Goldman, v. Rodriguez ( 1993 )

January 6, 1993
United States Court of Appeals
For the First Circuit
No. 92-1458
GOLDMAN, ANTONETTI, FERRAIUOLI,
AXTMAYER & HERTELL, A PARTNERSHIP,
Plaintiff, Appellee,
v.
MEDFIT INTERNATIONAL, INC., ET. AL.,
Defendants, Appellees,
HECTOR RODRIGUEZ,
Defendant, Appellant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Hector M. Laffitte, U.S. District Judge]
Before
Torruella, Circuit Judge,
Campbell, Senior Circuit Judge,
Stahl, Circuit Judge.
Hector L. Rodriguez on brief pro se.
Juan R. Marchand Quintero with whom Rivera Cestero & Marchand
Quintero and Miguel J. Rodriguez-Marxuach were on brief for appellees.
STAHL, Circuit Judge. Defendant-appellant Hector
Rodriguez ("Rodriguez" or "defendant") appeals from the entry
of a default judgment against him in the amount of $91,294.38
plus interest. We affirm.
I.
RELEVANT PROCEDURAL AND FACTUAL BACKGROUND
On June 6, 1990, the Puerto Rico law firm of
Goldman, Antonetti, Ferraiuoli, Axtmayer & Hertell
("GAFAH")1 filed a complaint against Rodriguez, Randy Smith
("Smith"), George and Lorin Croce, and Medfit International,
Inc. ("Medfit"), seeking payment of legal fees totalling
$101,294.38.2 The complaint alleged that defendants had
breached an agreement with Ferraiuoli, Axtmayer & Hertell
("GAFAH's predecessor firm") calling for plaintiff to provide
defendants with professional legal services relative to the
formation, development, and financing of a latex glove
manufacturing business.3
1. GAFAH was the original plaintiff in this case. However,
plaintiff-appellee Goldman, Antonetti, Ferraiuoli & Axtmayer
("GAFA" or "plaintiff") was substituted for GAFAH after
Hertell left the partnership in September of 1990.
2. Default was subsequently entered against Smith and Medfit
for failure to answer the complaint. The action against
George and Lorin Croce was dismissed with prejudice, pursuant
to Fed. R. Civ. P. 41(a)(1), after they agreed to pay
plaintiff $10,000.00 towards the legal fees due. None of
these defendants is a party to this appeal.
3. More specifically, plaintiff claims that it agreed to
render professional services on an hourly fee basis, and that
its fees would be payable by Rodriguez and Smith personally
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2
Subsequently, Rodriguez moved to dismiss the
complaint pursuant to Rules 4(e) and 12(b)(1)-(7) of the
Federal Rules of Civil Procedure. After reviewing the
record, the district court treated Rodriguez's motion as a
motion for summary judgment, and denied it on May 8, 1991.
On August 2, 1991, the district court issued a
scheduling order setting a pretrial and settlement conference
for November 14, 1991, and a bench trial for December 16,
1991. That order warned the parties that any failure to
comply with its provisions could result in the imposition of
sanctions under Fed. R. Civ. P. 16(f). This warning was
repeated in an October 18, 1991, order which rescheduled the
pretrial and settlement conference to November 15, 1991.4
Despite these warnings, Rodriguez failed to appear for the
November 15, 1991, pretrial and settlement conference.
"until such time as financing was obtained" for their latex
glove manufacturing project. Rodriguez, on the other hand,
contends to have entered into an oral fee agreement with
plaintiff on behalf of Medfit Products Puerto Rico, Inc.
("MPPR"). Rodriguez also claims that the agreement set forth
a contingent fee arrangement, "said contingency being the
successful financing and closing of the proposed latex glove
project[,]" and denies that he is or ever was personally
responsible for payment of the legal fees owed to plaintiff.
4. The district court later continued the December 16, 1991,
trial date until January 21, 1992.
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Consequently, the district court entered a partial judgment
dismissing Rodriguez's counterclaims and cross-claim.5
On January 17, 1992, Rodriguez telephoned the
district court's chambers to notify the court that he would
not appear for the January 21, 1992, trial. Rodriguez did
not, however, request a continuance or provide the court with
a valid justification for his anticipated absence.
