Hooper-Haas et al v. Ziegler Holdings, LLC

Filing 75

OPINION AND ORDER - GRANTING Plaintiffs' 34 Motion for Default Judgment. Plaintiffs' 55 Urgent Motion Seeking Emergency Remedy is NOTED. Signed by Judge Jose A. Fuste on 5/25/2011. (mld)

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

ERIN HOOPER-HAAS, et al.,
Plaintiffs,
v.

CIVIL NO.

10-1712 (JP)

ZIEGLER HOLDINGS, LLC,
Defendant

FINDINGS OF FACT, CONCLUSIONS OF LAW, AND
ORDER FOR THE ENTRY OF JUDGMENT BY DEFAULT
Before the Court is Plaintiffs’ motion for default judgment as
to

Defendant

Ziegler

Holdings,

LLC

(“Ziegler”)

(No.

34),

and

Defendant’s opposition thereto (No. 45).1 A default hearing was held
before this Court on May 17, 2011.

For the reasons stated herein,

the Court hereby GRANTS Plaintiffs’ motion.2
By way of background, Plaintiffs Erin Hooper Haas, Craig Howland
Hooper, and Larry Alex Haas filed the instant complaint on June 23,
1.

Also pending before the Court is Plaintiffs’ urgent motion seeking an emergency
remedy (No. 55). In their motion, Plaintiffs state that the property, which
is the subject of this case, has apparently been abandoned for months, was left
open, and is currently in appalling conditions. Plaintiffs attached pictures
showing the state of disrepair of the property. (No. 55-1). Plaintiffs’ motion
is hereby NOTED. Relief is provided herein.

2.

The Court notes that on May 18, 2011, Defendant’s corporate representative,
Talbot Ziegler, sent a letter to the Court alleging insufficiency of legal
counsel (No. 68). In the letter, Talbot Ziegler blames everyone but himself
for the situation he finds himself in today. Defendant had many avenues that
it could have pursued before today.
It could have chosen to resolve the
dispute with his first attorney, promptly obtained a new one, or easily have
settled this case.
As explained herein, it is evident to the Court that
Plaintiffs’ desire was to settle this case, and Defendant obstinately refused
to accept the offers. Defendant, and not its attorneys, is solely responsible
for its current situation.

CIVIL NO. 10-1712 (JP)

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2010 in the Court of First Instance, Superior Court of Vieques,
Puerto Rico. The case was removed to this Court by Defendant Ziegler
on July 27, 2010.
answer

to

the

On July 28, 2010, Defendant Ziegler filed an

complaint

and

filed

a

counterclaim

against

all

Plaintiffs (No. 3). On August 5, 2010, Plaintiffs filed their answer
to Defendant’s counterclaim (No. 10).
Because Defendant had answered, on September 20, 2010, the Court
issued its Initial Scheduling Conference (“ISC”) Call Order (No. 11)
to the parties in which the Court: (1) set the ISC for November 9,
2010; (2) set the ISC Memorandum filing deadline for November 2,
2010; and (3) explained to the parties in detail the Court’s
expectations from the parties at the ISC.
On

September

30,

2010,

Defendant’s

attorneys,

José

Luis

Ubarri-García, Esq. (“Ubarri-Garcia”) and David W. Román, Esq.
(“Roman”) filed a motion to withdraw as legal counsel for Defendant
(No. 12).3 In their motion to withdraw, Defendant’s attorneys stated
that they had been unable to communicate with Defendant Ziegler. The
Court denied said motion until Defendant Ziegler announced new legal
representation (No. 17).
Prior to the ISC on November 9, 2010, Defendant failed to submit
an ISC memorandum.

Defendant’s attorneys informed the Court that

they had still not been able to communicate with Defendant, and

3.

Defendant apparently had a dispute concerning overdue legal fees with his
attorneys (Nos. 32-2, 45-3).

CIVIL NO. 10-1712 (JP)

-3-

Defendant failed to provide any information to its attorneys.

As

such, Defendant’s attorneys were not in a position to prepare the
ISC Memorandum. At that time, Defendant Ziegler had not obtained new
legal representation.

Plaintiffs also informed the Court that

Defendant Ziegler failed to respond to Plaintiffs’ request for
admissions

(No. 14).

However, because the Court prefers to decide

cases on the merits, it provided Defendant with a final opportunity
to litigate this case.

On December 3, 2010, the Court entered an

order resetting the ISC for December 15, 2010 and requiring Defendant
to file an ISC Memorandum by December 8, 2010 (No. 27).

In said

order, the Court again warned Defendant that failure to comply with
that order and/or the ISC Call Order will result in sanctions.
Despite this warning, Defendant did not submit an ISC Memorandum by
the Court’s deadline. In addition, Defendant had still not named new
legal representation, and was still not communicating with Attorneys
Ubarri-García and Román.

