Opinion
CIVIL ACTION NO. 19-01386-WGY
2022-10-31
Jorge TORRES, NYTR, YYTR, SRTR, and LVTR, Plaintiffs, v. Mendel ZARCHI, Antonio Silva Delgado, and Chabad Lubavitch of Puerto Rico, Defendants.
Jorge Torres, Fruitland PK, FL, Pro Se. David Efron, David Efron Law Offices, San Juan, PR, for Defendants.
Jorge Torres, Fruitland PK, FL, Pro Se. David Efron, David Efron Law Offices, San Juan, PR, for Defendants.
MEMORANDUM AND ORDER
Of the District of Massachusetts sitting by designation.
I. INTRODUCTION
This matter is before the Court on a motion for default judgment on the counterclaims by Mendel Zarchi ("Rabbi Zarchi") and Chabad Lubavitch of Puerto Rico ("Chabad") against Jorge Torres ("Torres"). Mot. Default Countercl., ECF No. 18 and Mot. Default J. Defs.' Countercl., ECF No. 66.
Another session of this Court dismissed the claims of Torres' four minor children, NYTR, YYTR, SRTR, and LVTR, before this counterclaim was filed. Order, ECF No. 7.
The Court granted the motion on July 11, 2019, Order, ECF No. 26, then held a hearing regarding the assessment of damages on September 30, 2021. Min. Order, ECF No. 60. At the hearing, the Court granted the motion for default judgment, adopted all the facts fairly pled in light of the default, and took the matter of the ultimate assessment of damages under advisement.
On December 22, 2021, the Court issued an order to correct procedural errors with respect to the default. The issues were corrected. See December 22, 2021 Electronic Order, ECF No. 61; January 25, 2022 Electronic Order, ECF No. 63; Clerk's Entry of Default ECF No. 64, Motion for Default Judgment, ECF No. 66. A properly noticed second hearing was set for July 13, 2022. See June 14, 2022 Electronic Order, ECF No. 69. Torres did not attend the July 13, 2022 Zoom hearing. July 13, 2022 Minute Order, ECF No. 72.
II. BACKGROUND
A. Factual Allegations
Rabbi Zarchi leads Chabad, an affiliate of a worldwide Jewish organization serving the religious and social needs of its community in Puerto Rico. According to the counterclaim, Torres undertook a "systematic campaign of harassment" toward Rabbi Zarchi and Chabad. Countercl. ¶ 1, ECF No. 17. The harassment included "messages, texts and emails," intimidating encounters on Chabad's premises, and "recruit[ing] reporters in South America" to publish false information about Rabbi Zarchi and Chabad. Id. ¶¶ 2, 4.
The hearing revealed the following facts. Rabbi Zarchi, the sole witness, testified to receiving "thousands" of threats from Torres via text message, Whatsapp, and Facebook at all hours. Torres "sent people" to Chabad where they recorded videos and interrupted his religious duties. They also recorded videos at Chabad's Kosher kitchen, where Rabbi Zarchi's wife worked. At one point, a Torres associate contacted Rabbi Zarchi to say "Look, Rabbi, we can make [the harassment] go [a]way if you cooperate with us."
In response, Rabbi Zarchi and Chabad hired round-the-clock security personnel and arranged to install security cameras throughout the facility. Rabbi Zarchi and Chabad filed for a protective order with local authorities. He also turned to the United States Attorney's Office and the Federal Bureau of Investigation for assistance. Local authorities escorted Rabbi Zarchi to his home. FBI agents were already familiar with Chabad's plight based on frivolous reports Torres made to the agency. The agents indicated to Rabbi Zarchi and Chabad that they would help counter the harassment to the extent possible.
In addition to these physical encounters, Rabbi Zarchi described Torres' efforts to impugn his reputation and Chabad's. Torres allegedly sent mass emails to government officials and newspapers claiming Rabbi Zarchi and Chabad were engaged in criminal enterprises. They claim Torres arranged newspaper articles describing Chabad as a front for racketeering and money laundering. They also claim Torres directed a "torrent" of negative Google reviews and social media posts at Chabad, which repelled potential donations. In addition, they claim Torres lobbied companies not to use Chabad's services.
The harassment prevented Rabbi Zarchi from attending to his religious duties and obligations. At the hearing, Rabbi Zarchi estimated his annual salary to be $130,000. He identified decreased productivity, difficulty sleeping, weight gain, and fear for the health and safety of his wife and family as additional consequences of the harassment. The harassment also agitated other Chabad employees. Rabbi Zarchi asked Torres to cease the harassment multiple times, to no avail.
