Cooperativa De Seguros Multiples De Pr v. Estado Libre Asociado De Puerto Rico
KLAN202500105
| Tribunal De Apelaciones De Pue... | Mar 21, 2025Background
- The State of Puerto Rico (ELA) confiscated a Mitsubishi Mirage registered to Luis Yadiel González Oquendo, who had an outstanding loan with Popular Auto, which held a security interest in the vehicle.
- The confiscation was based on alleged criminal activity involving violation of Puerto Rico's Controlled Substances Act while the vehicle was driven by Cristian Luis Santos Rivera, who was not the owner or the lender.
- Popular Auto, alongside its insurer, challenged the confiscation, arguing its status as a "third-party innocent owner" and claiming the legal prerequisites for confiscation were not met (including proper notification and lack of third-party involvement in the alleged crime).
- The Trial Court issued summary judgment for Popular Auto, declaring the confiscation null and ordering the vehicle's return.
- ELA appealed, arguing that Popular Auto did not qualify as a third-party innocent owner and that issues of fact required a trial, not summary judgment.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Popular Auto is a third-party innocent owner protected from confiscation | Popular Auto did not give the vehicle voluntarily to the offender and took contractual steps to prevent illegal use | ELA argued that Popular Auto was not a true third-party innocent owner as defined by law and that the doctrine should not extend to all finance creditors | Court held Popular Auto met the requirements for the innocent third-party exception |
| Propriety of summary judgment / existence of material factual disputes | No genuine issues of material fact existed; all relevant facts were supported by documentation | There were credibility issues and factual disputes, meriting a trial | Court found no material facts in dispute and summary judgment appropriate |
| Notification and procedural compliance with the Confiscation Law | ELA did not notify all interested parties timely; therefore, the confiscation process was invalid | ELA's actions complied with the Confiscation Law | Court found notice requirements met as to Popular Auto and it had standing to challenge |
| Scope and application of the third-party innocent owner doctrine | Doctrine should protect secured lenders with contractual and preventative measures | Widening the doctrine would undermine the purpose of forfeiture law | Court held doctrine extends to secured parties meeting the legal criteria |
Key Cases Cited
- Flores Pérez v. Estado Libre Asociado de Puerto Rico, 195 DPR 137 (PR 2016) (holds that confiscation is improper when the innocent owner defense applies)
- First Bank, Univ. Ins. Co. v. E.L.A., 156 DPR 77 (PR 2002) (defines the extent of third-party innocent owner protections in forfeiture cases)
- Mapfre v. E.L.A., 188 DPR 517 (PR 2013) (addresses evidentiary and procedural burdens in forfeiture challenges)
- García Rivera et al. v. Enríquez, 153 DPR 323 (PR 2001) (summary judgment standards under Puerto Rico procedural law)