninety
days, because Anchor P.R. had been unable to achieve assigned
sales objectives and because Newell manufactured and distributed
similar products which created a conflict of interest in its
distribution of Rubbermaid products. Rubbermaid then terminated
____________________
1 Anchor Hocking Puerto Rico, Ltd. was a wholly owned subsidiary
of Anchor Hocking Corporation which was incorporated in Delaware
on March 27, 1972, for the purpose of acquiring and selling
products in Puerto Rico.
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the Distribution Agreement. The effective date of termination
was February 3, 1992. Anchor P.R. changed its name to Newell
Puerto Rico, Ltd. In February 1992, Newell brought suit against
Rubbermaid, claiming that Rubbermaid's termination of the
Distribution Agreement was unjustified.
B. Expert Witness Testimony
B. Expert Witness Testimony
During the course of discovery, in June 1992, Newell's
expert witness on damages, Mr. Jos Villamil, submitted a written
report estimating Newell's damages under Law 75. In July 1992,
Rubbermaid's expert, Dr. El as R. Guti rrez, submitted a report
challenging the accuracy of the valuation estimate presented by
Mr. Villamil, and questioning whether the estimate was prepared
according to acceptable professional standards. Doctor Guti rrez
concluded that major flaws were present in the methods used by
Mr. Villamil to estimate damages, and these flaws had the effect
of producing an upward bias in the estimated value of damages for
the Rubbermaid line of products.2
During his first deposition on August 11, 1992,
Mr. Villamil acknowledged that he inadvertently included the
value of the Rubbermaid Commercial Products Line, which is not at
issue in this case, in his valuation of damages.3 Accordingly,
Mr. Villamil agreed to adjust his estimate and submit an amended
____________________
2 Doctor Guti rrez estimated damages, including a goodwill
component, to be between $247,686 and $269,431.
3 The Distribution Agreement which is the subject of this
lawsuit concerns the Rubbermaid Houseware Products Line. The
Rubbermaid Commercial Products Line is a separate and distinct
line of products not relevant to this case.
-5-
report reflecting his new evaluation. On August 13, 1992, four
days prior to trial, Mr. Villamil submitted an amended report.4
According to Rubbermaid, this amended report included new
calculations using a methodology and valuation procedure
different from that used in Mr. Villamil's previous report. On
August 13, the court ordered that both experts be deposed anew
and that transcripts of the depositions be filed not later than
August 27, 1992. The Court further determined that it would
appoint an economist to render a neutral expert report. Trial
was rescheduled for December 21, 1992.
Mr. Villamil was deposed again on August 20, 1992.
During this deposition, Mr. Villamil again acknowledged that
corrections should be made to his calculations. On August 27,
1992, Rubbermaid filed a "Motion to Disqualify Plaintiff's Expert
Witness, Exclude Plaintiff's Expert Witness Reports and Request
for Sanctions." The court denied this motion.
On December 8, 1992, the court appointed expert, Ernst
& Young, rendered a report which included a review of the
different reports filed by the expert witnesses for the parties
and an independent calculation of a value or a range of values of
damages for the distribution agreement under Law 75. On January
19, 1993, due to additional information provided by counsel for
Newell, Ernst & Young supplemented the December 8 report. On
____________________
4 In his amended report, Mr. Villamil estimated damages, not
including goodwill, to be between $1,620,000 and $2,941,000. He
estimated goodwill at $1,013,749 and therefore, the total value
of the distribution of the Rubbermaid product line in Puerto Rico
at between $2,633,749 and $3,954,749.
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February 2, 1993, Ernst & Young submitted a final report.5
During trial, the court heard testimony from Ernst &
Young regarding its report. Mr. Villamil then testified as an
expert for Newell. At trial, Rubbermaid expressly conceded that
Mr. Villamil was qualified as an expert. Mr. Villamil testified
that he believed his role was to evaluate Ernst & Young's report.
Rubbermaid objected to Mr. Villamil's testimony on the grounds of
surprise, arguing that his expressed views were different from
and inconsistent with the opinions rendered in his reports. The
court overruled the objection and permitted Mr. Villamil to
testify.
