GARCIA v. ROYAL BANK OF CANADA, (D.P.R. 2002)

JAY A. GARCIA GREGORY, United States District Judge

On February 6, 2002, the Court ordered the parties to submit briefs on whether defendant Ricardo Noriega ("Noriega") is entitled to summary judgment under the "objective reasonableness" prong of the qualified immunity analysis. (Docket No. 80.) On February 13, 2002, Noriega filed a motion for summary judgment on that score (Docket No. 83), and plaintiffs filed their opposition on February 19, 2002. (Docket No. 86.) After reviewing the parties's respective submissions, as well as the record, the Court finds that Noriega is entitled to qualified immunity, and therefore to summary judgment.

The factual background of this case has been extensively discussed in three prior opinions issued by the Court. (Docket Nos. 47, 49, and 74.) The Court will therefore assume familiarity with the procedural and factual background of the case, and will concentrate only on the facts underlying the latest dispute between the parties: whether Noriega is entitled to qualified immunity from damages because it was objectively reasonable for him to believe that he had probable cause to arrest plaintiff Jose Monestina Garcia ("Monestina") on July 12, 1995.

On July 7, 1995, Monestina arrived at a Royal Bank of Canada branch to deposit two checks of $200,000.00 each. The checks had been ostensibly drawn by Holland America, a company based in Seattle, Washington, to the order of Nigerian Port, Ltd., a Nigerian corporation. The checks had been tendered to Monestina by someone in the Dominican Republic in payment of some debt. After following a bank officer's instructions on how to endorse the checks, Monestina signed his name on the back of the checks, and made a notation that the checks were to be deposited in his account. He deposited them shortly thereafter.

Carmen Rivera de Rodriguez ("Rodriguez"), a former Royal Bank employee who worked for the bank when this incident occurred, testified that the usual procedure the bank followed when it received a "worthless" check was to send the check through the clearing system, wait for the Federal Reserve to return it, charge it back to the account, and send it back to the depositor. If a customer were to draw on his account while the check was undergoing the clearing process, however, the bank would be "stuck" — that is, left with the bad check.

In this case, the bank officers believed that the checks Monestina had deposited in his account were false. In her deposition, Rodriguez testified that she received a call from Danny Mirabal, a Royal Bank branch officer, who believed that the checks were false, and asked Rodriguez to find out if they were good. Rodriguez took the checks to the Royal Bank Regional Manager, and after an investigation, she believed that the checks were indeed false. She testified that she held that belief for several reasons: (1) the checks were made to the order of a Nigerian corporation, and the bank was aware of a high incidence of fraudulent checks issued to Nigerian corporations during that period; (2) the amounts of the checks were high; (3) Monestina's account had been dormant for some time; (4) the checks were made out to a corporation, but were being deposited into a personal account.

Rodriguez thereafter contacted Holland America, which confirmed that the checks were false. She then called the F.B.I., but they told her that they could not help her because the Royal Bank was a foreign bank. They then referred her to the United States Secret Service. The Secret Service, specifically agent Ralph Culkin, conducted an investigation, and thereafter referred the matter to the Puerto Rico Police. Noriega, who at the time worked as an agent of the Carolina Criminal Investigation Bureau of the Puerto Rico Police, was assigned the case. Noriega had been working on fraud investigations at various Puerto Rico banks.

Culkin spoke with Noriega and sent him copies of the false checks. He also told Noriega that Monestina would try to cash them. Noriega requested, and received, permission from his superior to investigate the matter further. He contacted a Holland America attorney, who certified the company had not issued out two checks to the order of Nigerian Ports for $200,000 each. He further informed Noriega that there were two sets of identical checks — one real, one false. The amount in the two false checks (the ones that Monestina had deposited in his account) were for amounts far larger than those contained in the real checks. Instead of $200,000 each, the checks were made out for $540 and $105.

Noriega later went to the bank and spoke with the bank officers. They corroborated the information he had received from Culkin and from Holland America. They also told him that Monestina wanted to cash the false checks he had deposited in his account.

