Rodríguez-Wilson v. Firstbank P.R.
| Decision Date | 25 February 2021 |
| Docket Number | Civil. No. 20-1324 (FAB) |
| Citation | 521 F.Supp.3d 148 |
| Court | U.S. District Court — District of Puerto Rico |
| Parties | Jorge E. RODRÍGUEZ-WILSON, Plaintiff, v. FIRSTBANK PUERTO RICO ; Santander Financial Services Inc., Defendants. |
Eugenio E. Ibarra-Pereira, Rivera Tulla & Ferrer, Hato Rey, PR, Jose F. Quetglas, Quetglas Law Office, San Juan, PR, for Plaintiff.
Jose A. Alvarado-Vazquez, Nestor Mendez-Gomez, Pietrantoni Mendez & Alvarez LLC, San Juan, PR, for Defendants.
Before the Court are FirstBank Puerto Rico ("FirstBank")’s motions for attorney fees. (Docket Nos. 31 and 41.) As discussed below, FirstBank's motions are DENIED .
For purposes of this decision, only a rough description of the factual and procedural background is necessary. A more thorough description of the background can be found at Rodríguez-Wilson v. Banco Santander de Puerto Rico, Civ. No. 20-1324, 501 F.Supp.3d 53, 55–57 (D.P.R. Nov. 12, 2020) (Besosa, J.).
Rodríguez filed a complaint against Banco Santander de Puerto Rico ("Banco Santander") prior to Banco Santander's merger with FirstBank. See Docket Nos. 1, 21, and 22. Rodríguez asserted a federal claim pursuant to the Real Estate Settlement Procedures Act ("RESPA"). (Docket No. 1 at pp. 1–2.) He also asked the Court to assert supplemental jurisdiction over a contract claim pursuant to Puerto Rico law. Id.
Banco Santander moved to dismiss the claims. (Docket No. 13.) The bank put forth a variety of reasons to dismiss the RESPA claim. See id. at pp. 1–2. It argued that the RESPA claim was barred by a three-year statute of limitations. Id. at pp. 6–7. The bank also argued that the RESPA claim was not ripe. Id. at pp. 13–14.
Rodríguez responded. (Docket No. 27.) He argued that the RESPA claim was not time-barred, Id. at pp. 2–3, but acknowledged that the "RESPA violations occurred outside of the three-year filing period established by 12 U.S.C. § 2614." Id. at p. 3. Still, Rodríguez argued, the violations "are relevant background information to an ongoing litigation in the Commonwealth Courts." Id. (emphasis omitted). He also contended that the RESPA claim was not time-barred because foreclosure proceedings were pending, and he had not yet lost his property. Id. Separately, Rodríguez agreed with Banco Santander that the RESPA claim was not ripe and requested a dismissal without prejudice of all claims. Id. at pp. 5–6.
The Court dismissed Rodríguez's claims against Banco Santander. Rodríguez-Wilson, 501 F.Supp.3d at 58–59. The Court pointed out that Rodríguez had omitted from his complaint a key date to his RESPA claim, and noted that this omission is reason enough to dismiss the complaint because it would ordinarily prevent the Court from determining whether the RESPA claim was timely. Id. at 57–58. Still, the Court held that the facts before it allowed the Court to determine that the RESPA claim was time-barred. Id. at 58–59. The Court dismissed the RESPA claim with prejudice and dismissed the Puerto Rico contract claim without prejudice. Id.
As Banco Santander's successor, FirstBank moves for attorney fees pursuant to 28 U.S.C. § 19272 and Rule 54 of the Federal Rules of Civil Procedure. (Docket Nos. 31 and 41.) FirstBank seeks an award of $11,081.50. Id.
In its original motion, FirstBank argues that attorney fees are appropriate because Rodríguez's complaint was meritless from its inception. (Docket No. 31 at p. 1.) FirstBank contends that Rodríguez knew his RESPA claim was time-barred, and supports this contention by noting that Rodríguez knew the facts which allowed the Court to determine the claim was time-barred. Id. at pp. 5–6. FirstBank argues that Rodríguez willingly omitted the key date to his RESPA claim as part of an effort to bypass the statute of limitations. Id. at p. 3.
In addition, FirstBank considers Rodríguez's agreement with FirstBank's ripeness argument to be problematic. Id. at p. 6. FirstBank argues that Rodríguez was attempting to achieve a dismissal without prejudice so that Rodríguez could later refile the claim once it became ripe. Id.