ADMISSION OF EXPERT TESTIMONY
ADMISSION OF EXPERT TESTIMONY
Rubbermaid challenges the admission at trial of
Mr. Villamil's testimony on grounds of surprise. Federal Rule of
Civil Procedure 60(b)(1); P rez-P rez v. Popular Leasing Rental,
___________ _______________________
Inc., 993 F.2d 281, 283 (1st Cir. 1993).
____
At the time of Mr. Villamil's testimony, Rubbermaid's
counsel objected on the ground that Mr. Villamil was presenting
new computations to the jury not contained in his first or second
report. The court overruled Rubbermaid's objection, indicating
that Mr. Villamil was entitled to criticize constructively Ernst
& Young's report. When ruling on Rubbermaid's objection, the
district court stated that Rubbermaid was entitled to "cross-
examine him in light of not only this analysis he is making here
____________________
5 The court appointed expert estimated the present value of lost
pre-tax profits at $585,951.
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today but in relation to the analysis he has made previously of
the reports you have rendered and which you have a copy and which
were the object of the deposition."
Rubbermaid knew that Mr. Villamil was going to be an
expert witness at trial. Moreover, Rubbermaid was very familiar
with the subject matter upon which he would render his testimony.
Rubbermaid had ample opportunity to cross-examine Mr. Villamil.
Even if Rubbermaid had been surprised by Mr. Villamil's
testimony, the appropriate remedy would have been to ask for a
continuance to allow Rubbermaid to prepare for the presentation
of rebuttal testimony. Szeliga v. General Motors Corp., 728 F.2d
_______ ____________________
566 (1st Cir. 1984) (the remedy for surprise in the introduction
of evidence is not to seek reversal after an unfavorable jury
verdict, but a request for continuance at the time surprise
occurs). Rubbermaid did not request a continuance, a sidebar or
even a limiting jury instruction. See Smith v. Massachusetts
___ _____ _____________
Institute of Technology, 877 F.2d 1106 (1st Cir. 1989), cert.
________________________ _____
denied, 493 U.S. 965 (1989) (courts look with disfavor on parties
______
who claim surprise but who do not ask for a recess so they may
attempt to counter the opponent testimony).
Rubbermaid also claims that Mr. Villamil's testimony
was inadmissible pursuant to Fed. R. Evid. 702, 703, 705 and 403
and Fed. R. Civ. P. 26(e). We find Rubbermaid's claims to be
without merit.
The admissibility of opinion evidence by experts is a
matter within the discretion of the trial court and its
-8-
determination of admissibility should be sustained unless clearly
erroneous. International Adhesive Coating Company, 851 F.2d at
______________________________________
544. Federal Rules of Evidence 7026 and 7037 "allow an expert
to present scientific or technical testimony in the form of
opinion based on facts or data perceived or made known to the
expert before or at trial." Da Silva v. American Brands, Inc.,
________ _____________________
845 F.2d 356, 360 (1st Cir. 1988). Once admitted, Rules 703 and
7058 then "place the full burden of exploration of the facts and
assumptions underlying the testimony of an expert witness
____________________
6 Federal Rule of Evidence 702 provides:
If scientific, technical, or other
specialized knowledge will assist the
trier of fact to understand the evidence
or to determine a fact in issue, a
witness qualified as an expert by
knowledge, skill, experience, training,
or education, may testify thereto in the
form of an opinion or otherwise.
7 Federal Rule of Evidence 703 provides:
The facts or data in the particular case
upon which an expert bases an opinion or
inference may be those perceived by or
made known to the expert at or before the
hearing. If of a type reasonably relied
upon by experts in the particular field
in forming opinions or inferences upon
the subject, the facts or data need not
be admissible in evidence.
8 Federal Rule of Evidence 705 provides:
The expert may testify in terms of
opinion or inference and give reasons
therefor without prior disclosure of the
underlying facts or data, unless the
court requires otherwise. The expert may
in any event be required to disclose the
underlying facts or data on cross-
examination.