On the basis of the information provided to him by the Secret Service, the Royal Bank officers, and the Holland America representative, Noriega sought permission from the Puerto Rico Justice Department to submit the case to a magistrate. A Commonwealth district attorney gave his authorization. On July 12, 1995, Noriega appeared before a magistrate and obtained a warrant for Monestina's arrest.

Also on July 12, 1995, Monestina called Royal Bank from his home in Santo Domingo, Dominican Republic, to inquire as to the status of the checks. The bank officers told Monestina that he had endorsed the checks improperly (in fact, he had not) and asked him to return to Puerto Rico to correct the alleged error. The bank A not tell Monestina that the checks were false, or that the bank not process them.

Monestina arrived at the bank on that same day, shortly after business hours. Noriega and Culkin were already there, and they arrested Monestina shortly thereafter. Monestina was charged with two violations of Article 272 of the Puerto Rico Penal Code, 33 L.P.R.A. § 4592, which proscribes knowingly and intentionally passing forged documents with intent to defraud.

On July 13, 1995, Monestina appeared before a state district court judge. He was represented by legal counsel, Miguel R. Calderon, Esq. The district court judge heard testimony from a Royal Bank representative, a Holland America Line representative, Culkin, and Noriega. Monestina's counsel had an opportunity to cross-examine all witnesses. After hearing the testimony, the district court judge found probable cause, and set bail at $100,000.

On August 31, 1995, at a preliminary hearing, a state judge dismissed all charges against Monestina, finding no cause to proceed further against him.

A. SUMMARY JUDGMENT STANDARD

Rule 56(c) of the Federal Rules of Civil Procedure sets forth the standard for ruling on summary judgment motions: The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue of material fact and that the moving party is entitled to a judgment as a matter of law. Fed.R.Civ.P. 56(c). The critical question is whether a genuine issue of material fact exists. A genuine issue exists if there is sufficient evidence supporting the claimed factual dispute to require a choice between the parties' differing versions of the truth at trial. Morris v. Government Dev. Bank of P.R., 27 F.3d 746, 748 (1st Cir. 1994); LeBlanc v. Great Am. Ins. Co., 6 F.3d 836, 841 (1st Cir. 1993). A fact is material if it might affect the outcome of the suit under the governing law. Morrisey v. Boston Five Cents Sav. Bank, 54 F.3d 27, 31 (1st Cir. 1995);Maldonado-Denis v. Castillo-Rodriguez, 23 F.3d 576, 581 (1st Cir. 1994). On a motion for summary judgment, the court must view all evidence and related inferences in the light most favorable to the nonmoving party.See Springfield Terminal Ry. v. Canadian Pac. Ltd., 133 F.3d 103, 106 (1st Cir. 1997). Nonetheless, the court is free to "ignore conclusory allegations, improbable inferences and unsupported speculation." Suarez v. Pueblo Int'l., Inc., 229 F.3d 49, 53 (1st Cir. 2000) (citing Medina-Munoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)).

B. QUALIFIED IMMUNITY

The gravamen of Noriega's Complaint is that he was arrested without probable cause, in violation of his federal constitutional rights under the Fourth Amendment. Noriega has raised the qualified immunity defense before, but in two previous Opinions and Orders addressing the issue, the Court expressly advised that it could not rule on the objective reasonableness question because "he had not placed [it] in a position to assess his claim." Docket No. 74 at 6. Noriega has now done so, thereby placing the Court in a position to properly evaluate his claim.

Qualified immunity shields government officials performing discretionary functions from civil damages insofar as their conduct does not violate a clearly established statutory or constitutional right which should have been known. See Harlow v. Fitzgerald, 457 U.S. 800, 818 (1982). "Qualified immunity seeks to ensure that defendants `reasonably can anticipate when their conduct may give rise to liability' by attaching liability only if `[t]he contours of the right violated are sufficiently clear that a reasonable official would understand that what he is doing violates that right.'" United States v. Lanier, 520 U.S. 259, 270 (1997). The Supreme Court has emphasized that a § 1983 plaintiff must allege a violation of a clearly established right secured by the Constitution or some other federal law. Camilo-Robles v. Hoyos, 151 F.3d 1, 6 (1st Cir. 1998).

