United States Court of Appeals
For the First Circuit
No. 05-1639
VISTAMAR, INC.,
Plaintiff, Appellant,
v.
FERNANDO E. FAGUNDO-FAGUNDO; JANE DOE; CONJUGAL PARTNERSHIP
FAGUNDO-DOE; ÁNGEL D. RODRÍGUEZ-QUIÑONES; JANE DOE;
CONJUGAL PARTNERSHIP RODRÍGUEZ-DOE; JUAN VAQUER-CASTRODAD;
JANE DOE; CONJUGAL PARTNERSHIP VAQUER-DOE,
Defendants, Appellees.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. José Antonio Fusté, U.S. District Judge]
Before
Torruella, Circuit Judge,
Gibson, John R.,* Senior Circuit Judge,
and Howard, Circuit Judge.
Antonio Borrés-Otero, with whom Fernando L. Gallardo and Woods
& Woods LLP, were on brief, for appellant.
Rosa Elena Pérez-Agosto, Assistant Solicitor General, with
whom Salvador Antonetti-Stutts, Solicitor General, Mariana D.
Negrón-Vargas, Deputy Solicitor General, and Maite L. Oronoz-
Rodríguez, Deputy Solicitor General, were on brief, for appellees
Fagundo-Fagundo and Rodríguez-Quiñones.
Carlos E. Cardona-Fernández, with whom Alberto Omar Jiménez-
Santiago, were on brief, for appellee Vaquer-Castrodad.
December 2, 2005
*
Of the Eighth Circuit, sitting by designation.
TORRUELLA, Circuit Judge. Plaintiff herein appeals from
a district court order granting defendants' motion to dismiss its
claim as untimely under Rule 12(b)(6) of the Federal Rules of Civil
Procedure. Because we find that plaintiff's claim alleging the
deprivation of its constitutionally protected property rights in
violation of the Fifth and Fourteenth Amendments of the United
States Constitution under 42 U.S.C. §§ 1983, 1985, and 1988 is
untimely under the applicable statute of limitations, we affirm the
district court's order granting defendants' motion to dismiss.
I.
In 1962, the Planning Board of Puerto Rico ("the Planning
Board") approved a development plan reserving for future use a 128-
acre lot ("the Vistamar Property") owned by Vistamar, Inc.
("plaintiff" or "Vistamar"). The Planning Board's alleged purpose
in freezing the property was to construct the Torrecillas
Expressway ("the Expressway").
In 1969, the Expressway not having been built, Vistamar
filed a civil rights suit in the United States District Court for
the District of Puerto Rico against defendants' official
predecessors.1 Vistamar argued that defendants' reservation,
1
The defendants in this case are Fernando Fagundo-Fagundo,
Secretary of the Department of Transportation and Public Works of
Puerto Rico, his wife and their conjugal partnership; Angel David
Rodríguez-Quiñones, President of the Planning Board of Puerto Rico,
his wife and their conjugal partnership; and Juan Vaquer-Castrodad,
Executive Director of the Land Administration of Puerto Rico, his
wife and their conjugal partnership. Because the defendants in the
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freezing, and subsequent inaction with regard to the Vistamar
Property was tantamount to an inverse condemnation.
On March 14, 1974, the district court issued a judgment
approving the terms of a stipulation in which the parties agreed to
the sale of the Vistamar Property for $1,718,789.00, with the court
noting that the stipulation "dispose[d] of the case on its merits."
Vistamar v. Vázquez, No.76-69 (D.P.R. 1974). Although the court's
order made no mention of the government's intended use of the
property, plaintiff now claims that its acquiescence to the
stipulation was subject to the understanding that the Vistamar
Property was necessary for the construction of the Expressway.
The Vistamar Property was never developed and the
Expressway was never built. No other land was ever expropriated
pursuant to the Expressway project. Beginning in 1984, and as
recently as 2003, plaintiff tried repeatedly to reacquire the
Vistamar Property from defendants, but to no avail.
In November 2002, mindful that a thirty-year statute of
limitations for real property disputes2 would soon mature,
1969 case were the official predecessors of those in the instant
case, we refer to all defendants in both cases collectively as
"defendants."
2
Section 1863 of the Puerto Rico Civil Code, 31 L.P.R.A. § 5293,
provides as follows:
Real actions with regard to real property prescribe after
thirty (30) years.
This provision is understood without prejudice to the
prescriptions relating to the acquisition of ownership or
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plaintiff initiated an investigation of government records and
archives, as a result of which Vistamar learned that when the
government acquired the Vistamar Property by stipulation in 1974,
it had no intention of building the Expressway.
In January 2003, plaintiff informed defendants of its
belief that the Vistamar Property had been acquired under false
pretenses and again attempted to repurchase the Vistamar Property.
