Vistamar, Inc. v. Fagundo-Fagundo

• Decision Date: 02 December 2005
• Docket Number: No. 05-1639.,05-1639.
• Citation: 430 F.3d 66
• Parties: VISTAMAR, INC., Plaintiff, Appellant, v. Fernando E. FAGUNDO-FAGUNDO; Jane Doe; Conjugal Partnership Fagundo-Doe; Ángel D. Rodríguez-Quiñones; Jane Doe; Conjugal Partnership Rodríguez-Doe; Juan Vaquer-Castrodad; Jane Doe; Conjugal Partnership Vaquer-Doe, Defendants, Appellees.
• Court: U.S. Court of Appeals — First Circuit

430 F.3d 66

VISTAMAR, INC., Plaintiff, Appellant, v. Fernando E. FAGUNDO-FAGUNDO; Jane Doe; Conjugal Partnership Fagundo-Doe; Ángel D. Rodríguez-Quiñones; Jane Doe; Conjugal Partnership Rodríguez-Doe; Juan Vaquer-Castrodad; Jane Doe; Conjugal Partnership Vaquer-Doe, Defendants, Appellees.

No. 05-1639.

United States Court of Appeals, First Circuit.

Heard November 7, 2005.

Decided December 2, 2005.

COPYRIGHT MATERIAL OMITTED

Antonio Borrés-Otero, with whom Fernando L. Gallardo and Woods & Woods LLP, were on brief, for appellant.

Rosa Elena Pérez-Agosto, Assistant Solicitor General, with whom Salvador Antonetti-Stutts, Solicitor General, Mariana D. Negrón-Vargas, Deputy Solicitor General, and Maite L. Oronoz-Rodríguez, Deputy Solicitor General, were on brief, for appellees Fagundo-Fagundo and Rodríguez-Quiñones.

Carlos E. Cardona-Fernández, with whom Alberto Omar Jiménez-Santiago, were on brief, for appellee Vaquer-Castrodad.

Before TORRUELLA, Circuit Judge, GIBSON, JOHN R.,^* Senior Circuit Judge, and HOWARD, Circuit Judge.

TORRUELLA, Circuit Judge.

Plaintiff herein appeals from a district court order granting defendants' motion to dismiss its claim as untimely under Rule 12(b)(6) of the Federal Rules of Civil Procedure. Because we find that plaintiff's claim alleging the deprivation of its constitutionally protected property rights in violation of the Fifth and Fourteenth Amendments of the United States Constitution under 42 U.S.C. §§ 1983, 1985, and 1988 is untimely under the applicable statute of limitations, we affirm the district court's order granting defendants' motion to dismiss.

I.

In 1962, the Planning Board of Puerto Rico ("the Planning Board") approved a development plan reserving for future use a 128-acre lot ("the Vistamar Property") owned by Vistamar, Inc. ("plaintiff" or "Vistamar"). The Planning Board's alleged purpose in freezing the property was to construct the Torrecillas Expressway ("the Expressway").

In 1969, the Expressway not having been built, Vistamar filed a civil rights suit in the United States District Court for the District of Puerto Rico against defendants' official predecessors.¹ Vistamar argued that defendants' reservation, freezing, and subsequent inaction with regard to the Vistamar Property was tantamount to an inverse condemnation.

On March 14, 1974, the district court issued a judgment approving the terms of a stipulation in which the parties agreed to the sale of the Vistamar Property for $1,718,789.00, with the court noting that the stipulation "dispose[d] of the case on its merits." Vistamar v. Vázquez, 337 F.Supp. 375 (D.P.R.1974). Although the court's order made no mention of the government's intended use of the property, plaintiff now claims that its acquiescence to the stipulation was subject to the understanding that the Vistamar Property was necessary for the construction of the Expressway.

The Vistamar Property was never developed and the Expressway was never built. No other land was ever expropriated pursuant to the Expressway project. Beginning in 1984, and as recently as 2003 plaintiff tried repeatedly to reacquire the Vistamar Property from defendants, but to no avail.

In November 2002, mindful that a thirty-year statute of limitations for real property disputes² would soon mature, plaintiff initiated an investigation of government records and archives, as a result of which Vistamar learned that when the government acquired the Vistamar Property by stipulation in 1974, it had no intention of building the Expressway.

In January 2003, plaintiff informed defendants of its belief that the Vistamar Property had been acquired under false pretenses and again attempted to repurchase the Vistamar Property. Defendants' failure to respond prompted plaintiff to allege that defendants condoned, endorsed, and adopted their predecessors' actions, rendering them liable for all wrongdoing alleged by plaintiff.

On February 26, 2003, Vistamar filed a complaint in the United States District Court for the District of Puerto Rico, accusing defendants of treating plaintiff differently from similarly situated property owners through the discriminatory application of eminent domain. Vistamar claimed that defendants' actions constituted a taking without compensation in violation of the Fifth and Fourteenth Amendments' equal protection and substantive and procedural due process guarantees, and asserted damages under 42 U.S.C. §§ 1983, 1985, and 1988 in excess of $40,000,000 to compensate for its lost profits, business credibility, and the expenses required to remain a viable concern while attempting to defend its property rights.

