1 IN THE UNITED STATES BANKRUPTCY COURT 2 FOR THE DISTRICT OF PUERTO RICO
3 IN RE: CASE NO. 16-09440 (ESL) 4 OMAR RAMOS MORALES CHAPTER 13 5
6 Debtor
7 OMAR RAMOS MORALES
8 Plaintiff(s) ADV. PROC. NO. 19-0446 (ESL) 9 vs. 10 BANCO POPULAR DE PUERTO RICO FILED & ENTERED ON MAY/18/2020 11 Defendant(s) 12
14 OPINION AND ORDER 15 This adversary proceeding is before the court upon the motion for partial summary judgment 16 filed by Omar Ramos Morales (“Debtor” or “Plaintiff”) on the ground that the uncontested facts 17 show that Banco Popular de Puerto Rico (“BPPR”) willfully violated the automatic stay by continuing with collections efforts against the Debtor after the bankruptcy petition was filed. 18 BPPR answered by opposing Debtor’s request and by moving on its own motion for summary 19 judgment praying the court to dismiss the complaint as BPPR did not violate the automatic stay. 20 The Debtor filed an opposition to BPPR’s motion for summary judgment. 21 The Debtor filed a petition under chapter 13 of the Bankruptcy Code on October 31, 2016. 22 BPPR was scheduled as a secured creditor and was given notice of the bankruptcy petition filing. 23 On December 20, 2016 BPPR filed a secured claim. The chapter 13 plan dated February 15, 2017 was confirmed on March 2, 2017. The confirmed chapter 13 plan provides that the debtor consents 24 to relief from the automatic stay pursuant to 11 U.S.C. § 362(d) to permit BPPR to enforce its 25 state-law interests against the collateral; and that any deficiency claim filed by BPPR following 26 the disposition of such collateral will be treated as unsecured. There are no pending matters in the 27 bankruptcy case. The Chapter 13 trustee filed a final report on plan completed and for entry of 1 discharge. The discharge order was entered. 2 The Debtor filed the instant complaint seeking damages for the alleged violation of the 3 automatic stay provisions of 11 U.S.C. §362(a) on October 31, 2019. Defendant answered the 4 complaint. A pretrial was scheduled and held on February 21, 2020. The parties filed a detailed 5 and comprehensive joint pretrial report (“report”). The report submits as uncontested facts the 6 relevant facts which serve as the basis for the pending motions for summary judgment. Jurisdiction 7 This court has jurisdiction under 28 U.S.C.§157 (a) (b) (1) and §1334. This action is a core 8 proceeding under 11 U.S.C. §§362 and Fed. R. Bankr. P. 7001. Venue lies in this District pursuant 9 to 28 U.S.C.§§1408;1409 and 1391(b). 10 Position of the Parties Debtor/Plaintiff 11 Debtor alleges that BPPR delivered to him a collection letter demanding immediate payment 12 of the pre-petition arrears regarding the mortgage loan #9489 after the bankruptcy petition was 13 filed. “The collection letter demands payment for the balance of the arrears in the mortgage loan 14 in the amount of $86,454.52 and in summary states: ‘you should pay the total amount due owed in 15 any of our branches or send payment by mail immediately’ ’We urge you to pay on time to 16 maintain a good credit record.’” Such action, taken with actual knowledge of the filing of the bankruptcy petition and the treatment of the claim in the confirmed chapter 13 plan, constitutes a 17 willful violation of the automatic stay. 18 The Plaintiff submits that the automatic stay was lifted pursuant to the provisions of the 19 confirmed chapter 13 plan for the exclusive purpose of proceeding with in rem remedies against 20 the collateral. The collection letter demanded immediate payment from the Plaintiff. The letter was 21 not sent with the purpose of enforcing a state law in rem remedies. The three elements for a stay 22 violation are present. Therefore, BPPR is liable for its actions. The collection letter demands payments for the balance of the arrears in the mortgage loan 23 in the amount of$86,454.52 and states: “you should pay the total amount due owed in any of our 24 branches or send payment by mail immediately” The collection letter also states “[w]e urge you to 25 pay on time to maintain a good credit record.” Therefore, BPPR “threatened the Debtor with 26 reporting such debt with the credit bureau agencies and its effects on his credit. It is undisputed 27 that BPPR had