232 F. Supp. 3d 230
D.P.R.2017Background
- RCAC sued Edwin Cruz-Rivera, Abrahamny Agosto-Garcia, and their conjugal partnership seeking (1) payment on a promissory note and related fees or (2) foreclosure of a mortgage securing that note.
- RCAC alleges it is the current holder and owner of the promissory note and the mortgage deed, originally executed in favor of Doral Bank.
- Defendants moved for summary judgment arguing the mortgage deed is null because it was never recorded in the Puerto Rico Property Registry.
- RCAC conceded an unrecorded mortgage cannot be foreclosed but argued it may still pursue a personal action to collect on the promissory note as holder of the note.
- The parties agreed the mortgage remains unrecorded; the only contested legal question was whether RCAC may bring a personal collection action absent a valid recorded mortgage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can RCAC foreclose an unrecorded mortgage? | RCAC effectively concedes it cannot foreclose until the mortgage is recorded. | Mortgage is null without recording; foreclosure impossible. | Denied: foreclosure barred until recording. |
| May RCAC pursue a personal collection action on the promissory note despite unrecorded mortgage? | As holder of the duly executed and endorsed promissory note, RCAC can sue personally to collect the debt. | Entire action should be dismissed because the underlying mortgage is invalid. | Allowed: RCAC may proceed with a personal collection action on the promissory note. |
| Does Puerto Rico property law render unrecorded mortgages null? | N/A (RCAC acknowledges recording requirement). | Recording is essential; an unrecorded mortgage is a nullity. | Agreed: unrecorded mortgage is a nullity under Puerto Rico law. |
| Summary judgment appropriate to dismiss entire complaint? | RCAC argued foreclosure is barred but collection claim survives. | Sought wholesale dismissal. | Denied: summary judgment dismissed as to whole complaint; collection claim survives. |
Key Cases Cited
- Farmers Ins. Exch. v. RNK, Inc., 632 F.3d 777 (1st Cir. 2011) (standard for genuine dispute at summary judgment)
- Rodriguez-Rivera v. Federico Trilla Reg’l Hosp. of Carolina, 532 F.3d 28 (1st Cir. 2008) (definition of genuine factual dispute)
- DePoutot v. Raffaelly, 424 F.3d 112 (1st Cir. 2005) (summary judgment: draw inferences for nonmovant)
- McGrath v. Tavares, 757 F.3d 20 (1st Cir. 2014) (court must not weigh evidence or resolve credibility at summary judgment)
- In re Las Colinas, Inc., 426 F.2d 1005 (1st Cir. 1970) (Puerto Rico law: recording is essential; unrecorded mortgage is a nullity)