In re Hospital De Damas, Inc.

495 B.R. 180, 2013 WL 3455793, 2013 Bankr. LEXIS 2775, 58 Bankr. Ct. Dec. (CRR) 49
CourtUnited States Bankruptcy Court, D. Puerto Rico
DecidedJuly 9, 2013
DocketNo. 10-08844 EAG
StatusPublished

This text of 495 B.R. 180 (In re Hospital De Damas, Inc.) 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 Hospital De Damas, Inc., 495 B.R. 180, 2013 WL 3455793, 2013 Bankr. LEXIS 2775, 58 Bankr. Ct. Dec. (CRR) 49 (prb 2013).

Opinion

OPINION AND ORDER

EDWARD A. GODOY, Bankruptcy Judge.

Hospital de Damas, Inc. has operated since 1987 a not-for-profit hospital known as Hospital de Damas in Ponce, Puerto Rico (“Damas”). On September 24, 2010, Damas filed a petition for relief under chapter 11 of the Bankruptcy Code. Certain union members who were or are also employees of Damas filed proofs of claim 95 and 98 for the payment of 2009 and 2008 Christmas bonuses (the “Claimants”). Damas objected to these proofs of claim.

Currently pending before the court is a motion for summary judgment brought by Damas on its objections to proofs of claim 95 and 98, Claimants’ opposition to the motion for summary judgment, and Da-mas’ reply in support of its motion for summary judgment. For the reasons stated herein, Damas’ motion for summary judgment is hereby granted and proofs of claim 95 and 98 are, therefore, disallowed.

Jurisdiction

This court has jurisdiction over the subject matter and the parties pursuant to 28 U.S.C. §§ 1384 and 157(a) and the General Order of Referral of Title 11 Proceedings to the United States Bankruptcy Court for the District of Puerto Rico, dated July 19, 1984 (Torruella, C.J.). This is a core proceeding in accordance with 28 U.S.C. § 157(b).

Procedural Background

On January 13, 2011, the Claimants filed proofs of claim 95 and 98 for the 2009 and 2008 Christmas bonuses, respectively (“POC 95” and “POC 98”). Damas objected to both proofs of claim, arguing that nothing was owed under the Christmas Bonus Act of Puerto Rico because it obtained exemptions from the Puerto Rico Department of Labor (“PRDOL”). P.R. Stat. Ann. tit. 29, §§ 501-07 (the “Bonus Act”). [Docket Nos. 553 & 555.]

The Claimants filed a motion for extension of time to conduct discovery and oppose Damas’ objection to POC 98. [Docket No. 626.] Although the Claimants’ motion was technically a request for an extension, it provided the legal basis for the Claimants’ opposition: the exemption from the PRDOL did not apply to the unionized employees of Damas. [Docket No. 626 at ¶ 8.] But, since the Claimants did not file timely any further [183]*183opposition to Damas’ objection to POC 98, the court granted the objection to POC 98. [Docket No. 748.] Claimants’ motion for reconsideration of the order of disal-lowance and Damas’ opposition to it are still pending resolution by the court. [Docket Nos. 802 & 873.]

The Claimants also moved for an extension of time to conduct discovery and oppose the objection to POC 95, again asserting that the exemption from the PRDOL did not apply to the unionized employees of Damas. [Docket No. 625 at ¶ 5.] They subsequently filed a more substantial opposition, again contesting the application of the PRDOL exemption to them. [Docket No. 787.]

On January 4, 2013, Damas and the Claimants submitted a joint pretrial report as to POCs 95 and 98. [Docket Nos. 1287 & 1288.] At the pretrial hearing of January 8, 2013, the court scheduled for trial the contested matters on POCs 95 and 98. [Docket No. 1298.] However, special counsel for Damas suggested that this controversy could be disposed of through summary judgment. [Docket No. 1298.] Damas then submitted its motion for summary judgment, which the Claimants opposed, and Damas replied in support. [Docket Nos. 1304,1317 & 1319.]