Rabbi Zarchi considers this lawsuit an additional component of the harassment campaign.
B. Procedural History
This case originated in the United States District Court for the Southern District of New York. Clerk's Notes, ECF No. 16. Torres filed suit against Rabbi Zarchi, Chabad, and one Antonio Silva Delgado ("Delgado"), alleging libel, various crimes, and official corruption. See generally Compl., ECF No. 1. Torres alleged Rabbi Zarchi, Chabad, and Delgado conspired to violate federal antitrust statutes and slandered him and his family in an effort to monopolize the production of Kosher products in Puerto Rico. See id. at 6, ¶¶ 14, 15. Rabbi Zarchi, Chabad, and Delgado moved successfully under 28 U.S.C. § 1404(a) to transfer the case to this Court for their convenience. Mot. Req. Change of Venue 4, ECF No. 4; Third Mot. Reiterating Dismissal or Transfer Case, ECF No. 10.
Upon transfer to this Court, Chabad and Rabbi Zarchi filed this counterclaim claiming defamation, Countercl., and moved to dismiss the complaint. Mot. Dismiss Compl., ECF No. 19. This Court granted a default entry on the counterclaim. Mot. Default Countercl.; Order, ECF No. 26. The United States Court of Appeals for the First Circuit dismissed Torres' interlocutory appeal of the default for lack of diligent prosecution. U.S.C.A. J., ECF No. 49.
The Court then scheduled a hearing on the pending motion to dismiss and an evidentiary hearing on the assessment of damages as to the counterclaim. Order, ECF No. 52. Mail sent to Torres has been returned as undeliverable since August 19, 2019, and he has made no effort to prosecute the case. See Returned Mail, ECF No. 44. Accordingly, this Court dismissed the complaint for failure to prosecute, Order, ECF No. 54, and undertook the default process.
III. ANALYSIS
This Court has jurisdiction over this case pursuant to 28 U.S.C. § 1332(a) because the amount in controversy exceeds $75,000 and because Torres and the counterclaimants are citizens of New York and Puerto Rico, respectively. Compl. 1-2. Rabbi Zarchi seeks damages for emotional injuries. Countercl. 2. Chabad seeks damages for harm to its reputation and income. Id.
The Commonwealth of Puerto Rico is a state for purposes of federal diversity jurisdiction. 28 U.S.C. § 1332(e); see Rodriguez-Diaz v. Sierra-Martinez, 853 F.2d 1027, 1034 (1st Cir. 1988).
A. Legal Standard
To calculate damages following the entry of a default judgment, the Court considers the allegations in the counterclaim and testimony presented at the evidentiary hearing. See Jones v. Winnepesaukee Realty, 990 F.2d 1, 4 (1st Cir. 1993). Considering the default here, the Court adopts the well-pled facts in the counterclaim and Rabbi Zarchi's hearing testimony.
The Court applies Puerto Rico law to actions for emotional and reputational damages. First National City Bank v. Gonzalez, 293 F.2d 919, 921 (1st Cir. 1961). Puerto Rico law provides that "[a] person who by an act or omission causes damage to another through fault or negligence shall be obliged to repair the damage so done." P.R. Laws Ann. tit. 31, § 5141. Under section 5141 of Title 31,
all damage, whether material or moral, gives rise to reparation if three requirements or elements are met: first, proof of the reality of the damage suffered; second, a causal relation between the damage and the action or omission of another person; and third, said act or omission is negligent or wrongful.Soc. de Gananciales v. El Vocero de P.R., 135 P.R. Dec. 122, 134 (1994) (citations omitted). This Court concludes that each of these elements is met for both Rabbi Zarchi's claims of emotional damages and Chabad's claims of business damages.
B. Proof of the Damages Suffered
1. Emotional Damages
Rabbi Zarchi claims emotional damages totaling $5,000,000. Countercl. 2. He offers proof that the harassment decreased his productivity, disrupted his sleep, caused him to gain weight, and instilled fear in him regarding the health and safety of his wife and family. These claims are sufficient to establish emotional damages.
