Hispanic Federation v. Uriarte Otheguy

• Court: District Court, D. Puerto Rico
• Decided: April 21, 2025
• Docket: 3:21-cv-01573
• Status: Unknown

Opinion

1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE DISTRICT OF PUERTO RICO

4 HISPANIC FEDERATION AND THE 5 SOLAR FOUNDATION, 6 Plaintiffs, 7 CIVIL NO. 21-1573 (HRV) v. 8

9 ALEJANDRO J. URIARTE OTHEGUY,

10 Defendant. 11

13 OPINION AND ORDER1

14 I. INTRODUCTION 15 Pending before the court is “Defendant’s Motion for Relief from Judgment” under 16 Fed. R. Civ. P. 60(b). (Docket No. 88). Defendant Alejandro J. Uriarte-Otheguy 17 (“Uriarte”), who has disobeyed several court orders, failed to announce new legal 18 representation after his attorney withdrew, and failed to appear at the hearing held to 19 determine damages after the Court entered default as a sanction, now requests that the judgment issued ordering him to pay damages to the Plaintiffs be set aside. (Id.). The 20 Plaintiffs Hispanic Federation and the Solar Foundation (hereinafter “Plaintiffs”) filed a 21 response in opposition (Docket No. 89), to which Uriarte replied. (Docket No. 93). 22 For the reasons set forth below, the motion for relief from judgment under Fed. 23 R. Civ. P. 60(b) is DENIED. 24

26 1 Gabriella A. Acevedo-Sotomayor, a second-year law student at the Inter American University of Puerto 27 Rico School of Law, assisted in the research and drafting of this Opinion and Order.

28 1 1 2 II. BACKGROUND 3 Plaintiffs are two nonprofit corporations that funded the construction of a solar energy station in San Juan, Puerto Rico, after two hurricanes devastated Puerto Rico’s 4 energy infrastructure in 2017. On November 30, 2021, Plaintiffs brought the present 5 action alleging that they hired Uriarte to build the solar energy station. Despite having 6 been paid more than $800,000, Uriarte never completed the project. (Docket No. 1). 7 Plaintiffs brought causes of action for fraudulent inducement (Dolo), fraud, and unjust 8 enrichment. (Id.). 9 The pretrial process was characterized by several instances of Uriarte’s 10 noncompliance with the deadlines set in the case management order and other discovery 11 violations. (Docket Nos. 41, 42, 47, 56, 57). On April 8, 2024, for example, the Court had to order Uriarte to comply with his discovery obligations and to pay $7,375 in attorney’s 12 fees to the Plaintiffs as a sanction for his failure to comply. (Docket No. 61). 13 On May 8, 2024, and again on May 10, 2024, counsel for Uriarte requested leave 14 to withdraw from his legal representation. (Docket Nos. 68 and 70). In the motions to 15 withdraw, it was represented that Defendant had decided to file for personal bankruptcy, 16 and this created a conflict of interest. Defendant, still through counsel, requested that 17 the orders for payment of attorney’s fees and to answer discovery be held in abeyance 18 until new legal representation was announced. On May 14, 2024, the Court granted the 19 request for leave to withdraw as counsel and gave Uriarte 21 days, that is, until June 3, 2024, “to announce new legal representation and/or inform as to the status of 20 compliance with court orders.” (Docket No. 72). I admonished Uriarte that failure to 21 comply with the order could result in the imposition of additional sanctions. The 22 Defendant did neither. He did not announce new legal representation within the term 23 granted nor notified whether he intended to comply with any of the Court’s orders. 24 What’s more, Uriarte never attempted to provide the Court with his contact information 25 so that notices could be sent directly to him. 26 27 28 2 1 On June 18, 2024, Plaintiffs moved to strike the Defendant’s answer to the 2 complaint and for the entry of default under Fed. R. Civ. P. 37(b). (Docket No. 72). True 3 to form, Uriarte did not respond. On July 11, 2024, the Court ordered the entry of default against the Defendant 4 (Docket Nos. 73 and 74) and set a hearing to determine damages. (Docket No. 78). 5 Uriarte did not appear at this hearing either. 6 At the default hearing, Plaintiffs presented argument through counsel and 7 introduced documentary evidence in support of their request that judgment be entered 8 in their favor and against the Defendant. The Court entered Judgment in the amount of 9 $881,410.24 as to the causes of action for “Dolo” and fraud, as well as costs and attorney’s 10 fees in the amount of $31,725. The Court also ordered the payment of pre-judgment and 11 post-judgment interest. (Docket Nos. 85, 86). Four months later, on January 13, 2025, Uriarte filed the instant motion for relief 12 from judgment. (Docket No. 88). Plaintiffs opposed (Docket No. 89), and he replied. 13 (Docket No. 93). 14 III. APPLICABLE LAW AND DISCUSSION 15 Uriarte moves for relief from judgment under Fed. R. Civ. P. 60(b) arguing that 16 after his counsel withdrew, he did not receive notification of any subsequent events in 17 the case, including the entry of judgment against him. (Docket No. 88). He asserts this 18 is a due process violation. (Id.). 19 In opposition, the Plaintiffs cite to Uriarte’s dismal record of compliance with court orders and the rules of discovery. Further, addressing the claim of lack of notice, 20 Plaintiffs submit that Uriarte never provided his contact information or address to be 21 added to the case as a pro se party. Also, Plaintiffs contend that former counsel received 22 all notifications even after being granted leave to withdraw and that current counsel has 23 some type of professional relationship with former counsel. The failure of Uriarte to 24 monitor the docket, Plaintiffs say, is the reason he did not learn of developments in the 25 case, including the entry of a default judgment. In addition to requesting that the Rule 26 60(b) motion be denied, Plaintiffs move for the imposition of additional monetary 27 sanctions against Uriarte. 28 3 1 A. Legal Standard 2 Rule 60(b) of the Federal Rules of Civil Procedure provides in relevant part that 3 “[o]n motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding” based on one of the following six grounds: 4 (1) mistake, inadvertence, surprise, or excusable neglect; 5 (2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial 6 under Rule 59(b); 7 (3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party; 8 (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; 9 it is based on an earlier judgment that has been reversed or 10 vacated; or applying it prospectively is no longer equitable; or (6) any other reason that justifies relief. 11 12 Fed. R. Civ. P. 60(b). Allowing a motion under this rule is committed to the Court’s 13 discretion. De la Torre v. Cont’l Ins. Co., 15 F.3d 12, 14 (1st Cir. 2004). Further, Rule 60(b) is considered a “vehicle for extraordinary relief” to be allowed only “under 14 extraordinary circumstances.” Davila-Alvarez v. Escuela de Medicina Universidad 15 Central del Caribe, 257 F.3d 58, 64 (1st Cir. 2001). 16 B. Discussion 17 Although Uriarte does not cite a specific ground under Rule 60(b), the Court 18 understands that only two grounds are potentially applicable. Since Uriarte generally 19 asserts a due process violation for lack of notice (and I assume an opportunity to be 20 heard), an argument can be made that his motion falls under Rule 60(b)(4), allowing 21 relief when the judgment at issue is void.2 Otherwise, the only other potentially applicable ground is Rule 60(b)(6), under which the Court may order that a judgment or 22 order be set aside for “any other reason that justifies relief.” Fed. R. Civ. P. 60(b)(6). This 23

