FOR THE DISTRICT OF PUERTO RICO 2 3 IN RE: : CASE NO. 11-07033 4 : GILBERTO RODRIGUEZ DIAZ; : 5 NILDA OQUENDO BERNABE : CHAPTER 13 : 6 Debtors : ____________________________________: 7 OPINION AND ORDER 8 This case is before the court upon the Motion Requesting Allowance of Late Proof of Claim 9 filed on March 1, 2012 by the Treasury Department of the Commonwealth of Puerto Rico (hereinafter 10 referred to as “Treasury”) alleging that there has been no bad faith, dilatory tactics and thus, 11 Treasury’s late filed claim should be allowed pursuant to Fed. R. Bankr. P. 9006(b)(1) (Docket No. 12 40). The Chapter 13 Trustee (hereinafter referred to as “Trustee”) filed its Opposition to Creditor 13 Treasury Department of the Commonwealth of Puerto Rico’s Request to File Claim After Bar Date 14 on March 14, 2012 (Docket No. 41). On April 9, 2012, Treasury filed its reply (Docket No. 47). On 15 August 10, 2012, a pretrial conference was held in which the parties agreed that there were no 16 relevant facts in controversy and that the joint pre-trial report would be considered as cross motions 17 for summary judgment (Docket No. 58). For the reasons set forth below Treasury’s motion for 18 summary judgment is denied and the Trustee’s opposition to the motion for summary judgment is 19 granted. 20 Facts and Procedural Background 21 Gilberto Rodriguez Diaz and Nilda Oquendo Bernabe filed a bankruptcy petition under 22 Chapter 13 of the Bankruptcy Code on August 19, 2011. The Debtors in Schedule E (Creditors 23 Holding Unsecured Priority Claims) included two (2) separate claims from Treasury that amounts to 24 $8,163.03 which are entitled in its entirety to priority. The Debtors listed the first one as a tax debt 25 only pertaining to Ms. Oquendo in the amount of $1,024.61, and the second one as a joint tax debt 26 pertaining to Mr. Rodriguez Diaz for the tax years 2000-2007 in the amount of $7,138.42. On August 27 24, 2011, the Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors, & Deadlines was entered, 28 establishing as that the deadlines to file a proof of claim for all creditors was December 22, 2011, and 1 for a governmental unit the deadline to file a proof of claim was February 15, 2012 (Docket No. 6). 2 On September 23, 2012, the first meeting of creditors was held and closed (Docket No. 13). On 3 November 1, 2011, the Debtors filed an Amended Schedule E (Creditors Holding Unsecured Priority 4 Claims) which listed Ms. Oquendo’s tax debt for the years 1990-2010 in the amount of $17,935.09; 5 of this amount $2,093.26 was listed as being entitled to priority and the remaining $15,841.83 was 6 listed as not being entitled to priority (Docket No. 25). On February 27, 2012, this court ordered the 7 confirmation of Debtors’ Chapter 13 plan (Docket No 37). 8 On March 1, 2012, Treasury filed a Motion Requesting Allowance of Late Proof of Claim 9 alleging that there has been no bad faith, dilatory tactics and thus, Treasury’s late filed claim should 10 be allowed pursuant to Fed. R. Bankr. P. 9006(b)(1) (Docket No. 40). On the same date, Treasury 11 filed proof of claim #6-1 in the amount of $18,368.43 of which $2,094.77 is listed as entitled to 12 priority pursuant 11 U.S.C. §507(a)(8) and the remaining $16,273.66 was listed as unsecured. On 13 March 14, 2012 the Trustee filed its Opposition to Creditor Treasury Department of the 14 Commonwealth of Puerto Rico’s Request to File Claim After Bar Date arguing that (i) Treasury was 15 included in Schedule E and in creditors’ matrix since the filing of the bankruptcy petition; (ii) Fed. 16 R. Bankr. P. 3002(c) provides a governmental entity 180 days after the first date set for the meeting 17 of creditors to file a proof of claim; (iii) the allowance of a tardily filed proof of claim will result in 18 prejudice to other unsecured creditors who timely filed their claims since these creditors will receive 19 a lesser distribution and (iv) the “[t]imely filing of proofs of claim is necessary for the orderly, 20 effective, and efficient administration of Chapter 13 plans” (Docket No. 41). On March 30, 2012, 21 Treasury filed a motion requesting an extension of time of twenty (20) days to file reply to Trustee’s 22 opposition (Docket No. 42). On March 21, 2012, the court granted Treasury’s request for a twenty 23 (20) day extension of time to file its response (Docket No. 43). On April 9, 2012, Treasury filed its 24 Reply to Trustee’s Opposition to Motion to File Claim After Bar Date arguing that Debtors will not 25 be prejudiced by the allowance of Treasury’s proof of claim because the priority portion is not 26 dischargeable; thus the Debtors will still be liable for said debt even if the motion is denied pursuant 27 to 11 U.S.C. §§523(a) and 