United States Court of Appeals

For the First Circuit

No. 18-1074 

ROBERT ANEL DÍAZ-MORALES,

Plaintiff, Appellee,

v.

SERGIO RUBIO-PAREDES, Puerto Rico District Attorney; EMILIO 

ARILL-GARCIA; LIMARIS CRUZ-VÉLEZ,

Defendants, Appellants,

JOHN DOE; CONJUGAL PARTNERSHIP DOE-CRUZ; UNKNOWN PUERTO RICO 

POLICE RANKED SUPERVISORS AND OFFICERS A., B., AND C.; JANE DOE; 

CONJUGAL PARTNERSHIP RUBIO-DOE; MARY DOE; CONJUGAL PARTNERSHIP 

ARILL-DOE; UNKNOWN ASSISTANT DISTRICT ATTORNEYS D., E., AND F.,

Defendants.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF PUERTO RICO

[Hon. Juan M. Pérez-Giménez, U.S. District Judge]

Before

Howard, Chief Judge,

and Barron, Circuit Judge.*

* Judge Torruella heard oral argument in this matter and 

participated in the semble, but he did not participate in the 

issuance of the panel's opinion in this case. The remaining two 

panelists therefore issued the opinion pursuant to 28 U.S.C. 

§ 46(d).
Ángel E. Rotger-Sabat, with whom Ramón Coto-Ojeda and Coto & 

Associates were on brief, for the Appellee.

Carlos Lugo-Fiol, with whom Isaías Sánchez-Báez, Solicitor 

General of Puerto Rico, was on brief, for the Appellants.

May 10, 2021
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HOWARD, Chief Judge. Like Colón-Torres v. NegrónFernández, No. 18-1579 (1st. Cir May 10, 2021), which was also 

decided today, this case implicates a question about the scope of 

the automatic stay provision of the Puerto Rico Oversight, 

Management, and Economic Stability Act ("PROMESA"). And, like 

Colón-Torres, this dispute arises from a settlement following a 

suit under 42 U.S.C. § 1983 against an officer of the Commonwealth 

of Puerto Rico sued in the officer's individual capacity.

In Colón-Torres, we confronted a plaintiff's effort to 

recover under the settlement, and we concluded that the enforcement 

action at issue must be stayed under PROMESA, even though the 

original suit was against the officer individually, because the 

plaintiff's motion to enforce the settlement was against the 

Commonwealth and sought payment directly from it pursuant to the

settlement. See Colón-Torres, slip op. at 17–21. Here, however, 

the § 1983 claim itself has been dismissed with prejudice, and 

there is no pending action to enforce the settlement through an 

action against the Commonwealth or anyone else. We thus conclude 

that the District Court was right to deny the Commonwealth's 

motions for reconsideration that are at issue, insofar as they may 

be construed as motions to apply PROMESA's automatic stay to either 

the now-dismissed § 1983 action or the as-yet-unenforced 

settlement agreement.
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I. BACKGROUND

Because the parties reached a settlement, we recite the 

facts underlying this case only briefly and draw them from the 

district court's opinions at the motion to dismiss and summary 

judgment stages. 

A. Factual Background

In November 2003, the plaintiff, Robert Anel DíazMorales, was convicted of murder and assault in connection with 

the October 2001 death of Kenia Rosario Viera. In May 2012, the 

Supreme Court of Puerto Rico vacated Díaz's conviction and 

sentence. Shortly thereafter, Díaz filed suit in the Federal 

District Court for the District of Puerto Rico for violations of 

his civil rights under 42 U.S.C. § 1983 against the Defendants:

the law enforcement officer in charge of investigating the murder 

and the two district attorneys who prosecuted his case. 

In particular, Díaz alleged that, during the course of 

the investigation, law enforcement officers, including Defendant 

Limaris Cruz-Vélez, were told by several witnesses that four other 

individuals, including the victim's former romantic partner, were 

responsible for the assault and murder. But Cruz and other 

officers were led to Díaz after tracking the victim's phone. Díaz 

was interviewed and eventually arrested and charged with murder. 