Defendants' failure to respond prompted plaintiff to allege that
defendants condoned, endorsed, and adopted their predecessors'
actions, rendering them liable for all wrongdoing alleged by
plaintiff.
On February 26, 2003, Vistamar filed a complaint in the
United States District Court for the District of Puerto Rico,
accusing defendants of treating plaintiff differently from
similarly situated property owners through the discriminatory
application of eminent domain. Vistamar claimed that defendants'
actions constituted a taking without compensation in violation of
the Fifth and Fourteenth Amendments' equal protection and
substantive and procedural due process guarantees, and asserted
damages under 42 U.S.C. §§ 1983, 1985, and 1988 in excess of
$40,000,000 to compensate for its lost profits, business
credibility, and the expenses required to remain a viable concern
while attempting to defend its property rights.
of property rights by prescription.
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The district court granted defendants' motion to dismiss
pursuant to Rule 12(b)(6). This appeal followed.
II.
The district court did not reach the merits of Vistamar's
civil rights claims because it dismissed the case as untimely under
the statute of limitations. Plaintiff now seeks review of two
issues: 1) whether the instant action is time-barred; and 2)
whether the doctrines of equitable tolling or equitable estoppel
are applicable to the instant case. Defendants raise res judicata
as an alternative affirmative defense, but because we find that
plaintiff's claim is time-barred, we need not consider it.
We review the district court's grant of defendants'
motion to dismiss de novo. Badillo-Santiago v. Naveira-Merly, 378
F.3d 1, 5 (1st Cir. 2004). In an appeal of a Rule 12(b)(6)
dismissal, we must accept as true all well-pleaded facts as the
plaintiff presents them. Edes v. Verizon Communs., Inc., 417 F.3d
133, 137 (1st Cir. 2005).
A.
Section 1983 creates a private right of action for
violations of federally protected rights. Because it has no
statute of limitations provision, § 1983 claims "borrow[] the
appropriate state law governing limitations unless contrary to
federal law." Poy v. Boutselis, 352 F.3d 479, 483 (1st Cir. 2003)
(citing Wilson v. García, 471 U.S. 261 (1984)).
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The parties do not dispute -- and it is well-established
in this circuit -- that the relevant statute of limitations for
civil rights claims in Puerto Rico is one year, in accordance with
31 L.P.R.A. § 5298(2). Centro Médico del Turabo, Inc. v. Feliciano
de Melecio, 406 F.3d 1, 6 (1st Cir. 2005); Benítez-Pons v. Puerto
Rico, 136 F.3d 54, 59 (1st Cir. 1998).
What they do dispute is the date when the one-year
limitations period began to accrue. Vistamar maintains that the
district court erred when it dismissed the claim as untimely.
Defendants argue -- and the district court agreed -- that the claim
was filed almost 30 years late.
We have held that "[a]lthough the limitations period is
determined by state law, the date of accrual is a federal law
question." Carreras-Rosa v. Alves-Cruz, 127 F.3d 172, 174 (1st
Cir. 1997). The parties do not dispute the applicability of the
general principle that § 1983 claims accrue "when the aggrieved
party knows or has reason to know of the injury which is the basis
for his action." Rodríguez Narvaez v. Nazario, 895 F.2d 38, 42 n.5
(1st Cir. 1990). Rather, they differ as to the definition of the
injury itself.
In determining the commencement of accrual, "[t]he first
step . . . is to identify the actual injury of which the plaintiff
complains." Guzmán-Rivera v. Rivera-Cruz, 29 F.3d 3, 5 (1st Cir.
1994). The Supreme Court has clearly stated that, in this inquiry,
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"the proper focus is on the time of the discriminatory act, not the
point at which the consequences of the act become painful." Chardón
v. Fernández, 454 U.S. 6, 8 (1981) (citing Delaware State College
v. Ricks, 449 U.S. 250, 258 (1980)).
Plaintiff insists that the injury suffered was not the
loss of its land, but rather the taking of the land under false
pretenses, an injury which it did not discover -- or have reason to
discover -- until November 2002. Defendants argue that the
relevant injury was the appropriation of the Vistamar Property,
which occurred in 1974. We have long held that "[i]n a § 1983 case
concerning the unlawful taking of property, the statute of
limitations begins to run on the date of the wrongful
appropriation." Altair Corp. v. Pesquera de Busquets, 769 F.2d 30,
32 (1st Cir. 1985), abrogated on other grounds by Carreras-Rosa v.
Alves-Cruz, 127 F.3d, 172, 174 (1st Cir. 1997); see also Gilbert v.
City of Cambridge, 932 F.2d 51, 57 (1st Cir. 1991); Centro Médico
del Turabo, Inc. v. Feliciano de Melecio, 321 F. Supp. 2d 285, 290
(D.P.R. 2004). Plaintiff essentially asks us to find that the
appropriation did not become "wrongful" until Vistamar's
investigation revealed defendants' true intentions.
