Camacho et al v. Rivera-Siaca et al
Filing
19
OPINION AND ORDER DENYING Defendants' 8 Motion to Dismiss. The Court Orders Plaintiff's to brief certain issues found at the last age of this Opinion and order. Defendants shall also Answer the Complaint. Plaintiffs' brief due 9/6/2018. Defendants must respond by 9/20/2018. Answer due by 9/10/2018. Signed by Judge Jay A. Garcia-Gregory on 8/27/2018. (ALP)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
MARI ANGELA CAMACHO, et al.,
Plaintiffs,
CIVIL NO. 17-1935 (JAG)
v.
HECTOR RIVERA SIACA, et al.,
Defendants.
OPINION AND ORDER
GARCIA-GREGORY, D.J.
Plaintiffs Mari Angela Camacho, Jose Ruben Camacho, and Viviana Conner (collectively,
“Plaintiffs”), as heirs of Jose Ruben Camacho Camacho (“Mr. Camacho-Camacho”), filed a
diversity suit against Hector Rivera-Siaca ( “Mr. Rivera-Siaca”) and his former spouse Luisa
Estrella Claverol Siaca (“Ms. Claverol-Siaca”) (collectively, “Defendants”) alleging that they
fraudulently transferred property in violation of P.R. Laws Ann. tit. 31, § 3198, and Articles 1802
and 1803, P.R. Laws Ann. tit. 31, §§ 5141 and 5142. Docket No. 1 at 2.
Before this Court is Ms. Claverol-Siaca’s Motion to Dismiss for Lack of Subject Matter
Jurisdiction Pursuant Rule 12(b)(1).1 Docket No. 8. Plaintiffs opposed the Motion to Dismiss.
Docket No. 10. Defendants replied to the opposition, Docket No. 16, and Plaintiffs Sur-Replied,
Docket No. 17.
Although this Court finds that Mr. Camacho-Camacho was domiciled in Connecticut at
the time of his death, Docket No. 10-1,2 Plaintiffs must brief some issues about Mr. Camacho-
1
Co-defendant Hector Rivera Siaca has not filed a responsive pleading.
2 The Court considers Mr. Camacho-Camacho’s death certificate to determine if this Court has jurisdiction
over the matter. Cruz-Martinez v. Hosp. Hermanos Melendez, Inc., 475 F. Supp. 2d 140, 144 (D.P.R. 2007) (citing
CIVIL NO. 17-1935 (JAG)
2
Camacho’s widow to establish diversity. Thus, the Court ORDERS Plaintiffs to brief (1) whether
Ms. Artiles-Posada is an indispensable party; and (2) whether the share or interest of Ms. ArtilesPosada, as part of the community property and as the surviving spouse, has been distributed and
set out in compliance with the community property regime under Puerto Rico Law, P.R. LAWS
ANN. tit. 31, § 3621.
BACKGROUND3
A. Factual Background
Plaintiffs, who are all domiciled in Connecticut, sued as heirs of Mr. Camacho-Camacho,
who passed away in 2010. Docket No. 1 at 2. The case comes before this Court after a long history
in the Commonwealth’s courts, which began around 1986. Id. at 1.
The dispute commenced when Mr. Rivera-Siaca agreed to buy Mr. Camacho-Camacho’s
restaurant for $140,000.00, but only made an initial check for $5,000.00 and two subsequent
checks that were returned because of insufficient funds. Id. at 3. As a result, Mr. CamachoCamacho sued Mr. Rivera-Siaca in the Superior Court of San Juan (“state court”) against. Id. In
1989, the state court entered a judgment for $113,000.00 plus $5,000 in attorneys’ fees in favor of
Mr. Camacho-Camacho. Docket No. 1 at 1, 3. Although Mr. Camacho-Camacho and his wife
Zenaida Artiles-Posada (, “Ms. Artiles-Posada”) moved to Connecticut, where they lived until Mr.
Valentin v. Hosp. Bella Vista, 254 F.3d 358, 364-64 (1st Cir. 2001)) (“[C]ourt[s] enjoy [] broad authority to
order discovery, consider extrinsic evidence, and hold evidentiary hearings in order to determine [their]
own jurisdiction” while conducting this inquiry).