25 2 Rule 60(b)(4) “applies only in the rare instance where a judgment is premised either on a certain type of 26 jurisdictional error or on a violation of due process that deprives a party of notice or the opportunity to be heard.” United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 271, 130 S. Ct. 1367, 176 L. Ed. 2d 158 27 (2010).

28 4 1 is so because Uriarte is not contending that there is excusable neglect (Rule 60(b)(1))3, 2 newly discovered evidence (Rule 60(b)(2)), fraud or misconduct (Rule 60(b)(3)), or that 3 the judgment has been satisfied (Rule 60(b)(5)). The Court quickly disposes of the claim that the default judgment entered in this 4 case is void. Certainly, any default judgment would be void if it was entered by the Court 5 while it lacked jurisdiction over Uriarte; for instance, due to a failure to properly serve 6 him with process. See M & K Welding, Inc. v. Leasing Partners, LLC, 386 F.3d 361, 364 7 (1st Cir. 2004) (citing Precision Etchings & Findings v. LGP Gem Ltd., 953 F.2d 21, 23 8 (1st Cir. 1992)). Indeed, while the decision to grant a Rule 60(b) motion generally lies 9 within the discretion of the court, a motion under Rule 60(b)(4) must be granted if the 10 challenged judgment is void for lack of personal jurisdiction. Echevarria-Gonzalez v. 11 Gonzalez-Chapel, 849 F.2d 24, 28 (1st Cir. 1988) (emphasis added) (“If the judgment is void, the district court has no discretion but to set aside the entry of default judgment.”). 12 However, a judgment “is not void simply because it is or may have been erroneous; it is 13 void only if, from its inception, it was a legal nullity.” United States v. One Rural Lot No. 14 10,356, 238 F.3d 76, 78 (1st Cir. 2001). The concept of void judgments is “narrowly 15 construed” to encompass two circumstances: “[when] the court that rendered judgment 16 lacked jurisdiction or in circumstances in which the court’s action amounts to a plain 17 usurpation of power constituting a violation of due process.” United States v. Boch 18 Oldsmobile, Inc., 909 F.2d 657, 661 (1st Cir. 1990). 19 Here, Uriarte does not challenge jurisdiction. Nor can he. He was properly served with process from the get-go. (See Docket No. 16). Thereafter, he appeared through 20 counsel and, for a while, actively litigated the case. His technical argument is about lack 21 22