Accordingly, when Rodriguez failed to appear for trial, the
district court found that he was in default. The district
court then held a bench trial on the question of damages, and
determined that plaintiff was entitled to recover $91,294.38
plus interest from Rodriguez and the previously defaulted
Smith and Medfit. The district court found all three
defendants jointly and severally liable for this judgment.
II.
DISCUSSION
On appeal, Rodriguez makes three principal
arguments: (1) that the district court erred in failing to
grant his motion to dismiss; (2) that the district court
abused its discretion in dismissing his counterclaims and
cross-claim; and (3) that the district court abused its
5. In so doing, the district court also took note of
Rodriguez's failure to prepare a pretrial order and his
failure otherwise to comply with its orders.
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discretion in entering default judgment against him.6 We
discuss each argument in turn.
A. Rodriguez's Motion to Dismiss
Rodriguez first challenges the district court's
denial of his motion to dismiss, arguing that the district
court erroneously relied on certain allegations contained in
Jose A. Axtmayer's unsworn statement signed under penalty of
perjury to find: (1) that a genuine, material factual dispute
existed over the substance of the oral fee agreement; (2)
that Rodriguez was subject to the in personam jurisdiction of
the district court; and (3) that MPPR was not an
indispensable party under Fed. R. Civ. P. 19(b). We disagree
with Rodriguez's contentions.
1. Standard of Review
There is no dispute that Rodriguez's motion to
dismiss was properly treated as a motion for summary
judgment. See Fed. R. Civ. P. 12(c). Appellate review of a
district court order denying a motion for summary judgment is
plenary. Federal Deposit Ins. Corp. v. World Univ. Inc., No.
6. Rodriguez also litters his brief and reply brief with
one-sentence allegations of error that are accompanied by
neither argument nor supporting authority. Time and time
again, we have warned litigants that "issues raised in a
perfunctory manner, unaccompanied by some effort at developed
argumentation, are deem waived." See, e.g., Elgabri v.
Lekas, 964 F.2d 1255, 1261 (1st Cir. 1992) (quoting United
States v. Zannino, 895 F.2d 1, 17 (1st Cir.), cert. denied,
494 U.S. 1082 (1990)). Accordingly, we do not address the
merits of Rodriguez's one-sentence arguments.
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92-1389, slip op. at 4 (1st Cir. Oct. 22, 1992). Summary
judgment shall be granted only when the record demonstrates
that there is no genuine issue as to any material fact and
that the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(c); see also Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). The party moving for
summary judgment "bears both the initial and the ultimate
burden of demonstrating its legal entitlement to summary
judgment." Lopez v. Corporacion Azucarera de Puerto Rico,
938 F.2d 1510, 1516 (1st Cir. 1991). Furthermore, like the
district court, we "`must view the entire record in the light
most hospitable to the party opposing summary judgment,
indulging all reasonable inferences in that party's favor.'"
Mesnick v. General Elec. Co., 950 F.2d 816, 822 (1st Cir.
1991) (citing Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st
Cir. 1990)), cert. denied, 112 S. Ct. 2965 (1992).
"Nonetheless, the nonmovant cannot content himself with
unsupported allegations; rather, he must set forth specific
facts, in suitable evidentiary form, in order to establish
the existence of a genuine issue for trial." Rivera-Muriente
v. Agosto-Alicea, 959 F.2d 349, 352 (1st Cir. 1992).
2. The Unsworn Statement
Axtmayer's unsworn statement signed under penalty
of perjury was submitted in support of plaintiff's
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opposition to Rodriguez's motion to dismiss.7 Rodriguez
argues that the district court's reliance on the allegations
contained in Axtmayer's unsworn statement constitutes an
abuse of discretion because the statement fails to conform to
the requirements of Fed. R. Civ. P. 56(e). We disagree.
Under federal law, an unsworn statement signed
under penalty of perjury may be used, in lieu of a sworn
statement or affidavit, to support or oppose a motion for
summary judgment. See 28 U.S.C. 1746;8 see also Pfeil v.