The facts are borrowed from Plaintiffs’ Complaint and are presumed to be true for purposes of this
Opinion and Order.
3
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3
Camacho-Camacho passed away, they filed multiple motions to renew their state court
judgment.4 Id. at 4.
In the mid 1990’s, Mr. Camacho-Camacho’s attorney found that Mr. Rivera-Siaca had claimed
the house where Ms. Claverol-Siaca lived with Defendants’ children as a separate property when
he filed for division of the conjugal partnership. Docket No. 1 at 4. During the division of the
conjugal partnership, a judicial lien was placed on the property. Id. Before scheduling the auction
to sell the house, Mr. Camacho-Camacho, however, had to wait until Defendants’ children
attained legal age. Id. at 5. After Defendants’ children reached legal age, Mr. Camacho-Camacho
scheduled the auction of the property. Id. Ms. Claverol-Siaca moved to intervene in Plaintiffs’ case
against Mr. Rivera-Siaca the day the auction was supposed to take place. Id. The auction was
stayed by the state court after Ms. Claverol-Siaca claimed to have interest in the property. Id. at 67.
Plaintiffs were later informed that Mr. Rivera-Siaca had transferred his portion of
ownership of the house to Ms. Claverol-Siaca, which totaled one hundred percent of its value.5
Docket No. 1 at 8. As a result, Plaintiffs sought to amend their claim before the San Juan state court
to include the transfer in fraud of creditors.6 The state court, however, denied the motion and
required Plaintiffs to file a separate suit. Id.
4
All the motions were granted by the San Juan state court. Docket No. 1 at 4.
Plaintiffs stated in their Complaint that they “conducted discovery as to Ms. Claverol-Siaca’s claims, and
learned that rather than having credits against Mr. Rivera-Siaca, she in fact owed him more in rent than
the value of the property.” Docket No. 1 at 6.
6 Plaintiffs claimed that “[s]ince Luisa Claverol Siaca is both Hector Rivera Siaca’s ex wife and his first
cousin, and both defendants knew of the debt owed to plaintiffs, the transfer of [the property] is
presumptively fraudulent pursuant to 31 L.P.R.A. §3198.” Id. at 8.
5
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4
On April 27, 2016, Plaintiffs and Mr. Camacho-Camacho’s widow Ms. Artiles-Posada, sued
Defendants in this Court alleging fraudulent transfer of property. (“First Case”). Zenaida Artiles
Posada, et al. v. Hector Rivera Siaca and Luisa Estrella Claverol, Civ. No. 16-1832 (CCC) (D.P.R. filed April
29, 2016). The plaintiffs argued that transferring Mr. Rivera-Siaca’s primary asset was fraudulent
and “should be rescinded and the entire property returned to [Mr. Rivera-Siaca] so that it can be
placed in public auction to satisfy [Mr. Rivera-Siaca]’s debt with [P]laintiffs.” Id. at 9. However,
the First Case was dismissed without prejudice because Ms. Artiles-Posada was a resident of
Puerto Rico and destroyed complete diversity between the parties. Artiles Posada v. Rivera Siaca, No.
16-1832, slip. op., 2017 WL 914610 (D.P.R. Mar. 7, 2017).
B. Procedural Background
On July 10, 2017, Plaintiffs filed this action without Ms. Artiles-Posada as a party. See
Docket No. 1 at 2-3. On November 20, 2017, co-Defendant Ms. Claverol-Siaca moved to dismiss
Plaintiffs’ Complaint due to lack of subject matter jurisdiction arguing that Mr. CamachoCamacho was a resident of Puerto Rico at the time of his death because he had his primary
residence in Puerto Rico and was enjoying tax benefits under Puerto Rico law. Docket No. 8 at 12. Ms. Claverol-Siaca claims that Plaintiffs, as his heirs, are deemed to be residents of Puerto Rico
. Id. at 2.
On December 11, 2017, Plaintiffs opposed Ms. Claverol-Siaca’s Motion to Dismiss. Docket.