To determine the reasonable value of mental and emotional damages, a plaintiff must offer evidence "showing that it is not a question of a simple passing affliction, but that, in some appreciable measure, the health, welfare, and happiness of the claimant were really affected." Ruiz-Rodríguez v. Colberg-Comas, 882 F.2d 15, 17 (1st Cir. 1989) (citation omitted). There is no mechanical system applicable by courts to arrive at an exact evaluation of damages. Rodriguez Cancel v. A.E.E., 16 P.R. Offic. Trans. 542, 551 (1985). Indeed, "the human assessment of intangible elements, such as pain, joy, sadness or frustration, 'is not devoid of a certain degree of speculation.' " Laclaustra Sánchez v. Prime Outlets Puerto Rico, No. 08-1757, 2009 WL 10717485, at *4 (D.P.R. July 23, 2009) (McGiverin, U.S.M.J.), report and recommendation adopted, 2009 WL 10717443, at *1 (D.P.R. July 27, 2009) (quoting Riley v. Rodríguez de Pacheco, 19 P.R. Offic. Trans. 806, 119 D.P.R. 762, 805 (1987).
Laclaustra Sánchez v. Prime Outlets Puerto Rico illustrates the range of emotional damages. Id. There, plaintiff Minet Laclaustra Sánchez ("Sánchez") sought emotional damages after sustaining a fractured ankle on Prime Outlets Puerto Rico's property. Id. at *1. The injury limited Sánchez's mobility, preventing her from spending as much time with her grandchildren and from walking through shopping malls as often or for the same duration as she did prior to the injury. Id. at *4. In calculating her damages, that court considered the absence of evidence that Sánchez had sought psychological assistance for her mental and emotional anguish. Id. The Court also noted that Sánchez did not present the testimony of family members or other witnesses to corroborate her alleged mental pain and suffering. Id. The court concluded that Sánchez failed to demonstrate that the injury affected her "ability to function normally within her daily life," as she had alleged. Id. The Court assessed her damages for mental and emotional anguish at $15,000. Id.
The court distinguished Sánchez's suffering from a case involving harsher emotional harm, Rodríguez-Torres v. Caribbean Forms Manufacturer, Inc., 399 F.3d 52, 64 (1st Cir. 2005). Id. There, the First Circuit affirmed an award of $250,000 for emotional damages where the plaintiff testified that as a result of losing her employment, her personal life changed "drastically" and she entered a "deep depression." Id. (citing Rodríguez-Torres, 399 F.3d at 64).
Based on the record before this Court, Rabbi Zarchi's damages tend toward the Rodríguez-Torres end of the range. Like Sánchez, the record does not reflect that Rabbi Zarchi sought psychotherapy in response to the harassment. See id. Also like Sánchez, there is no corroboration of Rabbi Zarchi's testimony. See id. Yet the record definitively shows how the consistent pattern of harassment "drastically" affected Rabbi Zarchi. Torres' harassment substantially interfered with Rabbi Zarchi's ability to discharge his responsibilities to the Chabad community, inflicted physical symptoms upon him, and inculcated fear among his family and colleagues.
2. Business Damages
Chabad seeks reputational and "business" damages of 2,000,000 dollars. Countercl. 1
As a result of the harassment, Chabad suffered from Rabbi Zarchi's lost productivity and allege to have spent between $150,000 and $200,000 on increased security measures. Rabbi Zarchi does not claim that the harassment diminished financial contributions to Chabad. Rather, he emphasizes how the harassment has limited the organization's capacity to secure additional donations, particularly by diverting his time away from fundraising. He also testified to the negative media torrent's likely -- though concededly unquantifiable--chilling effect on potential contributions. Rabbi Zarchi estimated the combined value of his squandered fundraising time and unrealized contributions to be $500,000.
C. Causal Relationship
With respect to section 5141, "the concept of fault is as broad as the behavior of human beings, and . . . includes any fault that causes harm or injury." Bonilla v. Chardon, 18 P.R. Offic. Trans. 696, 701 (1987) (citation omitted) (assessing damages for mental anguish against the Puerto Rico Department of Education for causing denial of special education services to children). A showing of proximate causation satisfies the causation element of section 5141. See Baum-Holland v. Hilton El Con Mgmt., LLC, 964 F.3d 77, 93 (1st Cir. 2020). Both Rabbi Zarchi and Chabad establish a causal nexus between their emotional and business damage, respectively, and the wrongful actions Torres committed.
Rabbi Zarchi testified that the harassment caused decreased productivity, difficulty sleeping, weight gain, and fear for the health and safety of his wife and family.
Chabad established a direct connection between the harassment and the steps it forced them to take in order to protect its premises and staff. But for Torres' harassment, Chabad would neither have arranged around-the-clock security nor installed security cameras. Chabad has also shown that the harassment discouraged potential donations.
D. The Acts are Negligent or Wrongful
Rabbi Zarchi and Chabad have alleged facts sufficient to show Torres' acts were wrongful.
