FirstBank of Puerto Rico v. Rosta Family Ltd. Partnership

271 F. Supp. 3d 377
CourtDistrict Court, D. Puerto Rico
DecidedSeptember 14, 2017
DocketCivil No. 16-1816 (DRD) Consolidated with: 15-1683; 15-1684; 15-1685
StatusPublished
Cited by1 cases

This text of 271 F. Supp. 3d 377 (FirstBank of Puerto Rico v. Rosta Family Ltd. Partnership) is published on Counsel Stack Legal Research, covering District Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
FirstBank of Puerto Rico v. Rosta Family Ltd. Partnership, 271 F. Supp. 3d 377 (prd 2017).

Opinion

OPINION AND ORDER

DANIEL R. DOMÍNGUEZ,, United States District Judge

FirstBank of Puerto Rico v. Rosta Family Limited Partnership, et al. was filed on April 25, 2016, as Civil Case No. 16-1816 (DRD), and consolidated with the following cases: Civil Case No. 15-1683, Civil Case No. 15-1684 and Civil Case No. 15-1685. See Docket No. 27.

INTRODUCTION

Pending before the Court is a Motion for Summary Judgement in Case No. N3CI201400650 (“Motion for Summary Judgement”) filed on February 12, 2015, in Civil Case No. N3CI201400650 in the state court by Doral Bank; Doral Financial Corporation; Doral Mortgage Lie; Doral Recovery II, LLC and Doral Recovery, Inc. (collectively “Doral”). See Docket No. 132.1 Doral’s Motion for Summary Judgment was later removed to the district court under Civil Case No. 15-1683 on May 27, 2015. On November 2, 2016, Civil Cases No. 15-1683, 15-1684, and 15-1685 were consolidated with Civil No. 16-1816 (DRD), filed on April 25, 2016. See Docket No, 27. As part of the consolidation, the Court has now pending Doral’s Motion for Summary Judgment as stated in the Motion to Sever Independent Action and to Stay Lead Case (“Motion’ to Sever”) filed on February 17, 2017 at Docket No. 81. For the reasons set forth below, Doral’s Motion for Summary Judgment is GRANTED. The Motion to Sever and- to stay the main case will be entertained on this same date separately.

In Doral’s Motion for Summary Judgment filed at Docket No. 132, Civil Case No. 16-1816 (DRD), Doral challenges the Puerto Rico Appeals Court (“Appeals Court”) decision declaring null and void Deed No. 72, which established restrictive covenants, easements, and/or right of way over the lot where the four condominiums were located, for failure to include certain indispensable parties, such as, BPPR, Doral and any bank that had provided financing to the titleholders of the four condominiums.2 Consequently, all the pending deeds of purchase and sale and deeds of mortgage that are intertwined with Deed No. 72 cannot be registered with the Property Registry pursuant to the decision of the Appeals Court,

Regarding Case No. N3CI201400650, Doral alleges that they, alongside Intervening Party Banco Popular de Puerto Rico (BPPR), were indispensable parties to case N3CI200700551.3 As such, they contend that by not including Doral and BPPR, as well as any other indispensable party, in said suit, the judgment and appellate proceedings related to Case No. N3CI201400650, especially in regards to the annulment of Deed No. 72, must be vacated,4 Doral’s Motion for Summary Judgment stands unopposed, as of the date of removal.

FACTUAL AND PROCEDURAL BACKGROUND

The facts in the present case are undisputed. Deed No. 72 was executed on December 21, 2001, wherein Costa Real, S.E. constituted easements of right of way, use and enjoyment over multiple property lots. See Docket No. 133-11. Thereafter, Deed No. 72 was presented before the Property Registry on January 25, 2002 and is pending recordation at Entry 151 of Ledger 151. See Docket No. 133-12. Deed No. 60 of Surface Area Correction, Segregations and Description of Remainder was also filed in the Registry Property that same day. See Docket No. 133-13. Both deeds were registered in the Property Registry under property number 23, 742 at volume 510, page 107 and at volume 510, page 106, respectively. See Docket No. 51-7.

