In re Empresas Omajede Inc.

• Decision Date: 08 June 2015
• Docket Number: CASE NO. 12–10113 ESL
• Citation: 537 B.R. 63
• Parties: In re: Empresas Omajede Inc., Debtor
• Court: U.S. Bankruptcy Court — District of Puerto Rico

537 B.R. 63

In re: Empresas Omajede Inc., Debtor

CASE NO. 12–10113 ESL

United States Bankruptcy Court, D. Puerto Rico.

Signed June 8, 2015

Entered June 9, 2015

Gerardo A. Carlo Altieri, G.A. Carlo–Altieri Law Offices, LLC, San Juan, PR, Kendra Loomis, San Juan, PR, for Debtor.

OPINION AND ORDER

Enrique S. Lamoutte, United States Bankruptcy Judge

This case is before the court upon Empresas Omajede, Inc.'s (hereinafter referred to as the “Debtor”) Objection to Proof of Claim Number 5 Filed by Banco Popular de Puerto Rico. The objection hinges on the interpretation of certain contractual clauses regarding the late fees and default rate (or additional late fees) which are included in the three (3) commercial loans that the Debtor has outstanding with Banco Popular de Puerto Rico (hereinafter referred to as “BPPR”) (Docket No. 153). The Debtor argues that the late fees may be imposed upon the Debtor after the ten (10) day grace period has lapsed for all three (3) loans, and that the default rate (or additional late fee) is triggered after a payment has been overdue for thirty (30) days, and only applies to the days past due beyond the thirty (30) days. The Debtor further argues that the default rate may only be applied for two (2) of the three (3) loans if the Debtor has been notified of the default in writing. (Docket No. 153). BPPR filed its Response to Objection to Claim No. 5 (Docket No. 184).

Subsequently, BPPR filed a Motion Requesting Partial Summary Judgment and Memorandum of Law in Support of Summary Judgment as to the issue regarding the contractual interpretation of the penalty clauses for late fees and delinquent interest (referred to as additional late fees in the other 2 loan documents) for late payments pursuant to the loan documents (Docket No. 243). BPPR also filed a Statement of Uncontested Material Facts regarding the contractual clauses in controversy (Docket No. 244). The Debtor filed its Motion for Partial Summary Judgment on the Debtor's Objection to Proof of Claim No. 5 Filed by Banco Popular de Puerto Rico (Docket No. 245). The Debtor filed its Objection to Proof of Claim Number 5–1 filed by Banco Popular de Puerto Rico which is based on the same grounds as its prior objection to BPPR's proof of claim but the same includes its objection to attorney's fees since no breakdown is provided (Docket No. 253). BPPR filed its Response to Debtor's Objection to BPPR's Amended Proof of Claim 5 (Docket No. 5).

For the reasons set forth below this court finds that for all the three (3) loan agreements in controversy only the late fee may be applied after a ten (10) day period. The default interest or additional late fees are not applicable in the instant case as discussed herein. The Debtor's Motion for Partial Summary Judgment on the Debtor's Objection to Proof of Claim No. 5, Filed By Banco Popular de Puerto Rico is granted and BPPR's Motion Requesting Partial Summary Judgment and Memorandum of Law in Support of Summary Judgment is denied.

Jurisdiction

The Court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 157(b). This is a core proceeding pursuant to 28 U.S.C. §§ 157(b)(2)(B). Venue is proper under 28 U.S.C. §§ 1408 and 1409.