notice of the automatic stay entered and in effect in the instant case. Furthermore, BPPR was aware of the provision included in the confirmed plan and the limitations of the stay 1 lifting. The evidence and the uncontested facts proved that BPPR had knowledge of the automatic 2 stay and the provisions of the confirmed plan at least on 6 ways.” 3 The terms of the confirmed plan show that only in rem remedies were allowed. Thus, 4 “[a]ttempts to coerce the Debtor into making payments towards the pre-petition debt were not 5 allowed under the terms of the confirmed plan.” There is no reasonable basis to conclude 6 otherwise. Arguments that the Debtor has continued to occupy his residence for free is not a defense 7 to violations of the automatic stay. “Pursuant to Puerto Rico applicable law, the Plaintiff can 8 occupy the property not only until a judgment is entered in favor of BPPR but until the property is 9 sold at a public auction and title has been properly transferred. Defendant BPPR needs to follow 10 the necessary steps towards the foreclosure of the property. As of for now, Defendant BPPR has 11 admitted that it has not foreclosed on the property. See Defendant’s Statement of Uncontested Fact 12 No. 13. Apparently, no foreclosure has been initiated by the Defendant BPPR because it has decided not to. However, what is evident is that defendant decided to continue with collection 13 efforts of coercive nature against the plaintiff after the bankruptcy filing and the confirmation of 14 the plan.” 15 BPPR/Defendant 16 BPPR admits and agrees that the material facts are uncontested and that there is single 17 exhibit pertinent to this adversary proceeding. What the court must determine is if the mailing of 18 the June 14, 2019 letter from BPPR to the Debtor constituted a violation of the automatic stay provisions of 11 U.S.C. §362 or was in contempt pursuant to 11 U.S.C. §105. BPPR alleges that 19 this adversary proceeding should be disposed of summarily in its favor. 20 BPPR alleges that plaintiff has failed to meet the three (3) elements for a finding of a 11 21 U.S.C. §362 automatic stay violation. The elements are: “a debtor alleging a violation of the 22 automatic stay must demonstrate, by a preponderance of the evidence, ‘(1) that a violation of the 23 automatic stay occurred; (2) that the violation was willfully committed, and (3) that the debtor 24 suffered damage as a result of the violation.’” Rivera v. Oriental Bank, 558 B.R. 36, 41 (Bankr. 25 D.P.R. 2016) (citing Slabicki v. Gleason, 466 B.R. 572, 577-78 (B.A.P. 1st Cir. 2012). First, there is no violation of the automatic stay as “Banco Popular’s letter dated June 14, 26 2019 did not violate 11 U.S.C. §362(a)(6). The letter was not an act to collect, assess or recover a 27 claim against the debtor that arose before the commencement of the case. As noted from its tenor, Banco Popular’s letter was not a coercive, harassing or collection effort against Plaintiff; it had the 1 intended purpose of providing Plaintiff with options to retain his residence, which could forestall 2 Banco Popular’s enforcement of its lien notwithstanding receiving consensual relief from stay 27 3 months earlier.” 4 Second, BPPR did not willfully violate the automatic stay nor intended the actions which 5 constituted the violation. The “automatic stay which Banco Popular was aware of, had been lifted 6 on March 2, 2017as to Banco Popular. This is a crucial factor in disposing of this adversary proceeding regarding the alleged 11 U.S.C. §362(a)(6) violation. Besides the fact that the 7 automatic stay was no longer in effect, by reviewing the full text of the letter, this Honorable Court 8 can determine that Banco Popular did not intend to collect loan #0705909489 through its June 14, 9 2019 letter.” BPPR reasons that it “was under the reasonable impression that no automatic stay 10 was in effect, and Banco Popular intended to inform Plaintiff of options available to retain his 11 residence without foreclosure proceedings, to which he had consented to 27 months earlier.” The 12 court must determine if there is a violation of the automatic stay under the totality of the circumstances, McConnie Navarro v. Banco Popular de Puerto Rico (In re McConnie Navarro), 13 563 B.R. 127 (Bankr. D. P.R. 2017). It is not per se improper to contact a debtor. Under the totality 14 of circumstances, the statements in the letter show that BPPR “is not attempting to collect the debt 15 as a personal liability.” 