DLJ Mortgage Capital Inc, v. Rodriguez-Maldonado et al
Filing
77
ORDER granting 71 Motion for Summary Judgment: Plaintiff's motion for summary judgment is GRANTED, and judgment shall be entered against Defendant Vazquez in the amount of $351,206.57 in principal; plus accrued interest amounting to 36;166,521.88 as of March 24, 2020 and interest continuing to accrue at a daily rate of $62.76 until Defendant Vazquez pays off the debt in full; plus an accumulated $11,446.23 in escrow advances. If Defendant Vazquez does not pay the judg ment sum to Plaintiff within sixty days of the date of this order, then Plaintiff may foreclose on the mortgage lien and sell the mortgaged property through public sale. The modified principal amount of $357,551.18 will serve as the minimum bid at auction. So ordered. Signed by US Magistrate Judge Bruce J. McGiverin on 8/18/2021. (jm)
Case 3:16-cv-02069-BJM Document 77 Filed 08/18/21 Page 1 of 7
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
DLJ MORTGAGE CAPITAL, INC.,
Plaintiff,
v.
Civil No. 16-2069 (BJM)
JULIAN VÁZQUEZ PEREZ and
CARMEN A. RODRÍGUEZ
MALDONADO,
Defendants.
OPINION AND ORDER
Plaintiff, DLJ Mortgage Capital Inc., brought this action against Julián Vázquez
Pérez and Carmen A. Rodríguez Maldonado (“Defendant Vázquez” and “Defendant
Rodríguez,” collectively “Defendants”) to collect on a mortgage note and foreclose on the
mortgaged property. Docket No. (“Dkt.”) 1. Before the court is Plaintiff’s motion for
summary judgment. Dkt. 71. The case is before me by consent of the parties. Dkt. 21.
Defendants have not opposed the motion. For the reasons set out below, DLJ’s motion for
summary judgment is GRANTED.
BACKGROUND
This summary of the facts is guided by Plaintiff’s Local Rule 561 statement of
uncontested facts. Dkt. 71-72.
Plaintiff is a corporation that holds title over the mortgage in question; Plaintiff’s
principal place of business is in New York, New York. Dkt. 1 ¶¶ 1, 16. Select Portfolio
1
Local Rule 56 requires parties at summary judgment to supply brief, numbered statements
of facts, supported by citations to admissible evidence. It “relieve[s] the district court of any
responsibility to ferret through the record to discern whether any material fact is genuinely in
dispute,” CMI Capital Market Inv. v. González-Toro, 520 F.3d 58, 62 (1st Cir. 2008), and prevents
litigants from “shift[ing] the burden of organizing the evidence presented in a given case to the
district court.” Mariani-Colón v. Dep’t of Homeland Sec., 511 F.3d 216, 219 (1st Cir. 2007). The
rule “permits the district court to treat the moving party’s statement of facts as uncontested” when
not properly opposed, and litigants ignore it “at their peril.” Id.
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DLJ Mortgage Capital, Inc. v. Vázquez Perez, Civil No. 16-2069 (BJM)
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Servicing, Inc. (“SPS”) is Plaintiff’s servicer, acting on Plaintiff’s behalf to manage all
transactions, payments, communications disbursements, and other matters between
Plaintiff and mortgagees. Dkt. 1 ¶ 2; see also Dkt. 71, Ex. 5 at 2. SPS has its principal place
of business in Salt Lake City, Utah. Id. Defendants are both residents of Puerto Rico. Dkt.
1 ¶ 3. On November 29, 2005, Defendants signed a promissory note for a mortgage lien of
$348,880.00, payable to FirstBank Puerto Rico, with interest accruing at 6.875 percent per
annum from the date of the note until paid. Dkt. 72 ¶ 1. On the same day, the parties secured
payment of the debt brought about by the note through a mortgage lien (Mortgage Deed
No. 1163). Id. ¶ 4. The Property Registry lists Defendants as the owners of the property in
question.2 Id. ¶ 8; see also Ex. 2.
The note provides for a five percent late charge for any installment payment not
received within fifteen days of the due date. Id. ¶ 2. The note also contains a penal clause
which provides that if the “holder of the Note is required to foreclose the mortgage or seek
judicial collection, or collection in any bankruptcy proceeding,” they are then entitled to
an additional ten percent of the original principal amount to “cover costs, expenses and
attorney’s fees.” Id. ¶¶ 3, 5. This clause additionally ensures that the lender or the note
holder will receive ten percent of the original principal amount for “any other advances
which may be made under the mortgage” and for “interest in addition to that secured by
law.” Id. ¶ 5.
On August 10, 2010, Firstbank Puerto Rico and Defendants agreed to modify the
note by executing Mortgage Deed No. 423 before Public Notary Alexandra Serracante
Cadilla. Id. ¶¶ 11-13; see also Dkt. 71, Ex. 3. Mortgage Deed No. 423 increased the
principal amount of the note to $357,551.18 and modified the annual interest rate to 5.5%
2
The note is recorded under Property No. 27416 in Section IV of the Property Registry of
San Juan, Trujillo Alto, at page 180 of Volume 554, Inscription No. 8. Id. ¶¶ 7, 10.
