Daniel Vielleville, Andrew Ricco and Peter Berlowe
Daniel Vielleville, Andrew Ricco and Peter Berlowe (J. Albert Diaz)

Case: Five for Entertainment et al. vs. Ramon Luis Ayala Rodriguez, aka Daddy Yankee, et al.

Case no.: 11-24142

Description: Breach of contract, defamation

Filing date: Nov. 16, 2011

Trial date: Nov. 4-Nov. 21, 2013

Judge: Senior U.S. District Judge Patricia Seitz

Plaintiff attorneys: Peter Berlowe, partner; Daniel Vielleville, partner; Andrew Ricco, associate of Assouline & Berlowe; Eric W. Bloom, partner, Margaret Ciaverella, partner Tomas Leonard, partner, at Winston & Strawn.

Defense attorneys: Jon Polenberg, partner; Barbara Joy Riesberg, partner; Jude Christopher Cooper, partner, Mark David Nichols, associate of Polenberg Cooper, Sauders & Riesberg; Edwin Prado, partner of Prado Nunez & Associates.

Jury award: $6.4 million

Details: Daddy Yankee’s real name is Ramon Luis Ayala Rodriguez. He is an immensely popular reggaeton star, especially in his native Puerto Rico. His last release, “Prestige,” scored several hits, including “Lovumba,” which went to No. 1 on the Billboard Latin chart. Reggaeton is a mix of reggae, Latin and Caribbean music that was made popular in Puerto Rico.

The artist was scheduled for a 10-concert tour of Argentina but withdrew in a dispute over finances. The points of contention arose from two contracts: one for a four-concert leg of the tour, and another one for six concerts.

Daddy Yankee, his record company and manager were sued by Five for Entertainment S.A., doing business as Five Live Entertainment, and promoter Diego Hernan De Iraola for alleged breach of contract, defamation and injurious falsehood.

The lawsuit claimed Daddy Yankee’s manager, Edgar Baldiri Martinez, made false statements to radio stations and newspapers claiming De Iraola and Five Live had “swindled” the concert producers and committed forgery.

Daddy Yankee filed a counterclaim on March 1, stating that the artist was defamed in a press release from Five Live, characterizing the reasons for the tour’s cancellation and imputing a “criminal offense” upon the singer. Lawyers for the singer and his companies also claimed that he was not paid as required under the first contract.

Iraola’s attorneys said the cancellation of the tour caused his company to nearly go under. “The cancellation caused all its business to dry up,” Berlowe said.

Plaintiffs case: Five Live presented evidence how it organized and sold out two shows for Daddy Yankee as part of the planned concert tour, and that Daddy Yankee received roughly $800,000 in payments. “The key issue that the jury decided as to the second contract was whether Daddy Yankee’s was supposed to be paid in full before he got to Argentina or after,” Berlowe said. “We argued that is was supposed be after. They argued that it was supposed to be before. And the jury agreed with us.”

He said the jury found that Baldiri made the defamatory statements with the consent of the artist.

Berlowe gave credit to the legal team from Winston & Strawn from Washington, which he said did “most of the heavy lifting.”

“It was their clients. They brought them to us,” Berlowe said.

Defense case: Polenberg said the defense focused on how De Iraola failed to pay $500,000 as required under the first contract. “Everything related to this case predicated on a failure to pay,” he said. “There was an issue of fact on some of the payment requirements under the second contract.” He said that about $500,000 needed to be paid to artist before he traveled to Argentina.

Verdict: A jury on Nov. 15 determined liability in the first phase of the trial and returned with the award phrase on Nov. 2. Following a three-day damages trial, the jury came back with a $6.4 million verdict in favor of De Iraola and the plaintiffs.

Jurors found that the damages suffered by Five Live due to Baldiri’s statements amounted to $4 million, while defamation damages to De Iraola amounted to $2 million.

Jurors found damages from the canceled concert series amounted to $382,000 in damages for Five Live.

Separately, the jury found that in Daddy Yankee’s counterclaim on breach of contract for the first leg of the tour, that Daddy Yankee suffered $300,000 in damages. Seitz had ruled pre-trial in favor of the artist’s breach of contract claim on summary judgment.

“When the case got to the jury, we were already down behind the eight-ball on that summary judgment issue,” Berlowe said.

Comments: “This case is fair warning to everybody that they have to live up to their contracts,” Berlowe said. “The issues in this case are not a unique. It’s a simple case of breach of contract and the breacher defaming the other party.”

Post verdict: Prado, Daddy Yankee’s attorney in Puerto Rico, was far from conceding defeat right after the verdict.

Prado told the Spanish news agency Efe, “This is not a final verdict. We’re working on a series of motions that we must exhaust before we can appeal this sentence because the actions they’re accusing Yankee of were neither authorized nor instigated by the artist or his company.”

Polenberg said the necessary post-verdict motions have been filed with Seitz and there are plans to file an appeal.