No. 10. They asserted that Mr. Camacho-Camacho was domiciled in Connecticut at the time of
his death. Id. at 2-4. Plaintiffs also argued that although Mr. Camacho-Camacho had a residence
in Puerto Rico, his domicile was Connecticut. Id. at 6.
CIVIL NO. 17-1935 (JAG)
5
On December 28, 2017, Ms. Claverol-Siaca filed her reply opposing the motion to dismiss,
in which she raised for the first time that Plaintiffs are precluded by res judicata from asserting
diversity jurisdiction because this Court had allegedly entered a final judgment on this matter in
the First Case. Docket No. 16 at 3. Ms. Claverol-Siaca also requested this Court to dismiss this
case with prejudice because Plaintiffs did not prove this Court has jurisdiction under the diversity
statute. Id. at 7.
Shortly after, Plaintiffs filed a “Supplement to Opposition to Motion to Dismiss” arguing
that the requirements of res judicata are not present. Docket No. 17 at 1-2. Plaintiffs also submitted
additional evidence about tax returns arguing that Mr. Camacho-Camacho’s domicile was
Connecticut. Id. at 2.
ANALYSIS
I.
Res Judicata
The Court notes that Ms. Claverol-Siaca failed to raise the res judicata defense in her answer
to Plaintiffs’ Complaint. Since res judicata is an affirmative defense, it may be waived if not raised
in the answer. Indianapolis Life Ins. Co. v. Herman, 204 Fed. Appx. 908, 910 (1st Cir. 2006). However,
“a court on notice that it has previously decided an issue may dismiss the action sua sponte,
consistent with the res judicata policy of avoiding judicial waste.” In re Medomak Canning, 922 F.2d
895, 904 (1st Cir. 1990) (citation omitted). Thus, the Court considers whether Plaintiffs claims
asserting diversity jurisdiction are barred by res judicata.
Under the doctrine of res judicata, “a final judgment on the merits precludes parties from
relitigating claims that were or could have been brought in a prior action.” Universal Ins. Co. v. Office
of Ins. Comm’r, 755 F.3d 34, 37 (1st Cir. 2014) (citing Haag v. United States, 589 F.3d 43 (1st Cir. 2009)).
CIVIL NO. 17-1935 (JAG)
6
To dismiss an action on res judicata grounds, Puerto Rico law requires the movant to establish, “(i)
the existence of a prior judgment on the merits that is final and unappealable; (ii) a perfect identity
of thing or cause between both actions; and (iii) a perfect identity of the parties and the capacities
in which they acted.” Id. at 28 (citation and internal quotations marks omitted); see also Lausell
Marxuach v. Díaz de Yanez, 3 P.R. Offic. Trans. 742, 745 (1975) (“[T]here be the most perfect identity
between the things, causes, and persons of the litigants, and their capacity as such.”).
Ms. Claverol-Siaca’s argues that Plaintiffs’ claims are barred by res judicata because: (1) the
District Court entered a final judgment on the merits in the First Case; (2) this case is upon the
same causes of action and raises the same diversity allegations as the First Case, and (3) both cases
involve the same parties. Docket 16 at 4. The Court disagrees.
First, here, as Plaintiffs correctly point out, the First Case was not adjudicated on the
merits, but was dismissed without prejudice on jurisdictional grounds. See. Rivera Siaca, 2017 WL
914610, at *2. Specifically, the First Case was dismissed because Ms. Artiles-Posada’s presence as
a plaintiff defeated diversity of citizenship since she had moved to Puerto Rico. Id. at 1-2.7 Thus,
the First Case does not have preclusive effect on this case as it was not dismissed on the merits.
See Semtek Intern. Inc. v. Lockheed Martin Corp., 531 U.S. 497, 505 (2001) (explaining that “[t]he primary
meaning of ‘dismissal without prejudice,’ . . . is dismissal without barring the plaintiff from
returning later, to the same court, with the same underlying claim.”). Since the dismissal of the
In order to cure the defect, Plaintiffs moved the Court to voluntarily dismiss Ms. Artiles-Posada’s claims
without prejudice. See Rivera Siaca, 2017 WL 914610 at *2. Instead, the Court dismissed the case without
prejudice and, as to the requirement of complete diversity, it stated that at that stage of the case complete
diversity was already destroyed since it “must be determined at the time of filing the suit.” Id.