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squarely on the shoulders of opposing counsel's cross-
examination." International Adhesive Coating Company, 851 F.2d
______________________________________
at 544-45 (quoting Smith v. Ford Motor Co., 626 F.2d 784 (10th
_____ ______________
Cir. 1980)).
[I]f in arriving at his opinion the
expert has reasonably relied on facts or
data before trial, the basis for the
opinion need not be disclosed as a
condition to admitting testimony. The
burden is on opposing counsel through
cross-examination to explore and expose
any weaknesses in the underpinnings of
the expert's opinion. . . . Moreover,
the fact that an expert's testimony may
be tentative or even speculative does not
mean that the testimony must be excluded
so long as opposing counsel has an
opportunity to attack the expert's
credibility. When the factual
underpinning of an expert opinion is
weak, it is a matter affecting the weight
and credibility of the testimony -- a
question to be resolved by the jury.
International Adhesive Coating Company, 851 F.2d at 544
__________________________________________
(citations omitted).
The district court has broad discretion to decide
whether evidence should be excluded under Rule 403.9 "[O]nly
rarely -- and in extraordinarily compelling circumstances -- will
we, from the vista of a cold appellate record, reverse a district
____________________
9 Federal Rule of Evidence 403 provides:
Although relevant, evidence may be
excluded if its probative value is
substantially outweighed by the danger of
unfair prejudice, confusion of the
issues, or misleading the jury, or by
considerations of undue delay, waste of
time, or needless presentation of
cumulative evidence.
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court's . . . judgment concerning the relative weighing of
probative value and unfair effect." Pinkham v. Burgess, 933 F.2d
_______ _______
1066, 1071 (1st Cir. 1991) (quoting Freeman v. Package Machinery
_______ _________________
Co., 865 F. 2d 1331, 1340 (1st Cir. 1988)). The district court's
___
refusal to exclude Mr. Villamil's testimony under Rule 403 does
not present such an extraordinary circumstance. Rubbermaid
suggests that Mr. Villamil's testimony had the effect of
confusing and misleading the jury and should have been excluded
under Rule 403. We disagree. Mr. Villamil was Newell's only
expert as to damages. Newell was entitled to present witnesses
on the issue of damages. At trial, Rubbermaid conceded Mr.
Villamil's qualifications as an expert in this area. Juries are
often asked to determine complex issues of fact after listening
to expert testimony. Rubbermaid was able to cross-examine both
Mr. Villamil and the Ernst & Young expert as to their testimony
and to present testimony by its own expert witness on the issue
of damages. In light of these factors, we do not believe the
district court abused its discretion in determining that Mr.
Villamil's testimony had substantial probative value that was not
outweighed by unfair prejudice and should not be excluded under
Rule 403.
Rubbermaid's argument that Mr. Villamil's testimony was
inadmissible pursuant to Fed. R. Civ. P. 26(e)10 is equally
____________________
10 Federal Rule of Civil Procedure 26(e) states:
Supplementation of Responses. A party
______________________________
who has responded to a request for
discovery with a response that was
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without merit. In essence, Rubbermaid argues that Mr. Villamil's
opinion testimony proffered during trial was different from the
opinions he rendered during the pretrial litigation and that
Newell failed to supplement and amend its discovery responses as
required by Rule 26(e) to reflect those differences.
"[I]n reviewing a contention that answers were not
properly supplemented within the strictures of Rule 26(e), a
court should look to the conduct of the trial, the importance of
the evidence to its proponent, and the ability of the [opposing
____________________
complete when made is under no duty to
supplement the response to include
information thereafter acquired, except
as follows:
(1) A party is under a duty seasonably
to supplement the response with respect
to any question directly addressed to (A)
the identity and location of persons
having knowledge of discoverable matters,
and (B) the identity of each person
expected to be called as an expert
witness at trial, the subject matter on
which the person is expected to testify,
and the substance of the person's
testimony.
(2) A party is under a duty seasonably
to amend a prior response if the party
obtains information upon the basis of
which (A) the party knows that the
response was incorrect when made, or (B)
the party knows that the response though
correct when made is no longer true and
the circumstances are such that a failure
to amend the response is in substance a
knowing concealment.
