-CVR Jardin de las Catalinas Limited Partnership et al v. Joyner-Kelly, No. 3:2011cv01374 - Document 46 (D.P.R. 2012)
Court Description: OPINION AND ORDER re 22 Motion for Judgment on the Pleadings; and re 27 Report and Recommendation. The Court has made an independent examination of the record in this case and ADOPTS the magistrate judge's findings and recommendations. Pla intiffs' claims are barred by the statute of limitations. Defendant's motion for judgment on the pleadings is GRANTED and plaintiffs' case is DISMISSED WITH PREJUDICE. Judgment shall be entered accordingly. Signed by Judge Francisco A. Besosa on 05/21/2012. (brc) (Main Document 46 replaced on 5/21/2012 as per Judge Besosa's request.) (re)
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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO JARDIN DE LAS CATALINAS LIMITED PARTNERSHIP, JARDIN DE SANTA MARIA LIMITED PARTNERSHIP, Plaintiffs, CIVIL NO. 11-1374 (FAB) v. GEORGE JOYNER, in his official capacity as Executive Director of the PUERTO RICO HOUSING FINANCE AUTHORITY, Defendant. OPINION AND ORDER BESOSA, District Judge. Before the Court is the Report and Recommendation ( R&R ) (Docket No. 27), regarding defendant s motion for judgment on the pleadings under Federal Rule of Civil Procedure 12(c) (Rule 12(c)) (Docket No. 22), which plaintiffs did not oppose. Having considered the magistrate judge s recommendations, and the parties objections and responses, the Court ADOPTS the R&R. DISCUSSION I. Procedural History On April 19, 2011, Jardin de las Catalinas Limited Partnership ( Catalinas ) and Jardin de Santa Maria Limited Partnership ( Santa Maria ) (together, plaintiffs ) filed a complaint against George Joyner, in his official capacity as executive director of the Puerto Rico Housing Finance Authority ( PRHFA ) (hereafter Civil No. 11-1374 (FAB) 2 defendant ), alleging a seizure of property constituted by tax credits known as the Low Income Housing Tax Credit ( LIHTC ) and amended by the Housing and Economic Recovery Act ( HERA ). (Docket No. 1.) On December 19, 2011, defendant filed a motion for judgment on the pleadings, alleging that plaintiffs lack a property interest in the credits and thus fail to state a violation of a constitutional right. In the alternative, defendant argues that plaintiffs section 1983 claim is time-barred under the applicable statute of limitations. (Docket No. 22.) Plaintiffs moved the magistrate judge for an extension of time to respond to defendant s motion on December 21, 2011, and were granted an extension until January 20, 2012. (Docket Nos. 25 & 26.) Even after being granted the extension requested, plaintiff failed to oppose defendant s motion for judgment on the pleadings, and on January 26, 2012, the magistrate judge issued an unopposed motion be granted. R&R recommending that defendant s (Docket No. 27.) After their prolonged absence, plaintiffs swiftly entered the scene and filed a motion asking the magistrate judge to reconsider the R&R. (Docket No. 28.) The magistrate judge denied plaintiffs motion, and noted that [t]he content of the reconsideration may be filed by plaintiffs Recommendation. as (Docket an No. objection 29.) to the Plaintiffs Report filed and their objections to the R&R, defendant filed an opposition to plaintiffs objections, plaintiffs filed a reply, and defendant filed its Civil No. 11-1374 (FAB) surreply. 3 (Docket Nos. 30, 33, 38, 43.) The Court now considers the applicable legal standards and the parties arguments. II. Legal Standards A. Standard under 28 U.S.C. § 636(b)(1) A district court may refer, inter alia, a motion . . . for judgment on the pleadings to a magistrate judge for a report and recommendation. See 28 Fed.R.Civ.P. 72(b); Loc. Rule 72(a). U.S.C. §636(b)(1)(A)-(B); Any party adversely affected by the report and recommendation may file written objections within fourteen days of being served with the magistrate judge s report. See 28 U.S.C. §636(b)(1). A party that files a timely objection is entitled to a de novo determination of those portions of the report or specified proposed findings or recommendations to which specific objection is made. Sylva v. Culebra Dive Shop, 389 F.Supp.2d 189, 191-92 (D.P.R. 2005) (citing United States v. Raddatz, 447 U.S. 667, 673 (1980)). rule precludes further review. 