507(a)(8) (Docket No. 47). On August 9, 2012 the parties filed their Joint 28 Pre-Trial Report (Docket No. 57). On August 10, 2012, the pretrial conference was held in which 2 1 the Debtors withdrew their objection to proof of claim #6-1 filed by Treasury. Moreover, the court 2 noted that the pre-trial report fails to mention a specific reason as to why the proof of claim was filed 3 late in this case. Treasury responded that it is due to the lack of personnel in Hacienda and that it just 4 happened. Treasury also stated that it is in the best interest of the Debtors to reach an agreement since 5 there is an unsecured priority portion of the tax debt owed which is not dischargeable. The court also 6 noted that the only contested matter pending is the Trustee’s opposition to Treasury’s request to file 7 claim after bar date. The joint pre-trial report is considered as cross motions for summary judgment. 8 Parties agree that there are no relevant facts in controversy and that the issue is one of law. The matter 9 was taken under advisement by the court (Docket No. 58). 10 The issue in this case is whether a governmental unit may file a proof of claim after the bar 11 date in a Chapter 13 case alleging “excusable neglect” under Fed. R. Bankr. P. 9006(b). 12 Applicable Law and Analysis 13 Standard for Summary Judgment 14 Rule 56 of the Federal Rules of Civil Procedure, is applicable to this proceeding by Rule 7056 15 of the Federal Rules of Bankruptcy Procedure, provides that summary judgment should be entered 16 “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the 17 affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party 18 is entitled to a judgment as a matter of law.” Fed. R. Bankr. P. 7056; see also, In re Colarusso, 382 19 F.3d 51 (1st Cir. 2004), citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 20 L.Ed.2d 265 (1986).
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FOR THE DISTRICT OF PUERTO RICO 2 3 IN RE: : CASE NO. 11-07033 4 : GILBERTO RODRIGUEZ DIAZ; : 5 NILDA OQUENDO BERNABE : CHAPTER 13 : 6 Debtors : ____________________________________: 7 OPINION AND ORDER 8 This case is before the court upon the Motion Requesting Allowance of Late Proof of Claim 9 filed on March 1, 2012 by the Treasury Department of the Commonwealth of Puerto Rico (hereinafter 10 referred to as “Treasury”) alleging that there has been no bad faith, dilatory tactics and thus, 11 Treasury’s late filed claim should be allowed pursuant to Fed. R. Bankr. P. 9006(b)(1) (Docket No. 12 40). The Chapter 13 Trustee (hereinafter referred to as “Trustee”) filed its Opposition to Creditor 13 Treasury Department of the Commonwealth of Puerto Rico’s Request to File Claim After Bar Date 14 on March 14, 2012 (Docket No. 41). On April 9, 2012, Treasury filed its reply (Docket No. 47). On 15 August 10, 2012, a pretrial conference was held in which the parties agreed that there were no 16 relevant facts in controversy and that the joint pre-trial report would be considered as cross motions 17 for summary judgment (Docket No. 58). For the reasons set forth below Treasury’s motion for 18 summary judgment is denied and the Trustee’s opposition to the motion for summary judgment is 19 granted. 20 Facts and Procedural Background 21 Gilberto Rodriguez Diaz and Nilda Oquendo Bernabe filed a bankruptcy petition under 22 Chapter 13 of the Bankruptcy Code on August 19, 2011. The Debtors in Schedule E (Creditors 23 Holding Unsecured Priority Claims) included two (2) separate claims from Treasury that amounts to 24 $8,163.03 which are entitled in its entirety to priority. The Debtors listed the first one as a tax debt 25 only pertaining to Ms. Oquendo in the amount of $1,024.61, and the second one as a joint tax debt 26 pertaining to Mr. Rodriguez Diaz for the tax years 2000-2007 in the amount of $7,138.42. On August 27 24, 2011, the Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors, & Deadlines was entered, 28 establishing as that the deadlines to file a proof of claim for all creditors was December 22, 2011, and 1 for a governmental unit the deadline to file a proof of claim was February 15, 2012 (Docket No. 6). 2 On September 23, 2012, the first meeting of creditors was held and closed (Docket No. 13). On 3 November 1, 2011, the Debtors filed an Amended Schedule E (Creditors Holding Unsecured Priority 4 Claims) which listed Ms. Oquendo’s tax debt for the years 1990-2010 in the amount of $17,935.09; 5 of this amount $2,093.26 was listed as being entitled to priority and the remaining $15,841.83 was 6 listed as not being entitled to priority (Docket No. 25). On February 27, 2012, this court ordered the 7 confirmation of Debtors’ Chapter 13 plan (Docket No 37). 