On July 30, 2007, Costa Real, S.E. filed a complaint (Civil Num. N3CI201200773) in the state court wherein it requested the transfer of ownership of the recreational facilities to the Homeowner’s Council and requested that certain provisions included in Deed No. 72 be complied with. See Docket No. 134-1. Costa Real, S.E. did not serve process on Doral and did not include them in the complaint as parties in interest. See Docket No. 133-4. While Costa Real, S.E. only identified certain defendants in the original complaint as John Doe and Jane Doe, the complaint was not properly amended to identify these unknown defendants, or to include any other indispensable party. See Docket No. 134-3.

On August 6, 2007, the Council of Titleholders of Costa Dorada and/or/ Association or Residents of Costa Dorada, answered the Complaint and counterclaimed requesting that Deed No. 72 be declared null and void. See Docket No. 134-4. Most notably, Costa Dorada’s Council of Titleholders did not join as parties any of Costa Dorada’s titleholders or mortgagees of units already sold at Costa Dorada condominium. M; see also Undisputed Facts No. 25 and 26 at Docket No. 133-7. When the Costa Dorada’s Homeowners’ Council filed Civil Case No. N3CI200700551, Doral had mortgage interests in several of the units of the Costa Dorada complex pending registration in the Property Registry. See Docket Nos. 133-15 and 134-5.

On September 17, 2007, the Costa Dora-da Owners Council and/or Res. Assoc, filed a request for partial summary judgment alleging that Deed No. 72 was unenforceable. However, in said request for partial summary .judgment, Costa Dorada Owners’ Council did not include the rights of titleholders or mortgagees, such as those belonging to Doral or BPPR, presented after the filing of Deed No. 72. See Docket No. 134-7. The Court of First Instance granted an Injunction and established that Deed No. 72 was valid; however, after the Appeals Court, on April 23, 2008, issued an Order reversing the Court of First Instance and declared null and void Deed No. 72. See Docket Nos. 134-8 and 134-12, respectively.5 Doral, BPPR, and other financial institutions and/or parties with rights pending recordation in the Property Registry, such as mortgagees, were not notified of the Appeals Court’s decision. See Docket No. 133-10.

Following the Appeals Court’s decision in Civil Case No. KLAN200701677, Ana Valores Molini, wife of Horacio Gilormini and president of the Costa Dorada’s Homeowners’ Council Board alongside other Council members filed Civil Case No. N3CI201200773. This case was later consolidated with the case at bar pursuant to Order issued on November 14, 2014 by the Court of First Instance. See Docket No. 134-15. Doral contends that lawsuit N3CI201200773 aims to have several mortgages benefitting Doral and other financial institutions declared null. On February 3, 2015, the Registrar declined to record deeds of sale and mortgage because they lacked the right of way, use and enjoyment, after Deed No. 72 was declared null and void by the Appeals Court. See Docket No. 134-16. Hence, multiple deeds of mortgage that stem from Deed No. 72, and presented by several financial institutions, have been unable to be properly registered in the Property Registry, as the Registrar has declined recordation.

Doral further alleges that the Appeals Court’s ruling and the actions of the Property Registrar have caused serious financial implications for Puerto Rico’s economy. See Docket No. 134-17. This impact is two-fold because it not only affects the financial institutions who acted as mortgagees, but also the homeowners who subscribed the mortgages in the first place and lack any access to their homes. In essence, these homeowners,, in particular those who own apartments in Costa Dora-da I and Costa Dorada II, lost access' to the right of way, use and enjoyment conferred by Deed No. 72. See Docket No. 133-7, ¶ 22.

SUMMARY JUDGMENT

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Bluebook (online)
271 F. Supp. 3d 377, Counsel Stack Legal Research, https://law.counselstack.com/opinion/firstbank-of-puerto-rico-v-rosta-family-ltd-partnership-prd-2017.