Bautista Cayman Asset Company v. Fountainebleu Plaza, S.E. ( 2021 )

United States Court of Appeals
For the First Circuit
No. 20-1681
BAUTISTA CAYMAN ASSET COMPANY,
Plaintiff, Appellee,
v.
FOUNTAINEBLEU PLAZA, S.E.; EDWIN ANTONIO LOUBRIEL ORTIZ,
Defendants, Appellants,
SEDCORP, INC.,
Defendant.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. García-Gregory, U.S. District Judge]
Before
Kayatta, Lipez, and Barron,
Circuit Judges.
Juan R. Dávila-Díaz for appellants.
Carolina Velaz-Rivero, with whom Mauricio O. Muñiz-Luciano,
Hans E. Riefkohl-Hernández, and Marini Pietrantoni Muñiz LLC were
on brief, for appellee.
May 27, 2021
KAYATTA, Circuit Judge. In March of 2017, Bautista
Cayman Asset Company brought an action for collection of monies
and foreclosure of collateral against Fountainebleu Plaza, S.E.,
Edwin Loubriel Ortiz, and Sedcorp, Inc. The district court later
granted summary judgment in Bautista's favor. Fountainebleu and
Loubriel timely appealed. They contend that the district court
did not have subject-matter jurisdiction over the case, and that,
even if it did, genuine disputes of material fact precluded the
district court from granting summary judgment. After carefully
considering on de novo review the record and briefs on appeal, as
well as oral argument by counsel, we vacate and remand for the
sole purpose of better determining the amount due.
As to the district court's subject-matter jurisdiction,
Fountainebleu and Loubriel argue that a clause in the parties'
loan agreement -- the agreement at the core of the case -- was a
mandatory forum selection clause, requiring that the case be
litigated in Puerto Rico state court. That clause provides that,
"[i]n the event of any litigation that arises in connection with
this contract, with the Loan, or with the other documents connected
hereto, the parties submit to the jurisdiction of the General Court
of Justice of Puerto Rico." For substantially the reasons offered
by the district court in its opinion denying the defendants' motion
to dismiss for lack of subject-matter jurisdiction, Bautista
Cayman Asset Co. v. Fountainebleu Plaza, S.E., No. 3:17-cv-01383-
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JAG (D.P.R. Jan. 19, 2018), ECF No. 33, we conclude that the clause
did not deprive the district court of subject-matter jurisdiction.
We have previously read similar provisions as "an
affirmative conferral of personal jurisdiction by consent, and not
a negative exclusion of jurisdiction in other courts." Autoridad
de Energía Eléctrica de P.R. v. Ericsson Inc., 201 F.3d 15, 18–19
(1st Cir. 2000) (citing Redondo Constr. Corp. v. Banco Exterior de
España, S.A., 11 F.3d 3, 6 (1st Cir. 1993)). Fountainebleu and
Loubriel direct us to Summit Packaging Systems, Inc. v. Kenyon &
Kenyon, 273 F.3d 9 (1st Cir. 2001), but that case only bolsters
our reading of the clause. There, we held mandatory a clause
providing that, in the event of a certain dispute, "you agree that
the dispute will be submitted to arbitration . . . or . . .
submitted to the Courts of the State of New York." Id. at 11.
When parties, such as those in Summit Packaging, "agree that they
'will submit' their dispute to a specified forum, they do so to
the exclusion of all other forums." Id. at 13. This sort of
agreement stands "[i]n contrast to" mutual assent to a particular
court's "jurisdictional authority." Id. Where, as here, the
parties agree only to submit themselves to the jurisdiction of a
particular court, they do not do so to the exclusion of all others.
Moving past subject-matter jurisdiction, Fountainebleu
and Loubriel argue that genuine disputes of material fact precluded
the district court from granting summary judgment. They assert
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that such disputes existed as to whether (1) Bautista was the owner
of the loans in question; (2) Bautista set forth sufficient
evidence to prove the validity of the mortgage; (3) the description
of the mortgaged property was sufficient; and (4) the amounts
claimed by Bautista reflect all of the payments made by the
debtors. We address each of these points in turn.
