Estate of Berganzo-Colón Ex Rel. Berganzo v. Ambush

United States Court of Appeals
For the First Circuit
No. 12-1218
THE ESTATE OF ÁNGEL BERGANZO-COLÓN REPRESENTED BY EFRAÍN
AND RUBÉN BERGANZO; THE ESTATE OF ANTONIO RODRÍGUEZ-MORALES
REPRESENTED BY NOEMÍ RODRÍGUEZ-ROBLES, ELIEZER RODRÍGUEZ-ROBLES,
ÁNGEL M. RODRÍGUEZ-ROBLES, MARÍA M. RODRÍGUEZ-ROBLES AND
RUTH D. RODRÍGUEZ-ROBLES,
Plaintiffs, Appellees,
v.
JOSHUA M. AMBUSH,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Gustavo A. Gelpí, U.S. District Judge]
Before
Howard, Lipez and Thompson,
Circuit Judges.
Raúl M. Arias, with whom McConnell Valdes LLC was on brief,
for appellant.
David Efron, with whom Joanne V. Gonzales Varon and Law
Offices of David Efron, P.C. were on brief, for appellees.
January 7, 2013
HOWARD, Circuit Judge. Joshua M. Ambush, an attorney,
appeals various judgments and orders of the United States District
Court for the District of Puerto Rico, which nullified two retainer
agreements signed by Ambush's clients. The district court issued
its final judgment after a jury found that Ambush had secured his
clients' consent to the retainer agreements by deceit. We affirm.
I. Background
In 1972, Japanese terrorists opened fire on a group of
Puerto Ricans at Lod Airport in Tel Aviv, Israel, killing several
of them. Among those killed were Ángel Berganzo-Colón and Antonio
Rodríguez-Morales, whose heirs are the appellees in this case. At
the time, sovereign immunity generally prevented a victim of
terrorism (or his heirs) from filing suit in the United States
courts against a nation that sponsored the terrorist act. In 1996,
however, Congress created a "terrorism exception" to sovereign
immunity. Antiterrorism and Effective Death Penalty Act of 1996,
Pub. L. No. 104-132, § 221(a)(1)(C), 110 Stat. 1214, 1241 (repealed
2008). For acts of terrorism that occurred before the law was
enacted, plaintiffs had ten years to file suit. Id. § 221(a)(2).
In the early 2000s, Ambush was a new attorney in Maryland
with an interest in cases relating to international terrorism.
Ambush's research led him to believe that Libya and Syria had
sponsored the Lod Airport massacre, and he thought that he could
bring suit against those nations if he could find the right
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plaintiffs. He took his idea to an organization called the
American Center for Civil Justice (the "Center"), which sponsored
litigation by victims of terrorism. Ambush had become familiar
with the Center through his family friend Eliezer Perr, who was one
of the Center's principals. The Center agreed to participate, and
Ambush found potential plaintiffs, including the appellees, with
the help of his Puerto Rican cousin Leopoldo García-Viera.
In 2002, García had potential plaintiffs sign a "Claimant
and Center Agreement," under which the Center would cover all costs
of investigating and litigating their cases in return for twenty
percent of any proceeds from litigation. They also signed a power
of attorney in favor of Michael Engelberg, the director of the
Center. The Claimant and Center Agreement was not a retainer
agreement, but it did obligate the Center to secure counsel to
commence litigation. It did not mention Ambush. Ambush, who does
not speak Spanish, did not travel to Puerto Rico or meet with the
signatories.
Over the next few years, Ambush and the Center
unsuccessfully attempted to persuade a major law firm to litigate
against Libya and Syria. Faced with the impending expiration of
the ten-year statute of limitations, the Center asked Ambush to
draft and file a complaint, which he did in April 2006. Without
assistance from other attorneys, Ambush began to litigate the case,
known as Franqui v. Syrian Arab Republic, No. 1:06-cv-00734-RBW
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(D.D.C. filed Apr. 21, 2006). He effected service on the
defendants and opposed motions to dismiss. During this time,
Ambush had no written agreement with the Center regarding
compensation for his work on the Franqui litigation. From time to
time, he would ask the Center for payment at the rate of fifty
dollars per hour, as well as reimbursement for his expenses. The
Center made some payments to Ambush, but the Center and Ambush
dispute whether he was paid in full. Engelberg believed that
Ambush had been paid everything he was owed. Ambush believed that
he had an oral understanding with Eliezer Perr that he would
receive a substantial percentage of any recovery.