16 Third, “Plaintiff cannot prove or sustain damages, because he consented to relief from stay, 17 and Banco Popular’s June 14, 2019 letter did not request payment of loan arrears (immediately or 18 within a specific term); contrariwise, it offered Plaintiff several options available to retain his residence. It should be noted that, notwithstanding consenting to relief from stay in his confirmed 19 plan, Plaintiff continued occupying his residence without further payments to or communications 20 with Banco Popular. In other words, Plaintiff had continued to occupy his residence for free, and 21 without further intervention or communications by Banco Popular.” 22 Standard Motion for Summary Judgment 23 The court relies on the following prior decisions when analyzing the summary judgment 24 standard: In re Román-Perez, 527 B.R. 844, 855 – 856, (Bankr. D.P.R. 2015); In re Otero Rivera, 25 511 B.R. 6 (Bankr. D.P.R. 2014); and In re Lopez, 492 B.R. 595 (Bankr. D.P.R. 2013). Rule 56 of the Federal Rules of Civil Procedure is applicable to this proceeding by Rule 26 7056 of the Federal Rules of Bankruptcy Procedure. Summary judgment should be entered “if the 27 pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving 1 party is entitled to a judgment as a matter of law.” Fed. R. Bankr. P. 7056; see also, In re 2 Colarusso, 382 F.3d 51 (1st Cir. 2004), citing Celotex Corp. v. Catrett, 477 U.S. 317, 322–323, 3 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). 4 “The summary-judgment procedure authorized by Rule 56 is a method for promptly 5 disposing of actions in which there is no genuine issue as to any material fact or in which only a 6 question of law is involved.” Wright, Miller & Kane, Federal Practice and Procedure, 3d, Vol 10A, § 2712 at 198. “Rule 56 provides the means by which a party may pierce the allegations in 7 the pleadings and obtain relief by introducing outside evidence showing that there are no fact 8 issues that need to be tried.” Id. at 202–203. Summary judgment is not a substitute for a trial of 9 disputed facts; the court may only determine whether there are issues to be tried, and it is improper 10 if the existence of a material fact is uncertain. Id. at 205–206. 11 Summary judgment is warranted where, after adequate time for discovery and upon motion, 12 a party fails to make a showing sufficient to establish the existence of an element essential to its case and upon which it carries the burden of proof at trial. Celotex Corp. v. Catrett, 477 U.S. 317, 13 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The moving party must “show that there is no 14 genuine issue as to any material fact and that the moving party is entitled to judgment as a matter 15 of law.” Fed. R. Civ. P. 56(c). 16 For there to be a “genuine” issue, facts which are supported by substantial evidence must 17 be in dispute, thereby requiring deference to the finder of fact. Furthermore, the disputed facts 18 must be “material” or determinative of the outcome of the litigation. Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir. 1975), cert. denied, 425 U.S. 904, 96 S.Ct. 1495, 47 L.Ed.2d 754 (1976). When 19 considering a petition for summary judgment, the court must view the evidence in the light most 20 favorable to the nonmoving party. Poller v. Columbia Broadcasting System, Inc., 368 U.S. 464, 21 473, 82 S.Ct. 486, 7 L.Ed.2d 458 (1962); Daury v. Smith, 842 F.2d 9, 11 (1st Cir. 1988). 22 The moving party invariably bears both the initial as well as the ultimate burden in 23 demonstrating its legal entitlement to summary judgment. Adickes v. Kress & Co., 398 U.S. 144, 24 157, 90 S.Ct. 1598, 26 L.Ed.2d 142 (1970). See also López v. Corporación Azucarera de Puerto 25 Rico, 938 F.2d 1510, 1516 (1st Cir. 1991). It is essential that the moving party explain its reasons for concluding that the record does not contain any genuine issue of material fact in addition to 26 making a showing of support for those claims for which it bears the burden of trial. Bias v. 27 Advantage International, Inc., 905 F.2d 1558, 1560–61 (D.C. Cir. 1990), cert. denied, 498 U.S. 1 958, 111 S.Ct. 387, 112 L.Ed.2d 397 (1990). 