The district court granted defendants' motion to dismiss pursuant to Rule 12(b)(6). This appeal followed.

II.

The district court did not reach the merits of Vistamar's civil rights claims because it dismissed the case as untimely under the statute of limitations. Plaintiff now seeks review of two issues: 1) whether the instant action is time-barred; and 2) whether the doctrines of equitable tolling or equitable estoppel are applicable to the instant case. Defendants raise res judicata as an alternative affirmative defense, but because we find that plaintiff's claim is time-barred, we need not consider it.

We review the district court's grant of defendants' motion to dismiss de novo. Badillo-Santiago v. Naveira-Merly, 378 F.3d 1, 5 (1st Cir.2004). In an appeal of a Rule 12(b)(6) dismissal, we must accept as true all well-pleaded facts as the plaintiff presents them. Edes v. Verizon Communs., 417 F.3d 133, 137 (1st Cir.2005).

A.

Section 1983 creates a private right of action for violations of federally protected rights. Because it has no statute of limitations provision, § 1983 claims "borrow[] the appropriate state law governing limitations unless contrary to federal law." Poy v. Boutselis, 352 F.3d 479, 483 (1st Cir.2003) (citing Wilson v. Garcia, 471 U.S. 261, 105 S.Ct. 1938, 85 L.Ed.2d 254 (1985)).

The parties do not dispute — and it is well-established in this circuit — that the relevant statute of limitations for civil rights claims in Puerto Rico is one year, in accordance with 31 L.P.R.A. § 5298(2). Centro Médico del Turabo, Inc. v. Feliciano de Melecio, 406 F.3d 1, 6 (1st Cir.2005); Benítez-Pons v. Puerto Rico, 136 F.3d 54, 59 (1st Cir.1998).

What they do dispute is the date when the one-year limitations period began to accrue. Vistamar maintains that the district court erred when it dismissed the claim as untimely. Defendants argue — and the district court agreed — that the claim was filed almost 30 years late.

We have held that "[a]lthough the limitations period is determined by state law, the date of accrual is a federal law question." Carreras-Rosa v. Alves-Cruz, 127 F.3d 172, 174 (1st Cir.1997). The parties do not dispute the applicability of the general principle that § 1983 claims accrue "when the aggrieved party knows or has reason to know of the injury which is the basis for his action." Rodríguez Narvaez v. Nazario, 895 F.2d 38, 42 n. 5 (1st Cir.1990). Rather, they differ as to the definition of the injury itself.

In determining the commencement of accrual, "[t]he first step... is to identify the actual injury of which the plaintiff complains." Guzmán-Rivera v. Rivera-Cruz, 29 F.3d 3, 5 (1st Cir.1994). The Supreme Court has clearly stated that, in this inquiry, "the proper focus is on the time of the discriminatory act, not the point at which the consequences of the act become painful." Chardón v. Fernández, 454 U.S. 6, 8, 102 S.Ct. 28, 70 L.Ed.2d 6 (1981) (citing Delaware State College v. Ricks, 449 U.S. 250, 258, 101 S.Ct. 498, 66 L.Ed.2d 431 (1980)).

Plaintiff insists that the injury suffered was not the loss of its land, but rather the taking of the land under false pretenses, an injury which it did not discover — or have reason to discover — until November 2002. Defendants argue that the relevant injury was the appropriation of the Vistamar Property, which occurred in 1974. We have long held that "[i]n a § 1983 case concerning the unlawful taking of property, the statute of limitations begins to run on the date of the wrongful appropriation." Altair Corp. v. Pesquera de Busquets, 769 F.2d 30, 32 (1st Cir.1985), abrogated on other grounds by Carreras-Rosa v. Alves-Cruz, 127 F.3d, 172, 174 (1st Cir.1997); see also Gilbert v. City of Cambridge, 932 F.2d 51, 57 (1st Cir.1991); Centro Médico Del Turabo, Inc. v. Feliciano de Melecio, 321 F.Supp.2d 285, 290 (D.P.R.2004). Plaintiff essentially asks us to find that the appropriation did not become "wrongful" until Vistamar's investigation revealed defendants' true intentions.

We have unambiguously rejected this contention — that the claim does not accrue until the plaintiff knows of both the injury and the discriminatory animus — in the employment discrimination context. Morris v. Gov't Dev. Bank of Puerto Rico, 27 F.3d 746, 749-50 (1st Cir.1994) (dismissing appellant's contention that "his cause of action existed in what amounts to a state of suspended animation until he became aware of the racial and political motives behind the adverse employment decision").

We have not previously addressed this "suspended animation" theory with regard to takings claims, but we now find our analysis in the employment context to be persuasive with regard to unlawful takings as well. In Morris, we held that a plaintiff in a § 1983 action "need not know all the facts that support his claim in order for countdown to commence." Id. at 750. We reasoned that the principle reasons for enforcing statutes of limitations — to protect defendants "from the burden of defending claims arising from [actions] which are long past, while, concominantly, protecting [plaintiffs] who act celeritously to enforce their perceptible rights" — would be undermined if we held otherwise. Id. (internal quotation marks and citation omitted). Today we find that the need for repose in property disputes compels...