In August 2008, as the Franqui litigation progressed, the
United States and Libya signed a settlement agreement that
foreclosed terrorism-related suits against Libya. In exchange,
Libya would compensate victims of terrorist acts it sponsored, by
contributing to a settlement fund to be administered by the United
States Department of State. The fund would pay $10 million to the
estate of each person killed in an act of Libyan-sponsored
terrorism.
After the Libyan settlement was announced, the Center
sent Ambush a letter telling him to turn his case file over to Paul
Gaston, an attorney whom the Center had hired and who had filed a
notice of appearance in the Franqui litigation a few months before.
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Ambush did not turn over his file, but instead went to Puerto Rico
to meet with the Franqui plaintiffs for the first time.
On December 15, 2008, Ambush, along with his cousin
García and a notary public, met with the families of Ángel Berganzo
and Antonio Rodríguez. Berganzo had two heirs: Efraín and Rubén
Berganzo-Cruz. Only Efraín attended the meeting. Rodríguez had
five heirs: Noemí, Eliezer, María, Ángel, and Ruth Rodríguez-
Robles. All but Ruth attended the meeting. What was said at the
meeting is a matter of dispute that we will discuss below. But it
is undisputed that all of the heirs present at the meeting signed
retainer agreements--one for each estate--that revoked Engelberg's
power of attorney, retroactively retained Ambush as the heirs'
counsel for the Franqui litigation and the administration of their
claims in the Libyan settlement, and awarded Ambush ten percent of
any recovery. Rubén Berganzo did not sign the retainer agreement,
but he testified that his brother Efraín signed on his behalf under
a power of attorney. Ruth Rodríguez signed the retainer agreement
a week later in Florida. Two days after the meeting, Ambush sent
a letter to Engelberg informing him that his power of attorney was
revoked and telling him not to contact the plaintiffs in the
Franqui litigation.
Ambush then worked to obtain settlement funds for the
Franqui plaintiffs. He dismissed the Franqui litigation as the
settlement agreement required, and he gathered the documents that
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the State Department requested. By April 2009, the State
Department paid $10 million to Ambush's trust account for each of
the two estates. Of this $10 million, Ambush sent $2 million to
the Center pursuant to the Claimant and Center Agreements, kept $1
million pursuant to the retainer agreements, and sent $7 million to
the heirs.
As one might expect, relations between Ambush and the
Center soured. The Center filed suit against Ambush, alleging that
he breached his fiduciary duty to the Center by convincing the
Franqui plaintiffs to revoke Engelberg's power of attorney, and
that he deliberately performed his work inefficiently and
overcharged the Center. See Am. Ctr. for Civil Justice v. Ambush,
No. 1:09-cv-00233-PLF (D.D.C. filed Feb. 6, 2009). Ambush
counterclaimed for breach of contract, alleging that the Center had
failed to pay him $2 million that it had promised as compensation
for his work on the Franqui litigation.
While Ambush and the Center litigated against each other,
the Center hired a Puerto Rico attorney, Javier López-Pérez, to run
the following advertisement in the Puerto Rican press directed
specifically toward the Franqui plaintiffs:
You could be the object of a scheme of
improper collection of attorneys fees by
attorneys in Washington and Maryland. If you
are a party to the settlement that was reached
with the Government of Libya and have been
approached by attorneys from outside who
propose new agreements for the payment of
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additional fees, please communicate with us
immediately.
You do not have to pay any more than
what was originally agreed.
López also was quoted extensively in a newspaper article titled
"Victims of Lod Massacre 'Deceived.'" The heirs of Ángel Berganzo
and Antonio Rodríguez contacted López, who ultimately filed this
action against Ambush in the United States District Court for the
District of Puerto Rico.
The heirs alleged that the retainer agreements were void
because Ambush secured their consent by deceit, known in Spanish as
dolo. Puerto Rico contract law provides that "[c]onsent given by
. . . deceit shall be void." P.R. Laws Ann. tit. 31, § 3404.
