Liz Marie Beltran Valdes and Emanuel Robles Robles v. Empresas Berrios, Inc.

• Court: United States Bankruptcy Court, D. Puerto Rico
• Decided: November 6, 2025
• Docket: 23-00043
• Status: Unknown

Opinion

IN THE UNITED STATES BANKRUPTCY COURT 1 FOR THE DISTRICT OF PUERTO RICO 2 IN RE: 3 LIZ MARIE BELTRAN VALDES CASE NO. 23-00180 (ESL) 4 EMANUEL ROBLES ROBLES CHAPTER 13 5 Debtors 6

7 LIZ MARIE BELTRAN VALDES ADV. PROC. 23-00043 EMANUEL ROBLES ROBLES 8 Plaintiff(s) 9

10 vs.

11 EMPRESAS BERRIOS, INC.

12 Defendant FILED AND ENTERED 11/6/2025 13

14 15 OPINION AND ORDER 16 This adversary proceeding is before the court upon the Motion for Summary Judgment 17 (dkt. #66) and Statement of Facts in Support of Motion for Summary Judgment (the “Debtor- 18 Plaintiffs’ Statement of Facts”, dkt. #67) filed by Debtor-Plaintiffs on August 7, 2025, and the 19 Opposition to Plaintiffs’ Motion for Summary Judgement and, in the Alternative, Motion to 20 Dismiss for Failure to State a Claim (the “Opposition to Summary Judgement”, dkt. #69) and 21 Memorandum of Law in Support of Defendant’s Opposition to Plaintiffs’ Motion for Summary 22 Judgement (the “Defendant’s Statement of Facts”, dkt. #70) filed by Empresas Berrios, Inc. 23 (“Defendant”) on August 15, 2025. 24 For the reasons stated herein, the Motion for Summary Judgment (dkt. #66) is hereby 25 DENIED. 26

27 1 Legal Issue 2 The issue before this court is whether Defendant’s post-petition automated debit on 3 account of a pre-petition debt constitutes a willful violation of the automatic stay. 4 Position of the Parties 5 Debtor-Plaintiffs contend that “[a]fter the automatic stay was implicated, the Defendant 6 continued to debit from Plaintiffs’ bank account in order to apply such funds to the Pre-Petition 7 Claim… [N]otwithstanding Defendant’s actual and constructive knowledge of the Automatic 8 Stay Order, Defendant continued its collection actions against the Plaintiffs on the Pre-Petition 9 Claim in violation of the Automatic Stay” (dkt. #66, p. 2). 10 Defendant’s main ground for the denial of the motion is that “Plaintiffs’ motion is 11 procedurally defective because they have failed to proffer any competent evidence of actual 12 damages as required under 11 U.S.C. § 362(k)(1)” (dkt. #69, p. 2). Defendant also alleges that it 13 did not violate the automatic stay because it “followed the bankruptcy process by filing a proof 14 of claim and accepting payment through the Chapter 13 plan” (id., p. 3). Ultimately, Defendant 15 concedes that “[i]t is undisputed that the automatic stay arose upon Plaintiffs’ Chapter 13 petition 16 on January 27, 2023, and that EBI had notice of the bankruptcy (through the court’s notice of 17 filing on Jan. 30, 2023). It also appears that one or more automatic loan payments were indeed 18 processed from Plaintiffs’ account in the weeks following the petition. However, the question is 19 whether these post-petition transactions amount to a willful violation of the stay as defined by 20 controlling law” (id., p. 5). 21 Defendant’s legal argument as to whether the transaction constitutes a willful violation is 22 the following:

23 Under First Circuit precedent, a “willful” stay violation does not require a showing 24 of malicious intent or bad faith; rather, “[t]he standard for a willful violation… is met if there is knowledge of the stay and the EBI intended the actions which 25 constituted the violation.” In other words, if a creditor knows about the bankruptcy 26 and deliberately acts in a way that violates the stay, the violation is willful regardless of whether the creditor believed (in good faith) 27 that it had a right to act. 1

2 That said, the willfulness inquiry can still involve factual nuance – for example, whether and when the creditor actually received notice of the filing in time to 3 prevent the action. Here, there is room for factual debate as to EBI’s knowledge 4 and intent at the time of the alleged improper debits. Plaintiffs contend that EBI had actual notice by January 30, 2023, yet the continuation of automated debits in 5 February or March could have been the result of a brief lapse in communication or 6 clerical error rather than a conscious decision to flout the stay.

