Triangle Cayman Asset Co. v. LG & AC, Corp.
| Docket Number | s. 19-1251,19-1786,20-1284 |
| Decision Date | 24 October 2022 |
| Citation | 52 F.4th 24 |
| Parties | TRIANGLE CAYMAN ASSET COMPANY, Plaintiff-Appellee, Cross-Appellant, v. LG AND AC, CORP.; Leonardo Gomez-Velez; Liviam Margarita Casillas Colon; Conjugal Partnership Gomez-Casillas, Defendants, Third-Party Plaintiffs, Appellants, Cross-Appellees. Anibal Colon-Santiago, Defendant. Oriental Bank, Third-Party Defendant-Appellee. |
| Court | U.S. Court of Appeals — First Circuit |
Bamily López-Ortiz, with whom Lizabel M. Negrón-Vargas was on brief, for appellants/cross-appellees.
Carolina Velaz-Rivero, with whom Luis C. Marini-Biaggi, Ignacio J. Labarca-Morales, and Marini Pietrantoni Muñiz, LLC were on brief, for appellee/cross-appellant.
Carlos R. Baralt Suárez, with whom Alfredo Fernández Martínez was on brief, for third-party defendant/appellee.
Before Gelpí, Lipez, and Thompson, Circuit Judges.
These appeals arise from the district court's grant of summary judgment in favor of Triangle Cayman Asset Company ("Triangle") and Oriental Bank ("Oriental") in a foreclosure action filed by Triangle against Liviam Margarita Casillas-Colón, Leonardo Gómez-Vélez, their conjugal partnership, and LG and AC Corporation (collectively, "Appellants"), who in turn filed counterclaims against Triangle and brought Oriental in as a third-party defendant. During the pendency of the appeals, additional events have made the procedural history of the case lengthy and convoluted.1 Ultimately, we conclude that several aspects of the appeals as to Triangle are now moot and dismiss the same without reaching their merits. We further affirm the district court's dismissal of the breach of contract and fraud counterclaims against Triangle and the entry of summary judgment in favor of Oriental.
In 2006, Appellants obtained a three-year loan with the now-defunct Eurobank for the purchase of real estate in Canóvanas, Puerto Rico, including a gasoline station. On December 23, 2009, the parties refinanced the loan for an additional three-year term, in the amount of $1,240,188, amortized over twenty years (the "Financing Agreement"). Pursuant to said agreement, the loan was set to mature in December 2012. Upon said date, all obligations under the agreement were due and payable without notice or demand. Appellants secured the Financing Agreement with collateral that included mortgages on four properties. They further agreed, in the event of default, to assign any rents, income, and revenues from their lease agreements on the four properties covered by the mortgages to Eurobank.
On April 30, 2010, the Puerto Rico Office of the Commissioner of Financial Institutions closed Eurobank, appointing the Federal Deposit Insurance Corporation ("FDIC") as receiver. Subsequently, the FDIC and Oriental agreed for the latter to acquire Eurobank's Financing Agreement with Appellants.3
In 2011, Appellants and Oriental initiated preliminary conversations for the refinancing of the loan. In December 2012, Appellants failed to make the outstanding balloon payment due under the Financing Agreement. However, Oriental granted them two administrative extensions until May 2013.
On March 13, 2013, Oriental sent Appellants a draft proposal for the refinancing of the Financing Agreement, but it was never finalized. Appellants continued making monthly payments under the Financing Agreement until May or June 2013, when Oriental refused to accept the payments, on the ground that Appellants had to pay off the loan or refinance it as the entire payment was due. As a result, Oriental appraised Appellants' properties during February 2014 through March 2015 to determine whether the loan had adequate collateral.
On September 28, 2015, Oriental entered into an Assignment and Assumption Agreement with Triangle, transferring Eurobank's prior credit relationship with Appellants from Oriental to Triangle.
On October 20, 2016, Triangle filed its complaint for collection of monies and foreclosure of the mortgages and other collateral based on Appellants' default on the loan. On March 13, 2017, Triangle filed an ex parte motion requesting an order for attachment of rents. On March 22, 2017, the district court granted Triangle's motion and issued an order to Appellants' tenants to directly remit to Triangle all payments that they owed Appellants in connection with the mortgaged properties.
Appellants, in turn, filed counterclaims against Triangle for breach of contract, fraud, invasion of privacy, defamation, violations of the Fair Debt Collection Practices Act ("FDCPA"), and tortious interference with contractual agreements. Appellants also filed third-party claims against Triangle's predecessor, Oriental, for breach of contract, fraud, defamation, and violations of the FDCPA based on the assignment of the loan agreement.
