| IN THE UNITED STATES BANKRUPTCY COURT 9 FOR THE DISTRICT OF PUERTO RICO 3 || IN RE: CASE NO. 12-03808 (ESL) 4 ||ERNESTO ANTONIO MELENDEZ CHAPTER 11 PEREZ 5 6 Debtor ADV. PROC. NO. 12-00386 (ESL) 7 || ERNESTO ANTONIO MELENDEZ PEREZ 8 9 Plaintiff 10 VS. 11 |} MARGARITA DIAZ RIVERA 12 Defendant 13 OPINION AND ORDER 14 This case is before the court upon Mr. Ernesto Antonio Melendez Perez’s (hereinafter 13 referred to as “Plaintiff” or “Debtor”’) Amended Motion for Partial Summary Judgment and 16 || Memorandum of Law (“Motion for Partial Summary Judgment”) seeking a determination that 17 |! Defendant willfully violated the automatic stay provisions pursuant to 11 U.S.C. §$362(a) when 18 |! che filed a Sur-Reply in Compliance of Order' (the “Sur-Reply”’) at the Puerto Rico Court of 19 |! First Instance, Superior Court of Bayamon (“state court’) requesting payment of various 20 obligations that are not excepted under 11 U.S.C. $362(b)(2)(A)@i). The Plaintiff requests this 21 |! court to award him actual damages, including the payment of legal fees under 11 U.S.C. 22 §362(k)(1) stemming from this violation. Mrs. Margarita Diaz Rivera (hereinafter referred to as 23 irs. Diaz” or “Defendant’) filed an Opposition to Motion for Summary Judgment arguing 24 that: (i) the motion filed at the state court was in compliance with a prior state court order and 25 |/the same was intended for the state court to determine the domestic support obligations 26 27 ' The document is titled in Spanish "Duplica en Cumplimiento de Orden" (Docket No. 46-3) again parties have only filed Spanish language documents and for the sake of judicial economy the court will consider these documents. If any party would like to appeal any order, these documents will have to be offered with a certified translation. -|-
1 || C‘DSO”) pursuant to 11 U.S.C. §101C14A) of the Plaintiff; and (ii) the civil case in the state 2 court is exempted from the automatic stay provisions pursuant to 11 U.S.C. $362(b)(2)(A)(i1) 3 §362(b)(2)(B) because there was no specific request for the default to be cured with 4 || property of the estate. For the reasons stated herein the Motion for Partial Summary Judgment is 5 || granted. 6 Jurisdiction 7 The Court has jurisdiction pursuant to 28 U.S.C. 8§ 1334(b) and 157(a). This is a core 8 || proceeding pursuant to 28 U.S.C. §$157(a) and (b). Venue of this proceeding is proper under 9 || 28 U.S.C. §§1408 and 1409. 10 Facts and Procedural Background 11 The Debtor filed a bankruptcy petition under Chapter 11 of the Bankruptcy Code on 12 ||May 16, 2012 (lead case, No. 12-038087). The 341 meeting of the creditors was initially 13 || scheduled for June 25, 2012 (Docket No. 9 in lead case), and rescheduled and held on October 14 }|5, 2012 (Docket Nos. 14 & 23 in lead case). On August 23, 2012, Mrs. Diaz filed a Motion to 15 || Dismiss Case pursuant to 11 U.S.C. §1112(b)(4)(P) (Docket No. 33, lead case). On October 1, 16 2012, the Debtor filed his Memorandum of Law in Support of his Opposition to Motion to 17 || Dismiss filed by Margarita Diaz Rivera (Docket No. 65, lead case). On October 16, 2012, Mrs. 18 || Diaz filed her Verified Reply to Debtor’s Memorandum of Law (Docket No. 71, lead case). On 19 ||March 12, 2013, this court rendered an Opinion and Order (Docket No. 97, lead case) 20 || regarding Mrs. Diaz’s motion to dismiss case or convert pursuant to 11 U.S.C. §$1112(b)(4)(P). 21 || This court held that: “(1) [i]t is uncontested that the $3,000 monthly payment, the health 22 || insurance coverage for Mrs. Diaz, and the disability insurance policy naming Mrs. Diaz as the 23 || sole beneficiary constitute domestic support obligations under 11 U.S.C. §101(14A). Thus the 24 ||same must be currently paid; (2) [t]he additional $2,000 monthly payment and mortgage 25 ||payment of Mrs. Diaz’s residence are not domestic support obligations under 11 U.S.C. 26 ||$101¢14A), but rather form part of the liquidation and division of conjugal assets property 27 erences to the lead case are to the entries and documents filed in the bankruptcy case, case number 12-03808