Thus, the Court was unable to proceed with

the ISC on December 15, 2010.
Almost a month later, Defendant had still not appeared with new
counsel

or

complied

with

discovery

requests.

Accordingly,

on

January 13, 2011, this Court granted Plaintiffs’ motion for entry of
default and ordered the Clerk of Court to enter default against
Defendant Ziegler (No. 29).

The Court found that Defendant’s

repeated failure to respond to Plaintiffs’ discovery request and to

CIVIL NO. 10-1712 (JP)
comply

with

the

-4-

Court’s

ISC

Call

unjustifiably delay the proceedings.

Order

was

an

attempt

to

In its opinion and order, the

Court outlined the opportunities it had given Defendant Ziegler to
comply with its orders and litigate this case, and the warnings
issued to Defendant if it continued to delay the proceedings and
disregard the Court’s orders.

The Court concluded that ongoing

attempts to coerce compliance would be a poor use of the Court’s time
and

resources,

unnecessarily

and

would

protracted

unfairly

and

force

inefficient

Plaintiffs

litigation

into

an

process.4

Accordingly, Defendant Ziegler is currently in default.
Since Defendant is in default, this “constitutes an admission
of all facts well-pleaded in the complaint.”

Metropolitan Life Ins.

Co. v. Colón Rivera, 204 F. Supp. 2d 273, 274-75 (D.P.R. 2002); see
also Franco v. Selective Ins. Co., 184 F.3d 4, 9 n.3 (1st Cir. 1999).
As such, the Court adopts as true the following well-pleaded facts5:

4.

The Court notes that five days later, on January 18, 2011, Attorney Vanessa
Marie Mullet-Sánchez appeared on behalf of Defendant Ziegler (No. 31). At that
time, Defendant filed a motion for reconsideration (No. 32) of the Court’s
entry of default, which was denied (No. 33). In that motion, Defendant argued
that it unsuccessfully attempted to secure new legal representation. Defendant
also stated that its corporate representative, Talbot Ziegler, sent several pro
se motions to the Court regarding his inability to obtain new counsel.
Nevertheless, Defendant had the responsibility to promptly obtain new legal
representation, and should have been able to obtain an attorney in Puerto Rico
before January 18, 2011.

5.

The Complaint was originally in the Spanish language.
is filed at No. 1-2.

A certified translation

CIVIL NO. 10-1712 (JP)
1.

-5-

The personal information of plaintiffs is as follows:
Erin Hooper Haas
449 Mountain Meadows Road
Boulder, CO 80302
Tel. [phone]
Road No. 200, Km. 1, Hm. 5
Monte Santo Playa Ward
Vieques, PR 00765
P.O. Box 1131
Vieques, PR 00765
Craig Howland Hooper
P.O. Box 119
Boothbay, ME 05006
Tel. [phone]
Larry Alex Haas
52 Patterson Lane
Newington, NH 03801
Tel. [phone]

2.

The defendant is a foreign corporation, registered in Ohio and
not authorized to do business in Puerto Rico.

According to the

Ohio Department of State, its resident agent is Talbot Dewitt
Ziegler,

and

its

address

is

850

Big

Hill

Road,

Dayton,

Ohio 45419.
3.

On January 13, 2008, in public deed number 2 granted in
Vieques, Puerto Rico, before notary Santiago Lampón-González,
the plaintiffs sold the defendant their rights of possession to
the following real property:
URBANA:
Parcela
de
terreno
marcada
con
el
número 241-A localizada en el Barrio Santa María,
Sector Bravos de Boston, Isabel Segunda en el
Municipio de Vieques, Puerto Rico, identificada en un

CIVIL NO. 10-1712 (JP)

-6-

plano de mensura titulado "Physical Survey of
Lots 241-A, 241-B and 244 Held in Civil Possession by
Craig Hooper and Erin Hooper Haas", preparado por
Paul C. Small, agrimensor licenciado número 15270,
compuesta de 480.1361 metros cuadrados, equivalentes
a 0.1222 cuerdas, en lindes por el Norte con la
parcela número 240 poseída civilmente por Alberto F.
Soto
y
Judy
Félix,
en
una
alineación
de
15.4921 metros a lo largo de una verja de alambre
eslabonado asentada sobre una base de concreto, por
el Sur con la parcela 242 poseída civilmente por
Elsie Cruz Rosa en una alineación de 20.2255 metros
a lo largo de una verja de mampostería, por el Este
con una carretera municipal sin nombre con superficie
de gravilla a lo largo de una pared de mampostería
con
cuatro
alineaciones
de
4.5113
metros,
4.9402 metros, 2.3231 metros y 15.4346 metros, y por
el Oeste con la parcela 241-B poseída civilmente por
Craig Hooper y Erin Hooper-Haas a lo largo de una
línea
ondulante
de
tres
alineaciones
de
11.4256 metros, 5.1599 metros y 13.8443 metros;
incluyendo una residencia de madera de dos plantas
sobre una marquesina de una planta de mampostería
junto con un tanque séptico y todas sus pertenencias,
teniendo una servidumbre de paso de 4.0 metros de
ancho para beneficio de los solares 241-B y 244 a lo
largo de la colindancia Norte en común con Alberto
Soto y Judy Félix, proveyendo ingreso y egreso por
sobre el solar 241-A hasta la carretera municipal que
queda al Este del solar 241-A y teniendo una anchura
variable y una servidumbre continua de un metro sobre
y a lo largo de la colindancia Este del solar 244 y
la colindancia Norte del solar 241-B para beneficio
de los solares 241-A y 241-B para ingreso y egreso a
la playa.6
4.

