In re Fuentes-Padilla

534 B.R. 77, 2015 U.S. Dist. LEXIS 72626, 2015 WL 3489882
CourtDistrict Court, D. Puerto Rico
DecidedJune 3, 2015
DocketNo. 14-1897 GAG; Bankruptcy No. 14-05883(BKT)
StatusPublished

This text of 534 B.R. 77 (In re Fuentes-Padilla) is published on Counsel Stack Legal Research, covering District 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 Fuentes-Padilla, 534 B.R. 77, 2015 U.S. Dist. LEXIS 72626, 2015 WL 3489882 (prd 2015).

Opinion

OPINION AND ORDER

GUSTAVO A. GELPI, District Judge.

Prospero Fuentes Padilla and Mercedes Martinez Melendez (“debtors” or “appel[79]*79lants”), who are debtors in Chapter 13 Bankruptcy Case No. 14-05883(BKT), appeal the judgment entered by the United States Bankruptcy Court for the District of Puerto Rico, pursuant to 28 U.S.C. § 158. Appellants contend that the bankruptcy court erred by dismissing Bankruptcy Case No. 14-05883(BKT) pursuant to 11 U.S.C. § 521 (i) and then denying their request for reconsideration of said dismissal. (See Transmittal of Record on Appeal at Docket No. 1.)

I. Jurisdiction

The bankruptcy court had jurisdiction over this matter pursuant to 28 U.S.C. § 1334, which confers jurisdiction on this court as to all matters arising under 11 U.S.C. § 101 et seq., and pursuant to this court’s resolution dated July 19, 1984, which, in turn, refers all Title 11 matters to the United States Bankruptcy Court for the District of Puerto Rico. This court has appellate jurisdiction pursuant to 28 U.S.C. § 158(a)(1). See Vizcaya Argentaria v. Wiscovitch-Rentas, No. CIV 08-2323(GAG), 2009 WL 1309687, at *1 (D.P.R.2009).

II. Standard of Review

Appellate courts reviewing a bankruptcy appeal generally apply the “clearly erroneous” standard to findings of fact and de novo review to conclusions of law. TI Fed. Credit Union v. DelBonis, 72 F.3d 921, 928 (1st Cir.1995); In re Savage Indus., Inc., 43 F.3d 714, 719-20 n. 8 (1st Cir.1994). Where the issue on appeal is essentially one of statutory interpretation, appellate courts review the issue de novo. In re San Miguel Sandoval, 327 B.R. 493, 506 (1st Cir. BAP 2005) (citing Jeffrey v. Desmond, 70 F.3d 183, 185 (1st Cir.1995)). In addition to thé clearly erroneous and de novo standards of review, “[t]he appellate court in a bankruptcy appeal may apply an abuse of discretion standard of review of a decision or action by a Bankruptcy Court when such decision is within the discretion of the Bankruptcy Court.” In re San Miguel Sandoval, 327 B.R. at 506 (quoting 9E Am.Jur.2d Bankruptcy § 3512 (2004)). “Abuse occurs when a material factor deserving significant weight is ignored, when an improper factor is relied upon, or when all proper and no improper factors are assessed, but the court makes a serious mistake in weighing them.” Perry v. Warner (In re Warner), 247 B.R. 24, 25 (1st Cir. BAP 2000) (quoting Indep. Oil & Chem. Workers of Quincy, Inc. v. Procter & Gamble Mfg., Co., 864 F.2d 927, 929 (1st Cir.1988)).

“A bankruptcy court’s findings of fact are reviewed for clear error and its conclusions of law are reviewed de novo.” In re Soto, 491 B.R. 307, 311 (1st Cir. BAP 2013) (citing Lessard v. Wilton-Lyndeborough Coop. Sch. Dist., 592 F.3d 267, 269 (1st Cir.2010)). “We review an order dismissing a chapter 13 case for abuse of discretion.” Id. (citing Howard v. Lexington Inv., Inc., 284 F.3d 320, 322-23 (1st Cir.2002)).

As such, the court reviews the bankruptcy court’s decision to dismiss the Chapter 13 petition for an abuse of discretion, but reviews the facts underlying the decision under the “clearly erroneous” standard. In re Ortiz, 200 B.R. 485, 489 (D.P.R.1996).

III. Relevant Factual and Procedural Background

The following factual summary is derived from the record on appeal, and contains only the facts necessary to resolve the issues presented to this court.

On July 17, 2014, debtors filed their voluntary petition for relief under the provisions of Chapter 13 of the Bankruptcy Code. Two days after their petition was [80]*80filed, the bankruptcy court notified debtors a list of documents that needed to be filed to complete the petition. See Bankr. No. 14-05883(BKT), Docket No. 7. The court’s notice cautioned debtors that “[fjailure to file or request an extension within the time period and under the terms of Fed. R. Bankr. P. 1007(c) and 9006(b)(1) may result in the dismissal of the case.” Id. The court went further to advise that failure to file the requested documents within forty-five (45) days from the filing of the petition may result in the automatic dismissal of the case, pursuant to 11 U.S.C. § 521(i). Id. Debtors-had yet to file the following documents to complete the petition: Schedules B, E, H, I and J, Statement of Financial Affairs, and its Statement of Currently Monthly Income and Disposable Income Calculation. Id.

Immediately following the filing of the Chapter 13 petition, the first Creditor’s Meeting was set for August 19, 2014, pursuant to section 341 of the Bankruptcy Code. Bankr. No. 14-05883(BKT), Docket No. 2. On July 28, 2014, eleven (11) days after filing the petition, debtors requested a thirty (30) day extension of time to file the missing documents. Id. at Docket No. 9. Debtors requested additional time to review the schedules that were already filed to check for errors, update the information and to fill out the missing documents. Id. Debtors’ counsel argued he needed additional time to prepare their bankruptcy case because the debtors are elderly and suffer from health conditions. Bankr. No. 14-05883(BKT), Docket No. 9. Namely, he argued that debtors’ petition was an emergency filing caused by an ongoing litigation in state court, hence the missing documents. Id. Nevertheless, debtors and their counsel failed to further allege or provide any information or details to support the hasty, and incomplete nature of the petition.

On July 29, 2014, the court granted debtors’ extension of time in a limited fashion. The deadline to file the schedules and statements was extended twenty-one (21) days or seven (7) days prior to the meeting of the creditors under Section 341, whichever was shorter. Bankr. No. 14-05883(BKT), Docket No. 10. In sum, the schedules and statements were due by August 12, 2015. Id. The extended deadline to complete the petition elapsed and the documents were still missing. The Chapter 13 U.S. Trustee, Alejandro Oliveras Rivera (“Trustee” or “Appellee”), moved for the dismissal of the case on August 15, 2015. Id.

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534 B.R. 77, 2015 U.S. Dist. LEXIS 72626, 2015 WL 3489882, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-fuentes-padilla-prd-2015.