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1 || settlement agreed upon by the parties during their divorce proceedings; and (3) [t]he court will 2 ||hold and evidentiary hearing regarding the life insurance policy obligation to determine the 3 intent of the parties at the time of the divorce proceedings and thus, determine whether the 4 ||same constitutes a domestic support obligation or forms part of the property settlement.” 5 || (Docket No. 97, lead case, pgs. 14-15). On January 24, 2014, the evidentiary hearing was held 6 || to determine the intent of the parties at the time of the divorce proceedings regarding the nature 7 || of the life insurance policy (Docket No. 177, lead case). On July 17, 2014 this court rendered 8 Opinion and Order (Docket No. 218, lead case) in which it held that the life insurance 9 || policy does not constitute a DSO pursuant to 11 U.S.C. $101014A). 10 On October 24, 2012, the Debtor filed this adversary proceeding premised upon 11 || allegations that Mrs. Diaz violated the automatic stay provisions by requesting payment from 12 ||the Debtor of various obligations in state court which are not excepted under 11 U.S.C. 13 || $362(b)(2)(A)Gi) and the state court granting Mrs. Diaz’s request. 14 Subsequently, on December 26, 2012, the Defendant filed a Motion to Dismiss 15 || Complaint and to Vacate Pre-Trial Hearing (Docket No. 13). On January 21, 2013, the 16 || Plaintiff filed his Opposition to Motion to Dismiss (Docket No. 17). On April 4, 2013, the 17 || court rendered an Opinion and Order (Docket No. 21) denying Defendant’s motion to dismiss. 18 }}On April 18, 2013, the Defendant filed her Answer to Complaint (Docket No. 24). On 19 || September 26, 2013, the parties filed the Joint Pre Trial Report (Docket No. 34). On January 20 || 24, 2014, the preliminary pretrial conference was held in which this court determined that this 21 adversary proceeding hinges on the final decision regarding what constitutes a DSO in the 22 || contested matter heard today (in the lead case). The pre-trial hearing was continued without a 23 || date (Docket No. 41). 24 On February 21, 2014, the Plaintiff filed an Amended Motion for Partial Summary 25 || Judgment (Docket No. 46) arguing that Defendant violated the automatic stay provisions 26 || pursuant to 11 U.S.C. §362(a) based upon the following: (i) Defendant filed a Sur-Reply in 27 state court on June 6, 2012, subsequent to the filing of the bankruptcy petition, requesting
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1 || payment of various obligations that were not excepted under any of the provisions under 11 2 ||U.S.C. §362(b)(2); Ci) the state court Order rendered on July 10, 2012 granting the 3 || Defendant’s contempt motion and Sur-Reply is null and void because such action was taken in 4 || contravention of the automatic stay, thus the Order is without effect; and (ii) this court in its 5 || April 4, 2012 Opinion and Order (Docket No. 21, pg. 5) stated the following: 6 “Tt]he representations made to the state court are that these obligations 7 constitute “domestic support obligations” and as such are not subject to 8 the automatic stay and are not dischargeable. Thus, according to the representations made by the Defendant to the state court, the debtor must 9 continue making payment. Clearly, such a request is not for the establishment or clarification of a domestic support obligation. It is a 10 request to compel payment of the established obligation. The court at this Wl juncture need only decide whether or not the actions in the subject pleading are excepted under section 362(b)(2)(A)(ii). The court finds that 12 they are not.” (Docket No. 46, pg. 8). 13 On March 20, 2014 the court ordered as follows: “[o]n February 21, 2014 the plaintiff 14 || moved for summary judgment and provided for fourteen (14) days to the opposing party IS (defendant) to oppose. In spite of the time that has elapsed defendant has not opposed the 16 motion for summary judgment. In view of the foregoing, the court orders the defendant to 17 8 show cause within fourteen (14) days why partial summary judgment should not be entered in