7. Axtmayer's statement alleges, inter alia, that Rodriguez
and Smith retained GAFAH's predecessor firm to represent them
in connection with the establishment of a latex glove
manufacturing facility in Puerto Rico. Axtmayer further
alleges that the firm agreed to provide the professional
services requested "on a per hour fee basis to be invoiced
monthly and payable by Rodriguez and Smith until such time as
financing was obtained for the project." Finally, Axtmayer
states that after Medfit Products of Puerto Rico was
incorporated in Puerto Rico, Rodriguez and Smith agreed that
they, along with Medfit and George and Lorin Croce, "were
[the firm's] clients in their individual capacities and were
personal[ly], jointly and severally responsible for the
payment of the services rendered and expenses incurred by
[the firm] as a result of their representation."
8. In relevant part, 28 U.S.C. 1746 provides:
Wherever, under any law of the United States or under
any rule, regulation, order, or requirement made
pursuant to law, any matter is required or permitted to
be supported, evidenced, established, or proved by the
sworn declaration, verification, certificate,
statement, oath, or affidavit, in writing of the person
making the same . . . such matter may, with like force
and effect, be supported, evidenced, established, or
proved by the unsworn declaration, certificate,
verification, or statement, in writing of such person
which is subscribed by him, as true under penalty of
perjury, and dated, in substantially the following
form:
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Rogers, 757 F.2d 850, 859 (7th Cir. 1985) (holding that an
affidavit failing to satisfy the "technical, non-substantive
requirements of execution" may be considered as part of a
party's opposition to a motion for summary judgment provided
the affidavit complies with 28 U.S.C. 1746), cert. denied,
475 U.S. 1107 (1986); Davis v. Frapolly, 756 F. Supp. 1065,
1067 (N.D. Ill. 1991) (holding that unsworn statements signed
under penalty of perjury may be considered as evidence in
support of a motion for summary judgment). Because
Axtmayer's unsworn written statement meets the requirements
of 28 U.S.C. 1746, the district court was entitled to give
it the same weight as an affidavit when it considered
defendant's motion. Therefore, because Axtmayer's unsworn
statement established the existence of a genuine, material
factual dispute concerning the substance of the parties' oral
fee agreement, the district court properly denied Rodriguez's
motion to dismiss.
3. In Personam Jurisdiction
As noted, Rodriguez also challenges the district
court's ruling that it had personal jurisdiction over him.
. . . .
If executed within the United States, its
territories, possessions, or commonwealths:
"I declare (or certify, verify, or state)
under penalty of perjury that the foregoing
is true and correct. Executed on (date).
(Signature)".
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In so doing, Rodriguez first contends that the district court
should not have considered the allegations in Axtmayer's
statement when it decided the question of in personam
jurisdiction.9 However, Rodriguez's argument is undermined
by the fact that a district court may go beyond the four
corners of the pleadings and consider materials presented in
support of a motion to dismiss for lack of in personam
jurisdiction. See American Express Int'l, Inc. v. Mendez-
Capellan, 889 F.2d 1175, 1178 (1st Cir. 1989) (affidavits
presented on a motion to dismiss for lack of in personam
jurisdiction, which was converted to a motion for summary
judgment, deemed to be "available for either motion").
Accordingly, the district court committed no error in
considering the Axtmayer statement. Rodriguez's attack on the
merits of the district court's ruling is equally unavailing.
"It is well established that in diversity cases, `the
district court's personal jurisdiction over a nonresident
defendant is governed by the forum's long-arm statute.'"
Pizarro v. Hoteles Concorde Int'l, C.A., 907 F.2d 1256, 1258
(1st Cir. 1990) (quoting Mangual v. General Battery Corp.,
710 F.2d 15, 19 (1st Cir. 1983)). Rule 4.7(a)(1) of the
Puerto Rico Rules of Civil Procedure, the Commonwealth's
9. Axtmayer's statement asserts that Rodriguez personally
initiated the negotiations which led to the representation
and fee agreements with GAFAH's predecessor firm in a 1987
visit to the firm's offices.
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long-arm statute, allows Puerto Rico courts to assert
personal jurisdiction over a non-resident defendant "if the
action or claim arises because said person . . . [t]ransacted
business in Puerto Rico personally or through an agent . . .
