Wednesday, February 20, 2013
The question of exclusivity in a declaratory judgment action under Law 75 is for the jury
The exclusivity imbroglio continues. In Medina & Medina v. Hormel Corporation, No. 09-1098 (JAG)(D.P.R. Feb. 20, 2013), Plaintiff, a distributor of meat products, filed an action for breach of contract, damages, and declaratory judgment under Law 75. After motion practice, the Court found that summary judgment was inappropriate on the issue whether an exclusive distributorship existed and ordered a jury trial as demanded in the Complaint. The parties agreed to bifurcate liability and damages to try first the issue of liability. During the pretrial conference, defendant Hormel objected to having juries decide the ultimate question whether there was an exclusive agreement arguing that it is an issue of law for the Court. The Court, however, holds that an action for declaratory relief is both legal and equitable and the constitutional right to a jury trial requires the jury to decide the exclusivity question. Mind you, under Puerto Rico law, exclusivity is apparent from the agreement of the parties or the course of dealings. Stating the Court’s Opinion differently, the distributor’s claim for impairment of an alleged exclusive contract under Law 75 requires the jury to decide if the facts demonstrate the existence of a meeting of the minds to appoint Medina as the exclusive distributor, and if so, the scope of the exclusivity. In other words, was there a breach of contract? Bifurcation of the case and the declaratory judgment action do not override the right to a jury trial on this question.