Rodriguez v. Escambron Development Corp., Civ. No. 78-2526CC.

• Decision Date: 10 February 1983
• Docket Number: Civ. No. 78-2526CC.
• Citation: 556 F. Supp. 703
• Parties: Maria Elisa RODRIGUEZ, Buenaventura Rivera, Carmen Elisa Rivera, Jose Rafael Rivera, Miguel Antonio Rivera, Lydia E. Rivera, Jose Ramon Rivera, Ramon Jose Rivera, Plaintiffs, v. ESCAMBRON DEVELOPMENT CORP. and/or the Successors of Félix Benítez Rexach; René Benítez Rexach, Félix Benítez Rexach, Jr., Gilberto Benítez Rexach and Haydee Benítez Rexach, Defendants, v. UNITED STATES of America, Intervenor.
• Court: U.S. District Court — District of Puerto Rico

556 F. Supp. 703

Maria Elisa RODRIGUEZ, Buenaventura Rivera, Carmen Elisa Rivera, Jose Rafael Rivera, Miguel Antonio Rivera, Lydia E. Rivera, Jose Ramon Rivera, Ramon Jose Rivera, Plaintiffs, v. ESCAMBRON DEVELOPMENT CORP. and/or the Successors of Félix Benítez Rexach; René Benítez Rexach, Félix Benítez Rexach, Jr., Gilberto Benítez Rexach and Haydee Benítez Rexach, Defendants, v. UNITED STATES of America, Intervenor.

Civ. No. 78-2526CC.

United States District Court, D. Puerto Rico.

February 10, 1983.

D. Rivé-Rivera, Calderon, Rosa-Silva & Vargas, Hato Rey, P.R., for plaintiffs.

Raymond L. Acosta, U.S. Atty., Hato Rey, P.R., for intervenor.

Pedro Morell-Corrada, Río Piedras, P.R., for defendant Gilberto Benítez-Rexach.

OPINION AND ORDER

CEREZO, District Judge.

This case originated in the Superior Court of Puerto Rico, Bayamón Part, with the filing of a relatively simple and brief complaint against Escambrón Development Corp., sole defendant at that time, in which plaintiffs sought judicial declaration of their right of ownership by means of extraordinary prescription or uninterrupted adverse possession exceeding thirty years over a farm of 9.897 "cuerdas" which physically formed part of a bigger 42 "cuerdas" farm recorded in the Registry of Property as owned by the corporate defendant. Shortly thereafter the United States of America filed a motion seeking intervention asserting that it was a necessary party in the litigation for it held liens against the property object of the dominion proceedings. In its memorandum the government urged that a judgment upholding the extraordinary prescription claim would adversely affect its opportunity to collect certain liens arising from taxes owed even if plaintiffs received a title subject to such liens and that under the laws of Puerto Rico a creditor may protect his liens over real property involved in litigation without having to resort to another lawsuit. Intervenor's claim is based on taxes owed by taxpayers Félix Benítez Rexach and his wife Lucienne D'Hotelle which they had refused to pay after demand. The complaint sets forth the amounts assessed against them and the fact that action had been previously filed in federal court to foreclose these liens. The right of the United States to intervene in this action has never been disputed.

The case eventually found its way to this court upon the government's petition for removal. Plaintiffs subsequently filed their answer to intervenor's complaint denying for lack of information the fundamental allegations. This denial was based on the fact that the action for foreclosure of federal tax liens, Civil 67-64, United States v. Félix Benítez Rexach, et al., had not been completely investigated by their attorneys. On January 29, 1979 plaintiffs tendered an amended complaint adding the members of the estate of Félix Benítez Rexach as defendants.¹ Their inclusion is not entirely clear since the amended pleading states that the property claimed forms part of a farm recorded in the Registry of Property of Bayamón, Puerto Rico on behalf of Escambrón Development Corp. and/or Lucienne D'Hotelle as owners. No mention of Benítez Rexach as owner is made in the amended complaint. This has become irrelevant since after the death of Lucienne D'Hotelle her husband became sole owner of the property.