." P.R. Laws Ann. tit. 19, App. III, R. 4.7(a)(1) (1983);
see also Pizarro, 907 F.2d at 1258. However, for such an
assertion of jurisdiction to be permissible, two additional
tests must be met. First, plaintiff's cause of action "must
arise out of the defendant's action within the forum state."
Id. (quoting Escude Cruz v. Ortho Pharmaceutical Corp., 619
F.2d 902, 905 (1st Cir. 1980)). In addition, of course, the
contacts among the non-resident defendant, forum, and cause
of action must rise to a level where the due process
requirements of "fair play and substantial justice," see
International Shoe Co. v. Washington, 326 U.S. 310, 316
(1945), are met. See id.10
10. The Supreme Court has elaborated upon this "minimum
contacts" rule:
The application of [the minimum contacts]
rule will vary with the quality and
nature of the defendant's activity, but
it is essential that there be some act by
which the defendant purposefully avails
itself of the privilege of conducting
activities within the forum state, thus
invoking the benefits and protections of
its laws.
Hanson v. Denckla, 357 U.S. 235, 253 (1958).
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Here, there is undisputed record evidence that
Rodriguez initiated and personally participated in the
negotiations which led to the fee agreement which is the
subject of this litigation, and that at least some portion of
these negotiations took place at GAFAH's predecessor firm's
offices in Puerto Rico. Thus, it is clear that Rodriguez is
subject to the reach of 4.7(a)(1) and that the cause of
action arose out of Rodriguez's action in the forum state.
Furthermore, the record reveals that Rodriguez was personally
and continuously involved in plaintiff's efforts to assist in
the formation, development, and financing of MPPR, which was
to be a Puerto Rico corporation.11 This fact, when coupled
with Rodriguez's solicitation and subsequent retention of
plaintiff, leaves little doubt that Rodriguez purposefully
availed himself "of the privilege of conducting activities
within the forum . . ., thus invoking the benefits and
protections of its laws." Hanson, 357 U.S. at 253.
Therefore, we find no error in the district court's
conclusion that its assertion of in personam jurisdiction
over Rodriguez would not offend either Puerto Rico's long-arm
statute or the Due Process Clause of the United States
Constitution.
4. Rule 19(b)
11. These activities took place over a two-year span and
allegedly generated the $101,294.38 of unpaid fees and
expenses plaintiff is seeking.
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Finally, Rodriguez argues that the district court
erred in refusing to grant his motion to dismiss on the basis
of plaintiff's failure to join MPPR as a non-diverse
indispensable party under Fed. R. Civ. P. 19(b).12 This
argument does not require extended discussion.
The district court ruled that because defendants
and the non-diverse MPPR were alleged to be jointly and
severally liable for the legal fees owed plaintiff, joinder
of MPPR was not mandatory, but was merely permissive. The
district court's ruling on this issue is patently correct.
See Temple v. Synthes Corp., Ltd., 111 S. Ct. 315, 316 (1990)
(citing to the Advisory Committee Notes to Rule 19(a), which
explicitly state that "a tortfeasor with the usual `joint-
and-several' liability is merely a permissive party to an
action against another with like liability."). Accordingly,
we find no error in the district court's refusal to grant
Rodriguez's motion insofar as it is premised on Fed. R. Civ.
P. 19(b).
B. Dismissal of Rodriguez's Counterclaims and Cross-claim
As a result of Rodriguez's failure to appear at the
scheduled pretrial and settlement conference, his failure to
prepare a pretrial order, and his failure to otherwise comply
with the court's orders, the district court dismissed with
12. Joinder of MPPR, a Puerto Rico corporation, would have
destroyed the district court's subject matter jurisdiction in
this diversity case.
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prejudice Rodriguez's counterclaims and cross-claim. The
dismissal was premised upon Fed. R. Civ. P. 16(f).13
Rodriguez claims that the district court's imposition of
these sanctions constitutes an abuse of discretion. Again,
we disagree.
