Quinones v. Operating Partners Co. (In re Quinones)
| Decision Date | 18 May 2016 |
| Docket Number | ADV. PROC. NO. 15-00177 (ESL),CASE NO. 14-08177 (ESL) |
| Parties | IN RE: JUAN CARLOS RIVERA QUINONES Debtors JUAN CARLOS RIVERA QUINONES Plaintiff v. OPERATING PARTNERS CO., LLC; JOHN DOE AND JANE ROE; X, Y, OR Z, INS. CORP Defendants |
| Court | United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Puerto Rico |
This adversary proceeding is before the court upon the Plaintiff's Motion for Summary Judgment on the Issue of Liability for Willful Violation of the Discharge Injunction (Docket Nos. 11 and 12) filed by the Debtor (hereinafter referred to as "Debtor" or "Plaintiff") seeking a determination that Operating Partners Co., LLC (hereinafter referred to as "Operating Partners" or "Defendant") willfully violated the discharge injunction pursuant to 11 U.S.C. §524(a)(2) when it filed a motion for execution of judgment in a state court collection action initiated pre-petition by Operating Partners against the Debtor after the discharge order was entered. Operating Partners filed its Opposition to Motion for Summary Judgment alleging that it did not receive adequate notice of the Debtor's bankruptcy case because the Debtor provided an incorrect address and that its claim was not properly scheduled (Docket No. 20). In addition, Operating Partners asserts that the Plaintiff has not provided sufficient evidence that Operating Partners actually filed the motion to continue the pre-petition collection action in state court. Also, before the court is Plaintiff's Reply in Support of Motion for Summary Judgment on the Issue of Liability for Willful Violation of the Discharge Injunction filed by the Debtor in which he asserts that the Defendant's claim was properly scheduled and that it received notice of the bankruptcy case and discharge order (Docket No. 22). Moreover, the Debtor also contends that whether or not the Defendant actually filed the motion for execution of judgment does not matter as it is undisputed that the Debtor received a copy of the motion and that is dated after the discharge order was entered.
For the reasons stated below, Debtor's motion for partial summary judgment is granted and Operating Partners' Opposition to Motion for Summary Judgment is denied.
The Court has jurisdiction pursuant to 28 U.S.C. §§157(a) and 1334(b). This is a core proceeding pursuant to 28 U.S.C. §157(b)(1) and (b)(2). Venue of this proceeding is proper under 28 U.S.C. §§1408 and 1409.
The Debtor filed a Chapter 7 bankruptcy petition on October 1, 2014 (Lead Case No. 14-081771, Docket No. 1). The Debtor in Schedule F included Operating Partners as an unsecured creditor and stated that it was the assignee of PR Acquisitions, LLC, (Schedule F, Lead Case, Docket No 1, p. 26). The Debtor listed the following address for Operating Partners: P.O. Box 365061, San Juan, PR, 00936-5061. In addition, the Debtor disclosed in the Statement of Financial Affairs that there was a pending state court action for collection of money that had been filed by Operating Partners (Lead Case, Docket No.1, p.37). The Debtor also included PR Acquisitions, LLC as an unsecured creditor in the amount of $5,459.63 and listed its address as: 250 Munoz Rivera Aver [sic] Suite 1200, Hato Rey, PR, 00918 (Schedule F, Lead Case, Docket No. 1, p. 25).
On October 2, 2014, the Notice of Chapter 7 Bankruptcy Case, Meeting of Creditors & Deadline (the "Notice") was docketed in the instant case (Lead Case, Docket No. 6). The Notice disclosed that the deadline to object to the Debtor's discharge or to challenge the dischargeability of certain debt was December 29, 2014. The certificate of service of the Noticeindicates that it was sent by first class mail to Operating Partners to the address provided by the Debtor. In addition, the Notice was also sent to by first class mail to PR Acquisitions, LLC and to Operating Partners' attorney in the state court action.2 The 341 meeting of the creditors was held and closed on October 30, 2014 (Lead Case, Docket No. 9). Subsequently, on October 30, 2014, the Chapter 7 Trustee filed a Report of No Distribution and on October 31,2014 a notice was docketed indicating to creditors that they had 30 days to object to the Report of No Distribution (the "Notice of No Distribution") (Lead Case, Docket Nos. 11 and 12). The certificate of service indicates that the Notice of No Distribution was sent by first class mail to Operating Partners, PR Acquisitions, LLC, and Operating Partners' attorney in the state court action to the addresses provided by the Debtor.
On January 5, 2015, the order granting the Debtor's discharge under section 727 of the Bankruptcy Code was entered (the "Discharge Order") (Lead Case, Docket No. 16). The certificate of service indicates that the Discharge Order was sent by first class mail to Operating Partners, PR Acquisitions, LLC, and Operating Partners' attorney in the state court to the addresses provided by the Debtor.