If no violation of a clearly established constitutional right (is found, then the analysis halts because "there is qualified immunity."Aponte Matos v. Toledo Davila, 135 F.3d 182, 187 (1st Cir. 1998). "The first inquiry is whether the constitutional right asserted by plaintiffs was clearly established at the time of the alleged violation. The second, if the right was clearly established, is whether a reasonable officer in the same situation would have understood that the challenged conduct violated that established right." Id. at 186. A state actor claiming qualified immunity must do so either under a theory that the asserted constitutional right was not clearly established or under the theory that his conduct satisfies the test of objective legal reasonableness. Camilo-Robles, 151 F.3d at 5-6. As noted earlier, this Opinion and Order will focus solely on the issue of Noriega's entitlement to a qualified immunity defense on objective reasonableness grounds.

Indeed, "[i]t has been clearly established for a very long time that the Fourth Amendment requires that arrests be based on probable cause."See, e.g., Abreu-Guzman v. Ford, 241 F.3d 69, 73 (1st Cir. 2001). This case, therefore, turns on the question "whether an objectively reasonable officer would have understood that the arrest of the plaintiff violated these clearly established constitutional rights." Id. It is objectively reasonable for officers to seek an arrest warrant "so long as the presence of probable cause is at least arguable." Id. (citing Prokey v. Watkins, 942 F.2d 67, 72 (1st Cir. 1991)); Floyd v. Farrell, 765 F.2d 1, 5 (1st Cir. 1985). When officers make an arrest subject to a warrant, then, even if probable cause is lacking, officers are entitled to qualified immunity "unless the warrant applications is so lacking in indicia of probable cause as to render official belief in its existence unreasonable." Abreu-Guzman, 241 F.3d at 73 (quoting St. Hilaire v. Laconia, 71 F.3d 20, 28 (1st Cir. 1995)). Similarly, an officer who conducts an arrest pursuant to a warrant is liable only "where the officer should have known that the facts recited in the affidavit did not constitute probable cause." Rodriguez v. Furtado, 950 F.2d 805, 812 (1st Cir. 1991).

This standard is not especially demanding. The issue is not whether Noriega in fact had probable cause but whether his conclusion to that effect was sufficiently reasonable to afford him the protection of qualified immunity. The standard "gives ample room for mistaken judgments," Malley v. Briggs, 475 U.S. 335, 373 (1986), and it is satisfied "so long as the presence of probable cause is at least arguable." Prokey v. Watkins, 942 F.2d 67, 72 (1st Cir. 1991).

This generous standard favors Noriega's position. The record shows that, given the facts available to Noriega when he made the arrest pursuant to a warrant, the existence of probable cause was "at least arguable." Noriega relied on information provided by Secret Service agent Ralph Culkin, Holland America (the check issuing entity), and the Royal Bank officers regarding the fraudulent nature of the checks and Monestina's putative intent to cash them. To be sure, not all of the information he received may have been accurate. Plaintiffs, however, have not persuasively shown why Monestina was not reasonably entitled to rely on that information when concluding that Monestina had probably committed a crime.

Moreover, the post-arrest finding of a state district court judge that there was probable cause — in a proceeding that afforded Monestina the opportunity to cross-examine witnesses, and therefore apprise the judge as to the very arguments it is raising here — provides perhaps the most compelling support for Noriega's stated position. The district judge's conclusion that there was probable cause (a higher standard than the one Noriega would have to meet to prevail here) bolsters Noriega's contention that the presence of probable cause, even if it didn't itself exist, was at least arguable in this case.

The Court concludes that Noriega's conduct was objectively reasonable. He is therefore entitled to the protection afforded by qualified immunity. Accordingly, the Court grants his summary judgment motion.

For the foregoing reasons, the Court grants Noriega's summary judgment motion and dismisses Monestina's federal claims against Noriega with prejudice. Judgment shall enter accordingly.

Pursuant to the Opinion and Order issued on this date, the Court hereby enters judgment dismissing the plaintiffs's federal claims against defendant Ricardo Noriega with prejudice. The remaining state-based claims are dismissed without prejudice.

This case is now closed for statistical purposes.