"There is deceit when by words or insidious machinations on the
part of one of the contracting parties the other is induced to
execute a contract which without them he would not have made." Id.§ 3408. According to the heirs' complaint, Ambush failed to
disclose at their meeting that the Center had paid him for his
work, falsely told them that the Center had done nothing on the
estates' behalf, and misrepresented that the estates' compensation
was contingent on the heirs' signature of the retainer agreements.
At trial, both of Berganzo's heirs testified, as did
three of Rodríguez's five heirs: Noemí, Eliezer, and María
Rodríguez. Ángel and Ruth Rodríguez did not testify. Engelberg,
the director of the Center, also testified for the heirs. Both
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sides called Ambush as a witness, and Ambush called García, who was
present at Ambush's meeting with the heirs. At the close of the
heirs' case and again at the close of Ambush's case, the court
denied motions by Ambush to dismiss the heirs' dolo claim as a
matter of law under Rule 50 of the Federal Rules of Civil
Procedure.
The jury returned a verdict against Ambush, deciding that
he had committed dolo against all seven heirs, and it awarded
$100,000 in additional damages to each of the five heirs who
testified at trial. The court entered a judgment nullifying the
retainer agreements and ordered Ambush to pay $1 million in
restitution to each of the two estates. Ambush then filed a post-
trial motion for judgment as a matter of law or for a new trial.
In addition, Ambush moved for remittur of the $100,000 of
additional damages for each testifying heir. The court denied the
motion for judgment as a matter of law or for a new trial, but it
remitted the additional damages to $5,000 for each testifying heir.
Ambush timely appealed the denials of his motions for judgment as
a matter of law and for a new trial.
II. Analysis
Ambush appeals on three grounds, each of which he raised
at trial and in his post-trial motions. First, there was
insufficient evidence to justify the jury's finding of dolo.
Second, the jury should not have been allowed to find dolo with
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respect to the two heirs who did not testify. Third, the court
erred by instructing the jury on just one of the two types of dolo
described in the Puerto Rico Civil Code.
We review a denial of a motion for judgment as a matter
of law de novo, examining the evidence and reasonable inferences
therefrom in the light most favorable to the nonmovant (here, the
heirs). Casillas-Díaz v. Palau, 463 F.3d 77, 80-81 (1st Cir.
2006). "A party seeking to overturn a jury verdict faces an uphill
battle. 'Courts may only grant a judgment contravening a jury's
determination when the evidence points so strongly and
overwhelmingly in favor of the moving party that no reasonable jury
could have returned a verdict adverse to that party.'" Marcano
Rivera v. Turabo Med. Ctr. P'ship, 415 F.3d 162, 167 (1st Cir.
2005) (quoting Rivera Castillo v. Autokirey, Inc., 379 F.3d 4, 9
(1st Cir. 2004)). Our review "is weighted toward preservation of
the jury verdict." Crowe v. Bolduc, 334 F.3d 124, 134 (1st Cir.
2003).
We review a denial of a motion for a new trial for abuse
of discretion. Goulet v. New Penn Motor Express, Inc., 512 F.3d
34, 44 (1st Cir. 2008). "A district court should grant a motion
for a new trial only if 'the outcome is against the clear weight of
the evidence such that upholding the verdict will result in a
miscarriage of justice.'" Id. (quoting Ramos v. Davis & Geck,
Inc., 167 F.3d 727, 731 (1st Cir. 1999)).
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A. Sufficiency of the Evidence Regarding Dolo
At trial, the jury determined that the heirs had proven,
by clear and convincing evidence,1 that Ambush committed dolo
against all of them. Ambush argues that the evidence was
insufficient to support the jury's verdict. To prove dolo, a
plaintiff must establish "(1) the intent to defraud; (2) reliance
on the fraudulent acts; (3) the false representations used to
consummate the fraud; and (4) that the fraud was consummated by
virtue of such representations." P.R. Elec. Power Auth. v. Action
Refund, 472 F. Supp. 2d 133, 138-39 (D.P.R. 2006). The parties'
dispute begins with the third element: whether Ambush made false
representations to the heirs. We will review the testimony
regarding some of the alleged misrepresentations.
The heirs allege that Ambush falsely represented that if
they did not sign the retainer agreements, disbursement of the
settlement funds would be delayed. This allegation rests on the
testimony of Efraín Berganzo and Eliezer Rodríguez.
1
At the beginning of the trial, the court instructed the jury
that a plaintiff must prove dolo by clear and convincing evidence.
