Vélez v. León (In re León), CASE NO. 12-01251 (ESL)
| Decision Date | 16 September 2013 |
| Docket Number | ADV. PROC. NO. 13-00040 (ESL),CASE NO. 12-01251 (ESL) |
| Parties | IN RE: JORGE A. PÉREZ LEÓN Debtor YOMAYRA SANTIAGO VÉLEZ Plaintiff v. JORGE A. PÉREZ LEÓN, NOREEN WISCOVITCH RENTAS Defendants |
| Court | U.S. Bankruptcy Court — District of Puerto Rico |
This case is before the court upon the Motion to Dismiss and Memorandum of Law (the "Motion to Dismiss", Docket No. 6) filed by the defendant Jorge A. Pérez León (the "Defendant") and Motion Joining [the] Co-Defendant's Motion to Dismiss (Docket No. 10) filed by the Chapter 7 Trustee. The Defendant and the Chapter 7 Trustee sustain that the court lacks jurisdiction to consider a domestic relations controversy and that the Plaintiff's contentions subvert the distribution scheme established in the Bankruptcy Code. For the reasons stated below the Defendant's Motion to Dismiss, as joined by the Chapter 7 Trustee, is denied in part and granted in part.
The Plaintiff and the Defendant were married until July 15, 2010, when the Puerto Rico Court of First Instance, Caguas Superior Section, issued a divorce decree. See Docket No. 1, pp. 9-11.
On February 22, 2012, the Defendant filed a voluntary Chapter 7 Bankruptcy Petition with its corresponding schedules (Lead Case Docket No. 1). In Schedule A, he reported a 50% undivided interest in a real property located at Urb. Los Flamboyanes, Gurabo, PR, which healso informed was assigned as "homestead"1 for his dependent children and is being paid by his ex-wife who lives the property (the "Real Property", Lead Case Docket No. 1, p. 20). No further real property was listed. Id. On June 21, 2012, the Plaintiff filed a priority domestic support obligations claim in the amount of $4,150.92. See Claims Register No. 4-1. Her claim was not objected. On June 13, 2012, the court entered the Discharge of Debtor (Lead Case Docket No. 14).
On March 6, 2013, the Plaintiff filed a Complaint (Docket No. 1) for this court to authorize the liquidation of conjugal community property between her and the Defendant, now her ex-husband, under Sections 541 () and 726 (distribution of property of the estate) of the Bankruptcy Code and Fed. Rs. Bankr. P. 7011(1) and (3)2. The Plaintiff's main purpose in filing her Complaint is to propose an offer3 to purchase her 50% share of the Defendant's participation in the Real Property and assume the mortgage debt on it. See Docket Nos. 1, p. 5, ¶¶ 19-21, and 11, p. 2, ¶ 7 and p. 4, ¶ 19.
On April 9, 2013, the Defendant filed a Motion to Dismiss (Docket No. 6) arguing that the Complaint poses a domestic relations issue over which this court has no jurisdiction and attempts to subvert the order of distribution established in the Bankruptcy Code. The Defendant further argues that he claimed an exemption on the real property jointly owned by him and the Plaintiff and no party in interest (including the Plaintiff) timely objected it. He further contends that the Complaint contemplates as a remedy a distribution that would result in the elimination of the Defendant's right to claim exemptions under 11 U.S.C. § 522, to which he is entitled because no objections were timely filed. The Defendant concludes that the Complaint (Docket No. 1) fails to state a claim upon which relief can be granted and therefore it should be dismissed.
On April 11, 2013, the court entered an Order [for the Plaintiff] to Show Cause (Docket No. 7) why the Complaint should not be dismissed for the reasons stated in Defendant's Motion to Dismiss (Docket No. 6) in twenty one (21) days.
On April 21 2013, the Chapter 7 Trustee filed a Motion Joining Co-Defendant's Motion to Dismiss (Docket No. 10) adopting and incorporating the Defendant's Motion to Dismiss (Docket No. 6).
On May 2, 2013, the Plaintiff filed a Reply to Debtors Motion to Dismiss Dkt # 6 & Reply to Trustee's Joining Motion to Dismiss Dkt # 10 (Docket No. 11) averring that her intention is to purchase the community property that she currently resides in, to wit, the Real Property. She also claims to be the only person making mortgage payments on the Real Property, that it was declared homestead (hogar seguro)4 and that she is the only one who has made an offer on the property in the best interest of the estate and all parties involved.
On May 2, 2013, the Plaintiff filed a Motion in Compliance With Order (Docket No. 12) requesting the court to deem the Order entered on April 11, 2013 complied in light of her Reply to Debtor's Motion to Dismiss (Docket No. 11).
