THE DISTRICT OF PUERTO RICO 2
3 IN RE: ELIZABETH N. MORALES GONZALEZ CASE NO. 10-10858 BKT 5 DEBTORS 6 _____________________________________
7 JUAN A. ALVAREZ VALENTIN Chapter 13 ELIZABETH N. MORALES GONZALEZ 8 PLAINTIFFS ADV. NO.: 11-163 9 10 VS.
12 DEFENDANTS 13
17 Before this court is Plaintiff’s Motion for Summary Judgment [Dkt. No. 22], 18 Defendant’s Opposition to Motion for Summary Judgment [Dkt. No. 32], and 19 Plaintiff's Reply to Treasury's Opposition to Motion for Summary Judgment [Dkt. 20 No. 36]. For the reasons set forth below, the Plaintiff’s Motion for Summary 21 Judgment is GRANTED. 22 On November 18, 2010, Plaintiffs/Debtors, Juan A. Alvarez Valentin and 23 Elizabeth N. Morales Gonzalez filed a chapter 13 bankruptcy petition. The 24 Plaintiffs filed the captioned adversary proceeding on August 4, 2011, pursuant 25 to 11 U.S.C. §506 and Federal Rules of Bankruptcy Procedure, Rules 3012 and 7001(2), to determine the value of Defendant's, Treasury Department of the Commonwealth of Puerto Rico’s, interest in Plaintiffs' residence and to deem Defendant's claim partially unsecured [Dkt. No.1]. Plaintiffs' only real estate, their property located at Venus Gardens, San Juan, PR, is encumbered by a first 1 mortgage in favor of Doral Bank and three attachments in favor of Defendant due 2 to income tax debt. 3 As per the title search, the Plaintiffs’ interest in their residence is 4 subject to four liens. First, there is a mortgage lien in the subject property 5 with a payoff balance, as of June 2011, in the amount of $153,557.78 [Claim No. 6 26-1]. Second, Defendant has an attachment over Plaintiffs' property for income 7 taxes in the amount of $83,690.18, as per certification dated December 21, 2000. 8 Third, Defendant has an attachment over Plaintiffs’ property of income taxes in 9 the amount $209,140.69, as per certification March 24, 2003. Fourth, Defendant 10 has an attachment over Plaintiffs’ property for income taxes in the amount of 11 $28,161.54, as per certification June 19, 2005. On December 14, 2010, the 12 13 Plaintiffs’ residence located at Venus Gardens was appraised for $165,000 based 14 on present market value, the property’s conditions, and similar comparable [Dkt 15 No. 1, Exh. A]. On October 20, 2011, the Defendant answered the complaint, 16 denying all allegations, interests, damages, attorney’s fees and costs against 17 them and requesting the dismissal of the case [Dkt. No. 16]. Plaintiffs' Motion 18 for Summary Judgment and Defendant's Opposition followed. 19 Under Federal Rules of Civil Procedure 56(c), made applicable in bankruptcy 20 by Federal Rules of Bankruptcy Procedure, Rule 7056, summary judgment is 21 available if the pleadings, depositions, answers to interrogatories, and 22 admissions on file, together with the affidavits, if any, show that there is no 23 genuine issue as to any material fact and that the moving party is entitled to 24 judgment as a matter of law. Fed.R. Civ. P. 56(c); Borges ex rel. S.M.B.W. v. 25 Serrano-Isern, 605 F.3d 1, 4 (1st Cir. 2010).As to issues on which the movant, at trial, would be compelled to carry the burden of proof, it must identify those portions of the pleadings which it believes demonstrates that there is no genuine issue of material fact. In re Edgardo Ryan Rijos & Julia E. Cruz Nieves v. Banco Bilbao Vizcaya & Citibank, 263 B.R. 382, 388 (B.A.P. 1st Cir. 2001). A fact is 1 deemed "material" if it potentially could affect the outcome of the suit. Borges 2 at 5. Moreover, there will only be a "genuine" or "trial worthy" issue as to such 3 a "material fact," "if a reasonable fact-finder, examining the evidence and 4 drawing all reasonable inferences helpful to the party resisting summary 5 judgment, could resolve the dispute in that party's favor." Id. at 4. The court 6 must view the evidence in a light most favorable to the nonmoving party. Alt. 7 Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 26 (1st Cir. 2004).Therefore, 8 summary judgment is “inappropriate if inferences are necessary for the judgment 9 and those inferences are not mandated by the record.” Rijos at 388. 10 Although this perspective is favorable to the nonmoving party, she still 11 must demonstrate, “through submissions of evidentiary quality, that a trial 12 13 worthy issue persists.” Iverson v. City of Boston, 452 F.3d 94, 98 (1st Cir. 14 2006). Moreover, “[o]n issues where the nonmovant bears the ultimate burden of 15 proof, [she] must present definite, competent evidence to rebut the motion.” 16 Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.1991). These showings may 17 not rest upon “conclusory allegations, improbable inferences, and unsupported 18 speculation.” Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st 19 Cir.1990).But, the evidence offered by the nonmoving party “cannot be merely 20 colorable, but must be sufficiently probative to show differing versions of fact 21 which justify a trial.” Id. See also Horta v. Sullivan, 4 F.3d 2, 7-8(1st Cir. 22 1993) (the materials attached to the motion for summary judgment must be 23 admissible and usable at trial.) “The mere existence of a scintilla of evidence” 24 in the nonmoving party's favor is insufficient to defeat summary judgment. 