Caribbean Mgmt. Group, Inc. v. Erikon, LLC

966 F.3d 35
CourtCourt of Appeals for the First Circuit
DecidedJuly 17, 2020
Docket19-1421P
StatusPublished
Cited by32 cases

This text of 966 F.3d 35 (Caribbean Mgmt. Group, Inc. v. Erikon, LLC) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Caribbean Mgmt. Group, Inc. v. Erikon, LLC, 966 F.3d 35 (1st Cir. 2020).

Opinion

United States Court of Appeals For the First Circuit

No. 19-1421

CARIBBEAN MANAGEMENT GROUP, INC.,

Plaintiff, Appellee,

v.

ERIKON LLC,

Defendant, Appellant.

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

[Hon. Carmen Consuelo Cerezo, U.S. District Judge]

Before

Thompson, Selya, and Barron, Circuit Judges.

Iván Aponte-González, Héctor J. Quiñones Inserni, and García, Aponte & Quiñones, LLC on brief for appellant. Eugene F. Hestres and Bird Bird & Hestres, P.S.C. on brief for appellee.

July 17, 2020 SELYA, Circuit Judge. A money judgment (even a money

judgment for several million dollars) may not be worth the paper

on which it is written if the judgment creditor does not undertake

timely enforcement action. This case, in which the judgment

creditor slept upon its rights until the prescribed period for

execution of judgments had elapsed, illustrates the point. Given

the judgment creditor's failure to act in a timeous manner, we

affirm the district court's denials of both its motion for leave

to execute on the judgment and its motion for reconsideration.

I.

Background

We briefly rehearse the relevant facts and travel of the

case. In 2006, Erikon LLC (Erikon) sold its interest in a

development project in Aguadilla, Puerto Rico, to Caribbean

Management Group, Inc. (CMG). As part of the consideration for

the purchase, CMG executed a promissory note payable to Erikon for

$7,500,000. David Wishinsky Kerr (Wishinsky) personally

guaranteed CMG's indebtedness.

A dispute soon arose over CMG's obligations under the

note, and CMG and Erikon sued each other in the United States

District Court for the District of Puerto Rico. After the cases

were consolidated, the parties reached a settlement and requested

that the district court enter a consent judgment in Erikon's favor

against CMG and Wishinsky, jointly and severally, for $7,500,000

- 2 - (plus $50,000 in attorneys' fees). The court entered the

stipulated judgment on March 25, 2008.1

Erikon immediately encountered strong headwinds in

collecting on the judgment. By September of 2008, CMG and

Wishinsky had paid only $250,000 toward satisfaction of the

judgment. At Erikon's request, the district court issued a writ

of attachment on two parcels of land owned by CMG and/or Wishinsky,

together with an order authorizing the public sale of those

parcels. The record contains no indication that the judicially

authorized sale ever took place.

Endeavoring to explore other avenues for collecting on

the judgment, Erikon repeatedly sought to take Wishinsky's

deposition. Erikon's efforts stalled, but in February of 2009,

CMG, Wishinsky, and Erikon reached an agreement regarding payment

of the balance owed on the judgment. CMG and Wishinsky committed

to making monthly payments and, as long as they complied, Erikon

agreed not to execute on the judgment. Pursuant to this

arrangement, CMG and Wishinsky paid Erikon an additional

$2,900,000 over the next twenty-two months.

1 As entered, the judgment also ran in favor of Koeniger Development, Inc. (Koeniger), a corporate entity affiliated with Erikon. Koeniger's efforts to enforce the judgment seem to have ended around 2014, and it did not join the execution-related motions filed by Erikon that underlie this appeal. Consequently, we make no further mention of Koeniger.

- 3 - CMG and Wishinsky stopped making payments in January of

2011. Even so, Erikon made no meaningful effort to collect the

balance of the judgment for approximately two years. We fast-

forward to early 2013, at which time Wishinsky's attorney, who

also represented Caribbean Seaside Heights Properties, Inc.

(Seaside), an entity affiliated with the Aguadilla development

project, approached Erikon. They discussed both the outstanding

balance owed on the judgment and a separate claim that Seaside was

bent on bringing against Erikon for expenses incurred in the course

of the Aguadilla project. These discussions went nowhere, and

Seaside sued Erikon in May of 2013. During the pendency of the

Seaside litigation, further attempts to reach a global settlement

came to naught.

Harking back to the original case, Erikon moved in April

of 2014 for the appointment of a special master to conduct the

public sale of the attached parcels of real estate. The following

February, the district court denied the motion without prejudice.

The court determined that Erikon's effort to execute on the

judgment was untimely under Rule 51.1 of the Puerto Rico Rules of

Civil Procedure (P.R.R. 51.1) because more than five years had

passed since the judgment became final. The court invited Erikon,

if it so desired, to move for leave to execute on the judgment out

of time.

- 4 - Erikon did not take up the court's invitation then and

there. Instead, Erikon turned its attention to defending the

Seaside litigation. In July of 2016, the court presiding over the

Seaside litigation entered summary judgment in Erikon's favor.

Seaside appealed and, during the pendency of the appeal, Seaside

and Erikon engaged in three court-ordered settlement conferences.

Although they were not parties to the Seaside litigation, CMG and

Wishinsky participated in some of these negotiations in an attempt

to reach a global settlement. When the settlement talks failed,

we affirmed the summary judgment. See Caribbean Seaside Heights

Props., Inc. v. Erikon LLC, 867 F.3d 42, 45 (1st Cir. 2017).

In July of 2017, Erikon at long last moved for leave to

execute on the judgment and renewed its request for appointment of

a special master. The district court denied the motion, reasoning

that Erikon had waited to file its motion until more than six years

after CMG and Wishinsky's final payment in January of 2011 and

that Erikon had failed to justify the delay of more than two years

since the denial of its first request to appoint a special master.

Erikon moved for reconsideration of this order under Federal Rule

of Civil Procedure 59(e). While Erikon calls this filing a "Motion

to Set Aside Order Pursuant to FRCP 59(e)," the filing was

technically a motion to alter or amend the judgment, see Fed. R.

Civ. P. 59(e), and we refer to it as a motion for reconsideration.

The nomenclature has no bearing on the outcome of this appeal.

- 5 - The court summarily denied the motion for

reconsideration. This timely appeal followed.2

II.

Analysis

Our discussion proceeds in three parts. We begin by

ironing out two wrinkles that relate to our appellate jurisdiction

and the scope of our review. With the surface smoothed, we turn

sequentially to the district court's denial of Erikon's motion for

leave to execute on the judgment and its denial of Erikon's motion

for reconsideration.

A.

Appellate Jurisdiction

We start with two questions that relate to our appellate

jurisdiction. The first concerns the contours of our jurisdiction

under 28 U.S.C. § 1291

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Cite This Page — Counsel Stack

Bluebook (online)
966 F.3d 35, Counsel Stack Legal Research, https://law.counselstack.com/opinion/caribbean-mgmt-group-inc-v-erikon-llc-ca1-2020.