On the second-to-last day of testimony, after nearly all the
witnesses had testified, we issued an opinion holding that dolo
must be proven only by a preponderance of the evidence. Portugues-
Santana v. Rekomdiv Int'l, 657 F.3d 56 (1st Cir. 2011). The
district court decided that Rekomdiv did not apply retroactively,
and that the jury would continue to be instructed on the clear-and-
convincing standard. Estate of Colón v. Ambush, Civ. No. 10-01044
(GAG), 2011 WL 4543431, at *1 (D.P.R. Sept. 29, 2011). On appeal,
the heirs describe the clear-and-convincing standard in passing as
"inapplicable," but they do not argue that the court's decision was
erroneous.
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Efraín Berganzo stated the following on direct
examination (via an interpreter):
Q. Do you know what would happen if you
wouldn't sign that document?
A. This is the document of legal
representation. Without it the case wouldn't
be processed.
Q. What do you mean when you say "no se podia
salir el caso"?
. . . .
A. . . . . That the case wouldn't be able to
be processed if I didn't sign this document.
Q. What would that mean? If the case would
not have been processed, what would have
happened in your mind?
A. The claim wouldn't have had any value and
I wouldn't have gotten any money.
Berganzo also testified that Ambush, García, or the notary public
(or more than one of them) "told me that if I didn't sign the
document, they wouldn't be able to process my complaint."
On cross-examination, Berganzo appeared to recant his
testimony:
Q. . . . [B]efore you executed the retainer
agreement, did Mr. Ambush ever say that if you
did not sign that agreement he would stop
representing you?
A. Negative.
Q. And by that you mean he did not say that?
A. That's correct.
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Q. And Mr. Ambush did not say either that if
you did not sign that agreement you would not
receive the payment that your estate was
entitled to, right?
A. That is correct.
On redirect, however, the heirs' counsel drew a distinction between
statements by Ambush and statements by García and the notary
public:
Q. . . . . [You testified on cross-
examination] that Ambush did not say that he
would quit; did Ambush say anything? Does
Ambush speak Spanish?
A. Negative.
Q. Did anybody say that Ambush would quit the
case if you didn't sign the retainer?
A. That it would not be processed.
This testimony, viewed in the light most favorable to the heirs,
supports a conclusion that while Ambush may not have told Bergonzo
directly that he would quit the case, he conveyed this message
through García or the notary public.
Eliezer Rodríguez gave similar testimony in his direct
examination:
Q. What do you understand would have happened
if you would not have signed the document?
. . . .
A. Well, if I didn't sign, if I didn't sign
it then maybe I wouldn't have received the
compensation.
Rodríguez's testimony on cross-examination was consistent:
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Q. Have you seen any documents that establish
that the Center has paid Mr. Ambush?
A. Well, I mean, that since we received the
amount, I imagine he must have collected, I
don't know.
Q. But you don't know?
A. Yes. Yes, he was supposed to have gotten
paid because otherwise they wouldn't have
given us the money.
Ambush denied that he had made such representations. In our view,
a reasonable jury could have resolved this dispute in favor of the
heirs and determined that Ambush misrepresented that the heirs
risked delay or worse if they did not sign the retainer agreements.
See Aponte-Rivera v. DHL Solutions (USA) Inc., 650 F.3d 803, 809
(1st Cir. 2011) ("It was the jury's role to determine witness
credibility . . . . This case does not present a situation in
which the evidence so strongly and overwhelmingly supports [the
defendant's] position that we should disturb the jury's verdict."
(internal quotation marks omitted)).
Some of the heirs also testified that Ambush told them
that he would be paid his ten percent fee under the retainer
agreements only if the Center did not pay him. Such a
representation would have been false because the retainer
agreements entitled Ambush to his fee regardless of whether the
Center paid him as well. On direct examination, Noemí Rodríguez
testified as follows: "Q. What were the documents for? A. It
was a document to sign for 10 percent in case they were not paid at
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the Center then they could not collect it from there." On cross-
examination, she maintained this account of the meeting:
Q. Now, you also told us during your direct
examination that you understood that when you
signed . . . the retainer agreement with Mr.
Ambush, that Mr. Ambush would only collect
that . . . 10 percent . . . if he was not paid
by the Center, correct?
A. That's what he said.
Q. And you signed it because you understood
that 10 percent would be a reasonable amount
to pay Mr. Ambush if the Center did not pay
him, correct?
A. If the Center didn't pay him, yes.
She also implied that other heirs relied on this representation
when signing: "A. Well, we signed because he told us that if the
Center didn't pay him then he would charge us that 10 percent, if
the Center didn't pay him." She admitted that the retainer
agreements themselves did not put this condition on Ambush's
compensation, but she was adamant that Ambush had said otherwise:
Q. But, Ms. Rodriguez, you have just looked
through [the retainer agreement] and you can't
find any language saying that the 10 percent
would be paid only if the Center didn't pay
Mr. Ambush, correct?
A. Yes, because he said it verbally to us.
He explained to us that if he was paid the 20
percent from [the Claimant and Center
Agreements signed in] 2002, if he was paid the
20 percent, then he would not be charging us
the 10 percent.
Eliezer Rodríguez corroborated this testimony on direct
examination: "Q. Do you know why Mr. Ambush had asked for 10
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percent of the compensation? A. Well, he asked for 10 percent in
case the Center didn't pay him the 20 percent, something like
that." Although he admitted on cross-examination that he could not
remember much about the meeting with Ambush, he insisted on this
aspect of his testimony: "Q. And you agreed to pay the additional
10 percent if he was not paid by the Center? A. Exactly." Ambush
has various responses to this testimony, which we address in turn.
Ambush first argues that he never told the heirs that he
would collect his ten percent fee only if the Center did not pay
him. As with the testimony regarding whether the heirs would be
paid if they failed to sign the retainer agreements, a reasonable
jury could have chosen to believe the testimony of Noemí and
Eliezer Rodríguez and to disbelieve Ambush's testimony. Thus, the
jury could have concluded that Ambush misrepresented an important
aspect of the retainer agreements.
Ambush also claims that testimony about what was said at
the meeting constitutes extrinsic evidence that is inadmissible to
determine the meaning of the retainer agreements. See In re
Advanced Cellular Sys., Inc., 483 F.3d 7, 12 (1st Cir. 2007). But
dolo involves an antecedent issue: whether the retainer agreements
are valid at all. P.R. Laws Ann. tit. 31, § 3404 ("Consent given
by . . . deceit shall be void."). An invalid contract does not
bind the parties, no matter how clear it is. See Century Packing
Corp. v. Giffin Specialty Equip. Co., 438 F. Supp. 2d 16, 26
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(D.P.R. 2006) (stating that "a contract which lacks the necessary
consent due to 'dolo' is null ab initio, i.e., from its
inception").
Ambush further contends that a party to an agreement is
bound by the agreement's clear terms even if she did not understand
the agreement when she signed it. See Herman v. Hogar Praderas de
Amor, Inc., 130 F. Supp. 2d 257, 262 (D.P.R. 2001). While it is
true that a party to a contract generally cannot plead ignorance of
the contract's terms, the contract is invalid nevertheless if the
party was deceived into signing it. See Soto v. State Indus.
Prods., Inc., 642 F.3d 67, 78 (1st Cir. 2011) ("In the absence of
fraud, the fact that an offeree cannot read, write, speak, or
understand the English language is immaterial to whether an
English-language agreement the offeree executes is enforceable."
(emphasis added) (quoting Morales v. Sun Constructors, Inc., 541
F.3d 218, 222 (3d Cir. 2008))). Regardless of how much the heirs
understood about the retainer agreements, a reasonable jury could
have concluded that Ambush's misrepresentations vitiated their
consent.
In the alternative, Ambush claims that even if he did
tell the heirs that he would receive his ten percent fee only if
the Center did not pay him, this representation constituted not
deceit but an oral amendment to the retainer agreements. The
parties have informed us that, indeed, in September 2012 Ambush and
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the Center settled their litigation against each other, with Ambush
receiving $980,000 plus interest for his work on the Franqui
litigation. If Ambush had verbally amended the retainer agreements
to provide that his ten percent fee was contingent on the Center
not paying him, he would be bound to return at least some money to
the heirs. At oral argument before this court, however, Ambush's
counsel said that Ambush does not intend to reimburse the heirs
because the retainer agreements do not require him to do so. This
would seem an uncomfortable position for Ambush to take when
arguing that the evidence might support a finding of oral
modification. In any event, the argument is beside the point in
light of the jury's supportable finding of dolo.
Finally, Ambush argues that Rubén and Efraín Berganzo,
who both graduated from high school and worked for the Puerto Rico
Electric Power Authority, were sophisticated enough to make a
knowing decision to execute the retainer agreements. See Cabán
Hernández v. Philip Morris USA, Inc., 486 F.3d 1, 12 (1st Cir.
2007) ("[W]hen examining efforts to invalidate consent, Puerto Rico
courts consider the education, social background, economic status,
and business experience of the challenger."). This defense fails.
The cases in which a party has been held to a contract by virtue of
that party's sophistication involve a lack of evidence of bad faith
on the part of the defendant, id., a plaintiff that is a
sophisticated business entity, Westernbank P.R. v. Kachkar, Civil
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No. 07-1606 (ADC/BJM), 2009 WL 6337949, at *23-24 (D.P.R. Dec. 10,
2009), or both, CitiBank Global Markets, Inc. v. Rodríguez Santana,
573 F.3d 17, 29 (1st Cir. 2009). Here, by contrast, Efraín
Berganzo, who signed the retainer agreement himself and on behalf
of his brother Rubén, was a high school graduate who testified to
his understanding that if he did not sign the retainer agreement,
his claim against Libya would not be processed. A reasonable jury
could have concluded that Berganzo was not sophisticated enough to
know that Ambush was deceiving him about the consequences of
failing to sign.
In summary, viewing the evidence and reasonable
inferences in the light most favorable to the heirs, we believe
that a reasonable jury could have concluded that Ambush misled them
into signing the retainer agreements, and that Ambush's
misrepresentations constituted dolo. Similarly, the district court
did not abuse its discretion in denying Ambush's motion for a new
trial because the outcome was not against the clear weight of the
evidence.
B. The Non-Testifying Heirs' Dolo Claim
Although only five of the seven heirs testified at trial,
the jury found that Ambush had committed dolo against all seven.
The district court permitted this outcome because it considered the
non-testifying heirs, Ángel and Ruth Rodríguez, to be parties to
the case as representatives of their father's estate. Ambush
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contends that these heirs brought their claims only as individuals,
and that they could not prove dolo without testifying about their
reliance on Ambush's misrepresentations.
The district court's ruling implicates two difficult
questions of Puerto Rico law: the distinction between individual
and inherited claims, and the extent to which a victory by an heir
to an estate benefits the estate's other heirs. We have described
before "the unsettled state of governing Puerto Rico law" with
respect to a similar issue: whether all heirs to an estate are
required parties under Rule 19 of the Federal Rules of Civil
Procedure. Jiménez v. Rodríguez-Pagán, 597 F.3d 18, 25 (1st Cir.
2010); see also Cruz-Gascot v. HIMA-San Pablo Hosp. Bayamon, 728
F. Supp. 2d 14, 21-26 (D.P.R. 2010) (discussing Jiménez and
examining precedent on the issue).
We need not resolve these questions, however, because the
testifying heirs presented enough evidence for the jury to conclude
that Ambush deceived the non-testifying heirs into signing the
retainer agreements.2 Ángel and Ruth Rodríguez are siblings of
Noemí Rodríguez, who testified that "we signed because [Ambush]
told us that if the Center didn't pay him then he would charge us
that 10 percent, if the Center didn't pay him." A reasonable jury
2
Although this was not the district court's reason for
refusing to dismiss the dolo claims of the non-testifying
defendants, we may affirm the district court on any ground
supported by the record. In re Miles, 436 F.3d 291, 293-94 (1st
Cir. 2006).
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could have concluded that the word "we" referred at least to
Noemí's siblings. Although Ruth was absent from the meeting with
Ambush and signed the retainer agreement a week later in Florida,
there was enough evidence for a reasonable jury to infer that she
did so for the same reasons as Noemí. The testimony showed that in
matters concerning her father's estate, Noemí was the family's
leader; all of her siblings gave her power of attorney to represent
them in the claim against Libya. And while all of the Rodríguez
heirs signed the retainer agreement as individuals, only Noemí
signed on behalf of the estate as well. This evidence allowed the
jury to find in favor of the non-testifying heirs, regardless of
whether they brought their claims individually or on behalf of
their father's estate. See Colón Rivera v. Promo Motor Imps.,
Inc., 144 P.R. Dec. 659, 669 (1997) (certified translation)
("[Deceit] can be established through inference or circumstantial
evidence."); cf. St. Paul Fire & Marine Ins. Co. v. Ellis & Ellis,
262 F.3d 53, 62-63 (1st Cir. 2001) (holding, in a case involving
fraud, that a jury could find reliance on the basis of
circumstantial evidence). Therefore, we agree with the district
court (albeit on different grounds) that Ambush was not entitled to
judgment as a matter of law, or a new trial, with respect to the
non-testifying heirs' dolo claims.