19 favor of plaintiff finding that the defendant violated the automatic stay provisions of 11 U.S.C. 20 $362(a) and scheduling a hearing on damages.” (Docket No. 48). On April 3, 2014, the 21 ||Defendant filed her Opposition to Motion for Summary Judgment arguing that she did not 22 || violate the provisions of the automatic stay based upon the following: (1) the Sur-Reply filed at 3 the state court was in compliance with a prior state court order and the same was intended for 24 the state court to determine that the payment obligations of the Debtor according to the divorce 25 26 decree were domestic support obligations (“DSO”) pursuant to 11 U.S.C. §101014A); Gi) “It]he only language that could be interpreted as a collection effort is in the ‘wherefore’
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wherein it was requested that the [state court] order Debtor-Plaintiff to comply with all the
2 || obligations of the divorce decree because these were domestic support obligations;” (iii) “...the 3 || Sur-reply has the sole purpose of obtaining a ruling from the [state court] that the obligations in 4 || the divorce decree were domestic support obligations and as such, [are] exempted from the 5 automatic stay pursuant to section 362(b)(2)(A)(ii); and (iv) “...even though there was a 6 general request for the obligations to be complied with, there was no specific request for the default to be cured with property of the estate; which falls within the exception to the
9 automatic stay of Section 362(b)(2)(B). And even after the Sur-Reply was granted, Defendant 10 || did not pursue an order for contempt and/or to garnish Debtor’s property (Docket No. 50). 11 Material Uncontested Facts 12 3 1. Plaintiff and Defendant were married on May 5, 1972.
14 2. On May 15, 2003, the appearing parties filed a divorce petition by mutual 15 || consent at the state court, Civil Case No. D DI2002-3422. 16 3. On May 15, 2003, the state court entered a Judgment granting the divorce 17 petition. 18 19 4, On April 9, 2012, the Defendant filed an Urgent Motion for Contempt and Other
0 Measures in the state court in Civil Case No. DDI2002-3422 (Docket No. 46, Exhibit 1). 21 5. On May 9, 2012, the Plaintiff filed his Reply to the Urgent Motion for Contempt 22 |! and Other Measures (Docket No. 50, Exhibit 1). 23 6. On May 10, 2012, the state court issued an Order instructing the other party to 24 |! inform (disclose) his position within 20 days. (Docket No. 50, Exhibit 2). 25 7. On May 16, 2012, the Debtor filed a voluntary bankruptcy petition under 26 Chapter 11 of the Bankruptcy Code. 27
1 8. On May 18, 2012, the Plaintiff filed a motion informing the state court that he 2 || had filed for bankruptcy and filing the Notice of Automatic Stay (Docket No. 46, Exhibit 2). 3 9. On June 6, 2012, the Defendant filed her Sur-Reply in the state court. (Docket 4 || No. 46, Exhibit 3). 5 10. On July 30, 2012, the state court entered an Order granting the motion filed by 6 || Mrs. Diaz. (Docket No. 46, Exhibit 4). 7 11. On September 28, 2012, the Plaintiff filed an Urgent Motion Requesting 8 || Modification of Alimony in state court to reduce the alimony payments (Docket No. 50, Exhibit 9 |} 3). 10 Applicable Law & Analysis ll Standard for Motion for Summary Judgment 12 Rule 56 of the Federal Rules of Civil Procedure, is applicable to this proceeding by Rul 13 || 7056 of the Federal Rules of Bankruptcy Procedure. Summary judgment should be entered if th 14 pleadings, depositions, answers to interrogatories, and admissions on file, together with th affidavits, if any, show that there is no genuine issue as to any material fact and that the movin party is entitled to a judgment as a matter of law. See In re Colarusso, 382 F.3d 51 (1* Cir,
18 2004), citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-323 (1986). “The summary-judgmen 19 || procedure authorized by Rule 56 is a method for promptly disposing of actions in which there i 20 no genuine issue as to any material fact or in which only a question of law is involved.” Wright 21 || Miller & Kane, Federal Practice and Procedure, Civil 3d, Vol 1OA, § 2712 (2013). “Rule 5 22 provides the means by which a party may pierce the allegations in the pleadings and obtain relie by introducing outside evidence showing that there are no fact issues that need to be tried.” Id. a 202-203. Summary judgment is not a substitute for a trial of disputed facts; the court may onl
%6 determine whether there are issues to be tried, and it is improper if the existence of a materia 27 || fact is uncertain. Id. at 205-206.
