America update: Perez Teuffer, International Man of Mystery

[anderson]

Rumbo de Houston is a daily Spanish-langauge newspaper in Houston. They've been a regular source of local reporting on America's efforts to come into MLS in general and Houston in particular.

In today's edition (07/21/05), they report on Javier Perez Teuffer. He's the former president of America and has been in charge of their negotiations to bring America into MLS since September 2004. As such, he's been the point man for Televisa and America in their negotiations with local Houston entities and MLS.

Today's Rumbo report, by Gustavo Rangel, notes the following:

Perez Teuffer says that America is in the middle of negotiations to bring an MLS team to Houston.

George R. Diaz Arrastia, America's lawyer in the civil suit against Cuauhtemoc Blanco and America brought by Casimiro Mendoza Reyes (see below), says that Perez Teuffer is not an employee of America.

Perez Teuffer says that he's currently not an employee of either America or Televisa.

America's spokesman in Mexico declined to comment on the status of Perez Teuffer.

Perez Teuffer says that he has all the necessary legal authority to negotiate for an America team in MLS. He responds to a question about whether the authorities with whom he's negotiating understand that he's not an employee of America by saying that you should go ask them if they're statisfied with the seriousness of how America's been acting.

David Nuno, Oliver Luck's spokesman, says that he's unaware of America's legal problems in Houston and would not comment on the affiliation of Perez Teuffer with the club.

Houston city councilman Adrian Garcia declined to comment. Mayor White's office said he was out of town.

Luck, Garcia, White, as well as two members of the Harris County Sports & Convention Corp., have been subpoenaed to appear on August 3 [note: the article doesn't specify for which proceeding, but presumably for the civil suit against Blanco].

In addition, today's edition of Rumbo includes a side story, also by Rangel, that suggests that Perez Teuffer and America severed his formal employment as a legal ploy in the civil suit against Blanco. In that suit, Mr. Mendoza claims that he was assaulted by Blanco in a club on January 12, 2004. America is also apparently named as a defendant. America's initial defense is that the court has no jurisdiction over America because America has no permanent or continuous business operations in Texas. Rangel postulates that America and Perez Teuffer severing their formal employment relationship is an attempt to avoid giving the appearance of such links. Unfortunately, the side story isn't in the electronic edition, so I can't link it here.

It's been a while since I've had to deal with the jurisdiction rules, but my recollection of civil procedure is more or less consistent with the theory that America is asserting in denying that the court has jurisdiction over it. I'm not sure if it'll work, but keeping Perez Teuffer off their official employment helps their case somewhat, but only somewhat. I'm not sure the jurisdiction argument will work for them if they have an agent representing them in negotiations to establish a permanent presence in Texas. Some Westlaw research could probably shed some light on that question, but I'd have a hard time justifying those charges to a client. :D

I'd also add that Perez Teuffer is probably correct when he says that he has enough legal authorization to negotiate on behalf of America. He may have some sort of power of attorney or similar authorization. But all he really needs is someone from America or Televisa, like Juan de Villafranca, who's also been in town for some of these meetings, to represent to other parties that Perez Teuffer is authorized to negotiate on their behalf. Rumbo wants to make a big deal out of Teuffer not being an employee, but he doesn't need to be an employee, just an agent, to negotiate on behalf of a party.

So, the "Perez Teuffer Who?" ploy by America is probably consistent with a jurisdiction argument, although it may not work in the end. It also doesn't, in and of itself, mean that Perez Teuffer lacks authority to negotiate on America's behalf. The whole thing strikes me as too clever for their own good, but it's probably not a big deal.

Anyway, here are the articles from Rumbo (again, the side piece in which Rangel speculates on the legal strategy isn't available on-line):

Here's the main piece on Perez Teuffer:


El América 'desconoce' a Pérez Teuffer
(http://www.diariosrumbo.com/rumbo/articulo.asp?idart=234813&idcat=964)

Here's the peice on Blanco's civil suit:

Confesiones y negaciones de un goleador (http://www.diariosrumbo.com/rumbo/articulo.asp?idart=234818&idcat=964)

[yanks02]

Wow. I tried to read all that, I really did. You lost me somewhere between jurisdiction and something else.

But thanks for the article and the summary. That's interesting indeed.

[anderson]

Wow. I tried to read all that, I really did. You lost me somewhere between jurisdiction and something else.

But thanks for the article and the summary. That's interesting indeed.Damn legalese. ;)

"Jurisdiction" is basically the concept that a court has the ability to call you in to answer for something.

When someone files a suit against you, they usually have to try to explain why they believe that court has the ability to call you in. You have the right to argue that the court has no power over you.

If they win, you have to stick around and defend yourself against their claims. If you win, you can go home.