2 The moving party cannot prevail if any essential element of its claim or defense requires 3 trial. López, 938 F.2d at 1516. In addition, the moving party is required to demonstrate that there 4 is an absence of evidence supporting the nonmoving party's case. Celotex, 477 U.S. at 325, 106 5 S.Ct. 2548. See also Prokey v. Watkins, 942 F.2d 67, 72 (1st Cir. 1991); Daury, 842 F.2d at 11. 6 In its opposition, the nonmoving party must show genuine issues of material facts precluding summary judgment; the existence of some factual dispute does not defeat summary judgment. 7 Kennedy v. Josephthal & Co., Inc., 814 F.2d 798, 804 (1st Cir. 1987). See also, Kauffman v. 8 Puerto Rico Telephone Co., 841 F.2d 1169, 1172 (1st Cir. 1988); Hahn, 523 F.2d at 464. A party 9 may not rely upon bare allegations to create a factual dispute but is required to point to specific 10 facts contained in affidavits, depositions and other supporting documents which, if established at 11 trial, could lead to a finding for the nonmoving party. Over the Road Drivers, Inc. v. Transport 12 Insurance Co., 637 F.2d 816, 818 (1st Cir. 1980). The moving party has the burden to establish that it is entitled to summary judgment; no 13 defense is required where an insufficient showing is made. López, 938 F.2d at 1517. The 14 nonmoving party need only oppose a summary judgment motion once the moving party has met 15 its burden. Adickes, 398 U.S. at 159, 90 S.Ct. 1598. 16 The summary judgment standard applies to both parties to the complaint as they have filed 17 cross motions for summary judgment. The relevant facts are not in controversy. Both parties 18 agree on the uncontested facts. What is determinative is whether the letter sent by BPPR to the Debtor constitutes a post-petition collection action by BPPR of the debt dealt with specifically in 19 the confirmed chapter 13 plan. The letter was attached to the complaint and has been submitted 20 by both parties as an exhibit to their respective motions for summary judgment. The letter is 21 attached to this order as Exhibit I for ready reference. 22 Uncontested Facts 23 The uncontested facts detailed below are taken from the joint pretrial report verbatim. The 24 court notes that the same uncontested facts have also been included in the motions for summary 25 judgment being addressed herein. 1. On November 30, 2016, the Plaintiff, Omar Ramos Morales, residing at Bo. Tejas Sector 26 Joyeros Km. 1.9 Carr. 917, Las Piedras, P.R.00771, filed a Chapter 13 Bankruptcy petition; Case 27 number 16-09440-ESL, with Schedules, and Statement of Financial Affairs. 2. In Schedule A/B: Property, Plaintiff declared a “100% interest in property located at Bo. 1 Tejas Sector Joyeros Km. 1.9 Carr. 917, Las Piedras, P.R.”, with a current value of $170,000.00. 2 3. In Schedule D: Creditors Who Have Claims Secured by Property, Section 2.2, Plaintiff 3 declared Defendant Banco Popular of Puerto Rico (hereinafter “BPPR”) as a creditor with a claim 4 of $212,784.00, secured in the amount of $170,000.00, by a“100% interest in property located at 5 Bo. Tejas Sector Joyeros Km. 1.9 Carr. 917, Las Piedras, P.R.”, and unsecured in the amount of 6 $42,784.00, with regards to Debtor’s pre-petition mortgage debt identified with account number 9489. 7 4. In the Master Address List, Defendant BPPR was listed with a mailing address of Banco 8 Popular, Bankruptcy Department, PO Box 366818, San Juan, PR 00936-6818. 9 5. On or about December 1, 2016, [the] Court gave notice through the CM/ECF System, 10 including Defendant BPPR, informing that all actions or proceedings to enforce any claims or to 11 levy on property of the debtor subsequent to the filing of the aforesaid petition were stayed by law. 12 6. The notice mailed by [the] Court to BPPR, included the following warning to all creditors: “The filing of the case imposed an automatic stay against most collection activities. This means 13 that creditor generally may not take action to collect debts from the Debtors, the Debtors’ property 14 and certain co-debtors. For example, while the stay is in effect, creditors cannot sue, garnish wages, 15 assert a deficiency, reposes property or otherwise try to collect from the Debtors. Creditors who 16 violate the stay can be required to pay actual expenses and punitive damages and attorney’s fees”. 