Roosevelt Cayman Asset Company II v. Sanchez-Mata
Filing
85
OPINION AND ORDER. Motion terminated: 67 Motion for Summary Judgment. Signed by Judge Carmen C. Cerezo on 3/12/2019. (mld)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
ROOSEVELT CAYMAN ASSET
COMPANY II
Plaintiff
vs
CELENIA SANCHEZ MATA
Defendant
CIVIL 15-2477CCC
OPINION AND ORDER
This is action for collection of monies and foreclosure of a mortgage filed
by plaintiff Roosevelt Cayman Asset Company II (“RCAC-II against defendant
Celenia Sánchez Mata (“Sánchez Mata”) on October 8, 2015, based on a loan
originally granted by Golden Financial Services, Inc. to Sánchez Mata on
December 28, 2007. On December 15, 2015, Sánchez Mata filed a Motion to
Dismiss (d.e. 8), which the Court denied on July 29, 2016. On October 26,
2016, Sánchez Mata filed a Motion for Reconsideration of our Order denying
her Motion to Dismiss (d.e. 17), and her Answer to the Complaint (d.e. 18).
On January 25, 2017, Sánchez Mata filed a revised Answer to the
Complaint pleading additional affirmative defenses (d.e. 20). On January 19,
2018, Sánchez Mata filed a Motion for Summary Judgment along with a
Statement of Uncontested Facts (d.e. 33, 34). On February 7, 2018, RCAC-II
filed an Opposition to Sánchez Mata’s Motion for Summary Judgment (d.e. 40).
On April 24, 2018, the Court entered an Order denying Sánchez Mata’s Motion
for Summary Judgment (d.e. 46).
On June 5, 2018, the parties filed a Joint Pretrial Report (d.e. 53). On
July 10, 2018, Sánchez Mata filed a Motion to Dismiss or for Stay (d.e. 62). On
July 11, 2018, RCAC-II filed an Opposition to Sánchez Mata’s Motion to
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Dismiss or for Stay (d.e. 63). On July 30, 2018, the Court entered an Order
denying Sánchez Mata’s Motion to Dismiss or for Stay, and granting RCAC-II
until August 27, 2018 to file a Motion for Summary Judgment (d.e. 66).
Before the Court now is the Motion for Summary Judgment, along with
a Statement of Material Uncontested Facts and Memorandum of Law, filed by
plaintiff RCAC-II on August 27, 2018 (d.e. 67). RCAC-II submitted nine (9)
Exhibits in support thereto (d.e. 67, d.e. 68). On October 17, 2018, Sánchez
Mata filed an Opposition to Motion for Summary Judgment and Cross Motion
to Strike, with a specific prayer to strike or exclude Exhibits 7 and 9 to
RCAC-II’s Motion for Summary Judgment (d.e. 76), and an Opposition to
RCAC-II’s Statement of Material Uncontested Facts (d.e. 77). The parties
subsequently filed related motions and responses on evidentiary issues
(d.e. 79-83).
The Court, after considering the pleadings and the record, finds that
RCAC-II is entitled to the entry of summary judgment in its favor pursuant to
Rule 56 of the Federal Rules of Civil Procedure. The Court issues and enters
the following:
I.
FINDINGS OF FACT
On December 28, 2007, Sánchez Mata received a mortgage loan from
Golden Financial Services, Inc. doing business as Golden Mortgage Bankers,
which repayment obligation Sánchez Mata evidenced with mortgage note in the
amount of $128,000.00, repayable with an annual interest rate of 7.25%, due
on January 1, 2038.
