Matter of Unanue-Casal, Civ. No. 91-2337 (JAF)
| Decision Date | 07 August 1992 |
| Docket Number | Civ. No. 91-2337 (JAF),Bankruptcy No. 90-04490 (SEK). |
| Citation | 144 BR 604 |
| Parties | In the Matter of Ulpiano UNANUE-CASAL, a/k/a Charles Unanue, Debtor. Gerardo A. QUIRÓS-LÓPEZ, Chapter 7 Trustee, Goya Foods, Inc., Goya de Puerto Rico, Inc., Plaintiffs-Appellees, v. Ulpiano UNANUE-CASAL, Liliane Unanue, Emperor Equities, Inc., and Kalif Trading, Inc., Defendants-Appellants. |
| Court | U.S. District Court — District of Puerto Rico |
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Arturo J. Garcia-Sola and Dora M. Penagaricano, McConnell Valdes Kelley Sifre Griggs & Ruiz-Suria, San Juan, P.R., for Goya Foods, Inc. & Goya de Puerto Rico, Inc.
Antonio Hernandez-Rodriguez, William Vidal-Carvajal, Hernandez & Vidal, San Juan, P.R., for Charles Unanue.
Harvey B. Nachman, Nachman & Fernandez-Sein, San Juan, P.R., for Liliane Unanue & Emperor Equities, Inc.
Viviana Rodriguez, Atty., Federal Litigation Div., Dept. of Justice, Com. of Puerto Rico, San Juan, P.R., for intervenor, Com. of Puerto Rico.
In this appeal from orders of the United States Bankruptcy Court for the District of Puerto Rico, appellants Liliane Unanue and Emperor Equities, Inc. ("Emperor") make a facial and as-applied challenge to the constitutionality of the Puerto Rico provisional remedies statute, 32 L.P.R.A.App. III R. 56. Finding no constitutional infirmity in the statute, we affirm the bankruptcy court's rulings.
On August 29, 1990, Ulpiano Unanue-Casal, a/k/a Charles Unanue ("Charles Unanue" or "debtor"), filed a petition under Chapter 7 of the Bankruptcy Code. In his schedule of liabilities and assets, he listed a little over $40,000 in assets, while listing liabilities in the amount of over $1,100,000. Gerardo A. Quirós-López was appointed Chapter 7 Trustee.
On August 30, 1991, Goya Foods, Inc. and Goya de Puerto Rico, Inc. ("Goya"), as creditors in the bankruptcy proceeding and on behalf of the trustee, commenced an adversary proceeding seeking to set aside allegedly fraudulent transfers made by the debtor. Along with Unanue, named as defendants were his wife Liliane Unanue, Emperor Equities, Inc. ("Emperor"), and Kalif Trading, Inc. ("Kalif"). Emperor is a Delaware corporation whose sole shareholder is Liliane Unanue. Kalif is a Panamanian corporation in which Charles and Liliane Unanue had sole signature authority over the corporation's accounts. The complaint in the adversary proceeding alleged that, since 1980, Charles Unanue has been fraudulently transferring his assets to his wife, Kalif, and Emperor. Among the assets allegedly transferred were cash, securities, and a condominium apartment at San Gerónimo Condominium in San Juan, Puerto Rico. Plaintiffs sought an order declaring the transfers null and void and restoring the assets to the debtor's estate.
On the same day the complaint in the adversary proceeding was filed, plaintiffs moved for provisional remedies under Fed. R.Bankr.P. 7064, Fed.R.Civ.P. 64, and Rule 56 of the Puerto Rico Rules of Civil Procedure, 32 L.P.R.A.App. III R. 56. On September 4, 1991, the bankruptcy court entered an ex parte order of attachment on the proceeds of the sale of Apartment 5-D, San Gerónimo Condominium, an apartment held in Emperor's name until its sale in the spring of 1991. The order called for attachment of $400,000 of Emperor's assets, representing the amount of the sale. However, execution of the attachment realized a total of only $950, the balance having been transferred by Liliane Unanue to a bank account in her name in Zurich, Switzerland. The first provisional remedy was granted subject to plaintiffs' posting a $50,000 bond.
Thereafter, on September 12, 1991, Goya moved for additional provisional remedies. Plaintiffs sought, inter alia, cautionary notices and orders prohibiting the alienation of the following properties: Apartment 11B at the San Gerónimo Condominium; Apartment 5A of the same complex; two apartments located in New York City; and properties in La Solana del Rio, Fuengirola, Málaga, Spain and Paris, France. On the same day, the bankruptcy court entered an order to show cause why the requested provisional remedies should be entered ex parte, without notice and a hearing, as well as whether the court had jurisdiction over the properties located outside Puerto Rico. After receiving plaintiffs' response, the court entered an order on September 20, 1991, vacating an earlier order setting pretrial conferences in both this action and an earlier-filed adversary proceeding1 and setting a status conference for September 24, 1991, at which, inter alia, the motion for provisional remedies would be discussed. The court ordered that all parties be notified "by the quickest means available to the Clerk's Office for such notice."
