In re: Felix A Zepeda Funez and Ercilia Fernandez Gomez

• Court: United States Bankruptcy Court, D. Puerto Rico
• Decided: June 14, 2013
• Docket: 12-01737
• Status: Unknown

Opinion

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

3 IN RE: 4 FELIX A ZEPEDA FUNEZ CASE NO. 12-01737 BKT 5 ERCILIA FERNANDEZ GOMEZ Chapter 13 6

9 XXX-XX-0701 10 XXX-XX-5091 11 FILED & ENTERED ON 06/14/2013 12

13 Debtor(s)

14 OPINION AND ORDER 15 Pursuant to Rule 3008 of the Federal Rules of Bankruptcy Procedure and 11 16 U.S.C. § 502(j), a party in interest may seek reconsideration of an order 17 18 allowing or disallowing a claim. Section 502(j) does not permit the reckless 19 reconsideration of a claim nor does § 502(j) disregard the provisions of § 502(a) 20 and § 1327(a). Instead, § 502(j) allows reconsideration of allowed or disallowed 21 claims, but only for cause. See International Yacht and Tennis, Inc. v. 22 Wasserman, 922 F.2d 659 (11th Cir.1991). “Reconsideration of both allowed and 23 disallowed claims may occur at any time before a case is closed, but in such 24 reconsideration the court must weigh the extent and reasonableness of any delay, 25 or prejudice to any party in interest, the effect on efficient court administration and the moving party's good faith.” In re Orsini Santos, 349 B.R. 762, 769 (1st Cir.BAP 2006); In re Gomez, 250 B.R. 397 (Bankr.M.D.Fla.1999). The meaning of the phrase “for cause” is not clearly defined in the Bankruptcy Code. Several courts have equated a § 502(j) motion for 1 reconsideration with a motion for relief from judgment under Federal Rule of 2 Bankruptcy Procedure 9024. As such, these courts have held that the movant may 3 only seek reconsideration based on the Rule 60(b) standards. See Matter of 4 Colley, 814 F.2d 1008 (5th Cir.1987). Under Federal Rule of Civil Procedure 5 60(b), the court may provide relief from judgment based on such things as 6 mistake, newly discovered evidence, fraud, a void or satisfied judgment or any 7 other similar reason justifying relief. Fed.R.Civ.P. 60(b). However, the cases 8 which held the movant to this standard all dealt with proofs of claims that had 9 been actually litigated, and the Fifth Circuit Court of Appeals specifically held 10 in Colley that Rule 60(b) standards are applicable only when the parties have 11 actually litigated an objection on the proof of claim. Colley at 1010. The 12 13 discretion to reconsider “should not ... encourage parties to avoid the usual 14 rules for finality of contested matters.” Id. Reconsideration under § 502(j) is a 15 two-step process. A court must first decide whether “cause” for reconsideration 16 has been shown. In re Jones, 2000 WL 33673759 at *2 (Bankr.M.D.N.C.2000). Then, 17 the Court decides whether the “equities of the case” dictate allowance or 18 disallowance of the claim. Id. The discretion to reconsider “should not ... 19 encourage parties to avoid the usual rules for finality of contested matters.” 20 Movant filed claim number 4-1 on 6/8/2012, and amended the same on 21 7/6/2012. On 7/11/2012, Debtor objected to claim number 4-2 [Dkt. No. 44], and 22 properly sent notice to the Movant. After 86 days on 10/5/2012, the court entered 23 an order granting the Objection as unopposed [Dkt. No. 54]. The court notes that 24 the record of the case reflects that Movant was represented by counsel and was 25 actively litigating matters pertaining to this same mortgage debt. On 4/1/2013, Movant filed this Reconsideration now pending before the court. Without providing any explanation as to their 178 day silence to the Debtor's Objection to their claim, Movant's Motion contains one paragraph which describes the terms of the alleged mortgage debt between Citibank, NA and Debtor, and references a copy of a 1 power of attorney purportedly evidencing a servicing agreement between Citiban 2 and Movant. The second relevant paragraph states that these documents rende 3 the Debtor's Objection as moot. The Movant presents no ‘“cause” fo 4 reconsideration in his Motion, and gives no basis for the allowance of thei 5 claim “according to the equities of the case.” To permit reconsideration of 6 Movant's claim, it was their burden to establish “cause.” Movant's Motion does 7 not succeed. Accordingly, the Motion for Reconsideration filed by Citimortgage, 8 Inc., as servicing agent for Citibank NA ("Movant") on 4/1/2013 [Dkt. No. 78] i 9 DENIED. 10 IT IS SO ORDERED. 11 12 In San Juan, Puerto Rico this 14 day of June, 2013. 13 Aa rian K. Tester 15 U.S. Bankruptcy Judge 16 17 18 19 20 21 22 23 24 25