Opinion
CIVIL NO. 20-1313 (GAG)
2021-10-15
Yasmin C. REYES DE LEON, Plaintiff, v. COCONUT PROPERTIES, LLC d/b/a Coconut Properties Inc.; et al., Defendants.
Humberto F. Cobo-Estrella, Cobo-Estrella H. Law, LLC, San Juan, PR, for Plaintiff. Jose G. Rodriguez-Rosado, Mercedita, PR, Juan P. Rivera-Roman, Juan P. Rivera Roman Law Office, Ponce, PR, for Defendant Coconut Properties LLC. David O. Martorani-Dale, United States Attorney's Office, Civil Division, Hato Rey, PR, for Defendants FEMA Federal Agency, US Department of Homeland Security, US Department of Justice.
Humberto F. Cobo-Estrella, Cobo-Estrella H. Law, LLC, San Juan, PR, for Plaintiff.
Jose G. Rodriguez-Rosado, Mercedita, PR, Juan P. Rivera-Roman, Juan P. Rivera Roman Law Office, Ponce, PR, for Defendant Coconut Properties LLC.
David O. Martorani-Dale, United States Attorney's Office, Civil Division, Hato Rey, PR, for Defendants FEMA Federal Agency, US Department of Homeland Security, US Department of Justice.
MEMORANDUM ORDER
GUSTAVO A. GELPI, United States District Judge
Yasmin C. Reyes de Leon ("Reyes de Leon" or "Plaintiff") filed the above-captioned case against Coconut Properties, LLC, d/b/a Coconut Properties Inc. ("Coconut Properties" or "Defendant"), the United States of America, the Department of Homeland Security, and the Federal Emergency Management Agency ("FEMA") alleging breach of contract, unjust enrichment, and fraudulent representation after FEMA allegedly failed to remove Katherine Ortiz ("Ortiz") from Plaintiff's property at the end of the temporary housing period that was part of FEMA's emergency response in the aftermath of Hurricanes Irma and Maria. (Docket No. 1). Plaintiff seeks to recover for breach of contract under 28 U.S.C. § 1346(a)(2) ("The Tucker Act") as well as Articles 1054, 1059, and 1060 of the Puerto Rico Civil Code, P.R. LAWS ANN. tit. 31, §§ 3018, 3023, 3024. (Docket No. 1 ¶¶ 37, 40). On July 1, 2021, the Court granted the motion to dismiss as to the United States of America, the Department of Homeland Security, and FEMA. (Docket No. 48).
Currently before the Court is Coconut Properties’ motion to dismiss the complaint for lack of subject-matter jurisdiction pursuant to FED. R. CIV. P. 12(b)(1) premised on Plaintiff's failure to meet the $75,000 amount-in-controversy requirement for federal diversity jurisdiction, set forth at 28 U.S.C. § 1332(a). (Docket No. 67). Plaintiff opposed. (Docket No. 69). For the ensuing reasons, the Court DENIES Defendants’ motion to dismiss the complaint at Docket No. 67.
I. Relevant Factual and Procedural Background
Plaintiff Reyes de Leon is a resident of the state of Maryland and is the property owner of a home in Ponce, Puerto Rico. (Docket No. 1 ¶ 6). Defendant Coconut Properties is a limited liability company registered with the Puerto Rico Department of State and has an office located in Ponce, Puerto Rico. Id. ¶ 7.
In the aftermath of Hurricane Maria, FEMA offered Direct Temporary Housing Assistance ("DTHA") to eligible applicants under 42 U.S.C. § 5174. Id. ¶ 12. FEMA implemented a Direct Lease Program to provide DTHA, which allowed approved applicants to stay in temporary housing for a period of up to 18 months. Id. ¶ 12. FEMA contracted out its administrative functions regarding property leasing for the Direct Lease Program to property management companies such as Coconut Properties. Id. ¶¶ 14-15.
On February 12, 2018, Reyes de Leon signed a property management agreement with Coconut Properties regarding her three-bedroom real estate property in Ponce, Puerto Rico. Id. ¶ 16. This agreement "indicated that the ‘Agent’ Coconut Properties, LLC was under contract to [FEMA] to lease on its behalf the property to be utilized to provide housing to eligible individuals[.]" Id. On May 16, 2018, Coconut Properties signed a temporary housing agreement with Ortiz, which provided Reyes de Leon's property to Ortiz as temporary housing. Id. ¶ 17.
Despite receiving FEMA's written notifications to vacate, Ortiz remained in possession of Reyes de Leon's property beyond the Direct Lease Program's expiration date on September 30, 2019. Id. ¶¶ 17, 19, 21. Reyes de Leon continues to pay both the utilities and the mortgage of the property after the temporary housing agreement ended. Id. ¶¶ 19, 21. Likewise, Reyes de Leon incurred legal expenses from an eviction process that she initiated in Puerto Rico Local Court. (Docket No. 1 ¶ 19).
Reyes de Leon claims $103,510.00 from Coconut Properties for her loss of the use and benefit of her property. Id. ¶ 3, 42. In her computation of damages, Reyes de Leon includes rent and utilities for each month since September 2019, the value of the real estate property retained by the tenant, the cost of the eviction process and attorney's fees, damages to the property, federal civil action legal fees, as well as the cost of transportation to attend court hearings in Puerto Rico. Id. ¶ 24.
In her complaint, Reyes de Leon lists damages in the amount of $102,510.00 from Coconut Properties (Docket No. 1 at 11) and in the amount of $103,510.00. Id. ¶ 3, 42. Noting this difference, but also that both amounts are over $75,000, the Court will use the $103,510.00 amount to give Plaintiff the benefit of doubt.