Díaz later alleged that he was only charged because Cruz conducted 

the investigation recklessly and with gross disregard for his 
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rights and protections under the Fourth and Fifth Amendments. Díaz 

also alleged that Defendant Sergio Rubio-Paredes, the lead 

district attorney in his case, not only charged and prosecuted him 

despite knowing that other suspects had been identified but also 

coerced witnesses to implicate Díaz. Díaz raised the same 

allegations, along with a claim for supervisory liability, against 

Defendant Emilio Arill-Garcia, Rubio's direct supervisor. 

B. Procedural History

In March 2016, the district court granted in part and 

denied in part the Defendants' motion for summary judgment. Though 

the district court concluded that Díaz had failed to provide any 

proof of a conspiracy between the Defendants, it allowed Díaz's 

claims for malicious prosecution to proceed against each defendant 

individually. The parties then began preparing for trial, which 

was scheduled to begin on January 23, 2017. On the eve of trial, 

the parties began settlement negotiations and, on February 3, 2017, 

Díaz notified the court that they had reached a settlement and 

that the case would be voluntarily dismissed. 

The settlement agreement was filed under seal, and the 

district court dismissed the case with prejudice on February 6, 

2017. In the judgment, the district court expressly stated that 

"[i]n accordance with the stipulation, the court will retain 

jurisdiction until the terms and conditions of [the settlement] 

are implemented and fully complied with." As relevant here, the 
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agreement specifically stated that the settlement amount would "be 

paid to . . . Robert Díaz-Morales by the Commonwealth of Puerto 

Rico" because "Defendants are beneficiaries of [Puerto Rico Law 

9]." (emphasis added). The settlement ordered the payment to be 

made in installments, with the first installment due by December 

31, 2017. 

On May 3, 2017, before the first installment of the 

agreed settlement payments was due, the Financial Oversight and 

Management Board ("FOMB") filed a petition for bankruptcy relief 

on behalf of the Commonwealth under Title III of PROMESA. On 

September 4, 2017, the Puerto Rico Department of Justice, on behalf 

of the Defendants, filed an "informative motion" with the district 

court notifying it of the Title III petition; the motion did not 

ask the district court to take any action. 

Nevertheless, Díaz filed a motion in opposition. He 

argued that the "automatic stay is not applicable to this case"

and that "the judgment against the Defendants is enforceable." 

Specifically, he first contended that the complaint "was NOT 

against the Commonwealth nor was it on account of a debt of the 

Commonwealth" but instead "sought damages against the Defendants[]

exclusively in their personal and individual capacity." He went 

on to assert that if the settlement were breached, the district 

court would retain jurisdiction to determine the proper course but 

that such a possibility remained "premature and speculative." 
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The district court granted Díaz's opposition without 

elaboration, and the Defendants sought reconsideration. They 

argued that "the stay bars [Díaz] from continuing his collection 

efforts against the Government through the instant Complaint," 

since the Commonwealth was the party "responsible for paying the 

amount agreed upon in the covenant." They devoted the bulk of 

their motion to the assertion that a claim against an officer of 

Puerto Rico in his individual capacity seeks to enforce a claim 

against the Commonwealth, then closed by arguing that "in all 

earnest, this discussion is moot given that there is a settlement 

agreement that disposed of the case at bar -- and that settlement 

unequivocally states that the Commonwealth will pay." Thus, the 

Defendants requested that the District Court "respect the 

automatic stay that is in effect." 

The district court denied the motion for 

reconsideration, this time issuing an opinion. The district court 

reasoned that the Commonwealth was not a party to the suit or the 

judgment because the plaintiff had sought damages from the 

Defendants solely in their individual capacities. The district 

court also noted that at no point in the litigation was there a 

"cause of action alleged against the Commonwealth[] seeking 

payment or compensation of any kind" and that, because the 

Commonwealth had "consistently averred that in no way ha[d] it 

submitted to the [court's] jurisdiction," there was "nothing to be 
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stayed here." The Defendants filed a second motion for 

reconsideration, primarily to highlight additional case law, but 

the district court denied that motion as well. 

The Defendants timely appealed both the initial denial 

of the motion and the denial of both motions for reconsideration. 

II. DISCUSSION

We typically review a district court's denial of 

reconsideration for abuse of discretion, but we will evaluate the 

denial of these motions de novo because they "cover[ ] . . . more 

or less the same points . . . earlier made to the district court." 

Town of Norwood v. New Eng. Power Co., 202 F.3d 408, 415 (1st Cir. 

