Jose L. Velez Arcay v. Banco Santander de Puerto Rico

• Court: United States Bankruptcy Court, D. Puerto Rico
• Decided: September 27, 2013
• Docket: 12-00396
• Status: Unknown

Opinion

IN THE UNITED STATES BANKRUPTCY COURT 1 FOR THE DISTRICT OF PUERTO RICO

2 IN RE: CASE NO. 11-06828 (ESL) 3 JOSE L.VELEZ ARCAY 4 CHAPTER 13 Debtor 5

6 JOSE L VELEZ ARCAY ADV. PROC. NO. 12-00396 (ESL)

7 Plaintiff

8 vs.

9 BANCO SANTANDER DE PUERTO 10 RICO

11 Defendant 12 13 OPINION AND ORDER 14 This case is before the court upon the Motion for Summary Judgement and 15 Memorandum of Law in Support Thereof (the “Motion for Summary Judgement”, Docket No. 9) 16 filed by the Defendant Banco Santander de Puerto Rico (“Banco Santander” or the 17 “Defendant”) arguing that it did not violate the automatic stay when it sought to reopen a 18 foreclosure proceeding pending before the Puerto Rico Court of First Instance, Superior Court 19 of Bayamón, after the confirmation of the Chapter 13 Plan (which included a modification of 20 the automatic stay for Santander to foreclose on the Plaintiff’s real property) and obtained a 21 foreclosure judgment that included both in rem and in personam remedies against the Plaintiff. 22 Also before the court is the Opposition to Santander’s Motion for Summary Judgement (Docket 23 No. 32) filed by José L. Vélez Arcay (the “Plaintiff” or the “Debtor”) arguing that Banco 24 Santander deliberately violated the automatic stay and exceeded the scope of the modification of 25 the Chapter 13 Plan. For the reasons stated below, Banco Santander’s Motion for Summary 26 Judgement is hereby denied. 27 1 Procedural Background 2 Banco Santander filed a foreclosure complaint against the Debtor at the Puerto Rico 3 Court of First Instance, Superior Court of Bayamón (the “State Court”), Case No. D CD2011- 4 0652 (503), prior to the filing of the bankruptcy petition (Lead Case Docket No. 1). 5 On August 13 2011, the Plaintiff filed a voluntary Chapter 13 petition (Lead Case 6 Docket No.1). In Schedules A and D, he reported a three-bedroom real property located at Edif. 7 IX Gold Village Condo in Vega Alta, Puerto Rico (the “Real Property”), which is encumbered 8 with a mortgage in favor of Banco Santander (Lead Case Docket No. 17, pp. 13 and 22). The 9 meeting of creditors was held and closed on October 12, 2011 (Lead Case Docket No. 27). 10 On October 25, 2011, Banco Santander filed a secured Proof of Claim in the amount of 11 $129,186.67. See Claims Register No. 20-1. The Debtor did not object it. 12 On February 20 2012, Plaintiff filed an Amended [Chapter 13] Plan Dated February 20, 13 2013 (the “Amended Chapter 13 Plan”, Lead Case Docket No. 66), which was confirmed on 14 March 20, 2012 (Lead Case Docket No. 73). The Amended Chapter 13 Plan provided for the 15 modification of the automatic stay so that Banco Santander could foreclose the Real Property 16 (Lead Case Docket No. 66, p. 4). 17 On July 18, 2012, the Defendant filed a Motion Requesting Re-Opening of the Case 18 (Docket No. 37-3, p. 38) and a Motion in Compliance with Order And Reiterating Request for 19 Judgment Without Hearing (Docket No. 37-3, p. 16) before the State Court. The Defendant’s 20 Motions resulted in the State Court entering Judgment on July 24, 2012 in favor of Banco 21 Santander for collection of monies and foreclosure of mortgage (Docket No. 37-3, pp. 42-45). 22 In that Judgment, the State Court expressly ordered the sale of the Real Property at public 23 auction and “if the proceeds from said sale are insufficient to cover payment, the Bailiff may 24 proceed with the seizure of other goods owned by the [Debtor]”. State Court Judgment in 25 Default, p. 4 (Docket No. 37-3, p. 45). 26 On October 30, 2012, the Plaintiff filed the instant adversary proceeding arguing that 27 Banco Santander exceeded the limited scope of the modification to the automatic stay and 1 willfully violated it. It further alleges that Banco Santander has a significant history of violating 2 automatic stays and discharge orders and has failed to implement an effective policy to assure 3 that its collection personnel comply with the provisions of the Bankruptcy Code. As a result, 4 the Plaintiff seeks actual and punitive damages, legal and attorneys’ fees, and that Banco 5 Santander be held in contempt and be ordered to cease and desist from violations of the 6 automatic stay. See the Complaint, Docket No. 1. 