II. Standard of Review
FED. R. CIV. P . 12(b)(1) is the proper vehicle for challenging the Court's subject-matter jurisdiction. Valentín v. Hosp. Bella Vista, 254 F.3d 358, 362-63 (1st Cir. 2001). As relevant here, Rule 12(b)(1) is appropriate for analyzing 28 U.S.C. § 1332(a) ’s amount-in-controversy requirement. Soprema, Inc. v. Workers Corp., 485 F. Supp. 2d 1, 3 (D.P.R. 2007). Under Rule 12(b)(1), a party may move the Court to dismiss a complaint for lack of subject-matter jurisdiction at any time. In ruling on a Rule 12(b)(1) motion, the Court must construe the complaint liberally and indulge all reasonable inferences in favor of the plaintiff. Aversa v. United States, 99 F.3d 1200, 1210 (1st Cir. 1996). When subject-matter jurisdiction is challenged, however, the party asserting jurisdiction has the burden of proving it by a preponderance of the evidence. Industria de Refrigeración Comercial Indufrial, S.A. v. Gutierrez-Guzmán, 947 F. Supp. 2d 180, 181 (D.P.R. 2013) (citing Bank One, Tex., N.A. v. Montle, 964 F.2d 48, 50 (1st Cir. 1992) ).
III. Legal Discussion and Analysis
In its motion, Coconut Properties contends that the Court lacks subject-matter jurisdiction over this claim arguing that the amount-in-controversy requirement for diversity jurisdiction is not met as required by 28 U.S.C. § 1332(a). (Docket No. 67 ¶ 10). Coconut Properties does not dispute that there is complete diversity between the parties, but instead disputes the amount in controversy. Id.
In federal cases, the plaintiff carries the burden of establishing that the minimum amount in controversy has been met. Abdel-Aleem v. OPK Biotech, LLC, 665 F.3d 38, 41 (1st Cir. 2012). In this regard, "the sum claimed by the plaintiff controls if the claim is apparently made in good faith. It must appear to a legal certainty that the claim is really for less than the jurisdictional amount to justify dismissal." St. Paul Mercury Indem. Co. v. Red Cab Co., 303 U.S. 283, 288-89, 58 S.Ct. 586, 82 L.Ed. 845 (1938). Good faith claims of damages are measured objectively; "[t]he question is ... whether to anyone familiar with the applicable law this claim could objectively have been viewed as worth" more than the amount in controversy. Coventry Sewage Ass'n v. Dworkin Realty Co., 71 F.3d 1, 6 (1st Cir. 1995).
A plaintiff's "general allegation of damages that meet the amount requirement suffices unless questioned by the opposing party or the court." Stewart v. Tupperware Corp., 356 F.3d 335, 337 (1st Cir. 2004). Once the opposing party questions the amount, however, "the party seeking to invoke jurisdiction has the burden of alleging with sufficient particularity facts indicating that it is not a legal certainty that the claim involves less than the jurisdictional amount." Id.
Here, Plaintiff pleaded the requisite amount in controversy, which Defendant has challenged on the basis that it is exaggerated, without evidence, too general to be clearly and accurately quantified, and that the damages were caused by Plaintiff's inaction. (Docket No. 67 ¶ 12-15). Under the above framework set forth by the United States Court of Appeals for the First Circuit, the burden therefore shifts to the plaintiff to allege facts with "sufficient particularity" that demonstrate that it is not a legal certainty that the claim involves less than the jurisdictional amount. Abdel-Aleem, 665 F.3d at 42.
In her response, Plaintiff notes that Defendant has failed to proffer evidence that her original amount-in-controversy claim is in bad faith and failed to cite any statutory provision of state tort law that would limit Plaintiff's recovery, which would make it a legal certainty that she would not recover the amount claimed. (Docket No. 69 at 4). Indeed, many of the Defendant's arguments against the amount in controversy seem better suited for a 12(b)(6) motion to dismiss for failure to state a claim rather than the 12(b)(1) motion at hand. Nevertheless, once the amount in controversy has been challenged, the burden shifts to the plaintiff to allege facts indicating that it is not a legal certainty that the claim involves less than the required amount in controversy, which may be met by amending pleadings or submitting affidavits. Abdel-Aleem, 665 F.3d at 42.
In her complaint, construing the complaint liberally and indulging in all reasonable inferences in her favor, Plaintiff has alleged with sufficient particularity facts that indicate that it is not a legal certainty that the claim involves less than the jurisdictional amount. Aversa, 99 F.3d at 1210. In her damage computations, Plaintiff itemizes her compensatory damages sought, including: rent and utilities since the property was wrongfully occupied, the estimated value of the property unlawfully retained by tenant, damages to the property, and the legal and transportation fees related to the eviction process as well as this federal civil legal action. (Docket No. 1 ¶ 24). She also requests punitive damages if applicable. Id. at 11. Plaintiff attempts to calculate these damages and lists the purported amount of recovery for each one. Id.; cf. Abdel-Aleem, 665 F.3d at 42 (affirming grant of 12(b)(1) motion where plaintiff failed to provide any substantiation or valuation of the damages alleged in his complaint). In addition, as noted in Plaintiff's response, Defendant does not cite any state tort law that limits the amount of recovery. See Grupo Alimentaria, LLC v. Conagra Foods, Inc., No. 15-2302 (GAG), 2016 WL 5415651, at *4-5 (D.P.R. Sept. 28, 2016) (granting 12(b)(1) motion where state law limited recovery).
Accordingly, the Court cannot hold with legal certainty that Plaintiff's claim is for less than the jurisdictional amount and therefore DENIES Defendant's motion to dismiss on these grounds.
IV. Conclusion
For the reasons set forth above, the Court DENIES Coconut Properties’ motion to dismiss for lack of subject-matter jurisdiction at Docket No. 67.