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for the first twenty-four consecutive months, increasing the rate to 6.875% starting in the
twenty-fifth month.3 Id.
Defendants have been in default regarding their obligations under the note since
March 1, 2013. Dkt. 72 ¶ 23; see also Ex. 5, ¶ 11. On June 21, 2017, co-debtor Defendant
Rodríguez filed a bankruptcy petition in the United States Bankruptcy Court for the Middle
District of Florida (“USBC”), and on October 11, 2017, the USBC granted her discharge
from personal liability in other lawsuits, including the matter at hand. Dkt. 72 ¶¶ 25-26. As
of March 24, 2020, Defendants owed $351,206.57 in principal on the note, had accrued
$166,521.88 in interest, and had accumulated $11,446.23 in escrow advances on the note.
Id. ¶ 27. Since May 24, 2020, Defendants have accrued interest at a rate of $62.76 per day
and will continue to do so until they pay off the debt in full. Id.
Plaintiff is the current holder and owner of the note. Id. ¶ 27. Plaintiff tasked SPS
with servicing the mortgagee on their behalf, but SPS has been unable to collect from
Defendants despite multiple efforts. Id. ¶¶ 31-32. As per the modifications under Mortgage
Deed No. 423, the principal amount of the note, $357,551.18, will serve as the lowest bid
at auction in the case of foreclosure. Id. ¶¶ 28-29. Neither defendant is serving in the United
States Armed Forces. Id. ¶¶ 33-34. This action was filed against Defendants in June 2016.
SUMMARY JUDGMENT STANDARD
Summary judgment is appropriate when “the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). A fact is material only if it “might affect the outcome of the suit under
the governing law,” Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and “[a]
‘genuine’ issue is one that could be resolved in favor of either party.” Calero-Cerezo v. U.S.
Dep't of Justice, 355 F.3d 6, 19 (1st Cir. 2004). The movant for summary judgment must
first “inform [ ] the district court of the basis for its motion,” and identify the record
3
The modified note was recorded as Inscription No. 9 under Property No. 27416 in the
Property Registry. Id. ¶ 20.
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materials “which it believes demonstrate the absence of a genuine issue of material fact.”
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); R. 56(c)(1). If this threshold is met, the
opponent “must do more than simply show that there is some metaphysical doubt as to the
material facts” in order to avoid summary judgment. Matsushita Elec. Indus. Co. v. Zenith
Radio Corp., 475 U.S. 574, 586 (1986). The nonmoving party may not prevail with mere
“conclusory allegations, improbable inferences, and unsupported speculation” regarding
any element of the claim. Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st
Cir. 1990).
In considering summary judgment, the court ascertains whether the “evidence is
such that a reasonable jury could return a verdict for the nonmoving party.” Leary v. Dalton,
58 F.3d 748, 751 (1st Cir. 1995). The court draws inferences and evaluates facts “in the
light most favorable to the nonmoving party,” Leary, 58 F.3d at 751, and the court must not
“superimpose [its] own ideas of probability and likelihood (no matter how reasonable those
ideas may be) upon the facts of the record.” Greenburg v. P.R. Maritime Shipping Auth.,
835 F.2d 932, 936 (1st Cir. 1987).
DISCUSSION
Puerto Rico law governs this diversity action. Under Puerto Rico law, “obligations
arising from contracts have legal force between the contracting parties and must be fulfilled
in accordance with their stipulations.” P.R. Laws Ann. tit. 31, § 2994. The law defines a
mortgage as an “obligation secured by real property that is duly recorded in the Property
Registry.” P.R. Laws Ann. tit. 13, § 30294. The law also distinguishes between debts and
mortgages:
Any given debt can give rise to a personal action for collection of monies
which may eventually be executed upon personal or any other property of
the debtor. These proceedings will be filed against the debtor and the prayer
for relief is limited to money. The mortgage, on the other hand, is the
guarantee which gives rise to a mortgage foreclosure suit to collect from the
very property that secured the debt.
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Chicago Title Ins. Co. v. Sotomayor, 394 F. Supp. 2d 452, 460 (D.P.R.2005). “A secured
creditor may take legal action to collect on a debt and enforce the pledge if not timely
satisfied.” DLJ Mortg. Capital, Inc. v. Jesus-Santa, No. 15-1596 (BJM), 2016 WL
3365396, at *2 (D.P.R. June 16, 2016) (alteration in original).