On December 28, 2007, as guarantee of the repayment obligation,
Sánchez Mata executed a mortgage deed, Deed No. 362 of First Mortgage,
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before Notary Manuel Rivera Meléndez, in favor of Golden Financial Services,
Inc. doing business as Golden Mortgage Bankers, encumbering the property
described in the Spanish language hereinbelow, in the amount of $128,000.00:
URBANA: Solar marcado con el No. 11 del Bloque "A" de la
URBANIZACIÓN METROPOLIS, localizado en el Barrio Martín
González del término municipal de Carolina, Puerto Rico, con un
área superficial de 325.00 metros cuadrados. En lindes por el
Norte, con el solar No. 14, en una longitud de 13.00 metros; por el
Sur, con la Calle No. 1, en una longitud de 13.00 metros; por el
Este, con el solar No. 10, en una longitud de 25.00 metros; y por
el Oeste, con el solar No. 12, en una longitud de 25.00 metros. En
este solar enclava una casa de concreto y bloques para vivienda.
Property number 35,058, recorded at page 212 of volume 1370 of
Carolina, Registry of the Property of Carolina, Second Section.
As reflected by the Registry Certification dated October 19, 2015, the
Mortgage Deed and Modification Deed are valid and subsisting liens
encumbering Property No. 35,058, which property is owned by Sánchez Mata.
On August 20, 2010, Sánchez Mata and Doral Bank, as a subsequent
holder of the Mortgage Note, executed a special repayment plan based on
Sánchez Mata’s defaulting of the terms and conditions of the loan.
Sánchez Mata and Doral Bank modified the principal amount, interest,
maturity date and last payment, becoming its new principal of $124,910.88,
with annual interest of 4.350%, beginning on October 1st, 2010 up to
September 1st, 2011, with monthly payments of $451.07, interest only, with
annual interest of 7.25%, beginning on October 1st, 2011 up to September 1st,
2012, interest only, with monthly payments of $751.78; with annual interest of
7.25%, beginning on October 1st, 2012 up to maturity on January 1st, 2048,
principal and interest, with monthly payments of $815.18; and the last payment
in the amount of $7,360.24.
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On February 27, 2015, the Office of the Commissioner of Financial
Institutions of the Commonwealth of Puerto Rico closed Doral Bank, and
appointed the Federal Deposit Insurance Corporation (“FDIC”) as Receiver (the
“Receiver”).
On March 10, 2015, RCAC-II executed a Limited Power of Attorney
constituting and appointing Rushmore Loan Management Services, LLC
(“Rushmore”), as its true and lawful Attorney-in-Fact, in RCAC-II’s name, place
and stead and for RCAC-II’s benefit, for the purpose of performing all acts and
executing all documents in the name of RCAC-II to effectuate the enumerated
transactions in respect of any of the deeds of mortgage and mortgage notes
secured thereby for which RCAC-II is the legal holder (whether RCAC-II is
named therein as mortgagee or beneficiary or has become mortgagee by virtue
of endorsement of the Mortgage Note secured by any such Mortgage) and for
which the Attorney-in-Fact is performing sub-servicing activities, all subject to
the terms of the Agreement (see d.e. 40-2). The Receiver sold and transferred
to RCAC-II Sánchez Mata’s loan, note, and collateral, as of June 1, 2015
(see d.e. 60-1 and d.e. 60-2). By a subsequent endorsement, RCAC-II is now
the owner and holder of the mortgage note in the amount of $128,000.00,
originally issued to the order of Golden Financial Services, Inc. d/b/a Golden
Mortgage Bankers.
On July 28, 2015, RCAC-II notified Sánchez Mata that her loan was in
default and of its intention to foreclose.
On October 8, 2015, RCAC-II filed the
Complaint at bar against Sánchez Mata for collection of monies and
foreclosure of Mortgage.
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Sánchez Mata defaulted on the terms and conditions of the Mortgage
Note since September 1, 2014. As certified under the penalty of perjury by
Abelardo O. Dauhajre Dávila, Associate Counsel of Rushmore Loan
Management Services, LLC, according to the loan servicer’s records, as of
September 19, 2018, Sánchez Mata owed RCAC-II the principal amount of
$130,233.38, accrued interest since September 1, 2014 in the amount of
$36,814.95, at the annual interest rate of seven point twenty five percent
(7.25%), late charges amounting to 5% of any and all monthly payments or
installments in arrears over fifteen (15) days after the installment is due,
amounting to $2,780.64, escrow account deficiency in the amount of
$2,945.63, corporate advances in the amount of $14,111.36, property
inspections in the amount of $36.16, and expressly agreed-upon attorney’s
fees and legal costs in the amount of $12,800.00, for a total of $186,921.52.
