Court Opinion

ID: 3187929
Source: CourtListenerOpinion
Date Created: 2016-03-23 14:03:05.083819+00
Date Added: 2024-06-11T07:39:03.401930
License: Public Domain

Case: 14-14133   Date Filed: 03/22/2016   Page: 1 of 10

                                                          [DO NOT PUBLISH]

              IN THE UNITED STATES COURT OF APPEALS

                      FOR THE ELEVENTH CIRCUIT
                        ________________________

                              No. 14-14133
                        ________________________

                    D.C. Docket No. 1:11-cv-24142-PAS

FIVE FOR ENTERTAINMENT S.A.,
d.b.a. Five Live Entertainment,

                                                             Plaintiff - Counter
                                                           Defendant - Appellee
                                                               Cross Appellant,

DIEGO HERNAN DE IRAOLA,
Rivadavia 670 Neuqun Argentina,

                                                             Plaintiff - Counter
                                                          Defendant - Appellee,

                                   versus

EL CARTEL RECORDS, INC.,
RAMON LUIS AYALA RODRIGUEZ,
a.k.a. Daddy Yankee,
ICARO SERVICES, INC.,
d.b.a. Icaro Booking Services,
EDGAR BALDIRI MARTINEZ,

                                                           Defendants - Counter
                Case: 14-14133     Date Filed: 03/22/2016    Page: 2 of 10

                                                                    Claimants - Appellants
                                                                         Cross Appellees.

                              ________________________

                     Appeals from the United States District Court
                         for the Southern District of Florida
                            ________________________

                                    (March 22, 2016)

Before MARCUS, WILLIAM PRYOR and JILL PRYOR, Circuit Judges.

PER CURIAM:

      Recording artist Daddy Yankee1 and his record company, El Cartel Records,

Inc. (“El Cartel”) (collectively, the “Performers”), entered into an engagement with

Five for Entertainment S.A. (“Five Live”) for Daddy Yankee to perform several

concerts in Argentina to be produced by Five Live. This arrangement quickly ran

into trouble and ultimately imploded when the Performers, citing Five Live’s

failure to pay engagement fees in full, cancelled the concerts. A lawsuit followed.

Five Live and its president and majority shareholder, Diego Hernan De Iraola, filed

suit against the Performers; Daddy Yankee’s booking agent, Icaro Services, Inc.

(“Icaro”); and Icaro’s president, Edgar Baldiri Martinez (“Baldiri”). The amended

complaint alleged contract, defamation, and unfair trade practices claims. The

Performers, Icaro, and Baldiri responded with counterclaims in the same vein.

      1
          Daddy Yankee’s real name is Ramon Luis Ayala Rodriguez.

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Protracted litigation ensued; when no party prevailed on all of its respective claims,

all appealed to this court.

         Although the parties challenge the ultimate resolution of their various claims

on several grounds, we find no reversible error in the underlying proceedings and,

as a general matter, affirm based on the district court’s well-reasoned orders

entered on July 31, 2013 and August 14, 2014.2 We find one issue worthy of

discussion, however: whether the district court erred when it ruled that Five Live

was not entitled to collect, as reliance damages for breach of contract,

reimbursement for certain contract payments made to the Performers because Five

Live never requested reliance damages in its amended complaint. We agree with

the district court on this issue as we do on all others and affirm.

                                       I. BACKGROUND 3

         Daddy Yankee is an internationally well-known, Grammy award-winning

singer of Reggaeton music. In 2010, he partnered with Five Live to present six

concerts in Argentina. The parties memorialized this arrangement in an

engagement contract (the “Engagement Contract”) between Five Live and the

Performers. Pursuant to the Engagement Contract, the Performers agreed that

         2
          In adopting the reasoning of the district court, we recognize that some of the arguments
the parties raise on appeal were not addressed in the district court’s written orders. Nevertheless,
having carefully reviewed the record and the briefs, and with the benefit of oral argument, we
reject these arguments without further discussion.
         3
             We summarize the facts only to the extent they concern Five Live’s breach of contract
award.

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Daddy Yankee would perform six shows, and in return, Five Live agreed to pay a

fee of $820,000 in several installments, with payment due in full by November 1,

2010.

        After signing the Engagement Contract, Five Live and the Performers

decided to expand the concert tour. They entered into a second contract (the

“Second Contract”), in which the Performers agreed that Daddy Yankee would

perform four additional shows. In exchange, Five Live agreed to pay $480,000,

with the full amount due when Daddy Yankee arrived in Argentina.

