Jardin de las Catalinas Limited Partnership et al v. Joyner-Kelly

Filing 46

OPINION AND ORDER re 22 Motion for Judgment on the Pleadings; and re 27 Report and Recommendation. The Court has made an independent examination of the record in this case and ADOPTS the magistrate judge's findings and recommendations. Pla intiffs' claims are barred by the statute of limitations. Defendant's motion for judgment on the pleadings is GRANTED and plaintiffs' case is DISMISSED WITH PREJUDICE. Judgment shall be entered accordingly. Signed by Judge Francisco A. Besosa on 05/21/2012. (brc) (Main Document 46 replaced on 5/21/2012 as per Judge Besosa's request.) (re)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
JARDIN DE LAS CATALINAS LIMITED
PARTNERSHIP, JARDIN DE SANTA
MARIA LIMITED PARTNERSHIP,
Plaintiffs,
CIVIL NO. 11-1374 (FAB)

v.
GEORGE JOYNER, in his official
capacity as Executive Director
of the PUERTO RICO HOUSING
FINANCE AUTHORITY,
Defendant.

OPINION AND ORDER
BESOSA, District Judge.
Before the Court is the Report and Recommendation (“R&R”)
(Docket No. 27), regarding defendant’s motion for judgment on the
pleadings under Federal Rule of Civil Procedure 12(c) (Rule 12(c))
(Docket

No.

22),

which

plaintiffs

did

not

oppose.

Having

considered the magistrate judge’s recommendations, and the parties’
objections and responses, the Court ADOPTS the R&R.
DISCUSSION
I.

Procedural History
On April 19, 2011, Jardin de las Catalinas Limited Partnership

(“Catalinas”) and Jardin de Santa Maria Limited Partnership (“Santa
Maria”) (together, “plaintiffs”) filed a complaint against George
Joyner, in his official capacity as executive director of the
Puerto

Rico

Housing

Finance

Authority

(“PRHFA”)

(hereafter

Civil No. 11-1374 (FAB)

2

“defendant”), alleging a seizure of property constituted by tax
credits known as the Low Income Housing Tax Credit (“LIHTC”) and
amended by the Housing and Economic Recovery Act (“HERA”). (Docket
No. 1.)

On December 19, 2011, defendant filed a motion for

judgment on the pleadings, alleging that plaintiffs lack a property
interest in the credits and thus fail to state a violation of a
constitutional right.

In the alternative, defendant argues that

plaintiffs’ section 1983 claim is time-barred under the applicable
statute of limitations.

(Docket No. 22.)

Plaintiffs moved the

magistrate judge for an extension of time to respond to defendant’s
motion on December 21, 2011, and were granted an extension until
January 20, 2012.

(Docket Nos. 25 & 26.)

Even after being granted

the extension requested, plaintiff failed to oppose defendant’s
motion for judgment on the pleadings, and on January 26, 2012, the
magistrate

judge

issued

an

unopposed motion be granted.

R&R

recommending

that

defendant’s

(Docket No. 27.)

After their prolonged absence, plaintiffs swiftly entered the
scene and filed a motion asking the magistrate judge to reconsider
the R&R. (Docket No. 28.) The magistrate judge denied plaintiffs’
motion, and noted that “[t]he content of the reconsideration may be
filed

by

plaintiffs

Recommendation.”

as

(Docket

an
No.

objection
29.)

to

the

Plaintiffs

Report
filed

and
their

objections to the R&R, defendant filed an opposition to plaintiffs’
objections, plaintiffs filed a reply, and defendant filed its

Civil No. 11-1374 (FAB)
surreply.

3

(Docket Nos. 30, 33, 38, 43.)

The Court now considers

the applicable legal standards and the parties’ arguments.
II.

Legal Standards
A.

Standard under 28 U.S.C. § 636(b)(1)
A district court may refer, inter alia, “a motion . . .

for judgment on the pleadings” to a magistrate judge for a report
and

recommendation.

See

28

Fed.R.Civ.P. 72(b); Loc. Rule 72(a).

U.S.C.

§636(b)(1)(A)-(B);

Any party adversely affected

by the report and recommendation may file written objections within
fourteen days of being served with the magistrate judge’s report.
See 28 U.S.C. §636(b)(1).

A party that files a timely objection is

entitled to a de novo determination of “those portions of the
report or specified proposed findings or recommendations to which
specific objection is made.”