On September 24, 1991, at the hearing, Goya's provisional remedy motion was discussed. The court heard argument from all of the parties, including appellants, who had retained counsel. Two days later, the court granted Goya's motion for provisional remedies in a series of rulings ordering the filing of cautionary notices on the properties and the prohibition of their transfer or alienation pending the outcome of the adversary action. These orders were entered subject to plaintiffs posting a $1,000,000 bond. It is from these bankruptcy court orders, as well as the initial order attaching the proceeds of the condominium sale, that Liliane Unanue and Emperor appeal.2
While not raised by the parties, we must first determine whether this court has jurisdiction over the appeal of the bankruptcy court's orders. The First Circuit has found that a trial court's order refusing to dissolve the grant of a prejudgment, provisional remedy is not an appealable order under the collateral order doctrine enunciated in Cohen v. Beneficial Industrial Loan Corp., 337 U.S. 541, 69 S.Ct. 1221, 93 L.Ed. 1528 (1949). Lowell Fruit Co. v. Alexander's Market, Inc., 842 F.2d 567, 568-70 (1st Cir.1988) (per curiam) (writ of attachment); Sobol v. Heckler Congressional Committee, 709 F.2d 129, 130-32 (1st Cir.1983) (per curiam) (same); Trustees of Hospital Mortg. Group v. Compañía Aseguradora Interamericana S.A. Panama, 672 F.2d 250, 251 (1st Cir. 1982) (per curiam) (). In Lowell Fruit Co., like the appeal before us, appellants challenged a pre-judgment attachment order on due process grounds. The court found that, notwithstanding the hardship imposed upon appellant because of a potentially erroneous grant of a provisional remedy, this fact did not, in and of itself, make the order appealable.
This court's appellate jurisdiction is based on 28 U.S.C. § 158(a).3 Under section 158(a), this court can hear appeals of both final judgments, orders and decrees of the bankruptcy court and also, with leave of the court, from interlocutory orders and decrees. The First Circuit has discussed the concept of "finality" in the context of bankruptcy proceedings.
Finality is viewed more flexibly in the bankruptcy context than it is in other civil litigation contexts. In re Comer, 716 F.2d 168, 171 (3d Cir.1983). A bankruptcy order need not dispose of all aspects of a case to be final; an order which disposes of a "discrete dispute within the larger case" will be considered final and appealable. In re Saco Local Development Corp., 711 F.2d 441, 444 (1st Cir.1983). The order in question must, however, "conclusively determine" the dispute. Id. at 445-46.
In re American Colonial Broadcasting Corp., 758 F.2d 794, 801 (1st Cir.1985). See also Tringali v. Hathaway Machinery Company, 796 F.2d 553, 557-58 (1st Cir. 1986).
Here, we think that the bankruptcy court's orders granting provisional remedies are "final" in the sense that they dispose of a particular dispute within the larger bankruptcy proceeding. While the merits of the adversary proceedings are still to be determined, the bankruptcy court's orders did conclusively determine the applicability of the Puerto Rico provisional remedies rule to the facts of the case. Implicit in the court's decision is that the Puerto Rico provision authorizing the grant of provisional remedies is constitutional. We, therefore, find that appellants' appeal is properly before us.4
In an appeal from a decision of the bankruptcy court, Fed.R.Bankr.P. 8013 provides the district court's standard of review. "Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous," while conclusions of law are afforded de novo review. In re 604 Columbus Ave. Realty Trust, 968 F.2d 1332, 1341 (1st Cir.1992); In re G.S.F. Corp., 938 F.2d 1467, 1474 (1st Cir.1991); Briden v. Foley, 776 F.2d 379, 381 (1st Cir.1985). Here, because appellants challenge the constitutionality of a rule of procedure enacted by the Legislature of Puerto Rico, our review is de novo.
Rule 56 of the Puerto Rico Rules of Civil Procedure, 32 L.P.R.A.App. III. R. 56, provides for the various provisional remedies available under Puerto Rico law. Rule 56.1 sets forth the general principles underlying the grant of provisional remedies.
In every action, before or after entering judgment, and on motion of claimant, the court may issue any provisional order it may deem necessary to secure satisfaction of the judgment. The court may order the attachment, garnishment, the prohibition to alienate, claim and delivery of personal property, receivership, an order to do or to desist from doing any specific act, or it may order any other measure it deems necessary, according to the circumstances of the case. In every case in which a provisional remedy is sought, the court shall consider the interests of all the parties and shall adjudicate as substantial justice may require.
32 L.P.R.A.App. III. R. 56.1. (emphasis added). In F.D. Rich Co. v. Superior Court, 99 P.R.R. 155, 173 (1970), the Supreme...
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