Rodriguez v. Puerto Rico Institute of Culture , 98 F. App'x 15 ( 2004 )

Not for Publication in West's Federal Reporter
Citation Limited Pursuant to lst Cir. Loc. R. 32.3
United States Court of Appeals
For the First Circuit
No. 02-2305
LIONEL LUGO RODRIGUEZ, ET AL.,
Plaintiffs, Appellants,
v.
PUERTO RICO INSTITUTE OF CULTURE, ET AL.,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Jay A. Garcia-Gregory, U.S. District Judge]
Before
Selya, Circuit Judge,
Coffin, Senior Circuit Judge,
and Lipez, Circuit Judge.
Mauricio Hernández Arroyo for appellants.
Elisa Bobonis Lang for appellee Puerto Rico Institute of
Culture.
Leticia Casalduc-Rabell, Assistant Solicitor General, with
whom Roberto J. Sánchez Ramos, Solicitor General, and Kenneth
Pamias Velázquez, Deputy Solicitor General, were on brief for
appellees Bounds-Dávila, Ortiz-Colón, Maza, González-Valentín,
Nazario, Martínez, Mas and Hernández.
Jose A. Acosta Grubb, with whom Fiddlep, González & Rodríguez,
P.S.C., was on brief for appellee Municipal Revenue Collection
Center.
May 5, 2004
COFFIN, Senior Circuit Judge. For more than a decade,
appellant Lionel Lugo Rodríguez has been pursuing an endorsement
from the Puerto Rico Institute of Culture ("PRIC") for his shopping
mall project in an historic district of San Germán, Puerto Rico.
Such an endorsement is a prerequisite for the project to be
classified as tax-exempt, and Commonwealth administrative and
judicial proceedings concluded with denial of the endorsement.
Appellant argues here that the process leading to that result was
tainted by fraud, and he seeks a remedy under federal RICO and
civil rights law, as well as under Puerto Rico tort provisions. We
agree with the district court that appellant already has had his
day in court on this matter and that further deliberation on the
particulars is barred by the doctrine of res judicata. We decline
to add another lengthy chapter to the saga and therefore provide
background only as necessary to explain our conclusion.
The merits of appellant's claim that PRIC wrongfully denied
him its endorsement were thoroughly considered by the Puerto Rico
Circuit Court of Appeals, which reviewed the voluminous
correspondence and other documentary evidence generated between
1988 and 1998, as well as the administrative transcript, and
concluded that appellant "did not fulfill his obligation to show
any irregularity in the proceedings." Rather, the court determined
that the PRIC endorsement was denied because appellant failed to
satisfy the architectural requirements that the agency had
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specified. Appellant claims that newly discovered evidence of
fraud entitles him to revisit this judgment. Appellees respond
with multiple bases for dismissing the federal claims, including
appellant's alleged failure to adequately plead a RICO cause of
action, Eleventh Amendment immunity, and the Rooker-Feldman
doctrine. With an exception we address below, see infra at note 2,
we believe that the most direct path – and thus the most
appropriate – is via preclusion principles.
Res judicata under Puerto Rico law precludes "only claims that
were or could have been raised in a previous suit," Boateng v.
Interamerican Univ., Inc., 210 F.3d 56, 62 (lst Cir. 2000), and
there must be "'the most perfect identity between the things,
causes, and persons of the litigants, and their capacity as such,'"
id. at 61 (quoting P.R. Laws Ann. tit. 31, § 3343). The
resemblance between the cases need not literally be "perfect,"
however. Id. "For res judicata purposes, '[t]he thing corresponds
basically to the object or matter over which the action is
exercised.'" Id. (quoting Lausell Marxuach v. Díaz de Yáñez, 3 P.R.
