Valentín v. White Rose, Inc.

993 F. Supp. 2d 77, 2014 WL 324383, 2014 U.S. Dist. LEXIS 12574
CourtDistrict Court, D. Puerto Rico
DecidedJanuary 27, 2014
DocketCivil No. 12-1870(DRD)
StatusPublished
Cited by2 cases

This text of 993 F. Supp. 2d 77 (Valentín v. White Rose, Inc.) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Valentín v. White Rose, Inc., 993 F. Supp. 2d 77, 2014 WL 324383, 2014 U.S. Dist. LEXIS 12574 (prd 2014).

Opinion

OPINION AND ORDER

DANIEL R. DOMÍNGUEZ, Senior District Judge.

David Valentin (“Plaintiff’), a Puerto Rico resident, filed a complaint alleging the unjust termination of a sales representative contract between him and White Rose, Inc. (“Defendant”), a Delaware corporation. Plaintiffs cause of action is based on the Puerto Rico Sales Representative Act, as amended, 10 L.P.R.A. § 279 et seq. (“Law 21”), which proscribes termination without just cause of a sales representative contract. Plaintiff avers an alternative cause of action under local Law 80 claiming unjust dismissal from employment. Docket No. 13.

Defendant filed a motion to dismiss under Rule 12(b)(6) of the Federal Rules of Civil Procedure and a brief in support of the same (Docket Nos. 17 and 18). Defendant asserts that Plaintiff failed to demonstrate a plausible entitlement of relief under Law 21 (Docket Nos. 18 and 26). However, Defendant barely addresses Plaintiffs claims under Law 80 — and as addressed only as an apparent afterthought, on a footnote on the very last page of the brief. Defendant’s defense against Plaintiffs Law 80 claim is a feeble attempt for Defendant only alluded to having a defense against Plaintiff, without pleading such defenses, and alerting of having “sufficient ‘just cause’ ” for Plaintiffs termination, also without identifying the just cause. Docket No. 18, note 3 on page 12. Instead, Defendant’s motion to dismiss rested only on attacks of Plaintiffs Law 21 claims admitting to making payments to Plaintiff that were “much more akin to an employer-employee relationship [79]*79enforceable under Law 80,” (Docket No. 18, page 9); and on their claim in the prayer for relief that “[i]f [Plaintiff] is entitled to any relief in this matter, it would be pursuant to Law 80, i.e., the other claim forwarded in the Amended Complaint.” Id. at page 12.

Based on the analysis that follows, the Court hereby GRANTS IN PART AND DENIES IN PART Defendant’s motion to dismiss. The motion to dismiss is GRANTED as to Plaintiffs causes of action under Law 21 and it is DENIED as to Plaintiffs causes of action under Law 80.

I. BACKGROUND

In or around December of 1998, Plaintiff began a professional relationship1 with Defendant to introduce in the Puerto Rico retail market products distributed by Defendant. Plaintiffs responsibilities included identifying buyers for Defendant’s products, as well as developing the marketing and promotion of such products (Docket No. 13, ¶¶ 9-10). Under the professional relationship with Defendant, Plaintiff had the prerogative of “devising, developing, and implementing sale and promotion strategies for the [Puerto Rico] market of the products entrusted only to Plaintiff by [Defendant].” Id. at ¶ 12. Allegedly, Plaintiffs duties were to be performed on “a continuous basis, with no fixed end date, through a set compensation for his services.” Id. at ¶ 11. Plaintiff listed his duties as follows:

a.obtaining a workspace for himself;
b. setting the agenda for tasks to be performed by Plaintiff;
c. cost reduction initiatives;
d. identifying buyers for the [Defendant] products entrusted to him exclusively;
e. nurturing the business relationships with current buyers in the PR market, and seeking new buyers;
f. initiate, procure, and conclude sales contracts, binding [Defendant], for the products it entrusted to Plaintiff;
g. procuring and executing binding personal credit guarantees, in favor of [Defendant], with the principals of the buyer corporations; and,
h. supervising the warehouse operations of [Defendant’s] products in [Puerto Rico].

Id. at ¶ 13. Also during the “professional relationship,” Plaintiff “enjoyed autonomy to carry out his tasks in the [Puerto Rico] market.” Id. at ¶ 14. Plaintiff avers that his efforts had been increasingly lucrative to the parties and showed trends of continued growth. Id.

By the late 2006, Defendant afforded Plaintiff sick and vacation leave accrual; health insurance benefits; reimbursement of expenses incurred by Plaintiff; and withholding of employment taxes. On January of 2007, upon Plaintiffs inquiry to Defendant, Plaintiff was allegedly notified that Defendant changed Plaintiffs classification from “employee” to “independent contractor.”2 Id. at ¶ 35. Apparently, the [80]*80so called “business relationship” had been considered by Defendant as an employment relationship until the end of 2006, and as a professional services relationship thereafter. Notwithstanding the change in Plaintiffs classification or characterization by Defendant, Plaintiff avers that: (1) Plaintiff had no authority to hire or terminate Defendant’s employées; (2) Plaintiff was economically dependent on the compensation received from Defendant; (3) Plaintiffs compensation was not contingent on the outcome of his tasks; and (4) Plaintiffs tasks were for the sole purpose of furthering Defendant’s interests, which constituted Defendant’s entire operations in Puerto Rico until 2011.

Around mid-2011, the manner in which the relationship between the parties was conducted continued to change. Plaintiff claims that Defendant initiated “a business relationship” with a Mr. Fernando Herrera and that Defendant required that Plaintiff share Plaintiffs experience, contracts, and overall expertise with Herrera because Herrera was to be selling a line of Defendant’s international products in the Puerto Rico market. Id. at ¶ 16-17. Plaintiff complied with Defendant’s request and assisted Herrera in recruiting, interviewing and training personnel to sell the international products. Plaintiff also shared with Herrera’s personnel his know-how in the business and his client listing and introduced Herrera’s personnel to some of Plaintiffs contacts at the various stores where Plaintiff sold Defendant’s products. Id. at ¶ 18. At this point, the Court notes that Plaintiff did not identify whose business know-how Plaintiff was sharing with Herrera and his personnel. This information is potentially relevant for a claim under Law 21 such as the instant claim as said evidence may show the existence of Plaintiffs business as an independent entrepreneur, which is critical for Plaintiffs Law 21 cause of action.

On October of 2011, Plaintiff alleges that he noticed that the products he was selling in the Puerto Rico market were also to be sold by Herrera in Puerto Rico. Id. at ¶ 19. Because Plaintiff considered himself as an exclusive sales representative of Defendant’s products in Puerto Rico, Plaintiff notified this matter to Defendant. Allegedly, Defendant took no action in this respect. Id.

Finally, on April 12, 2012, Plaintiff was terminated from his “business relationship” with Defendant without an explanation, except that Defendant clarified that Plaintiffs termination was not related to his performance. Id. at ¶ 20. Since Plaintiffs termination, Herrera and his personnel have allegedly been carrying out Plaintiffs duties. Id. at ¶ 21.

II.. RULE 12(b)(6) MOTION TO DISMISS STANDARD

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Bluebook (online)
993 F. Supp. 2d 77, 2014 WL 324383, 2014 U.S. Dist. LEXIS 12574, Counsel Stack Legal Research, https://law.counselstack.com/opinion/valentin-v-white-rose-inc-prd-2014.