Sylva v. Culebra Dive Shop, 389

F.Supp.2d 189, 191-92 (D.P.R. 2005) (citing United States v.
Raddatz, 447 U.S. 667, 673 (1980)).
rule precludes further review.
22, 30-31 (1st Cir. 1992).

Failure to comply with this

See Davet v. Maccorone, 973 F.2d

In conducting its review, the Court is

free to “accept, reject, or modify, in whole or in part, the
findings

or

recommendations

made

by

the

magistrate

judge.”

28 U.S.C. § 636 (a)(b)(1).

Templeman v. Chris Craft Corp., 770

F.2d

1985);

245,

247

Pharmaceuticals,

(1st
Inc.,

Cir.
286

Alamo

F.Supp.2d

144,

Rodriguez
146

v.

Pfizer

(D.P.R.

2003).

Furthermore, the Court may accept those parts of the report and

Civil No. 11-1374 (FAB)

4

recommendation to which the parties do not object.

See Hernandez-

Mejias, 428 F.Supp.2d at 6 (citing Lacedra, 334 F.Supp.2d at 125126).
B.

Federal Rule of Civil Procedure 12(c) Standard
“A motion for judgment on the pleadings is treated much

like a Rule 12(b)(6) motion to dismiss.”

Perez-Acevedo v. Rivero-

Cubano, 520 F.3d 26, 29 (1st Cir. 2008) (citing Curran v. Cousins,
509 F.3d 36, 43-44 (1st Cir. 2007)).

When considering a motion

under Rule 12(c), a “‘court must view the facts contained in the
pleadings in the light most favorable to the nonmovant and draw all
reasonable inferences therefrom . . . .’”

Id. (quoting R.G. Fin.

Corp. v. Vergara-Nuñez, 446 F.3d 178, 182 (1st Cir. 2006)).

“[A]n

adequate complaint must provide fair notice to the defendants and
state a facially plausible legal claim.”

Ocasio-Hernandez v.

Fortuño-Burset, 640 F.3d 1, 12 (1st Cir. 2011).
When faced with a motion for judgment on the pleadings,
“[a] plaintiff is not entitled to ‘proceed perforce’ by virtue of
allegations
action.”
S.Ct.

that

merely

parrot

the

elements

of the

cause of

Id. at *9 (quoting Ashcroft v. Iqbal, ___ U.S. ___, 129

1937,

1950

(2009)).

Any

“[n]on-conclusory

factual

allegations in the complaint [, however,] must . . . be treated as
true, even if seemingly incredible.”
at 1951).

Id. (citing Iqbal, 129 S.Ct.

Where those factual allegations “allow[] the court to

draw the reasonable inference that the defendant is liable for the

Civil No. 11-1374 (FAB)

5

misconduct alleged,” the claim has facial plausibility.

Id.

(citing Iqbal, 129 S.Ct. at 1949).
C.

Plaintiffs’ Waiver of any Objection to the Report and
Recommendation
Plaintiffs

failed

to

oppose

defendant’s

motion

for

judgment on the pleadings. They moved for an extension of time to
respond to defendant’s motion, were granted the extension, and
still failed to file a timely opposition to defendant’s motion.
(See Docket Nos. 25 & 26.)

They presented their arguments on the

merits

their

of

that

recommendation.
granted

motion

in

objection

(See Docket No. 30.)

defendant’s

motion

for

to

the

report

and

After the magistrate judge

judgment

on

the

pleadings,

plaintiffs filed a motion for reconsideration of the R&R.

(Docket

No. 28.) The magistrate judge appropriately denied the plaintiffs’
motion to reconsider, but noted that plaintiffs could make their
arguments in an objection to the R&R. (Docket No. 29.)
First, as a general matter, defendant correctly points
out that plaintiffs’ failure to raise the relevant claims in a
timely manner results in a waiver of those objections.

See

DiMarco-Zappa v. Cabanillas, 238 F.3d 25, 33 (1st Cir. 2001). “The
law is clear that when a dispositive motion is heard before a
magistrate judge, the movant must make all her arguments then and
there, and cannot later add new arguments at subsequent stages of
the proceeding.”

Maurice v. State Farm Mut. Auto. Ins. Co., 235

F.3d 7, 10 (1st Cir. 2000).

