AT&T Mobility Puerto Rico Inc v. Pulsar Puerto Rico Inc; et als

Opinion

1 IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF PUERTO RICO 2

4 IN RE: CASE NO. 08-07557 BKT 5 Chapter 7 PULSAR PUERTO RICO INC 6 Adversary No. 11-00042 7

8 Debtor(s)

9 AT&T MOBILITY PUERTO RICO INC 10

11 Plaintiff vs. 12

13 PULSAR PUERTO RICO INC; et als 14 Defendants FILED & ENTERED ON 10/16/2013 15

17 OPINION AND ORDER 18 19 Before this court is the Motion Requesting Amended and/or Additional Findings of Fact 20 pursuant to Federal Rules of Bankruptcy Procedure 7052 (the “Motion to Alter or Amend”) filed by 21 Chapter 7 Trustee Wilfredo Sagarra-Miranda (the “Trustee”) [Dkt. No. 191], Plaintiff’s Opposition 22 23 to the Motion to Alter or Amend (the “Opposition”) [Dkt. No. 196], and Trustee’s Reply to the 24 Motion to Alter or Amend [Dkt. No. 197]. Also before the court is the opposition to the Motion to 25 Alter or Amend filed by Wigberto Lugo Mender, defendant and duly appointed Chapter 7 Trustee for

the Estate of Wilfredo Rodríguez Flores and Nydia Rosa Acosta Castrodad, Case No. 11-03478- BKT7 (hereinafter “Trustee Lugo”) [Dkt No. 202]. For the reasons set forth below, Trustee’s Motion to Alter or Amend is DENIED. 1 I. Factual Background 2 Debtor, Pulsar Puerto Rico Incorporated, filed a voluntary chapter 11 petition on November 3 4 7, 2008. Debtor’s chapter 11 case was converted to a chapter 7 case on September 13, 2010. On 5 February 14, 2011, AT&T Mobility Puerto Rico Incorporated (“AT&T”) filed an adversary 6 proceeding against Debtor. This court entered an opinion and order on April 5, 2012 disposing of all 7 8 pending claims in this instant adversary proceeding (the “Opinion” or “Order”). The Trustee seeks to 9 appeal such Order. The Trustee’s Motion to Alter or Amend followed. 10 11 In the Motion to Alter or Amend, the Trustee requests this Court to amend the following 12 items included in the Order in question: 13 14 1. On page 2, lines 19-20, of the Opinion amend: “and amended on August 1, 2008” to “and 15 amended by the same parties on August 1, 2008.” See Docket No. 153-8. 16 17 2. On page 2, line 22, of the Opinion amend: “d/b/a” to “and/or”. See Docket No. 94-2. 18 19 3. On page 7, lines 26-28, of the Opinion, amend: “agreed to pay Pulsar P.R. h/n/c Diamond 20 Palace Hotel & Casino, represented by its President Wilfredo Rodríguez Flores, as lessor” to 21 22 “agreed to pay Pulsar P.R. h/n/c Diamond Palace Hotel & Casino, as lessor”. See Docket No. 23 153-1, p. 5, ¶¶ 13-14 and Docket No. 157, p. 1, ¶ 1. 24 25 4. On page 9, lines 23-24, of the Opinion, amend: “The agreement is a private document” to