7
CIVIL NO. 17-1935 (JAG)
7
prior case was without prejudice, the first requirement to dismiss a federal court action on res
judicata grounds is not present.
Moreover, the First Case’s dismissal was based on the absence of complete diversity,
which does not necessarily prevent parties from refiling the case. Rivera Siaca, 2017 WL 914610, at
*2; see Cason v. Puerto Rico Elec. Power Auth., 770 F.3d 971, 977 (1st Cir. 2014). The First Circuit has
stated that:
Rigid insistence on the time-of-filing rule, rather than eliminating the
jurisdictional defect the District Court found, would mean an almost certain replay
of the case. . . . If an easily curable jurisdictional defect is discovered shortly after a
case is filed, the district court should decide whether the plaintiff must be put to
the bother of filing a fresh suit ‘which at long last will merely bring the parties to
the point where they now are.
Id. “[T]he pivotal question . . . is whether [the non-diverse party] is a severable and dispensable
party. If so, it is in the interest of judicial economy for the Court to retain jurisdiction over the
case by dismissing the claims against [the non-diverse party] without prejudice.” Zayas v. Mennonite
Gen. Hosp., Inc., No. 14-1744 (JAG-SCC), 2016 WL 4548392, at *1 (D.P.R. Aug. 31, 2016) (citing Cason
v. Puerto Rico Elec. Power Auth., 770 F.3d 971, 977 (1st Cir. 2014); Gorfinkle v. U.S. Airways, Inc., 431 F.3d
19, 22 (1st Cir. 2005))). Therefore, that the Court opted to dismiss the First Case because there
was no diversity of jurisdiction does not preclude the parties from refiling the suit without joining
the nondiverse party if said party is not indispensable.
For the reasons discussed above, this Court rejects Ms. Claverol-Siaca’s res judicata
argument.
The Court now turns to whether diversity of jurisdiction is present here. To address this
question, we must first determine Mr. Camacho-Camacho’s domicile.
CIVIL NO. 17-1935 (JAG)
II.
8
Diversity of Jurisdiction
Ms. Claverol-Siaca argues that Mr. Camacho-Camacho was a resident of Puerto Rico at
the time of his death because he had his primary residence in Puerto Rico and was enjoying tax
benefits under Puerto Rico law. Docket No. 8 at 1-2. Wherefore she contends that “his heirs and
legal representatives are deemed to be residents of the same state as the decedent—Puerto Rico.
Id. at 2. The Court disagrees.
Federal courts have subject-matter jurisdiction over cases in which the amount in
controversy exceeds $75,000 exclusive of interests and costs, and where the parties are “citizens
of different States.” 28 U.S.C. § 1332(a). Once a party’s jurisdictional allegations are challenged, it
is up to that party to prove by a preponderance of the evidence that the district court has
jurisdiction. See Padilla-Mangual v. Pavia Hosp., 516 F.3d 29, 31 (1st Cir. 2008) (citing Bank One, Texas,
N.A. v. Montle, 964 F.2d 48, 50 (1st Cir. 1992)).
In establishing diversity jurisdiction, citizenship is established by looking at the place
where the parties are domiciled. See Rodriguez v. Señor Frog’s de la Isla, Inc., 642 F.3d 28, 32 (1st Cir.
2011). A person’s domicile is where he or she has a “true, fixed home and principal establishment,
and to which, whenever he [or she] is absent, he [or she] has the intention of returning.” Id.
(internal quotations and citations omitted). Two things are required to establish or change
domicile: (1) physical presence in a place, and (2) the intent to remain there indefinitely or make
that place one’s home. See Aponte-Dávila v. Municipality of Caguas, 828 F.3d 40, 46 (1st Cir. 2016); Alers
v. Barcelo, 152 F. Supp. 3d 59, 64 (D.P.R. 2016).
