Bautista Cayman Asset Company v. Fountainebleu Plaza, S.E.

999 F.3d 33

• Court: Court of Appeals for the First Circuit
• Decided: May 27, 2021
• Docket: 20-1681P
• Status: Published

Opinion

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-

- 2 - 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

- 3 - 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.

- 4 - 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

- 5 - 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.

- 6 - 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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