Candelario-Del Moral v. UBS Financial Services Incorporated of Puerto Rico, No. 3:2008cv01833 - Document 105 (D.P.R. 2010)

Court Description: OPINION AND ORDER. DENIED 93 MOTION to Alter Judgment. Signed by Judge Salvador E Casellas on 4/9/2010.(LB)

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO 1 2 3 MADELINE CANDELARIO DEL MORAL 4 Plaintiff 5 6 7 v. UBS FINANCIAL SERVICES INCORPORATED OF PUERTO RICO Defendants 8 9 OPINION and ORDER 10 11 12 13 14 Pending before this Court is Plaintiff Madeline Candelario del Moral s ( Plaintiff or Candelario ) motion for reconsideration under F ED . R. C IV . P. 59(e)(Docket # 93), Defendant UBS Financial Services Incorporated of Puerto Rico s ( UBS ) opposition thereto (Docket #101), and Candelario s reply (Docket # 103). After reviewing the filings and the applicable law, Candelario s motion is DENIED. 15 Factual Background 16 17 18 19 20 21 22 23 24 25 26 Civil No. 08-1833 (SEC) The facts and procedural background of this case are set forth in our Opinion and Order dated January 13, 2010. Docket # 86. On April 3, 2009, UBS moved for summary judgment, arguing that Plaintiff s claims were time-barred, and that Plaintiff had no actionable claim under Article 1802. Dockets ## 23 & 24. Specifically, UBS argued that the Superior Court s October 2006 Order and Writ of Execution were verbally vacated by Puerto Rico Superior Court Judge, Charles JimÃ©nez-Nettleship ( Judge JimÃ©nez-Nettleship ), during a hearing held on November 13, 2006. UBS contended that the attachment of EfrÃ³n s accounts was removed after a careful review of Judge JimÃ©nez-Nettleship s verbal order, the Minutes for said proceedings, Plaintiff s appeals to the Puerto Rico Court of Appeals and Supreme Court, and said courts rulings on the matter. 1 CIVIL NO. 08-1833 (SEC) 2 2 Plaintiff opposed, and on May 6, 2009, she filed a cross motion for summary judgment. 3 Docket ## 37-39. According to Plaintiff, the Order and Writ of Execution, issued in accordance 4 with the Puerto Rico Court of Appeals Judgment dated February 16, 2006, constituted the law 5 of the case. Plaintiff further averred that Judge JimÃ©nez-Nettleship s verbal order did not affect 6 the Order and Writ of Execution s validity. According to Plaintiff, the Minutes of the November 7 13, 2006 hearing were never signed by the Judge, nor certified and notified to the parties by the 8 Courtroom Clerk, as required by the Rule 32(b)(1) for the Administration of the Court of First 9 Instance of the Commonwealth of Puerto Rico (Rule 32), P.R. Laws Ann. tit. 4, R. 32. As a result 10 thereof, Plaintiff argued that Judge JimÃ©nez-Nettleship s verbal order was never valid or 11 enforceable. Thereafter, the parties filed numerous replies and sur-replies. 12 After reviewing the filings, and the applicable law, on January 13, 2010, this Court partially 13 granted Candelario s motion for summary judgment. In so doing, we held that although Judge 14 JimÃ©nez-Nettleship verbally set aside the October 2006 Order and Writ of Execution, the minutes 15 of the hearing were never notified to the parties or signed by the Judge, and a result, such an order 16 was not final, and thus enforceable, until the Courtroom Clerk issued the Minutes for the 17 proceedings, the Judge signed the same, and the parties were notified in accordance with Puerto 18 Rico Rule of Civil Procedure 65.3, P.R. Laws Ann. tit. 32, Ap. III. Based on the foregoing, this 19 Court concluded that UBS failed to act like a prudent and reasonable person under the 20 circumstances, and to exercise the owed duty of care, and accordingly awarded Plaintiff 21 $3,808,739.48, plus interest over said sum at a rate of 10.50% annually from June 4, 2001. 22 Shortly thereafter, Plaintiff filed the present motion for reconsideration, and UBS opposed. 23 Standard of Review 24 F ED . R. C IV. P. 59(e) allows a party, within ten (10) days of the entry of judgment, to file 25 a motion seeking to alter or amend said judgment. The rule itself does not specify on what 26 1 CIVIL NO. 08-1833 (SEC) 3 2 grounds the relief sought may be granted, and courts have ample discretion in deciding whether 3 to grant or deny such a motion. Venegas-HernÃ¡ndez v. Sonolux Records, 370 F.3d 183, 190 (1 st 4 Cir. 2004) (citations omitted). In exercising that discretion, courts must balance the need for 5 giving finality to judgments with the need to render a just decision. Id. (citing Edward H. Bolin 6 Co. v. Banning Co., 6 F.3d 350, 355 (5th Cir. 1993)). 7 Despite the lack of specific guidance by the rule on that point, the First Circuit has stated 8 that a Rule 59(e) motion must either clearly establish a manifest error of law or must present 9 newly discovered evidence. F.D.I.C. v. World Univ., Inc., 978 F.2d 10, 16 (1st Cir. 1992) (citing 10 Fed. Deposit Ins. Corp. v. Meyer, 781 F.2d 1260, 1268 (7th Cir. 1986)). Rule 59(e) may not, 11 however, be used to raise arguments that could and should have been presented before judgment 12 was entered, nor to advance new legal theories. Bogosonian v. Woloohojian Realty Corp., 323 13 F.3d 55, 72 (1st Cir. 2003). 