        Problems arose when Five Live struggled to make the agreed-upon

installment payments. By November 16, 2010, Five Live had paid only a portion

of the $820,000 it owed under the Engagement Contract and a portion of the

$480,000 it owed under the Second Contract. The next day, the Performers

cancelled the entire tour, citing Five Live’s failure to meet the payment deadlines.

        Five Live filed suit in district court alleging, as relevant here, that the

Performers had breached the Second Contract.4 The case eventually proceeded to

trial. In the liability phase, the jury returned a verdict in favor of Five Live on its

        4
         Five Live and the Performers each raised breach of contract claims for the Engagement
Contract as well. The district court granted summary judgment in favor of the Performers after
determining that Five Live had breached the Engagement Contract by failing to make timely
payment. The jury awarded the Performers $300,030 in damages for this claim.

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claim that the Performers breached the Second Contract.5 The district court held a

pretrial conference after the jury returned its verdict on liability but before the

damages phase of the trial. At the conference, the district court determined that

Five Live was entitled to reimbursement of its out-of-pocket expenses but no

reliance damages for payments it made on the Second Contract because it failed to

disclose that it was seeking such damages, either in its amended complaint or in

discovery. In the damages phase, the jury awarded Five Live $382,130 in damages

for the Performers’ breach of the Second Contract.

       The Performers filed a motion for judgment as a matter of law, arguing that

this award was excessive. Relying on the district court’s prior ruling that Five Live

was only entitled to reimbursement for its out-of-pocket expenses, the Performers

contended that the jury’s award exceeded Five Live’s expenses and therefore

lacked evidentiary support. Noting its pretrial ruling limiting the types of damages

the Performers could collect, the district court agreed and reduced Five Live’s

damages accordingly. Five Live and the Performers appealed.

                                    II. DISCUSSION

       Five Live challenges the district court’s conclusion that it could not recover,

as reliance damages, the payments it made on the Second Contract before the
       5
          Whereas the Engagement Contract required Five Live to provide payment in full before
Daddy Yankee traveled to Argentina, the Second Contract required payment upon his arrival.
Because the Performers cancelled the Second Contract before payment was due—in contrast to
the Engagement Contract, which they cancelled after payment was due—the jury found them
liable for breach of the Second Contract.

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breach.6 At the pretrial conference on damages, the district court determined that

Five Live could not recover reliance damages because it had failed to disclose in

its amended complaint that it was seeking such damages. We review the district

court’s pretrial ruling for abuse of discretion. See Lloyd v. Prof’l Realty Servs.,

Inc., 734 F.2d 1428, 1432 n.12 (11th Cir. 1984) (noting that, on appeal, we

consider whether a district court’s pretrial ruling is “an abuse of the broad

discretion accorded the trial judge to control pretrial procedures”). “[T]he abuse of

discretion standard allows a range of choice for the district court, so long as that

choice does not constitute a clear error of judgment.” Rasbury v. IRS (In re

Rasbury), 24 F.3d 159, 168 (11th Cir. 1994) (internal quotation marks omitted).

       The relevant inquiry on appeal thus concerns whether the district court

abused its discretion in precluding Five Live from seeking, as reliance damages,

reimbursement for payments it made under the Second Contract. We find no abuse

of discretion in the court’s decision.

       6
          It is unclear which of two district court decisions Five Live challenges on appeal: (1) the
pretrial ruling that Five Live could not recover payments it made on the Second Contract or (2)
the order granting judgment as a matter of law and reducing Five Live’s award on its breach of
contract claim to reflect only out-of-pocket expenses. Although Five Live never expressly
identifies which ruling it is challenging, its arguments on appeal principally concern the
adequacy of its damages pleading and whether the Performers had notice of the types of damages
it was seeking—issues the district court addressed in the pretrial ruling. Insofar as the district
court referenced those issues in its order granting judgment as a matter of law, it did so to
explain why its calculation of the proper amount of damages was in accordance with that ruling.
To the extent that Five Live challenges the district court’s calculation of Five Live’s adjusted
breach of contract award in the order granting judgment as a matter of law, we reject that
argument. Five Live identifies no error in the district court’s calculations.

