Molinos Valle Del Cibao, C. Por A. v. Lama
633 F.3d 1330
| 11th Cir. | 2011Background
- Molinos Valle Del Cibao, a Dominican corporation, contracted to buy US dollars from the Lamas for Dominican pesos; the checks were drawn on Chipstek and Expertek, subsidiaries controlled by the Lamas, but payable to the Lamas’ messengers.
- The checks bounced; Molinos and the Lamas met in 2004 and 2006; Oscar Sr. acknowledged personal liability for part of the debt and Carlos signed a promissory note.
- Molinos sued in the SD Florida asserting breach of contract (Count I) and a worthless check claim under Fla. Stat. § 68.065 (Count IV) seeking treble damages if pierce-the-veil theory applied; other counts for FDUTPA and unjust enrichment were dismissed or settled.
- Diversity/jurisdiction became contested because Carlos and Oscar Jr. are Dominican citizens; Oscar Sr. is a dual US–DR citizen, raising questions about alienage jurisdiction.
- The district court admitted settlement-negotiation statements under Rule 408 and ruled on various JMOL and damages, with a jury finding in Molinos’s favor on Count I and Count V; post-trial, the court adjusted damages.
- On appeal, the Eleventh Circuit vacated the portion of the judgment pertaining to Carlos and Oscar Jr. and retained Oscar Sr., addressing jurisdiction and piercing-the-veil theories.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether complete diversity exists with Oscar Sr. | Molinos argues Oscar Sr. is US-domiciled and thus US citizen for § 1332(a). | Lamas contend Oscar Sr. is domiciled abroad or that nondiverse parties defeat jurisdiction. | Oscar Sr. is domiciled in Florida; thus alienage jurisdiction remains valid for the case against him. |
| Whether Carlos and Oscar Jr. are indispensable or misjoined parties under Rule 19/Rule 21 | Molinos seeks to keep all defendants; argues nondiverse parties may be dropped without voiding jurisdiction. | Lamas argue lack of diversity requires dismissal or imputation of citizenship to destroy diversity. | Rule 21 dismissal of nondiverse Carlos and Oscar Jr. is appropriate; the case may proceed against Oscar Sr. alone. |
| Whether Chipstek and Expertek’s status requires piercing the veil for Count IV | Molinos claims alter ego/agency theories to hold Lamas personally liable for the bad checks. | Lamas maintain no proper basis to pierce the veil because officers/shareholders were not owners of Chipstek/Expertek. | Evidence insufficient to pierce the veil against non-shareholder directors; agency theory not preserved; Count IV affirmed as against Oscar Sr. but reversed as to others. |
| Whether settlement-negotiation statements were improperly admitted under Rule 408 | Molinos sought to use admissions to identify the Lamas as the true contracting parties. | Lamas argued Rule 408 barred such statements. | District court did not abuse its discretion; statements were admitted for purposes other than establishing liability, and not as settlement admissions. |
| Whether Mejia lacked authority to bind Oscar Sr.; whether ratification supports liability | Molinos argued Mejia had authority or that Oscar Sr. ratified Mejia's actions. | Lamas contend no authority or ratification. | There is sufficient evidence of explicit ratification by Oscar Sr.; liability under ratification supports Oscar Sr.'s liability on Count I. |
Key Cases Cited
- Newman-Green, Inc. v. Alfonzo-Larrain, 490 U.S. 826 (1989) (Rule 21 rescue of nondiverse party; finality concerns in diversity cases)
- Iraola & CIA, S.A. v. Kimberly-Clark Corp., 232 F.3d 854 (11th Cir. 2000) (diversity burden to show citizenship; alienage rules)
- Caterpillar, Inc. v. Lewis, 519 U.S. 61 (1996) (finality/efficiency considerations in Rule 21 dismissals)
- Dania Jai-Alai Palace, Inc. v. Sykes, 450 So.2d 1114 (Fla. 1984) (piercing the corporate veil based on ownership and improper use)
- Mayer v. Eastwood Smith & Co., 164 So. 684 (Fla. 1935) (ownership principle in veil piercing; improper use requires liability)
- Freeman v. Northwest Acceptance Corp., 754 F.2d 553 (5th Cir. 1985) (imputation of subsidiary's citizenship to parent in veil- piercing/indispensability context)
- Seminole Boatyard, Inc. v. Christoph, 715 So.2d 987 (Fla. 4th Dist. Ct. App. 1998) (non-shareholder liability under veil-piercing theory—limited applicability)
- Gasparini v. Pordomingo, 972 So.2d 1053 (Fla. 3d Dist. Ct. App. 2008) (elements of piercing the corporate veil require domination, fraud/improper use, and injury)