UNITED STATES DISTRICT COURT FOR THE 

DISTRICT OF PUERTO RICO

Alfredo Castellanos Bayouth, et al.

v. NH Civil No. 05-ds-21-JD

PR Civil No. 02-2357

Gabriela Alejandra Guzman Pinal

and Luis Olmos Dueas

O R D E R

Because this case has been stayed since April of 2003 when

the court granted the defendants’ motion to compel arbitration,

the court ordered the parties to file a joint status report,

which they have done. They report that the arbitration

proceeding was initiated, Guzman v. Cast Entertainment, Inc., 50

T 199 00466 02, but is now stayed pending resolution of the

bankruptcy case filed by one of the plaintiffs, Cast

Entertainment, Inc., In re Cast Entertainment, Inc., No. 03-

05246-SEK (filed May 20, 2003). Cast Entertainment also brought

an adversary proceeding in the bankruptcy court against defendant

Gabriela Alejandra Guzman Pinal (“Guzman”), Cast Entertainment,

Inc. v. Guzman, No. 03-00112-SEK (filed August 4, 2003). The

adversary proceeding is stayed pending resolution of a motion

filed by the plaintiffs in this case, “Motion Requesting Urgent

Lift of Stay and to Vacate as Void Ab Initio the Report and

Recommendation That Was Issued and Adopted by This Court.” 

Case 1:05-ds-00021-JD Document 13 Filed 07/11/05 Page 1 of 10
Default was entered as to defendant Olmos on March 25, 1

2003. Therefore, the only active defendant is Guzman.

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A. Motion Requesting Urgent Lift of Stay and to Vacate

Alfredo Castellanos Bayouth and Cast Entertainment, Inc.,

filed a complaint on September 6, 2002, alleging claims of

conspiracy to commit fraud in the inducement, conspiracy to

defraud, and unjust enrichment against Guzman and Luis Olmos

Dueas. Guzman filed a demand for arbitration against Cast 1

Entertainment on the same day. The plaintiffs filed an amended

complaint on October 2, 2002, adding Castellanos’s family as

plaintiffs and adding claims of libel and slander and defamation. 

Guzman filed a motion to compel arbitration and to stay the

district court proceedings on December 3, 2002, based on an

arbitration clause in her “Personal Representation Agreement”

with Cast Entertainment. The plaintiffs failed to respond to the

motion. 

Cast Entertainment filed a voluntary petition for bankruptcy

under Chapter 11 on December 11, 2002, but did not notify the

district court of its filing. Due to the recusal of all of the

judges in the District of Puerto Rico, the case was reassigned to

Judge Ronald R. Lagueux, of the District of Rhode Island, on

December 12, 2003. On the day the case was reassigned, Guzman

filed a notice informing the court of the bankruptcy filing. The

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Although the order stated that the plaintiffs’ motion to 2

attach remained pending and was stayed, that motion had been

denied on January 28, 2003. Therefore, that motion is no longer

pending.

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plaintiffs did not raise an issue about the automatic stay

imposed by the bankruptcy filing but continued to litigate their

case in district court.

Judge Lagueux referred Guzman’s motion to compel arbitration

and for a stay to the magistrate judge who issued a report and

recommendation on February 10, 2003. The magistrate judge

recommended that the defendants’ unopposed motion to compel

arbitration and to stay this proceeding be granted. The

plaintiffs sought an extension of time to file their objection to

the report and recommendation and then sought leave to file an

amended objection, which was granted on March 19, 2003. In the

meantime, the bankruptcy court dismissed Cast Entertainment’s

case on March 17, 2003. On April 14, 2003, Cast Entertainment

filed in the district court a “Motion for Voluntary Dismissal

Pursuant to Rule 41," notifying the court that it was voluntarily

dismissing its causes of action in this case, without prejudice. 

The filing was docketed as a notice of voluntary dismissal. 