“The agreement is a private document with no notarized signature.” See Docket No. 152, p. 5, ¶ 27. Local Civil Rule 56(e) provides that a fact supported by a record citation shall be deemed admitted unless properly controverted. This fact was not controverted. 1 5. On page 10, lines 15-16, of the Opinion, amend: “Pulsar and Wilfredo Rodríguez Flores 2 were the rightful owners of the Diamond Palace Hotel under the AT&T Lease Agreement” to 3 “Pulsar was the rightful owner of the Diamond Palace Hotel under the AT&T Lease 4 5 Agreement.” See Docket No. 152-4.1 6 Further, Trustee asks this Court to make the following additional findings: 7 8 1. “On November 7, 2008, Pulsar filed the creditor’s mailing matrix.” See Docket No. 153-1, 9 10 p. 4, ¶ 7 and Docket No. 157, p. 1, ¶ 1. 1 As Pulsar is a corporation, it could only act through 11 its officers, who were natural persons. In this lease agreement, Pulsar appeared through its 12 president, Wilfredo Rodríguez Flores. However, Wilfredo Rodríguez Flores appeared strictly 13 14 in representation of Pulsar. In this regard, the Court’s finding is not supported by the text of 15 the agreement or general corporate law. 16 17 2. “Centennial de Puerto Rico (“Centennial” or “AT&T”) was included by Pulsar in the 18 creditor’s mailing matrix as of the date the bankruptcy petition was filed and received notice 19 20 of the bankruptcy filing.” See Docket No. 153-1, p. 4, ¶ 8 and Docket No. 157, p. 1, ¶ 1. 21 3. “On December 17, 2008, Pulsar filed its schedules, and is therein identified as the owner 22 23 in fee simple of the Diamond Palace Hotel & Casino.” See Docket No. 153-1, p. 4, ¶ 9 and 24 Docket No. 157, p. 1, ¶ 1. 25 4. “As per the bankruptcy schedules, Pulsar maintained the following bank accounts as of the date of the filing of its Chapter 11 petition: (a) Banco Popular Puerto Rico- Acct. No. xxxxx8140 (b) Banco Santander, Puerto Rico-Acct. No. xxxxxxx9418 (c) Doral Bank, Puerto Rico- Acct. No. xxxxx5261 (d) Eurobank, Puerto Rico-Acct. No. xxxxx0830 (e) 1 Westernbank, Puerto Rico-Acct. No. xxxxxx0438 (f) Westernbank, Puerto Rico-Acct. No. 2 xxxxxx0454 (g) Westernbank, Puerto Rico-Acct. No. xxxxxx1281 (h) Westernbank, Puerto 3 Rico-Acct. No. xxxxxx0926 (i) Westernbank, Puerto Rico-Acct. No. xxxxxx1558” See 4 5 Docket No. 153-1, p. 5, ¶ 11 and Docket No. 157, p. 1, ¶ 1. 6 5. “Most of the checks AT&T issued to joint payees under the AT&T Lease Agreement 7 8 cannot be traced as deposited in the bank accounts Pulsar listed in its bankruptcy schedules.” 9 See Docket No. 153-1, pp. 8-9, ¶ 23 and Docket No. 157, p. 2, ¶ 5. 10 11 6. “Cingular merged with AT&T and thereafter AT&T acquired the rights and obligations of 12 the AT&T Lease Agreement.” See Docket No. 153-1, p. 5, ¶ 15 and Docket No. 157, p. 1, ¶ 13 14 1. 15 7. “Centennial merged into and became part of AT&T, and ceased to exist and a separate 16 17 legal entity.” See Docket No. 153-1, p. 12, ¶ 30 and Docket No. 157, p. 2, ¶ 9. 18 19 8. “The first check that AT&T issued to pay rent under the Centennial Lease Agreement was 20 dated July 23, 2010, and drawn to the order of Rodríguez International Corp. and/or 21 Rodríguez Flores.” See Docket No. 153-1, p. 13, ¶ 31 and Docket No. 157, p. 2, ¶ 9. 22 23 9. “After July 23, 2010, AT&T issued eight (8) additional checks to pay rent under the 24 Centennial Lease Agreement, all of which were drawn to the order of Rodríguez 25 International Corp. and/or Rodríguez Flores.” See Docket No. 153-1, p. 13, ¶ 31 and Docket No. 157, p. 2, ¶ 9. 1 10. “After Pulsar’s Chapter 11 case was converted to one under Chapter 7, the trustee sent 2 Centennial a letter dated September 20, 2010, by certified mail return receipt requested.” See 3 Docket No. 153-1, p. 13, ¶ 33 and Docket No. 157, p. 2, ¶ 10. 4 5 11. “After the September 20, 2010 letter was received, AT&T issued six (6) checks to pay 6 rent under the Centennial Lease Agreement, all of which were drawn to the order of 7 8 Rodríguez International Corp. and/or Rodríguez Flores.” See Docket No. 153-1, p. 13, ¶ 34 9 and Docket No. 157, p. 2, ¶ 11. 10 11 12. “AT&T operated both of its antenna/equipment with power sourced through the Diamond 12 Palace until the case was converted to Chapter 7.” See Docket No. 152, p. 3, ¶15. Local Civil 13 14 Rule 56(e) provides that a fact supported by a record citation shall be deemed admitted 15 unless properly controverted. The fact was not controverted. 16 17 13. “In Schedule G of Debtor’s Amended Schedules (Executory Contracts and Unexpired 18 Leases), Debtor listed as an existing executory contract or unexpired lease a certain verbal 19 20 agreement with Rodriguez International Investment Corp., which it described as a pre- 21 bankruptcy assignment of rental income (approximately $15,000 per month) for 22 improvements to and use of real estate necessary to operate and comply with the fire code”. 23 24 See Docket No. 152, p. 5, ¶26. Local Civil Rule 56(e) provides that a fact supported by a 25 record citation shall be deemed admitted unless properly controverted. The fact was not

