Wiscovitch-Rentas v. Cooperativa De Ahorro Y Credito (In re Vazquez)
| Decision Date | 06 April 2016 |
| Docket Number | ADV. PROC. NO. 14–00298 (ESL),CASE NO. 12–09895 (ESL) |
| Citation | 549 B.R. 304 |
| Parties | In re: Luis A. Vazquez Vazquez Madeline E. Otero Feliciano, Debtors Noreen Wiscovitch–Rentas, Plaintiff v. Cooperativa De Ahorro Y Credito ("Coopaca"), Defendant |
| Court | U.S. Bankruptcy Court — District of Puerto Rico |
Jorge Luis Couto Gonzalez, Manati, PR, for Debtors.
Rafael A. Gonzalez Valiente, Aimee I. Lopez Pabon, Godreau & Gonzalez, San Juan, PR, for Plaintiff.
Damaris Quinones Vargas, Bufete Quinones Vargas & Asoc, Cabo Rojo, PR, for Defendant.
Enrique S. Lamoutte
This case is before the court upon the Motion Requesting Entry of Summary Judgment and Plaintiff's Statement of Facts in Support of Motion for Summary Judgment (Docket Nos. 20 and 21) filed by the Chapter 7 Trustee (hereinafter referred to as "Trustee" or "Plaintiff") and the opposition thereto filed by the Cooperativa de Ahorro de Credito de Arecibo (hereinafter referred to as "COOPACA" or "Defendant") (Docket No. 34). Also before the court is COOPACA's Motion for Summary Judgment and Memorandum of Law in Support (Docket No. 23) and the Plaintiff's Reply to Defendant's Opposition to Plaintiff's Motion Requesting Summary Judgement (Docket No. 35). The Trustee filed the Motion Requesting Entry of Summary Judgment to avoid COOPACA's lien on an automobile purchased by Luis A. Vazquez Vazquez (hereinafter referred to as "co-debtor"). The Trustee argues that the lien was perfected nineteen (19) days before the bankruptcy petition and is voidable as a preferential transfer pursuant to 11 U.S.C. § 547
. COOPACA contends that the recording of a security interest over a vehicle is not a transfer and that the co-debtor was solvent when the installment contract was signed and when the lien was recorded. In addition, COOPACA contends that its actions to perfect the lien complied with the applicable Puerto Rico law and regulations making the transaction valid and non-voidable under 11 U.S.C. § 546.
For the reasons stated below, the Trustee's Motion Requesting Entry of Summary Judgment is granted and COOPACA's cross motion for summary judgment is denied.
The Court has jurisdiction pursuant to 28 U.S.C. §§ 157(b)(2)
and 1334(b). This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(F). Venue of this proceeding is proper under 28 U.S.C. §§ 1408 and 1409.
The Debtors filed a Chapter 7 bankruptcy petition on December 17, 2012 (Lead Case No. 12–098951 , Docket No. 1). On February 6, 2013, the Debtors filed a motion to convert their Chapter 7 bankruptcy case to a case under Chapter 13 (Lead Case, Docket No. 11). On February 22, 2013, the court granted Debtors' motion requesting conversion of their bankruptcy case to Chapter 13 (Lead Case, Docket No. 20). Thereafter, on January 9, 2014, the Debtor filed a motion requesting conversion of their bankruptcy case to Chapter 7 (Lead Case, Docket No. 89) and the same was granted on January 14, 2014 (Lead Case, Docket No. 91).
On March 14, 2014, the Trustee filed her Objection to COOPACA's proof of claim # 8 arguing that the perfection of COOPACA's security interest in the Kia Sorento purchased by the co-debtor took place within the voidable preference period and requested that the same be allowed as a general unsecured claim (Lead Case Docket No. 108). On April 10, 2014 COOPACA filed a motion (Lead Case Docket No. 112) requesting an extension of thirty (30) days to reply to the Trustee's objection to claim # 8 and the same was granted (Lead Case Docket No. 113). On May 9, 2014, COOPACA filed its Opposition to Trustees Objection of Secured Status of Claim Number 8 (Lead Case Docket No. 119). On May 19, 2014, the court entered an Order granting COOPACA's Opposition to Trustees Objection of Secured Status of Claim Number 8 and denied the Trustee's objection to proof of claim # 8 without prejudice to filing a preference action under 11 U.S.C. Section 547
and Fed. R. Bankr.P. 7001(1) (Lead Case Docket No. 121).
