H. LEE FARTHING, Plaintiff, Appellant,
COCO BEACH RESORT MANAGEMENT, LLC, Defendant, Appellee, JOHN DOE, INC., Defendant.
FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF
PUERTO RICO [Hon. Camille L. Vélez-Rivé, U.S.
Richard Schell-Asad and Troncoso & Schell on brief for
Alejandro Suárez Vincenty, Hugo Rodríguez
Díaz, and Rodríguez & Rodríguez, PSC
on brief for appellee.
Lynch, Thompson, and Kayatta, Circuit Judges.
Farthing, a South Carolina resident, brought this diversity
suit against Coco Beach Resort Management, LLC ("Coco
Beach"), a Puerto Rico company that employed Farthing
for just over three months on a one-year contract as its
"Marketing and Sales Director." Farthing alleges
that Coco Beach breached his employment agreement by
unilaterally terminating it early. He seeks damages to
compensate him for unpaid base salary and anticipated
commissions on real estate sales that Farthing alleges were
imminent when Coco Beach fired him.
court below granted Coco Beach's motion for summary
judgment, holding that the employment agreement was void as
against public policy because Puerto Rico law requires a
person working as a real estate broker to have a license. It
is undisputed that Farthing had no such license before or
after he was employed, and that no term of the employment
agreement required him to have such a license.
vacate and remand. Summary judgment was entered in error
because issues of law and issues of material fact remain in
dispute. It is disputed whether Coco Beach was aware that
Farthing did not have a broker's license at any relevant
time, including when the agreement was signed, and it is
disputed whether at least some of the work Farthing performed
and was intended to perform was permissible without a
broker's license. It was error to hold on summary
judgment that Farthing has no viable claim against Coco Beach
for breach of contract.
briefly review the relevant background, highlighting along
the way the facts that remain in dispute.
Puerto Rico law, it is a misdemeanor to "engage in the
profession of real estate broker . . . without the
corresponding license." P.R. Laws Ann. tit. 20, §
3057(a). "Real estate broker" is defined by statute
[a] natural person who holds a license to practice the
profession . . . and acts as intermediary, through the
payment or the promise of payment of any compensation
previously and mutually agreed upon between the parties that
contract to execute in Puerto Rico a sales transaction,
promise of sale, purchase or sale option, exchange, lease,
auction, property management, or in the offering, promotion,
or negotiation of the terms of all sales, sales options,
promise of sale, lease management, or exchange of real
property located in or outside of the Commonwealth of Puerto
Id. § 3025(g). The parties agree that Farthing,
at all relevant times, has lacked the license required to
work as a real estate broker in Puerto Rico.
alleges that, in the past, he was employed in South Carolina
as a "real estate broker with an expertise in 'high
end' or 'luxury resorts.'" On March 24,
2016, he signed a one-year employment agreement with Coco
Beach; the agreement had no early termination clause and no
requirement that Farthing obtain a Puerto Rico real estate
broker's license. Farthing, in a sworn affidavit, alleges
that Coco Beach's president knew when he hired Farthing
that Farthing was not a licensed real estate broker in Puerto
Rico and that he "specifically told [Farthing] that
under Puerto Rico's law [Farthing] did not need a real
estate license, as [Farthing] would be an employee of Coco
Beach selling [Coco Beach's own] property." Coco
Beach disputes that allegation and maintains that it