controverted. 14. “Rodríguez International does not have a financing statement registered against the Debtor as per the records of the Commercial Transactions Registry of the Department of 1 State of the Commonwealth of Puerto Rico.” See Docket No. 152, p. 5, ¶28. Local Civil Rule 2 56(e) provides that a fact supported by a record citation shall be deemed admitted unless 3 properly controverted. The fact was not controverted. 4 5 Pursuant to Federal Rules of Bankruptcy Procedure Rule 7052, Trustee requests this Court to 6 enter a new order with an accompanying set of fact finding and amendments as specified above. 7 8 In opposition, Plaintiff objects on two grounds: 9 10 1. Trustee’s motion is meritless on its face because under Fed.R.Civ.P. 52(b) made applicable 11 through Fed. R. Bankr. P. 7052 does not apply to judgment entered pursuant to a motion for 12 13 summary judgment and only applies when a district court issues factual findings following a 14 trial on the merits. 15 16 2. Trustee failed to meet the heavy burden of showing grounds for the motion. Therefore, 17 because the Trustee did not explain his reasoning for the motion that would otherwise 18 19 provide an appellate court with a better understanding of the factual predicate for this Court’s 20 ruling. 21 22 In reply to the above opposition, Trustee argues that: 23 24 1. The facts to be included are uncontested facts. 25 2. Citing, Golden Gate Acceptance Corp. v. General Motors Corp., 597 F.2d 676, 678 and

Boazman v. Economics Laboratory, Inc., 537 F.2d 210, 213 n. 5 (5th Cir. 1976), the Trustee points out that this Court is not precluded from amending and/or making additional findings in relation to its ruling on the motion for summary judgment. 1 3. Plaintiff’s opposition only raises threshold issues because the facts the Trustee requested to 2 be added are all uncontroverted facts. 3 4 Trustee Lugo also opposes the Motion to Alter or Amend for two main reasons: 5 6 1. The Trustee fails to file the Motion to Alter or Amend pursuant to proper grounds. Proper 7 grounds for a FRCP Rule 52(b) motion would be to “allow the court to correct plain errors of law 8 or fact, or, in limited situations, allow the parties to present newly discovered evidence”, 9 10 Gutierrez v. Johnson & Johnson, 743 F.Supp.2d 418, 422 (D.N.J. 2010). No such plain errors of 11 fact, law or new evidence has been presented. 12 13 2. A FRCP Rule 52(b) motion for Amended or Additional Findings does not apply to a 14 judgment entered pursuant to a motion for summary judgment. This rule only applies when a 15 district court issues factual findings following a trial on the merits. Trustee Lugo also 16 17 incorporated by reference the legal arguments submitted by AT&T in their opposition [Docket 18 No. 196]. 19 20 II. Discussion and Analysis 21 22 After reviewing Debtors’ arguments, and the relevant law, this Court finds that in its April 5, 23 2012 order of dismissal, the court laid out the findings of facts and conclusions of law as mandated 24 by Fed. R. Civ. P., Rule 7052. 25 Federal Rules of Bankruptcy Procedure Rule 7052 incorporates Federal Rules of Civil Procedure Rule 52. Pursuant to Rule 52, a trial court shall “find facts specially and state separately its conclusions of law.” See Fed.R.Civ.P. 52(a). The Rule explicitly cries that it will be “sufficient if the findings of fact and conclusions of law ... appear in an opinion or memorandum of decision filed by 1 || the court.” Id. The order of April 5, 2012 complies with this requirement. Trial courts enjoy ampl 2 breathing room discretion under Rule 52 to use either method to promote judicial economy. See □□□□ 3 4 || Inre Hongisto, 293 B.R. 45, 56 (N.D. Cal. 2003) aff'd, 86 F. App'x 331 (9th Cir. 2004) Cf., In r || Alvarado, 463 B.R. 200, 212 (D.P.R. 2011). 6 The court issued the Order after a thorough review of the documents provided by the parties| 7 g || The Order constitutes a seven-page opinion with a detailed background, applicable law an ? conclusions of law. This Court deems such details to be sufficient for an appellate court t 10 adequately review any issues taken on appeal. For judicial economy purposes, courts are not to mak 11 12 || minute additions or subtractions that are considered to be merely typographical in nature. This Cou 13 |! also deems unnecessary to amend its Order to include various documents that are referenced in it 14 original order that can be found on the case docket. 15 16 WHEREFORE IT IS ORDERED, that the Trustee’s Motion Requesting Amended and/o 17 |! Additional Findings of Fact pursuant to Federal Rules of Bankruptcy Procedure 7052 is DENIED] 18 1 In San Juan, Puerto Rico this 16th day of October, 2013. 20 21

23 Brian K. Tester a4 U.S. Bankruptcy Judge 25