8 On March 1, 2012, Treasury filed a Motion Requesting Allowance of Late Proof of Claim 9 alleging that there has been no bad faith, dilatory tactics and thus, Treasury’s late filed claim should 10 be allowed pursuant to Fed. R. Bankr. P. 9006(b)(1) (Docket No. 40). On the same date, Treasury 11 filed proof of claim #6-1 in the amount of $18,368.43 of which $2,094.77 is listed as entitled to 12 priority pursuant 11 U.S.C. §507(a)(8) and the remaining $16,273.66 was listed as unsecured. On 13 March 14, 2012 the Trustee filed its Opposition to Creditor Treasury Department of the 14 Commonwealth of Puerto Rico’s Request to File Claim After Bar Date arguing that (i) Treasury was 15 included in Schedule E and in creditors’ matrix since the filing of the bankruptcy petition; (ii) Fed. 16 R. Bankr. P. 3002(c) provides a governmental entity 180 days after the first date set for the meeting 17 of creditors to file a proof of claim; (iii) the allowance of a tardily filed proof of claim will result in 18 prejudice to other unsecured creditors who timely filed their claims since these creditors will receive 19 a lesser distribution and (iv) the “[t]imely filing of proofs of claim is necessary for the orderly, 20 effective, and efficient administration of Chapter 13 plans” (Docket No. 41). On March 30, 2012, 21 Treasury filed a motion requesting an extension of time of twenty (20) days to file reply to Trustee’s 22 opposition (Docket No. 42). On March 21, 2012, the court granted Treasury’s request for a twenty 23 (20) day extension of time to file its response (Docket No. 43). On April 9, 2012, Treasury filed its 24 Reply to Trustee’s Opposition to Motion to File Claim After Bar Date arguing that Debtors will not 25 be prejudiced by the allowance of Treasury’s proof of claim because the priority portion is not 26 dischargeable; thus the Debtors will still be liable for said debt even if the motion is denied pursuant 27 to 11 U.S.C. §§523(a) and 507(a)(8) (Docket No. 47). On August 9, 2012 the parties filed their Joint 28 Pre-Trial Report (Docket No. 57). On August 10, 2012, the pretrial conference was held in which 2 1 the Debtors withdrew their objection to proof of claim #6-1 filed by Treasury. Moreover, the court 2 noted that the pre-trial report fails to mention a specific reason as to why the proof of claim was filed 3 late in this case. Treasury responded that it is due to the lack of personnel in Hacienda and that it just 4 happened. Treasury also stated that it is in the best interest of the Debtors to reach an agreement since 5 there is an unsecured priority portion of the tax debt owed which is not dischargeable. The court also 6 noted that the only contested matter pending is the Trustee’s opposition to Treasury’s request to file 7 claim after bar date. The joint pre-trial report is considered as cross motions for summary judgment. 8 Parties agree that there are no relevant facts in controversy and that the issue is one of law. The matter 9 was taken under advisement by the court (Docket No. 58). 10 The issue in this case is whether a governmental unit may file a proof of claim after the bar 11 date in a Chapter 13 case alleging “excusable neglect” under Fed. R. Bankr. P. 9006(b). 12 Applicable Law and Analysis 13 Standard for Summary Judgment 14 Rule 56 of the Federal Rules of Civil Procedure, is applicable to this proceeding by Rule 7056 15 of the Federal Rules of Bankruptcy Procedure, provides that summary judgment should be entered 16 “if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the 17 affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party 18 is entitled to a judgment as a matter of law.” Fed. R. Bankr. P. 7056; see also, In re Colarusso, 382 19 F.3d 51 (1st Cir. 2004), citing Celotex Corp. v. Catrett, 477 U.S. 317, 322-23, 106 S.Ct. 2548, 91 20 L.Ed.2d 265 (1986). 21 “The summary-judgment procedure authorized by Rule 56 is a method for promptly disposing 22 of actions in which there is no genuine issue as to any material fact or in which only a question of law 23 is involved.” 10A Wright, Miller & Kane, Federal Practice and Procedure 3d§ 2712 at 198. “Rule 24 56 provides the means by which a party may pierce the allegations in the pleadings and obtain relief 25 by introducing outside evidence showing that there are no fact issues that need to be tried.” Id at 202- 26 203. Summary judgment is not a substitute for a trial of disputed facts; the court may only determine 27 whether there are issues to be tried, and it is improper if the existence of a material fact is uncertain. 28 Id at 205-206. 3 1 Summary judgment is warranted where, after adequate time for discovery and upon motion, 2 party fails to make a showing sufficient to establish the existence of an element essential to its case 3 upon which it carries the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 322 4 (1986). The moving party must "show that there is no genuine issue as to any material fact and that 5 moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). 