Robles-Rodriguez v. Municipality of Ceiba
| Decision Date | 13 March 2020 |
| Docket Number | Civil No. 18-1168 (ADC) |
| Parties | HECTOR A. ROBLES-RODRIGUEZ, et al., Plaintiffs, v. MUNICIPALITY OF CEIBA, et al., Defendants. |
| Court | U.S. District Court — District of Puerto Rico |
Before the Court is a Report and Recommendation ("R&R") issued by Magistrate Judge Bruce J. McGiverin, recommending the Court grant a motion for partial dismissal filed by the Federal Deposit Insurance Corporation ("FDIC") as Receiver of Doral Bank. ECF Nos. 70, 124. The "Appearing Plaintiffs," a shorthand used by the parties and Magistrate Judge and adopted herein to reference a large group of plaintiffs involved in this matter, opposed the motion for partial dismissal and filed objections to the R&R. ECF Nos. 85, 117, 127. The FDIC filed a response to Appearing Plaintiffs' objections, which Appearing Plaintiffs later moved to strike. ECF Nos. 129, 131.
For the following reasons, the Court hereby ADOPTS the R&R's recommendations and hereby GRANTS FDIC's motion for partial dismissal, at ECF No. 70. Appearing Plaintiffs' objections at ECF No. 127 are OVERRULED. Appearing Plaintiffs' filing at ECF No. 131 is DENIED. The remaining claims are hereby REMANDED to state court.
The Office of the Commissioner of Financial Institutions of the Commonwealth of Puerto Rico ordered Doral Bank ("failed bank" or "failed institution") to close on February 27, 2015. ECF No. 1 at 2. On that same day, the FDIC was appointed as receiver of the failed institution. Id. Notice of the appointment and receivership was published in various news outlets including local newspapers. ECF No. 94-1 at 24-43. The FDIC also executed a purchase and assumption agreement with Banco Popular of Puerto Rico ("Banco Popular") transferring to Banco Popular certain failed bank's assets, including loans related to Hacienda Las Lomas, a residential development project. Id. However, the FDIC agreed not to transfer certain liabilities related to the Hacienda Las Lomas assets purchased by the Banco Popular under the purchase and assumption agreement. Id at 3.
Since 2015, Appearing Plaintiffs filed various claims at the Commonwealth of Puerto Rico Court of First Instance related to Hacienda Las Lomas' issues, which include claims related to failed bank's acts or omissions. ECF Nos. 4-1, 4-2, 45-6 at 1, 45-2 at 24, 45-12 at 79. However, Appearing Plaintiffs did not include failed bank or the FDIC as defendants. ECF No. 94 at 19. Moreover, it was not until a couple of years into the state court litigation that the Appearing Plaintiffs included Banco Popular as defendant for the first time. ECF No. 4-1.
On February 2018, the FDIC sent a "Notice to Discovered Claimant to Present Proof of Claim" ("notice letters") to every Appearing Plaintiffs identified as borrower of failed bank. ECF 10 at 4, 94-3, 94-4, 94-5. Copy of those notice letters were also forwarded to and received by Appearing Plaintiffs' four attorneys of record. ECF Nos. 72-1, 72-2, 72-3, 72-4, 94-4 at 45-47, 94-4 at 49-51. As stated in the notice letters, the FDIC set May 2018 as a late-creditor claim submission deadline for Appearing Plaintiffs. ECF Nos. 94-3, 94-4, 94-5. The notice letters identified the deadline, included information regarding FIRREA's administrative claims process, and provided instructions regarding the submission of claims. Id. The notice letters also attached "Proof of Claim" forms. ECF No. 114-1. Then, in March 2018, the FDIC moved for substitution in state court and filed a notice of removal pursuant to the Financial Institution Reform, Recovery, and Enforcement Act of 1989, Pub. L. No. 101-73, § 209, 103 Stat. 183 et seq. ("FIRREA"). ECF No. 1.
Due to the mandatory nature of the administrative claim process, the FDIC requested a stay of Court proceedings until the exhaustion and conclusion of the administrative claim process. ECF No. 10 at 4-5. A group of Appearing Plaintiffs requested extension of time to announce legal representation and alleged communication issues with one of their four attorneys of record. ECF No. 54. They also submitted a couple of communications between them and counsel dating back to April 2018. ECF Nos. 54-3. The Court granted Appearing Plaintiffs' request at ECF No. 54, FDIC's filing at ECF No. 10, and stayed the case in light of the administrative claim process. ECF No. 68.
On October 31, 2018, the FDIC moved to dismiss all claims related to failed bank's acts or omissions pursuant to Fed. R. Civ. P. 12(b)(1) and 12 U.S.C. § 1821(d)(5)(C); § 1821(d)(13)(D) for lack of subject matter jurisdiction due to Appearing Plaintiffs' failure to timely submit proofs of claims or failure to exhaust administrative claim process ("motion for partial dismissal" or "motion to dismiss"). ECF No. 70. Considering several filings by the parties, at ECF Nos. 71, 72, 73, 74, the Court lifted the stay, denied Appearing Plaintiffs' motion to strike FDIC's motion for partial dismissal, and granted Appearing Plaintiffs thirty days to file a response. ECF No. 76.