14 Applicable Law and Analysis 15 In the present motion, Plaintiff argues that this Court failed to consider that the August 16 2006 Writ and Order of Execution obligated UBS to maintain all of Efron s accounts frozen. 17 According to Plaintiff, this Court s January 13, 2010 Judgment should be amended to order that 18 UBS deposit all sums in Efron s account as of February 2007, thus ensuring that EfrÃ³n makes the 19 $50,000 monthly payments to Candelario as established by the Commonwealth courts rulings. 20 Additionally, Plaintiff posits that this Court erroneously upheld UBS s payment of the credit line 21 agreement with UBS Bank USA, Account number 5V-50203. 22 In opposition, UBS argues that Candelario s Rule 59(e) motion improperly seeks to re23 litigate arguments previously ruled upon by this Court, to wit, the payment of the loan agreement 24 with UBS Bank USA, as well as introduce damages allegations that were not argued or properly 25 evidenced in her cross-motion for summary judgment. On the former, UBS avers that Plaintiff s 26 1 CIVIL NO. 08-1833 (SEC) 4 2 reliance on Hull-Dobbs Co v. Superior Court, 81 P.R. Dec. 221 (1959), is misplaced insofar as 3 the present case involves a security interest in investment property governed by the Uniform 4 Commercial Code of Utah, not a chattel mortgage. UBS further contends that Puerto Rico s 5 Commercial Transaction Act, P.R. Laws Ann. tit. 19, § 404(1), provides that the parties may agree 6 as to the law that shall govern their rights and duties, be it the law of Puerto Rico or any state or 7 nation, which in the present suit is the State of Utah. In terms of the latter, UBS argues that the 8 complaint is insufficient to support summary judgment regarding Plaintiff s alleged damages as 9 a result of not being able to collect the $50,000 monthly payments from EfrÃ³n. Specifically, UBS 10 avers that Plaintiff should have moved for summary judgment on said alleged damages, 11 notwithstanding, her cross-motion is devoid of allegations and supporting evidence regarding this 12 issue. On the other hand, UBS points out that the October 2006 Order and Writ of Execution do 13 not refer to future payments or order the attachment and seizure of assets in excess of the 14 principal sum of $4,160,522.61, plus interest. 15 In the present case, there were no controversies regarding the material issues of fact. 16 Pursuant to the uncontested facts, it was undisputed that Judge JimÃ©nez-Nettleship issued a verbal 17 order during the November 13, 2006 hearing, and that the Minutes for said proceedings, 18 transcribed on December 12, 2006, lacked the Judge s signature, and were never properly notified 19 to the parties. Instead, the parties disagreed on the interpretation of the applicable law regarding 20 the validity of Judge JimÃ©nez-Nettleship s verbal order. Accordingly, this Court determined that 21 a verbal order, issued in open court at the Commonwealth level, is not valid and enforceable from 22 its issuance. To become valid and enforceable, if must be notified to the parties in Minutes signed 23 by the presiding Judge. Specifically, this Court held that [f]rom the Superior Court s Minutes, 24 it is clear that Judge JimÃ©nez-Nettleship verbally set aside the October 2006 Order and Writ of 25 Execution. However, the minutes of the hearing were never notified to the parties or signed by 26 1 CIVIL NO. 08-1833 (SEC) 5 2 the Judge. This Court finds that such an order is not final, and thus enforceable, until the 3 Courtroom Clerk issues the Minutes for the proceedings, the Judge signs the same, and the 4 parties are notified in accordance with Rule 65.3. 5 In determining the monies owed, this Court concluded that 6 7 8 9 10 11 insofar as Account JX60059 was pledged as a Collateral Account for loan Account 5V50203, UBS acted correctly in paying off loan account 5V50203 with the funds from the former. However, as previously stated, from the date of their release in February 2007 to July 31, 2007, the values and assets in Account JX60059 decreased from approximately $11 million to $1,155,367.71. Thus UBS s negligent release of EfrÃ³n s accounts in February 2007 led to a significant decrease of the assets in Account JX60059, and ultimately deprived Plaintiff from receiving the amount ordered by the Superior Court. Specifically, the Superior Court awarded Plaintiff $4,160,522.61, and she only received $351,783.19. Therefore, as a direct result of UBS s negligence, Plaintiff did not receive $3,808,739.48. Docket # 86, p. 21. 