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Summary judgment is warranted where, after adequate time for discovery and upo motion, a party fails to make a showing sufficient to establish the existence of an elemen 3 || essential to its case and upon which it carries the burden of proof at trial. Celotex Corp. 4 || Catrett, 477 U.S. at 322. The moving party must “show that there is no genuine issue as to an 5 material fact and that the moving party is entitled to judgment as a matter of law.” Fed. R. Civ, P. 56(c). 7 For there to be a “genuine” issue, facts which are supported by substantial evidence mus
9 be in dispute, thereby requiring deference to the finder of fact. Furthermore, the disputed fact 10 || must be “material” or determinative of the outcome of the litigation. Hahn v. Sargent, 523 F.2 11 ||461, 464 Cir. 1975), cert. denied, 425 U.S. 904 (1976). When considering a petition fo 12 summary judgment, the court must view the evidence in the light most favorable to th 13 nonmoving party. Poller v. Columbia Broadcasting Systems, Inc., 368 U.S. 464, 473 (1962); Daury v. Smith, 842 F.2d 9, 11 Cir. 1988). The moving party invariably bears both the initial as well as the ultimate burden i
7 demonstrating its legal entitlement to summary judgment. Adickes v. Kress & Co., 398 □□□□ 18 || 144, 157 (1970). See also L6pez v. Corporaci6n Azucarera de Puerto Rico, 938 F.2d 1510, 151 19 ||“ Cir. 1991). It is essential that the moving party explain its reasons for concluding that th 20 |! record does not contain any genuine issue of material fact in addition to making a showing o 71 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 (1990).
The moving party cannot prevail if any essential element of its claim or defense requires 95 trial. Lopez, 938 F.2d at 1516. In addition, the moving party is required to demonstrate that 26 there is an absence of evidence supporting the nonmoving party’s case. Celotex, 477 U.S. at 27 325. Also see Prokey v. Watkins, 942 F.2d 67, 72 (1* Cir. 1991); Daury, 842 F.2d at 11. In its
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opposition, the nonmoving party must show genuine issues of material facts precluding Summary judgment; the existence of some factual dispute does not defeat summary judgment. 3 || Kennedy v. Josepthal & Co., Inc., 814 F.2d 798, 804 (1" Cir. 1987). Also see Kauffman v. 4 || Puerto Rico Telephone Co., 841 F.2d 1169, 1172 C1“ Cir. 1988); Hahn, 523 F.2d at 464. A 5 party may not rely upon bare allegations to create a factual dispute but is required to point to 6 specific facts contained in affidavits, depositions and other supporting documents which, if established at trial, could lead to a finding for the nonmoving party. Over the Road Drivers, Inc.
9 v. Transport Insurance Co., 637 F.2d 816, 818 (1* Cir. 1980). 10 The moving party has the burden to establish that it is entitled to summary judgment; no 11 ||defense is required where an insufficient showing is made. Lépez, 938 F.2d at 1517. The 12 nonmoving party need only oppose a summary judgment motion once the moving party has met 13 its burden. Adickes, 398 U.S. at 159. For the reasons explained below, this court grants the Plaintiff's Motion for Partial Summary Judgment. 7 Automatic Stay 18 The automatic stay provision is one of the fundamental debtor protections in the 19 || Bankruptcy Code. It gives the debtor a “breathing spell” from creditors and stops all collection 20 efforts, all harassment, and all foreclosure actions. H.R. Rep. No. 95-595, 95h Cong. 1“ Sess. 71 340-342 (1977); S. Rep. No. 989, 95% Cong., 2d Sess. 54-55 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5840, 6296-97. “It allows the debtor to attempt a repayment or
reorganization plan or simply be relieved of the financial pressures that drove him into
95 || bankruptcy.” Id. The automatic stay is extremely broad in scope and "applies to almost any type 26 of formal or informal action taken against the debtor or the property of the estate.” Alan N. 27 || Resnick & Henry J. Sommer, 3 Collier on Bankruptcy 4 362.03 (16th ed. 2014). Furthermore,
the automatic stay also protects creditors since it prevents the “dismemberment of a debtor's
