Bautista Cayman Asset Company v. Vilarino-Rodriguez et al, No. 3:2016cv03070 - Document 39 (D.P.R. 2018)
Court Description: OPINION AND ORDER granting 29 motion for summary judgment. Signed by Judge Juan M. Perez-Gimenez on 12/5/2018.
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Bautista Cayman Asset Company v. Vilarino-Rodriguez et al Doc. 39 IN TH E U N ITED S TATES D ISTRICT COU RT FOR TH E D ISTRICT OF PU ERTO RICO BAU TISTA CAYMAN ASSET COMPAN Y, Bautista, v. FRAN CISCO I. VILARIÑ O- ROD RIGUEZ, CIV. NO. 16-30 70 (PG) e t a l., Defendants. OPIN ION AN D ORD ER On Decem ber 12, 20 16, plaintiff Bautista Caym an Asset Com pany (“Bautista”) filed a com plaint for collection of m onies and foreclosure of collateral against defendants Fran cisco I. Vilariño-Rodriguez, his wife Digna M. Torres-Ortiz, and the Vilariño-Rodriguez– Torres-Ortiz conjugal partnership (collectively, “defendants”). See Docket No. 1. On March 5, 20 18, Bautista m oved for sum m ary judgm ent. See Docket No. 29. Because defendants failed to tim ely respond, this court deem ed Bautista’s m otion for summ ary judgm ent as unopposed. See Docket No. 32. For the reasons specified below, this court GRAN TS Bautista’s unopposed m otion for sum m ary judgm ent. I. U N CON TESTED MATERIAL FACTS The court adopts these facts, which are duly supported in the record, from Bautista’s unopposed statem ent of uncontested m aterial facts (“SUMF”). On Septem ber 17, 20 0 8, defendants executed a Loan Agreem ent with Doral Bank (“Doral”), pursuant to which Doral provided to them a loan facility in the am ount of $ 1,497,0 0 0 .0 0 , with interest at an annual rate of 7.25% (“Loan 1”). 1 See SUMF ¶ 3. A prom issory note was issued to the order of Doral, and subsequently endorsed to Bautista. See SUMF ¶ 4. On the sam e date, defendants 1 Bautista’s SUMF provides an interest at an annual rate of 7.5%. See SUMF ¶ 3. The loan agreem ent, however, clearly sets forth a rate of 7.25%. See Exhibit 1(b). Dockets.Justia.com CIV. NO. 16-30 70 (PG) Page 2 executed two pledge agreem ents through which Doral acquired pledge an d security interest over five different m ortgage notes (with their respective m ortgage deeds). See SUMF ¶¶ 7-13. Doral and defendants also executed an agreem ent for a line of credit in the principal am ount of $ 75,0 0 0 .0 0 with an interest rate of 2.0 0 % over the prim e rate of interest published by Bloom berg Inform ation Services in New York (“Loan 2”). See SUMF ¶ 14. On October 29, 20 13, Doral and defendants executed an Am ended and Restated Loan Agreem ent (“ARLA”) to consolidate Loan 1 and Loan 2. See SUMF ¶ 15. In executing the ARLA, defendants recognized that: the principal an d interest on the debt pursuant to Loan 1 and Loan 2 existing at the date of execution of said agreem ent am ounted to $ 1,436,242.0 0 and $ 86,20 2.83, respectively; that such debt was due and payable; and that there was no defense or counterclaim against the collection of such debt and, if any, the sam e was waived. See SUMF ¶ 17. The ARLA consolidated the outstanding debts into a single loan facility, adjusted the interest charge, and extended the m aturity date of the loan facility. See SUMF ¶ 18 . Under the term s and conditions of the ARLA, in case of default, defendants would be responsible for paym ent of interest on the principal due at a rate of default of the applicable interest rate plus five percent per annum and for the paym ent of relevant charges under the term s of the agreem ent, ten days after the event of default. See SUMF ¶ 27. Moreover, the loan would be in effect until the date of term ination, unless term inated or accelerated by the lender in the event of default. See SUMF ¶ 28. In the event of default, all m onies owed to lender by defendants would becom e due and payable without prior requirem ent or notice. See SUMF ¶ 28. On February 27, 20 15, the Com m ission er of Financial Institutions of the Com m onwealth of Puerto Rico closed Doral and appointed the Federal Deposit Insurance Corporation as its receiver. See SUMF ¶ 29. On March 27, 20 15, Bautista