On April 21, 2003, the district court accepted and approved

the magistrate judge’s report and recommendation that Guzman’s

motion to compel arbitration and to stay the case be granted.2

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On May 20, 2003, Cast Entertainment filed a second petition in

bankruptcy, In re Cast Entertainment, 03-05246. The arbitration

proceeding has been stayed pending resolution of the second

bankruptcy proceeding. On August 4, 2003, Cast Entertainment

filed an adversary proceeding against Guzman in the bankruptcy

court, seeking to set aside the arbitration clause in the

parties’ agreement, Cast Entertainment v. Guzman, 03-00112-SEK. 

More than a year after the district court ordered the

parties to arbitrate and stayed the case, the plaintiffs filed a

motion challenging that order, “Motion Requesting Urgent Lift of

Stay and to Vacate as Void Ab Initio the Report and

Recommendation That Was Issued and Adopted by This Court.” 

Guzman filed an objection. At the same time, the plaintiffs

filed a motion in the adversary proceeding in the bankruptcy

court charging Guzman with intentionally violating the automatic

stay imposed pursuant to 11 U.S.C. § 362(a). On August 11, 2004,

the bankruptcy court stayed all matters in the adversary case

pending the resolution of the plaintiffs’ “Motion Requesting

Urgent Lift of Stay and to Vacate as Void Ab Initio the Report

and Recommendation That Was Issued and Adopted by This Court.” 

The case was referred to this judge on January 18, 2005.

The plaintiffs’ motion is an untimely request for

reconsideration of the court’s order adopting and approving the

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magistrate judge’s report and recommendation. In addition,

because no bankruptcy proceeding was pending when the court

issued its order on April 21, 2003, no automatic stay was in

place at that time. However, the circumstances of this

litigation demonstrate that for reasons other than those raised

in the plaintiffs’ motion, the court’s order must be vacated and

the stay lifted.

Only parties that have agreed to arbitrate can be compelled

to submit a dispute to arbitration. See First Options of

Chicago, Inc. v. Kaplan, 514 U.S. 1920, 1924 (1995); Westmoreland

v. Sadoux, 299 F.3d 462, 465 (5th Cir. 2002); Gen. Elec. Co. v.

Deutzag, 270 F.3d 144, 154 (3d Cir. 2001); Rock-Tenn Co. v.

United Paperworkers Int’l Union, 184 F.3d 330, 333 (4th Cir.

1999). In this case, Guzman and Cast Entertainment entered a

“Personal Representation Agreement” in July of 2001 that includes

an arbitration clause providing: “in the event that any dispute

should arise in connection with this Agreement, it shall be

subject to arbitration . . . .” Castellanos signed the agreement

on behalf of Cast Entertainment, as president of the company. 

None of the individual plaintiffs in this action, including

Castellanos, signed the agreement or apparently otherwise agreed

to arbitrate any disputes with Guzman. Because the plaintiffs,

other than Cast Entertainment, did not agree to arbitration, they

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cannot be compelled to arbitrate their claims against Guzman.

Cast Entertainment voluntarily dismissed its claims in this

case before the court issued its order compelling arbitration. 

As a result, at the time the order issued, no party in the case

was subject to the arbitration agreement so that the order had no

effect on the parties in this case. Therefore, the order

compelling arbitration and imposing a stay in this case pending

resolution of the arbitration proceeding is vacated. Guzman’s

request for sanctions is denied.

B. Status of Cast Entertainment

As discussed above, Cast Entertainment notified the court on

April 14, 2003, that it was voluntarily dismissing its claims

against the defendants, without prejudice. The defendants did

not object to that action. The case was stayed a week later, and

no further action was taken on Cast Entertainment’s notice. 

Although Cast Entertainment filed a second bankruptcy petition on

May 20, 2003, which is ongoing, that action does not affect any

party in this case.

Cast Entertainment filed a motion to strike or withdraw its

voluntary dismissal on June 18, 2004. In support of its motion,

Cast Entertainment states that its counsel, plaintiff Alfredo

Castellanos, was unaware that he was required to obtain

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Castellanos represents that he has never before practiced 3

in the area of bankruptcy law and finds it a “complicated world.”