(3) A duty to supplement responses may
be imposed by order of the court,
agreement of the parties, or at any time
prior to trial through new requests for
supplementation of prior responses.
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party] to formulate a response." Thibeault v. Square D Co., 960
_________ ____________
F.2d 239, 244 (1st Cir. 1992) (internal citation and quotations
omitted). It is not unusual for experts to make changes in their
opinions and revise their analyses and reports frequently in
preparation for, and sometimes even during, a trial. In the
present case, the parties did not stipulate that they would
accept without question the findings of Ernst & Young, the court
appointed expert. Newell was therefore entitled to have its
expert, Mr. Villamil, criticize the Ernst & Young report and
testimony in an attempt to discredit that report and testimony.
Mr. Villamil was Newell's only expert on damages, hence, Mr.
Villamil's testimony was a very important part of Newell's case.
If counsel for Rubbermaid felt ill-prepared to cross-examine Mr.
Villamil when faced with his testimony at trial, counsel's
solution was to request a continuance. Rubbermaid's failure to
do so will not now result in a new trial.
JURY'S FINDING OF JUST CAUSE
JURY'S FINDING OF JUST CAUSE
A federal judge may grant a new trial where the jury's
verdict is against the clear weight of the evidence. Kearns v.
______
Keystone Shipping Co., 863 F.2d 177, 181 (1st Cir. 1988) (citing
______________________
11 C. Wright & A. Miller, Federal Practice and Procedure 2806
______________________________
(1973)). A trial court should set aside a jury verdict only to
prevent a miscarriage of justice. Kearns, 863 F.2d at 181. We
______
review the district court's refusal to grant Rubbermaid's motion
for a new trial for an abuse of discretion. Id. at 179; Fed. R.
___
Civ. P. 59(a). So long as a reasonable basis exists for the
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jury's verdict, we will not disturb the district court's ruling
on appeal. Grenada Steel Industries, Inc. v. Alabama Oxygen Co.,
______________________________ __________________
695 F.2d 883 (5th Cir. 1983). Mere disagreement with the verdict
will not justify the granting of a new trial. Keeler v. Hewitt,
______ ______
697 F.2d 8, 11 (1st Cir. 1982). After carefully reviewing the
record below, we find no abuse of discretion in the district
court's decision not to disturb the jury's finding that
Rubbermaid failed to establish just cause for terminating its
contract with Newell.
In its complaint, Newell alleged that Rubbermaid's
termination of the Distribution Agreement was without just cause.
Newell further alleged that actions taken by Rubbermaid in
violation of the Distribution Agreement caused a decline in
Newell's annual sales of Rubbermaid products. According to
Newell, Rubbermaid took actions which were detrimental to the
established relationship and which violated the Distribution
Agreement by:
1. making direct sales to retailers;
2. imposing unreasonable sales quotas on Newell;
3. reclassifying some of its housewares products to
take them out of the Distribution Agreement; and
4. delaying and refusing to service orders placed by
Newell.
The Puerto Rico Dealer's Contract Act, P.R. Laws Ann.
tit. 10, 278-278d (1976), known as "Law 75," prohibits a
supplier from unilaterally terminating a distribution agreement
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with a dealer or refusing to renew it on its normal expiration
except for "just cause." 10 L.P.R.A. 278a. Law 75 was enacted
to prevent suppliers from terminating dealers in Puerto Rico once
these dealers had invested in the business to create and build a
profitable market for the suppliers' products. L neas A reas
_____________
Costarricenses, S.A. v. Caribbean General, Inc., 682 F. Supp. 117
____________________ _______________________
(D. P.R. 1988) (citing Warner Lambert v. Tribunal Superior, 101
______________ __________________
D.P.R. 378, 101 P.R.R. 527 (1973)).
As noted, Law 75 permits a supplier to terminate a
distribution agreement for just cause. Section 278(d) of the Act
defines "just cause" as follows:
nonperformance of any of the essential
obligations of the dealer's contract on
the part of the dealer, or any action or
omission on his part that adversely and
substantially affects the interest of the
principal or grantor in promoting the
marketing or distribution of the
merchandise or service.