On January 25, 2018, Triangle moved to dismiss Appellants' counterclaims. In turn, on August 3, 2018, the district court adopted the magistrate judge's report and recommendation, dismissing all such counterclaims, except that of invasion of privacy.
On July 9, 2018, Triangle moved for summary judgment, seeking immediate payment of amounts due or, alternatively, foreclosure of the mortgaged properties. Oriental also moved for summary judgment. On January 22, 2019, the district court adopted the magistrate judge's reports and recommendations and entered an order granting Triangle's and Oriental's motions for summary judgment. Said order also incorporated the August 3, 2018 dismissal of counterclaims against Triangle (minus that for invasion of privacy). On January 28, 2019, the district court entered judgment in the third-party complaint against Oriental, reflecting its dismissal with prejudice. On February 26, 2019, Appellants filed a notice of appeal as to the January 22, 2019 order granting summary judgment in favor of Triangle and Oriental and the January 28, 2019 judgment, which dismissed the third-party claims against Oriental. This notice of appeal led to the docketing of appeal number 19-1251 in this court ("Appeal No. 1").
On April 23, 2019, this court entered an order directing Appellants to show cause as to why Appeal No. 1 should not be dismissed for lack of jurisdiction. In response, Appellants (1) suggested that they only intended to appeal from the district court's order and judgment dismissing their third-party complaint against Oriental and (2) informed this court that they had filed two motions before the district court to establish finality -- one seeking certification under Federal Rule of Civil Procedure 54(b)4 and another seeking voluntary dismissal of the sole remaining counterclaim against Triangle for invasion of privacy. In an electronic amended order entered on May 14, 2019, the district court granted the second motion, dismissing Appellants' invasion of privacy counterclaim against Triangle with prejudice. That same day via a separate electronic order, the district court denied as moot Appellants' motion for Rule 54(b) certification due to their voluntary dismissal of the sole remaining counterclaim against Triangle.5
On May 16, 2019, the district court entered a judgment (the "May 16 Judgment") which stated: "In accordance with the Judgment entered on January 28, 2019 [ third-party claims against Oriental] and the Amended Order entered on May 14, 2019 [ with prejudice the invasion of privacy counterclaim against Triangle], this case is DISMISSED with prejudice." Concerned by the wording of the May 16 Judgment, Triangle sought reconsideration, asking the district court to dismiss only the invasion of privacy counterclaim with prejudice and to enter judgment in Triangle's favor on the amended complaint, as set out in the January 22, 2019 order. The district court directed the parties to submit proposed orders and judgments. In response, Triangle filed a motion in compliance, which included two proposed judgments. However, the district court entered an electronic order on June 20, 2019, denying Triangle's motion in compliance as "unnecessary" and stated: "The judgment entered May 16, 2019 is sufficient." On July 22, 2019, Triangle filed a notice of appeal challenging the effective denial of the motion in compliance, the May 16 Judgment, and the denial of Triangle's motion to alter or amend. This appeal was docketed as 19-1786 ("Appeal No. 2").
Meanwhile, while this court's show cause order was pending in Appeal No. 1 (), Appellants petitioned for bankruptcy. This court entered a stay of appeal pending Appellants' bankruptcy proceedings on October 16, 2019.
On January 3, 2020, while both appeals were stayed, the district court sua sponte entered two judgments. First, the district court entered a partial judgment ordering Appellants to pay Triangle $1.4 million (to satisfy the remaining balance on the loan). Second, it entered a final judgment which incorporated (1) the partial judgment entered that same day, (2) the judgments entered on January 28, 2019 ( Appellants' third-party complaint against Oriental), and (3) the judgment entered on May 14, 2019 ( Appellants' invasion of privacy counterclaim against Triangle) -- thereby dismissing the entire case with prejudice (the "January 3 Judgments").
On January 14, 2020, Appellants filed a motion to alter and amend, asking the district court to set aside its January 3 Judgments on the ground that it lacked jurisdiction because of the automatic bankruptcy stay. That same day, the district court noted the pendency of the stay, yet did not vacate the January 3 Judgments. Appellants hence filed a second notice of appeal challenging the January 3 Judgments. This appeal is pending as appeal 20-1284 ("Appeal No. 3"). Via order on August 5, 2020, we consolidated the three appeals.
Prior to addressing the merits of the claims on appeal, we must first...
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