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authorization from the bankruptcy court before Cast Entertainment

could seek action by this court concerning it. Even if 3

authorization would otherwise have been necessary, the bankruptcy

proceeding had been dismissed before April 14, 2003. Therefore,

Cast Entertainment presents no basis for withdrawing its

voluntary dismissal.

In addition, because Cast Entertainment is no longer a

party, this case is not affected by its arbitration and

bankruptcy proceedings. Given the long delay in this case, the

interests of justice would be best served by addressing the

claims brought in this litigation. Therefore, Cast

Entertainment’s motion to strike or withdraw its voluntary

dismissal is denied. All claims brought by Cast Entertainment in

this case are voluntarily dismissed without prejudice pursuant to

Federal Rule of Civil Procedure 41(a) as of April 14, 2003.

C. Other Pending Motions

It appears from a review of the docket that a variety of

motions remain pending in this case. 

The plaintiffs move to amend their amended complaint to add

a breach of contract claim on behalf of Cast Entertainment. 

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Because Cast Entertainment is no longer a party in this case,

that motion is denied. The plaintiffs’ motion to strike Guzman’s

response to the plaintiffs’ motion is also denied. 

Guzman’s out-of-state counsel, Hunton & Williams, LLP, moves

to withdraw. Counsel represents that Guzman has requested that

the firm no longer represent her. Counsel also represents that

local counsel of record, Angel E. Rotger Sabat of the firm Maymi

Rivera & Rotger PSC will continue to represent Guzman in this

litigation. Although the plaintiffs oppose the motion, they

provide no reasonable basis not to allow the firm to withdraw.

Therefore, the motion is granted.

Guzman’s motion to dismiss, filed on December 3, 2002, was

stayed by the court’s April 21, 2003, order. The stay is now

lifted and that motion is ripe for consideration. That part of

the motion addressing claims brought by Castellanos and Cast

Entertainment, which are in the first three counts, is premised

on Cast Entertainment as a party and the applicability of the

agreement made between Guzman and Cast Entertainment. Because

Cast Entertainment is no longer a party, the motion does not

address those claims in the present posture of the case. The

other grounds Guzman raises in her motion to dismiss would be

more productively addressed in the context of summary judgment. 

The court notes, however, that there is a dispute as to

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whether members of the Castellanos family are parties to this

action. As alleged in the amended complaint, the remaining

plaintiffs in this case are Alfredo Castellanos; the conjugal

partnership of Castellanos and his wife, Maria A. Hambleton; and

their minor sons, Alfredo Castellanos Hambleton and Alexandra

[sic] Castellanos Hambleton. As such, Maria A. Hambleton is not

named individually as a plaintiff. 

In addition, no guardian or representative is named as

having brought suit on behalf of the children, who lack capacity

to bring and maintain a suit in federal court on their own

behalf. See Fed. R. Civ. P. 17(c); see also T.W. by Enk v.

Brophy, 124 F.3d 893, 895 (7th Cir. 1997). Because they lack

capacity to litigate on their own, the children are dismissed

without prejudice from the case. The plaintiffs remaining in

this case are Alfredo Castellanos and the conjugal partnership. 

Conclusion

For the foregoing reasons, the plaintiffs’ motion to lift

the stay and to void the court’s order (PR document no. 81) is

granted. The plaintiffs’ motion to strike or withdraw (PR

document no. 83) is denied. The plaintiffs’ motions to amend and

to strike (PR document nos. 82 and 93) are denied. The

plaintiffs’ motions requesting clarification (PR document no.

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87), in compliance (PR document no. 88), requesting resolution

(PR document no. 89), and requesting urgent resolution (PR

document no. 95) are terminated. The defendant’s motion to

withdraw (PR document no. 98) is granted. The defendant’s motion

to dismiss (PR document no. 25) is terminated without prejudice. 

Defendant Guzman shall file and serve her answer within

twenty days of the date of this order.

SO ORDERED.

Joseph A. DiClerico, Jr.

United States District Judge

 (Sitting by designation.)

July 11, 2005

cc: Alfredo Castellanos-Bayouth, Esquire

Laurie Uustal Mathews, Esquire

Angel E. Rotger-Sabat, Esquire

USDC-PR, Clerk

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