Popular Auto, Inc. v. M/V NI & MI et al

Filing 57

AMENDED OPINION AND ORDER denying 6 MOTION to dismiss as to All Plaintiffs MOTION to Stay filed by Pedro A. Ray-Chacon, Conjugal Partnership Ray-Santiago. Signed by Judge Juan M Perez-Gimenez on 6/14/2012.(PMA) Modified on 6/14/2012 to add text (cm).

THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO

POPULAR AUTO, INC.
Plaintiff,
v.

CIV. NO. 11-2164 (PG)

M/V
NI
&
MI,
its
engines,
equipment and furnishings, etc, in
rem; PEDRO A. RAY CHACON, HIS WIFE
NILSA P. SANTIAGO RAMOS; AND THEIR
CONJUGAL PARTNERSHIP
Defendants.
OPINION AND ORDER
I. FACTUAL AND PROCEDURAL BACKGROUND
On December 2nd, 2011, Popular Auto, Inc. (hereinafter “Plaintiff”)
filed the above-captioned claim to enforce a mortgage lien on an American
flag vessel M/V NI & MI, Hull identification Number STNAG043D001,
belonging to Pedro A. Ray Chacon, his wife Nilsa P. Santiago Ramos, and
their conjugal partnership (hereafter collectively referred to as
“Defendants”). See Docket No. 1. In its complaint, Plaintiff asserts this
Court’s original jurisdiction pursuant to 28 U.S.C. § 1333. In addition,
Plaintiff states that this Court has supplemental jurisdiction over the
non-federal claims against Defendants under 28 U.S.S. § 1367. See Docket
No. 1. On August 12, 2011, three (3) months prior to filing suit in
federal court, Plaintiff’s parent company, Banco Popular de Puerto Rico
(hereinafter “BPPR”) filed a $17 million complaint against Defendants,
which, among other things, included a collection claim on another boat
financed by Plaintiff. See Docket No. 6.
Defendants have filed now a motion to dismiss arguing that
Plaintiff “is self-servingly attempting to obtain a contradictory ruling
on the matter by forcing the Defendants to litigate the case twice,” that
is, in both federal and state court. See Docket No. 6 at page 3. The
Defendants maintain that this Court should refrain from exercising
jurisdiction over this matter pursuant to the abstention doctrine set

Civil No. 11-2164 (PG)

Page 2

forth in Colorado River Conservation District v. United States, 424 U.S.
800 (1976). According to Defendants, this matter should be litigated
together with the other collection proceedings the Plaintiff has already
filed against Defendants in state court, in particular, because this
action is nothing more than a loan collection claim that does not
encompass any complicated issues of maritime law. In light of the
aforementioned, Defendants request this Court dismiss this suit without
prejudice; or in the alternative, that the case be stayed until the state
suit is adjudicated in its entirety. See Docket No. 6. In its opposition,
Plaintiff asserts, in relevant part, that claims in rem over a marine
vessel must be brought in this Court. See Docket No. 9. The Defendants
replied reiterating their position on the matters of abstention and
refuting Plaintiff’s arguments. See Docket No. 26.
After careful review, this Court holds that the present case does
not present the extraordinary circumstances necessary under the Colorado
River doctrine to justify the waiver of federal jurisdiction. Thus, this
Court DENIES the Defendants’ Motion to Dismiss or Stay Proceedings
(Docket No. 6).
II. DISCUSSION
In their motion to dismiss, Defendants base their arguments on the
First Circuit ruling in Currie v. Group Insurance Commission 290 F.3d. 1
(2002), which in turn is based on the Supreme Court ruling in Colorado
River. In the latter, the Supreme Court emphasized that “federal courts
have a virtually unflagging obligation to exercise jurisdiction,”
Colorado River, 424 U.S. at 817, and therefore, a federal court usually
may not abstain simply because of parallel proceedings in state court.
Id. The Colorado River doctrine came to be known as the “fourth category”
of abstention beyond the “three traditional branches.” Colorado River,
424 U.S. at 814. The first three forms of abstention are: “Pullman-type
(avoiding a constitutional determination by allowing a state court to
construe state law), Burford-type (deferring to a state regarding
difficult questions of state law that involve significant policy