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       New York law7 recognizes the doctrine of reliance damages, which entitles

the party prevailing on a breach of contract claim to collect “expenses of

preparation and of part performance, as well as other foreseeable expenses incurred

in reliance upon the contract.” Bausch & Lomb Inc. v. Bressler, 977 F.2d 720, 729

(2d Cir. 1992) (internal quotation mark omitted). Reliance damages, however,

“will be offset by the amount of any loss that the party in breach can prove with

reasonable certainty the injured party would have suffered had the contract been

fully performed.” Id. (internal quotation marks omitted).

       The confusion regarding which remedies Five Live sought for breach of the

Second Contract began with the amended complaint, which contained two separate

breach of contract claims. The first, Count One, concerned the Performers’

purported breach of the Engagement Contract. The second, Count Two, concerned

their breach of the Second Contract. In Count One, Five Live alleged, among other

things, that the Performers had failed to reimburse approximately $800,000 in

payments Five Live made under the Engagement Contract. In contrast, Count Two

contained no allegation that the Performers had failed to reimburse Five Live for

       7
        The parties do not dispute that, as provided in the Second Contract, New York law
governs the claim at issue.

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payments made. Incidentally, in neither count did Five Live ever explicitly

identify the manner of damages it was seeking. 8

       Although the amended complaint alleged that the Performers failed to

reimburse Five Live for payments made pursuant to the Engagement Contract

only, in the liability phase Five Live presented evidence that it had paid $219,980

on the Second Contract. Then, at the pretrial conference on damages, the

Performers argued (and the district court agreed) that the amended complaint failed

to apprise them adequately that Five Live sought reimbursement for payments

made under the Second Contract as a remedy for breach. Five Live contends that it

clearly sought reimbursement for all payments made to the Performers, regardless

of which contract each payment specifically concerned. Five Live notes, in

particular, that the $800,000 figure cited in the amended complaint was comprised

of payments made under both the Engagement Contract and the Second Contract.

       Although we agree with the Performers that the language of the amended

complaint does not clearly reveal whether Five Live sought reimbursement for

payments made under the Second Contract, it is precisely because of this

ambiguity that we find no abuse of discretion in the district court’s decision. Five

Live never explicitly stated—either in its amended complaint or in discovery—that

       8
         In both counts, Five Live merely “demand[ed] a judgment comprising compensatory
and punitive damages in an amount to be determined at trial.” Am. Compl. at 23, 26 (Doc. 35)
(“Doc.” refers to the docket entry in the district court record in this case).

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it sought reimbursement for payments it made in reliance on the Second Contract.9

Indeed, it alleged no facts indicating that it made payments on the Second

Contract. Five Live also never attempted to amend the complaint to request

reliance damages after realizing it had made payments on the Second Contract.

Nor did Five Live amend its initial disclosures or subsequent discovery responses

to identify the damages it sought on each claim. Although it may have been

possible to infer from the amended complaint Five Live’s intent to seek

reimbursement of all payments under both contracts, nothing in the amended

complaint or Five Live’s discovery responses compelled the district court to draw

that inference. As such, the district court did not abuse its discretion in

determining that Five Live failed to give the Performers adequate notice of Five

Live’s intent to seek reimbursement. Cf. Jones v. Childers, 18 F.3d 899, 909 (11th

Cir. 1994) (holding district court did not abuse its discretion when it refused to

allow party to amend its pleadings after close of discovery and after trial was set).

       We also find no error in the district court’s reasoning that, as a result of Five

Live’s failure to provide the Performers with adequate notice of its intent to seek

reliance damages, the Performers never had an opportunity to take discovery on

potential defenses to the recovery of reliance damages. To the extent the

       9
         In its initial discovery disclosures, Five Live only made broad reference to seeking
reimbursement for “monies paid by [Five Live] to [the Performers].” Pl.’s Initial Disclosures at
6 (Doc. 267-1).

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Performers were unaware that Five Live sought reimbursement for payments made

on the Second Contract, they were unable to conduct discovery concerning

potential offsets to those payments. Although some of that discovery may have

overlapped with discovery the Performers had already conducted or would have

conducted in any event, the district court made no clear error of judgment in

deciding that such discovery was inferior to the targeted inquiry the Performers

could have conducted had they adequately been apprised of Five Live’s intent to

seek reliance damages.

                                III. CONCLUSION

      In sum, we find no reversible error in the underlying proceedings and

therefore affirm the judgment of the district court.

      AFFIRMED.

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