The

purchase

price

was

$239,000.00;

the

defendant

paid

$100,000.00 and guaranteed payment of the remaining balance by
means of a promissory note for the amount of $139,000.00 with
47 monthly installments of $1,053.85 and a final installment of

6.

As described in the Spanish language in the original Complaint (No. 1-2).
property is also described in English in the deed. (Pl.’s Exh. 1, p. 3).

The

CIVIL NO. 10-1712 (JP)

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$120,000.00 on month 48.

In addition, the defendant was

obligated to insure the property for an amount not less than
$120,000.00.
5.

To this date, Defendant has suspended his monthly installment
payments and has not renewed the property insurance he had
committed to keep updated, forcing
insurance.

Plaintiffs to purchase said

In accordance to the terms of purchase, in the case

that Defendant did not comply with his obligations, he shall
deliver

possession

of

the

real

property,

object

of

this

complaint, to Plaintiffs,7 waiving any ulterior judicial remedy.
Likewise, he committed to pay the amount of $5,000.00 for
attorney’s fees.
On May 17, 2011, this Court held a default judgment hearing at
which

Plaintiffs

and

Defendant

were

present.

Plaintiffs

were

permitted to present evidence as to liability and damages, and
Defendant’s counsel was afforded the benefit of cross-examination
even in default.

Plaintiffs presented the testimony of several

witnesses with knowledge of the facts alleged in the complaint, and
also presented the deed, entitled “Deed Number 2, Segregation,
Purchase, Sale and Conveyance of Rights of Possession” (hereinafter,
the “deed”) (Pl.’s Exh. 1), the final “purchase-sales” agreement

7.

The Court notes that the certified translation of the complaint
“defendants”;
however,
the
original
Spanish
language
complaint
“demandantes” or plaintiffs. (No. 1-2, p. 3).

says
says

CIVIL NO. 10-1712 (JP)

-8-

(Pl.’s Exh. 2), and the insurance policies on the property (Pl.’s
Exh.

3).

Plaintiffs

presented

the

testimony

of

Santiago

Lampón-González, the notary, Sheila Levin, the real estate agent,
Paul C. Small, the surveyor, and Plaintiff Erin Hooper Haas.
Defendant

Ziegler

was

permitted

to

cross-examine

Plaintiffs’

witnesses and also to present evidence.
The evidence presented by Plaintiffs made clear that the parties
had entered into an agreement for the purchase and sale of a
property, which was not registered in the Registry of Property (Pl.’s
Exh. 1).

After the sale was executed, Defendant allegedly attempted

to register the property but encountered difficulties in doing so.
The testimony established that Defendant refused to make further
payments on the mortgage because of the difficulties encountered in
registering the property and sought to cancel the mortgage and/or
back out of the purchase.8

Plaintiffs presented evidence that they

attempted to assist Defendant and that several offers and concessions
were made to Defendant in order to avoid litigation.
At

the

hearing,

Plaintiffs

presented

evidence

as

to

the

insurance policy on the property that Defendant was required to pay
but had failed to pay. (Pl.’s Exh. 3). Plaintiffs paid $2,430.00 for
the

one-year

MAPFRE

insurance

policy

on

the

property,

and

an

8.

Indeed, in its opposition, Defendant argues that the deed should be nullified
and that Plaintiffs are not entitled to demand payment of the purchase price
(No. 45, p. 14).

CIVIL NO. 10-1712 (JP)

-9-

additional $886.00 for a flood insurance policy with United Surety
& Indemnity Co.

Plaintiffs also presented testimony that Defendant

had stopped making payments on the mortgage.
After considering the evidence, the Court finds that this is
simply a case of buyer’s remorse.

Defendant Ziegler had the

opportunity before purchasing the property to inspect the property,
the relevant documents, and to consult with engineers or attorneys
regarding this property and the process of registering an untitled
property in Vieques, Puerto Rico.

