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United States District Court for the District of Puerto Rico
March 19, 2021, Decided; March 19, 2021, Filed
CIV. NO.: 19-2138 (SCC); 20-1095 (SCC)
OPINION AND ORDER
Plaintiffs Magda Rodríguez-Rodríguez and Félix Peña-Fernández filed this action under federal question and diversity jurisdiction seeking vacatur of the Award of Arbitrator (the "Award") entered by the American Arbitration Association ("AAA") against them and in favor of Defendant Doctor's Associates, LLC ("Doctor's") regarding the termination of certain franchise agreements. See Docket No. 1. Several months later, Doctor's filed a separate action in this Court seeking confirmation of the Award. See Docket No. 1 of Case No. 20-1095. The two actions were consolidated at the request of Plaintiffs. See Docket No. 18. Pending before the Court are Mr. Peña and Ms. Rodríguez's separate Motions to Dismiss Doctor's' petition, arguing that the "rights, titles and interests" under the franchise agreements have already been adjudicated in this Court via a criminal forfeiture proceeding against Mr. [*3] Peña and therefore the petition should be dismissed. See Docket No. 21; Docket No. 26 of Case No. 20-1095.1 Doctor's opposed both Motions. See Docket Nos. 19, 28.
I. Factual and Procedural Background
In 2015, Doctor's entered into three franchise agreements with Plaintiffs, under which Plaintiffs — who were married at the time — agreed to run three Subway restaurants in Puerto Rico according to Doctor's' proprietary system of operation (the "Franchise Agreements" or "Agreements").2 See Docket No. 3, Exs. 1, 2, 3 of Case No. 20-2095. In March of 2019, Doctor's commenced an arbitration proceeding pursuant to an arbitration clause in the Franchise Agreements through the AAA against Plaintiffs seeking to terminate the Agreements and other relief. See Docket No. 1, ¶ 6 of Case No. 20-1095.
Prior to the commencement of the arbitration, Mr. Peña had pled guilty to thirteen counts of bank fraud in criminal case number 18-426. See Docket No. 20, Ex. 3 of Case No. 20-1095. As a result, the Court issued a preliminary forfeiture order on October 12, 2018, pursuant to 21 U.S.C. § 853(n) ("Section 853") and Federal Rule of Criminal Procedure 32.2 ("Rule 32.2."), under which Mr. Peña agreed as part of his plea to forfeit his "rights, title and interest" in Franchise Agreement [*4] #18256 and Franchise Agreement #21043 to the United States as proceeds of his illegal conduct. See Docket No. 20, Ex. 2 of Case No. 20-1095.
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2021 U.S. Dist. LEXIS 53821 *; 2021 WL 1098263
MAGDA C. RODRÍGUEZ-RODRÍGUEZ ET AL., Plaintiffs, v. DOCTOR'S ASSOCIATES, LLC., Defendants
Prior History: United States v. Pea-Fernndez, 401 F. Supp. 3d 223, 2019 U.S. Dist. LEXIS 141543, 2019 WL 3890149 (D.P.R., Apr. 15, 2019)
franchise agreement, arbitration, rights, forfeiture, arbitration award, vacate, forfeiture proceeding, forfeited, forfeiture order, title and interest, motion to dismiss, vacatur