2 |] assets by individual creditors levying on the property.” Id. 3 The automatic stay prohibits “the commencement or continuation, including the issuance 4 || or employment of process, of a judicial, administrative, or other action or proceeding against the 5 debtor that was or could have been commenced before the commencement of the case under this 6 title, or to recover a claim against the debtor that arose before the commencement of the case under this title.’ 11 U.S.C. $362(a)(1). “Subsection (a)(1) provides for a broad stay of legal
9 proceedings against the debtor that were or could have been commenced prior to the 10 |}commencement of the bankruptcy case, or that seek to recover a prepetition claim against the 11 debtor. It includes a stay against the commencement or continuation of administrative, judicial 12 || and other actions or proceedings against the debtor.” Alan N. Resnick & Henry J. Sommer, 3 13 Collier on Bankruptcy §] 362.03[3] (16th ed. 2014). “The stay provision of subsection (a)(1) is drafted so broadly that it encompasses all types of legal proceedings, subject only to the exceptions provided in section 362(b).” Id. 7 “Except as provided in section 362(b), the stay prohibits proceedings on both 18 || dischargeable and non-dischargeable debts.” Id. “When litigation is pending against the debtor 19 |} at the time a bankruptcy case is commenced, the litigation is stayed automatically. The 20 | nondebtor party has an obligation to notify the court in which the litigation is pending that the 71 action is stayed and to take any other action necessary to assure that the action does not continue. Failure to do so violates the stay. In addition, if the nonbankruptcy court continues the
action or enters a judgment notwithstanding the imposition of the automatic stay, the action or
95 ||judgment should be considered ineffective against the debtor.” Id. “Despite the fundamental 26 || importance of the automatic stay, Congress has allowed certain exceptions to the automatic stay, 27 || such as those included under Section 362(b) of the Bankruptcy Code.” Centeno Sanchez v.
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Dept. of Treasury (In re Sanchez), 2013 Bankr. Lexis 137, *10 (Bankr. D.P.R. 2013) citing 229
2 Main St, Ltd. Pshp. v. Mass. EPA (In re 229 Main St.), 262 F. #d 1, 3-4 (1* Cir. 2001). 3 Section 362(b) lists a number of acts that are exceptions from a debtor’s automatic stay. 4 ||In the instant case, Defendant argues that her actions were exempted by 11 U.S.C. 5 §362(b)(2)(A)Gi) and 362(b)(2)(B). Section 362(b)(2)(A)Gi) of the Bankruptcy Code provides 6 an exception to the automatic stay provisions under subsection (a) of Section 362 of the Bankruptcy Code by allowing: “(A) of the commencement or continuation of a civil action or
9 proceeding—(i1) for the establishment or modification of an order for domestic support 109 obligations.” 11 U.S.C. §362(b)(2)(A)(G1). Section 362(b)(2)(B) provides another exception to 11 the automatic stay by allowing: “(B) of the collection of a domestic support obligation from 12 property that is not property of the estate.” 11 U.S.C. §362(b)(2)(B). 13 In the instant case, the Defendant argues that she filed the Sur-Reply in the state court in compliance with a prior state court order and the same was intended for the state court to determine that the payment obligations of the Debtor according to the divorce decree were DSO
17 || Pursuant to 11 U.S.C. $101014A) and as such the same were exempted from the automatic stay 18 provisions pursuant to Section 362(b)(2)(A)@1). Defendant also argues that: “[t]he only 19 || language that could be interpreted as a collection effort is in the ‘wherefore’ wherein it was 20 requested that the [state court] order Debtor-Plaintiff to comply with all the obligations of the 71 divorce decree because these were domestic support obligations” (Docket No. 50). This court in its March 12, 2013 Opinion and Order (Docket No. 97) in the lead case concluded the
following regarding the Sur-Reply and the state court order granting the same: (i) the prayer of
