Fed. Deposit Ins. Corp. v. Almeida-LeóN, Civil No. 18-1960 (FAB)

• Decision Date: 19 February 2019
• Docket Number: Civil No. 18-1960 (FAB)
• Parties: FEDERAL DEPOSIT INSURANCE CORPORATION AS RECEIVER FOR R-G PREMIER BANK OF PUERTO RICO, Plaintiff, v. FRANCISCO ALMEIDA-LEÓN, et al., Defendants.
• Court: U.S. District Court — District of Puerto Rico

FEDERAL DEPOSIT INSURANCE CORPORATIONAS RECEIVER FOR R-G PREMIER BANK OF PUERTO RICO, Plaintiff, v. FRANCISCO ALMEIDA-LEÓN, et al., Defendants.

Civil No. 18-1960 (FAB)

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF PUERTO RICO

February 19, 2019

OPINION AND ORDER

BESOSA, District Judge.

Before the Court is the Federal Deposit Insurance Corporation ("FDIC")'s motion for a preliminary injunction. (Docket No. 12.) For the reasons set forth below, the Court DENIES the FDIC's motion.

I. Background

Defendants Juan Almeida-León, Francisco Almeida-León, Wanda Cruz-Quiles, their conjugal partnership, and Tenerife Real Estate Holdings LLC (collectively, "the Almeidas") are litigants in two civil actions: (1) FDIC v. Almedia-León et al., Civil No. 18-1960 (FAB) (District of Puerto Rico action), and (2) Tenerife Real Estate Holdings, LLC et al. v. United States, Civil No. 16-685 ("Court of Federal Claims action"). The actions arise from the same factual allegations.

On April 11, 2017, R-G Premier Bank loaned the Almeidas $2,100,000.00. (Docket No. 1 at p. 4.) The Office of the Commissioner of Financial Institutions in Puerto Rico closed R-G Premier Bank on April 30, 2010, naming the FDIC as receiver. Id. The Almeidas defaulted on the loan. Id. at p. 6. The FDIC as receiver (FDIC-R) filed a complaint against the Almeidas for the collection of monies and mortgage foreclosure. FDIC v Almedia-León, et al., Civil No. 12-2025 (FAB), Docket No. 1. The Court entered judgment in favor of the FDIC-R on September 26, 2013. (Docket No. 25.)

According to the FDIC, the Almeidas attempted to "fraudulently transfer away valuable assets that [were] otherwise subject to execution by the FDIC-R through the enforcement of the Judgment entered by this Court." (12-2025, Docket No. 27 at p. 4.) The FDIC-R moved for a temporary restraining order ("TRO"), requesting that the Court stay "the public bid process of the [mortgaged properties] in order to ensure that the proceeds of said sale which correspond to Juan [Almeida] - and which would therefore be attachable by the FDIC - are properly preserved." Id. at p. 11. This Court granted the FDIC-R's motion for a TRO, restraining the Almeidas from "conducting, otherwise causing the occurrence of, the auction scheduled to be held on May 29, 2014 at 9:30 a.m. at the Puerto Rico Court of First Instance, San Juan Superior Division." (12-2025, Docket No. 29.) The Court converted the TRO to a preliminary injunction with the consent of the parties. (12-2025, Docket No. 54.) Ultimately, the FDIC and the Almeidas reached a settlement agreement on July 28, 2014. (12-2025, Docket No. 68.) Consequently, the Court granted the FDIC-R's motion to set aside the preliminary injunction. (12-2025, Docket Nos. 68 and 69.)

A. The FDIC/Almeida Settlement Agreement

The Almeidas agreed to pay the FDIC-R with proceeds from the foreclosure of three properties located on Kennedy Avenue in San Juan, Puerto Rico, referred to as the "Kennedy Property." (12-2025, Docket No. 65, Ex. 1.) The settlement agreement contains a mandatory forum selection clause, providing that:

[The FDIC-R and the Almeidas] agree that jurisdiction and venue in any action to enforce any provision of this Agreement, or for breach of this Agreement shall be the [United States District Court for the District of Puerto Rico] which shall retain jurisdiction for enforcement purposes. Notwithstanding the foregoing, the Foreclosure Action and Foreclosure Auction will remain in and under the jurisdiction of State Court.

Id. at p. 12.¹ Also, the settlement agreement provided that the FDIC "is currently obtaining a Phase 1 Environmental Site Assessment report on and assessing the environmental condition of the Kennedy Property." Id. at p. 9. The FDIC pledged to complete the Environmental Site Assessment "as quickly as possible." Id. The parties stipulated that the "Foreclosure Auction [would] not occur" until the FDIC completed the Environmental Site Assessment.

Id.²

B. The Court of Federal Claims Action

The foreclosure of the Kennedy Property has not occurred. On May 23, 2017, the Almeidas commenced an action in the United States Court of Federal Claims pursuant to the Tucker Act, 28 U.S.C. § 1491. See Tenerife Real Estate Holdings, LLC, etal. v. United States, Civil No. 17-685.³ The Almeidas sued the United States, asserting that the "FDIC is an agency of the United States as defined by 28 U.S.C. § 451; is part of the United States of America, with powers to sue and to be sued." Id. at p. 14.

