Aviles v. City of Phila. Water Rev. Bureau (In re Aviles)
| Decision Date | 01 July 2015 |
| Docket Number | ADV. PROC. NO. 14–00285 ESL,CASE NO. 12–00664 ESL |
| Citation | 532 B.R. 428 |
| Parties | In re: Yisaris Quiles Aviles, Debtor Yisaris Quiles Aviles, Plaintiff v. City of Philadelphia Water Revenue Bureau, Defendant |
| Court | U.S. Bankruptcy Court — District of Puerto Rico |
Paul James Hammer, Estrella, LLC, San Juan, PR, James Vendermark, Philadelphia, PA, Felix M. Zeno Gloro, Arecibo, PR, for Plaintiff.
This adversary proceeding is before the court upon the Motion to Dismiss and Memorandum in Support (the “Motion to Dismiss ”, Docket No. 11) filed by the defendant City of Philadelphia alleging that: (a) the Plaintiff has not established in personam jurisdiction against it nor has she established “a prima facie showing that this court's long-arm statute and the Due Process Clause of the Fourteenth Amendment are satisfied” (id., p. 3); and (b) the Plaintiff fails to state a claim upon which relief may be granted because it is a “governmental unit” and, “as such, is protected by Sovereign Immunity under the Eleventh Amendment and Bankruptcy Code ... 11 U.S.C. §§ 101(27) and 106 ” (id., p. 4). Also before the court is the Opposition to Motion to Dismiss (Docket No. 22) filed by the Plaintiff arguing she properly established in personam jurisdiction and that her “Complaint adequately pleads a cause for willful violation of the discharge injunction and for injunctive relief and civil contempt” (id., p. 15, ¶ 33). For the reasons stated herein, the Motion to Dismiss (Docket No. 11) is hereby denied as to the lack of in personam jurisdiction but granted in regards to the dismissal of the emotional distress and punitive damages.
On January 31, 2012, the Plaintiff filed a Chapter 7 bankruptcy petition. See Lead Case Docket No. 1. In Schedule A, she disclosed having an ownership interest in the following two properties: (1) 5838 Oakland Street, Philadelphia, PA (the “Oakland St. Property”); and (2) 114 E. Tioga Street, Philadelphia, PA (the “Tioga St. Property”). See Lead Case Docket No. 1, p. 18. In Schedule F, she reported an unsecured debt with the Water Revenue Bureau of the City of Philadelphia (the “City of Philadelphia” or “City”) in the amount of $584.66 (id., p. 30). The City of Philadelphia was notified of the bankruptcy petition (id., p. 45, and Lead Docket No. 7).
On March 2, 2012, the Chapter 7 Trustee abandoned the Oakland St. Property pursuant to Section 544(a) of the Bankruptcy Code. See Lead Case Docket No. 11.
On May 9, 2012, the court entered the Discharge of Debtor (Lead Case Docket No. 18).
On November 16, 2014, the City of Philadelphia issued an invoice to the Plaintiff in the total amount of $2,687.19 comprising: (a) previous account balance in the amount of $2,631.69; (b) a late payment penalty in the amount of $27.35; (c) current charges in the amount of $14.15; (d) and another penalty in the amount of $14.00. See Docket No. 24, p. 3.
On September 16, 2014, the Plaintiff filed a Motion to Reopen Case to Permit to File an Adversary Proceeding for Contempt and Violation of the Discharge Injunction (Lead Case Docket No. 22), which the court granted on November 6, 2014 (Lead Case Docket No. 25).
On December 8, 2014, the Plaintiff filed an adversary proceeding through the instant Complaint alleging that the City of Philadelphia willfully violated the discharge injunction and order by “issuing collection letters to the Debtor after the date of the Discharge Order” (Docket No. 1, p. 6, ¶ 13). She claims: (i ) actual and compensatory damages in an amount no less than $10,000 (for mental anguish, suffering, physical harm and out-of-pocket expenses and time lost defending against the alleged violations); (ii ) punitive damages in an amount no less than $10,000; and (iii ) legal costs, expenses and attorneys' fees.
On January 19, 2015, the City of Philadelphia filed the Motion to Dismiss and Memorandum in Support (Docket No. 11) alleging that the Plaintiff: (a) has not established in personam jurisdiction against it nor has she established “a prima facie showing that this court's long-arm statute and the Due Process Clause of the Fourteenth Amendment are satisfied” (id., p. 3); and (b) fails to state a claim upon which relief may be granted because it is a “governmental unit” and, “as such, is protected by Sovereign Immunity under the Eleventh Amendment and Bankruptcy Code ... 11 U.S.C. §§ 101(27) and 106 ” (id., p. 4).
After requesting and receiving an extension of time1 , on February 17, 2015, the Plaintiff filed an Opposition to Motion to Dismiss (Docket No. 22) arguing she had established in personam jurisdiction and that her “Complaint adequately pleads a cause for willful violation of the discharge injunction and for injunctive relief and civil contempt” (id., p. 15, ¶ 33).