22, 30-31 (1st Cir. 1992). Failure to comply with this See Davet v. Maccorone, 973 F.2d In conducting its review, the Court is free to accept, reject, or modify, in whole or in part, the findings or recommendations made by the magistrate judge. 28 U.S.C. § 636 (a)(b)(1). Templeman v. Chris Craft Corp., 770 F.2d 1985); 245, 247 Pharmaceuticals, (1st Inc., Cir. 286 Alamo F.Supp.2d 144, Rodriguez 146 v. Pfizer (D.P.R. 2003). Furthermore, the Court may accept those parts of the report and Civil No. 11-1374 (FAB) 4 recommendation to which the parties do not object. See Hernandez- Mejias, 428 F.Supp.2d at 6 (citing Lacedra, 334 F.Supp.2d at 125126). B. Federal Rule of Civil Procedure 12(c) Standard A motion for judgment on the pleadings is treated much like a Rule 12(b)(6) motion to dismiss. Perez-Acevedo v. Rivero- Cubano, 520 F.3d 26, 29 (1st Cir. 2008) (citing Curran v. Cousins, 509 F.3d 36, 43-44 (1st Cir. 2007)). When considering a motion under Rule 12(c), a court must view the facts contained in the pleadings in the light most favorable to the nonmovant and draw all reasonable inferences therefrom . . . . Id. (quoting R.G. Fin. Corp. v. Vergara-Nuñez, 446 F.3d 178, 182 (1st Cir. 2006)). [A]n adequate complaint must provide fair notice to the defendants and state a facially plausible legal claim. Ocasio-Hernandez v. Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011). When faced with a motion for judgment on the pleadings, [a] plaintiff is not entitled to proceed perforce by virtue of allegations action. S.Ct. that merely parrot the elements of the cause of Id. at *9 (quoting Ashcroft v. Iqbal, ___ U.S. ___, 129 1937, 1950 (2009)). Any [n]on-conclusory factual allegations in the complaint [, however,] must . . . be treated as true, even if seemingly incredible. at 1951). Id. (citing Iqbal, 129 S.Ct. Where those factual allegations allow[] the court to draw the reasonable inference that the defendant is liable for the Civil No. 11-1374 (FAB) 5 misconduct alleged, the claim has facial plausibility. Id. (citing Iqbal, 129 S.Ct. at 1949). C. Plaintiffs Waiver of any Objection to the Report and Recommendation Plaintiffs failed to oppose defendant s motion for judgment on the pleadings. They moved for an extension of time to respond to defendant s motion, were granted the extension, and still failed to file a timely opposition to defendant s motion. (See Docket Nos. 25 & 26.) They presented their arguments on the merits their of that recommendation. granted motion in objection (See Docket No. 30.) defendant s motion for to the report and After the magistrate judge judgment on the pleadings, plaintiffs filed a motion for reconsideration of the R&R. (Docket No. 28.) The magistrate judge appropriately denied the plaintiffs motion to reconsider, but noted that plaintiffs could make their arguments in an objection to the R&R. (Docket No. 29.) First, as a general matter, defendant correctly points out that plaintiffs failure to raise the relevant claims in a timely manner results in a waiver of those objections. See DiMarco-Zappa v. Cabanillas, 238 F.3d 25, 33 (1st Cir. 2001). The law is clear that when a dispositive motion is heard before a magistrate judge, the movant must make all her arguments then and there, and cannot later add new arguments at subsequent stages of the proceeding. Maurice v. State Farm Mut. Auto. Ins. Co., 235 F.3d 7, 10 (1st Cir. 2000). The Court finds that the arguments Civil No. 11-1374 (FAB) 6 raised in plaintiffs motion for reconsideration should have been raised in an opposition to defendant s motion and are therefore deemed waived. Even had the motion never been referred to a magistrate judge, it is clear that [a] party s failure . . . to timely oppose a motion in the district court constitutes forfeiture. Crispin- Taveras v. Municipality of Carolina, 647 F.3d 1, 7 (1st Cir. 2011) (citing Rivera-Torres v. Ortiz-Velez, 341 F.3d 86, 102 (1st Cir. 