Bautista Cayman Asset Company v. Fountainebleu Plaza, S.E.
999 F.3d 33
1st Cir.2021Background
- Bautista Cayman Asset Co. sued Fountainebleu Plaza, S.E., Edwin Loubriel Ortiz, and Sedcorp, Inc. in federal court (collection and foreclosure) in 2017; the district court granted summary judgment for Bautista.
- Defendants appealed, arguing lack of subject-matter jurisdiction based on a forum-selection clause requiring litigation in Puerto Rico state court.
- Defendants also challenged: Bautista's ownership of the loans; admissibility/validity of the pledge, mortgage, and note; sufficiency of the property description; and the calculation of amounts due (claiming payments totaling ~$242,625 were not credited).
- The district court denied dismissal for lack of jurisdiction and granted summary judgment for Bautista.
- On appeal the First Circuit affirmed jurisdiction and most summary-judgment rulings but vacated and remanded solely to determine the correct amount due because of a genuine dispute over whether predecessor payments were credited.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether forum-selection clause divested federal court of jurisdiction | Clause is only a consent to jurisdiction in Puerto Rico courts; federal court retains jurisdiction | Clause is mandatory and requires litigation in Puerto Rico state court, divesting federal jurisdiction | Clause did not deprive federal court of subject-matter jurisdiction; it operates as consent to a particular forum, not an exclusive ban on other forums |
| Ownership of the loans | Bautista is the endorsed owner of the mortgage note and therefore the creditor | No record evidence shows Bautista owns the loans | Defendants admitted facts in their answer (including endorsement to Bautista); court found no genuine dispute on ownership |
| Admissibility/validity of pledge, mortgage, and note | Documents (attached to complaint) are valid and were incorporated; defendants admitted their veracity | Documents are drafts/missing signatures/seals under Puerto Rico law and therefore inadmissible for summary judgment | Because documents were described in and incorporated into the complaint and defendants admitted relevant parts, defendants failed to create a genuine admissibility dispute |
| Sufficiency of property description in mortgage | Description (as pled and in title study) identifies the mortgaged remnant property | Alleged discrepancies in area descriptions make the description insufficient | Defendants offered no legal argument/case law on materiality; argument waived |
| Accuracy of amount due (credit for payments) | Loan servicer affidavit established amount due | Defendants produced records and an affidavit asserting ~$242,625 in predecessor payments were not credited | Genuine factual dispute exists over whether predecessor payments were credited; judgment vacated and case remanded solely to determine correct amount due |
Key Cases Cited
- Autoridad de Energía Eléctrica de P.R. v. Ericsson Inc., 201 F.3d 15 (1st Cir. 2000) (forum clause construed as conferring personal jurisdiction by consent rather than excluding other forums)
- Redondo Constr. Corp. v. Banco Exterior de España, S.A., 11 F.3d 3 (1st Cir. 1993) (treatment of forum-selection language as permissive consent to jurisdiction)
- Summit Packaging Sys., Inc. v. Kenyon & Kenyon, 273 F.3d 9 (1st Cir. 2001) (distinguishing mandatory forum/arbitration clauses that exclude other forums from mere consent-to-jurisdiction clauses)
- Celotex Corp. v. Catrett, 477 U.S. 317 (U.S. 1986) (summary-judgment burden-shifting framework)
- Town of Westport v. Monsanto Co., 877 F.3d 58 (1st Cir. 2017) (court must not make credibility determinations at summary judgment)
- Zannino v. Kellogg Brown & Root, 895 F.2d 1 (1st Cir. 1990) (arguments not adequately briefed are deemed waived)