Rentas v. Sani-Plant Co. (In re Fussa), CASE NO. 17-03075 (ESL)
| Decision Date | 14 August 2020 |
| Docket Number | CASE NO. 17-03075 (ESL),ADV. PROC. NO. 19-00225 (ESL) |
| Parties | IN RE: ALBERTO ENRIQUE DAVILA FUSSA; PAULA ANDREA MONTENEGRO MORALES Debtors NOREEN WISCOVITCH RENTAS, CHAPTER 7 TRUSTEE Plaintiff v. SANI-PLANT COMPANY, INC. Defendant |
| Court | U.S. Bankruptcy Court — District of Puerto Rico |
This adversary proceeding is before the court upon the Motion for Summary Judgment on Statute of Limitations Grounds filed by Sani-Plant Company, Inc. (hereinafter referred to as "Sani-Plant" or "Defendant") arguing that the Plaintiff's claims are time-barred pursuant to 11 U.S.C. §108(a) because the Chapter 7 Trustee failed to timely preserve debtors' claims for pre-petition unpaid wages under applicable non-bankruptcy law (Docket No. 29). The Chapter 7 Trustee (hereinafter referred to as "Trustee" or "Plaintiff") filed her Opposition to Defendant's Motion for Summary Judgment contending that: (i) discovery is still pending and there are issues of material facts such as whether the transfers made to the Debtors (who have interests in Defendant Corporation) were made on account of salaries, debt, or other account; (ii) there are issues of material facts as to the details of certain account receivables owed for the years 2014 and 2015; and (iii) the Defendant's argument would be inapplicable if the transfers made were not on account of wages but based upon some other account such as a debt or if made on account of salaries but for a different period (Docket No. 38). For the reasons stated herein, the court denies the Defendant's Motion for Summary Judgment and grants Plaintiff's Opposition to Motion for Summary Judgment.
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), (E). Venue of this proceeding is proper under 28 U.S.C. §§1408 and 1409.
The Debtor filed a bankruptcy petition under Chapter 7 of the Bankruptcy Code on April 29, 2017 (Lead Case No. 17-03075). The Debtors included in Schedule A/B- Property, in line item #38 an accounts receivable or commissions already earned which they disclosed was for unpaid wages from Sani-Plan[t] with an estimated value or amount that was listed as not available (Lead Case No. 17-03075, Docket No. 13, pg. 12). On April 30, 2019, the Trustee filed the instant adversary proceeding against Sani-Plant for turnover of property of the bankruptcy estate pursuant to 11 U.S.C. §§ 541, 542 and 543. The property consists of pre-petition account receivables owed by Defendant for alleged unpaid wages in the amount of $7,280.83 (Docket No. 1). On September 4, 2019, the Defendant filed its Answer to Complaint (Docket No. 17). On October 17, 2019, the Plaintiff filed a Motion Requesting Rescheduling of Preliminary Pretrial and Scheduling Conference set for October 25, 2019 (Docket No. 18) and the same was granted (Docket No. 19). On February 14, 2020, the parties filed a Joint Initial Scheduling ConferenceReport (Docket No. 21). On February 21, 2020 a preliminary pretrial hearing was held in which the parties were granted ninety (90) days to conclude discovery, that is June 30, 2020 and one hundred eighty days (180) to file dispositive motions, that is September 30, 2020. Replies are due twenty-one (21) days thereafter. Rule 7026(a)(1) disclosures by March 31, 2020. Property to be recovered is in the amount of $7,280.83 for services rendered pursuant to 11 U.S.C. §§542 & 543 (Docket No. 22).
On June 5, 2020, the Trustee filed an Informative Motion as to Discovery Served Upon Defendant (Docket No. 25). On June 5, 2020, the Plaintiff filed a Motion Requesting Extension until July 31, 2020 to Conclude Discovery (Docket No. 26) and the same was granted (Docket No. 27).