25 the Sur-Reply requested the state court to order the Debtor to comply with each and every one 26 ||of the obligations included in the Divorce Petition and Judgment since the same are not 27 || dischargeable under the Bankruptcy Code and form part of valid order of domestic obligations
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(Docket No. 33, lead case pgs. 4-5); (ii) the state court did not adjudicate whether the various
2 || obligations contained in the stipulations were DSO’s under 11 U.S.C. §101(14A) and it may not 3 || because that is a matter of federal jurisdiction; and (iii) the state court granted this motion, thus 4 || ordering the Debtor to comply with the payments associated with the obligations included as 5 part of the stipulations of the Divorce Judgment (Docket No. 97, lead case, pgs 13-14). The 6 court’s analysis of the Sur-Reply and the state court order is as follows: 7 “Mrs. Diaz also presented the argument that due to Debtor’s default in his 8 domestic support obligations she had to file in state court a motion requesting an 9 Order directing the Debtor to pay all domestic support obligations, and the state court rendered an Order granting the same, wherein it is specifically decided that 10 the obligations are non-dischargeable domestic support obligations that the Debtor must continue to pay post-petition (Docket No. 71, pgs. 2-3). The prayer 11 pertaining to this particular motion requested the state court to order attorney Melendez to comply with each and every one of the obligations included in the 12 Divorce Petition and Judgment since the same are not dischargeable under the B Bankruptcy Code and form part of valid order of domestic obligations (Docket No. 33-3, pgs. 4-5). However, no particular section of the Bankruptcy Code was 14 referenced in the prayer of said motion. The state court granted this motion (“Con Lugar’). The state court ordered Mr. Melendez to comply with the payments 15 associated with the obligations included as part of the stipulations of the Divorce Judgment. 16 7 The stipulations in the Divorce Petition included both domestic support obligations and property settlement debts in connection with a separation 18 agreement, which are not dischargeable debts in an individual Chapter 11 case pursuant to 11 U.S.C. §§ 523(a)(5), 523(a)U15) and 1141(d)(2). Debts that are in 19 the nature of alimony, maintenance or support, and property settlement debts are non-dischargeable in an individual Chapter 11 case. The state court did not 20 adjudicate whether the various obligations contained in the stipulations were 1 domestic support obligations under 11 U.S.C. § 101(14A) and, arguably it may not, as determining if an obligation qualifies as support is a matter of federal 22 bankruptcy law, not state law. Therefore, the state court decision does not have effect on the matters before the court.” (Docket No. 97, lead case, pgs. 13-14). 23 On April 4, 2013, this court in its Opinion and Order (Docket No. 21) denied
95 ||Defendant’s motion to dismiss this adversary proceeding. The court concluded that the 26 || Defendant’s representations to the state court included in the Sur-Reply was a request to compel 27
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payment, not for the establishment or clarification of a domestic support obligation pursuant to
2 11 U.S.C. $362(b)(2)(A) (ii). This court stated as follows: 3 “The representations made to the state court are that these obligations constitute “domestic support obligations’ and as such are not subject to the 4 automatic stay and are not dischargeable. Thus, according to the 5 representations made by the Defendant to the state court, the debtor must continue making payment. Clearly, such a request is not for the 6 establishment or clarification of a domestic support obligation. It is a request to compel payment of the established obligation. The court at this 7 juncture, need only decided whether or not the actions in the subject pleading are excepted under section 362(b)(2)(A)(ii). The court finds that 8 they are not.” (Docket No. 21, pg. 5). ? This court finds that it has already adjudicated in the negative whether the Defendant’s 10 state court Sur-Reply was exempted under section 362(b)(2)(A)(ii). The court held that the same 11 was not exempted under section 362(b)(2)(A)(i1).