17 7. Defendant BPPR filed a proof of claim on December 20, 2016, as secured, in the amount 18 of $239,272.51, in relation to the mortgage loan identified with number 9489. 8. On February 15, 2017, Plaintiff filed an Amended Chapter 13 Plan dated February 3, 19 2017, providing in Section III(H1), for Defendant BPPR mortgage loan identified with number 20 9489: “(H1) Relief from the Automatic Stay. The debtor consents to relief from the automatic stay 21 pursuant to 11 U.S.C. § 362(d) to permit the following creditors to enforce their state-law interests 22 against the following collateral. Any deficiency claim filed by such creditor following the 23 disposition of such collateral will be treated as unsecured. The debtor’s consent does not affect the 24 interests of the trustee or any co-obligor.” The Collateral (Description and Location) was described 25 as “100% interest in property located at Bo. Tejas Sector Joyeros Km. 1.9 Carr. 917, Las Piedras, P.R.” 26 27 9. On March 2, 2017, a Confirmation Order for the Plan was entered in this case which 1 included Plaintiff’s mortgage loan with Defendant BPPR identified with number 9489; and 2 Defendant BPPR received notification of this order on or about March 6, 2017. 3 10. The Confirmed Plan provided for the relief from the automatic stay upon confirmation 4 in favor of BPPR regarding the mortgage loan with account number ending in 9489. Per the terms 5 of the plan, the stay was lifted for the creditor to proceed with state law remedies against the 6 collateral exclusively. 11. On June 14, 2019, the Defendant sent a letter to Plaintiff regarding the mortgage loan 7 #9489. [The letter is attached hereto as Exhibit I.] 8 12. Defendant BPPR has not foreclosed on Plaintiff’s “100% interest in property located at 9 Bo. Tejas Sector Joyeros Km. 1.9 Carr. 917, Las Piedras, P.R.” 10 13. Defendant BPPR has not filed a deficiency claim against Plaintiff. 11 The Automatic Stay 12 The automatic stay provision is one of the fundamental debtor protections in the Bankruptcy Code. It gives the debtor a “breathing spell” from creditors and stops all collection 13 efforts, all harassment, and all foreclosure actions. H.R. Rep. No. 95–595, 95th Cong. 1st Sess. 14 340–342 (1977); S. Rep. No. 989, 95th Cong., 2d Sess. 54–55 (1978), reprinted in 1978 15 U.S.C.C.A.N. 5787, 5840, 6296–97. ICC v. Holmes Transp., Inc., 931 F.2d 984, 987 (1st 16 Cir.1991); In re Smith Corset Shops, Inc., 696 F.2d 971, 977 (1st Cir.1982). “It allows the debtor 17 to attempt a repayment or reorganization plan or simply be relieved of the financial pressures that 18 drove him into bankruptcy.” Id. at 977. Section 362 of the Bankruptcy Code provides that upon filing for bankruptcy, a debtor is 19 immediately protected by an automatic stay that prohibits, inter alia, the “continuation ... or other 20 action or proceeding against the debtor that was or could have been commenced before the 21 [bankruptcy petition] or to recover a claim against the debtor that arose before the commencement 22 of the case under this title” and “any act to collect, assess, or recover a claim against the debtor 23 that arose before the commencement of the case ...” 11 U.S.C. § 362(a)(1) and (6). “This respite 24 enables debtors to resolve their debts in a more orderly fashion and at the same time safeguards 25 their creditors by preventing different creditors from bringing different proceedings in different courts, thereby setting in motion a free-for-all in which opposing interests maneuver to capture 26 the lion's share of the debtor's assets.” Soares v. Brockton Credit Union (In re Soares), 107 F.3d 27 969, 975 (1st Cir.1997) (citations omitted). “Section 362(a)(6) is intended to prevent creditor harassment of the debtor in attempting to collect pre-petition debts. The conduct prohibited ranges 1 from that of an informal nature, such as by telephone contact or by dunning letters, to more formal 2 judicial and administrative proceedings that are also stayed under subsection (a)(1).” Alan N. 3 Resnick & Henry J. Sommer, 3 Collier on Bankruptcy ¶ 362.03[8][a] (16th ed.2015). 