The Court finds that the arguments

Civil No. 11-1374 (FAB)

6

raised in plaintiffs’ motion for reconsideration should have been
raised in an opposition to defendant’s motion and are therefore
deemed waived.
Even had the motion never been referred to a magistrate
judge, it is clear that “[a] party’s failure . . . to timely oppose
a motion in the district court constitutes forfeiture.”

Crispin-

Taveras v. Municipality of Carolina, 647 F.3d 1, 7 (1st Cir. 2011)
(citing Rivera-Torres v. Ortiz-Velez, 341 F.3d 86, 102 (1st Cir.
2003)).

Furthermore, the Court’s local rules expressly state that

by failing to file a timely opposition to a motion, “the opposing
party shall be deemed to have waived objection.” Loc. Civ.R. 7(b).
Although 28 U.S.C. § 636(b)(1)(C) gives parties the right
to de novo review to specific parts of reports and recommendations
to which they properly object, those parties are “not entitled to
a de novo review of an argument never raised.”

See Borden v.

Sec’y. of Health and Human Servs., 836 F.2d 4, 6 (1st Cir. 1987);
28 U.S.C. § 636(b)(1)(C).
until

after

recommendation

a

Allowing parties to sit on their hands

magistrate
would

judge

severely

has

undermine

issued
the

a

report

utility,

and

and
the

purpose, of referring motions to magistrate judges. See id. Thus,
“parties must take before the magistrate [judge], ‘not only their
best shot but all of their shots.’”

Id. (quoting Singh v.

Superintending Sch. Comm., 593 F. Supp. 1315, 1318 (D.Me. 1984)).
Given plaintiffs’ failure to oppose the motion for judgment on the

Civil No. 11-1374 (FAB)
pleadings

properly,

7

they

have

consequently

passed

on

any

opportunity to present substantive arguments regarding that motion.
See

id.;

Crispin-Taveras,

647

F.3d

at

7;

Loc.

Civ.R.

7(b).

Accordingly, the Court need not consider the arguments presented in
plaintiffs’ objections to the report and recommendation (Docket
No. 30) or their reply to defendant’s opposition. (Docket No. 38.)
III. The Court’s Review of the R&R
The magistrate judge granted defendant’s motion for judgment
on the pleadings on the basis that plaintiffs failed to state a
cause of action under section 1983, and on the basis that their
claims are time-barred by the applicable statute of limitations.
(Docket No. 27.)

While the Court need not consider plaintiffs’

untimely motions, for the purposes of thoroughness, the Court has
reviewed the applicable motions and is in agreement with the
magistrate judge’s analysis.
First, plaintiffs have not established an entitlement to a
property interest in the tax credit created under section 42 of the
Internal Revenue Code.

Plaintiffs seem to acknowledge that the

allocation of low income housing tax credits rests on the sole
discretion of the state allocating agency, but argue that the
increase

in

the

LIHTC

granted

by

HERA

were

discretion, but were mandated by federal statute.
at 3-4.)

not

subject

to

(Docket No. 30

Plaintiffs have failed to cite to any relevant case law

that contradicts First Circuit Court of Appeals precedent, which

Civil No. 11-1374 (FAB)

8

states that because the state agency has “absolute discretion to
determine whether federal income tax credits are awarded to an
applicant”, an applicant has no “cognizable ‘property interest’ in
the ‘promised’ federal income tax credits.”

Barrington Cove Ltd.

Partnership v. Rhode Island Housing and Mortg. Finance Corp., 246
F.3d 1, 5-6 (1st Cir. 2001).
Plaintiff’s reliance on Rio Grande Community Health Center,
Inc. v. Rullan is misplaced.

397 F.3d 56, 72-73 (1st Cir. 2005)

(holding that “a § 1983 action does lie for an FQHC [federallyqualified health center] to enforce the Secretary[] [of Health’s]
obligation

to

make

wraparound

payments

under

42

U.S.C.

§ 1396a(bb).”) As the Rio Grande court established, a violation of
a federal right “must be ‘unambiguously conferred’ by the statutory
provision at issue.”

Id.

The language of the statute at issue in

this case, 26 U.S.C. § 42, however, “simply mandates that states
promulgate their own allocation plans regarding these federal
income tax credits, without identifying any particular condition
under which the states are obligated to allocate them.” Barrington
Cove, 246 F.3d at 6.
Thus, plaintiffs have no entitlement to tax credits under the
LIHTC or under the HERA, which temporarily created a fixed floor
rate of 9 percent for

low income housing tax credits.