We have unambiguously rejected this contention -- that
the claim does not accrue until the plaintiff knows of both the
injury and the discriminatory animus -- in the employment
discrimination context. Morris v. Gov't Dev. Bank of Puerto Rico,
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27 F.3d 746, 749-50 (1st Cir. 1994) (dismissing appellant's
contention that "his cause of action existed in what amounts to a
state of suspended animation until he became aware of the racial
and political motives behind the adverse employment decision").
We have not previously addressed this "suspended
animation" theory with regard to takings claims, but we now find
our analysis in the employment context to be persuasive with regard
to unlawful takings as well. In Morris, we held that a plaintiff
in a § 1983 action "need not know all the facts that support his
claim in order for countdown to commence." Id. at 750. We
reasoned that the principle reasons for enforcing statutes of
limitations -- to protect defendants "from the burden of defending
claims arising from [actions] which are long past, while,
concominantly, protecting [plaintiffs] who act celeritously to
enforce their perceptible rights" -- would be undermined if we
held otherwise. Id. (internal quotation marks and citation
omitted). Today we find that the need for repose in property
disputes compels the same result.
Having rejected plaintiff's suggestion that the actual
injury occurred only upon discovery of animus, we still find it
necessary to determine when the plaintiff knew or had reason to
know of the injury. Rodríguez-García v. Municipality of Caguas,
354 F.3d 91, 96-97 (1st Cir. 2004).
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The injury occurred in 1974 when ownership of the
Vistamar Property was transferred from plaintiff to defendants
under false pretenses, but Vistamar did not discover the absence of
a legitimate public purpose until 2002, when it initiated an
investigation. If Vistamar was an unwilling participant in the
1974 settlement but for the government's legitimate public purpose,
it could have undertaken an investigation of government records at
that time. But even if, as Vistamar claims, it did not have reason
to know of the injury in 1974, it surely did shortly thereafter.
After defendants purchased the Vistamar Property for more than $1.7
million,
[it] was abandoned and was never used for any
purpose, it was never fenced, no improvements
were made . . . [it was] infested with rats
and mosquitoes, invaded by squatters, becoming
a shambles with burnt and stripped
automobiles. No other land was ever
expropriated for the construction of the
Torrecillas Expressway nor was this project
ever buil[t] or even star[t]ed to be built.
Brief for Appellant at 7. Plaintiff should have been on notice
that an investigation of some kind was warranted when the Vistamar
property was completely abandoned and no other parcel of land was
frozen in the entire thirty-mile stretch where the Expressway was
to have been constructed. Further, it seems that Vistamar was, in
fact, on notice. In 1984, Vistamar's attorney wrote to the then-
Secretary of the Department of Transportation and Public Works
"stating that the Torrecillas Expressway was not going to be built,
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and demanding the right to repurchase the property." Id. at 7-8.
Vistamar maintains that its knowledge in 1984 has no bearing on
what it had reason to suspect about defendants' 1974 intentions
because the government may legally change its plans regarding the
use of real property. We do not find this argument to be
persuasive. If Vistamar had enough information in 1984 to allege
that there never would be an Expressway, it certainly had reason to
wonder whether there ever had been legitimate plans to build one.
Although plaintiff might not have known it with certainty until
November 2002, there was more than enough cause for suspicion in
the intervening period to support our conclusion that Vistamar had
"reason to know" of the injury by 1984, at the latest.
B.
Plaintiff next contends that the doctrine of equitable
tolling or equitable estoppel applies in this case. The two
doctrines are distinct, and we will consider them separately.
Benítez-Pons v. Commonwealth of Puerto Rico, 136 F.3d 54, 63 (1st
Cir. 1998).
Equitable tolling is available "in exceptional
circumstances" to extend the statute of limitations. Neverson v.
Farquharson, 366 F.3d 32, 40 (1st Cir. 2004); see also Delaney v.
Matesanz, 264 F.3d 7, 14 (1st Cir. 2001) ("equitable tolling, if
available at all, is the exception rather than the rule; resort to
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its prophylaxis is deemed justified only in extraordinary
circumstances.").
We have left open the question of whether the equitable
tolling of § 1983 actions is governed by state or federal law.
Benítez-Pons, 136 F.3d at 61 (citing Torres Ramírez v. Bermúdez
García, 898 F.2d 224, 229 & n.2 (1st Cir. 1990)). It is not
necessary to decide it here because tolling is inapplicable under
either test. Federal law requires a showing of "excusable
ignorance of the statute of limitations caused by some misconduct
of the defendant." Benítez-Pons, 136 F.3d at 61. (internal
quotation marks and citations omitted). Puerto Rico law allows
equitable tolling where the injury involves damage that is
"willfully and wrongfully [] concealed". Id. (internal quotation
marks and citations omitted). Our analysis is further informed by
the principle that, "[i]t is axiomatic that the grounds for tolling
statutes of limitations are more limited in suits against the
government." Id. (internal quotation marks and citations omitted).
