79 F.4th 1
1st Cir.2023Background
- Rivera defaulted on a mortgage for property in Loíza, Puerto Rico; First Bank foreclosed beginning in 2010 and Rivera sold a parcel called "Blue Iguana" to Gómez with the bank's consent.
- LSREF2 Island Holdings (later HibiscusPR 73 LLC) acquired the mortgage and resisted segregating the Blue Iguana parcel in the foreclosure; Commonwealth trial court ordered segregation and attorneys' fees; Court of Appeals reversed; Puerto Rico Supreme Court later reinstated intervention and fees.
- Rivera filed a tort suit (Article 1802) in 2017 in Commonwealth court, removed to federal court; the federal district court construed the complaint as alleging abuse of process and malicious prosecution, found abuse of process time‑barred and malicious prosecution premature, and dismissed the entire complaint with prejudice in 2018.
- Rivera sought reconsideration only as to the abuse‑of‑process dismissal and did not appeal or move to alter the judgment as to malicious prosecution; the foreclosure litigation later concluded in a manner favorable to Rivera.
- Rivera refiled a substantially similar tort complaint in federal court in 2020 adding Hibiscus; defendants moved to dismiss on res judicata grounds based on the 2018 dismissal with prejudice; the district court granted the motion and this appeal followed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the 2018 dismissal with prejudice precludes Rivera's 2020 malicious prosecution claim | The 2018 complaint never clearly pleaded malicious prosecution, so dismissal with prejudice did not adjudicate that claim | The 2018 district court construed the complaint to include malicious prosecution and dismissed the whole complaint with prejudice, so claim preclusion applies | The court held the prior dismissal was on the merits and precludes the 2020 malicious prosecution claim |
| Choice of law for preclusion analysis | Apply federal preclusion law | Apply Puerto Rico (state) preclusion law per Semtek and later First Circuit guidance | Puerto Rico law governs preclusion here; no conflict with federal interests identified |
| Whether a dismissal as "premature" means the court lacked jurisdiction and thus dismissal should be without prejudice | Rivera contends the district court lacked jurisdiction to adjudicate a premature malicious prosecution claim, so it could not enter a merits judgment | Defendants say the court exercised jurisdiction, ruled that the claim (to the extent alleged) was premature, and dismissed with prejudice | Court found Rivera failed to develop a jurisdictional argument; the contention was waived and the dismissal stands as a merits adjudication |
| Whether Rivera preserved/attempted remedies to avoid preclusion | Rivera argues he tried to preserve the malicious prosecution claim (footnote in reconsideration) | Defendants note Rivera did not move under Rule 60 or appeal to obtain dismissal without prejudice | Court held Rivera should have taken steps (appeal or Rule 60 motion); his limited footnote and failure to appeal waived the issue |
Key Cases Cited
- Semtek Int'l, Inc. v. Lockheed Martin Corp., 531 U.S. 497 (2001) (federal courts in diversity apply the preclusion law of the state where they sit unless federal interests require otherwise)
- Medina-Padilla v. U.S. Aviation Underwriters, Inc., 815 F.3d 83 (1st Cir. 2016) (Puerto Rico treated as a state for preclusion choice‑of‑law and state law applied when no federal conflict)
- Medina v. Chase Manhattan Bank, N.A., 737 F.2d 140 (1st Cir. 1984) (dismissal with prejudice operates as adjudication on the merits)
- Johnson v. SCA Disposal Servs. of New England, Inc., 931 F.2d 970 (1st Cir. 1991) (prior First Circuit precedent concerning preclusion in diversity cases)
- Hochendoner v. Genzyme Corp., 823 F.3d 724 (1st Cir. 2016) (dismissals for lack of subject‑matter jurisdiction normally operate without prejudice)
- Andrew Robinson Int'l, Inc. v. Hartford Fire Ins. Co., 547 F.3d 48 (1st Cir. 2008) (courts may consider the record of the original action when assessing a later res judicata defense)
- Zannino v. United States, 895 F.2d 1 (1st Cir. 1990) (issues raised perfunctorily or without developed argument are deemed waived)