As an initial matter, we note that "[t]he proper
performance of the case-management function requires that the
trial court be allowed great latitude in applying Rule
16(f)." Veranda Beach Club v. Western Surety Co., 936 F.2d
1364, 1370 (1st Cir. 1991); see also Barreto v. Citibank,
N.A., 907 F.2d 15, 16 (1st Cir. 1990) (taking note of the
"well established principle that discovery orders, other pre-
trial orders, and, indeed, all orders governing the
management of a case are enforceable under pain of sanction
13. In pertinent part, Fed. R. Civ. P. 16(f) provides:
If a party or party's attorney fails to obey
a scheduling or pretrial order, or if no
appearance is made on behalf of a party at a
scheduling or pretrial conference, or if a
party or party's attorney is substantially
unprepared to participate in the conference,
or if a party or party's attorney fails to
participate in good faith, the judge, upon
motion or the judge's own initiative, may
make such orders with regard thereto as are
just, and among others any of the orders
provided in Rule 37(b)(2)(B),(C),(D). . . .
The orders provided for in Fed. R. Civ. P. 37(b)(2)
include orders "striking out pleadings or parts thereof, or
staying further proceedings until the order is obeyed, or
dismissing the action or proceeding or any part thereof, or
rendering a judgment by default against the disobedient party."
Fed. R. Civ. P. 37(b)(2)(C) (emphasis added).
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for unjustifiable violation."). As such, we review a
district court's selection and imposition of sanctions only
for abuse of discretion. See National Hockey League v.
Metropolitan Hockey Club, 427 U.S. 639, 642 (1976); Veranda
Beach Club, 936 F.2d at 1370.
We also recognize that "`dismissal with prejudice
is a harsh sanction which runs counter to our strong policy
favoring the disposition of cases on the merits.'" Marx v.
Kelly, Hart & Hallman, P.C., 929 F.2d 8, 10 (1st Cir. 1991)
(quoting Figueroa Ruiz v. Alegria, 896 F.2d 645, 647 (1st
Cir. 1990)). Nonetheless, the sanction of dismissal "must be
available to the district court in appropriate cases, not
merely to penalize those whose conduct may be deemed to
warrant such a sanction, but to deter those who might be
tempted to such conduct in the absence of such a deterrent."
National Hockey League, 427 U.S. at 643; see also Marx, 929
F.2d at 10; Barreto, 907 F.2d at 16. Conduct which may
warrant dismissal of a claim with prejudice includes
"`disobedience of court orders, [disregarding] warnings,
[and] contumacious conduct . . . .'" Figueroa Ruiz, 896 F.2d
at 648 (quoting Cosme Nieves v. Deshler, 826 F.2d 1, 2 (1st
Cir. 1987)).
As detailed above, the district court issued two
separate orders which notified the parties as to the date and
time of the November 15, 1991, pretrial and settlement
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conference. In addition, both orders provided explicit
warnings to the parties that failure to comply could result
in the imposition of sanctions under Fed. R. Civ. P. 16(f).
Despite ample notice and repeated warnings, Rodriguez did not
attend the pretrial and settlement conference. Nor did he
provide the court with either proper notice that he would not
appear or a compelling justification for his absence. As
such, we cannot say the district court abused its discretion
in construing Rodriguez's absence as "a willful disregard of
the Court's procedure and time" and therefore dismissing his
counterclaims and cross-claim.14
C. Default Judgment
On February 28, 1992, the district court entered
default judgment against Rodriguez for his failure to appear
at trial. Rodriguez challenges this order, arguing that the
14. We do note that on November 14, 1991, at 3:22 p.m.,
Rodriguez attempted, via telecopier, to file with the
district court a motion for an extension of time in which to
compromise the controversy. However, the record indicates
that defendant's motion was not actually received and filed
by the district court until November 15, 1991, at 3:14 p.m.,
after the scheduled 2:30 p.m. conference had already taken
place. Rodriguez also claims that at the same time he
transmitted his motion, he notified the court that he would
not be attending the conference scheduled for the following
day. However, even were we to credit this assertion, it
would not provide us with a sufficient basis for determining
that the district court's actions were an abuse of
discretion.
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entry of default constitutes an abuse of discretion both
because (1) the district court failed to give him notice
pursuant to Fed. R. Civ. P. 55(b)(2), and (2) plaintiff
failed to prove its case on the merits at trial.15 Here
too, Rodriguez's arguments are unavailing.
