In re: Cruz M. Mendez Garcia

• Court: United States Bankruptcy Court, D. Puerto Rico
• Decided: November 16, 2017
• Docket: 15-10374
• Status: Unknown

Opinion

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

3 IN RE: CASE NO. 15-10374 4

5 CRUZ M. MENDEZ GARCIA CHAPTER 13

6 Debtor(s) FILED & ENTERED ON 11/16/2017 7

9 OPINION & ORDER

10 Debtor’s Reconsideration of Order Granting Objection to Debtor’s Claim of Exemptions 11 [Dkt. No. 93] is DENIED. The court has reviewed this motion and the associated filings at 12 dockets 108, 109, 119 and 122 and abides by its Order [Dkt. No. 91]. 13 Debtor argues that in the instant case she liberally chose the state law exemptions to 14 declare homestead exemption over her home. The Puerto Rico homestead act is silent as to the 15 16 issue of when the property is not recorded in name of Debtor in the Registry of the Property. 17 Even though the statute is silent as to that issue, as per Debtor’s sur-reply this must not be an 18 issue given that the deed declaring her homestead rights is not a constitutive document that needs 19 to be recorded in the Registry of the Property to have validity. Further debtor claimed her 20 exemption through an affidavit. Thus, she claimed her right through a deed and an affidavit. 21 Creditor Rushmore Loan Management Services argues in turn, that given the courts’ 22 previous conclusion1 that Rushmore’s claim lacked successive chain of ownership, it must also 23 24 conclude that Debtor’s Notarial Act/deed claiming the homestead exemption submitted before 25 the Registry of the Property also lacks the successive chain of ownership. Thus, it was 26 1See Opinion and Order [Adv. Dkt. No. 17] in the related adversary case number 16-00094. 27 1 improperly claimed by Debtor. Currently, the titular registrant of the real property in question is 2 Gustavo Adolfo Piccard Rivera, and not Debtor. Pursuant to Puerto Rico mortgage law, the 3 access to the Registry of the Property will be closed to Debtor’s Notarial Act/deed claiming the 4 homestead protection. 5 In the leading case in this District as to the requirements of the Puerto Rico Home 6 Protection Act of 20112, In re Hernandez, 487 B.R. 353, 362 (Bankr.D.P.R.2013), the court 7 8 stated, in relevant part: 9 Articles 9 and 11 of the PR Home Protection Act distinguish between real properties that are registered at the Property Registry and those that are 10 not. The methods for claiming the homestead exemption in both instances are different. In cases where the real property is registered at the Property 11 Registry Article 9 governs the procedure by which homestead is claimed. 12 In cases where the real property is not registered at the Property Registry or where the declaration of homestead has not yet been recorded or 13 annotated, Articles 11 and 12 will govern. Thus, when an individual or head of family files for bankruptcy, he/she must disclose in Schedule C 14 whether or not his/her claimed homestead is or not registered at the Property Registry. If the real property is registered, he/she must show pre- 15 petition compliance with Article 9 of the 2011 PR Home Protection Act. If 16 the real property is not registered, the debtor must submit with the bankruptcy petition the sworn statement required in Article 12 of the PR 17 Home Protection Act, but instead of declaring that the real property was a principal residence before the service of process of foreclosure, he/she 18 must declare that the real property was his/her pre-petition principal residence. 19

20 In the present case, Debtor attached to her reconsideration motion at docket number 93 both a 21 sworn statement and a Notarial Act/deed dated December 14, 2015. The court concurs with 22 Rushmore’s assertion that the PR Home Protection Act does not provide a remedy in the case of 23 an individual who is not the titular registrant of the real property, yet seeks a homestead 24 exemption for said property. Moreover, this is consistent with the principle of the successive 25

26 2 P. R. Laws Ann. Titl. 31 § 1858

27 1 || chain of ownership under Puerto Rico mortgage law. The titular registrant must be the individua 2 claiming the homestead protection. As stated in Hernandez, “[c]ompliance with the requirements ° of the 2011 PR Home Protection Act is essential to properly claiming a homestead exemption 1 bankruptcy proceedings.” In re Hernandez, 487 B.R. at 362.

6 SO ORDERED

7 San Juan, Puerto Rico, this 16th day of November, 2017. 8

10 ea Hike 11 Brian K. Tester U.S. Bankruptcy Judge 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 -3-