Ambrosia Coal and Const. Co. v. Pagés Morales, No. 01-12714.

CourtUnited States Courts of Appeals. United States Court of Appeals (11th Circuit)
Writing for the CourtTjoflat
Citation368 F.3d 1320
Decision Date06 May 2004
Docket NumberNo. 01-12714.
PartiesAMBROSIA COAL AND CONSTRUCTION COMPANY, a Pennsylvania Corporation, Plaintiff-Counter-Defendant-Appellant, v. Hector Carlos PAGÉS MORALES, Ana Celia Pagés, Green Isle Partners Ltd., S.E., Green Isle-GP Ltd., S.E., et al., Defendants-Cross-Defendants-Appellees, Isla Verde Beach Hotel & Casino, S.E., Isla Verde Beach Hotel & Casino, Inc., Defendants-Appellees, Small Corporate Services, Lenine Strollo, Defendants-Counter-Claimants-Cross-Claimants.
368 F.3d 1320
AMBROSIA COAL AND CONSTRUCTION COMPANY, a Pennsylvania Corporation, Plaintiff-Counter-Defendant-Appellant,
v.
Hector Carlos PAGÉS MORALES, Ana Celia Pagés, Green Isle Partners Ltd., S.E., Green Isle-GP Ltd., S.E., et al., Defendants-Cross-Defendants-Appellees,
Isla Verde Beach Hotel & Casino, S.E., Isla Verde Beach Hotel & Casino, Inc., Defendants-Appellees,
Small Corporate Services, Lenine Strollo, Defendants-Counter-Claimants-Cross-Claimants.
No. 01-12714.
United States Court of Appeals, Eleventh Circuit.
May 6, 2004.

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COPYRIGHT MATERIAL OMITTED

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Frank Gugliotta Salpietro, Meyer, Unkovic & Scott, LLP, Pittsburgh, PA, Arnaldo Velez, Miami, FL, for Ambrosia Coal and Const. Co.

Jesus E. Cuza, Fort Lauderdale, FL, Ricardo A. Reyes, Tobin & Reyes, P.A., Boca Raton, FL, Glenn Jerrold Waldman, Waldman & Feluren, P.A., Weston, FL, Ina M. Berlingeri-Vincenty, Goldman, Antonetti & Cordova, San Juan, PR, for Defendants-Cross-Defendants-Appellees and Defendants-Appellees.

Appeal from the United States District Court for the Southern District of Florida.

Before TJOFLAT and MARCUS,

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Circuit Judges, and MUSGRAVE*, District Judge.

TJOFLAT, Circuit Judge:


I.

This litigation stems from the disposition of a leasehold interest in a parcel of real estate (the "Leasehold") located in Isla Verde, Puerto Rico. On September 15, 1994, the plaintiff in this case, Ambrosia Coal and Construction Company ("Ambrosia"), entered into a Settlement Agreement (the "Agreement") with all of the defendants except Green Isle Partners Ltd., S.E. ("Green Isle, Ltd.") and related entities (collectively the "Green Isle defendants").1 The Agreement called for defendant Hector Carlos Pagés Morales ("Pagés") to give Ambrosia $750,000 in cash and a nonnegotiable promissory note in the principal sum of $3.25 million to be paid in full on or before September 2001. The Agreement also obligated Pagés to convey the Leasehold to Green Isle, Ltd., in return for which he would receive a 33% limited partnership interest in Green Isle, Ltd. and a 33% interest in its general partner. Finally, the Agreement required Pagés to place in a trust (created by him) half of his partnership interest in Green Isle, Ltd., with the proviso that the income that partnership interest generated would (1) be used to pay off the $3.25 million note and (2) provide the sole funds for paying off the note.

As required by the Agreement, Pagés delivered $750,000 and the $3.25 million note to Ambrosia, conveyed the Leasehold to Green Isle, Ltd., received 33% interests in that limited partnership and its general partner, and placed half of his interest in Green Isle, Ltd. in a trust he created for the benefit of Ambrosia (the "Trust"). According to Ambrosia's second amended complaint (the "complaint"), in December 1995, Pagés unilaterally reduced the chances that Ambrosia would obtain payment in full of the $3.25 million note by agreeing to amendments to the Green Isle, Ltd. partnership agreement. First, those amendments disposed of approximately half of the partnership interest in Green Isle, Ltd. that Pagés had placed in the Trust, thus reducing the amount of income that would be available to pay off the note. Second, the amendments reclassified the portion of Pagés's partnership interest remaining in the Trust — from "full limited partnership status" to "`Class B' limited partnership status" — so that the amount of income that partnership interest generated would be "de minimus." Ambrosia discovered these amendments to Green Isle, Ltd.'s partnership agreement in January 1998.

II.
A.

In December 1999, Ambrosia filed this lawsuit in the United States District Court for the Southern District of Florida (the "Federal Case"). Its complaint contains nineteen counts. The centerpiece of most of these counts is Pagés's conduct in

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agreeing to the amendments to Green Isle, Ltd.'s partnership agreement, which disposed of approximately half of the Green Isle, Ltd. interest he had placed in Trust and reclassified what interest remained. The counts are as follows:

Count I. Ambrosia seeks the rescission of the Agreement based on the reduction of the Trust's interest in Green Isle, Ltd.