In pertinent part, Fed. R. Civ. P. 55 (b)(2)
provides: "[If] the party against whom judgment by default
is sought has appeared in the action, the party . . . shall
be served written notice of the application for judgment at
least 3 days prior to the hearing on such application."
(Emphasis supplied). By its very terms, therefore, Rule
55(b)(2) does not apply where, as here, there is no motion
for default pending and where the court has, on its own
motion, found a party to be in default for a failure to
appear. Pertinent authority supports such a construction of
the Rule. See Anilina Fabrique de Colorants v. Aakash
Chemicals and Dyestuffs, Inc., 856 F.2d 873, 877 (7th Cir.
1988) (notice requirement of Rule 55(b)(2) does not apply
where district court entered default order on its own motion)
15. Rodriguez also objects to the holding of a bench trial
despite the fact that he had properly requested a jury trial
in his answer. However, "after a default judgment has been
entered under Fed. R. Civ. P. 37(b)(2), a party has no right
to jury trial under either Fed. R. Civ. P. 55(b)(2), . . . or
the Seventh Amendment." Adriana Int'l Corp. v. Thoeren, 913
F.2d 1406, 1414 (9th Cir. 1990), cert. denied, 111 S. Ct.
1019 (1991); see also Eisler v. Stritzler, 535 F.2d 148, 153
(1st Cir. 1976) (holding that after entry of a default
judgment, a hearing, but not a jury trial, is required to
assess damages).
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(citing Tolliver v. Northrop Corp., 786 F.2d 316, 318 (7th
Cir. 1986)); see also Ringgold Corp. v. Worrall, 880 F.2d
1138, 1141-42 (9th Cir. 1989) (notice requirement of Rule
55(b)(2) does not apply where party is defaulted for failing
to attend the first day of a trial scheduled months before);
Brock v. Unique Racquetball and Health Clubs, Inc., 786 F.2d
61, 65 (2d Cir. 1986) (notice requirement of Rule 55(b)(2)
does not apply where party is defaulted for defense counsel's
and parties' failure to appear at a trial that already has
commenced). Accordingly, Rule 55(b)(2) does not provide us
with a basis for setting aside the district court's entry of
default.16
Rodriguez also argues that the entry of default
against him was an abuse of discretion because plaintiff
failed to prove its case on the merits at trial. Defendant's
argument ignores the maxim that an entry of a default against
a defendant establishes the defendant's liability. See
Brockton Savings Bank v. Peat, Marwick, Mitchell & Co., 771
F.2d 5 (1st Cir. 1985) ("[T]here is no question that, default
16. Our refusal to apply the notice requirement of Rule
55(b)(2) to this case can hardly be viewed as unfair to
Rodriguez. Clearly, the purpose of Rule 55(b)(2) is to make
certain that a defaulted party is on notice of the
possibility that a default judgment might be entered against
him/her. Here, Rodriguez admitted in an affidavit to his
awareness "that the court had positioned itself to hold
[Rodriguez] liable by default or otherwise" at the time he
failed to appear for trial. Thus, the situation against
which Rule 55(b)(2) guards was not present in this instance.
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having been entered, each of [plaintiff's] allegations of
fact must be taken as true and each of its [] claims must be
considered established as a matter of law."), cert. denied,
475 U.S. 1018 (1986); see also United States v. DiMucci, 879
F.2d 1488, 1497 (7th Cir. 1989) ("As a general rule, a
default judgment establishes, as a matter of law, that
defendants are liable to plaintiff as to each cause of action
alleged in the complaint."); Eisler v. Stritzler, 535 F.2d
148, 153 (1st Cir. 1976) (noting that "[t]he default judgment
on the well-pleaded allegations in plaintiff's complaint
established . . . defendant's liability."). Thus, the
district court's entry of default established Rodriguez's
liability for the legal fees due.
III.
CONCLUSION
For the foregoing reasons, the challenged district
court orders are affirmed.
Affirmed. Double costs to appellee.17
Affirmed. Double costs to appellee.
17. We award double costs in response to appellee's well-
grounded request for sanctions under Fed. R. App. P. 38.
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