6 For there to be a "genuine" issue, facts which are supported by substantial evidence must be 7 |jin dispute thereby requiring deference to the finder of fact. Furthermore, the disputed facts must be 8 ||"material" or determinative of the outcome of the litigation. Hahn v. Sargent, 523 F.2d 461, 464 (1st 9 1975), cert. denied, 425 U.S. 904 (1976). When considering a petition for summary judgment, 10 court must view the evidence in the light most favorable to the nonmoving party. Poller v. 11 ||Columbia Broadcasting Systems, Inc., 368 U.S. 464, 473 (1962); Daury v. Smith, 842 F.2d 9, 11 (1st 12 1988). 13 The moving party invariably bears both the initial as well as the ultimate burden in 14 demonstrating its legal entitlement to summaryjudgment. Adickes v. Kress & Co., 398 U.S. 144, 157 15 (1970). See also Lopez v. Corporacion Azucarera de Puerto Rico, 938 F.2d 1510, 1516 (1st Cir. 16 Itis essential that the moving party explain its reasons for concluding that the record does not 17 ||contain any genuine issue of material fact in addition to making a showing of support for those claims 18 which it bears the burden of trial. Bias v. Advantage International, Inc., 905 F.2d 1558, 1560-61 19 Cir, 1990), cert. denied, 498 U.S. 958 (1990). 20 The moving party cannot prevail if any essential element of its claim or defense requires trial. 21 Lopez, 938 F.2d at 1516. In addition, the moving party is required to demonstrate that there is an 22 |labsence of evidence supporting the nonmoving party's case. Celotex, 477 U.S. at 325. See also, 23 |/Prokey v. Watkins, 942 F.2d 67, 72 (1st Cir. 1991); Daury, 842 F.2d at 11. In its opposition, the 24 |inonmoving party must show genuine issues of material facts precluding summary judgment; the 25 |lexistence of some factual dispute does not defeat summary judgment. Kennedy v. Josepthal & Co., 26 |\Inc., 814 F.2d 798, 804 (1st Cir. 1987). See also Kauffman v. Puerto Rico Telephone Co., 841 F.2d 27 1169, 1172 (1st Cir. 1988); Hahn, 523 F.2d at 464. A party may not rely upon bare allegations to 28 a factual dispute but is required to point to specific facts contained in affidavits, depositions
1 jjand other supporting documents which, if established at trial, could lead to a finding for the 2 |Inonmoving party. Over the Road Drivers, Inc. v. Transport Insurance Co., 637 F.2d 816, 818 (1st Cir. 3 4 The moving party has the burden to establish that it is entitled to summary judgment; no 5 ||defense is required where an insufficient showing is made. Lopez, 938 F.2d at 1517. The nonmoving 6 need only oppose a summary judgment motion once the moving party has met its burden. 7 ||Adickes, 398 U.S. at 159. 8 Uncontested Material Facts 9 1. On August 24, 2011, the court duly notified to all parties in interest the “Notice of Chapter 10 13 Bankruptcy Case, Meeting of Creditors and Deadlines” which listed February 15, 2012 as 11 the governmental unit deadline to file a proof of claim. 12 2. Treasury was included in the master address list of this petition. 13 3. Treasury is a governmental agency. 14 4. On March 1, 2012, Treasury filed proof of claim #6-1. 15 ||\The applicability of the “excusable neglect” standard under Fed. R. Bankr. P. 9006(b)(1) in Chapter 16 1/3 Cases 17 The court in Aboody v. United States (In re Aboody), 223 B.R. 36 (B.A.P. 1* Cir. 1998) 18 ljaddressed this particular controversy and held that; “[t]his Court adopts the majority view and 19 |iconcludes that the excusable neglect standard found in Fed. R. Bankr. P. 9006(b)(1) is not applicable 20 a Chapter 13 case, based on Fed. R. Bankr. P. 9006(b)(3) and Fed. R. Bankr. P. 3002(c)(1), to 21 a governmental unit to late file a prof of claim.” Id at 39; See also; In re Figueroa Bonilla, 2008 22 Lexis 4042 (Bankr. D.P.R. 2008). Notwithstanding, the court finds that the portion of the tax 23 liability that is entitled to priority status under 11 U.S.C. §507(a)(8) is not dischargeable in conformity 24 11 U.S.C. 523(a)(1)(A). 25 Conclusion 26 For the reasons stated above the court finds that the excusable neglect standard pursuant to 27 R. Bankr. P 9006(b)(1) in Chapter 13 cases may not be used as a shield by governmental units 28 have filed proof of claims after the bar date.
1 In view of the foregoing, Treasury’s motion for summary judgment is DENIED and Trustee’s 2 \jopposition to the motion for summary judgment is hereby GRANTED. 4 In San Juan, Puerto Rico, this 16" day of January 2013. > 6 Attaryille onitdl Seance tanker Dag 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28