25 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); González-Pina v. Rodríguez, 407 F.3d 425, 431 (1st Cir. 2005). In the summary judgment motion presently before the court, Plaintiffs argue that there are no genuine issues as to any material facts and that therefore, the moving party is entitled to judgment as a matter of law. The Plaintiffs allege 1 that pursuant to 11 U.S.C.§ 506(a), the Defendant only has a secured claim 2 against debtors in the amount of $11,442.22, because this is the equity left 3 after considering the property’s first lien in favor of Doral Bank. (The first 4 lien on the property in favor of Doral Bank, in the amount of $153,557.78, is 5 wholly secured because the property’s value was appraised at$165,000). Plaintiffs 6 argue that Defendant has not raised any errors, inconsistencies, or inaccuracies 7 regarding the appraisal provided by Plaintiffs, nor presented any other appraisal 8 or comparables to contradict the appraisal submitted. 9 In opposition, Defendant argues that the value of Plaintiffs’ property is 10 in fact a genuine material issue that directly affects their interest to the 11 extent of the amount subject to setoff. The Defendant argues that the appraisal 12 13 may not reflect the actual value of the property that holds the Defendant's 14 secured claim.
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THE DISTRICT OF PUERTO RICO 2
3 IN RE: ELIZABETH N. MORALES GONZALEZ CASE NO. 10-10858 BKT 5 DEBTORS 6 _____________________________________
7 JUAN A. ALVAREZ VALENTIN Chapter 13 ELIZABETH N. MORALES GONZALEZ 8 PLAINTIFFS ADV. NO.: 11-163 9 10 VS.
12 DEFENDANTS 13
17 Before this court is Plaintiff’s Motion for Summary Judgment [Dkt. No. 22], 18 Defendant’s Opposition to Motion for Summary Judgment [Dkt. No. 32], and 19 Plaintiff's Reply to Treasury's Opposition to Motion for Summary Judgment [Dkt. 20 No. 36]. For the reasons set forth below, the Plaintiff’s Motion for Summary 21 Judgment is GRANTED. 22 On November 18, 2010, Plaintiffs/Debtors, Juan A. Alvarez Valentin and 23 Elizabeth N. Morales Gonzalez filed a chapter 13 bankruptcy petition. The 24 Plaintiffs filed the captioned adversary proceeding on August 4, 2011, pursuant 25 to 11 U.S.C. §506 and Federal Rules of Bankruptcy Procedure, Rules 3012 and 7001(2), to determine the value of Defendant's, Treasury Department of the Commonwealth of Puerto Rico’s, interest in Plaintiffs' residence and to deem Defendant's claim partially unsecured [Dkt. No.1]. Plaintiffs' only real estate, their property located at Venus Gardens, San Juan, PR, is encumbered by a first 1 mortgage in favor of Doral Bank and three attachments in favor of Defendant due 2 to income tax debt. 3 As per the title search, the Plaintiffs’ interest in their residence is 4 subject to four liens. First, there is a mortgage lien in the subject property 5 with a payoff balance, as of June 2011, in the amount of $153,557.78 [Claim No. 6 26-1]. Second, Defendant has an attachment over Plaintiffs' property for income 7 taxes in the amount of $83,690.18, as per certification dated December 21, 2000. 8 Third, Defendant has an attachment over Plaintiffs’ property of income taxes in 9 the amount $209,140.69, as per certification March 24, 2003. Fourth, Defendant 10 has an attachment over Plaintiffs’ property for income taxes in the amount of 11 $28,161.54, as per certification June 19, 2005. On December 14, 2010, the 12 13 Plaintiffs’ residence located at Venus Gardens was appraised for $165,000 based 14 on present market value, the property’s conditions, and similar comparable [Dkt 15 No. 1, Exh. A]. On October 20, 2011, the Defendant answered the complaint, 16 denying all allegations, interests, damages, attorney’s fees and costs against 17 them and requesting the dismissal of the case [Dkt. No. 16]. Plaintiffs' Motion 18 for Summary Judgment and Defendant's Opposition followed. 19 Under Federal Rules of Civil Procedure 56(c), made applicable in bankruptcy 20 by Federal Rules of Bankruptcy Procedure, Rule 7056, summary judgment is 21 available if the pleadings, depositions, answers to interrogatories, and 22 admissions on file, together with the affidavits, if any, show that there is no 23 genuine issue as to any material fact and that the moving party is entitled to 24 judgment as a matter of law. Fed.R. Civ. P. 56(c); Borges ex rel. S.M.B.W. v. 25 Serrano-Isern, 605 F.3d 1, 4 (1st Cir. 2010).As to issues on which the movant, at trial, would be compelled to carry the burden of proof, it must identify those portions of the pleadings which it believes demonstrates that there is no genuine issue of material fact. In re Edgardo Ryan Rijos & Julia E. Cruz Nieves v. Banco Bilbao Vizcaya & Citibank, 263 B.R. 382, 388 (B.A.P. 1st Cir. 2001). A fact is 1 deemed "material" if it potentially could affect the outcome of the suit. Borges 2 at 5. Moreover, there will only be a "genuine" or "trial worthy" issue as to such 3 a "material fact," "if a reasonable fact-finder, examining the evidence and 4 drawing all reasonable inferences helpful to the party resisting summary 5 judgment, could resolve the dispute in that party's favor." Id. at 4. The court 6 must view the evidence in a light most favorable to the nonmoving party. Alt. 7 Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 26 (1st Cir. 2004).Therefore, 8 summary judgment is “inappropriate if inferences are necessary for the judgment 9 and those inferences are not mandated by the record.” Rijos at 388. 