7 On December 26, 2012, without answering the Complaint, the Defendant filed a Motion 8 for Summary Judgment with its corresponding Statement of Uncontested Material Facts 9 alleging that the Plaintiff had failed to state a claim upon which relief may be granted because 10 the confirmed Amended Chapter 13 Plan provided for lift the automatic stay for Banco 11 Santander to foreclose the Real Property. It further contends that it only requested from the 12 State Court an in rem foreclosure relief, not an in personam relief, and that it had no control 13 over the contents of the State Court’s Default Judgment. See Docket Nos. 9 and 9-1. 14 Initially, the Plaintiff filed a Motion for Deferment Under Fed. R. Civ. P. 56(d) on 15 January 22, 2013 alleging that he needed to conduct discovery to file a duly supported 16 opposition (Docket No. 14), which the court granted on February 20, 2013 (Docket No. 23). 17 After conducting the requested discovery, the Plaintiff filed an Opposition to Santander’s 18 Motion for Summary Judgment on June 28, 2013 (Docket No. 32) arguing that Banco Santander 19 “willfully violated the automatic stay in plaintiff’s bankruptcy by submitting a draft judgment to 20 the [S]tate [C]ourt which openly contradicted and exceeded the limited scope of the 21 modification to the automatic stay that allowed this creditor to proceed exclusively with in rem 22 relief against the collateral guaranteeing plaintiff’s loan with [Banco] Santander” (Docket No. 23 32, p. 4). The Plaintiff further avers that the Defendant “was the main moving force behind the 24 offending judgment that granted [its] foreclosure and collection of monies action against 25 plaintiff personally and/or any other personal goods of the plaintiff sufficient to satisfy the 26 amounts demanded by [Banco] Santander, that is, beyond the scope of plaintiff’s amended 27 plan” (Docket No. 32, p. 4). The Plaintiff did not seek summary judgment relief in his favor. 1 On August 19, 2013, the Defendant filed a Reply to Plaintiff’s Opposition to Banco 2 Santander’s Motion for Summary Judgment (Docket No. 37) acknowledging that although its 3 local counsel inadvertently submitted a “defective judgment draft”, it is the State Court Judge’s 4 responsibility to ensure every judgment is correct, not Banco Santander’s, and thus it cannot be 5 held accountable for the mistaken Judgment against the Plaintiff that included both in rem and 6 in personam remedies. Banco Santander also insists that its State Court counsel only requested 7 the foreclosure of its collateral in rem when it requested the reopening of the case against the 8 Plaintiff in the State Court. 9 Material Uncontested Facts 10 The court proceeds to determine the material uncontested facts pursuant to Fed. R. Civ. P. 11 56(g)1, applicable to bankruptcy proceedings through Fed. R. Bankr. P. 7056: 12 1. Banco Santander filed a pre-petition action in the State Court for foreclosure and 13 collection of monies against the Plaintiff, Case No. D CD2011-0656 (503). See Docket 14 Nos. 9-1, p. 2, and 32-1, p. 2. 15 2. On August 13, 2011, the Plaintiff filed a voluntary Chapter 13 bankruptcy petition (Lead 16 Case Docket No. 1). 17 3. On October 25, 2011, Banco Santander filed a secured Proof of Claim in the amount of 18 $129,186.67 for its mortgage over the Plaintiff’s Real Property. See Claims Register 19 No. 20-1. 20 4. Banco Santander has a validly registered lien on the Plaintiff’s Real Property (Docket 21 No. 33-1, p. 12). 22 5. Banco Santander is the current owner and holder of the Mortgage Promissory Note, and 23 is also empowered to declare the debt due and payable prior to its due date in case of 24 default. See Docket No. 37-3, p. 43. 25