Plaintiffs do not allege ignorance of the statute of
limitations, and so do not meet the threshold requirement for
equitable tolling under federal law. As for wrongful concealment,
the district court found plaintiff's claim insufficient under the
heightened pleading requirement of Rule 9(b) of the Federal Rules
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of Civil Procedure,3 and we agree. In Ramírez Morales v. Rosa
Viera, we held that there could be no equitable tolling on grounds
of concealment where none of the defendants "actually prevented or
discouraged" plaintiffs from investigating the relevant files
before the end of the limitations period. 815 F.2d 2, 4 (1st Cir.
1987), abrogated on other grounds by Carreras-Rosa v. Alves-Cruz,
127 F.3d 172, 174 (1st Cir. 1997). The same principle applies in
this case. Vistamar acknowledges that its own November 2002
investigation led to the discovery of the grounds for this § 1983
claim and does not suggest that defendants discouraged or opposed
the investigation in any way. Nor does Vistamar allege any
specific acts of concealment that would have impeded an
investigation at an earlier date had Vistamar chosen to undertake
one. Explaining the 28-year delay, Vistamar contends merely that
it was "discouraged from examining governmental records due to the
continued misrepresentation throughout the years that the
government, at least at one time, seriously contemplated the
construction of the Torrecillas Highway." Brief for Appellant at
20. Vistamar suggests that the pleading requirement of Rule 9(b)
is met through allegations that "none of the Appellees or their
predecessors sought to clarify or admit that the project had never
been a serious endeavor." Id. We cannot accept the argument that
3
Rule 9(b) demands that, "[i]n all averments of fraud or mistake,
the circumstances constituting fraud or mistake shall be stated
with particularity." Fed. R. Civ. P. 9(b).
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a defendant's failure to volunteer -- unbidden -- that which
plaintiff later discovers is tantamount to wrongful concealment.
Of fundamental importance in this case is the principle
that "[e]quitable tolling is unavailable where a party fails to
exercise reasonable diligence." Benítez-Pons, 136 F.3d at 61. This
principle is buttressed by both law and logic. If plaintiffs fail
diligently to pursue the vindication of their own rights, the law
will not undermine repose by extending the statute of limitations
to accommodate them. See, e.g., Niehoff v. Maynard, 299 F.3d 41,
52 (1st Cir. 2002) ("The guiding principle behind the doctrine of
equitable tolling is that the law should be used to achieve some
approximation of justice."); González v. United States, 284 F.3d
281, 291 (1st Cir. 2002) ("Tolling is appropriate only when the
circumstances that cause a plaintiff to miss a filing deadline are
out of his hands.") (internal citation and quotation marks
omitted). Plaintiffs maintain that they were duly diligent because
the misrepresentation of defendants was such that "no reasonable
person would have undertaken a search of records going back to the
origins of the alleged project." Brief for Appellants at 20. We
judge this position to be untenable in light of the facts which
Vistamar presents.
C.
Equitable estoppel is a distinct, but closely related
doctrine. Kelley v. National Labor Relations Board, 79 F.3d 1238,
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1247 (1st Cir. 1996). In § 1983 claims, federal equitable estoppel
principles apply. Benítez-Pons, 136 F.3d at 63. Courts must thus
consider whether 1) the party to be estopped from asserting a
statute of limitations defense (defendant) knew the facts; 2)
defendant intended for his conduct to be relied upon or the party
asserting the estoppel (plaintiff) had a right to believe it was so
intended; 3) the plaintiff was ignorant of the true facts; and 4)
plaintiff relied on the conduct of the party to be estopped, to his
injury. Id. (citing Clauson v. Smith, 823 F.2d 660, 661 (1st Cir.
1987)). The critical inquiry is whether plaintiff's reliance was
reasonable. Id. In this case, we must conclude that it was not.
Vistamar discovered in 1984 that the Expressway had not been
included in the Metropolitan Road Plan for 1982. But in 1986, the
Secretary of the Department of Public Works assured plaintiff that
the Expressway was going to be built. Vistamar made no other
attempts to repurchase the property until 1998, by which time the
dereliction of the property must have been apparent. The
combination of defendants' apparent vacillation with regard to the
Expressway plan and their complete inaction with respect to the
Vistamar Property made plaintiff's reliance unreasonable.
III.
For the foregoing reasons, we find that the district
court properly dismissed plaintiff's § 1983 claim as time-barred.
Affirmed.
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