Count II. Ambrosia seeks rescission of the Agreement on the ground that Ambrosia was fraudulently induced to enter into the Agreement.

Count III. Ambrosia seeks rescission of the Agreement based on the Puerto Rican doctrine of "dolo in contrahendo."2

Count IV. Ambrosia seeks rescission of the December 1995 amendment of the Green Isle, Ltd. partnership agreement.

Count V. Ambrosia seeks damages against the Green Isle defendants under a Puerto Rican fraud statute, 31 P.R. Laws Ann. § 3499.3

Count VI. Ambrosia seeks rescission of the Agreement on the ground that two parties to the Agreement, namely Garita Hotel Corporation ("Garita Corp.") and Garita Hotel Limited Partnership ("Garita Ltd."), received no consideration for entering into the Agreement.4

Count VII. Ambrosia seeks damages for breach of the Agreement against Pagés and other defendants designated in Ambrosia's complaint as the "Isla Verde defendants,"5 each of which are parties to the Agreement.

Count VIII. Ambrosia seeks damages against Pagés and the other Isla Verde defendants for breach of the obligation of good faith.

Count IX. Ambrosia seeks damages against the Green Isle defendants and the Isla Verde defendants under the dolo in contrahendo doctrine.

Count X. Ambrosia seeks damages against Pagés and the other the Isla Verde defendants for failing to pay Garita Ltd. for the Leasehold, which they purchased in 1991.6

Count XI. Ambrosia seeks damages against the Green Isle defendants and the

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Isla Verde defendants on the theory that those defendants conspired with Pagés to defraud Ambrosia by reducing the value of the Green Isle, Ltd. interest Pagés had placed in Trust.

Count XII. Ambrosia seeks damages against the Green Isle defendants and the Isla Verde defendants under 31 P.R. Laws Ann. § 3375.7

Count XIII. Ambrosia seeks damages against the Green Isle defendants for tortiously interfering with Ambrosia's contractual relationship with Pagés under the Agreement.

Count XIV. Ambrosia seeks an accounting from the Green Isle defendants and the Isla Verde defendants for the purpose of determining how much income the Trust should have received for its interest in Green Isle, Ltd.

Count XV. Ambrosia seeks rescission of (or damages for) various "side agreements" entered into by Pagés and individual defendants George Malizia and Lenine Strollo.

Counts XVI-XIX. Ambrosia seeks damages against all defendants under the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1964(c), for violations of 18 U.S.C. §§ 1962(c), (a), (b), and (d), respectively.8 From 1991 to 1999, the Green Isle defendants, the Isla Verde defendants, and others allegedly formed an "enterprise" and conducted it through a pattern of racketeering activity by engaging in mail and wire fraud, see 18 U.S.C. §§ 1341, 1343.

B.

In October 1999, after Ambrosia sent them a copy of the complaint it intended to file (and did file in December 1999) in the United States District Court for the Southern District of Florida, Pagés and the other Isla Verde defendants filed a lawsuit against Ambrosia, Garita Corp., Garita Ltd., and others in the Court of First Instance of the Commonwealth of Puerto Rico, Pagés v. Ambrosia Coal and Constr. Co., Civil Case No. KAC 99-1548(901) (Oct. 27, 1999) (the "Puerto Rico Case").9 As translated, the complaint in the Puerto Case seeks the following seven declarations:

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(i) that the Agreement is valid and is in effect;

(ii) that plaintiffs and defendants should conduct themselves pursuant to the terms of the Agreement;

(iii) that plaintiffs have not breached their obligations under the Agreement;

(iv) that ... plaintiffs have complied with each and every one of their obligations under the Agreement;

(v) that plaintiffs have not committed any tortious act either in the state of Florida or in any other jurisdiction;

(vi) that [except as stated in the Agreement], plaintiffs do not owe ... any of the defendants any sum of money; and

(vii) that plaintiffs are not obligated to issue any the five (5) promissory notes as requested by [Ambrosia, Garita Corp., and Garita Ltd.].10

C.

The Federal Case was filed in the Southern District of Florida before Ambrosia had any notice of the filing of the Puerto Rico Case. Ambrosia received such notice only in February 2000, when it was served with process.11 Meanwhile, on January 19, 2000, Ambrosia served Pagés with process in the Federal Case. The remaining defendants were served with process soon thereafter. The defendants in the Federal Case moved the district court to dismiss Ambrosia's complaint on the grounds provided by Federal Rule of Civil Procedure 12(b)(1), (2), (3), and (6).12

On July 17, 2000, the district court entered an order directing the parties to submit briefs on the question of whether the court should abstain from exercising its jurisdiction in the Federal Case pending the completion of the litigation in the Puerto Rico Case.13 On March 29, 2001, the district court held a hearing on the defendant's motions to dismiss and on the question of whether the court should abstain. On April 11, 2001, the court entered the order that is the subject of this appeal.