Procedural Background

Empresas Omajede, Inc. filed a bankruptcy petition under Chapter 11 of the Bankruptcy Code on December 21, 2012. The Debtor included BPPR in its Schedule F–Creditors Holding Unsecured Nonpriority Claims- as an unsecured creditor for three (3) different claims in the following amounts: (i) $425,775.09; (ii) $1,498,456.00; and (iii) $1,249,070.00. On March 1, 2013, the Debtor filed a Motion Submitting Amended Summary of Schedules, Schedules A, B, Amended Schedules D, E, F, Schedules G, H, Statement of Financial Affairs and Amended List of Creditors Holding 20 Largest Unsecured Claims (Docket No. 34). The Debtor in Schedule A–Real Property listed the following properties: (i) La Electronica Building listed with a current value of $12,000,000 and a secured claim in the amount of $2,747,526; (ii) parking of La Electronica Building listed with a current value of $1,481,477.50 and a secured claim in the amount of $228,633.70; (iii) property # 3 Monacillos listed with a current value of $2,275,940 and a secured claim in the amount of $342,950.55; (iv) property # 4 Carraizo with a current value of $39,600 and with a secured claim in the amount of $34,062; (v) property # 5 Carraizo with a current value of $200,000 and with a secured claim in the amount of $306,558; and (vi) property # 6 Carraizo with a current value of $70,400 and a secured claim in the amount of $76,639.51 The Debtor included BPPR in its Schedule D–Creditors Holding Secured Claims- as a secured creditor of the followingproperties: (i) property # 6–Carraizo listed with a value of $70,400. The amount of the claim is in the amount of $76,539.51 of which $6,239.51 is listed as the unsecured portion of the claim; (ii) mortgage on property # 4–Carraizo with a listed value of $39,600 and a secured claim in the amount of $34,062; (iii) first mortgage on property # 1–La Electronica Building with a listed value of $12,000,000 and a secured claim in the amount of $2,747,526; and (iv) property # 5–Carraizo with a listed value of $200,000 and a claim in the amount of $306,558 of which $106,558 is listed as the unsecured portion. The Debtor listed all of BPPR's secured claims as disputed. On March 11, 2013, the Debtor filed a Motion Submitting Amended Schedule D and Amended Statement of Financial Affairs in which it updated the information to include the dates that the secured claims were incurred. The updated information on BPPR's secured claims consists of the following: (i) June 29, 2005, date mortgage was executed on property # 6–Carraizo listed with a value of $70,400. The claim is in the amount of $76,639.51, of which $6,239.51 is listed as the unsecured portion of the claim; (ii) June 29, 2005, date mortgage on property # 4–Carraizo with a listed value of $39,600 and a secured claim in the amount of $34,062; (iii) June 8, 2006/ March 21, 2003 date(s) of mortgage on property # 1–La Electronica Building with a listed value of $12,000,000 and a secured claim in the amount of $2,747,526; and (iv) June 29, 2005, date mortgage was incurred on property # 5–Carraizo with a listed value of $200,000 and a claim in the amount of $306,558 of which $106,558.00 is listed as the unsecured portion. The Debtor listed all of BPPR's secured claims as disputed (Docket No 40).

On April 29, 2013, BPPR filed proof of claim # 5–1 as a secured claim in the amount of $3,155,331.80, which consists of three (3) loans; namely: (1) loan # 9002 with a principal amount of $425,775.09; (2) loan # 9003 with a principal amount of $1,490,348.83; and (3) loan # 9004 with a principal amount of $1,239,207.88.

On April 3, 2014, the Debtor filed its Objection to Proof of Claim Number 5 Filed by Banco Popular de Puerto Rico which is based upon certain contractual clauses contained in the three (3) commercial loans which the Debtor currently has outstanding with BPPR. The clauses pertain to late fees and additional late fees and when these clauses are triggered. The Debtor argues that the three (3) loans provide for certain grace periods for payment and that the application of these grace periods is evidenced by Debtor's payment history with the predecessor creditor Westernbank, prior to the transfer of the loans to BPPR. The Debtor argues as follows (i) Loans 9002, 9003 and 9004 have a ten (10) day grace period during which no penalties are applicable. Ten (10) days after the payment date, there is a late fee which is 5% of the monthly payment. The additional late fee is triggered thirty (30) days after the payment due date and consists of an additional 2% (two percentage points) added to the interest rate until full payment is made of all delinquents amounts owed; (ii) BPPR sent a letter to the Debtor on February 23, 2011 attempting to unilaterally alter the loan contracts. In said letter, BPPR acknowledged that Loans 9002, 9003 and 9004 “contain clauses that go in force during periods rof default: one establishes a delinquency charge and the other establishes a default fee.” The letter further states that “only the clause relating to the default fee will be in force.” Lastly, the letter states that, “[i]t is important to clarify that at Banco Popular the default fee is activated the day following the payment due date, and does not include any grace period days. It is deactivated as soon as the payment of the debt is made current, provided that there is no new default event” (Docket No 153, Exhibit Ecertified translation of letter—original letter not submitted); (iii) BPPR unilaterally and contrary to Article 1208 of the Puerto Rico Civil Code, 33 L.P.R.A. § 3373 altered the contract terms, thus the Debtor's and BPPR's amortization tables have diverged; and (iv) the interest payments that have been wrongfully accumulated (for the period of August 2010 through February 28, 2014) and adjusted to principal for Loans 9002, 9003 and 9004 amount to $26,622.17, $80,159.52 and $62,195.59, respectively. Loan 9004 became due and payable on June 30, 2010, after this date payments made by Debtor included principal and interest and other times only interest. The Debtor ceased to make payments on this Loan after April 2013 (Docket No. 153, Exhibit I).

On May 5, 2014, BPPR filed a Motion requesting Extension of Time to File Response to Debtor's Objection (Docket No. 161) and the court granted the same on May 6, 2014 (Docket No. 162). On May 12, 2014, BPPR filed a second Motion requesting Extension of Time to File Response to Debtor's objection to BPPR's proof of claim (Docket No. 167) and the court granted the same on May 13, 2014 (Docket No. 168).

On May 16, 2014, BPPR filed amended proof of claim # 5–2 as a secured claim in the amount of $3,172,207.78 which consists of three (3) loans; namely: (1) loan # 9002 with a principal amount of $425,775.09; (2) loan #...