Civil No. 11-2164 (PG)

Page 3

considerations), and Younger-type (invoking federal jurisdiction to
restrain criminal proceedings)”. Colorado River, 424 U.S. at 814-817. The
Colorado River abstention doctrine is distinctively concerned with
federal court abstention when there are pending related state
proceedings. See Rivera-Feliciano v. Acevedo-Vila, 438 F.3d 50, 62 (1st
Cir.2006) (citing Colorado River, 424 U.S. at 818-19). “Jurisdiction
should be surrendered under the Colorado River doctrine sparingly, and
only in exceptional circumstances.” Pastrana Torres v. Zabala Carrion,
376 F.Supp.2d 209, 214 (D.P.R. 2005) (citing Colorado River, 424 U.S. at
813, 817; Villa Marina Yacht Sales, Inc. v. Hatteras Yachts, 915 F.2d 7,
13 (1st Cir.1990)).
Courts have held that grounds for abstention under the Colorado
River doctrine rest on “considerations of wise judicial administration,
giving regard to conservation of judicial resources and comprehensive
disposition of litigation.” Colorado River, 424 U.S. at 817 (internal
citations and quotation marks omitted). Nevertheless, the general rule
states that “the pendency of an action in the state court is no bar to
proceedings concerning the same matter in the Federal court having
jurisdiction.” Id.
“The crevice in federal jurisdiction that Colorado River carved is
a narrow one. Of all the abstention doctrines, it is to be approached
with the most caution, with only the clearest of justifications
warranting dismissal.” Jimenez v. Rodriguez–Pagan, 597 F. 3d 18, page, 27
(1st Cir.2010). Accordingly, the First Circuit has elaborated an
“exceptional-circumstances test” comprised of eight (8) factors to be
taken into account when determining whether federal proceedings
concurrent to state proceedings should be terminated pursuant to Colorado
River. Such factors include:
(1) whether either court has assumed jurisdiction
over a res; (2) the [geographical] inconvenience of
the federal forum; (3) the desirability of avoiding
piecemeal litigation; (4) the order in which the
forums obtained jurisdiction; (5) whether federal
law or state law controls; (6) the adequacy of the

Civil No. 11-2164 (PG)

Page 4

state forum to protect the parties’ interests; (7)
the vexatious or contrived nature of the federal
claim;
and
(8)
respect
for
the
principles
underlying removal jurisdiction.

Jimenez v. Rodriguez–Pagan, 597 F.3d at 27-28.
It is imperative to point out that “no one factor is meant to be
determinative, but rather courts must make a carefully considered
judgment taking into account both the obligation to exercise jurisdiction
and the combination of factors counseling against that exercise.” Rio
Grande Cmty. Health Ctr. v. Rullan, 397 F.3d 56, 72 (1st Cir.2005)
(internal citations and quotations omitted); see also Villa Marina Yacht
Sales, Inc. v. Hatteras Yachts, 915 F.2d 7, 13 (1st Cir.1990) (finding
that something more than a concern for judicial efficiency must animate a
federal court’s decision to give up jurisdiction).
The first factor of the “exceptional-circumstances test,” namely,
whether either court has assumed jurisdiction over a res, is irrelevant
to this case, considering that the res alluded to in the federal
complaint is different from the ones included in the claim in
Commonwealth court. Similarly, the second prong of the test has also
little bearing on this case since the federal forum is equally convenient
to the state forum, as both are located in the same city. See Currie, 290
F.3d at 10.
In considering the third factor, whether the concern for avoiding
piecemeal litigation should play a role in this case, we see nothing
“beyond the routine inefficiency that is the inevitable result of
parallel proceedings.” Hatteras Yachts, 915 F.2d at 16. “[P]iecemeal
litigation occurs when different tribunals consider the same issue,
thereby duplicating efforts and possibly reaching different results.”
Romine v. Compuserve Corp. 160 F.3d page, 341 (6th Circ. 1998). Regarding
this element of the test, the First Circuit has also held that:
“[d]ismissal is not warranted simply because
related issues otherwise would be decided by
different courts, or even because two courts
otherwise would be deciding the same issues.

