Portugues-Santana v. Rekomdiv International
2011 U.S. App. LEXIS 19413
1st Cir.2011Background
- Portugues-Santana sought a Victoria's Secret franchise in Puerto Rico and enlisted Domingo of Rekomdiv to help secure it.
- Domingo urged Portugues to retain Venable LLP, and Portugues was told to hire Rekomdiv as well to complete the deal.
- Domingo allegedly represented that obtaining the Victoria's Secret franchise was a done deal and that Victoria's Secret owed favors to Bayh, a Venable partner.
- Portugues paid $400,000 to Venable and $100,000 to Rekomdiv, plus an additional $125,000 to Rekomdiv as a broker fee.
- Venable later emailed that no franchise was available because Victoria's Secret does not use a franchise/distributor model, but Venable would explore other approaches.
- A jury found the defendants liable for dolo (fraud) and awarded $625,000 in damages; Portugues later settled with Venable.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Dolo standard in Puerto Rico law | Portugues argues preponderance applies. | Portugues argues the stronger 'strong, clear, and convincing' standard. | Puerto Rico now uses preponderance; instruction harmless. |
| Sufficiency of dolo proof | Evidence supports dolo in contract formation. | Evidence insufficient for dolo. | Evidence supports verdict; no JMOL required. |
| Settlement evidence under Rule 408 and post-trial offset | Venable settlement should offset damages. | Settlement evidence barred and offset appropriate. | Exclusion proper; remand to determine possible offset. |
Key Cases Cited
- Puerto Rico Electric Power Auth. v. Action Refund, 515 F.3d 57 (1st Cir. 2008) (fraud proof standard by preponderance on PR law)
- McHann v. Firestone Tire & Rubber Co., 713 F.2d 161 (5th Cir. 1983) (Rule 408 settlement evidence in civil trials)
- McInnis v. A.M.F., Inc., 765 F.2d 240 (1st Cir. 1985) (Rule 408 applicability to settlements)
- De Jesus Diaz v. Carrero, 112 D.P.R. 631 (P.R. 1982) (abandons solid/clear standard; fraud proof by preponderance)
- Lummus Co. v. Commw. Oil Ref. Co., 280 F.2d 915 (1st Cir. 1960) (fraud elements and reliance guidance)
- Prado Alvarez v. R.J. Reynolds Tobacco Co., 313 F. Supp. 2d 61 (D.R. 2004) (preponderance standard for fraud claims (district court authority cited))