10 Although this perspective is favorable to the nonmoving party, she still 11 must demonstrate, “through submissions of evidentiary quality, that a trial 12 13 worthy issue persists.” Iverson v. City of Boston, 452 F.3d 94, 98 (1st Cir. 14 2006). Moreover, “[o]n issues where the nonmovant bears the ultimate burden of 15 proof, [she] must present definite, competent evidence to rebut the motion.” 16 Mesnick v. Gen. Elec. Co., 950 F.2d 816, 822 (1st Cir.1991). These showings may 17 not rest upon “conclusory allegations, improbable inferences, and unsupported 18 speculation.” Medina-Muñoz v. R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st 19 Cir.1990).But, the evidence offered by the nonmoving party “cannot be merely 20 colorable, but must be sufficiently probative to show differing versions of fact 21 which justify a trial.” Id. See also Horta v. Sullivan, 4 F.3d 2, 7-8(1st Cir. 22 1993) (the materials attached to the motion for summary judgment must be 23 admissible and usable at trial.) “The mere existence of a scintilla of evidence” 24 in the nonmoving party's favor is insufficient to defeat summary judgment. 25 Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986); González-Pina v. Rodríguez, 407 F.3d 425, 431 (1st Cir. 2005). In the summary judgment motion presently before the court, Plaintiffs argue that there are no genuine issues as to any material facts and that therefore, the moving party is entitled to judgment as a matter of law. The Plaintiffs allege 1 that pursuant to 11 U.S.C.§ 506(a), the Defendant only has a secured claim 2 against debtors in the amount of $11,442.22, because this is the equity left 3 after considering the property’s first lien in favor of Doral Bank. (The first 4 lien on the property in favor of Doral Bank, in the amount of $153,557.78, is 5 wholly secured because the property’s value was appraised at$165,000). Plaintiffs 6 argue that Defendant has not raised any errors, inconsistencies, or inaccuracies 7 regarding the appraisal provided by Plaintiffs, nor presented any other appraisal 8 or comparables to contradict the appraisal submitted. 9 In opposition, Defendant argues that the value of Plaintiffs’ property is 10 in fact a genuine material issue that directly affects their interest to the 11 extent of the amount subject to setoff. The Defendant argues that the appraisal 12 13 may not reflect the actual value of the property that holds the Defendant's 14 secured claim. Also, the Defendant argues that the Plaintiffs’ Motion for Summary 15 Judgment does not comply with the clear terms of Local Civil Rule 56 and striking 16 the same, along with its supporting documentation, is warranted. 17 After reviewing the arguments of the parties, and the relevant law, this 18 court concludes that there is no genuine issue as to any material fact and that 19 the moving party is entitled to judgment as a matter of law. As compelled, the 20 Plaintiffs carry the burden of proof as to the value of the property and through 21 the property appraisal of December 14, 2010, they have demonstrated that there is 22 no genuine issue of material fact. As to the arguments regarding Plaintiffs lack 23 of compliance with Local Civil Rule 56, the court finds them to be meritless. 24 If Defendant’s contention is that the value of the property is a genuine 25 issue of fact in dispute in this case, then the Defendant had an obligation to present an appraisal of the property, a comparable, or have taken any affirmative action that would demonstrate to the court that the Plaintiffs’ appraisal does not reflect the actual value of the property. The value then would be the material fact in dispute mandating a trial. This was not done. The Defendant did 1 ||not present any evidence that a trial worthy issue exists, nor competent evidenc 2 rebut the Plaintiffs’ motion. 3 Therefore, Defendant's claim number 23-3 will be amended as follows: 4 $11,442.22 secured; $396.83 priority; and $210,938.18 general unsecured. ° WHEREFORE, IT IS ORDERED that the Plaintiff's Motion for Summary Judgment 6 shall be, and it hereby is, GRANTED. Clerk to enter judgment. ’ IT IS SO ORDERED. San Juan, Puerto Rico this 10 day of July, 2012.
10 An rian K. Tester 12 U.S. Bankruptcy Judge 13 CC: ALL CREDITORS 14 15 16 17 18 19 20 21 22 23 24 25