7 Notably, once EBI unquestionably became aware of the issue (no later than when 8 it filed its Proof of Claim on March 1, 2023), EBI undertook no further collection actions outside the bankruptcy case. The record is clear that after the initial post- 9 petition incident, EBI’s only course was to participate in the Chapter 13 plan 10 administration – it did not harass Plaintiffs with phone calls, did not file a separate lawsuit, did not repossess any property, etc. 11

12 All payments after that point came through the Trustee’s plan distributions. These facts permit an inference that any stay violation was technical and short-lived, not 13 willful in the egregious sense. While intent in the § 362(k) context does not require 14 a specific intent to violate the stay, it does require that the actor meant to do the act which violates the stay. 15 16 A genuine issue of fact exists as to whether the timing and circumstances of the postpetition debits demonstrate a willful act or a promptly corrected oversight. 17 Given the ambiguities – for example, whether an automated debit that occurred just 18 days after notice was sent could have been stopped in time – the determination of willfulness should be reserved for trial. 19 20 Id., pp. 5-6. 21 Uncontested Material Facts 22 After reviewing the record, including Debtor-Plaintiffs’ Statement of Facts (dkt. #67) and 23 Defendant’s Statement of Facts (dkt. #70)1, the court finds that the following material facts are 24 uncontested: 25 26 1 Defendant failed to comply with Local Civil Rule 56(c) by not submitting a separate statement admitting, denying, 27 or qualifying Debtor-Plaintiffs’ proposed material facts with record citations. As such, Debtor-Plaintiffs’ Statement of Facts (dkt. #67) are deemed admitted as unopposed. 1 1. On June 6, 2021, Debtor Lizmarie Beltran Valdes entered into an installment sales 2 agreement with Defendant, which outlines the following financing repayment terms: twenty-three 3 (23) installments of $45.70 beginning on July 6, 2021, and a final installment of $45.92 ending 4 on June 6, 2023. See Bank. Case No. 23-00180, Claims Register, Proof of Claim No. 5-1, pp. 6- 5 10. 6 2. On January 27, 2023, Debtor-Plaintiffs filed a voluntary petition under Chapter 13 7 of the Bankruptcy Code. See Bank. Case No. 23-00180, dkt. #1. 8 3. The Debtor-Plaintiffs included “Mueblerias Berrios” in Schedule E/F as a 9 nonpriority unsecured claim in the amount of $296.00 as of petition date, that is, January 27, 10 2023. and in the Creditors’ Matrix. See Bank. Case No. 23-00180, dkt. 1, p. 27, item 4.5, and p. 11 69. 12 4. Defendant was notified of Plaintiffs’ bankruptcy petition. See Notice of Chapter 13 13 of Bankruptcy Case, Bank. Case No. 23-00180, dkt. #7; Certificate of Service, Bank. Case No. 14 23-00180, dkt. #9; Opposition to Summary Judgement, dkt. #69, p. 5 (Admission: “EBI had notice 15 of the bankruptcy (through the court’s notice of filing on Jan. 30, 2023)”). 16 5. On March 1, 2023, Defendant filed Proof of Claims No. 5, as secured in the 17 amount of $172.28. See Bank. Case No. 23-00180, Claims Register, Proof of Claim No. 5-1. 18 6. On March 22, 2023, Attorney Nanette Rickenbach entered a Notice of Appearance 19 on behalf of Defendant. See Bank. Case No. 23-00180, dkt. #19. 