B Defendant also argues that the Sur-Reply filed in state court is exempted under section 14 || 362(b)(2)(B) because “....even t[h]ough there was a general request for the obligations to be 15 || complied with, there was no specific request for the default to be cured with property of the 16 estate; which falls within the exception to the automatic stay of [s]ection 362(b)(2)(B).” (Docket M No. 50, pg. 9). This court finds that this exception is inapplicable in the instant case for two (2) 18 reasons, namely; (i) the Defendant sought collection of obligations which this court has 19 20 determined do not constitute domestic support obligations under section 101(14A); and (ii) all
1 || property owned by the Debtor on the date of filing, plus all earnings from services performed 92 || after commencement of the case, but before the case is closed, converted or dismissed is 23 || property of the estate pursuant to 11 U.S.C. §§541 and 1115. 24 Violation of the Automatic Stay 25 Section 362(k) provides that “an individual injured by any willful violation of a stay 26 provided by this section shall recover actual damages, including costs and attorneys’ fees, and, 27 in appropriate circumstances, may recover punitive damages.” 11 U.S.C. $362(k)(1). “A debtor -1?-
seeking damages under this section bears the burden of proving by a preponderance of the
2 evidence the following three elements: (1) that a violation of the automatic stay occurred; (2) 3 || that the violation was willfully committed; and (3) that the debtor suffered damages as a result 4 || of the violation.” Slabicki v. Gleason (In_re Slabicki), 466 B.R. 572, 577-578 (B.A.P. 1“ Cir. 5 2012) citing In re Panek, 402 B.R. 71, 76 (Bankr. D. Mass. 2009). 6 The First Circuit in Laboy v. Doral Mortg. Corp. din re Laboy), 647 F. 3d 367, 374 a* Cir. 2011) stated the following regarding whether a violation is deemed “willful,” “[a] violation
9 is ‘willful’ if a ‘creditor’s conduct was intentional (as distinguished from inadvertent), and 10 committed with knowledge of the pendency of the bankruptcy case. In re McMullen, 386 F. 3d 11 320, 330 (1 Cir. 2004);” See also; Fleet Mortg. Group v. Kaneb, 196 F. 3d 265, 269 □□□ Cir. 12 || 1999) (“A willful violation does not require a specific intent to violate the automatic stay. The 13 standard for a willful violation of the automatic stay under §362(h)* is met if there is knowledge of the stay and the defendant intended the actions which constituted the violation”). Thus, “without a willful violation, the damages provision of $362 by its terms, is irrelevant.” In re 7 Laboy, 647 F. 3d at 373-374. 18 This court finds that the Defendant’s filing in state court of the Sur-Reply compelling 19 || payment of all the obligations included in the divorce petition constitutes a willful violation of 20 || the automatic stay pursuant to section 362(a)(1), since the Defendant knew that the Debtor had 21 filed for bankruptcy and included this information in her Sur-Reply in state court. Moreover, the Sur-Reply did not specify that the source of payment of the domestic support obligations be
limited to non-estate property. This court finds that the Defendant in her Sur-Reply 25 || misrepresented the Bankruptcy Court by alleging that this court had denominated (designated) 26 || the life insurance policy and the disability insurance policy as domestic support obligations. In 27 3 Section 362(k)(1) was previously codified as subsection 362(h) of the Bankruptcy Code. 13.
the Sur-Reply, the Defendant also alleges that all the obligations included in the divorce petition 2 || form part of a valid Order regarding domestic support obligations. At this juncture, this court 3 ||had not rendered a holding regarding the obligations which constitute domestic support 4 || obligations pursuant to 11 U.S.C. §101(14A). This court rendered two (2) Opinions and Orders, 5 the first on March 12, 2013 and the second on July 17, 2014 (Docket Nos. 97 & 218, lead case), 6 as to whether the obligations included in the divorce decree constituted domestic support obligations pursuant to 11 U.S.C. §101(14A) or were part of the liquidation and division of
9 conjugal assets property settlement agreed upon by the parties. The First Circuit’s view is that 109 |] actions taken in contravention of the automatic stay in a judicial proceeding are “null and void.” 11 See Soares v. Brockton Credit Union (In re Soares), 107 F. 3d 969, 976 (1* Cir. 1997). Thus, 12 || this court finds that the state court’s Order granting Defendant’s Sur-Reply is null and void. 13 Moreover, it is the creditor’s obligation to inform other courts of a debtor’s bankruptcy filing. See In re Soares, 107 F. 3d at 978. However, in the instant case, it was the Debtor that on May 18, 2012, filed a motion informing the state court that he had filed for bankruptcy. 17 Conclusion 18 For the reasons stated above the Plaintiff's Motion for Partial Summary Judgment is 19 || hereby granted and the Defendant’s Opposition to Motion for Summary Judgment is denied. A 20 || hearing on damages is scheduled for October 28, 2014 at 2:00pm. 21 SO ORDERED. 22 In San Juan, Puerto Rico, this 28" day of July, 2014. 23 24 c Carrere 25 unitdé states Bankruptcy Judge 26 27
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