Triangle Cayman Asset Company 2 v. Empresas Omajede, Inc., No. 3:2017cv02372 - Document 67 (D.P.R. 2019)
Court Description: OPINION AND ORDER finding as moot 35 Motion to Compel; denying 46 Motion to Dismiss for Lack of Jurisdiction. Signed by Judge Juan M. Perez-Gimenez on 4/3/2019. (PMA)
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Triangle Cayman Asset Company 2 v. Empresas Omajede, Inc. Doc. 67 IN TH E U N ITED S TATES D ISTRICT COU RT FOR TH E D ISTRICT OF PU ERTO RICO TRIAN GLE CAYMAN ASSET COMPAN Y 2 , CIV. NO. 17-2372 (PG) Plaintiff v. EMPRESAS OMAJED E, IN C., Defendant. OPIN ION AN D ORD ER On Decem ber 20 , 20 17, plaintiff Triangle Caym an Asset Com pan y 2 1 (“plaintiff” or “TCAC2”) filed the above-captioned diversity claim for collection of m onies and foreclosure of collateral against defendant Em presas Om ajede, Inc. 2 (“defendant” or “Em presas”). See Docket No. 1. After a tem porary stay following the afterm ath of Hurricane Maria, the defendant filed a m otion to dism iss for lack of jurisdiction 3 along with a request to conduct lim ited discovery as to the parties’ diversity. See Dockets No. 21-22. The court granted the lim ited discovery request, as well as several extensions of tim e to the jurisdictional discovery deadlin e. See Dockets No. 23, 28 , 32, 42, 45. The record reflects that the parties engaged in various disputes during this process, leading to defendant’s second m otion to com pel, which is now pending. See Docket No. 35. Defendant also filed a ren ewed m otion to dism iss for lack of jurisdiction in the face of 1Pursuant to the allegations in the com plaint, TCAC2 “is an exem pt, for-profit corporation, organized and existing pursuant to the laws of the Caym an Islands” and “has a place of busin ess in the state of Texas and, for diversity jurisdiction purposes, also has its principal place of business in San Francisco, California.” See Docket No. 1 at page 2. 2 Pursuant to the allegations in the com plaint, Em presas “is a for-profit corporation duly organized and existing under the laws of the Com m onwealth of Puerto Rico.” See Docket No. 1 at page 2. 3 The court denied this m otion without prejudice considering request to file a ren ewed m otion to dism iss upon conclusion of jurisdictional discovery proceedings. See Docket No. 34. Dockets.Justia.com Civ. No. 17-2372 (PG) Page 2 objections to the purportedly incom plete discovery produced by the plaintiff. See Docket No. 46. In its m otion to dism iss, defendant essentially argues that this court lacks jurisdiction because, in reality: (1) plaintiff is an entity that does busin ess exclusively in Puerto Rico by m eans of an alter ego, and (2) Puerto Rico is plaintiff’s true principal place of business. See id. The defendant contends that Capital Crossing Puerto Rico, LLC, a Puerto Rico lim ited liability com pany, controls the business and assets of TCAC2 in Puerto Rico and is thus its alter ego. Additionally, defendant purports that the real party in interest in TCAC2’s loan acquisition business is its sister com pany, which is registered in Puerto Rico. As to this alleged schem e, defendant accuses plaintiff of withholding “all the relevant inform ation and docum ents pertaining to the sister entities and the attributions and delegations between said entities … devised to ‘avail itself’ of certain unspecified tax ben efits.” Docket No. 46 at page 4. In sum , defendant argues that diversity is lacking and that plaintiff’s allegations are insufficient to establish diversity. In its opposition, TCAC2 argued that while it “owns a portfolio of loans with collateral in Puerto Rico, that is not the relevant inquiry for establishing diversity jurisdiction.” Docket No. 55 at page 3. Instead, it contends that pursuant to the applicable law, it can only be deem ed a citizen of the Caym an Islands (its place of incorporation) and of Texas and California (its principal place of business). See Docket No. 55. Federal courts are courts of lim ited jurisdiction. “Federal courts have jurisdiction over controversies arising between ‘citizens of different states,’ provided that the am ount in controversy exceeds $ 75,0 0 0 .” Garcia Perez v. Santaella, 364 F.3d 348 , 350 (1st Cir. 20 0 4); see also 28 U.S.C. § 1332(a)(1). This court has the responsibility “to police the border of federal jurisdiction.” Spielm an v. Genzym e Corp., 251 F.3d 1, 4 (1st Cir. 20 0 1). This responsibility includes the duty to “rigorously enforce the jurisdictional lim its that Congress chooses to set in Civ. No. 17-2372 (PG) Page 3 diversity cases.” Rosario Ortega v. Star Kist Foods, 213 F.Supp.2d 8 4, 87 (D.P.R. 20 0 2) (citing Coventry Sewage Assoc. v. Dworkin Realty Co., 71 F.3d 1, 3 (1st Cir. 1995)). The requirem ent that there be com plete diversity of citizenship between all plaintiffs and all defen dants is one such lim it. See Casas Office Machines, Inc. v. Mita Copystar Am erica, Inc., 42 F.3d 668, 673 (1st Cir. 1994). “[A] corporation shall be deem ed to be a citizen of every State and foreign state by which it has been incorporated and of the State or foreign state where it has its principal place of business.” 