America is apparently arguing that the court can't call them in as a defendant in this suit. If they succeed, then they're dismissed from the suit and Mendoza can't go after them for damages. Mendoza is reportedly suing Blanco and America for $500,000.

[yanks02]

America is apparently arguing that the court can't call them in as a defendant in this suit. If they succeed, then they're dismissed from the suit and Mendoza can't go after them for damages. Mendoza is reportedly suing Blanco and America for $500,000.

Ah okay. Well I say anything that inconveniences Blanco is fine by me, so I'm going to have to support Mendoza here. I can't stand Blanco.

[Che chico!]

Shouldnt this be in the Mexico forum? Maybe it is already..

[CeltTexan]

I sure hope that our main man Luck and the HSA knows all of what Rumbo speak!

[anderson]

Shouldnt this be in the Mexico forum? Maybe it is already..I suppose some people there may find it interesting too, but I put it in this forum because the point of the Rumbo article is that the person with whom Houston and Harris County authorities are negotiating to bring America's MLS team to Houston isn't formally employed by America or Televisa.

Of course, I'd add that Perez Teuffer doesn't actually need to be employed by them and that the Rumbo piece borders a bit on sensationalism because it doesn't put the legal situation in a more accurate context. Their front page headline reads, "Quien ese ese que ana alli hablando por el America?" ("Who is this going around speaking for America?"). They're in the business of moving newspapers, but it's not like Perez Teuffer is some sort of imposter or charlatan and the implications in their piece aren't really all that accurate.

I think the real issue put of their report may be whether America is antagonizing the local Houston and Harris County officials who have reportedly been subpoenaed in connection with the Blanco civil suit. Given that Luck, Loston, Garcia, and White are named in the Rumbo piece as having been subpoenaed, I suspect they're well aware by now of the Blanco suit.

Whether Perez Teuffer is formally in America's employment may not be a real issue, but having Cuauhtemoc Blanco in your employment is something of a telenovela. :o

[cristoforo7]

Perhaps the larger issue for MLS is whether this really is a cheap tactic by Club America to disassociate itself from Teuffer merely for purposes of avoiding a ratification issue in a $500,000 lawsuit. To me, that type of stuff smacks of amateurish business and legal strategy. Very unprofessional and unwise from a business standpoint, in my opinion, and could easily come back to bite Club America in the a-- in the legal matter if a jury finds out about how the organization fraudulently (allegedly) attempted to create a barrier between itself and Teuffer. Jury could get really p.o.'d and hold it against Club Am when deciding the amount of damages to award-- what should be a $100,000 damages case could end up a $1,000,000 damages case.

If I were on the board of governors for MLS (or its general counsel), I would look at this type of stuff and start to question the professionalism of the organization that is potentially looking to be a franchise owner.

[anderson]

Perhaps the larger issue for MLS is whether this really is a cheap tactic by Club America to disassociate itself from Teuffer merely for purposes of avoiding a ratification issue in a $500,000 lawsuit. To me, that type of stuff smacks of amateurish business and legal strategy. Very unprofessional and unwise from a business standpoint, in my opinion, and could easily come back to bite Club America in the a-- in the legal matter if a jury finds out about how the organization fraudulently (allegedly) attempted to create a barrier between itself and Teuffer. Jury could get really p.o.'d and hold it against Club Am when deciding the amount of damages to award-- what should be a $100,000 damages case could end up a $1,000,000 damages case.

If I were on the board of governors for MLS (or its general counsel), I would look at this type of stuff and start to question the professionalism of the organization that is potentially looking to be a franchise owner.I think that's an interesting point. But I suspect that this case will never get to a jury. Blanco settled cases against him before, so I'm not sure why he or America would want to see this go to trial if their maximum exposure in a settlement would be less than or equal to $500,000. I'm assuing that the plaintiffs would settle for the amount for which they're suing, but that's a very reasonable assumption.

I agree that MLS may not be amused by these sorts of tactics either, but I'm not sure that would be enough to convince AEG to walk away from a very attractive multi-asset deal with Televisa.

(Incidentally, Televisa closed a deal with EMI last week to enable them to share properties in both Mexico and the US. Televisa closing that deal with EMI may make them an even more attractive partner to AEG.)

[anderson]

In today's edition (08/03), Rumbo reports that Perez Teuffer will clarify his relationship with Televisa and America on Aug. 16 in response to the civil suit by Mendonza against Blanco and America. He's expected to declare for those proceedings that he's an agent of Televisa with all authority necessary to negotiate on their behalf.

The story also points out that Adrian Garcia and Oliver Luck don't believe that his status as an agent, rather than an employee, has any effect on the negotiations that he's conducted. Luck emphasizes that Perez Teuffer and Juan Villafranca always had authority from Televisa to negotiate.