4 The uncontested facts show that the automatic stay was in effect, BPPR had actual notice 5 of the filing of the petition, BPPR filed a secured proof of claim, and the claim by BPPR was 6 specifically dealt with in the confirmed chapter 13 plan. It is also uncontested that on June 14, 2019, BPPR sent to the Debtor a letter requesting payment of the arrears on the mortgage loan. 7 Violation of the Automatic Stay 8 “The automatic stay imposes on non-debtor parties an affirmative duty of compliance.” 9 Whitman–Nieves v. P.R. Fed. Credit Union (In re Whitman–Nieves), 519 B.R. 1, 8 (Bankr. 10 D.P.R. 2014), quoting Otero–Lopez v. Dep't of Treasury of P.R. (In re Otero–Lopez), 492 B.R. 11 595, 607 (Bankr. D.P.R. 2013). To ensure compliance of the automatic stay, section 362(k) of the 12 Bankruptcy Code provides the necessary means to redress its violation: “an individual injured by a willful violation of a stay provided by this section shall recover actual damages, including costs 13 and attorneys' fees, and in appropriate circumstances, may recover punitive damages”. 11 U.S.C. 14 § 362(k)(1). “A debtor seeking damages under this section bears the burden of proving by a 15 preponderance of the evidence the following three elements: (1) that a violation of the automatic 16 stay occurred; (2) that the violation was willfully committed; and (3) that the debtor suffered 17 damages as a result of the violation.” Slabicki v. Gleason (In re Slabicki), 466 B.R. 572, 577–578 18 (1st Cir. BAP 2012), citing In re Panek, 402 B.R. 71, 76 (Bankr. D.Mass. 2009). “A willful violation does not require a specific intent to violate the automatic stay.” In re Otero, 492 B.R. at 19 607. “The standard for a willful violation of the automatic stay ... is met if there is knowledge of 20 the stay and the defendant intended the actions which constituted the violation.” Fleet Mortgage 21 Group v. Kaneb, 196 F.3d 265, 269 (1st Cir.1999). “The debtor has the burden of providing the 22 creditor with actual notice. Once the creditor receives actual notice, the burden shifts to the 23 creditor to prevent violations of the automatic stay.” Id. “In cases where the creditor received 24 actual notice of the automatic stay, courts must presume that the violation was deliberate.” Id. “A 25 violation may also be willful if the creditor's original action in violation of the stay occurred without notice of the bankruptcy filing, but it failed to take prompt action to remedy the violation 26 after receipt of notice.” Chapter 13 Practice & Procedure § 5B:6. Also see In re Abrams, 127 B.R. 27 239, 243–244 (9th Cir. BAP 1991); In re Combs, 2006 Bankr. LEXIS 3569, 2006 WL 6591825 (Bankr. N.D.Ga.2006); In re Smith, 180 B.R. 311 (Bankr. N.D.Ga. 1995) (failure to vacate 1 judgment entered post-petition constituted a willful violation of the automatic stay); Commercial 2 Credit Corp. v. Reed, 154 B.R. 471, 476 (E.D.Tex. 1993) (“[A] creditor must act immediately to 3 restore the status quo once it learns that it has violated the stay.”); In re Wariner, 16 B.R. 216 4 (Bankr. N.D.Tex. 1981) (“A creditor has an affirmative duty to return the property and restore the 5 status quo once it learns its actions violated the stay.”); In re Miller, 10 B.R. 778 (Bankr. D.Md. 6 1981) (creditor has an affirmative obligation to return vehicle repossessed post-petition; failure to do so constituted a willful stay violation and supported an award of damages); In re Taylor, 7 190 B.R. 459, 461 (Bankr. S.D.Fla. 1995) (“once notice was given [to creditor] that the petition 8 relief had been filed, [he] had an affirmative duty to undo the technical violation). 9 The basic determination that the court must make is whether the June 14, 2019 letter 10 constituted a violation of the automatic stay. The relevant facts are uncontested. The issue is 11 whether under the uncontested facts, the statements in the June 14, 2019 letter, and the reasonable 12 inferences from the same, BPPR violated the automatic stay provisions of section 362(a) of the Bankruptcy Code. 13 Discussion 14 The information in the June 14, 2019 letter will be divided in three parts and in the sequence 15 that the same were presented. 