II.
CONCLUSIONS OF LAW
Under Rule 56(c) of the Federal Rules of Civil Procedure, summary
judgment is appropriate when “. . . [t]he pleadings, answers to interrogatories,
and admissions on file together with the affidavits, if any, show that there is no
genuine issue as to any material fact and that the moving party is entitled to a
judgment as a matter of law.”
The procedure authorized by Rule 56 “is a method for promptly disposing
of actions in which there is no genuine issue as to any material fact as in which
only a question of law is involved.” 10 Wright, Miller & Kane Federal Practice
and Procedure, Civil 2d, Sec. 2712 at p. 563. In order to grant summary
judgment, the trial court must determine if there are any "material" factual
issues which are identified depending on the substantive law that should be
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resolved and also, whether such issues are also “genuine.” Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 106 S. Ct. 2505 (1986), at p. 2510. The First
Circuit's standard for granting summary judgment was set forth in the seminal
case of Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir. 1975), cert. denied,
425 U.S. 904 (1976); cited with approval in Pahlavi v. Palandjian, 809 F.2d 938
(1st Cir. 1987); Computer Systems of America v. International Buss. Machines,
795 F.2d 1086 (1st Cir. 1986); Mutual Fire, Marine & Inland Ins. Co. v. Costa,
789 F.2d 83 (1st Cir. 1986); Bratt v. International Business Machines Corp.,
785 F.2d (1st Cir. 1986); Finn v. Consolidated Rail Corp., 782 F.2d 13
(1st Cir. 1986); Emery v. Merrimack Valley Wood Products, Inc., 701 F.2d 985
(1st Cir. 1983); Astra Pharmaceutical Products, Inc. v. Bechman Instruments,
Inc., 718 F.2d 120 (1st Cir. 1983); Pignons S.A. de Mecanigne v. Polaroid
Corp., 657 F.2d 484 (1st Cir. 1981).
A "material issue" is one that affects the outcome of the litigation;
therefore, if a factual issue is not relevant to the resolution of the controlling
legal issues, summary judgment should be granted; Pignons, supra; Finn,
supra; Molinos de Puerto Rico v. Sheridan Towing Co., 62 F.R.D. 172
(D.P.R. 1973).
As stated by the Supreme Court, “. . . the materiality
determination on a motion for summary judgment rests on the substantive law,
and it is the substantive law's identification of which facts are critical and which
facts are irrelevant that governs.” Anderson, 106 S.Ct. at p. 2510.
The function of the summary judgment is "to pierce the boilerplate of the
pleadings and examine the parties' proof to determine whether a trial is actually
necessary.” Vega-Rodriguez v. Puerto Rico Telephone Co., 110 F.3d 174, 178
(1st Cir. 1997) (citing Wynne v. Tufts Univ. Sch. of Med., 976 F.2d 791, 794
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(1st Cir. 1992)). Rule 56(c) of the Federal Rules of Civil Procedure provides
for the entry of summary judgment “if the pleadings, depositions, answers to
interrogatories, and admissions on file together with the affidavits, if any, show
that there is no genuine issue as to any material facts and that the moving
party is entitled to judgment as a matter of law.”
When, as here, the moving party asserts that the competent evidence
clearly demonstrates that it is entitled to judgment, the non-moving party bears
the burden of showing the existence of some factual disagreement sufficient
to defeat the motion.
However, the burden is satisfied only if the cited
disagreement relates to a genuine issue of material fact. See Anderson v.
