Omar Portugués-Santana v. Rekomdiv International Inc.
725 F.3d 17
1st Cir.2013Background
- Portugués sought a Victoria’s Secret franchise and, relying on Domingo’s representations, retained Venable ($400,000) and Rekomdiv ($225,000 total). No franchise materialized.
- Portugués sued Venable/Bayh (settled pre-trial) and separately sued Rekomdiv and Domingo for dolo (fraudulent inducement) and breach; a jury found Rekomdiv and Domingo liable and awarded $625,000.
- After the verdict Portugués asked the court to void the Rekomdiv contract and order return of the $225,000; the court voided the contract but (erroneously) denied restitution and treated the $625,000 verdict as encompassing payments to both Rekomdiv and Venable.
- Rekomdiv and Domingo sought post-trial offset of the $625,000 award by the Venable settlement amount; the district court denied offset. This Court remanded to consider the settlement for offset but did not decide the issue.
- On remand the district court again denied offset, reasoning the jury awarded damages only for Rekomdiv/Domingo’s dolo (no double recovery), and dismissed sua sponte Rekomdiv/Domingo’s legal malpractice suit against their trial counsel for failure to state a viable malpractice claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the $625,000 verdict must be offset by the Venable settlement | Portugués: no offset; verdict compensates only dolo by Rekomdiv/Domingo | Rekomdiv/Domingo: Venable is joint tortfeasor; settlement should reduce their liability to avoid double recovery | No offset required; verdict was for Rekomdiv/Domingo’s dolo only and no double-compensation shown |
| Whether plaintiff was entitled to restitution (return of $225,000) after dolo verdict | Portugués: restitution separate from damages under PR law §3514; should receive return | Rekomdiv/Domingo: court previously ruled restitution unavailable and that ruling stands | District court mistakenly denied restitution but that denial was not appealed; failure to get restitution weighs against finding double recovery |
| Whether dismissal of legal malpractice complaint sua sponte was proper | Rekomdiv/Domingo: malpractice complaint states viable claims (joinder, third-party practice, failure to object) | Lamboy: complaints fail Rule 12(b)(6)/12(c) standards; plaintiff cannot show but-for causation (suit-within-a-suit) | Affirmed dismissal: malpractice pleading fails causal-nexus (suit-within-a-suit) requirement |
| Whether specific malpractice allegations (failure to joinder/third-party practice; failure to object at closing) satisfy causation | Rekomdiv/Domingo: these failures cost them the dolo defense / prevented contribution from Venable | Lamboy: underlying dolo verdict was supported by evidence; no plausible claim that different tactics would have changed outcome; closing-argument error was forfeited and likely cured by instruction | Dismissed: complaint lacks allegation that different counsel conduct would have changed result; causation not plausibly alleged |
Key Cases Cited
- Villarini-García v. Hosp. del Maestro, 112 F.3d 5 (1st Cir. 1997) (offset principle prevents double recovery where jury awarded total damages attributable to settling and non-settling tortfeasors)
- Río Mar Assocs., LP v. UHS of P.R., Inc., 522 F.3d 159 (1st Cir. 2008) (offset required where jury instructions/verdict encompassed total damages caused by both settling and non-settling parties)
- Ponce v. Ashford Presbyterian Cmty. Hosp., 238 F.3d 20 (1st Cir. 2001) (reduction by settlement appropriate when jury was instructed to assess total damages including settling parties)
- Gonzalez-Gonzalez v. United States, 257 F.3d 31 (1st Cir. 2001) (standard for affirming sua sponte dismissal; complaint must be patently meritless when no notice)
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (complaint must state a claim plausible on its face under Rule 12(b)(6))
- McHann v. Firestone Tire & Rubber Co., 713 F.2d 161 (5th Cir. 1983) (illustrative contrast where jury was instructed to award total damages, supporting offset of non-settling defendant’s award)