20 7. On May 11, 2023, the Plaintiffs filed an Amended Chapter 13 Plan dated May 11, 21 2025, addressing the objection that had been filed by Defendant to the prior plan and providing 22 for payment in full of Proof of Claim No. 5-1. See Bank. Case No. 23-00180, dkt. #24, pp. 3-4, 23 item 3.7. 24 8. On June 30, 2023, the court entered an order confirming the Amended Chapter 13 25 Plan dated May 11, 2025. See Bank. Case No. 23-00180, dkt. #36. 26 9. Following Debtor-Plaintiffs’ petition for relief, Defendant continued to debit funds 27 from Debtor-Plaintiffs’ bank account on account of the pre-petition debt. See Statement of 1 Uncontested Fact No. 8 and 9, dkt. #67, p. 3, ¶¶ 8-9; Unworn Declaration Under Penalty of 2 Perjury, dkt. #66-1, ¶ 4; Opposition to Summary Judgement, dkt. #69, p. 5 (Admission: “[O]ne 3 or more automatic loan payments were indeed processed from Plaintiffs’ account in the weeks 4 following the petition.”). 5 10. On June 12, 2023, the Debtor-Plaintiffs filed the instant adversary proceeding 6 complaint against the Defendant for willful violation of the automatic stay and unjust enrichment. 7 See dkt. #1. 8 11. As of this date, ten proof of claims have been filed for a total amount of 9 $90,251.67, of which $32,359.19 are secured. Therefore, the claim filed by Mueblerias Berrios 10 accounts for 0.002% of the claims filed, and 0.005% of the secured claims. See Bank. Case No. 11 23-00180, Claims Register. 12 Applicable Law and Discussion 13 (A) Standard for Motion for Summary Judgment 14 Under Fed. R. Civ. P. 56, made applicable to adversary proceedings under Fed. R. Bankr. 15 P. 7056, summary judgment is appropriate when “the movant shows that there is no genuine 16 dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. 17 Civ. P. 56(a). See also Fed. R. Bankr. P. 7056; Celotex Corp. v. Catrett, 477 U.S. 317, 322-332 18 (1986); In re Colarusso, 382 F.3d 51 (1st Cir. 2004); Alicea v. Wilkie, 2020 WL 1547064, 2020 19 U.S. Dist. LEXIS 57213 (D.P.R. 2020). 20 “The summary-judgment procedure authorized by Rule 56 is a method for promptly 21 disposing of actions in which there is no genuine dispute as to any material fact or in which only 22 a question of law is involved.” Charles A. Wright, Arthur R. Miller, & Mary K. Kane, 10A Federal 23 Practice and Procedure § 2712 (4th ed., West 2022). “Rule 56 provides the means by which a 24 party may pierce the allegations in the pleadings and obtain relief by introducing outside evidence 25 showing that there are no fact issues that need to be tried.” Id. (footnotes omitted). “[S]ummary 26 judgment is not a substitute for the trial of disputed fact issues. Accordingly, the court … is 27 empowered [only] to determine whether there are issues to be tried.” Id. (footnotes omitted). See 1 also Bernier v. Treasury Dep't (In re Bernier), 2022 WL 17096264, at *5, 2022 Bankr. LEXIS 2 3283, at *17-18 (Bankr. D.P.R. 2022) (“the court may only determine whether there are issues to 3 be tried, and it is improper if the existence of a material fact is uncertain.”). 