The Almeidas premised the Court of Federal Claims action on their settlement agreement with the FDIC-R. See Civil No. 12-2025. They alleged that the FDIC "never disclosed the fact that, before the [settlement agreement] was signed, it had in fact obtained the environmental study which demonstrated that the mortgaged realty posed no environmental risk to health or safety." (Docket No. 14 at p. 4.) The amended complaint sets forth a breach of contract claim pursuant to Puerto Rico law, and a Takings Claim pursuant to the Fifth Amendment of the United States Constitution.Id. at p. 17.⁴ The Almeidas seek $20 million in damages for each plaintiff. Id. at p. 20.

1. The Court of Federal Claims Dismissed the Almeidas' Amended Complaint

The United States moved to dismiss the Almeidas' amended Court of Federal Claims complaint pursuant to Rule 12(b)(1). (Docket No. 15.) The Court of Federal Claims' jurisdiction is "limited to actual, presently due money damages from the United States." Bowen v. Massachusetts, 487 U.S. 879, 914 (1988) (internal citation and quotation omitted). The United States asserted that the Court of Federal Claims lacked jurisdiction, because "claims relating to the FDIC's actions are not claims against the United States." (Docket No. 15 at p. 1.)⁵

On January 23, 2018, the Court of Federal Claims granted the United States' motion to dismiss, holding that the "FDIC is not the United States when it acts as a receiver for a failed bank." Tenerife Real Estate Holdings, LLC v. United States, 126 Fed. Cl. 156, 160 (2018); citing O'Melveny & Meyers v. FDIC, 512 U.S. 79, 85 (1994) ("But the FDIC is not the United States, and even if it were we would be begging the question to assume that it was asserting its own rights rather than, as receiver, the rights of [the failed bank].").⁶ Accordingly, the United States prevailed because the Court of Federal Claims lacked subject matter jurisdiction. Id.

2. The Almeidas' Appeal is Pending Before the United States Court of Appeals for the Federal Circuit

The Almeidas filed a notice of appeal and an opening brief in the United States Court of Appeals for the Federal Circuit on April 26, 2018 and August 8, 2018, respectively. (No. 18-1907, Docket Nos. 1 and 15.) The United States filed its responsive brief on December 7, 2018. (Docket No. 20.) A week later, the FDIC filed an amicus brief. (Docket No. 22.) On February 4, 2019, the Almeidas filed a reply brief. (Docket No. 28.)

The Almeidas argue that the FDIC is the United States because the "FDIC did not act as a receiver in the ordinary course of business." (Docket No. 13, Ex. 1 at p. 25.) The United States maintains that the FDIC as receiver "does not act on behalf of the United States for purposes of Government liability under the Tucker Act." Docket No. 20 at pp. 21 and 34; citing Atherton v. FDIC, 519 U.S. 213, 225 (1997) ("[H]ere, as in O'Melveny, the FDIC is acting only as a receiver of a failed institution; it is not pursuing the interests of the Federal Government as a bank insurer."). The FDIC argued in its amicus brief, however, that "the FDIC as receiver counts as the United States for Tucker Act Purposes." Docket No. 22 at p. 11; citing Auction Co. of Am. v. FDIC, 132 F.3d 746, 750 (D.C. Cir. 1997) ("As the FDIC as Receiver counts as the United States for the Tucker Act, it does so for the Tucker Act (and general federal) statute of limitations.").⁷ The FDIC suggested that the Court of Appeals for the Federal Circuit "may wish to sua sponte stay its proceedings or at least defer issuing a decision until the Puerto Rico district court decides the applicability of the forum selection clause." (Docket No. 22 at p. 10.) The Court of Appeals for the Federal Circuit has not issued a decision. Oral arguments will occur between April andSeptember. See Docket No. 33; Fed. R. App. P. 34(a) ("Oral argument must be allowed in every case unless a panel of three judges . . . agrees that oral argument is unnecessary.").

C. The District of Puerto Rico Action

The FDIC commenced this action on February 13, 2018, just one day before the FDIC filed its amicus brief in the Court of Federal Claims action. (Civil No. 18-1960, Docket No. 1; Civil No. 18-1907, Docket No. 22.) The FDIC seeks a declaratory judgment holding that the forum selection clause in the FDIC/Almeida settlement agreement is mandatory, and that the Court enjoin the Almeidas from litigating in any jurisdiction other than in this Court. (Docket No. 1 at p. 2.) Ultimately, the FDIC requests that the Court order the Almeidas to dismiss their complaint in the Court of Federal Claims and their corresponding appeal before the Court of Appeals for the Federal Circuit. Id.

On January 4, 2019, the FDIC moved for a preliminary injunction, because the Almeidas "flouted [the] forum selection clause by filing litigation elsewhere." (Docket No. 12 at p 9.) The Almeidas responded, and the FDIC replied. (Docket Nos. 27 and 35.) The Court heard argument at a preliminary injunction hearing on February 13, 2019. (Docket No. 37.) The FDIC's arguments in support of the preliminary injunction motion are unconvincing.

II. Preliminary Injunction Standard

The purpose of injunctive relief is to prevent future acts or omissions of the non-movant that violate the law or constitute harmful conduct. United States v. Oregon Med. Soc., 343 U.S. 326, 333 (1952). A preliminary injunction "is traditionally viewed as relief of an extraordinary nature and does...