Liberty Lobby, Inc., 477 U.S. 242, 247-248 (1986). “In this context, ‘genuine
issue’ means that the evidence about the fact is such that a reasonable jury
could resolve the point in favor of the non-moving party [and] ‘material’ means
that the fact is one that might affect the outcome of the suit under the
governing law.”
United States v. One Parcel of Real Property, Etc.,
960 F.2d 200, 204 (1st Cir. 1992). Therefore, a factual issue is material if it is
relevant to the resolution of a controlling legal issue raised by the motion for
summary judgment. See U.S. Fire Ins. Co. v. Producciones Padosa, Inc.,
835 F.2d 950, 953 (1st Cir. 1987).
The non-moving party bears the burden of showing that factual issues
exist. When meeting its burden, the opposing party may not rest upon mere
conclusory allegations, improbable inference, unsupported speculations or
denials in its pleading. Instead, it must set forth specific facts, which arise from
definite and competent evidence to establish the existence of a genuine issue
for trial. See Rathbun v. Autozone, Inc., 361 F.3d 62 (1st Cir. 2004); Pagano v.
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Frank, 983 F.2d 343, 347 (1st Cir. 1993); Wynne v. Tufts Univ. School of
Medicine, 976 F.2d 791, 794 (1st Cir. 1992), cert. den. 123 L.Ed. 2d 470. As
long as it is “the nonmovant [that] bears the ultimate burden of proof at trial, he
[will] not [be able to] defeat a motion for summary judgment by relying upon
evidence that is ‘merely colorable’ or not ‘significantly probative.’” See Pagano,
983 F.2d at 347.
“[E]ven in cases where elusive concepts such as motive or intent are at
issue, summary judgment may be appropriate if the nonmoving party rests
merely upon conclusory allegations, improbable inferences, and unsupported
speculation.” See Ayala-Gerena v. Bristol Myers-Squibb Co., 95 F.3d 86, 95
(1st Cir. 1996) (citations omitted).
In this case, there are no genuine issues of fact that would require the
Court to schedule a trial to adjudicate a statutory matter on the uncontested
facts presented by RCAC-II. Since the Court is summarily disposing of the
case, it will address several affirmative defenses raised by Sánchez Mata
during the process.
A.
Standing
RCAC-II, as assignee of the FDIC, has shown standing to collect on the
promissory note subscribed by Sánchez Mata.
Pursuant to the Puerto Rico Commercial Transactions Act, a negotiable
instrument is one that conveys:
a promise or an unconditional order for payment of a specific
amount of money, with or without interest or other charges
described in the order or promise, if it is (1) payable to the bearer
o to its order at the moment of emission or when it is first
possessed by a bearer; (2) is payable upon presentment or on a
certain date; and (3) does not specify any other obligation or
instruction upon the payor other than the payment of the amounts;
notwithstanding, the promise of payment may contain (i) a
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commitment or power to give, maintain, or protect collateral to
secure payment; (ii) an authorization or power to the bearer to
admit judgment or to execute the collateral or dispose of it in any
other way; or (iii) a waiver of the benefit of any law intended for the
advantage or protection of an obligor.
19 P.R. Ann. Laws § 504.
A note will be payable to the bearer when it:
states that it is payable to bearer or to the order of bearer or
otherwise indicates that the person in possession of the promise
of order is entitled to payment; . . .
19 P.R. Laws Ann. § 509(a)(1).
Regarding the manner in which an instrument is transferred, the Puerto
Rico Commercial Transactions Law:
(a) “Negotiation” means a transfer of possession, whether
voluntary or involuntary, of an instrument by a person other
than the issuer to a person who thereby becomes its holder.
(b) Except for negotiation by a remitter, if an instrument is payable
to an identified person, negotiation requires transfer of
possession of the instrument and its endorsement by the
holder. If an instrument is payable to bearer, it may be
negotiated by transfer of possession alone.