26 1 Fed. R. Civ. P. 56(g) provides as follows:

27 If the court does not grant all the relief requested by the motion [for summary judgment], it may enter an order stating any material fact --including an item of damages or other relief-- that is not 1 6. The Plaintiff defaulted on the Real Property’s mortgage payments since September 1, 2 2010. See Docket No. 37-3, p. 43. 3 7. The Plaintiff filed an Amended Chapter 13 Plan (Lead Case Docket No. 66), which 4 provided in Section 6(b) as follows:

5 Upon confirmation, the stay is … lifted as to the collateral only, to allow lien holder to proceed with in rem remedies only. Any allowed claim by a 6 creditor or creditors provided for in this section shall receive no distribution 7 under the plan, as to its secured portion. All payments and deduction regarding the obligation secured by collateral shall immediately cease and 8 shall be stopped by any entity making them or withdrawing them. Any unsecured portion of the claim as filed, or latter filed amending the same to 9 reflect a deficiency balance after surrender, shall be paid as an unsecured 10 claim pursuant to the plan, within the terms and condition of Section 10(c) of this plan. 11 See Lead Case Docket No. 66, p. 7; Docket No. 37-2, pp. 4-5 and 16. 12 13 8. The Amended Chapter 13 Plan was confirmed on March 22, 2012 (Lead Case Docket 14 No. 73). 15 9. On July 18, 2012, Banco Santander filed two separate motions before the State Court 16 requesting that the foreclosure proceedings be reopened and moved forward and for 17 judgment in default to be entered against the Plaintiff. See Docket 37-3, pp. 16-17 and 18 38. The caption in both motions reads as follows: “Re: Foreclosure of Mortgage (In 19 Rem)”. The pleadings and prayers for relief in those motions did not seek an in rem 20 remedy. Id. 21 10. The Defendant prepared and submitted to the State Court a judgment draft which the 22 State Court Judge subsequently signed and issued as a Judgment on July 24, 2012. 23 Compare Docket No. 33-1, p. 5, ¶ 12, and pp. 23-26, with Docket No. 37-3, pp. 34-37 24 and pp. 42-46. The State Court’s Judgment in favor of Banco Santander, as prepared by 25 the Defendant, expressly ordered the sale of the Real Property at public auction and “if 26 the proceeds from said sale [were] insufficient to cover payment, the Bailiff may 27 1 proceed with the seizure of other goods owned by the [Debtor]”. State Court Judgment 2 in Default, p. 4 (Docket No. 37-3, p. 45). 3 Jurisdiction 4 The court has jurisdiction pursuant to 28 U.S.C. §§ 157(b)(1) and 1334(b). This is a 5 core proceeding pursuant to 28 U.S.C. § 157(b)(2). 6 Applicable Law & Analysis 7 (A) Motions to Dismiss under Fed. R. Civ. P. 12(b)(6) and Motions for Summary Judgment 8 Although the Defendant did not expressly seek dismissal under Fed. R. Civ. P. 12(b)(6), 9 applicable in bankruptcy proceedings through Fed. R. Bankr. P. 7012, the requested remedy is 10 precisely the one provided in that rule (“failure to state a claim upon which relief can be 11 granted”). See the conclusion of the Motion for Summary Judgment, Docket No. 9, p. 5. Thus, 12 the court will first review the Defendant’s Motion for Summary Judgment under that rule, 13 considering that the Defendant did not file an answer to the Complaint. 14 The purpose of a motion to dismiss under Fed. R. Civ. P. 12(b)(6) is to assess the legal 15 feasibility of a complaint, not to weigh the evidence which the plaintiff offers or intends to 16 offer. See Ryder Energy Distribution Corp. v. Merrill Lynch Commodities, Inc., 748 F.2d 774, 17 779 (2nd Cir.1984); Citibank, N.A. v. K-H Corp., 745 F. Supp. 899, 902 (S.D.N.Y. 1990). 