24 3 It should be noted that to avail themselves of Rule 60(b)(6), parties must be faultless in the delay, otherwise, “[i]f a party is ‘partly to blame,’ Rule 60(b)(6) relief is not available to that party; instead, ‘relief 25 must be sought within one year under subsection (1) and the party’s neglect must be excusable.’” Claremont Flock Corp. v. Alm, 281 F.3d 297, 299 (1st Cir. 2002) (quoting Pioneer Inv. Servs. v. Brunswick 26 Assocs. Ltd. P’ship, 507 U.S. 380, 393, 113 S. Ct. 1489, 123 L. Ed. 2d 74 (1993)). As it shall be explained in further detail below, Uriarte is neither faultless nor just “partly to blame.” He is very much at fault. Yet, in 27 his filings, he does not seek to demonstrate that his neglect was excusable.

28 5 1 of notice of the court’s entry of default and the subsequent entry of the judgment, due to 2 his counsel’s withdrawal and the fact that he did not receive electronic notifications of 3 proceedings nor notifications directly from the Plaintiffs. Though labeled by him as such, any irregularities in the process of entering a default judgment, “do not . . . rise to the 4 level of a due process violation as contemplated by Rule 60(b)(4).” Formatech, Inc. v. 5 Mass. Growth Capital Corp., No. BAP No. MW 19-016, 2019 Bankr. LEXIS 3878, at *19 6 (1st Cir. Bankr. App. Panel, Dec. 19, 2019). “Due process requires notice reasonably 7 calculated, under all the circumstances, to apprise interested parties of the pendency of 8 the action and afford them an opportunity to present their objections.” Espinosa, 559 9 U.S. at 272. But actual notice is not required. Jones v. Flowers, 547 U.S. 220, 226, 126 S. 10 Ct. 1708, 164 L. Ed. 2d 415 (2006). 11 The Court is not prepared to accept the implied suggestion that following the withdrawal by his counsel, Uriarte did not know that he was still a party in the case and 12 needed to act accordingly. The notion that his attorney did not communicate to him that 13 he had withdrawn or the need to secure new legal representation is not believable. At no 14 point did Uriarte try to communicate with the Court or the Plaintiffs to provide his 15 current contact information to receive notifications. He decided to sit idly by. The 16 asserted lack of notice leading to the eventual entry of a default judgment was caused by 17 the inaction and lackadaisical attitude assumed by Uriarte. See Formatech, Inc. v. Mass. 18 Growth Capital Corp., 2019 Bankr. LEXIS 3878, at *23-24 (“After the withdrawal of 19 their counsel, the Defendants were under an obligation to monitor the electronic docketing system for the entry of new filings and orders.”); see also Witty v. Dukakis, 3 20 F.3d 517, 520 (1st Cir. 1993) (“[P]arties to an ongoing case have an independent 21 obligation to monitor all developments in the case and cannot rely on the clerk’s office to 22 do their homework for them.”); Marina-Aguila v. DenCaribbean, Inc., No. 04-cv-2212 23 (GAG), 2012 WL 692831, 2012 U.S. Dist. LEXIS 27499, at *5-6 (D.P.R. Feb. 29, 2012) 24 (denying Rule 60(b) motion where attorney of record was notified of the amended 25 complaint and default judgment before withdrawing from the case; if counsel did not 26 notify his client of these developments, that is a dispute between the attorney and his 27 28 6 1 client, “rather than one that the court should rectify through the discretionary power of 2 Rule 60(b).”). 3 That said, the only remaining avenue for potential relief is Rule 60(b)(6), which as stated, allows a court to relieve a party from a judgment for “any other reason that 4 justifies relief.” Fed. R. Civ. P. 60(b)(6). This subsection is designed as a catch-all and 5 relief “is only appropriate where subsections (1) through (5) do not apply.” Claremont 6 Flock Corp. v. Alm, 281 F.3d 297, 299 (1st Cir. 2002) (quoting United States v. Baus, 7 834 F.2d 1114, 1121 (1st Cir. 1987)). Moreover, as noted above, note 3, supra, “[t]o justify 8 relief under subsection (6), a party must show ‘extraordinary circumstances’ suggesting 9 that the party is faultless in the delay.” Pioneer Inv. Servs., 507 U.S. at 393 (citations 10 omitted). 