acquired the loan and collateral instrum ents described above. See SUMF ¶ 29. Defendants failed to m ake the paym ents as agreed upon in the ARLA. See SUMF ¶ 30 . On August 23, 20 16, Bautista served defendants with a notice of default and dem anded im m ediate Page 3 CIV. NO. 16-30 70 (PG) paym ent of the full am ounts due, including accrued interest and charges. See SUMF ¶ 30 . To date, defendants have not cured their default. See SUMF ¶ 31. II. STAN D ARD OF REVIEW Through sum m ary judgm ent, courts “pierce the boilerplate of the pleadings and assay the parties’ proof in order to determ ine whether trial is actually required.” Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794 (1st Cir. 1992). The Suprem e Court encourages em ploying sum m ary judgm ent in federal courts- it “[avoids] full blown trials in unwinnable cases, …[conserves] parties’ tim e and m oney, and [perm its] the court to husband scarce judicial resources.” McCarthy v. Northwest Airlines, Inc., 56 F.3d 313, 314 (1st Cir. 1995). See also Celotex Corp. v. Catrett, 477 U.S. 317 (198 6). A court m ay grant sum m ary judgm ent only when the pleadings and the evidence dem onstrate that “there is no genuine dispute as to any m aterial fact and the m ovant is entitled to judgm ent as a m atter of law.” Fed.R.Civ.P. 56(a). See also Sands v. Ridefilm Corp., 212 F.3d 657, 660 (1st Cir. 20 0 0 ). A factual dispute is “genuine” if it could be resolved in favor of either party, and “m aterial” if it potentially affects the outcom e of the case. See Calero-Cerezo v. U.S. Dep’t of J ustice, 355 F.3d 6, 19 (1st Cir. 20 0 4). The court m ust review the record “taken as a whole,” and “m ay not m ake credibility determ inations or weigh the evidence.” Reeves v. Anderson Plum bing Productions Inc., 530 U.S. 133, 135 (20 0 0 ). Credibility determ inations, the weighing of the eviden ce, an d the drawing of legitim ate inferences from the facts are functions of a jury, not of a judge. See id. In short, when there is a genuine dispute as to any m aterial fact, and when a court would be required to m ake credibility determ inations, weigh the evidence, or draw legitim ate inferences from the facts in order to adjudicate a controversy, sum m ary judgm ent will not be granted. While no legitim ate inferences can be drawn, the court will construe all reasonable inferen ces in favor of the nonm oving party. See Stoutt v. Banco Popular de Puerto Rico, 158 F. Supp. 2d 167, 171 (D.P.R. Page 4 CIV. NO. 16-30 70 (PG) 20 0 1). Still, the nonm oving party is required to dem onstrate “through subm issions of evidentiary quality that a trial worthy issue persists.” Iverson v. City of Boston, 452 F.3d 94, 10 8 (1st Cir. 20 0 6). III. D ISCU SSION Under Puerto Rico law, “obligations arising from contracts have legal force between the contracting parties, and m ust be fulfilled in accordance with their stipulations.” Laws of P.R. Ann. tit. 31, § 2994. 2 A loan agreem ent is an obligation in which “one of the parties delivers to the other … m oney … under the condition to return and equal am ount of the sam e kind and quality.” Id. § 4511. Courts cannot release a party from fulfilling what it agreed to fulfill through a legal and valid contract. See Matos, Gonzalez v. S.L.G. Rivera-Freytes, 181 P.R. Dec. 8 35, 8 43 (20 11); Cervecería Corona Inc. v. Com m onwealth Ins. Co., 115 P.R. Dec. 345 (1984). Thus, a creditor has the right to dem an d full paym ent of an outstanding debt. See Laws of P.R. Ann. tit. 31, § 3171. “A m ortgage is a guarantee of a debt, which in turn is secured by a particular property.” CitiMortgage, Inc. v. Rivera-Anabitate, 39 F. Supp. 3d 152, 154 (D.P.R. 20 14) (quotations om itted). “A m ortgage creditor m ay seek foreclosure if the debtor defaults on the paym ent of any principal or interest due.” Id. (citing Treco, Inc. v. Marina de Palm as, Inc., 626 F. Supp. 335, 342 (D.P.R.1986)). Bautista is undisputedly entitled to recover the am ounts owed in the prom issory note an d guaranteed in the m ortgage notes. Defen dants entered into a loan agreem ent and signed a prom