Pérez Teuffer vendrá a aclarar su posición con Televisa y el América (http://www.diariosrumbo.com/rumbo/articulo.asp?idart=241002&idcat=964)

[Li mu bei]

It's been a while since I've had to deal with the jurisdiction rules, but my recollection of civil procedure is more or less consistent with the theory that America is asserting in denying that the court has jurisdiction over it. I'm not sure if it'll work, but keeping Perez Teuffer off their official employment helps their case somewhat, but only somewhat. I'm not sure the jurisdiction argument will work for them if they have an agent representing them in negotiations to establish a permanent presence in Texas. Some Westlaw research could probably shed some light on that question.

A constitutionally permissible basis of state court jurisdiction is usually predicated upon: 1) purposeful availment of the privilege of conducting activities in the forum and, then, 2) the reasonableness of permitting jurisdiction. See, e.g., Int'l Shoe Co. v. Washington, 326 U.S. 310 (1945) (shifting emphasis from in-state service of process to a "minimum contacts" analysis).

I agree with you.

Though I know next to nothing about the situation; it is highly doubtful that America's argument is bolstered by removing Teuffer from "official employment." In fact, such a tactic would be quite silly given contemporary analysis of personal jurisdiction.

The only reason that I imagine America would do such a thing involves some sort of "plausible deniability" at the pre-trial, investigatory stage: America can say--not in court, but to opposing attorneys, investigators, etc.--with a straight-face that "they currently have no 'employees' conducting business in the forum" and with that said, maybe people won't look deeper . . . but the mere existence of the article above reveals the folly of the tactic.

[cristoforo7]

I don't think it's a jurisdictional issue, as it seems to me the matter has gotten past the motion to dismiss stage. I was thinking there was a ratification issue, like Teuffer stupidly said something to the effect of "We support Blanco, whatever he does..." and there is a claim for punitive damages (plus an allegation of vicarious liability against America).

I am also thinking that the strategy was thought up in Mexico by their Mexican lawyers without consulting the Texas lawyers, who probably would have told them their strategy of divorcing Teuffer just wouldn't fly.

Who knows what they are thinking ...

[Li mu bei]

I don't think it's a jurisdictional issue, as it seems to me the matter has gotten past the motion to dismiss stage. I was thinking there was a ratification issue, like Teuffer stupidly said something to the effect of "We support Blanco, whatever he does..." and there is a claim for punitive damages (plus an allegation of vicarious liability against America).
I assume that if a motion or responsive pleading has been made by America and lack of personal jurisdiction has been alleged in that motion or responsive pleading, then the issue is open until that defense has been ruled upon by the court.

Though the rationale behind the defense is that a party shouldn't be haled into a court and required to defend against an action when there are insufficient contacts to place them under that court's jurisdiction, the court's schedule may limit the ability of the court to dispose of the issue; there is no right to a speedy trial outside the criminal context.

If the court has decided the issue, or the defense has not been timely raised (including in ammended pleadings if not alleged in a motion), then the defense is, of course, gone.

I am also thinking that the strategy was thought up in Mexico by their Mexican lawyers without consulting the Texas lawyers, who probably would have told them their strategy of divorcing Teuffer just wouldn't fly.
I think you are probably right.

Who knows what they are thinking ...
Does anyone have an English version, of any kind, so that I can read for background?

[anderson]

Does anyone have an English version, of any kind, so that I can read for background?I don't think they have an English language version.

I still have a hard copy of the 07/21 edition at home, which includes the side story that's not available on-line in which Rangel speculates about the legal strategy. It's not long, so if you're interested I can translate it later.

The first piece (the one from 07/21) in the first post contains pretty much all the points translated into English. As is the problem with most news reports about legal matters, the reporter doesn't always know when something makes sense or when you should or shouldn't use certain terminology. I didn't want to infer anything beyond what the reporter, Gustavo Rangel, wrote, so I translated as closely to his wording as possible. That's pretty much all he provided.

The second piece (the one from 08/03), I just summarized the key points instead of translating. I can check it and translate if there's anything you think we should check.

[Li mu bei]

I don't think they have an English language version.

I still have a hard copy of the 07/21 edition at home, which includes the side story that's not available on-line in which Rangel speculates about the legal strategy. It's not long, so if you're interested I can translate it later.

The first piece (the one from 07/21) in the first post contains pretty much all the points translated into English. As is the problem with most news reports about legal matters, the reporter doesn't always know when something makes sense or when you should or shouldn't use certain terminology. I didn't want to infer anything beyond what the reporter, Gustavo Rangel, wrote, so I translated as closely to his wording as possible. That's pretty much all he provided.

