Popular Auto, LLC. v. Estado Libre Asociado De Puerto Rico
KLAN202500073
Tribunal De Apelaciones De Pue...May 30, 2025Background
- The Government of Puerto Rico confiscated a Nissan Maxima after it was allegedly used in criminal activity violating Article 215 of the Puerto Rico Penal Code.
- Popular Auto, LLC, as a creditor with a registered security interest in the vehicle, filed a challenge to the confiscation, arguing the "innocent third party" doctrine applied.
- The lower court granted summary judgment in favor of Popular Auto, ordering the vehicle and bond returned, finding no material dispute over Popular Auto’s innocent status.
- The State appealed, arguing that the decision on the "innocent third party" doctrine required further factual inquiry and an evidentiary hearing rather than summary adjudication.
- The Appellate Court reviewed the case de novo to determine if summary judgment was appropriate under procedural standards and the substantive law of forfeiture.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appropriateness of summary judgment | No material factual dispute, so summary judgment proper | Disputed facts require evidentiary hearing | Summary judgment improper |
| Applicability of "innocent third party" doctrine | Contract and lack of direct involvement show innocence | Contract clauses are too general, insufficient protective action by creditor | Remanded for factual development |
| Sufficiency of protective measures by creditor | Generic contract terms and instructions were sufficient | Specific and proven preventive measures are required | Further proof required |
| Right to evidentiary hearing | Summary judgment standards met, no hearing necessary | Genuine issues of fact require cross-examination/testimony | Evidentiary hearing required |
Key Cases Cited
- Reliable Financial v. ELA, 197 DPR 289 (P.R. 2017) (confiscation is an in rem civil action interpreted restrictively due to its punitive purpose)
- Flores Pérez v. ELA, 195 DPR 137 (P.R. 2016) (explaining the "innocent third party" doctrine in forfeiture)
- Doble Seis Sport TV v. Depto. Hacienda, 190 DPR 763 (P.R. 2014) (nature and purpose of civil forfeiture proceedings)
- Santiago v. Spte. Policía de PR, 151 DPR 511 (P.R. 2000) (interpretation of forfeiture statutes and punitive intent)