Appearing Plaintiffs filed a motion to compel the FDIC to produce various documents including, among other things, "certified mail receipts for all of the [n]otice [l]etters," and copies of the "[p]roof of [c]laim form[s]." ECF No 84. On January 10, 2019, the Appearing Plaintiffs filed an opposition to FDIC's motion to dismiss. ECF No. 85. In reaction to these motions, the FDIC filed a reply supported by a supplemental declaration under penalty of perjury and copies of several documents, including the documents that Appearing Plaintiffs' requested through their motion to compel. ECF Nos. 94, 94-1, 94-2, 94-3, 94-4, 94-5. Appearing Plaintiffs filed a "Combined Sur-reply[]." ECF No 101-1. Among other things, Appearing Plaintiffs requested FDIC's filings at ECF No. 94 to be stricken from the record, including the supplemental declaration under penalty of perjury and related attachments (ECF Nos. 94-1, 94-2, 94-3, 94-4, 94-5). The Combined Sur-reply also restated the request at ECF No. 84 to compel production of documents. ECF No. 101-1 at 24-25.
On March 7, 2019, the Court referred "the motion for partial dismissal and interrelated motion to compel, and all relevant filings thereto, ECF Nos. 70, 71, 72, 80, 84, 85, 87, 91, 94, 101, to U.S. Magistrate Bruce J. McGiverin for a Report and Recommendation." ECF No. 104. A couple of days after the referral order, the FDIC requested an extension of time to file a response to ECF No. 101, leave to file pages in excess, and a second motion requesting leave to file a response to Appearing Plaintiffs Sur-reply. ECF Nos. 103, 107, 108, 109.
Soon thereafter, the Magistrate Judge granted FDIC's filings at ECF Nos. 103, 108, 109. In addition, on April 22, 2019, the Magistrate Judge entered a separate order at ECF No. 113, which was not timely objected by Appearing Plaintiffs. The order at ECF No. 113 provided that ECF No. 113. Addressing Appearing Plaintiffs' motion to compel and the Combined Sur-reply, the Magistrate Judge determined that since "mail receipts for Appearing Plaintiffs and their former counsel are at Docket Number 94-3 and Number 94-4, [] the motion to compel production of those receipts should be denied as moot." ECF No. 113 at 2 (emphasis added). The Magistrate Judge also granted in part Appearing Plaintiffs' motion to compel and explicitly ordered the FDIC to provide "copy of the original Proof of Claim forms mailed to claimants and their counsel." Id. at 3. Finally, the Magistrate Judge granted Appearing Plaintiffs until May 6, 2019 to file a supplemental brief with additional arguments or evidence. Id. Appearing Plaintiffs did not submit any objections in connection with the order at ECF No. 113.
The FDIC filed a motion in compliance with the Magistrate Judge's order and, among other things, submitted copies of the proof of claim forms included with the notice letters to Appearing Plaintiffs. ECF No. 114. Appearing Plaintiffs filed a motion in compliance as well. ECF No. 117. The FDIC filed a response. ECF No. 120. The Magistrate Judge issued the R&R, and issued separate orders granting several filings. ECF Nos. 124, 125, 126.
On May 31, 2019, Appearing Plaintiffs filed objections to the R&R. ECF No. 127. The FDIC responded. ECF No. 129. Finally, Appearing Plaintiffs moved to strike FDIC's response and the FDIC opposed. ECF Nos. 131, 132.
Magistrate judges are granted authority to make recommendations on pretrial matters dispositive of a claim or defense, while the ultimate resolution of dispositive motions remains at the discretion of the presiding judge. See 28 U.S.C. § 636(b); Fed. R. Civ. P. 72(a), (b)(1); accord Loc. Civ. R. 72(a)(7)-(9). Any party adversely affected by the recommendation issued may file written objections within fourteen (14) days of being served with the report and recommendation. Fed. R. Civ. P. 72(b). A party that files a timely objection is entitled to a de novo determination of "those portions of the report or specified proposed findings or recommendations to which specific objection is made." Sylva v. Culebra Dive Shop, 389 F.Supp.2d 189, 191-92 (D.P.R.2005) (citing United States v. Raddatz, 447 U.S. 667, 673 (1980)). "The district court need not consider frivolous, conclusive, or general objections." Rivera-García v. United States, Civ. No. 06-1004 (PG), 2008 WL 3287236, *1 (D.P.R. Aug. 7, 2008) (citing Battle v. U.S. Parole Comm'n, 834 F.2d 419 (5th Cir. 1987)).
Moreover, to the extent the objections amount to no more than general or conclusory objections to the report and recommendation, without specifying to which issues in the report the party is objecting, or where the objections are repetitive of the arguments already made to the...
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