Offic. Trans. 742, 745 (1975)). The "cause" refers to "the main
ground or origin of the action." Id.; see also Worldwide Food
Distributors, Inc. v. Alberic Colón Bermúdez, 133 D.P.R. 827, 33
P.R. Offic. Trans. ___, slip op. at 7 (1993) ("'the cause is
equivalent to a ground or reason for asking'") (citation omitted).
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Preclusive effect is given only to judgments that are "final and
unappealable." Boateng, 210 F.3d at 63.
We conclude that the prerequisites for application of res
judicata are met here. Unquestionably, the underlying issue – the
legitimacy of PRIC's refusal to grant appellant an endorsement for
a tax exemption – is identical, matching both "thing" (the
endorsement) and "cause" (the validity of its denial). The
commonwealth circuit court decision on which we rely became final
when the Puerto Rico Supreme Court denied certiorari in March
1999.1 The parties, in pertinent respects, are the same.2
1
Shortly before he filed this federal action, appellant filed
a second commonwealth lawsuit against PRIC raising claims stemming
from the denial of the tax exemption. The Puerto Rico Court of
First Instance dismissed that complaint with prejudice, and his
petition for review remains pending in the Puerto Rico Supreme
Court. It is appellant's earlier commonwealth action, however,
that provides the basis for our res judicata holding. It appears
that appellant also filed a separate commonwealth action against
the Municipal Revenue Collection Center (CRIM), another defendant
in this case, and that the CRIM action remains pending as well.
2
We note that the original commonwealth action involved only
appellant and PRIC. Although the federal lawsuit named additional
plaintiffs and defendants, the district court supportably
determined that most of the new parties (appellant's business
entities, individual PRIC officials and PRIC's insurer) held the
same interests as the original parties, so res judicata applies as
well to the claims against them. See Perez-Guzman v. Gracia, 346
F.3d 229, 233-38 (lst Cir. 2003); Paniagua v. Corporacion de
Fomento Recreativo, 986 F. Supp. 694, 697 (D.P.R. 1997) (citing
Acevedo Santiago v. Western Digital Caribe, Inc., 140 D.P.R. 452,
40 P.R. Off. Trans. ____(1996)).
The one possible exception is CRIM (along with several CRIM
employees), but the claims against CRIM were properly dismissed for
other reasons. Appellant acknowledges that the Butler Act, 48
U.S.C. § 872, prohibits a federal court from barring CRIM's
collection of the disputed taxes on his project. He makes an
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Appellant nonetheless maintains that the commonwealth judgment
may not be given res judicata effect because it was infected by
fraud, and the presence of fraud triggers an exception to the
doctrine of res judicata. See, e.g., Medina v. Chase Manhattan
Bank, N.A., 737 F.2d 140, 144 (lst Cir. 1984).3 Moreover, he
contends that the new allegations of fraud that underlie his RICO
and civil rights claims distinguish this case from the earlier
litigation and could not have been raised earlier – making res
judicata by definition inapplicable.
As best we can tell, the centerpiece of appellant's fraud
claim is the draft of a letter, dated July 7, 1997, prepared by
architect Jorge Ortiz Colón for signature by PRIC's director at the
time, Dr. Luis E. Díaz Hernández. It is undisputed that the
additional due process claim, undeveloped in his brief, based on
the revocation of a fifteen-year tax exemption apparently granted
to the property before he owned it. We decline to delve below the
murky surface of this allegation, but note that the challenged
reassessment occurred no later than 1998; any resulting
constitutional claim would have been subject to a one-year statute
of limitations. See Ruiz-Sulsona v. Univ. of Puerto Rico, 334 F.3d
157, 159 (lst Cir. 2003). His assertion that he did not discover
the reassessment until 2001 is belied by his statement that he
learned of the alleged retroactive debt in 1998 when he went to the
Puerto Rico Tourism Company to apply for an extension of the tax
exemption. See, e.g., Reply to Order to Show Cause and Motion for
Reconsideration; Affirmation in Support to Supplemental Opposition
to Motion to Dismiss.