18 Fed. R. Civ. P. 8(a)(2), applicable to adversary proceedings through Fed. R. Bankr. P. 19 7008, mandates that complaints contain a “short and plain statement of the claim showing that 20 the pleader is entitled to relief.” “Although detailed factual allegations are not required, the 21 Rule does call for sufficient factual matter”. Surita Acosta v. Reparto Saman Inc. (In re Surita 22 Acosta), 464 B.R. 86, 90 (Bankr. D.P.R. 2012). Therefore, to survive a Fed. R. Civ. P. 12(b)(6) 23 motion to dismiss, a complaint must contain sufficient factual matter that, accepted as true, 24 “state[s] a claim to relief that is plausible on its face.” Bell Atlantic Corp. v. Twombly, 550 25 U.S. 544, 570 (2007). A claim has facial plausibility when the pleaded factual content allows 26 the court to draw the reasonable inference that the defendant is liable for the misconduct 27 alleged. Id. at 556. The Twombly standard was further developed in Ashcroft v. Iqbal, 556 1 U.S. 622 (2009), advising lower courts that “determining whether a complaint states a plausible 2 claim for relief will ... be a context-specific task that requires the reviewing court to draw on its 3 judicial experience and common sense.” 556 U.S. at 679. “In keeping with these principles, a 4 court considering a motion to dismiss can choose to begin by identifying pleadings that, because 5 they are no more than conclusions, are not entitled to the assumption of truth. While legal 6 conclusions can provide the framework of a complaint, they must be supported by factual 7 allegations. When there are well-pleaded factual allegations, a court should assume their 8 veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id. at 9 679. In sum, allegations in a complaint cannot be speculative and must cross “the line between 10 the conclusory and the factual”. Peñalbert-Rosa v. Fortuño-Burset, 631 F.3d 592, 595 (1st Cir. 11 2011). “[A]n adequate complaint must provide fair notice to the defendants and state a facially 12 plausible legal claim.” Ocasio–Hernandez v. Fortuño-Burset, 640 F.3d 1, 11 (1st Cir. 2011). 13 In Schatz v. Republican State Leadership Committee, 669 F.3d 50, 55 (1st Cir. 2012), the 14 U.S. Court of Appeals for the First Circuit established a two-step standard for motions to 15 dismiss under Fed. R. Civ. P. 12(b)(6). Step one: isolate legal conclusions. Step two: take the 16 complaint’s well-pleaded (non-conclusory) allegations as true, drawing all reasonable 17 inferences in favor of the plaintiff and determine if they plausibly narrate a claim for relief. 18 Also see Pérez v. Rivera (In re Pérez), 2013 WL 1405747 at *3, 2013 Bankr. LEXIS 1561 at 19 **9-10 (Bankr. D.P.R. 2013); Zavatsky v. O’Brien, 902 F. Supp. 2d 135, 140 (D. Mass. 2012). 20 In the instant case, the Complaint is factually well-pleaded. Furthermore, after drawing 21 all the reasonable inferences from the Plaintiff’s allegations in his favor, the court finds he has 22 plausible claim for relief for the reasons stated below. 23 A Fed. R. Civ. P. 12(b)(6) motion to dismiss may be considered as a motion for 24 summary judgment. See Fed. R. Civ. P. 12(d). Thus, the court will proceed to examine the 25 Defendant’s Motion for Summary Judgment under Fed. R. Civ. P. 56, applicable to this 26 adversary proceeding through Fed. R. Bankr. P. 7056. 27 1 Summary judgment should be entered if the pleadings, depositions, answers to 2 interrogatories, and admissions on file, together with the affidavits, if any, show that there is no 3 genuine issue as to any material fact and that the moving party is entitled to a judgment as a 4 matter of law. See In re Colarusso, 382 F.3d 51 (1st Cir. 2004), citing Celotex Corp. v. Catrett, 5 477 U.S. 317, 322-323 (1986). “The summary-judgment procedure authorized by Rule 56 is a 6 method for promptly disposing of actions in which there is no genuine issue as to any material 7 fact or in which only a question of law is involved.” Wright, Miller & Kane, Federal Practice 8 and Procedure, Civil 3d, Vol 10A, § 2712 (2013). “Rule 56 provides the means by which a 9 party may pierce the allegations in the pleadings and obtain relief by introducing outside 10 evidence showing that there are no fact issues that need to be tried.” Id. at 202-203. Summary 11 judgment is not a substitute for a trial of disputed facts; the court may only determine whether 12 there are issues to be tried, and it is improper if the existence of a material fact is uncertain. Id. 13 at 205-206. 