Aside from the limited discovery conducted, the development of this case has focused almost exclusively on the filing of several motions for summary judgment by the plaintiffs and the intervenor. The government's position has always been that plaintiffs' claim of ownership was inchoate before the year 1963, date of assessment of the taxes owed by the Benítez Rexachs, owners of the property. Thus, it asserts that its liens are prior and superior to any ownership claim of plaintiffs. The government has also contended that any local statutory provisions that would fix the perfection of plaintiffs' ownership claim prior to the completion of the prescribed thirty-year term must be ignored. The latter contention was meant to rebut the `relate-back' doctrine advanced by plaintiffs. Their arguments in opposition to the government's summary judgment motion have been reproduced as grounds for their own motion. The basis of plaintiffs' various motions for summary judgment, the first of which was filed on February 15, 1980, as well as of their oppositions to the government's motions, rests on the allegedly uncontroverted fact that Mr. Félix Benítez Rexach donated the land in dispute to them and that they have possessed the same publicly and without interruption for the last thirty years, specifically since 1945, as owners. They claim that the government's tax liens reach only the delinquent taxpayers' property and that, since they had acquired title over the nine "cuerdas" from the taxpayers because prescription ran against them, that tract of land was no longer the property of the prior owner — the government's debtors. Plaintiffs contend that under Aquilino v. United States, 363 U.S. 509, 80 S.Ct. 1277, 4 L.Ed.2d 1365 (1960) the property interests of the taxpayers must be defined and ascertained under state law. Since under the doctrine recognized by state law once extraordinary prescription is established, the prior owners are divested of title and, they claim, those who acquire through such means do so free of any liens imposed over the property during the development of the prescription period, their title to the land is clear and unencumbered. The government has consistently held that its tax liens prime plaintiffs' claim and that in any event, if it were ultimately determined that plaintiffs did in fact acquire through extraordinary prescription, they did so subject to the tax liens assessed against the delinquent taxpayers Benítez Rexach and Lucienne D'Hotelle, prior owners. The motions for summary judgment filed by both parties were twice denied. As to plaintiffs' motions, we ruled that their claim of ownership over the land was a matter as to which there was substantial controversy which required adjudication in a plenary hearing and not by summary disposition. Despite these rulings, the parties filed yet another set of motions for summary judgment based on the same legal arguments set forth above. The Court is fully aware that plaintiffs must first prove their ownership right before they can even call into question the consequences or effects of ownership by means of extraordinary prescription. It would seem fruitless to pass upon the effects of ownership when the validity of their title has not yet been established. Although we would ordinarily require plaintiffs to establish their claim of ownership via extraordinary prescription over the property before even considering the alleged favorable effects resulting from this particular manner of acquisition, our reluctance in doing otherwise has been set aside due to the fact that both parties have made the question of whether the property was obtained subject to or free from the tax liens a major issue in this case. We make clear, however, that our decision to pass upon this important legal issue does not in any manner relieve plaintiffs of their burden of proving ownership, something they have yet to do, as shall be discussed in the final part of this opinion. Our decision to rule now on the question of whether they acquired the property subject to or free from the government's liens before establishing the fact of ownership itself responds to the belief that a preliminary ruling on this issue will materially advance the termination of this lawsuit since it is questionable that plaintiffs will pursue their ownership claim if an adverse ruling on the effects of extraordinary prescription ultimately prevails.

It is convenient at this time to outline those facts which are not in dispute in this action, to wit: that taxpayers Félix Benítez Rexach and his wife Lucienne D'Hotelle owed the federal government taxes exceeding the sum of $4,000,000.00 which have been foreclosed in two actions filed before this court, Civil 67-64 and Civil 531-64; that these debts were owed and not paid; that said liens attached against the several properties belonging to them among which is the farm involved in this litigation and that these liens have been found to be valid by judgments entered in these two cases. The purpose of Civil 67-64 filed against the coexecutors of the Estate of Félix Benítez Rexach was to foreclose tax liens which secured debts of delinquent taxpayers Félix Benítez Rexach and his wife which encumbered certain properties of the debtors, including the farm located in Bayamón, Puerto Rico which is the object of this litigation. These tax liens arose on December 18, 1963, date of their assessment. The Bayamón property claimed by plaintiffs in this case was found by the court in Civil 67-64 to be the community property of Mr. Benítez Rexach and his wife Lucienne. In that action the Court determined that the government's debtors were liable for income taxes for the years 1959 and 1961 in the total sum of $2,622,127.31, plus interest, and further found that the tax debts arose from community income earned in 1959 and 1961. In that same action, it was determined that, although the Bayamón property claimed by plaintiffs was recorded on behalf of Lucienne D'Hotelle as owner, upon her death in 1968 her spouse acquired all of her estate thus subjecting that farm to the federal tax liens arising from the tax debts incurred in the years 1959 and 1961. On February 24, 1964, at an early stage of the development of Civil 67-64, the United States filed a notice of lis pendens giving notice to all of the pendency of the suit in which it sought to foreclose federal tax liens in the sum mentioned against the Bayamón farm recorded in the Registry of Property of Bayamón, Puerto Rico, a part of which is claimed by plaintiffs in this action. In addition to Civil 67-64, another action was filed by the...