3
At oral argument, appellant's counsel made passing reference
as well to the public policy exception to res judicata, see Medina,
737 F.2d at 144. The point was not developed, however, and in
these circumstances, we fail to see how it would provide an
independent basis for avoiding the doctrine.
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letter, communicating denial of the Institute's endorsement of a
tax exemption, was never sent, and that appellant was actually
notified of the denial in September 1997 by another PRIC official.4
It is also undisputed that Díaz Hernández had no contemporaneous
knowledge of the draft letter. Appellant claims, however, that the
letter was relied upon in a report written by PRIC architect
Mildred González Valentín and that González Valentín testified at
the PRIC administrative hearing that she had a signed copy of the
letter. Appellant suggests that use of the letter, without its
purported author's knowledge, was fraudulent and that the letter
tilted the proceedings against him.
We are unable to discern the fraud in these allegations.
There is nothing in the record to indicate that anyone deliberately
misrepresented the draft letter as the actual decision of Díaz
Hernández. Although it is alleged that González Valentín relied on
the letter in her report (which apparently is not part of the
record on appeal), this assertion is of limited significance for
two reasons. First, the letter simply summarizes the results of
PRIC's internal evaluation of the exemption request, matters that
were directly considered at the administrative hearing and by the
court on review. Nothing in the record indicates that the result
at either stage was affected by the "opinion" on those matters of
4
The record indicates the notification letter was sent by
Héctor F. Santiago Cazull, then Assistant Director of the
Institute's Patrimony Conservation area.
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Díaz Hernández – who was no longer PRIC's director at the time the
endorsement was denied. Second, the record indicates that González
Valentín concluded in her report that, despite the problems she
identified through an examination of the building and relevant
documents, a five-year tax exemption would be appropriate if the
construction blueprints for the project had previously received
official approval, which would indicate compliance with PRIC's
requirements for preserving the building's historical value. In
other words, despite the presence of the draft letter in her
report, González Valentín recommended an exemption if PRIC's
evaluation showed that the project met historical standards.
Thus, rather than reflecting fraud because it included the
draft letter, the architect's report suggests that the exemption
was denied because the project did not fulfill the specified
requirements – which was the conclusion reached in both the
administrative and judicial proceedings.5 We thus find no basis
for assigning the letter any significance in PRIC's decision to
deny endorsement, and certainly no indication that it was
fraudulently used to induce an unjustified result.
5
Although appellant asserts that González Valentín testified
that she had a signed copy of the Díaz Hernández letter, there is
some ambiguity in the record about the certainty of that statement.
The lack of clarity is of no consequence, however, because the
record contains no other evidence that any copy of the letter,
which unquestionably was a draft, was signed. The only reasonable
inference to be drawn, therefore, is that González Valentín's
testimony, if accurately described, reflected an error on her part
and is not evidence of fraud.
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In support of his claims, appellant submitted sworn statements
from Díaz Hernández, the PRIC director who was the nominal author
of the July 7 letter, and three others. Although several of the
statements make conclusory reference to fraudulent activity,
including forged documents, fraudulent documents and "other
improprieties," the only specific assertions of wrongdoing appear
to refer to the Ortiz Colón draft letter or the González Valentín
report, which, as we have discussed, cannot support a fraud claim.
As the following descriptions reveal, the offered sworn statements
fail to assist appellant in meeting his obligation under Fed. R.
Civ. P. 9(b) to allege his claim of fraud "with particularity."
See United States v. Karvelas, 360 F.3d 220, 226 (lst Cir. 2004)
("Rule 9(b) requires that a plaintiff's averments of fraud specify
the time, place, and content of the alleged false or fraudulent
representations.").