14 Summary judgment is warranted where, after adequate time for discovery and upon 15 motion, a party fails to make a showing sufficient to establish the existence of an element 16 essential to its case and upon which it carries the burden of proof at trial. Celotex Corp. v. 17 Catrett, 477 U.S. 317, 322 (1986). The moving party must “show that there is no genuine issue 18 as to any material fact and that the moving party is entitled to judgment as a matter of law.” 19 Fed. R. Civ. P. 56(c). 20 For there to be a “genuine” issue, facts which are supported by substantial evidence must 21 be in dispute, thereby requiring deference to the finder of fact. Furthermore, the disputed facts 22 must be “material” or determinative of the outcome of the litigation. Hahn v. Sargent, 523 F.2d 23 461, 464 (1st Cir. 1975), cert. denied, 425 U.S. 904 (1976). When considering a petition for 24 summary judgment, the court must view the evidence in the light most favorable to the 25 nonmoving party. Poller v. Columbia Broadcasting Systems, Inc., 368 U.S. 464, 473 (1962); 26 Daury v. Smith, 842 F.2d 9, 11 (1st Cir. 1988). 27 1 The moving party invariably bears both the initial as well as the ultimate burden in 2 demonstrating its legal entitlement to summary judgment. Adickes v. Kress & Co., 398 U.S. 3 144, 157 (1970). See also López v. Corporación Azucarera de Puerto Rico, 938 F.2d 1510, 4 1516 (1st Cir. 1991). It is essential that the moving party explain its reasons for concluding that 5 the record does not contain any genuine issue of material fact in addition to making a showing 6 of support for those claims for which it bears the burden of trial. Bias v. Advantage 7 International, Inc., 905 F.2d 1558, 1560-61 (D.C. Cir. 1990), cert. denied, 498 U.S. 958 (1990). 8 The moving party cannot prevail if any essential element of its claim or defense requires 9 trial. López, 938 F.2d at 1516. In addition, the moving party is required to demonstrate that 10 there is an absence of evidence supporting the nonmoving party’s case. Celotex, 477 U.S. at 11 325. Also see Prokey v. Watkins, 942 F.2d 67, 72 (1st Cir. 1991); Daury, 842 F.2d at 11. In its 12 opposition, the nonmoving party must show genuine issues of material facts precluding 13 summary judgment; the existence of some factual dispute does not defeat summary judgment. 14 Kennedy v. Josepthal & Co., Inc., 814 F.2d 798, 804 (1st Cir. 1987). Also see Kauffman v. 15 Puerto Rico Telephone Co., 841 F.2d 1169, 1172 (1st Cir. 1988); Hahn, 523 F.2d at 464. A 16 party may not rely upon bare allegations to create a factual dispute but is required to point to 17 specific facts contained in affidavits, depositions and other supporting documents which, if 18 established at trial, could lead to a finding for the nonmoving party. Over the Road Drivers, Inc. 19 v. Transport Insurance Co., 637 F.2d 816, 818 (1st Cir. 1980). 20 The moving party has the burden to establish that it is entitled to summary judgment; no 21 defense is required where an insufficient showing is made. López, 938 F.2d at 1517. The 22 nonmoving party need only oppose a summary judgment motion once the moving party has met 23 its burden. Adickes, 398 U.S. at 159. 24 While Fed. R. Civ. P. 56(a) authorizes a party to move for summary judgment on all or 25 part of the claims or defenses being asserted, Fed. R. Civ. P. 56(g)2 provides that if summary 26