By its terms, Law 75 sets forth a variety of
circumstances under which, once a dealer has shown that the
supplier terminated its contract, the supplier bears the burden
of showing just cause for the termination. Section 278a-1 of the
Act, which bears the heading, Just cause for termination;
______________________________
exceptions; presumptions, sheds light on the mechanics of the
_________________________
just cause exception. Section 278a-1(a) of the Act establishes
that certain violations or nonperformance by a dealer of any
provision included in the dealer's contract "shall not be
considered as being just cause unless the principal or grantor
________________________________
shows that such nonperformance may affect, or has truly and
_____
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effectively affected the interests of such principal or grantor
in an adverse or substantial manner in the development of the
market, distribution of the merchandise or rendering of services"
(emphasis added). Hence, under this section, in order to show
just cause, the supplier bears the burden of showing that the
dealer's violations or nonperformance of the contract adversely
affected the suppliers interests.
It is uncontested that Rubbermaid unilaterally
terminated the Distribution Agreement. Rubbermaid sought to show
just cause under Law 75 by arguing that termination was justified
because Newell failed to achieve assigned sales objectives and
experienced a decline in sales of Rubbermaid products, and that
Newell's sale of other product lines, not related to Rubbermaid,
created a conflict of interest detrimental to the Distribution
Agreement between Newell and Rubbermaid and therefore, adversely
affected Rubbermaid's interests. Newell presented evidence to
counter these allegations from which the jury could reasonably
conclude that Rubbermaid did not have just cause to terminate the
Distribution Agreement. Newell's evidence included testimony to
the effect that any decline in Rubbermaid sales by Newell was
caused by Rubbermaid's own actions in violation of the
Distribution Agreement. In particular, Newell presented evidence
indicating that Rubbermaid was selling products directly to
Pitusa (a retail store in Puerto Rico) at the same price it sold
to Newell, undercutting the ability of Newell to compete on the
Puerto Rican market for sales of Rubbermaid products. Newell
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also presented evidence indicating that plastic houseware
products manufactured by Newell which, according to Rubbermaid,
created a conflict of interest with Rubbermaid products, had been
manufactured by Anchor P.R. since 1968 and competed with
Rubbermaid products for the entire span of the contract.
Newell's evidence indicated that there was no new competition
introduced by the Newell acquisition of Anchor P.R. or any other
conflict in interest that would justify termination of the
Distribution Agreement.
Newell also presented evidence to the effect that its
assigned sales objectives did not adjust to the realities of the
Puerto Rican market. This evidence included testimony to the
effect that the sales objectives were unreasonable. Newell also
presented evidence to the jury in the form of an analysis of its
sales activities from 1986 to 1990. The analysis purported to
show that Newell's sales were adversely affected by several
factors, including Hurricane Hugo and direct sales by Rubbermaid,
but that overall, the company was successfully selling Rubbermaid
products.
Section 278a-1(c) establishes that where a dealer
violates a provision in the agreement fixing rules of conduct or
setting distribution quotas or goals because it does not adjust
to the realities of the Puerto Rican market at the time, the
violation will not be deemed just cause and "[t]he burden of
proof to show the reasonableness of the rule of conduct or of the
quota or goal fixed shall rest on the principal or grantor."
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Under this section, once Newell presented evidence showing that
the assigned sales objectives did not adjust to the realities of
the Puerto Rican market, it was Rubbermaid's burden to show the
reasonableness of the sales objectives. In finding against
Rubbermaid, the jury concluded that Rubbermaid did not meet its
burden. Judging the credibility of the witnesses and weighing
the evidence are within the exclusive province of the jury.
United States v. Garc a, 995 F.2d 556, 561 (5th Cir. 1993);
______________ ______
Lessee of Ewing v. Burnet, 36 U.S. 41 (1837). We will not
________________ ______
substitute our judgment for that of the jury in its evidentiary
findings. After reviewing the record, we conclude that the
jury's verdict is not against the clear weight of the evidence.