Civil No. 11-2164 (PG)

Page 5

Rather, concerns about piecemeal litigation should
focus on the implications and practical effects of
litigating suits deriving from the same transaction
in two separate fora, and weigh in favor of
dismissal only if there is some exceptional basis
for dismissing one action in favor of the other.”
Jimenez v. Rodriguez–Pagan, 597 F.3d at 29. No such exceptional basis
exists in this case that weighs in favor of dismissal because of the
potential for piecemeal litigation.
As to the fourth factor of the applicable test, also called the
“priority” element, the Supreme Court has clarified that the same “should
not be measured exclusively by which complaint was filed first, but
rather in terms of how much progress has been made in the two actions.”
See Currie, 290 F.3d at 10 (citing Moses H. Cone Memorial Hospital v.
Mercury Construction Corp., 460 U.S. 1 (1983)). In the case at hand,
Plaintiff filed suit in the Commonwealth court only three (3) months
before filing suit in this Court.1 Although the parts have not advised
this Court as to the present stage of proceedings in the state court,
considering the fact that they were filed almost simultaneously, it is
fair to assume that they are both in their incipient stages respectively.
For this reason, we find this prong to be of no weight in favor of
dismissal.
The fifth element requires us to consider whether federal law or
state law controls. To that effect, the Defendants argue there are no
claims that give rise to this Court’s original jurisdiction. However,
this Court disagrees. Pursuant to Rules C and E of the Supplemental Rules
for Certain Admiralty and Maritime Claims,2 we find that this is a
1

The State Court complaint was filed on August 12, 2011, while the federal complaint was
filed on December 2nd, 2011.
2
Rule C of the Supplemental Rules for Certain Admiralty and Maritime Claims states as
follows:
In Rem Actions: Special Provisions. WHEN AVAILABLE. An action in rem may be
brought: (a) to enforce any maritime lien….
Rule E of the Supplemental Rules for Certain Admiralty and Maritime Claims states as
follows:
Actions in Rem and Quasi in Rem: General Provisions. (1) APPLICABILITY. Except as
otherwise provided, this rule applies to actions in personam with process of
maritime attachment and garnishment, actions in rem, and petitory, possessory, and
partition actions, supplementing Rules B,C, and D.

Civil No. 11-2164 (PG)

Page 6

federal matter subject to our jurisdiction. Additionally, the Eleventh
Circuit Court has stated that “an in rem suit against a vessel is
distinctively an admiralty proceeding, and is hence within the exclusive
province of the federal court.” Board of Com’rs of Orleans Levee Dist. v.
M/V BELLE OF ORLEANS, 535 F.3d 1299 (11TH Cir. 2008). This leads us to
the sixth factor, namely, the adequacy of the state forum to protect the
parties’ interest. We find that although the Commonwealth court might be
well-equipped to protect the parties’ interests, this Court is the fora
entitled by federal law to solve issues such as the one now before us.
Concerning the seventh prong of the test, we find that Defendants
have failed to point out anything vexatious or contrived about the
Plaintiff’s suit. Finally, as for the eight and final factor, this Court
finds that respect for principles of removal jurisdiction do not sway the
court in favor of abstention.
After carefully reviewing the “exceptional-circumstances test” set
forth by Colorado River and its progeny, we find that the case at hand
does not display exceptional circumstances that undoubtedly justify
departure from the federal court’s duty to exercise jurisdiction. In view
of the preceding analysis, this Court is reluctant to abstain from
exercising jurisdiction over the above-captioned claim, and consequently,
Defendants’ request for abstention is hereby DENIED.

III. CONCLUSION
Pursuant to the foregoing, the Court DENIES Defendants’ Motion to
Dismiss or Stay Proceedings (Docket No. 6).

SO ORDERED.
In San Juan, Puerto Rico, June 14, 2012.
S/ JUAN M. PÉREZ-GIMÉNEZ
JUAN M. PÉREZ-GIMÉNEZ
UNITED STATES DISTRICT JUDGE