On July 16, 2020, the Defendant filed a Motion for Summary Judgment on Statute of Limitations Grounds contending that there are no material facts in controversy and the Trustee failed to timely toll the applicable statute of limitations under 11 U.S.C. §108(a) to pursue the debtors' claims asserted in this adversary proceeding and therefore, the complaint should be dismissed with prejudice (Docket No. 31). On July 16, 2020, Sani-Plant filed a Motion for Stay of Discovery until Dispositive Motion is Adjudicated, or in the Alternative Extension of Time to Respond to Discovery (Docket No. 32). On July 16, 2020, the Court granted the Defendant's motion requesting that discovery be stayed until the motion for summary judgment is adjudicated (Docket No. 34). On July 24, 2020, the Plaintiff filed her Opposition to Defendant's Motion for Summary Judgment arguing: (i) that there are issues of material facts such as whether the transfers made to the Debtors (who have interests in Defendant Corporation) were made on account of salaries, debt, or other account; (ii) there are issues of material facts as to the details of certain account receivables owed for the years 2014 and 2015; and (iii) the Defendant's argument would be inapplicable if the transfers made were not on account of wages but based upon some otheraccount such as a debt or if made on account of salaries but for a different period (Docket No. 38). On July 24, 2020, the Trustee filed a Request for Reconsideration of Order Staying Discovery Process requesting reconsideration contending that adjudicating and/or granting Defendant's Motion for Summary Judgment is improper in this adversary proceeding because discovery is still pending and there are genuine issues of material facts (Docket No. 39).
The parties agree that the following material facts are uncontested:
Uncontested Material Facts
The court relies on the following prior decisions when analyzing the summary judgment standard: In re Román-Perez, 527 B.R. 844, 855 - 856, (Bankr. D.P.R. 2015); In re Otero Rivera, 511 B.R. 6 (Bankr. D.P.R. 2014); and In re Lopez, 492 B.R. 595 (Bankr. D.P.R. 2013).
Rule 56 of the Federal Rules of Civil Procedure is applicable to this proceeding by Rule 7056 of the Federal Rules of Bankruptcy Procedure. Summary judgment should be entered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Bankr. P. 7056; see also, In re Colarusso,382 F.3d 51 (1st Cir. 2004), citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).
"The summary-judgment procedure authorized by Rule 56 is a method for promptly disposing of actions in which there is no genuine issue as to any material fact or in which only a question of law is involved." Wright, Miller & Kane, Federal Practice and Procedure, 3d, Vol 10A, § 2712 at 198. "Rule 56 provides the means by which a party may pierce the allegations in the pleadings and obtain relief by introducing outside evidence showing that there are no fact issues that need to be tried." Id. at 202-203. Summary judgment is not a substitute for a trial of disputed facts; the court may only determine whether there are issues to be tried, and it is improper if the existence of a material fact is uncertain. Id. at 205-206.
Summary judgment is warranted where, after adequate time for discovery and upon motion, a party fails to make a showing sufficient to establish the existence of an element essential to its case and upon which it carries the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party must "show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c).
For there to be a "genuine" issue, facts which are supported by substantial evidence must be in dispute, thereby requiring deference to the finder of fact. Furthermore, the disputed facts must be "material" or determinative of the outcome of the litigation. Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir. 1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). When considering a petition for summary judgment, the court must view the evidence in the light most favorable to the nonmoving party. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 473, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962); Daury v. Smith, 842 F.2d 9, 11 (1st Cir. 1988).
The moving party invariably bears both the initial as well as the ultimate burden in demonstrating its legal entitlement to summary judgment. Adickes v. Kress & Co., 398 U.S. 144, 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). See also López v. Corporación Azucarera de Puerto Rico, 938 F.2d 1510, 1516 (1st Cir. 1991). It is essential that the moving party explain its reasons for concluding that the record does not contain any genuine issue of material fact in addition to making a showing of support for those claims for which it bears the burden of trial. Bias v. Advantage International, Inc., 905 F.2d 1558, 1560-61 (D.C. Cir. 1990), cert. denied, 498 U.S. 958, 111 S.Ct. 387, 112 L.Ed.2d 397 (1990).
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