Plaintiff argues that it is entitled to summary judgment against Defendants for
foreclosure on the mortgaged property. Dkt. 71. Defendants have not opposed Plaintiff’s
motion. However, “even an unopposed motion for summary judgment should not be
granted unless the record discloses that there is no genuine issue as to any material fact and
that the movant is entitled to judgment as a matter of law.” CitiMortgage, Inc. v. RiverAnabitate, 39 F. Supp. 3d 152, 154 (D.P.R. 2014) (citing Rivera-Torres v. Rey-Hernandez,
502 F.3d 7, 13 (1st Cir. 2007)). The court must still decide whether the evidence is such
that a reasonable jury could return a verdict for the nonmoving party. Leary, 58 F.3d at 751.
In the present case, there is no factual issue or dispute: the defendants have failed
to satisfy the terms and conditions of the mortgage note and allege no facts suggesting
otherwise or justifications for their default. Dkt. 71, Ex. 1, 5. The note states that if
Defendants enter default, Plaintiff may demand immediate payment of the principal
amount that is still unpaid and all of the interest that has accrued on that amount. See Dkt.
71, Ex. 1, at 1. Plaintiff has properly done so.
Plaintiff is entitled to judgment as a matter of law as well, having already taken the
necessary steps to obtain such a judgment. The Court waived the mediation process
required under Article 3 of Law 184 of 2012, P.R. Laws Ann. tit. 32, App. III, § 2882,
finding that the time period for mediation had been exhausted because Defendants showed
no interest in paticipating in the process and did not oppose Plaintiff’s motion asking the
Court to waive mediation. Dkt. 69; see also, e.g., Roosevelt Cayman Asset Co. II v. Sanchez
Mata (D.P.R. Mar. 12, 2019) (holding that “the District of Puerto Rico, a federal court, is
not a ‘Court of Puerto Rico,’” and so it is not “bound by the jurisdictional requirements”
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of Puerto Rico law, such as required mediation). The law requires no further steps on the
part of Plaintiff.
Despite Defendant Rodríguez’s discharge from liability in bankruptcy court,
foreclosure against her can proceed anyway. If a United States Bankruptcy Court has
granted a defendant discharge from liability in other cases due to coinciding bankruptcy
court proceedings, then any judgment against said defendant will be void “to the extent
that such judgment is a determination of the personal liability of the debtor with respect to
any debt discharged.” 11 U.S.C.A. § 524(a)(1) (West). The United States Bankruptcy Court
for the Middle District of Florida granted Defendant Rodríguez discharge from personal
liability after she filed a bankruptcy petition on October 11, 2017. Dkt. 72 ¶¶ 25-26.
However, while Defendant Rodríguez is exempt from personal liability for her personal
debts, the foreclosure and sale of a property she holds partial title over can nonetheless
proceed under 11 U.S.C.A. § 522. Johnson v. Home State Bank, 501 U.S. 78, 83 (1991). A
bankruptcy discharge only extinguishes personal liabilities of the debtor; therefore, a
creditor’s right to recovery in rem (e.g. through foreclosure) survives or “passes through”
a bankruptcy discharge. 11 U.S.C.A. § 522(c)(2)(a) (West); see also Johnson, 501 U.S. at
82-83; Summers v. Fin. Freedom Acquisition LLC, 807 F.3d 351, 357 (1st Cir. 2015).
Recovery in rem is still viable in the case of a bankruptcy discharge because “[t]he land is
the real defendant in [a foreclosure] proceeding.” Summers, 807 F.3d at 357 (quoting Hunt
v. Darling, 26 R.I. 480, 59 A. 398, 399 (1904)). Thus, a bankruptcy discharge does not
release the mortgage lien because the property is still subject to payment through
foreclosure without demanding any personal recovery from the discharged party. Long v.
Bullard, 117 U.S. 617, 619, (1886).
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Defendants also agreed to waive their rights to presentment and notice of dishonor,
giving Plaintiff the ability to collect default penalties from Defendants without formally
informing them and the ability to legally inform other parties of Defendants’ default. Id. at
2; see also P.R. Laws Ann. tit. 19, §§ 701, 703, 704.
There is therefore no genuine issue of material fact as to Defendants’ liability or
Plaintiff’s right to foreclose on the property and Plaintiff is entitled to summary judgment
as a matter of law.
CONCLUSION
For the foregoing reasons, Plaintiff’s motion for summary judgment is
GRANTED, and judgment shall be entered against Defendant Vázquez in the amount of
$351,206.57 in principal; plus accrued interest amounting to $166,521.88 as of March 24,
2020 and interest continuing to accrue at a daily rate of $62.76 until Defendant Vázquez
pays off the debt in full; plus an accumulated $11,446.23 in escrow advances. If Defendant
Vázquez does not pay the judgment sum to Plaintiff within sixty days of the date of this
order, then Plaintiff may foreclose on the mortgage lien and sell the mortgaged property
through public sale. The modified principal amount of $357,551.18 will serve as the
minimum bid at auction.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this 18th day of August, 2021.
s/Bruce J. McGiverin
BRUCE J. MCGIVERIN
United States Magistrate Judge
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