2003)). Furthermore, the Court s local rules expressly state that by failing to file a timely opposition to a motion, the opposing party shall be deemed to have waived objection. Loc. Civ.R. 7(b). Although 28 U.S.C. § 636(b)(1)(C) gives parties the right to de novo review to specific parts of reports and recommendations to which they properly object, those parties are not entitled to a de novo review of an argument never raised. See Borden v. Sec y. of Health and Human Servs., 836 F.2d 4, 6 (1st Cir. 1987); 28 U.S.C. § 636(b)(1)(C). until after recommendation a Allowing parties to sit on their hands magistrate would judge severely has undermine issued the a report utility, and and the purpose, of referring motions to magistrate judges. See id. Thus, parties must take before the magistrate [judge], not only their best shot but all of their shots. Id. (quoting Singh v. Superintending Sch. Comm., 593 F. Supp. 1315, 1318 (D.Me. 1984)). Given plaintiffs failure to oppose the motion for judgment on the Civil No. 11-1374 (FAB) pleadings properly, 7 they have consequently passed on any opportunity to present substantive arguments regarding that motion. See id.; Crispin-Taveras, 647 F.3d at 7; Loc. Civ.R. 7(b). Accordingly, the Court need not consider the arguments presented in plaintiffs objections to the report and recommendation (Docket No. 30) or their reply to defendant s opposition. (Docket No. 38.) III. The Court s Review of the R&R The magistrate judge granted defendant s motion for judgment on the pleadings on the basis that plaintiffs failed to state a cause of action under section 1983, and on the basis that their claims are time-barred by the applicable statute of limitations. (Docket No. 27.) While the Court need not consider plaintiffs untimely motions, for the purposes of thoroughness, the Court has reviewed the applicable motions and is in agreement with the magistrate judge s analysis. First, plaintiffs have not established an entitlement to a property interest in the tax credit created under section 42 of the Internal Revenue Code. Plaintiffs seem to acknowledge that the allocation of low income housing tax credits rests on the sole discretion of the state allocating agency, but argue that the increase in the LIHTC granted by HERA were discretion, but were mandated by federal statute. at 3-4.) not subject to (Docket No. 30 Plaintiffs have failed to cite to any relevant case law that contradicts First Circuit Court of Appeals precedent, which Civil No. 11-1374 (FAB) 8 states that because the state agency has absolute discretion to determine whether federal income tax credits are awarded to an applicant , an applicant has no cognizable property interest in the promised federal income tax credits. Barrington Cove Ltd. Partnership v. Rhode Island Housing and Mortg. Finance Corp., 246 F.3d 1, 5-6 (1st Cir. 2001). Plaintiff s reliance on Rio Grande Community Health Center, Inc. v. Rullan is misplaced. 397 F.3d 56, 72-73 (1st Cir. 2005) (holding that a § 1983 action does lie for an FQHC [federallyqualified health center] to enforce the Secretary[] [of Health s] obligation to make wraparound payments under 42 U.S.C. § 1396a(bb). ) As the Rio Grande court established, a violation of a federal right must be unambiguously conferred by the statutory provision at issue. Id. The language of the statute at issue in this case, 26 U.S.C. § 42, however, simply mandates that states promulgate their own allocation plans regarding these federal income tax credits, without identifying any particular condition under which the states are obligated to allocate them. Barrington Cove, 246 F.3d at 6. Thus, plaintiffs have no entitlement to tax credits under the LIHTC or under the HERA, which temporarily created a fixed floor rate of 9 percent for low income housing tax credits. The enactment of HERA does not explicitly affect the discretion of state agencies to grant or deny tax credits for low-income housing. Civil No. 11-1374 (FAB) 9 In the absence of a statutory amendment or precedential case law, the Court finds that the First Circuit Court of Appeals, decision in Barrington Cove