In re TRIANGLE CAYMAN ASSET COMPANY
- Case Type:
- Case Status:
- 19-1251, 19-1786, 20-1284 (1st Circuit, Oct 24,2022) Published
- In a case so complex to require a timeline, the U.S. Court of Appeals for the First Circuit (Circuit) dismissed those aspects deemed moot without any merit review but affirmed the grant of summary judgment (and entry of judgment) in favor of Oriental Bank (Oriental) and the dismissal of contractual breach and fraud counterclaims against Triangle Cayman Asset Co. (Triangle) by the U.S. District Court for the District of Puerto Rico (DC) in a Triangle-launched foreclosure action against Liviam Casillas-Colón, Leonardo Gómez-Vélez, their "conjugal partnership," and LG and AC Corp. (Appellants).
- Procedural context:
- In the DC, the documents flew fast and loose. 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. In response, Appellants launched 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; they added third-party claims against Oriental, Triangle's predecessor, for breach of contract, fraud, defamation, and violations of the FDCPA based on the assignment of the loan agreement.
On March 22, 2017, the DC 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.
Dispositive motions soon arrived. In January 2018, Triangle tendered a motion to dismiss the Appellants' counterclaims (Triangle MTD). On July 9, 2018, Triangle moved for summary judgment, seeking immediate payment of amounts due or, alternatively, foreclosure of the mortgaged properties (Triangle MSJ). At around the same time, Oriental also moved for summary judgment (Oriental MSJ). On August 3, 2018, the DC adopted the magistrate judge's report and recommendation as to the Triangle MTD: dismissal of all counterclaims except for the one as to invasion of privacy. On January 22, 2019, the DC adopted the magistrate judge's reports and recommendations and entered an order granting the Triangle and Oriental MSJs and incorporated the August 3, 2018, dismissal of all but one of the counterclaims against Triangle. On January 28, 2019, the DC dismissed with prejudice Appellants' third-party complaint against Oriental, as reflected in the entered judgment.
Multiple appeals followed. The first (19-1251) was the Appellants', and focused on the DC's orders granting the Oriental and Triangle MSJs. On April 23, 2019, the Circuit entered an order directing Appellants to show cause as to why Appeal No. 1 should not be dismissed for lack of jurisdiction. The second appeal (19-1786) was actually Triangle's, and dealt with the DC's effective denial of its motion for compliance, the judgment issued on May 16, 2019, and the DC's rebuff of its motion to alter or amend that judgment due to Triangle's concern with its "wording." The third (No. 20-1284) was the Appellants', who, after filing for bankruptcy while the first appeal was pending and after the second appeal had commenced and winning a stay of appeal pending Appellants' bankruptcy proceedings on October 16, 2019, from the Circuit, appealed the DC's sua sponte judgments from January 3, 2020. The first of these, a partial one, ordered Appellants to pay Triangle $1.4 million (to satisfy the remaining balance on the loan), and the second incorporated (1) this partial judgment, (2) the judgments entered on January 28, 2019 (dismissing Appellants' third-party complaint against Oriental), and (3) the judgment entered on May 14, 2019 (dismissing Appellants' invasion of privacy counterclaim against Triangle), thus dismissing the whole case with prejudice. Apparently, the Appellants did not challenge the DC's denial of their motion to alter or amend these judgments on the basis of its lack of jurisdiction because of the automatic stay. Subsequent to these appeals' filing, the Circuit vacated the stay entered in appeal numbers one and two (19-1251 and 19-1786).
Via an order dated August 5, 2020, the Circuit consolidated the three appeals and, on April 14, 2021, denied without prejudice Triangle's motion to dismiss the appeals, filed on October 13, 2020, based on the DC's dismissal of the case in response to Triangle's "information motion" indicating that the satisfaction of the monies due to it per that court's earlier judgments.
- This all began when Appellants obtained a three-year loan with Eurobank for the purchase of real estate in Canóvanas, Puerto Rico, including a gasoline station. When the loan was refinanced for an additional three year term, the new loan agreement set a maturity date of December 2012, at which time all obligations under the agreement were due and payable without notice or demand. In addition, a financing agreement (Financing Agreement) secured this loan with collateral that included mortgages on four properties and required, in the the event of default, the assignment by Appellants of 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; per a later accord with the FDIC, Oriental acquired Eurobank's Financing Agreement with Appellants. Over the next three years, Appellants and Oriental initiated preliminary conversations for the refinancing of the loan, the Appellants failed to make the outstanding balloon payment due under the Financing Agreement in December 2012, and Oriental granted the Appellants administrative extensions through May 2013. Three months before this final extension ran out, on March 13, 2013, to be exact, Oriental sent Appellants a draft proposal for the refinancing of the Financing Agreement. This agreement was never finalized, but the Appellants did continue to make monthly payments under the Financing Agreement until "May or June 2013." At that time, 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; thereafter, it 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.
- Gustavo Gelpí; Kermit V. Lipez; and O. Regeriee Thompson
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