No further replies or briefs were filed.
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 157(b)(2)(A), (B), and (N).
Fed. R. Bankr.P. 7012 makes Fed. R. Civ. P. 12(b)(6) applicable to adversary proceedings. The purpose of a motion to dismiss under Fed. R. Civ. P. 12(b)(6) is to assess the legal feasibility of the complaint, not to weigh the evidence which the plaintiff offers or intendsto offer. See Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 779 (2nd Cir.1984); Citibank, N.A. v. K-H Corp., 745 F. Supp. 899, 902 (S.D.N.Y. 1990).
Fed. R. Civ. P. 8(a)(2), applicable to adversary proceedings through Fed. R. Bankr. P. 7008, mandates that complaints contain a "short and plain statement of the claim showing that the pleader is entitled to relief." "Although detailed factual allegations are not required, the Rule does call for sufficient factual matter". Surita Acosta v. Reparto Saman Inc. (In re Surita Acosta), 464 B.R. 86, 90 (Bankr. D.P.R. 2012). Therefore, to survive a Fed. R. Civ. P. 12(b)(6) motion to dismiss, a complaint must contain sufficient factual matter that, accepted as true, "state[s] a claim to relief that is plausible on its face." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Id. at 556. The Twombly standard was further developed in Ashcroft v. Iqbal, 556 U.S. 622 (2009), advising lower courts that "determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." 556 U.S. at 679. Id. at 679. In sum, allegations in a complaint cannot be speculative and must cross "the line between the conclusory and the factual". Peñalbert-Rosa v. Fortuño-Burset, 631 F.3d 592, 595 (1st Cir. 2011). "[A]n adequate complaint must provide fair notice to the defendants and state a facially plausible legal claim." Ocasio-Hernandez v. Fortuño-Burset, 640 F.3d 1, 11 (1st Cir. 2011).
In Schatz v. Republican State Leadership Committee, 669 F.3d 50, 55 (1st Cir. 2012), the U.S. Court of Appeals for the First Circuit established a two-step standard for motions to dismiss under Fed. R. Civ. P. 12(b)(6). Step one: isolate legal conclusions. Step two: take thecomplaint's well-pleaded (non-conclusory) allegations as true, drawing all reasonable inferences in favor of the plaintiff and determine if they plausibly narrate a claim for relief. Also see Pérez v. Rivera (In re Pérez), 2013 WL 1405747 at *3, 2013 Bankr. LEXIS 1561 at **9-10 (Bankr. D.P.R. 2013); Zavatsky v. O'Brien, 902 F. Supp. 2d 135, 140 (D. Mass. 2012).
In the instant case, the Complaint is factually well-pleaded. Notwithstanding, after drawing all the reasonable inferences from the Plaintiff's allegations in her favor, the court determines she does not have a plausible claim for relief for the reasons stated below.
One of the legal grounds upon which the Plaintiff seeks relief is 11 U.S.C. § 541. See the Complaint, Docket No. 1, p. 1, ¶ 1.
Subject to the debtor's right to claim certain property as exempt under 11 U.S.C. § 522, when a debtor files for bankruptcy "all [of his/her/its] legal and equitable interests ... in property as of the commencement of the case" become part of the bankruptcy estate "wherever located and by whomever held". 11 U.S.C. § 541(a)(1). The bankruptcy estate is created automatically by operation of law immediately after the bankruptcy petition is filed. See 11 U.S.C. § 541(b); Hon. Nancy C. Dreher, Hon. Joan N. Feeny and Michael J. Stepan, Esq., Bankruptcy Law Manual, Volume 1, §§ 5:1-5:2 (2012-2) pp. 944-946. "It is from this central core of estate property that the debtor's creditors will be paid." Wiscovitch-Rentas v. González-Claudio, 484 B.R. 1, 11 (Bankr. D.P.R. 2012), quoting Alan N. Resnick & Henry J. Sommer, 5 Collier on Bankruptcy ¶ 541.01 (16th ed. 2013).
Under Section 541(a)(2)(B) of the Bankruptcy Code, the bankruptcy estate also comprises "[a]ll interests of the debtor and the debtor's spouse in community property as of the commencement of the case that is ... liable for an allowable claim against the debtor, or for both an allowable claim against the debtor and an allowable claim against the debtor's spouse, to the extent that such interest is so liable." 11 U.S.C. § 541(a)(2)(B). The term "spouse" used in Section 541(a)(2) includes a former spouse when the ex-spouses have not partitioned the property of their former conjugal community, even if the conjugal community was...
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