Bautista Cayman Asset Company v. AMPPR
17f4th167
1st Cir.2021Background
- Plaintiff Bautista Cayman Asset Company (Cayman Islands) sued AMPPR (Puerto Rico nonprofit) in Feb. 2017 for breach of a 2007 loan secured by AMPPR’s headquarters parcel, claiming it succeeded to Doral Bank’s loan rights after FDIC receivership.
- Bautista pleaded two Puerto Rico-law claims: collection of monies and foreclosure; it named the United States under 28 U.S.C. § 2410 because IRS had recorded junior liens on the property.
- AMPPR moved to dismiss for lack of diversity jurisdiction and sought jurisdictional discovery challenging Bautista’s citizenship and status as loan owner; the district court denied discovery and found complete diversity.
- AMPPR asserted three counterclaims, including a “remedy at equity” seeking to limit Bautista’s recovery based on alleged purchase at a steep discount and extraordinary post‑contract circumstances; the district court dismissed the counterclaims.
- The district court granted summary judgment to Bautista on its collection and foreclosure claims (but initially did not resolve the U.S. lien issue); the United States was later dismissed after IRS released the liens, and AMPPR appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appellate finality / jurisdiction after district court left U.S. lien unresolved when notice filed | Bautista: voluntary dismissal of U.S. liens later cures any premature appeal; notice of appeal relates forward to that dismissal | AMPPR: appeal may be premature because district court initially left U.S. lien question unresolved | Held: Appellate jurisdiction exists; the notice of appeal "relates forward" to district court’s subsequent dismissal of the United States. |
| Subject-matter jurisdiction (diversity) at time of summary judgment given U.S. presence | Bautista: complete diversity existed (Cayman plaintiff v. PR defendant); IRS liens were effectively moot | AMPPR: presence of the United States (and alleged Bautista contacts with PR) destroys diversity | Held: No jurisdictional defect; court satisfied that diversity jurisdiction existed at relevant time (district court had proper jurisdiction). |
| Denial of jurisdictional discovery to probe Bautista’s citizenship/ownership of the loan | Bautista: submitted uncontradicted affidavit and documents showing Cayman citizenship and succession to loan; no basis for further discovery | AMPPR: needed discovery to show Bautista’s principal place of business or that Bautista was not the true owner | Held: Denial was not an abuse of discretion; AMPPR failed to raise the ‘‘true owner’’ theory below and did not controvert Bautista’s factual submissions. |
| Dismissal of AMPPR’s “remedy at equity” counterclaim (unjust enrichment / rebus sic stantibus) | Bautista: contract governs dispute; unjust enrichment inapplicable; rebus sic stantibus requires strict elements AMPPR didn’t plead | AMPPR: extraordinary circumstances (purchase at steep discount; 2008 crisis; hurricanes; COVID) justify equitable relief or contract modification | Held: Dismissal affirmed; SprintCom controls that unjust enrichment cannot apply where contract governs, and AMPPR failed to plead the required elements (and failed to preserve or allege several claimed extraordinary events below). |
Key Cases Cited
- Strawbridge v. Curtiss, 7 U.S. (3 Cranch) 267 (1806) (foundation for complete diversity requirement)
- In re Olympic Mills Corp., 477 F.3d 1 (1st Cir. 2007) (presence of nondiverse parties defeats diversity jurisdiction)
- Pacific Mut. Life Ins. Co. v. Am. Nat'l Bank & Trust Co. of Chi., 642 F. Supp. 163 (N.D. Ill. 1986) (discussion supporting continued jurisdiction despite nominal federal-party issues)
- Puerto Rico Tel. Co. v. SprintCom, Inc., 662 F.3d 74 (1st Cir. 2011) (unjust enrichment unavailable where contract governs; guidance on civil-law equitable powers)
- United States v. Zannino, 895 F.2d 1 (1st Cir. 1990) (principle that appellate courts need concrete arguments and that claims must be adequately developed)
- DeCambre v. Brookline Hous. Auth., 826 F.3d 1 (1st Cir. 2016) (appellate courts’ duty to inquire into jurisdictional questions)
- Clausen v. Sea-3, Inc., 21 F.3d 1181 (1st Cir. 1994) (relating-back of premature appeals doctrine)