19 P.R. Ann. Laws § 551.
RCAC-II has submitted a copy of the mortgage note and the allonge with
an endorsement in favor of RCAC-II (see d.e. 68-1). In addition, RCAC-II has
submitted the Power of Attorney, executed by the FDIC, authorizing David
Powell, Vice-President at Rushmore Loan Management Services, LLC, to
endorse any and all notes transferred from the FDIC, as receiver for Doral
Bank, in favor of RCAC-II (see d.e. 68-7).
RCAC-II acquired by endorsement and assignment from the FDIC, the
promissory note subscribed by Sánchez Mata. Accordingly, RCAC-II became
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the successor to the rights, obligations, credits, powers, and assets of the
FDIC.
B. Redemption of Litigious Rights
Section 1425 of the Puerto Rico Civil Code, 31 L.P.R.A. § 3950, titled,
“Right of debtor to extinguish litigated credit,” states:
When a litigated credit is sold, the Defendants shall have the right
to extinguish the same by reimbursing the assignee for the price
the later paid for it, the judicial costs incurred by him, and the
interest on the price from the day on which the same was paid.
A credit shall be considered as litigated from the day the suit
relating to the same has been answered.
The Defendants may make use of his right within nine (9) days,
counted from the day the assignee should demand payment of
him.
Further, a credit is regarded as litigious when, upon being litigated, a final
judgment is required to ascertain its existence, “that is, it is one which is in
doubt and one in which the rights are uncertain. For a credit to be considered
litigious it is essential that the litigation pending at the time of sale or
assignment of credit concern the existence of the credit itself and not merely
the consequences of its existence once final judgment is rendered.” Consejo
de Titulares v. C.R.U.V., 132 P.R.R. 707 (1993); citing Cámara Insular, Etc. v.
Anadón, S. en C., 83 P.R.R. 360 (1961), Santana v. Quintana,
52 P.R.R. 725 (1938) (Emphasis added).
The credit upon which Sánchez Mata asserts an alleged right of
redemption is a debt which Sánchez Mata admitted in her Amended Answer
to Complaint that did exist (see d.e. 30, p. 2, ¶¶ 9-10), and is therefore not a
credit which existence is in question, falling outside the Puerto Rico Civil
Code’s right of redemption.
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C. Compulsory Mediation under Puerto Rico Law No. 184
P.R. Law No. 184 of 2012, establishes a compulsory mediation
mechanism in foreclosure proceedings where the property in risk of foreclosure
is the principal residence of the defendant. The compulsory mediation referral
is a jurisdictional requirement which must be observed if the defendant meets
the two essential requirements set forth in Law 184: (1) an answer to the
complaint must be filed and (2) defendant must show that the property is
indeed its principal residence.
Nevertheless, Article 3 of Law 184 clearly defines the effect of the
jurisdictional requirement to the Courts of Puerto Rico. “This shall be a
jurisdictional requirement in the proceedings carried out in the Courts of Puerto
Rico, where the proceeding involves the foreclosure of a mortgage guaranteed
with a property that constitutes the debtor’s personal homestead . . .” Art. 3,
P.R. Law No. 184 of 2012.
The United States District Court, for the District of Puerto Rico, a federal
court, is not a “Court of Puerto Rico.”
As such, it is not bound by the
jurisdictional requirements set forth in a State law that facially limits its own
applicability to State courts.
See Roosevelt Cayman Asset Company v.
Pedro G. Velazquez-Rodriguez, et al., Civil No. 15-2721(CCC) (D.P.R. Order,
May 3, 2016).
On July 30, 2018, the Court had already ruled that Sánchez Mata’s
allegations regarding compulsory mediation as a jurisdictional requirement are
inmeritorious (see d.e. 66).
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D. Puerto Rico Law No. 169 of 2016 – “Ley de Ayuda al Deudor
Hipotecario” and CFPB Regulations
Sánchez Mata has argued that RCAC-II did not comply with Puerto Rico
Law 169 of 2016 but does not specify any misconduct.