The

enactment of HERA does not explicitly affect the discretion of
state agencies to grant or deny tax credits for low-income housing.

Civil No. 11-1374 (FAB)

9

In the absence of a statutory amendment or precedential case law,
the Court finds that the First Circuit Court of Appeals, decision
in Barrington Cove remains good law, and that plaintiffs have not
shown an entitlement to a property interest in the allocation of
tax credits under section 42 of the IRC.
Second, plaintiffs’ claims are time-barred because plaintiffs
filed a complaint after the statute of limitations on their section
1983 claim had run.

As the R&R states, Puerto Rico law is the

guiding factor in determining the statute of limitations for a tort
action in this district.

(Docket No. 27 at 8-9.)

Plaintiffs set

forth three reasons why their claim is not time-barred:

(1) the

tort is continuous, (2) plaintiffs did not have adequate notice of
the injury, thus requiring the statute of limitations to be tolled,
and (3) equitable tolling applies to plaintiffs. (Docket No. 30 at
19-24.)

The Court addresses each argument respectively.

As defendant correctly points out, a continuous tort under
Puerto Rico law “is ‘ongoing unlawful conduct,’ not a continuing
harmful effect.”

(Docket No. 33 at 10, citing M.R. (Vega Alta),

Inc. v. Caribe General Elec. Products, Inc., 31 F.Supp.2d 226, 240
(D.P.R. 1998).
credits

that

The form 8609 documents, which state the amount of
will

be

allocated

to

applicants,

were

plaintiffs by defendant on or before April 15, 2010.

sent

to

(Docket

No. 22-1, 22-2.) Thus, by April 15, 2010, plaintiffs were aware of
how many credits they would be allocated, and how many credits were

Civil No. 11-1374 (FAB)
allegedly

seized

by

10

the

defendant.

Plaintiffs

filed

their

complaint on April 19, 2011, more than one year later; therefore,
their claim is time-barred.
The date of receipt of the Form 8609 documents also goes
against

plaintiffs’

claims

of

inadequate

notice.

The

8609

documents most clearly state the amount of credit to be allocated,
and plaintiffs cannot seriously allege that they were “tricked” by
defendant because they failed to do their own due diligence in
reviewing the forms upon receipt.
Finally,

the

Court

finds

that

the

Baldwin

factors

are

inapplicable and that plaintiffs are not excused from the statute
of limitations.

See Baldwin County Welcome Center v. Brown, 466

U.S. 147 (1984) (finding that “[o]ne who fails to act diligently
cannot

invoke

diligence.”)

equitable

principles

to

excuse

that

lack

of

The First Circuit Court of Appeals has outlined five

factors to weigh when considering whether to allow equitable
tolling:

“(1)

lack

of

actual notice

of

filing

requirement;

(2) lack of constructive knowledge of the filing requirement;
(3) diligence in pursuing one’s rights; (4) absence of prejudice to
the defendant; and (5) a plaintiff’s reasonableness in remaining
ignorant of the notice requirement.”

Kale v. Combined Ins. Co. of

America, 861 F.2d 746, 752 (1st Cir. 1988).

The Court finds no

reason to employ equitable tolling in this instance, because it has
determined that plaintiffs knew or should have known when the

Civil No. 11-1374 (FAB)
alleged

seizure

11

occurred,

because

defendant

would

be

highly

prejudiced if plaintiffs’ suit were allowed to continue, and
because plaintiffs were not reasonable in remaining ignorant about
when the alleged seizure took place.

They were in receipt of the

forms which clearly outlined allocated credits and chose to wait to
file their complaint until after the statute of limitations had
run.

Thus, the Court finds that plaintiffs’ claim is time-barred,

plaintiffs

had

adequate

notice

of

the

alleged

seizure,

and

equitable tolling is not appropriate.
IV.

Conclusion
The Court has made an independent examination of the record in

this

case

and

ADOPTS

the

magistrate

judge’s

findings

and

recommendations. Plaintiffs have failed to state a cause of action
under

section

1983

because

they

have

no

legitimate

property

interest in tax credits granted pursuant to Section 42 of the IRC.
Moreover,

plaintiffs’

limitations.

claims

are

barred

by

the

statute

of

Defendant’s motion for judgment on the pleadings is

GRANTED and plaintiffs’ case is DISMISSED WITH PREJUDICE. Judgment
shall be entered accordingly.
IT IS SO ORDERED.
San Juan, Puerto Rico, May 21, 2011.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE