Distribuidora VW, Inc. v. Old Fashioned Foods, Inc., 3:12-cv-01387

This is a diversity suit in which VW alleges Old Fashioned terminated their relationship without just cause under Puerto Rico's Sales Representative Act (Law 21).
VW and Old Fashioned operated under a long-standing verbal agreement for sales in Puerto Rico, with commissions, bill backs, and promotional allowances as previously agreed with Ventura and Ricardo Rodriguez.
Ricardo Rodriguez formed Distribuidora VW, Inc. to continue the business once he left Ventura, but no written contract was ever executed between VW and Old Fashioned.
Old Fashioned paid VW commissions and offered incentives for almost a decade, despite the absence of a formal written contract between VW and Old Fashioned.
The court must determine (i) whether VW is an exclusive sales representative under Law 21, (ii) whether Article 82 of the Puerto Rico Commerce Code requires corroboration of contract terms, and (iii) VW’s breach of contract claim being distinct from Law 21 claims.
The court ultimately denies summary judgment on the exclusivity issue and the existence of a contract but grants summary judgment on VW’s breach of contract claim.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether VW is an exclusive sales representative under Law 21	VW argues exclusivity is shown by course of dealings and sole agent status.	Old Fashioned contends there is no written exclusive agreement and exclusivity is not established.	There is a genuine issue of material fact regarding exclusivity; summary judgment denied.
Whether Article 82 requires corroboration for contract existence	Article 82 allows proof by any civil-law means beyond written corroboration.	Article 82 requires corroboration of essential contract terms in writing.	Article 82 does not require corroboration; existence of contract may be shown by other evidence; material fact exists regarding contract existence.
Whether VW has standing to sue if exclusivity is not expressly stated	VW contends it represents the same business interests via course of dealings and VW’s incorporation vindicates standing.	Standing defense relies on lack of express transfer of rights from Ventura to VW.	Standing is viable; course of dealing can establish the exclusive relationship for Law 21 purposes.
Whether VW’s breach of contract claim survives	Breach arises from termination under general contract principles.	If there is no enforceable contract, breach claim fails; termination may be at-will.	Breach of contract claim dismissed with prejudice; no fixed-term contract shown under Puerto Rico law.

IOM Corp. v. Brown Forman Corp., 627 F.3d 440 (1st Cir. 2010) (exclusivity may be shown by contract or course of dealings)
Garita Hotel Ltd. P'ship v. Ponce Fed. Bank, 122 F.3d 88 (1st Cir. 1997) (contract terms require corroboration beyond mere oral testimony)
Vila & Hnos, Inc. v. Owens Illinois de Puerto Rico, 17 P.R. Offic. Trans. 987 (1986) (whether essential terms are proven; financing contract example; Article 82 scope)
Cruz-Marcano v. Sanchez Tarazona, 172 D.P.R. 526 (Puerto Rico Supreme Court 2007) (definition and scope of Law 21 exclusivity)
Hurley Int'l LLC v. Gonzalez, 920 F. Supp. 2d 243 (D.P.R. 2013) (course of dealing and exclusivity under Law 21)
Gonzalez v. Hurley Int'l LLC, 920 F. Supp. 2d 243 (D.P.R. 2013) (exclusivity scope and mercantile-law interpretation)
Yordan v. Burleigh Point, Ltd., 552 F. Supp. 2d 200 (D.P.R. 2007) (evidence considerations in contract disputes)
Orba, Inc. v. MBR Indus., Inc., 49 F. Supp. 2d 67 (D.P.R. 1999) (evidence of commercial practice in exclusivity analysis)