In order to prevail in a defamation action when the claimant is not a public figure . . . it is necessary to prove that Defendant negligently published false and defamatory information which was the proximate cause of the damages suffered by Plaintiff. See Colón v. Televicentro, 2009 TSPR 43; Krans v. Santarrosa, 2007 TSPR 219. Defamation means the act of discrediting a person by stating information injurious to the reputation of such person. Id. Corporations have standing to bring a defamation action. See MVM Inc. v. Marcial, 568 F. Supp 2d 158 (D.C.P.R. 2008).APX Alarm Sec. Sols., Inc. v. Renaissance Mktg., Inc., No. 06-1776, 2009 WL 3161029, at *4 (D.P.R. Sept. 29, 2009) (Dominguez, J.).
Rabbi Zarchi and Chabad proved that Torres intentionally published false and defamatory information, which caused emotional damages and business damages. As a nonprofit corporation, Chabad may bring a defamation claim. Torres discredited Rabbi Zarchi and Chabad by stating and disseminating information injurious to their reputation through mass emails to government officials and newspapers claiming Rabbi Zarchi and Chabad were engaged in criminal enterprises. They also demonstrated that Torres also arranged newspaper articles describing Chabad as a front for racketeering and money laundering. They also showed Torres directed a "torrent" of negative Google reviews and social media posts at Chabad, which repelled potential donations. In addition, they demonstrated Torres lobbied companies not to use Chabad's services.
E. Summary of General Damages Award
Zarchi and Chabad have therefore met all three elements required to award damages for emotional or reputational harm.
In light of the physical symptoms he suffered as well as the fear he and his family experienced, this Court concludes the Rabbi Zarchi's damages for emotional and mental anguish to be $250,000.
Based on Chabad's expenditures on additional security, Rabbi Zarchi's lost productivity, and the torrent of negative media's damage to potential fundraising, the Court assesses Chabad's damages at $200,000.
F. Attorney's Fees
Under Puerto Rico law, an award of attorney's fees is appropriate only when the court believes that the losing party "has been obstinate or frivolous." Corpak, Art Printing v. Ramallo Bros., 125 D.P.R. 724, 4-5 (1990); P.R.Laws Ann. tit. 32A, Ap. V, Rule 44.1(d)("Where a party . . . has acted obstinately or frivolously, the court, in its judgment, shall impose on such person the payment of a sum in attorney's fees which the court may deem to correspond to such conduct."). "Costs and attorney's fees are awarded if the court determines that the litigant has been unreasonably obstinate relative to the conduct normally accepted in a litigation, and costs the court as well as the litigants money and time." Mejias-Quiros v. Maxxam Prop. Corp., 108 F.3d 425, 1997 U.S. App. LEXIS 4658 (1st Cir. P.R. 1997); see also APX Alarm Sec. Sols., Inc., 2009 WL 3161029 at *5 (awarding attorney's fees to party subject to default judgment on basis of obstinacy).
Torres has been obstinate and frivolous. He wasted judicial resources and the counterclaimants' time and money by frivolously appealing the entry of the default judgment, Notice Interlocutory Appeal, ECF No. 32, filing frivolous motions, see, e.g., Informative Motion, ECF No. 35, and failing to docket a valid mailing address. As this Court noted when it dismissed Torres' complaint for failure to prosecute the action, parties to litigation have a duty to inquire periodically regarding the status of the litigation and to keep the Court informed of their current address and contact information. Dresser v. Norms, No. 1:18-CV-00426-DBH, 2019 WL 77134, at *2 (D. Me. Jan. 2, 2019), report and recommendation adopted, No. 1:18-CV-426-DBH, 2019 WL 302485 (D. Me. Jan. 23, 2019) (citing Am. Arbitration Ass'n, Inc. v. Defonseca, No. 1:93-cv-02424, 1997 WL 102495, at *2 (S.D.N.Y. Mar. 6, 1997) ("[A] litigant's obligation to promptly inform the Court and the opposing party of an address change is a matter of common sense, not legal sophistication.")).
Mail sent to Torres has been returned undeliverable since August 19, 2019. See Returned Mail, ECF No. 44.
IV. CONCLUSION
For the foregoing reasons, the Court grants Rabbi Mendel Zarchi damages of $250,000 and grants Chabad Lubavitch of Puerto Rico damages of $200,000, for a total of $450,000 with interest at the statutory rate from the date of the judgment. The Court also awards costs and attorney's fees to the counterclaimants. A petition for attorneys' fees may be filed within 30 days of the date of this order.
SO ORDERED.
WILLIAM G. YOUNG, JUDGE of the UNITED STATES