Arrieta Gimenez v. Arrieta Negron

• Decision Date: 10 November 1987
• Docket Number: Civ. No. 83-2460 (JAF).
• Citation: 672 F. Supp. 46
• Parties: Carmen Felicita ARRIETA GIMENEZ, et al., Plaintiffs, v. Alberto ARRIETA NEGRON, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

672 F. Supp. 46

Carmen Felicita ARRIETA GIMENEZ, et al., Plaintiffs, v. Alberto ARRIETA NEGRON, et al., Defendants.

Civ. No. 83-2460 (JAF).

United States District Court, D. Puerto Rico.

September 30, 1987.

As Amended November 10, 1987.

Blas C. Herrero, Jr., Carmen Felicita Arrieta, Iván Díaz de Aldrey, Conjugal Partnership, San Juan, P.R., for plaintiffs.

Edward A. Godoy, Feldstein, Gelpi, Hernandez & Gotay, San Juan, P.R., for defendants.

OPINION AND ORDER

FUSTE, District Judge.

This case is before us on a motion for summary judgement by the co-defendants in this action. Fed.R.Civ.P. 56. Those facts undisputed by both parties follow in relevant detail.

After two marriages and five children, Rafael Arrieta Ríos passed away on November 8, 1958. Plaintiff Carmen Felícita Arrieta Giménez is the child of his second wife and widow, Felícita Giménez Alvarez-Torres. Co-defendants are the children from his first marriage. At his death, Arrieta's estate consisted of real and personal property in the Commonwealth of Puerto Rico and in the State of Florida.

The course of probate was far from smooth. Arrieta's children from his first marriage contested his widow's election of dower and probate of the estate in Dade County. They, together with the estate of their mother and Central Juanita, Inc., of which Rafael Arrieta Ríos was a shareholder, also filed various claims against the estate in the Dade County proceedings. The widow and her daughter objected to all of these claims. In addition, they contested probate of the estate in Indian River County, Florida.

Eventually, on July 27, 1960, in Florida, plaintiff and her mother signed a Settlement Agreement with co-defendants. That contract purported to "irrevocably terminate and settle any and all differences and claims ... excepting such as are afforded by this Agreement." Settlement Agreement at 12. Under the terms of the Agreement, plaintiffs were to drop any claims against the co-defendants, who were in turn to drop their own cases. Plaintiff would be paid $175,000 and the widow $350,000 for their shares of Arrieta's estate. Moreover, the balance of a mortgage owed by the plaintiff was to be made by co-defendants. Finally, the plaintiff received title to a 1958 Buick and she and her mother were to be held harmless from any taxes levied on the estate.

Plaintiff admits that she and her mother received all that was due under the Agreement. In fact, the balance of the moneys owed was paid by July 26, 1962. Plaintiff filed the complaint that produced this action because on October 7, 1983 she discovered a Declaration of Trust in the records at the Registry of the property of Bayamón, Puerto Rico, indicating to her that the true value of her father's estate was considerably higher than she believed when she signed the Settlement Agreement. Indeed, plaintiff asserts that the value of her share of her father's estate was over $5 million, but that she was defrauded by her half-siblings, especially the oldest, Alberto Arrieta Negrón, into signing the Agreement and forfeiting her inheritance for far less than it was worth.

Months after she discovered the Declaration of Trust, plaintiff commenced this action. Nonetheless, even taking all of plaintiff's allegations of fraud and concealment to be true, we find that the applicable statute of limitations bars her claim.

I.

Pursuant to Erie Railroad v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 28 L.Ed. 1188 (1938), federal courts apply the substantive law of the state in which they sit, including state conflicts of law provisions. Klaxon Co. v. Stentor Electric Manufacturing Co., Inc., 313 U.S. 487, 61 S.Ct. 1020, 85 L.Ed. 1477 (1941); Advance Financial Corp. v. Isla Rica Sales, Inc., 747 F.2d 21, 28 (1st Cir.1984). Consequently, the Puerto Rico conflicts of law standards govern our determination.

Faced with plaintiff's claim of fraud, we turn to the Puerto Rico Supreme Court case, Widow of Fornaris v. Amer. Surety Co. of N.Y., 93 P.R.R. 538 (1961), which adopts the doctrine of "dominant contacts" for "damages" or torts. Under that doctrine, "it is not the number of contacts what sic determines the applicable law but the quality of the latter in relation to the question in controversy." Green Giant Co. v. Superior Court, 104 P.R.R. 489 (1975). In Green Giant, the Supreme Court distilled the principles judges should consider as follows:

a) predictability of results, b) maintainance of interstate and international order, c) simplification of the judicial task, d) advancement of the forum's governmental interests and e) application of the better rule of law.

104 P.R.R. at 695, citing R. Leflar, American Conflicts Law at 245 (1959).

With those standards in mind, we hold that, although it is a close question, Florida law applies to this particular claim. From 1958-1962, plaintiff resided, "permanently" by her own admission, in Fort Lauderdale. At least one of the defendants resided in Florida at that time. The agreement was signed in Florida and approved by the Dade County Probate Court there. All of the parties retained Florida lawyers. Indeed, payments pursuant to the Agreement were made through the Florida offices of the attorneys representing the plaintiffs. We conclude that the parties had reason to expect Florida law to govern their transaction, that Florida retains an interest in regulating the conduct of those making agreements in that state, and that no purpose of the Commonwealth of Puerto Rico is served by applying Puerto Rican law to the transaction.

II.

Applying Florida law, we find that the relevant statute of limitations bars plaintiff's claim. Florida Statutes, Section 95.031(2) (1986) reads:

Actions for products liability and fraud under s. 95.11(3) must be begun within the period prescribed in this chapter, with the period running from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, instead of running from any date prescribed elsewhere in s. 95.11(3), but in any event an action for fraud under s. 95.11(3) must be begun within 12 years after the date of the commission of the alleged fraud, regardless of the date the fraud was or should have been discovered.

This language quite clearly bans an attempt to redress a wrong that may have been committed more than twenty years ago.¹

While we sympathize with the plaintiff's desire for redress, the rationale behind the Florida legislature's actions is equally understandable. The lawmakers evidently concluded that there comes a time when the curtain must fall on a cause of action regardless of when the wrong is discovered. As the Supreme Court has held, and defendants have noted in their brief:

The theory is that even if one has a just claim it is not unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of state claims in time comes to prevail over the right to prosecute them.

Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 348-9, 64 S.Ct. 582, 586, 88 L.Ed. 788, quoted in American Pipe and Construction Co. v. Utah, 414 U.S. 538, 554, 94 S.Ct. 756, 766-67, 38 L.Ed.2d 713 (1974).

Nor are we persuaded by the facts of this case to protest the congressional mandate. When the plaintiff signed the Agreement she was already a college graduate; twelve years later she was certainly mature enough, and had been for some time, to investigate any wrongs that may have been committed by her brothers and sisters. We cannot view this as an instance where a cause of action was undiscoverable during the statutory period and thus unconstitutionally barred before it ever arose. Cf. Diamond v. E.R. Squibb and Sons, Inc., 397 So.2d 671, 672 (1981) (McDonald, J.,...