28 U.S.C. § 1332(c)(1). “Several years ago, the Suprem e Court established beyond any doubt that federal courts m ust em ploy the ‘nerve center’ test to determ ine the location of a corporation’s principal place of business.” Harrison v. Granite Bay Care, Inc., 8 11 F.3d 36, 40 (1st Cir. 20 16) (citing Hertz Corp. v. Friend, 559 U.S. 77, 80 – 81 (20 10 )). “The phrase ‘prin cipal place of business’ in 28 U.S.C.S § 1332(c)(1) refers to the place where the corporation’s high level officers direct, control, and coordinate the corporation’s activities.” Transportation & Storage Sols. Inc. v. KLT Indus., Inc., No. CIV.A. 13-40 137-TSH, 20 14 WL 5320 174, at *3 (D. Mass. Oct. 17, 20 14) (citing Hertz, 559 U.S. at 80 – 81). This court’s subject m atter jurisdiction has been previously questioned under com parable circum stances and pursuant to sim ilar argum ents as the ones raised here. For exam ple, in Bautista Caym an Asset Co. v. The Ferrer Grp., In c., No. CV 15-2277 (GAG), 20 16 WL 1642630 (D.P.R. Apr. 25, 20 16), defendants sought dism issal of plaintiff’s collection and foreclosure action arguing that plaintiff did not establish diversity of citizen ship under 28 U.S.C. § 1332. Plaintiff, Bautista Caym an Asset Com pany, countered that com plete diversity existed because it was a corporation organized under the laws of the Caym an Islands and that Texas was its principal place of business. Indeed, it stem m ed from the court’s opinion and order that defendants them selves had found public records evincing plaintiff’s corporate registration in the Caym an Islands. Relyin g on this docum entary evidence and plaintiff’s Civ. No. 17-2372 (PG) Page 4 allegations regarding its principal place of business outside of Puerto Rico, the court denied defendants m otion to dism iss concluding that Bautista was able to assert diversity jurisdiction. Id. at *3. Thereafter, on J uly 18, 20 18 , another fellow district judge also denied a m otion requesting dism issal of a foreclosure claim filed by Bautista Caym an Asset Com pany against defendant Asociacion de Miem bros de la Policia de Puerto Rico (“AMPPR”). See Bautista Caym an Asset Co. v. Asociacion De Miem bros De La Policia De Puerto Rico, No. CV 17-1167 (CCC), 20 18 U.S. Dist. LEXIS 125412 (D.P.R. J uly 18, 20 18). In said m otion, AMPPR claim ed that this court lacked subject m atter jurisdiction because, as here, Bautista was a “dum m y” corporation created for the sole purpose of m anufacturing diversity jurisdiction and its principal place of business was really Puerto Rico. The court noted that Bautista produced a sworn statem ent by its director, J oshua Peck, and a Certificate of Incorporation, both of which certified that Bautista was incorporated in the Caym an Islands and in good standing under the laws of said jurisdiction. Additionally, Bautista affirm ed that its representatives m et in Boston, either in person or by telephone or video conference from California or Texas, and that its officers m ade business decisions from either California or Texas. Consequently, the court held that Bautista’s nerve center, for purposes of determ ining citizenship, was not Puerto Rico. The court thus concluded that Bautista had “established that there is com plete diversity between the parties for us to have subject-m atter jurisdiction over this action.” Id. At *5. This court is now presented with an identical question: whether or not the doors of this court are open to TCAC2’s diversity claim . In its m otion to com pel, Em presas attached TCAC2’s answer to interrogatories signed by TCAC2’s Director, J oshua Peck. See Docket No. 37-1. Therein, TCAC2 asserted under penalty of perjury that it is an exem pted com pany organized and in good standing under the laws of the Caym an Islands. TCAC2 supported its answers referring to docum ents it produced Page 5 Civ. No. 17-2372 (PG) to Em presas. See Docket No. 37-1 at page 5. To that effect, Em presas adm itted in its m otion that TCAC2 produced “docum entation regarding the alleged corporate structure of TCAC-2,” including a “standard form Mem orandum and Articles of Association in the Caym an Islan ds.” Docket No. 46 at page 3. TCAC2 also affirm ed in its sworn answers that, through its officers, it conducts its business from Texas, New York and California. See Docket No. 37-1 at page 5. It also stated that it som etim es held m eetings in Boston, Massachusetts; and that officers would participate either in person or by telephone or video conference. See id. at page 11. Having been presented with sim ilar proof of citizenship, this court will not deviate from the conclusions reached by fellow judges in this district court. As such, the court finds that TCAC2 has sufficiently established it is not a citizen of Puerto Rico, and thus, the m otion to dism iss (Docket No. 46) is D EN IED . Consequently, defendant’s m otion to com pel jurisdiction al discovery (Docket No. 35) is deem ed MOOT. IT IS SO ORD ERED . In San J uan, Puerto Rico, April 3, 20 19. S/ J UAN M. PÉREZ-GIMÉNEZ JU AN M. PEREZ-GIMEN EZ SEN IOR U .S. D ISTRICT JU D GE
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