In his statement, Díaz Hernández, who left his position before
the endorsement was denied, confirms that he did not write the July
7 letter, criticizes its inclusion in the architect's report and
refers to "apparent inconsistencies effectuated by officials at the
Culture Institute." He states that he would have granted a ten-
year tax exemption because the project had complied with all of
PRIC's requirements, but his general declaration of compliance
contradicts the agency's and court's formal findings that the
requirements were not fulfilled. None of his assertions casts
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doubt on the integrity of the review process conducted by the
Puerto Rico circuit court or provides a basis for devaluing the
finality of its judgment.
Each of the other three affiants, all of whom worked for PRIC,
also offered only conclusory assertions of wrongdoing. Luis A.
Ruiz Quirindongo, an advisor to another PRIC director, Dr. José
Ramón de la Torre Martínez, stated that the file on appellant's
project showed that "documents had been concealed, and that
possible crimes committed therein, which induced errors within the
examiner's official report, as well as the courts and officials of
the Culture Institute." Ruiz stated that documentation was forged,
but did not specify the documents. He further stated that PRIC's
auditor concluded that there had been "an agreement . . . to commit
and to cover up crimes" related to appellant's project. Such a
bald claim of fraud, left unsubstantiated with any particular
misconduct, is insufficient to satisfy Rule 9(b) or to justify re-
opening the administrative process.
The remaining two affidavits were similarly lacking in
particularity. De la Torre, who had left his position at PRIC by
the time of his statement, reported that he "became aware of
certain questionable details executed during the process of denial
of [appellant's] tax exemption application." He asserted that
architect Ortiz Colón "apparently induced the Institute and the
Courts to err, by creating the false impression" that Ortiz Colón's
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written endorsement was for a limited portion of the project, the
tunnel protection plan. The Puerto Rico court, however, directly
reviewed the file materials and concluded otherwise.6
The final affidavit was from Edgar Correa Salgado, PRIC's
Press and Communication Director under de la Torre. Correa refers
to "the existence of certain fraudulent documents prepared by
Architect Jorge Ortíz Colón" and his – Correa's – recommendation
that an internal investigation be conducted into appellant's
allegations of improprieties in the endorsement process. Again,
there is no identification of particular "fraudulent documents,"
other than, apparently, the draft letter. According to Correa,
when he confronted de la Torre with information regarding "other
improprieties and internal security problems" affecting PRIC, de la
Torre informed him that he was proceeding with his immediate
resignation and "that he would not carry out any action in relation
to [appellant's] case."
None of these statements contain factual allegations adequate
to undergird appellant's conclusory fraud claim. Even with respect
to the July 7 draft letter and the González Valentín report, the
statements aver no fraudulent link to the administrative and
6
The court's opinion stated that "it is clearly evident from
the file – in particular from the documentary evidence provided by
the petitioner himself – that said endorsement was given for the
blueprints that submitted 'the corrective[] measures taken in order
to separate (sic) the affected parts of the tunnel', . . . and that
the same did not amount to or constitute an endorsement for the
project to be carried out in the building."
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judicial evaluation process. If such generalities were enough to
justify renewed inquiry into PRIC's denial of the endorsement, the
finality of judgments would be seriously compromised. Lacking a
viable fraud claim, appellant may not escape the preclusive effects
of the prior proceedings. Moreover, his inability to adequately
allege fraud defeats any RICO claim, which depends upon a showing
of at least two predicate acts of "racketeering activity," conduct
that in this case was alleged to be mail and wire fraud. See North
Bridge Assocs., Inc. v. Boldt, 274 F.3d 38, 42 (lst Cir. 2001).
Finally, to the extent appellant asserts a section 1983 claim based
on conduct unrelated to the revocation of the tax exemption, see
note 2 supra, it is insufficiently elaborated in his brief to
permit meaningful review and is therefore waived. We thus affirm
the district court's judgment of dismissal.7
Affirmed.
7
We have considered appellant's challenges to CRIM's
submission of exhibits without translations and to the court's
allowance of extra filings by defendants, but find no error
warranting reversal of the district court's judgment.
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