12 Accordingly, UBS was ordered to pay Plaintiff $3,808,739.48, plus interest over said sum at a 13 rate of 10.50% annually from June 4, 2001. Moreover, we pointed out noted that [a]lthough, as 14 previously noted, UBS did not err in paying off loan account 5V50203, as of February 2007, 15 EfrÃ³n s accounts had sufficient funds to satisfy said loan, as well as the Order and Writ of 16 Execution. Therefore, the payment of Loan Account 5V50203 would not have adversely affected 17 Plaintiff. Docket # 86, p. 21. 18 Plaintiff s main argument is premised on the Superior Court s October 2006 Order and 19 Writ of Execution, which she alleges obligated UBS to maintain EfrÃ³n s accounts frozen. As 20 stated in our prior Opinion and Order, on October 9 and 16, 2006, respectively, the Superior 21 Court issued the Order and Writ of Execution, which provided, among other issues, for the 22 attachment and/or garnishment of EfrÃ³n s real and personal property, even if the property was in 23 the possession of third parties, and if the property was not liquid and available when the 24 attachment and/or garnishment was carried out. The Marshal was to request that the third parties 25 retain the property when liquidated, so that in due course the funds could be remitted to the court 26 1 CIVIL NO. 08-1833 (SEC) 6 2 in an amount sufficient to satisfy the principal sum of $4,160,522.61, plus interest thereon at the 3 rate of 10.50% per annum, from June 4, 2001 until the debt was fully paid. Thereafter, in 4 accordance with the Order and Writ of Execution, on October 20, 2006, UBS attached the 5 following three accounts, JX-60059, WR-00855 and 5V-50203.1 Notwithstanding, said accounts 6 were released on February 2007. 7 As Plaintiff correctly points out, on August 20, 2007, Superior Court Judge Arlene SellÃ©s 8 Guerrini issued an Order for the Sale of Assets, acknowledging UBS s motion to clarify dated 9 October 27, 2006, and setting forth specific instructions for UBS regarding the liquidation of 10 assets belonging to EfrÃ³n. Therein, UBS was ordered to immediately sell and liquidate EfrÃ³n s 11 assets until the amount of $4,160,522.61 was reached, and thereafter issue a check payable to 12 Candelario for said amount. UBS was also ordered to maintain EfrÃ³n s account frozen until the 13 amount of interest accrued on the debt as of the day of the aforementioned payment is calculated 14 and until otherwise ordered by this Court. Docket # 38-24. The court also ordered EfrÃ³n to 15 immediately comply with his obligation to pay Plaintiff $50,000 every month until final 16 liquidation of the assets of the Community Property Regime. On August 27, 2007, UBS was 17 served with a copy of the aforementioned Order Concerning the Sale of Assets, and two days 18 later, UBS restrained the accounts maintained by EfrÃ³n at that time. 19 Notwithstanding, the record clearly shows that the October 2006 Order and Writ of 20 Attachment did not impose any additional obligation upon UBS aside from the attachment of 21 certain properties in an amount sufficient to satisfy the payment of the amount of $4,160,522.61 22 plus interest, that is, the amount already partially paid to Plaintiff by UBS and the remaining 23 amount awarded in our January 2010 Judgment. Judge SellÃ©s-Guerrini s August 2007 Order has 24 25 Accounts M9-16106 and JX36196 were closed prior to the October 20, 2006 Order and Writ of Execution. 1 26 1 7 CIVIL NO. 08-1833 (SEC) 2 no bearing on this case for purposes of determining the amount owed by UBS to Plaintiff. More 3 so, considering that this Court lacks jurisdiction over Judge SellÃ©s-Guerrini s orders as to EfrÃ³n s 4 obligation to comply with the $50,000 monthly payments imposed by the Court of Appeals in its 5 February 16, 2006 Amended Judgment, until final and enforceable disposition of the community 6 property. This Court s jurisdiction is limited to the Article 1802 claims against UBS, that is, the 7 amount Plaintiff would have received pursuant to the October 2006 Order and Writ of Attachment 8 but for UBS s negligent actions. Also, EfrÃ³n is not a party to this suit, thus we cannot ensure 9 third-party compliance with Judge Guerrini s August 2007 orders as to EfrÃ³n. Moreover, a review 10 of the record shows that UBS complied with the Superior Court s August 2007 Order. 11 In light of the foregoing, this Court need not delve further into UBS s payment of the loan 12 agreement with UBS bank USA. Especially considering that as of October 2006 and February 13 2007, EfrÃ³n s accounts had sufficient funds to satisfy said loan as well as pay the amounts owed 14 to Plaintiff. 15 Conclusion 16 For the reasons stated above, Plaintiff s motion for reconsideration is DENIED. 17 IT IS SO ORDERED. 18 In San Juan, Puerto Rico, this day 9th day of April, 2010. 19 20 21 22 23 24 25 26 S/Salvador E. Casellas SALVADOR E. CASELLAS U.S. Senior District Judge

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