remains good law, and that plaintiffs have not shown an entitlement to a property interest in the allocation of tax credits under section 42 of the IRC. Second, plaintiffs claims are time-barred because plaintiffs filed a complaint after the statute of limitations on their section 1983 claim had run. As the R&R states, Puerto Rico law is the guiding factor in determining the statute of limitations for a tort action in this district. (Docket No. 27 at 8-9.) Plaintiffs set forth three reasons why their claim is not time-barred: (1) the tort is continuous, (2) plaintiffs did not have adequate notice of the injury, thus requiring the statute of limitations to be tolled, and (3) equitable tolling applies to plaintiffs. (Docket No. 30 at 19-24.) The Court addresses each argument respectively. As defendant correctly points out, a continuous tort under Puerto Rico law is ongoing unlawful conduct, not a continuing harmful effect. (Docket No. 33 at 10, citing M.R. (Vega Alta), Inc. v. Caribe General Elec. Products, Inc., 31 F.Supp.2d 226, 240 (D.P.R. 1998). credits that The form 8609 documents, which state the amount of will be allocated to applicants, were plaintiffs by defendant on or before April 15, 2010. sent to (Docket No. 22-1, 22-2.) Thus, by April 15, 2010, plaintiffs were aware of how many credits they would be allocated, and how many credits were Civil No. 11-1374 (FAB) allegedly seized by 10 the defendant. Plaintiffs filed their complaint on April 19, 2011, more than one year later; therefore, their claim is time-barred. The date of receipt of the Form 8609 documents also goes against plaintiffs claims of inadequate notice. The 8609 documents most clearly state the amount of credit to be allocated, and plaintiffs cannot seriously allege that they were tricked by defendant because they failed to do their own due diligence in reviewing the forms upon receipt. Finally, the Court finds that the Baldwin factors are inapplicable and that plaintiffs are not excused from the statute of limitations. See Baldwin County Welcome Center v. Brown, 466 U.S. 147 (1984) (finding that [o]ne who fails to act diligently cannot invoke diligence. ) equitable principles to excuse that lack of The First Circuit Court of Appeals has outlined five factors to weigh when considering whether to allow equitable tolling: (1) lack of actual notice of filing requirement; (2) lack of constructive knowledge of the filing requirement; (3) diligence in pursuing one s rights; (4) absence of prejudice to the defendant; and (5) a plaintiff s reasonableness in remaining ignorant of the notice requirement. Kale v. Combined Ins. Co. of America, 861 F.2d 746, 752 (1st Cir. 1988). The Court finds no reason to employ equitable tolling in this instance, because it has determined that plaintiffs knew or should have known when the Civil No. 11-1374 (FAB) alleged seizure 11 occurred, because defendant would be highly prejudiced if plaintiffs suit were allowed to continue, and because plaintiffs were not reasonable in remaining ignorant about when the alleged seizure took place. They were in receipt of the forms which clearly outlined allocated credits and chose to wait to file their complaint until after the statute of limitations had run. Thus, the Court finds that plaintiffs claim is time-barred, plaintiffs had adequate notice of the alleged seizure, and equitable tolling is not appropriate. IV. Conclusion The Court has made an independent examination of the record in this case and ADOPTS the magistrate judge s findings and recommendations. Plaintiffs have failed to state a cause of action under section 1983 because they have no legitimate property interest in tax credits granted pursuant to Section 42 of the IRC. Moreover, plaintiffs limitations. claims are barred by the statute of Defendant s motion for judgment on the pleadings is GRANTED and plaintiffs case is DISMISSED WITH PREJUDICE. Judgment shall be entered accordingly. IT IS SO ORDERED. San Juan, Puerto Rico, May 21, 2011. s/ Francisco A. Besosa FRANCISCO A. BESOSA UNITED STATES DISTRICT JUDGE
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