After reciting the standard for determining whether the allegations of a complaint are sufficient to withstand a Rule 12(b)(6) motion to dismiss, the court declined, albeit implicitly, to determine whether any of the nineteen counts of Ambrosia's complaint stated a claim upon which relief can be granted.14 The court

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concluded that Ambrosia's RICO claims gave it federal question jurisdiction. It then took up the issue of abstention.

The court acknowledged that "[a]bstention from the exercise of federal jurisdiction is the exception...

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177 practice notes
  • Speaks v. U.S. Tobacco Coop., Inc., No. 5:12-CV-729-D
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • February 20, 2018
    ...factor . . . can only be neutral or weigh against abstention); Chase Brexton, 411 F.3d at 466; Ambrosia Coal & Constr. Co. v. Morales, 368 F.3d 1320, 1334 (11th Cir. 2004); Ryan v. Johnson, 115 F.3d 193, 200 (3d Cir. 1997); Extra Storage Space, LLC v. Maisel-Hollins Dev., Co., 527 F. Supp. ......
  • Stand Up for Cal. v. U.S. Dep't of the Interior, Case no. 2:16-CV-02681-AWI-EPG
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • July 18, 2018
    ..., governs whether a federal court should stay in favor of a state court proceeding. See Ambrosia Coal and Const. Co. v. Pages Morales , 368 F.3d 1320, 1328 (11th Cir. 2004) ; Martin v. Minuteman Press Int., Inc. , 2016 WL 4524885, *2 (E.D. Cal. Aug. 30, 2016) (citing, inter alia , R.R. Stre......
  • Trondheim Capital Partners, LP v. Life Ins. Co. of Ala., Case No. 4:19-CV-1413-KOB
    • United States
    • U.S. District Court — Northern District of Alabama
    • December 8, 2020
    ...courts have a virtually unflagging obligation to exercise the jurisdiction given them." Ambrosia Coal & Constr. Co. v. Pagés Morales , 368 F.3d 1320, 1328 (11th Cir. 2004) (quoting Colo. River Water Conservation Dist. v. United States , 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976......
  • Second Ave. Holdings, LLC v. Latimer (In re Latimer), Bankruptcy No. 11–00223–BGC7.
    • United States
    • U.S. Bankruptcy Court — Northern District of Alabama
    • March 26, 2013
    ...proceedings involve substantially the same parties and substantially the same issues.” Ambrosia Coal and Const. Co. v. Pages Morales, 368 F.3d 1320, 1330 (11th Cir.2004) (parenthetical added). And while the Colorado River opinion was couched in terms of dismissal, the Eleventh Circuit Court......
  • Request a trial to view additional results
177 cases
  • Speaks v. U.S. Tobacco Coop., Inc., No. 5:12-CV-729-D
    • United States
    • United States District Courts. 4th Circuit. Eastern District of North Carolina
    • February 20, 2018
    ...factor . . . can only be neutral or weigh against abstention); Chase Brexton, 411 F.3d at 466; Ambrosia Coal & Constr. Co. v. Morales, 368 F.3d 1320, 1334 (11th Cir. 2004); Ryan v. Johnson, 115 F.3d 193, 200 (3d Cir. 1997); Extra Storage Space, LLC v. Maisel-Hollins Dev., Co., 527 F. Supp. ......
  • Stand Up for Cal. v. U.S. Dep't of the Interior, Case no. 2:16-CV-02681-AWI-EPG
    • United States
    • United States District Courts. 9th Circuit. United States District Courts. 9th Circuit. Eastern District of California
    • July 18, 2018
    ..., governs whether a federal court should stay in favor of a state court proceeding. See Ambrosia Coal and Const. Co. v. Pages Morales , 368 F.3d 1320, 1328 (11th Cir. 2004) ; Martin v. Minuteman Press Int., Inc. , 2016 WL 4524885, *2 (E.D. Cal. Aug. 30, 2016) (citing, inter alia , R.R. Stre......
  • Trondheim Capital Partners, LP v. Life Ins. Co. of Ala., Case No. 4:19-CV-1413-KOB
    • United States
    • U.S. District Court — Northern District of Alabama
    • December 8, 2020
    ...courts have a virtually unflagging obligation to exercise the jurisdiction given them." Ambrosia Coal & Constr. Co. v. Pagés Morales , 368 F.3d 1320, 1328 (11th Cir. 2004) (quoting Colo. River Water Conservation Dist. v. United States , 424 U.S. 800, 817, 96 S.Ct. 1236, 47 L.Ed.2d 483 (1976......
  • Second Ave. Holdings, LLC v. Latimer (In re Latimer), Bankruptcy No. 11–00223–BGC7.
    • United States
    • U.S. Bankruptcy Court — Northern District of Alabama
    • March 26, 2013
    ...proceedings involve substantially the same parties and substantially the same issues.” Ambrosia Coal and Const. Co. v. Pages Morales, 368 F.3d 1320, 1330 (11th Cir.2004) (parenthetical added). And while the Colorado River opinion was couched in terms of dismissal, the Eleventh Circuit Court......
  • Request a trial to view additional results

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