Subsequently, on December 18, 2014, the Trustee filed an adversary proceeding requesting that COOPACA's lien on the 2013 Kia Sorrento be avoided because it constituted a fraudulent transfer pursuant to 11 U.S.C. § 548
and/or a preference pursuant to 11 U.S.C. § 547 (Docket No. 1). The Trustee contends that while the co-debtor purchased the vehicle on August 16, 2012, COOPACA did not present the financing statement at the Department of Transportation (hereinafter referred to as "DTOP") for registration until November 28, 2012. Thus, she argues that because the Debtors filed for bankruptcy nineteen days later (to wit, on December 17, 2012) that the lien should be avoided due to its fraudulent and/or preferential nature pursuant to 11 U.S.C. § 548 or 11 U.S.C. § 547. Based on the foregoing, the Trustee seeks a judgment stating that COOPACA does not have a valid security interest over the Kia Sorento, declaring COOPACA's claim to be an unsecured claim and ordering DTOP to cancel the lien.
On January 20, 2015, COOPACA filed a motion (Docket No. 9) requesting an extension of thirty (30) days to file its answer to the complaint and the same was granted (Docket No. 11). On February 18, 2015, COOPACA filed its Answer to Complaint (Docket No. 16) admitting most of the factual allegations but denying the Trustee's legal conclusions. COOPACA alleged that: (i) Luis A. Vazquez Vazquez requested the car loan by himself and was solvent at the moment of the sale and the alleged transfer; and (ii) it complied with all the legal requirements and applicable laws when recording the lien and as a result the lien is valid and protected under 11 U.S.C. § 546
.
On April 24, 2015, a pretrial conference was held during which the court granted the parties 120 days to conclude discovery and 30 days thereafter to file dispositive motions (Docket No. 17 Minute Entry, Docket No. 19 Audio File ). The pretrial hearing was continued without a date.
On October 14, 2015, the Trustee filed a Motion Requesting Entry of Summary Judgment (Docket No. 20) in which she contends that COOPACA's lien meets all of the requirements of a preferential transfer under Section 547
as: (i) "[p]erfection of a security interest in the debtor's property is a transfer at the time of perfection of that interest"; (ii) the transfer was on account of an antecedent debt since the co-debtor purchased the vehicle on August 16, 2012; (iii) the transfer was made while the co-debtor was insolvent; (iv) during the 90 day preference period; and (v) the transfer would allow the creditor to receive more than it would receive under a Chapter 7 liquidation (Docket No. 20). On the same date, the Trustee filed Plaintiff's Statements of Facts in Support of Motion for Summary Judgment (Docket No. 21).
Subsequently, on November 10, 2015, the Trustee filed a motion (Docket No. 28) requesting an extension of fourteen (14) days to file a response to COOPACA's Motion for Summary Judgment and Memorandum of Law in Support and the same was granted (Docket No. 30). On November 12, 2015, COOPACA filed a motion (Docket No. 29) requesting an extension of fourteen (14) days to file its opposition to the Trustee's Motion Requesting Entry of Summary Judgment and the same was granted (Docket No. 31). On November 27, 2015, COOPACA filed its Opposition (Docket No. 34) to the Trustee's Motion Requesting Entry of Summary Judgement by which it reiterated the arguments advanced in its Motion for Summary Judgment and Memorandum of Law in Support . On December 1, 2015, the Trustee filed a Reply to Defendant's Opposition to Plaintiff's Motion Requesting Summary Judgment (Docket No. 35) by which she contends that: (i) 11 U.S.C. § 546(b)
is not a defense against a preference action brought pursuant to 11 U.S.C. § 547(b) ; (ii) the Plaintiff has provided evidence establishing that the transaction in controversy meets the standards of Section 11 U.S.C. § 547 ; and (iii) the "Defendant has not presented evidence that would deny Plaintiff's allegations at [sic] the complaint nor has presented a valid defense against a voidable preference action" (Docket No. 35, ¶ 33, p.11).
The issue before the court is whether COOPACA's lien over the 2013 Kia Sorento constitutes a preferential transfer which may be avoided pursuant to Section 547
.
After considering the totality of the record, the following facts are uncontested. (Docket Nos. 20,21, 23, 34 & 35):
Material Uncontested Facts
1. On August, 18, 2012, the co-debtor and COOPACA executed an installment contract for the purchase of a 2013 KIA Sorento, license plate IBJ–051, Registry # 11125900 (Docket No. 23, Exhibit 4).
2. On November 29, 2012, COOPACA filed with DTOP the documents required to perfect the lien over the motor-vehicle (Docket No. 21, Exhibit B).
3. On December 17, 2012, the Debtors filed for bankruptcy relief. (Lead Case Docket No. 1).
4. On February 22, 2013, DTOP...
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