In a reply brief, FirstBank adds two arguments. (Docket No. 43.) One argument contends that, even if Rodríguez did not know the RESPA claim was time-barred, he should have known. Id. at p. 1. FirstBank's other new argument is that Rodríguez prolonged the litigation when Rodríguez opposed dismissal on statute of limitations grounds. Id. at p. 1.
Rodríguez responds that an attorney fees award is not warranted. (Docket No. 39 at p. 3.) He avers that omitting the key RESPA date from the complaint was an oversight. Id. at p. 5. In a sworn affidavit, Rodríguez's attorney attests that the key date was not purposely omitted and that he did not know the RESPA claim was time-barred. Id., Ex. 1 at p. 2. In addition, Rodríguez states that a dismissal without prejudice was requested because foreclosure proceedings were still pending, and Rodríguez had not yet lost his property. Id. at p. 5.
Section 1927 of Title 28 of the United States Code provides for sanctions directly against an attorney. To be liable, an attorney must "multipl[y] the proceedings ... unreasonably and vexatiously." 28 U.S.C. § 1927.
The courts in this circuit have given meaning to the section 1927 standard. "Behavior is ‘vexatious’ when it is harassing or annoying." Cruz v. Savage, 896 F.2d 626, 632 (1st Cir. 1990). There is no requirement for finding subjective bad faith or intentionality as a predicate for the imposition of sanctions. Id. at 631–32. At the same time, the actions need be more severe than mere negligence, inadvertence, or incompetence. Id. at 632. "[B]ad, even bordering on terrible" pleadings that evince a lack of "rudimentary research" are not sufficient to impose section 1927 sanctions in this jurisdiction. Negrón-Santiago v. San Cristobal Hosp., 764 F. Supp. 2d 366, 373 (D.P.R. 2011) (Fusté, J.).
This is not the first time a litigant has wasted the Court's time and other litigants’ time with a time-barred claim. Attorneys who file claims that are time-barred certainly demonstrate some amount of incompetence. Incompetence, however, is not a sufficient basis on which to award attorney fees.
FirstBank insufficiently supports its argument that Rodríguez knew his RESPA claim was time-barred when the complaint was filed. FirstBank's argument on this score is limited to pointing out that Rodríguez knew the facts which caused the claim to be time-barred. (Docket No. 31 at pp. 5–6.) There is a difference, however, between knowledge of underlying facts and knowledge of the facts’ legal consequences.
Cf. United States v. Florentino-Rosario, 459 F. Supp. 3d 345, 355–59 (D.P.R. 2020) (Besosa, J.) (). FirstBank eludes this difference, and points to nothing suggesting that Rodríguez or his attorney knew the facts’ legal consequences. In a sworn affidavit, however, Rodríguez's attorney attests that he did not know the legal consequences. (Docket No. 39, Ex. 1 at p. 2.)
FirstBank waived its argument that Rodríguez should have known that the RESPA claim was time-barred. Noonan v. Wonderland Greyhound Park Realty LLC, 723 F. Supp. 2d 298, 349 (D. Mass. 2010) (). The argument is a new theory of error that was asserted in FirstBank's reply, not in its original motion. Compare Docket No. 31 (), with Docket No. 43 at p. 1 (). Even if the argument was not waived, the Court would reject it. Rodríguez's complaint may have been "bad, even bordering on terrible," and some "rudimentary research" might have revealed that the RESPA claim was time-barred, but those circumstances do not justify section 1927 sanctions. Negrón-Santiago, 764 F. Supp. 2d at 373.
FirstBank's argument concerning Rodríguez's opposition to the motion to dismiss suffers a similar fate. The argument might have had some truck with the Court if asserted in FirstBank's motion requesting attorney fees. After FirstBank filed its motion to dismiss, (Docket No. 13,) Rodríguez must have been aware of the RESPA timeliness issue. Rodríguez's perplexing opposition to a timeliness dismissal, which did not address FirstBank's argument except to acknowledge that the "RESPA violations occurred outside of the three-year filing period established by 12 U.S.C. § 2614," (Docket No. 27 at p. 3,) has no discernible proper purpose. It is similar to other instances in which courts have found an award of attorney fees warranted. See, e.g., Carter v. Hickory Healthcare Inc., 905 F.3d 963, 969 (6th Cir. 2018) ; Lamboy-Ortiz v. Ortiz-Vélez, 630 F.3d 228, 241 (1st Cir. 2010) ; Cote v. James River Corp., 761 F.2d 60, 61 (1st Cir. 1985). Yet FirstBank's argument came not in its motion for attorney fees, see Docket No. 31 at p. 6 (...
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