Royal Car Rental, Inc. v. Banco Popular de Puerto Rico , 524 F. App'x 721 ( 2013 )

Not for Publication in West's Federal Reporter
United States Court of Appeals
For the First Circuit
No. 12-2131
ROYAL CAR RENTAL, INC.; BUMPERS ROYAL CORP.;
FRANK LÓPEZ-CARBALLO; NAIDABEL SOTO-MENÉNDEZ,
Plaintiffs, Appellants,
v.
BANCO POPULAR DE PUERTO RICO,
Defendant, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Juan M. Pérez-Giménez, U.S. District Judge]
Before
Howard, Lipez and Kayatta,
Circuit Judges.
Fernando E. Longo-Quiñones and Berríos & Longo Law Offices,
P.S.C. on brief for appellants.
Salvador J. Antonetti-Stutts and O'Neill & Borges LLC on brief
for appellee.
May 24, 2013
Per Curiam. This is an appeal of the dismissal of a
complaint against Banco Popular de Puerto Rico ("Banco Popular")
arising from conduct by Westernbank Puerto Rico, Inc.
("Westernbank"), whose assets and liabilities Banco Popular assumed
when Westernbank failed. In light of our decision in Acosta-
Ramírez v. Banco Popular de Puerto Rico, 712 F.3d 14 (1st Cir.
2013), we vacate the district court's judgment and remand the case
with instructions to dismiss for lack of subject matter
jurisdiction.
In 2007, Westernbank extended a line of credit to Royal
Car Rental, Inc. ("Royal") for the purpose of acquiring a fleet of
vehicles to use in Royal's business. Westernbank required that
Royal pledge the vehicles as collateral, and that the loan be
guaranteed by Royal's affiliate Bumpers Royal, Inc.; Frank López-
Carballo, the sole shareholder of Royal and Bumpers Royal; and
López's then-spouse, Naidabel Soto-Menéndez. According to the
complaint, Westernbank later falsely represented that Royal was not
complying with the terms of the loan and wrongfully attempted to
accelerate the debt. Royal was forced to file for bankruptcy, and
it commenced an adversary proceeding against Westernbank in 2009.
The bankruptcy court granted summary judgment to Westernbank, and
Royal did not appeal. Around the same time, the guarantors of
Royal's loan sued Westernbank on similar grounds in Puerto Rico's
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Court of First Instance. That court also granted summary judgment
to Westernbank.
Shortly before it was awarded summary judgment in the
bankruptcy and commonwealth courts, Westernbank was closed by the
Puerto Rico Office of the Commissioner of Financial Institutions,
and the Federal Deposit Insurance Corporation ("FDIC") was named
Westernbank's Receiver. The FDIC immediately transferred all of
Westernbank's deposits and certain of its loans (including the loan
at issue here) to Banco Popular under a Purchase and Assumption
Agreement.
Following the closure of Westernbank, Royal and the
guarantors of its loan filed yet another action on similar grounds
in the Court of First Instance, this time against Banco Popular as
successor to Westernbank. Banco Popular removed the action to the
United States District Court for the District of Puerto Rico. The
plaintiffs amended their complaint, alleging various wrongful
actions by Westernbank, including the use of perjury to deceive the
bankruptcy court. The amended complaint's allegations against
Banco Popular all depended on Westernbank's conduct: Banco Popular
"did not rectify Westernbank's conduct," and its "actions have been
the continuation of the conduct, acts, perjury, dolus [a concept
similar to fraud in the inducement], breach, and fraud in which
Westernbank was embarked against [Royal] and plaintiffs." The
district court dismissed the action for failure to state a claim,
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primarily because the bankruptcy court had already decided many of
the issues in the case. The plaintiffs appealed.
After the parties had briefed this appeal, but before
oral argument, we held in Acosta-Ramírez that no court had
jurisdiction over a suit for severance pay by former employees of
Westernbank against Banco Popular. 712 F.3d at 15-16. That was
because the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989, Pub. L. No. 101-73, 103 Stat. 183,
requires that claims based on the actions of a failed bank be
submitted to the FDIC through its administrative claims process. 12
U.S.C. § 1821(d)(3)-(13). If a claimant does not exhaust his or
her administrative remedies, then "no court shall have jurisdiction
over . . . any claim relating to any act or omission of" the failed
bank. Id. § 1821(d)(13)(D). At our request, the parties and the
FDIC submitted supplemental briefs discussing whether we have
jurisdiction over this appeal in light of Acosta-Ramírez.
The appellant makes no persuasive argument that the
complaint alleges a claim that is unrelated to the conduct of
Westernbank. On the contrary, every allegation against Banco
Popular "relat[es] to an act or omission of" Westernbank. 12
U.S.C. § 1821(d)(13)(D); see Acosta-Ramírez, 712 F.3d at 21. The
appellants do not claim that they have availed themselves of the
FDIC's administrative claims process. Acosta-Ramírez, 712 F.3d at
21. We therefore conclude that no court has jurisdiction over this
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case. Accordingly, we vacate the district court's judgment and
remand the case with instructions to dismiss for lack of subject
matter jurisdiction. No costs are awarded.
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