Thereafter, on March 24, 2015, the Debtor filed a Motion to Reopen Case to Permit the Debtors to File and Adversary Proceeding for Contempt and Violation of the Discharge Injunction (Lead Case, Docket No. 20) and the same was granted on April 28, 2015 (Lead Case, Docket No. 23). On June 12, 2015, the Debtor filed a motion requesting an extension of thirty (30) days to file the adversary proceeding or otherwise plead (Lead Case, Docket No. 25) and the same was granted on June 15, 2015 (Lead Case Docket No. 26).
On July 13, 2015, the Debtor initiated this adversary proceeding based upon: (i) an alleged willful violation of the discharge injunction pursuant to 11 U.S.C. §524(a); (ii) contempt of the Discharge Order; and (iii) for actual damages, punitive damages, compensatory damages and legal fees pursuant to Section 524(h) and the court's inherent authority to enforce its orderspursuant to Section 105. The Debtor sustains that Operating Partners willfully violated the discharge injunction by pursuing the state court collection action despite having knowledge of the Debtor's bankruptcy petition and the Discharge Order. The Plaintiff asserts that on or around March 2015 Operating Partners served the Debtor with copy of a motion requesting execution of the state court judgment and for the designation of a bailiff (the "Execution Motion"). The Execution Motion was dated January 13, 2015. On August 11, 2015, Operating Partners filed a motion requesting an extension of fifteen (15) days to file its answer to the Complaint (Docket No. 7) and the same was granted on August 17, 2015 (Docket No. 8). On August 26, 2015, Operating Partners filed its Answer to Complaint (Docket No. 10).
Subsequently, on October 19, 2015, the Debtor filed Plaintiff's Motion for Summary Judgment on the Issue of Liability for Willful Violation of the Discharge Injunction and Plaintiff's Statement of Material Facts (Dockets Nos. 11 and 12). The Debtor argues in its motion for partial summary judgment that Operating Partners willfully violated the discharge injunction when it filed the Execution Motion in state court and served the Debtor with a copy of the motion after he had received his discharge, despite having notice of the bankruptcy case and of the Discharge Order. In addition, the Debtor asserts that the Execution Motion was filed to collect a debt that had been discharged and that Operating Partners admits that it did not stay the state court collection action until July 27, 2015. On October 21, 2015, the court entered an Order granting Operating Partners thirty (30) days to file an opposition to the motion for summary judgment and continuing without a date the pre-trial scheduled for November 6, 2015, pending a decision on the Debtor's motion for partial summary judgment (Docket No. 13). On November 18, 2015, Operating Partners filed a motion requesting an extension of fifteen (15) days to file its opposition to Debtor's motion for summary judgment (Docket No. 15) and the court granted the same on November 20, 2015 (Docket No. 16).
On December 7, 2015, Operating Partners filed its Opposition to Motion for Summary Judgment and Answer to Plaintiffs' Statemen [sic] of Uncontested Facts (Docket Nos. 20 and 21) arguing that: (i) Debtor did not properly list Operating Partners' claim in his Schedules;(ii) Operating Partners never received notice of the Debtor's bankruptcy case because the Debtor provided an incorrect address3; and (iii) the Debtor has not provided sufficient evidence that Operating Partners actually filed the Execution Motion in state court.
On December 11, 2015, the Debtor filed Plaintiff's Reply in Support of Motion for Summary Judgment on the Issue of Liability for Willful Violation of the Discharge Injunction (Docket No. 22) in which he states that Operating Partners essentially only raised the defense of improper notice of the bankruptcy case and Discharge Order. Moreover, the Debtor argues that the Defendant had notice of the Debtor's bankruptcy case and of the Discharge Order since: (i) Debtor's motion to re-open the case and the Complaint were sent to the Defendant at the address provided by the Debtor and the Defendant accepted service; (ii) Operating Partners' state court attorney and principal, PR Acquisitions, LLC, were included in Debtor's Schedules and received notice of the bankruptcy case and Discharge Order as evidenced by the certificates of service;(iii) in the state court complaint the Defendant listed its address as the address listed in Schedule F for PR Acquisitions, LLC. Thus, the Debtor argues that the Defendant received notice of the bankruptcy case and Discharge Order at the address where it received and acknowledged service of the Complaint and in addition it received notice directly or indirectly through its state court attorney and/or PR Acquisitions, LLC. Furthermore, the Plaintiff sustains that Schedule F properly listed Operating Partners' claim and details that the claim is for $5,549.63 and that it is held...
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