First, Fountainebleu and Loubriel state that there is no
evidence in the record demonstrating that Bautista owns the credit
facilities at issue. But, in their answer to the complaint,
Fountainebleu and Loubriel admitted: Doral Bank executed a loan
agreement with Fountainebleu as borrower and Loubriel as
guarantor; to secure the obligations under the loan agreement,
Doral Bank executed a pledge agreement with Fountainebleu in which
a mortgage note was pledged in favor of Doral Bank; the mortgage
guaranteeing the mortgage note encumbers Property 16,778 in the
Registry of Property of Puerto Rico, Section of Guaynabo; a
financing statement in relation to the mortgage note was filed in
favor of Doral Bank before the Department of State; and the
mortgage note, which was "pledged in favor of Doral [Bank], . . .
was subsequently endorsed in favor of Bautista." Fountainebleu
and Loubriel offer no evidence or argument that those admitted
facts do not establish ownership by Bautista of the subject
facilities.
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Second, Fountainebleu and Loubriel state that Bautista
did not produce admissible evidence to show the validity of the
pledge agreement, the mortgage, and the mortgage note. They say
that the documents Bautista submitted were drafts lacking the
signatures and seals required under Puerto Rico law, see P.R. Laws
Ann. tit. 4, § 2034, and that the versions of the documents
Bautista submitted are inadmissible and therefore cannot support
Bautista's motion for summary judgment, see Fed. R. Civ.
P. 56(c)(2). But Bautista described the pledge agreement,
mortgage, and mortgage note in its complaint, and it attached
copies identical to the ones Fountainebleu and Loubriel now
challenge, incorporating them into the complaint. Fountainebleu
and Loubriel admitted to the veracity of the relevant portions of
these documents.
Third, Fountainebleu and Loubriel state that, even if
the pledge, mortgage, and mortgage note are otherwise valid, they
do not clearly identify the subject property. They emphasize that
the mortgage deeds guaranteeing the mortgage note differ from a
title study in how they describe the mortgaged properties. The
mortgage deeds describe the "remnant" of property number 16,778 -
- the mortgaged property -- as consisting of 91,352.3910 square
meters, but they also explain that "segregated from the
aforedescribed property was a part of [2.0628] cuerdas, without
describing in said deed the remnant." Bautista's title study
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described property number 16,778 as consisting of 86,232.1484
square meters since it is a "remnant of this property after
segregating a lot with an area of 5,120.2426 square meters,
equivalent to 1.3028 cuerdas."1 Fountainebleu and Loubriel have
not provided any legal argument or caselaw addressing the
materiality of such a purported discrepancy in the description of
the mortgaged property. Accordingly, we deem any argument waived.
See United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990).
Finally, Fountainebleu and Loubriel challenge the amount
of the judgment, claiming that it fails to account for payments
made to Bautista's predecessor totaling $242,624.89. As the moving
party, Bautista bore the initial burden of showing that no genuine
issue of material fact exists. See Feliciano-Muñoz v. Rebarber-
Ocasio, 970 F.3d 53, 62 (1st Cir. 2020) (citing Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986)). Bautista properly supported
the amount of the debt via an affidavit from its loan servicer.
At that point, Fountainebleu and Loubriel had to identify specific
facts demonstrating the existence of a genuine dispute to avoid
summary judgment against them. See id. Fountainebleu and Loubriel
produced transaction details and account records as evidence of
the claimed payments as well as an affidavit of Loubriel contending
1 Fountainebleu and Loubriel also note that Doral Bank sent
a letter to Loubriel roughly describing the collateral for the
loan as parcels of land totaling ninety-three thousand square
meters.
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that to the best of his knowledge Bautista had not netted these
payments out. Bautista claims that the payments were netted out
and alternatively that Fountainebleu and Loubriel should have
looked to Bautista's predecessor.
The record on this point leaves room for reasonable
debate. If the payments totaling nearly $250,000 were accounted
for, Bautista should have records showing precisely how and when
they were applied to the debt. And Loubriel should have -- or
should have had -- more documents showing that the payments went
unaccounted for in Bautista's rendering of the total debt. This
miasma works to Bautista's detriment. While we cannot "allow
conjecture to substitute for the evidence necessary to survive
summary judgment," we also "must not engage in making credibility
determinations or weighing the evidence at the summary judgment
stage." Town of Westport v. Monsanto Co., 877 F.3d 58, 66 (1st
Cir. 2017) (quoting Pina v. Children's Place, 740 F.3d 785, 802
(1st Cir. 2014)). In the absence of more evidence (say, an
accounting of the loan payment history), we have a classic battle
of the affidavits: the loan servicer's versus Loubriel's. We
therefore vacate the judgment and remand for the sole purpose of
better determining the amount due.
For the foregoing reasons, the judgment is vacated. No costs
are awarded.
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