27 2 See footnote no. 1, supra. Fed. R. Civ. P. 56(g) was previously covered by former Fed. R. Civ. P. 56(d)(1) prior 1 judgment is not granted, the court can determine if there are material facts which are genuinely 2 not in dispute, and establish those facts as undisputed for trial. 3 In the instant case, the uncontested facts are supported from the uncontested documents 4 and sworn statements in the record. While the Defendant’s Motion for Summary Judgment is 5 denied for the reasons stated below, the court has determined the facts that are uncontested 6 pursuant to Fed. R. Civ. P. 56(g). 7 (B) The Automatic Stay Afforded in 11 U.S.C. § 362(a) 8 “The automatic stay provision is one of the fundamental debtor protections in the 9 Bankruptcy Code.” Otero López v. Dep’t of Treasury (In re Otero López), 492 B.R. 595, 601 10 (Bankr. D.P.R. 2013). It gives the debtor a “breathing spell” from creditors and stops all 11 collection efforts, all harassment, and all foreclosure actions. H.R. Rep. No. 95-595, 95th Cong. 12 1st Sess. 340-342 (1977); S. Rep. No. 989, 95th Cong., 2d Sess. 54-55 (1978), reprinted in 1978 13 U.S.C.C.A.N. 5787, 5840, 6296-97. Also see Rodríguez Ramos v. BPPR (In re Rodríguez 14 Ramos), 493 B.R. 355, 362 (Bankr. D.P.R. 2013); In re Otero López, 492 B.R. at 601; ICC v. 15 Holmes Transp., Inc., 931 F.2d 984, 987 (1st Cir. 1991); In re Smith Corset Shops, Inc., 696 16 F.2d 971, 977 (1st Cir. 1982). “It allows the debtor to attempt a repayment or reorganization 17 plan or simply be relieved of the financial pressures that drove him into bankruptcy.” ICC v. 18 Holmes Transp., Inc., 931 F.2d at 977. Section 362 of the Bankruptcy Code provides that upon 19 filing for bankruptcy, a debtor is immediately protected by an automatic stay that prohibits, 20 inter alia, the “continuation ... or other action or proceeding against the debtor that was or could 21 have been commenced before the [bankruptcy petition] or to recover a claim against the debtor 22 that arose before the commencement of the case under this title” and “any act to collect, assess, 23 or recover a claim against the debtor that arose before the commencement of the case...” 11 24 U.S.C. §§ 362(a)(1) and (a)(6). “This respite enables debtors to resolve their debts in a more 25 orderly fashion and at the same time safeguards their creditors by preventing different creditors 26 from bringing different proceedings in different courts, thereby setting in motion a free-for-all 27 1 in which opposing interests maneuver to capture the lion’s share of the debtor’s assets.” Soares 2 v. Brockton Credit Union (In re Soares), 107 F.3d 969, 975 (1st Cir. 1997) (citations omitted). 3 In the instant case, the pre-petition State Court foreclosure proceedings filed by Banco 4 Santander against the Plaintiff were automatically stayed upon the Debtor’s filing for 5 bankruptcy on August 13, 2011 (Lead Case Docket No. 1) under 11 U.S.C. § 362(a). The stay 6 remained in effect until the confirmation of the Amended Chapter 13 Plan, which included a 7 modification of the automatic stay for Banco Santander to only proceed with the in rem 8 foreclosure of the Real Property. See Lead Case Docket No. 66, p. 7; Docket No. 37-2, pp. 4-5 9 and 16. 10 (C) Violation of the Automatic Stay 11 The automatic stay imposes on non-debtor parties an affirmative duty of compliance. 12 Sternberg v. Johnston, 595 F.3d 937, 943 (9th Cir. 2010); In re Otero López, 492 B.R. at 607. 13 To ensure compliance, Section 362(k) of the Bankruptcy Code provides the necessary means to 14 redress violations of the stay: “an individual injured by a willful violation of a stay provided by 15 this section shall recover actual damages, including costs and attorneys’ fees, and in appropriate 16 circumstances, may recover punitive damages”. 11 U.S.C. § 362(k)(1). “A debtor seeking 17 damages under this section bears the burden of proving by a preponderance of the evidence the 18 following three elements: (1) that a violation of the automatic stay occurred; (2) that the 19 violation was willfully committed; and (3) that the debtor suffered damages as a result of the 20 violation.” Slabicki v. Gleason (In re Slabicki), 466 B.R. 572, 577-578 (B.A.P. 1st Cir. 2012), 21 citing In re Panek, 402 B.R. 71, 76 (Bankr. D. Mass. 2009). “A willful violation does not 22 require a specific intent to violate the automatic stay.” In re Otero López, 492 B.R. at 607. 23 “The standard for a willful violation of the automatic stay ... is met if there is knowledge of the 24 stay and the defendant intended the actions which constituted the violation.” Fleet Mortgage 25 Group v. Kaneb, 196 F.3d 265, 269 (1st Cir. 1999). “The debtor has the burden of providing the 26 creditor with actual notice. Once the creditor receives actual notice, the burden shifts to the 27 creditor to prevent violations of the automatic stay.” Id. at 269. “In cases where the creditor 1 received actual notice of the automatic stay, courts must presume that the violation was 2 deliberate.” Id. at 269. 3 In the instant case, it is undisputed that Banco Santander was duly notified of the 4 Plaintiff’s bankruptcy petition and was duly included in the list of creditors. See Lead Case 5 Docket Nos. 17, p. 45, and 30. In fact, when Banco Santander filed the Motion Requesting 6 Reopening of the Case at the State Court, it expressly stated as follows:

7 [O]n March 22, 2012 an Order was issued in the Federal Bankruptcy Court where in Plaintiff’s Plan was confirmed. In what is relevant, defendants proposed, and 8 were accepted to modify the automatic stay prescribed in the Bankruptcy Code as to 9 Banco Santander Puerto Rico, so that the appearing party could execute its mortgage guarantee. Banco Sandander’s Motion Requesting Reopening of the 10 Case, Docket No. 37-3, p. 38, ¶ 1. 11 Thus, when Banco Santander sought to reopen the State Court case and obtain a default 12 Judgment against the Plaintiff, it was in actual knowledge of the provisions and extent of the 13 automatic stay, as modified through the confirmed Amended Chapter 13 Plan (Lead Case 14 Docket Nos. 66 and 73). In other words, Banco Santander had actual knowledge that the only 15 remedy it was allowed to seek in the State Court was an in rem foreclosure judgment, not an in 16 personam collection of monies against the Debtor. 17 Banco Santander alleges that it only sought an in rem remedy against the Debtor in the 18 Motion Requesting Reopening of the Case and in the Motion … Reiterating Request for 19 Judgment Without Hearing filed at the State Court because in the caption of both motions it 20 stated “Foreclosure of Mortgage (In Rem)” (Docket No. 37-3, pp. 16 and 38). Nevertheless, the 21 caption of a motion is not part of the pleading. See Jackson v. Ashton, 33 U.S. 148, 149 (1834) 22 (“the title or caption of the bill is no part of the bill”); Nordic Sugar Corp. v. Maine Guarantee 23 Authority, 447 A.2d 1239, 1241 (Supreme Judicial Court of Maine 1982) (“the court will look 24 to substance of motion”); Lund ex rel. Wilbur v. Pratt, 308 A.2d 554, 557 (Supreme Judicial 25 Court of Maine 1973) (“the caption is not part of the pleadings”); Gulf Ins. Co. v. Hennings, 26 283 S.W.3d 381, 387 (Tex. App. Waco 2008) (“substance of [a] motion is not determined solely 27 from its caption or introduction, but instead is gleaned from [the] body of [a] motion and prayer 1 for relief”). It then follows that “[t]he substance of the motion, not the nomenclature used or 2 labels placed on motions, is controlling.” In re Jeans.com, 491 B.R. 16, 26 (Bankr. D.P.R. 3 2013), quoting from In re Lozada Rivera, 470 B.R. 109, 112-113 (Bankr. D.P.R. 2012). Also 4 see Tenucp Prop. LLC v. Riley (In re GCP CT Sch. Acquisition, LLC), 429 B.R. 817, 826 5 (B.A.P. 1st Cir. 2010) (“[t]he substance of the motion, not the form, governs”); United States v. 6 Hart, 933 F.2d 80, 84 (1st Cir. 1991) (“title given to a motion or an appellant’s version of any 7 legal action does not control its meaning”); Hasbrouck v. Texaco, 879 F.2d 632, 635 (9th Cir. 8 1989) (“[t]he nomenclature the movant uses [to title or caption a motion] is not controlling”); 9 Credit Suisse First Boston Corp. v. Grunwald, 400 F.3d 1119, 1124 (9th Cir. 2005) (courts 10 “must look beyond the motion’s caption to its substance”). The same principle applies in Puerto 11 Rico. See Figueroa Ferrer v. Commonwealth of PR, 7 P.R. Off. Trans. 