ATTORNEYS' FEES & PRE-JUDGMENT INTEREST
ATTORNEYS' FEES & PRE-JUDGMENT INTEREST
Newell appeals the district court's denial of its
motion for attorneys' fees and pre-judgment interest. Puerto
Rico Rule 44.1(d) on attorneys' fees and 44.3(b) on pre-judgment
interest are rules of decision that should be applied by the
Federal Court sitting in diversity. De Le n L pez v. Corporaci n
_____________ ___________
Insular de Seguros, 931 F.2d 116, 126 (1st Cir. 1991); Pan
___________________ ___
American World Airways, Inc. v. Ramos, 357 F.2d 341, 342 (1st
_____________________________ _____
Cir. 1966) (Puerto Rico Rules of Civil Procedure 44.1(d) and
44.3(b) are a matter of substantive law to be applied by the
federal court sitting in diversity). The decision to award such
fees is within the discretion of the district court and we will
only disturb its ruling where there has been an abuse of that
discretion. De Le n L pez, 931 F.2d at 126-27.
_____________
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Under Rule 44.3(b) and 44.1(d) of the Puerto Rico Rules
of Civil Procedure, imposition of pre-judgment interest and
attorney's fees on the non-prevailing party is mandatory where
the party was obstinate and stubbornly litigious. Rule 44.3(b)
on pre-judgment interest provides:
(b) Except when the defendant is the
Commonwealth of Puerto Rico, its
municipalities, agencies,
instrumentalities or officers acting in
their official capacity, the court will
also impose on the party that has acted
rashly the payment of interest at the
rate fixed by the Board by virtue of the
previous subsection which is in effect at
the moment the judgment is pronounced,
from the time the cause of action arises
in every case of collection of money and
from the time the claim is filed in
actions for damages until the date
judgment is pronounced, to be computed on
the amount of the judgment. The interest
rate shall be stated in the judgment.
P.R. Laws Ann. tit. 32, App. III, Rule 44.3(b) (1989 Supp.).
Rule 44.1(d) on attorney's fees states:
In the event any party or its lawyer has
acted obstinately or frivolously, the
court shall, in its judgment, impose on
such person the payment of a sum for
attorney's fees which the court decides
corresponds to such conduct.
P.R. Laws Ann. tit. 32, App. III, Rule 44.1(d) (1989 Supp.).
A party is obstinate under Rule 44.1(d) if it engages
in actions which (a) make necessary litigation which could have
been avoided, (b) prolongs the litigation unnecessarily, or (c)
requires the other party to incur expenses in the pursuit of
avoidable tasks. Fern ndez Mari o v. San Juan Cement Co. Inc.,
_________________ _________________________
118 D.P.R. 713, 718-19 (1987); De Le n L pez, 931 F.2d at 126.
_____________
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In ruling on Rubbermaid's motion for attorneys' fees
and pre-judgment interest the district court stated:
We are not convinced that the defendant,
Rubbermaid, Inc., acted rashly or
contumaciously in defending from this Law
75 Dealer's Act suit. A reasonable
reviewer of this record may conclude that
the defendant's case presented plausible
positions that merited contract
termination. The fact that the jury
elected otherwise is not indicative of
contumacious conduct on the part of the
defendant.
After reviewing the record, we agree with the district
court in its conclusion that Rubbermaid did not act rashly or
contumaciously in defending this suit. Rubbermaid presented
evidence in support of its defense, indicating that Newell
experienced a decline in sales of Rubbermaid products and failed
to meet assigned sales objectives. Rubbermaid also presented
evidence to the effect that Newell's policies as to the pricing
of Rubbermaid products and Newell's sale of houseware plastics
that were not manufactured by Rubbermaid adversely affected
Rubbermaid's interests. The district court did not abuse its
discretion in denying Newell's motion for attorneys' fees and
pre-judgment interest.
Affirmed.
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Document Info
Docket Number： 93-1431
Filed Date： 4/11/1994
Precedential Status： Precedential
Modified Date： 9/21/2015