issory note. They guaranteed their debt through five m ortgages instituted on five properties. Then, they defaulted on their contractual obligations. They have, to this date, failed to cure the 2 Because this is a diversity jurisdiction case, Puerto Rico law applies. See Shady Grove Orthopedic Assocs., P.A. v. Allstate Ins. Co., 559 U.S. 393, 417 (2010 ) (quoting Hanna v. Plum er, 380 U.S. 460 , 465 (1965)). Page 5 CIV. NO. 16-30 70 (PG) existing an d continuin g defaults on the sam e. Bautista, accordingly, has the right to collect the m onies owed and, if needed, foreclose the m ortgaged properties. As such, sum m ary judgm ent is granted – no m aterial facts rem ain in controversy, an d Bautista is entitled to judgm ent as a m atter of law. IV. CON CLU SION For the foregoing reasons, Bautista’s m otion for sum m ary judgm ent is GRAN TED . J udgm ent will be entered accordingly. Defendants are ordered to pay Bautista the following sum s due as of the date of their default, notified on August 23, 20 16: $ 1,50 5,393.77 in aggregated principal, with accrued interest which continues to accrue until full paym ent of the debt at the rates specified in the ARLA, and an y other charges, fees, or costs stipulated to in that agreem ent or other m ortgage docum ents. Furtherm ore, in default of the paym ent of the sum s herein specified or of any part thereof, within fourteen (14) days from the date of entry of judgm ent, the m ortgaged properties referred to above (See Exhibit Nos. 5(b), 6(b), 7(b), 8 (b), 9(b), 10 (b), 11(b), 12(b), 13(b), 14(b)), shall be sold at public auction to the highest bidder therefor, without an appraisal or right of redem ption for the paym ent of Bautista’s m ortgage within the lim its secured thereby. Upon Bautista’s com pliance with Fed. R. Civ. P. 53, the court m ay appoint a Special Master to conduct the sales, but the Special Master shall not proceed to carry them out, or do anything in connection with them , until further order by this court and under the form and condition s to be directed by the court. The sales to be conducted by the appointed Special Master shall be subject to the confirm ation of the court, and the purchaser or purchasers of the properties shall be entitled to receive their possession. The m inim um bid to be accepted at the first public sale will be in accordance with the m ortgage deeds. Any funds derived from the sales to be m ade in accordance with the term s of judgm ent and such further orders of this Court shall be applied as follows: a) To the paym ent of all proper expenses attendant upon said sales, including the expenses, outlays and com pensation of the Special Master appointed herein, after said com pensation and expenses Page 6 CIV. NO. 16-30 70 (PG) shall have been fixed and approved by the court, all said expen ses to be deducted from the sum provided in the deed of m ortgage for costs, charges and disbursem ents, expenses and attorneys’ fees. b) To the paym ent of all expenses or advances m ade by Bautista. c) To the paym ent to Bautista of the am ount of $ 1,50 5,393.77 in aggregated principal, with accrued interest which continues to accrue until full paym ent of the debt at the rates specified in the ARLA, and any other charges, fees, or costs stipulated to in that agreem ent or other m ortgage docum ents. d) If after m aking all the above paym ents there shall be a surplus, said surplus shall be delivered to the Clerk of this Court, subject to further orders of the court. e) If after m aking all those paym ents there is a deficiency, Bautista m ay seek further orders by the court to collect the deficiency from Defendants. Bautista in these proceedings m ay solicit from this court such further orders, as it m ay deem advisable to its interests, in accordance with the term s of the judgm ent, including all available rem edies for the enforcem ent of a m oney judgm ent. IT IS SO ORD ERED . In San J uan, Puerto Rico, Decem ber 5, 20 18. S/ J UAN M. PÉREZ-GIMÉNEZ JU AN M. PÉREZ-GIMÉN EZ SEN IOR U .S. D ISTRICT J U D GE
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