2000) (emphasis omitted). In undertaking that review, we treat 

the denials of these motions, as the parties do, as rulings that 

the PROMESA automatic stay does not apply in the face of a request 

to apply it to either the § 1983 suit itself or an action to 

enforce the settlement agreement. We thus consider the 

Commonwealth's appeal to be a challenge to the conclusion that the 

stay does not apply here because the § 1983 suit has been dismissed 

with prejudice and no action to enforce the settlement has yet 

been brought, such that, as the district court articulated, "there

is nothing to be stayed." For the reasons that we will explain, 

we conclude that the district court was right.

In Colón-Torres, we concluded that the PROMESA stay 

applied to a motion the plaintiff had filed seeking payment from 
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the Commonwealth directly under a settlement agreement because we 

held that motion was an effort "to recover a claim against" the 

Commonwealth. Colón-Torres, slip op. at 20 (quoting 11 U.S.C. 

§ 362(a)(1)). PROMESA, we explained, directly incorporates the

automatic stay provisions of the Bankruptcy Code, 11 U.S.C. §§ 362,

922, which, among other things, stay "the commencement or 

continuation . . . of a judicial . . . action or proceeding 

against the debtor . . . to recover a claim against the debtor."

Id. § 362(a)(1).

In Colón-Torres, the parties disputed whether the 

Commonwealth was a party to the settlement, but the plaintiffappellee had styled his motion to recoup the settlement monies as 

one against the Commonwealth rather than one against the individual 

defendant. For that reason, we held that his enforcement action 

must be stayed as it was an action "against the debtor." ColónTorres, slip op. at 17-21.

Here, by contrast, even accepting that the text of the 

settlement agreement indicates that the Commonwealth is the liable 

party under it, there is no "action" or "proceeding" demanding 

that the Commonwealth make the payment to the plaintiff, and there 

has been no effort to "commence[]" or "continu[e]" one. 11 U.S.C. 

§ 362(a)(1). Of course, at the time the motion for reconsideration 

was filed, there was some chance that the Commonwealth might refuse 

to comply with the terms of the agreement when the deadline for 
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payment arrived, and that the plaintiff might then ask the district 

court to enforce the obligation.1 Even so, Díaz was right to argue 

that possibility remained "premature and speculative" at the times

relevant to this appeal. Thus, we agree with the district court 

that "there is nothing to be stayed here" with respect to the 

enforcement of the settlement itself.

The appellant-Defendants do renew their contention that 

the complaint in the original § 1983 action "is functionally an 

action against the Commonwealth." Regardless of whether they are 

right to so argue, cf. Colón-Torres, slip op. at 22-24, however, 

that action was not before the district court at the time they 

sought application of the stay. Though this dispute has its 

genesis in that § 1983 suit, the complaint was dismissed with 

prejudice pursuant to the terms of the settlement agreement before 

the Commonwealth filed for bankruptcy. Whether the "commencement" 

or "continuation" of that action should have been stayed pursuant 

to § 922 -- if it had still been live at the time of filing -- is 

not before us.

Of course, if Díaz does make any attempt to enforce the 

settlement here, Colón-Torres would likely bear on the question of 

1 The district court expressly retained jurisdiction to 

enforce the settlement agreement in its judgment dismissing the 

case. Cf. Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 

375, 378, 381 (1994); Colón-Torres, slip op. at 15–16 (discussing 

the Commonwealth's challenge to the district court's jurisdiction 

to enforce the terms of the settlement agreement). 
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whether his claim could proceed. Because the Commonwealth is the 

only party that has expressly committed in the settlement to pay 

the agreed-upon amount, it may be that any future collection effort 

under the terms of that agreement would be against the 

Commonwealth. See Colón-Torres, slip op. at 22-24. And, any 

action to enforce the settlement in this case that "seeks to 

recover a claim against the debtor" must be stayed if it is 

brought. See 11 U.S.C. § 362. But, no such action is now pending,

and the settlement agreement itself does not trigger the automatic 

stay. See Smith v. Capital One Bank (USA), N.A., 845 F.3d 256, 

258-59, 261 n.4 (7th Cir. 2016) (holding automatic stay was not 

violated where credit card company received a judgment it may have 

been able to enforce against a debtor but had not tried to do so).

III. CONCLUSION

For the foregoing reasons, we affirm the district 

court's order denying the application of the PROMESA stay.