16 The first states that “[o]ur records show that your mortgage loan reflects payments in arrears 17 at the date of this letter.” The total amounts owed were indicated as follows: 56 payments due in 18 the amount of $84,115.92, late charges in the amount of $2,338.60, for a total amount owed of $86,454.52. 19 The second part states that “[y]ou should pay the total amount due owed in any of our 20 branches”, that if payment was made after the date of the letter to disregard the notification, and 21 that if payment was made before the date of the letter to contact BPPR’s offices. It also states that 22 information on the “account is reported to the credit bureau agencies, including late payments or 23 non-payments in your account. We urge you to pay on time to maintain a good credit record.” 24 The third part states that “[i]t is possible that you may have been unable to make the 25 payments for reasons beyond your control, such as reduction in income, unemployment, or medical expenses, among others. The purpose of this letter is to inform you that we may be able to help 26 you.” The letter goes on to detail the many forms in which BPPR can help customers experiencing 27 financial difficulties. The first part informs the debt owed, the second requires payment of the debt and warns on 1 the consequences of non-payment. The third offers help to accommodate the needs of the 2 customer. Clearly, the letter is not in accordance with the facts applicable to the Debtor in this 3 case. The letter demands payment and offers assistance. The letter is not in agreement with the 4 terms of the confirmed plan. It may have been well intentioned if the Plaintiff had not filed 5 bankruptcy and the secured debt of BPPR was not specifically dealt with in a confirmed chapter 6 13 plan. BPPR moves the court to consider that it “was under the reasonable impression that no 7 automatic stay was in effect, and Banco Popular intended to inform Plaintiff of options available 8 to retain his residence without foreclosure proceedings, to which he had consented to 27 months 9 earlier.” BPPR also alleges the statements in the letter show that BPPR “is not attempting to collect 10 the debt as a personal liability.” 11 An “inference may be derived from the totality of circumstances, including from 12 circumstantial facts and post-transaction conduct.” Sheila Dewitt and Joseph Dewitt v. Edward T. Stewart, Jr., 948 F.3d 509, 523 (1st Cir, 2020). A factual inference must be based upon 13 substantial evidence. When considering inferences in the summary judgment context, such 14 inferences must be reasonable in light of the uncontested facts and cannot be based on speculation. 15 Summary judgment is proper when only one reasonable inference or interpretation of the facts can 16 be drawn in favor of the moving party. 17 The terms of the letter show a collection effort with options in case of need. The inference 18 drawn by BPPR is not based on substantial evidence. The content and tone of the letter are not in tune with the facts applicable to the Plaintiff/Debtor as of the date of the letter. The letter does not 19 make any differentiation as to secured portions or deficiencies. The offers of assistance to meet 20 the obligation do not negate the collection intent. Therefore, the court disagrees with the inference 21 or conclusion proffered by BPPR that the letter’s intention was to inform the Debtor of available 22 options. 23 BPPRs factual allegations that the Debtor continues to live the property and that the same 24 has not been foreclosed are arguments which may affect any damage award, but do not excuse the 25 collection effort under the circumstances of this case.
27 1 Conclusion In view of the foregoing, the court grants partial judgment in favor of the Debtor, concludin that BPPR violated the provisions of section 362(a). A hearing on damages will be scheduled, 3 Furthermore, BPPR’s request for the summary dismissal of the adversary proceeding is denied. ‘ IT IS SO ORDERED. ° In San Juan, Puerto Rico, this 18" day of May 2020. 6 7 =
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