In re Figueroa Alonso

546 B.R. 1, 2016 WL 675539
CourtUnited States Bankruptcy Court, D. Puerto Rico
DecidedFebruary 18, 2016
DocketCASE NO. 09-06996 (ESL)
StatusPublished
Cited by1 cases

This text of 546 B.R. 1 (In re Figueroa Alonso) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Figueroa Alonso, 546 B.R. 1, 2016 WL 675539 (prb 2016).

Opinion

OPINION AND ORDER

Enrique S. Lamoutte, United States Bankruptcy Judge

This case is before the court upon the Amended Motion Requesting Sanctions [3]*3(Docket No. 66) filed by the Debtor. The Debtor seeks sanctions against Banco Popular de Puerto Rico (hereinafter referred to as “BPPR”) and/or its attorneys for the filing of an amendment to BPPR’s claim three months before plan completion. The Debtor alleges that the filing of the amended claim propelled the Debtor into unreasonable and vexatious litigation about an issue that was not warranted by existing law pursuant to Fed. R. Bankr. P. 9011(b)(2). Consequently, Debtor requests monetary sanctions pursuant to Fed. R. Bankr. P. 9011(c)(2) in the form of payment of the attorney’s fees and costs incurred in prosecuting its objection to BPPR’s amended proof of claim. The attorney’s fees and costs amount to $6,052.17 as per the attached itemized detail. BPPR filed its Response to “Amended Motion for Sanctions” (Docket No. 73). For the reasons stated herein, the request for sanctions is hereby granted in part and denied in part.

Procedural Background

The Debtor filed a bankruptcy petition under Chapter 13 of the Bankruptcy Code on August 25, 2009. On that same date, the Debtor filed her Chapter 13 Plan of Reorganization (Docket No. 4). On October 22, 2009, BPPR filed proof of claim # 8-1 in the amount of $81,321.93 of which $3,763.84 was disclosed as pre-petition ar-rearages. On October 29, 2009, the Debt- or filed her Amended Plan and Notice of Opportunity to Object and for a Hearing (Docket No. 23). On November 18, 2009, the Court entered an Order confirming the Debtor’s Chapter 13 plan dated October 29, 2009 (Docket No. 27).

Subsequently, on May 23, 2014, fifty-five (55) months after filing its original claim, BPPR filed amended secured claim # 8-2 in the amount of $83,209.53 of which $13,298.34 was allocated to pre-petition ar-rearages. On May 28, 2014, BPPR filed an Informative Motion informing that it had amended its claim which requires payments in the amount of $13,298.34 and thus, it appears that the plan is insufficiently funded (Docket No. 32).

On June 24, 2014, the Debtor filed a Motion Requesting Entry of Order (Docket No. 34) informing the court that on June 20, 2014, the Debtor, through counsel, sent BPPR’s legal representation a safe harbor letter under Fed. R. Bankr. P. 9011 regarding its amended claim to which no response had been received to date. In addition, the Debtor also requested an extension of time to file an objection to BPPR’s amended claim. On June 25, 2014, the court granted the Debtor’s request for an extension of time to file her objection to BPPR’s amended claim (Docket No. 35).

On July 24, 2014, the Debtor filed her Objection to Claim number (8-1) by Creditor Banco Popular de Puerto Rico and/or request for entry of Order for the Trustee to Perform a Recovery of Disbursed Funds (the “Objection to Claim ”, Docket No. 38). In the Objection to Claim the Debtor argued, among other things, that the amendment to proof of claim # 8 constituted a collateral attack on the confirmed plan which pursuant to 11 U.S.C. § 1327 had become res judicata amongst the parties to the claim and the bankruptcy estate. Moreover, the Debtor stated that in the case of In re Ayala Pagan, ease no. 09-07451(EAG) the court reasoned that a confirmed plan has res judicata effect pursuant to section 1327 and that a post-confirmation amendment to a proof of claim to include charges not included in the confirmed plan was a collateral attack of the plan’s confirmation. Finally, the Debtor also appealed to the equitable powers of the court and declared that “[h]ad BPPR originally filed Proof of Claim # 8 for $13,298.34, the amount it now claims is [4]*4the correct amount of pre-petition arrears, the plan would have been sufficient to cover the pre-petition arrears now claimed” and that “BPPR’s lack of diligence places Debtor in an untenable situation and could probably force her to file a second bankruptcy case or have her residential property foreclosed, slashing her hopes'-for a fresh start after dutifully complying with the terms of the confirmed Chapter 13 Plan” (Docket No. 38).

On September 19, 2014, BPPR filed its Response to “Objection to Claim Number (8-1) by Creditor Banco Popular de Puer-to Rico and/or Request for Entry of Order for the Trustee to Perform a Recovery of Disbursed Funds” (the “Response to Debt- or’s Objection to Claim ”, Docket No. 47) by which it argued that: (i) the Debtor cannot modify the rights of secured claims secured by debtor’s principal residence pursuant to 11 U.S.C. § 1322(b)(2); (ii) BPPR’s case is distinguishable from In re Ayala Pagan, case no. 09-07451(EAG) because in In re Ayala Pagan the plan confirmed was a pay in full through the plan and in BPPR’s case the confirmed plan proposed to cure arrears and maintain current payments; (iii) In re Jimenez Galindez is distinguishable because in the instant case the Debtor was aware of BPPR’s mistake, given that the Debtor had proposed to pay $16,000 in pre-petition arrears; (iv) the totality of circumstances indicated that the plan confirmed was not filed in good faith pursuant to 11 U.S.C. § 1325(a)(3) because the same was filed to take advantage of BPPR’s mistake; and (v) the established precedent in the First Circuit is that amendments to proof of claims timely filed are freely allowed to particularize the amount due under a previously asserted right to payment or simply to cure technical defects in the original claim. See In re Hemingway Transp., 954 F.2d 1, 10 (1st Cir.1992); In re Crane Rental Co., 341 B.R. 118 (Bankr.D.Mass.2006) (Docket No. 47).

On December 9, 2014, the Debtor filed her Reply to Banco Popular de Puerto Rico’s Response to Objection to Claim # 8-1 as a supplement to her original argument due to recent case law developments in In re Jimenez Galindez, 514 B.R. 79 (Bankr.D.P.R.2014) and In re Ruiz Martinez, 513 B.R. 779 (Bankr.D.P.R.2014) arguing that the facts of the case before the court were “virtually undistin-guishable” from the facts that generated the opinion and orders in of In re Jimenez Galindez and In re Ruiz Martinez. The Debtor also moved the court for the imposition of costs and attorney’s fees to BPPR pursuant to Fed. R. Civ. P. 11 and 68 for Debtor’s prosecution of the matter (Docket No. 53),

On January 15, 2015, this court rendered its Opinion and Order (Docket No. 54) granting Debtor’s objection to BPPR’s amended claim and thus disallowing BPPR’s amended claim # 8-2. In the Opinion and Order, the court began its analysis by stating that:

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Bluebook (online)
546 B.R. 1, 2016 WL 675539, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-figueroa-alonso-prb-2016.