11 In this case, it is at best questionable that Uriarte can invoke Rule 60(b)(6) because he is not faultless. Indeed, default was entered as a sanction for Uriarte’s 12 discovery violations, noncompliance with court orders and failure to actively participate 13 in the litigation after his attorney’s withdrawal. See Home Port Rentals, Inc. v. Ruben, 14 957 F.2d 126, 132 (4th Cir. 1992) (affirming the entry of default as a sanction for 15 discovery violations and the refusal to grant relief from judgment where the defendant 16 was at fault for making himself unavailable for 11 months during which his whereabouts 17 were unknown). But since the result is ultimately the same, the Court will engage in the 18 Rule 60(b)(6) analysis assuming in his favor that Defendant can avail himself of said rule. 19 At the outset, it should be underscored that “[t]he high threshold required by Rule 60(b)(6) reflects the need to balance finality of judgments with the need to examine 20 possible flaws in the judgments.” Bouret-Echevarria v. Caribbean Aviation Maint. 21 Corp., 784 F.3d 37, 42 (1st Cir. 2015) (quoting Paul Revere Variable Annuity Ins. Co. v. 22 Zang, 248 F.3d 1, 5 (1st Cir. 2001)) (“There must be an end to litigation someday and 23 therefore district courts must weigh the reasons advanced for reopening the judgment 24 against the desire to achieve finality in litigation.”). Also, in the context of Rule 60(b)(6), 25 the decision to grant or deny relief “is inherently equitable in nature.” Ungar v. PLO, 599 26 F.3d 79, 83 (1st Cir. 2010) (citations omitted). To balance the competing policies— 27 finality of judgments vis-à-vis deciding cases on the merits—courts examine the 28 7 1 following factors: (1) the timeliness of the motion; (2) whether exceptional circumstances 2 justify extraordinary relief; (3) whether the movant can show a potentially meritorious 3 claim or defense; and (4) the likelihood of unfair prejudice to the opposing party. Bouret- Echevarria, 784 F.3d at 43. 4 First, as to timeliness, a Rule 60(b)(6) motion is supposed to be brought within a 5 reasonable time. Fed. R. Civ. P. 60(c). What is reasonable depends on the circumstances 6 of each case. Bouret-Echevarria, 784 F.3d at 43 (citing United States v. Baus, 834 F.2d 7 1114, 1121 (1st Cir. 1987)). Uriarte filed his Rule 60(b) motion approximately four months 8 after the entry of judgment. A four-month delay may seem insignificant. However, the 9 Court notes that starting in May of 2024, when his attorney withdrew from the case, 10 there were no additional attempts by Uriarte to participate in the litigation. That 11 represents a period of eight months were Uriarte was MIA. Nonetheless, for purposes of the discussion, and favorably to Uriarte, the Court proceeds under the assumption that 12 the motion was timely filed. 13 Second, the Court finds that Uriarte has failed to establish exceptional 14 circumstances. Other than claiming that the judgment should be set aside because he 15 never received notice of the entry of default, Uriarte makes no effort to explain what steps 16 he took to keep himself appraised of developments in the case or what circumstances, if 17 any, prevented him from doing so. His failure to diligently attend to matters related to 18 the case, as noted above, cannot form the basis of a finding of exceptional circumstances. 19 Indeed, it is the Court’s opinion that any lack of notice was the result of Uriarte’s inaction. Third, Uriarte’s motion does not endeavor to show that he had a meritorious 20 defense that the Court should consider as part of the analysis. To be sure, Uriarte denied 21 liability in his answer to the complaint. (Docket No. 23). But beyond that, he has 22 advanced no argument outlining what his defense to the Plaintiffs’ claims ultimately 23 would have been. 24 Lastly, the record establishes that there will be a serious prejudice to the Plaintiffs 25 if the judgment is set aside. As the Court noted in granting default as a sanction, Plaintiffs 26 had to deal with an obstructionist adversary that refused to engage in the discovery 27 process in good faith. See Stooksbury v. Ross, 528 Fed. Appx. 547, 554 (6th Cir. 2013) 28 8 1 (affirming the denial of a Rule 60(b) motion where default was entered against 2 defendants pursuant to Rule 37 following a finding that defendants clearly engaged in 3 delay and contumacious conduct.). Then, when his attorney withdrew, Uriarte decided to disappear from the case. The Plaintiffs have had to spend time and resources to bring 4 this case to a conclusion. They should not be put in the position of having to do it all over 5 again. 6 IV. CONCLUSION 7 In view of the above, the motion for relief from judgment (Docket No. 88) is 8 DENIED. The Court will not impose additional monetary sanctions as requested by 9 Plaintiffs. 10 IT IS SO ORDERED 11 In San Juan, Puerto Rico this 21st day of April, 2025. S/Héctor L. Ramos-Vega 12 HÉCTOR L. RAMOS-VEGA 13 UNITED STATES MAGISTRATE JUDGE

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