Paragraph ten of the deed,

specifically states:
The SELLERS and the BUYER state to have inspected the
Property subject to this contract, and have agreed that
there are no problems with its boundaries nor an existing
controversy or litigation related with the possession of
it and/or with its actual possessors.
Also, the Buyer
states that it has inspected the Property and has had the
opportunity to have it inspected by a person of it’s [sic]
choice, and further states that the Property has no
apparent or hidden defects and that it is accepting the
Property in its present condition without receiving or
expecting from Sellers and [sic] warranties, implied or
otherwise, in this respect.
(Pl.’s Exh., p. 8). Furthermore, paragraph eleven of the deed states
that the Sellers, in this case Plaintiffs, are “responsible for the
production and execution of any and all documents . . . that are
necessary for the future and possible registration of the Property
under the name of the [Buyers or Defendant].” (Pl.’s Exh. 1, p. 8).
Plaintiffs’ witnesses testified that, at no point, did Plaintiffs
refuse to provide Defendant with the documents necessary to register

CIVIL NO. 10-1712 (JP)
the property.

-10-

In fact, the Court finds that Plaintiffs made

extraordinary offers to assist Defendant in registering the property
and to settle this case and avoid litigation.

However, Plaintiffs’

offers were either not fruitful and/or rejected by Defendant Ziegler,
which only further demonstrated that Defendant Ziegler simply wanted
out of the sale.
Paragraph fourteen of the deed explicitly provides:
[i]t is understood by all parties and the undersigned
notary public advised them as well, that the SELLERS is
[sic] conveying and/or granting to the BUYER all rights of
civil possession (“posesion civilisma”) over the land
above described, inasmuch as title on said land appears to
be vested in the name of the Municipality of Vieques. The
BUYER is fully aware and was advised accordingly that in
order to apply for title to the land the BUYER must
contact the Municipality of Vieques to acquire said title
or conduct the proper legal proceedings before a court of
law.
Similarly, page eleven of the deed provides a notice to the parties
that the property is not registered in the Registry of Property
(Pl.’s Exh. 1).

Thus, Defendant was undoubtedly aware of exactly

what it was purchasing when it executed the agreement.
At

this

time,

the

only

issue

remaining

for

the

Court’s

consideration is the amount of damages to award Plaintiffs.

“Once

the entry of a default establishes the fact of damage, the trial
judge . . . has considerable latitude in determining the amount of
damages.”

See

(1st Cir. 1993).

Jones

v.

Winnepesaukee

Realty,

990

F.2d

1,

4

CIVIL NO. 10-1712 (JP)

-11-

Based on Defendant’s liability and the evidence presented at the
default hearing, the Court hereby ORDERS THE ENTRY OF JUDGMENT BY
DEFAULT for Plaintiffs TO HAVE AND RECOVER from Defendant:
1.

TWO THOUSAND FOUR HUNDRED AND THIRTY DOLLARS ($2,430.00)
for the MAPFRE insurance policy;

2.

EIGHT HUNDRED AND EIGHTY SIX DOLLARS ($886.00) for the
United Surety & Indemnity Co. flood insurance policy;

3.

FIVE THOUSAND DOLLARS ($5,000.00) for attorneys’ fees,
plus

any

additional

costs

and

expenses

incurred

by

Plaintiffs or their counsel in litigating this case;9
4.

ALL OF THE UNPAID BALANCE UNDER THE PROMISSORY NOTE.
Twenty-seven

(27)

payments

were

made

starting

February 14, 2008 for a total of $28,453.95.
the

difference

is

ONE

HUNDRED

AND

TEN

on

Therefore,

THOUSAND

FIVE

HUNDRED FORTY SIX AND FIVE CENTS ($110,546.05), plus
$6,909.13 in accrued interest calculated at a rate of 6%;10
and

9.

Plaintiffs may provide evidence and petition the Court for any additional
amount of attorney’s fees, costs and expenses incurred in litigating this case.

10.

Interest was calculated based on the interest owed on the unpaid balance as of
May 25, 2011.
The Court was not informed as to how much of the $1,053.85
monthly payment was interest and how much was principal. Therefore, the Court
assumed that all of it was principal for the benefit of the Defendant.

CIVIL NO. 10-1712 (JP)
5.

-12-

CIVIL POSSESSION OF THE PROPERTY subject of this case and
described in the deed and at paragraph three of the
Complaint, in accordance with paragraph six of the deed.

In conclusion, the Court hereby GRANTS Plaintiffs’ motion for
default judgment and further awards the Plaintiffs the aforementioned
damages to have and recover from Defendant Ziegler.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 25th day of May, 2011.

s/José Antonio Fusté
JOSÉ ANTONIO FUSTÉ
UNITED STATES DISTRICT JUDGE