The First Circuit has identified many factors that are relevant in determining a party’s
intent to remain in a place indefinitely: (1) the person’s place of voting; (2) the location of the
person’s real or personal property; (3) the state issuing the person’s driver’s license; (4) the state
CIVIL NO. 17-1935 (JAG)
9
where the person’s bank accounts are maintained; (5) the state where the person has club or
church memberships; (6) the state where the person is employed; and (7) the state where the
person pays taxes. See Bank One, 964 F.2d at 50; Alers, 152 F. Supp. 3d at 64-65.
Courts have repeatedly stated that no single factor is controlling. Garcia Perez v. Santaella,
364 F.3d 348, 351 (1st Cir. 2004) (citing Lundquist v. Precision Valley Aviation, Inc., 946 F.2d 8, 12 (1st
Cir. 1991)). “[T]he analysis focuses not simply on the number of contacts with the purported
domicile, but also on their substantive nature.” Id. (citing Lundquist, 946 F.2d at 12).
Under 28 U.S.C. § 1332(c)(2), “the legal representative of the estate of a decedent shall be
deemed to be a citizen only of the same State as the decedent.” 8 According to Ms. Claverol-Siaca,
because Mr. Camacho-Camacho was domiciled in Puerto Rico, Plaintiffs, as his heirs, should be
considered citizens of Puerto Rico. This Court disagrees with Co-defendant’s conclusion on Mr.
Camacho-Camacho’s domicile.
Mr. Camacho-Camacho’s domicile
Plaintiffs argue that Mr. Camacho-Camacho changed his domicile from Puerto Rico to
Connecticut since the mid 1990’s and lived there until his death in 2010. Docket No. 10 at 2. The
Court finds that Plaintiffs have met their burden of proof by showing that Mr. Camacho-Camacho
was domiciled in Connecticut.
8 Similarly,
under Connecticut Law, “[w]hen any person domiciled in this state dies intestate, the court of
probate in the district in which the deceased was domiciled at his death shall have jurisdiction to grant
letters of administration.” CT GEN STAT § 45a-303 (2016).
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10
1. Evidence Submitted by Plaintiffs
As evidence of Mr. Camacho-Camacho’s physical presence at the time of his death,
Plaintiffs submitted the certificate of death. Docket No. 10-1. Thus, the first element for
establishing domicile is satisfied.
Regarding the element of intent, Plaintiff offered the following evidence: (1) documents
from the Connecticut Probate Court stating that “Mr. Camacho worked in Connecticut and paid
taxes in Connecticut; he owned [real and personal] property in Connecticut; and voted in
Connecticut,” Docket No. 10-2; (2) Mr. Camacho-Camacho’s driver license issued by Connecticut;
Docket No. 10-3, and (3) Mr. Camacho-Camacho and Ms. Artiles-Posada’s federal income tax
return and Connecticut resident income tax returns for 2008, 2009, and 2010. Docket No. 17-1; 172; 17-3; 17-4; 17-5; 17-6. Balancing the intent factors, the scales tip heavily towards finding that Mr.
Camacho-Camacho’ domicile was Connecticut.
Ms. Claverol-Siaca nonetheless contends that Mr. Camacho-Camacho’s domicile
continued to be Puerto Rico because he enjoyed a tax exemption on his property in Puerto Rico,
which only applies to residential property. Docket No. 8 at 7-9. That Mr. Camacho-Camacho
owned property in Puerto Rico and paid state or municipal taxes on that property, does not rebut
the documentary evidence submitted by Plaintiffs. Garcia Perez v. Santaella, 364 F.3d 348, 351 (1st
Cir. 2004) (citing Lundquist v. Precision Valley Aviation, Inc., 946 F.2d 8, 12 (1st Cir. 1991). The proper
test in not whether Mr. Camacho-Camacho availed himself of tax exemption in Puerto Rico.
Rather, the proper inquiry is whether he was physically present in Connecticut and whether he
intended to remain there indefinitely. Plaintiffs have put forth more than enough evidence to show
that Mr. Camacho-Camacho’s domicile was Connecticut before he passed away.