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C. Jury Instruction on Dolo
Ambush also challenges the district court's instruction
to the jury on the definition of dolo. Puerto Rico law
distinguishes between two types of dolo: serious and incidental.
Serious dolo "causes, motivates, serves as the basis for and leads
to the execution of the contract, in such a manner that without it,
it would not have been executed." Colón Rivera, 144 P.R. Dec. at
667. Incidental dolo, on the other hand, occurs when "the contract
would have been executed anyway, but not under the same
conditions." Id. "In order that deceit may give rise to the
nullity of a contract, it must be serious," while "[i]ncidental
deceit renders the party who employed it liable to indemnify for
losses and damages only." P.R. Laws Ann. tit. 31, § 3409. At
trial, Ambush proposed instructing the jury on both types of dolo.
The heirs responded that they were making a claim of serious dolo
only, and that a description of incidental dolo would confuse the
jury. The court agreed with the heirs and instructed the jury with
respect to serious dolo only, omitting any mention of incidental
dolo. Ambush timely objected to this decision, and he argued in
his motion for a new trial that he was prejudiced by the court's
failure to instruct the jury on incidental dolo. The court denied
that motion, and Ambush raises the same argument here.
"We review preserved challenges to jury instructions de
novo, and look to the challenged instructions in relation to the
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charge as a whole, asking whether the charge in its entirety--and
in the context of the evidence--presented the relevant issues to
the jury fairly and adequately." Sony BMG Music Entm't v.
Tenenbaum, 660 F.3d 487, 503 (1st Cir. 2011) (internal quotation
marks omitted). A trial court's "refusal to give a particular
instruction constitutes reversible error only if the requested
instruction was (1) correct as a matter of substantive law, (2) not
substantially incorporated into the charge as rendered, and (3)
integral to an important point in the case." Gemini Investors Inc.
v. AmeriPark, Inc., 643 F.3d 43, 48 (1st Cir. 2011) (internal
quotation marks omitted).
Ambush does not dispute that the district court's
instruction accurately described serious dolo, but he claims that
without an instruction on incidental dolo, "the Jury was deprived
of the correct legal frame work that would allow it to decide:
(a) if there was evidence of dolo; and (b) the degree of dolo
involved." Instead, "[t]he Jury was left free to find dolo on the
basis of any conflict between Mr. Ambush's testimony and that of
the other witnesses or on the basis of the Jury's own subjective
judgment as to the purported insufficiency of any disclosure made
by Mr. Ambush."
We disagree with Ambush's characterization of the jury
instruction. In the district court, the heirs pursued a claim of
serious dolo exclusively. As we have discussed above, the heirs
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testified that their consent to the retainer agreements was based
on Ambush's misrepresentations; no heir testified that he or she
would have signed the retainer agreements anyway, but under
different conditions. In his closing argument at trial, the heirs'
counsel reiterated that Ambush's misrepresentations induced the
heirs to consent to the retainer agreements. Ambush therefore was
not entitled to an instruction on incidental dolo, a theory that
the heirs did not pursue and that their testimony did not support.
Such an instruction likely would have confused the jury, as the
district court recognized. Because incidental dolo was far from
"integral to an important point in the case," Gemini Investors
Inc., 643 F.3d at 48, the district court's decision to omit
Ambush's proposed instruction was not erroneous.3
III. Conclusion
We affirm the district court's judgment.
3
At trial, Ambush's counsel seemed to recognize that the
scope of the jury instruction on dolo should be limited by the
scope of the heirs' claims. When the heirs' counsel told the court
that it was waiving any claim of incidental dolo, Ambush's counsel
responded, "[L]et the record be clear that if there's no serious
dolo then he has foreclosed any claim that the jury should have
been instructed on incidental dol[o]."
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