The second piece (the one from 08/03), I just summarized the key points instead of translating. I can check it and translate if there's anything you think we should check.

Actually it seems that you did a good job the first time . . . I just didn't read close enough.

A succesful attack on in personam jurisdiction would allow America to avoid defending themselves against arguments which are based on the doctrine of respondeat superior, i.e., vicarious liability. Thus, they could shield themselves from suit--not just liability--much more easily by stopping the forward progress against them at an earlier stage of the process than they could by defeating arguments of vicarious liability (which would be made farther along in the process than lack of personal jurisdiction).

It seems like America is trying to offer as many excuses as possible to the judge for them to be dismissed from the suit, as a party, as soon as possible. It wouldn't be the "legally correct" decision, but it seems like it would be the Just decision. Read on . . . .

I honestly don't think America can win an argument of a lack of personal jurisdiction. This aspect of our system sucks--i.e., when plaintiffs try to bring deep pockets into court on the slightest, almost infinitesmal, chance that they can get their hands in those deep pockets. Such defendents have to actively defend or risk either a default judgment or a miscarriage of justice if thier defense is less than zealous.

But, it seems, from what little I know, that it is inconceivable that America will be found liability for the actions of an employee, who in all likelihood acted way, way outside the scope of his employment; in this situation, I don't think America could be held liable. Ultimately, the plaintiff would be liable for the legal fees of America. America just wants to avoid the trouble--time and money--of winning, though they would get the money back in the long term.

I think the Plaintiff will settle with America, because it doesn't seem like he can do much besides harrass America.

I'm wondering if the question of Teuffer's place with America has to do with whether he was at the club during the incident.

Maybe his status is completely unrelated: perhaps America have already formed some type of business association, incorparated in the U.S., and they want to announce a new team--to be owned and run by this association--in the near future.

[cristoforo7]

But, it seems, from what little I know, that it is inconceivable that America will be found liability for the actions of an employee, who in all likelihood acted way, way outside the scope of his employment; in this situation, I don't think America could be held liable. Ultimately, the plaintiff would be liable for the legal fees of America. ...

I'm wondering if the question of Teuffer's place with America has to do with whether he was at the club during the incident. ...

I agree vicarious liability would be very tough if not impossible to prove, although if Teuffer was at the club at the time of the incident (as well as coaches or other front office personnel), you are correct that it makes it a better case of vicarious liability for the plaintiff.

If the players were invited to the club by the team organization, for example by Teuffer himself, and "business was discussed", that makes it an even better case for vicarious liability.

As to plaintiff paying America's legal fees, I would believe that would be highly unlikely. Costs and possibly expert fees yes, but legal fees highly doubtful. Unless some kind of fee shifting statute applies. Anderson would know.

P.S. I have no knowledge of Texas law, so my suppositions are of course based on analogies to California law and general knowledge regarding the common law.

[Li mu bei]

As to plaintiff paying America's legal fees, I would believe that would be highly unlikely. Costs and possibly expert fees yes, but legal fees highly doubtful. Unless some kind of fee shifting statute applies. Anderson would know.

I could be totally wrong, but I think it would be quite easy to recover fees, whether under Texas tort law--statutory or otherwise--or by simply filing some type of counterclaim.

One of the biggest incentives for plaintiff's to not bring frivolous tort suits is--if unsuccessful in suit--being responsible for the prevailing party's expenses.

Besides, it doesn't really matter whether this is in Federal or state court: America could simply remove it to federal court where statutory provisions for fee recovery do exist.

[anderson]

Well, just as a disclaimer, my area is corporate/transactional, not litigation. But I know that Texas has a fee shifting provision in the settlement rules that allows the offering party to recover certain costs from the rejecting party in the event that the eventual judgment is significantly less favorable to the rejecting party than the settlement offer. I'm not sure about fee shifting otherwise in run-of-the-mill tort claims like this one. I can check with litigators later, but I suspect that the point above about the federal rules are probably right anyway.

Btw, I found my print copy of the 07/21 edition for a few more reported facts in the other article. The events in the Mendoza claim reportedly occurred during the evening of Jan. 12, 2004 at a bar called Viva Latino. Mendoza was working that night as some sort of candy and toiletries vendor in the restroom. Blanco claims that Mendoza insulted his ex-girlfriend (the article doesn't provide more detail about the circumstances). According to the article, Blanco's sworn statement includes an admission that physical contact occurred with Mendoza, but denies that Blanco attacked or assaulted Mendoza. Blanco also reportedly admits that he drank alcohol that night. The article doesn't say whether any sort of official America function was taking place at the bar, but America was in town on Jan. 11, 2004 to play an Interliga game at Reliant. My guess would be that the events in the bar probably occurred in the early morning hours of Jan. 12, during some Blanco post-game partying.