CIVIL NO. 17-1935 (JAG)
11
Plaintiffs, however, never addressed whether Ms. Artiles-Posada is an indispensable party
in this case under Fed R. Civ. P. 19; and if she is, whether joinder of Ms. Artiles-Posada will not
defeat the existence of complete diversity. This question is essential in determining whether the
jurisdictional defect—which dismissed the First Case—was cured by not joining Ms. ArtilesPosada. See Rivera Siaca, 2017 WL 914610 at *2; see Zayas v. Mennonite Gen. Hosp., Inc., No. 14-1744 (JAGSCC), 2016 WL 4548392, at *1 (D.P.R. Aug. 31, 2016); Cason v. Puerto Rico Elec. Power Auth., 770 F.3d
971, 977 (1st Cir. 2014).
III.
Indispensable Parties
Federal Rule of Civil Procedure 19 protects the interests of parties not yet involved in
ongoing litigation. The First Circuit has established that “[i]f the court finds [a] party is anything
less than indispensable, the case proceeds without [him or] her. If, on the other hand, the court
finds that the litigation cannot proceed in the party’s absence, the court must dismiss the case.”
Jiménez v. Rodríguez-Pagán, 597 F.3d 18, 25 (1st Cir. 2010); see Grupo Dataflux v. Atlas Global Group, L.P.,
541 U.S. 567, 572 (“[T]he question always is, or should be, . . . whether . . . they are indispensable
parties, for if their interests are severable and a decree without prejudice to their rights may be
made, the jurisdiction of the court should be retained and the suit dismissed as to
them.”) (citations omitted)).
Here, the Complaint was filed after the Court’s dismissal of the First Case—because plaintiffs
in that case failed to meet the burden of proof to overcome the challenge that complete diversity
jurisdiction was destroyed by the fact that both Mr. Camacho-Camacho and his widow “are
deemed to be owners and beneficiaries of the exemption on the property located in San Juan
Puerto Rico.” Rivera Siaca, 2017 WL 914610 at *2.
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12
Here, Plaintiffs failed to address if Mr. Camacho-Camacho’s widow released all her
interest in the estate and whether or not Ms. Artiles-Posada is an indispensable party.
Accordingly, Plaintiffs have not provided this Court with enough information to determine
whether complete diversity is present in this case.9
Therefore, Plaintiffs are ORDERED to brief the following issues: 1) whether Ms. ArtilesPosada is an indispensable party; and 2) whether the share or interest of Ms. Artiles-Posada, as
part of the community property and as the surviving spouse, has been distributed and partitioned
in compliance with Puerto Rico community property regime.
CONCLUSION
For the foregoing reasons, the Court finds that Plaintiffs’ claims are not barred by res
judicata and ORDERS Plaintiffs to brief, (1) whether Mr-Camacho-Camcho and Ms. ArtilesPosada’s marriage is governed by Puerto Rico law or Connecticut law, and (2) whether any share
or interest of Ms. Artiles-Posada—as the surviving spouse— in Mr. Camacho-Camacho’s estates
has been distributed and partitioned in compliance with the community property regime
prevalent in the state having jurisdiction over this marriage.
Plaintiffs’ brief is due by 9/6/2018. Defendants must respond by 9/20/2018.
IT IS SO ORDERED.
In San Juan, Puerto Rico, this Monday, August 27, 2018.
Ms. Artiles-Posasa owned—as the documents attached in Plaintiffs’ opposition to motion to dismiss
show—part of Mr. Camacho-Camacho’s estate acquired by him. See Docket No. 10-2. In addition, under
both Puerto Rico and Connecticut law the surviving spouse is entitled to an hereditary portion of the
deceased spouse’s estate. See Delgado v. Bowen, 651 F. Supp. 1320, 1322 (D.P.R. 1897) and CT GEN STAT § 45a303(c) (2016). This portion “comes by virtue of ownership, not inheritance.” Delgado v. Bowen, 651 F. Supp.
1320, 1322 (D.P.R. 1987). Accordingly, Ms. Artiles-Posada may be entitled to part of the profits of the
restaurant’s sale.
9
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13
s/ Jay A. Garcia-Gregory
JAY A. GARCIA-GREGORY
United States District Judge
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