278, 281, 107 D.P.R. 12 250, 258 (1978) (“[t]he caption of a case does not determine its nature”). Thus, this court must 13 discard the captions of Banco Santander’s motions and examine instead their substance, 14 pleadings and prayers for relief. 15 Contrary to Banco Santander’s contention, neither the Motion Requesting Reopening of 16 the Case or the Motion … Reiterating Request for Judgment Without Hearing (Docket No. 37-3, 17 pp. 16-17 and 38) requested the State Court to only enter an in rem judgment to foreclosure on 18 the Real Property. Quite the opposite: in its Motion … Reiterating Request for Judgment 19 Without Hearing, Banco Santander expressly requested the State Court to “enter judgment in 20 default against the defendants” upon the allegations of its foreclosure complaint (Docket No. 21 37-3, p. 16, ¶ 5), which included an in personam collection of monies through the seizure of 22 other goods owned by the Debtor (Docket No. 37-3, pp.42 and 46). As a result, this court 23 concludes that Banco Santander’s motions constitute a deliberate violation of the automatic 24 stay3. Fleet Mortgage Group v. Kaneb, 196 F.3d at 269. Thus, as a matter of law, the 25 Defendant is not entitled to summary judgment in its favor.

26 3 Because in the instant case the pleadings and prayers for relief in the motions filed by Banco Santander at the 27 State Court are dispositive, the court does not need to consider the argument of whether the Defendant violated the automatic stay by preparing and submitting to the State Court a defective judgment draft that included both in rem 1 Conclusion 2 For the reasons stated herein, Banco Santander’s Motion for Summary Judgment is 3 ||hereby denied as a matter of law. The court cannot enter partial summary judgment in the 4 || Plaintiff's favor because he did not request it. Notwithstanding, based on the uncontested facts 5 || determined herein under Fed. R. Civ. P. 56(g), the court hereby orders the Defendant to show 6 cause within 14 days why partial summary judgment should not be entered in favor of the 7 || Plaintiff regarding Banco Santander’s willful violation of the automatic stay in light of the 8 || analysis of the instant Opinion and Order. 9 SO ORDERED. 10 In San Juan, Puerto Rico, this 27" day of September, 2013. 11

13 seit oa canter pedis 14 15 16 17 18 19 20 21 22 23 24 25 26 27

1A.