Uncontested Facts

The following facts are uncontested pursuant to Fed.R.Civ.P. 56 and D.P.R. Civ. R. 56, made applicable to these proceedings through Fed. R. Bankr.P. 9014(c) and 7056 and P.R. LBR 1001 — 1(b) and (d). Also considered for purposes of this Opinion and Order are the Claimants’ proposed findings of fact in the joint pretrial report on POCs 95 and 98 and supporting exhibits. [Docket Nos. 1287 & 1288.]

The Claimants were or are employees of Damas represented by the Unidad Laboral de Enfermeras(os) y Empleados de la Sa-lud (the “Union”). [Damas’ Uncontested Facts at ¶ 18, Docket No. 1304; Claimants’ Reply to Uncontested Facts at ¶ 18, Docket No. 1317-2.] The collective-bargaining agreements between the majority of the bargaining units of the Union and Damas expired in December 2006. [Damas’ Uncontested Facts at ¶ 26, Docket No. 1304; Claimants’ Reply to Uncontested Facts at ¶ 26, Docket No. 1317-2.] After the expiration of the collective-bargaining agreements in 2006, negotiations continued between the Union and Damas to reach new agreements. [Damas’ Uncontested Facts at ¶ 3, Docket No 1304; Claimants’ Reply to Uncontested Facts at ¶ 3, Docket No. 1317-2.]

On October 28, 2008, Damas wrote to the Union that it would not be paying the 2008 Christmas bonus and that it would be applying for an exemption from the PRDOL. [Damas’ Uncontested Facts at ¶¶ 4 & 7, Docket No 1304; Claimants’ Reply to Uncontested Facts at ¶¶ 4 & 7, Docket No. 1317-2.] The Executive Director of the Union sent a letter dated November 24, 2008, to the Secretary of the PRDOL stating that Damas had advised the Union in writing that it would not be paying the 2008 Christmas bonus and of Damas’ intention to request an exemption from the PRDOL. [Claimants’ Exhibit 3, Docket No. 1288-2.] Legal counsel for the Union sent another letter dated December 9, 2008, to the Secretary of the PRDOL requesting that the PRDOL deny Damas’ request for an exemption. [Claimants’ Exhibit 3, Docket No. 802-3.] The Sub-Director of the PRDOL, in a letter dated December 12, 2008, responded to the Union by quoting the exception language of P.R. Laws Ann. tit. 29, § 506 and stating that, therefore, the exemption granted to Damas “will only be applicable to employees who do not belong to the bargaining unit,” and that “[a]s for workers who receive annual bonuses under collective bar[184]*184gaining agreements, the agreement will be the law between the parties.” [Claimants’ Exhibit 4, Docket No. 1288-2.] The PRDOL granted Damas’ request for an exemption to the payment of the 2008 Christmas bonus under the Bonus Act. [Damas’ Exhibit D, Docket No. 1804-1.] But, the Claimants assert that Damas received an exemption in 2008 only for its non-union employees. [Claimants’ Reply to Uncontested Facts at ¶ 7, Docket No. 1317-2.] Damas did not pay the 2008 Christmas bonus to any of the Claimants. [POC 98; Claimants’ Statement of Proposed Facts at ¶ 7, Docket No. 1317-1.]

The following year the Claimants sent another letter, dated December 21, 2009, to the PRDOL, inquiring whether Damas would be exempted from payment of the 2009 Christmas bonus to Union employees. [Claimants’ Exhibit 7, Docket No. 1288-2.] The PRDOL responded the same as before: quoting the exception language of P.R. Laws Ann. tit. 29, § 506 and stating, therefore, the exemption granted to Da-mas “will only be applicable to employees who do not belong to the bargaining unit.... ” [Claimants’ Exhibit 8, Docket No. 1288-2.] Again, the PRDOL granted Damas’ request for an exemption to the payment of the 2009 Christmas bonus under the Bonus Act. [Damas’ Exhibit E, Docket No.

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Bluebook (online)
495 B.R. 180, 2013 WL 3455793, 2013 Bankr. LEXIS 2775, 58 Bankr. Ct. Dec. (CRR) 49, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-hospital-de-damas-inc-prb-2013.