On March 9, 2015, the City of Philadelphia filed a Reply to ... Opposition to Motion to Dismiss (Docket No. 27) alleging that: (a) under Pennsylvania's Municipal Claims and Tax Lien Act, water and sewer usage assessments are liens against the property when assessed under 53 P.S. § 7106(a); (b) the real property where the water services are provided is in Philadelphia, Pennsylvania; (c) the City of Philadelphia retains a claim for the continuing unpaid and accruing water and sewer assessments and therefore may continue to seek collection of same; (d) merely sending a bill to the Plaintiff is not sufficient “minimum contacts” to create jurisdiction over a non-resident defendant like the City of Philadelphia; (d) the Plaintiff has failed to show the City of Philadelphia had the minimum contacts necessary for this court to in personam jurisdiction over it; (e) the property and any witnesses that may be called forward are all located in the Commonwealth of Pennsylvania; (f) the Discharge Order of the Plaintiff's personal debts did not affect the City of Philadelphia's liens for the unpaid water and sewer usage assessments against the real property; (g) notices of assessments and changes in assessments for secured amounts do not violate the Bankruptcy Code; (h) the City of Philadelphia did not violate Section 524 of the Bankruptcy Code by sending bills for water and sewer usage to the Plaintiff; (i) because Section 106 of the Bankruptcy Code preserves the City of Philadelphia's sovereign immunity, which the City has not waived, the Plaintiff is unable to state a claim which would allow for the recovery of damages for emotional distress; (j) a Bankruptcy Court may issue an order against a governmental unit, but not for punitive damages pursuant to 11 U.S.C. § 106(a)(3) ; and (k) costs and attorney fees should not be awarded for prosecuting a damages action arising from an alleged violation of the discharge injunction.
On March 31, 2015, the Plaintiff filed a Sur–Reply in Opposition to Motion to Dismiss alleging that the City of Philadelphia has sufficient contracts with the United States to be subject to the Bankruptcy Court's in personam jurisdiction because it is “as American as apple pie” (Docket No. 32, p. 32, p. 3, ¶ 7).
The Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 157(a). This is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(1) and (b)(2). A core proceeding, for bankruptcy jurisdictional purposes, is an action that has as its foundation the creation, recognition, or adjudication of rights that would not exist independent of a bankruptcy environment.” In re Med. Educ. & Health Servs., Inc., 459 B.R. 527, 545 (Bankr.D.P.R.2011) (citations and quotations omitted). A “violation of the discharge injunction [dispute] is a core proceeding.” Ricketts v. Bank of Am. Co. (In re Ricketts), 2013 Bankr.LEXIS 5392 at *13, 2013 WL 6858941 at *5 (Bankr.D.N.H.2013). Venue of this proceeding is proper under 28 U.S.C. §§ 1408 and 1409 and uncontested.
The City of Philadelphia claims that the Plaintiff has not established in personam jurisdiction because “the Complaint provides no assertions of actions by the City within Puerto Rico to establish the minimum contacts necessary for personal jurisdiction” (Docket No. 11, p. 3). The City of Philadelphia does not contest the validity of the service of the summons.
Pursuant to Fed. R. Civ. P. 12(b)(2), applicable in bankruptcy adversary proceedings through Fed. R. Bankr. P. 7012, a party may request the dismissal of a complaint for “lack of personal jurisdiction”.
Fed. R. Bankr. P. 7004(f) provides as follows:
Personal Jurisdiction . If the exercise of jurisdiction is consistent with the Constitution and laws of the United States, serving a summons or filing a waiver of service in accordance with this rule or the subdivisions of Rule 4 F.R.Civ.P. made applicable by these rules is effective to establish personal jurisdiction over the person of any defendant with respect to a case under the Code or a civil proceeding arising under the Code, or arising in or related to a case under the Code.
In Enron Corp. v. Arora (In re Enron Corp.), 316 B.R. 434, 444–446 (Bankr.S.D.N.Y.2004), the court explained as follows:
After the 1996 Amendments [to Fed. R. Bankr. P. 7004(f) ], courts have recognized in federal question cases that no inquiry into a defendant's “minimum contacts” with the forum state is needed to exercise jurisdiction pursuant to Bankruptcy Rule 7004 ; rather, only a federal “minimum contacts” test is required, whereby the Fifth Amendment's Due Process Clause limits a bankruptcy court's exercise of personal jurisdiction over a defendant. Nationsbank, N.A. v. Macoil, Inc. (In re Med–Atlantic Petroleum Corp.), 233 B.R. 644, 653 (Bankr.S.D.N.Y.1999) ; see Owens–Illinois, Inc. v. Rapid American Corp. (In re Celotex Corp.), 124 F.3d 619, 630 (4th Cir.1997) (...
To continue reading
Request your trial