Puerto Rico Law 169 bars a mortgage creditor from filing a complaint
seeking mortgage foreclosure when the borrower has submitted a request for
loss mitigation, and for the following one hundred twenty (120) days following
said request. Additionally, when a request for loss mititgation has been
submitted after the commencement of a foreclosure case, the mortgage
creditor will seek to stay proceedings until the vetting process has been carried
out.
Puerto Rico Law No. 169 was enacted on August 9, 2016 and came into
effect sixty days after its approval. Naturally, as the present complaint was filed
on October 8, 2015, Plaintiff was not bound by the sections pertaining to the
filing of the complaint. After three (3) years since the filing of the complaint,
Sánchez Mata failed to prosecute a loss mitigation request that would entail the
staying of proceedings under the captioned case pursuant to Puerto Rico Law
No. 169 and CFPB Regulations.
E.
Applicable Substantive Law
Under Article 1044 of the Civil Code of Puerto Rico, 31 L.P.R.A. § 2994,
“Obligations arising from contracts have legal force between the contracting
parties, and must be fulfilled in accordance with their stipulations.” Moreover,
“[t]he validity and fulfillment of contracts cannot be left to the will of one of the
contracting parties.” 31 L.P.R.A. § 3373 Article 1208 of the Civil Code of
Puerto Rico.
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Contracts in the Commonwealth of Puerto Rico are created as long as
the following requisites exist: (1) the consent of the contracting parties; (2) a
definite object which may be the subject of the contract; and (3) the cause for
the obligation which may be established. 31 L.P.R.A. § 3391; see Neca Mortg.
Corp. v. A & W Dev. S.E., 137 D.P.R. 860, 871 (1995). Furthermore, in
clarification of § 3391, § 3401 states in relevant part that, “consent is shown by
the concurrence of the offer and acceptance of the thing and the cause which
are to constitute the contract.” 31 L.P.R.A. § 3401. Thus, the traditional
elements of offer, acceptance and consideration in the formation of contract
under common law jurisdictions are also reflected in §§ 3391 and 3401 of
Puerto Rico’s Civil Code.
Article 1644 of Puerto Rico’s Civil Code states that the person who
receives money or other generic thing as a loan, is obligated to return to the
creditor money or a thing of the same kind and value. See 31 P.R. Laws Ann.
§ 4571.
Puerto Rico Mortgage Law Article 155, 30 P.R. Laws Ann. § 2551, states
that a mortgage imposes a legal lien upon the property over which it is
constituted, whoever is their owner or possessor, requiring fully securing
compliance of the obligation which it guarantees. It is an essential provision
of the mortgage contract that, if the obligated party defaults as to the principal
obligation, the mortgaged property may be sold to satisfy the guaranteed
credit. See Puerto Rico Civil Code Article 1751, 31 P.R. Laws Ann. § 5002.
Furthermore, under Puerto Rico law, as soon as a borrower accepts the
loan disbursement and subscribes a mortgage note, the terms of the mortgage
deed securing the note become contractually binding to both parties, including
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the right to the loan’s acceleration.
See Liechty v. Descartes Sauri,
109 D.P.R. 496, 502 (1980).
Finally, Article 1061 of the Civil Code of Puerto Rico provides that the
indemnity for losses and damages due to a defendant’s default to comply with
his or her obligation to pay an amount of money shall consist in the payment
of the legal interest. See 31 L.P.R.A. § 3025.
In light of the foregoing, the Court finds that Defendant Celenia Sánchez
Mata failed to comply with the terms and conditions of the mortgage loan, now
owned by Roosevelt Cayman Asset Company II, and enters judgment in favor
of plaintiff, Roosevelt Cayman Asset Company II, in the amount of
$186,921.52, as of September 19, 2018, which will continue to accrue interest
and charges at the contractual rates.
SO ORDERED.
At San Juan, Puerto Rico, on March 12, 2019.
S/CARMEN CONSUELO CEREZO
United States District Judge
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