4 “A dispute is 'genuine' if the evidence about the fact is such that a reasonable jury could 5 resolve the point in favor of the non-moving party.” Thompson v. Coca-Cola Co., 522 F.3d 168, 6 175 (1st Cir. 2008), quoting Sánchez v. Alvarado, 101 F.3d 223, 227 (1st Cir.1996). See also 7 Andino-Oquendo v. Federal National Mortgage Association, 2023 WL 2245072, at *1, 2023 U.S. 8 Dist. LEXIS 34375, at *2 (D.P.R. 2023), quoting Alicea, 2020 WL 1547064, at *2, 2020 U.S. 9 Dist. LEXIS 57213, at *4. A fact is material only if it is determinative of the outcome of the 10 litigation. See Hahn v. Sargent, 523 F.2d 461, 464 (1st Cir. 1975), cert. denied, 425 U.S. 904 11 (1976); Maymí v. P.R. Ports Auth., 515 F. 3d 20, 25 (1st Cir. 2008); In re Financial Oversight 12 and Management Board for Puerto Rico, 650 B.R. 334, 353 (D.P.R. 2023), quoting Vineberg v. 13 Bissonnette, 548 F.3d 50, 56 (1st Cir. 2008) (“Material facts are those that ‘possess[ ] the capacity 14 to sway the outcome of the litigation under the applicable law,’ and there is a genuine factual 15 dispute where an issue ‘may reasonably be resolved in favor of either party.’ ”). 16 When considering a petition for summary judgment, the court must review the evidence 17 in the light most favorable to the nonmoving party. See Thompson, 522 F.3d at 172, citing 18 Franceschi v. United States VA, 514 F.3d 81, 83 (1st Cir. 2008). The moving party invariably 19 bears both the initial as well as the ultimate burden in demonstrating its legal entitlement to 20 summary judgment. See Adickes v. Kress & Co., 398 U.S. 144, 157 (1970); López v. Corporación 21 Azucarera de Puerto Rico, 938 F.2d 1510, 1516 (1st Cir. 1991); Alicea, 2020 WL 1547064, at *2, 22 2020 U.S. Dist. LEXIS 57213, at *4. It is essential that the moving party explain its reasons for 23 concluding that the record does not contain any genuine issue of material fact in addition to 24 making a showing of support for those claims for which it bears the burden of trial. See Bias v. 25 Advantage International, Inc., 905 F.2d 1558, 1560–61 (D.C. Cir. 1990), cert. denied, 498 U.S. 26 958 (1990). 27 1 To that end, L. Civ. R. 56(b) requires a movant to include a separate, short, and concise 2 statement of material facts and to support each factual assertion with a citation to the evidentiary 3 record. See L. Civ. R. 56(b), (e). “The court may disregard any statement of fact not supported 4 by a specific citation to record material properly considered on summary judgment,” and “shall 5 have no independent duty to search or consider any part of the record not specifically referenced 6 in the parties’ separate statement of facts.” L. Civ. R. 56(e). 7 The moving party cannot prevail if any essential element of its claim or defense requires 8 trial. See López, 938 F.2d at 1516. In addition, the moving party is required to demonstrate that 9 there is an absence of evidence supporting the nonmoving party's case. See Celotex, 477 U.S. at 10 325; Prokey v. Watkins, 942 F.2d 67, 72 (1st Cir. 1991); Daury v. Smith, 842 F.2d 9, 11 (1st Cir. 11 1988). In its opposition, the nonmoving party must show genuine issues of material facts 12 precluding summary judgment; the existence of some factual dispute does not defeat summary 13 judgment. See Kennedy v. Josephthal & Co., Inc., 814 F.2d 798, 804 (1st Cir. 1987); Kauffman 14 v. Puerto Rico Telephone Co., 841 F.2d 1169, 1172 (1st Cir. 1988); Hahn, 523 F.2d at 464. A 15 party may not rely upon bare allegations to create a factual dispute but is required to point to 16 specific facts contained in affidavits, depositions, and other supporting documents which, if 17 established at trial, could lead to a finding for the nonmoving party. See Over the Road Drivers, 18 Inc. v. Transport Insurance Co., 637 F.2d 816, 818 (1st Cir. 1980). 19 The moving party has the burden to establish that it is entitled to summary judgment; no 20 defense is required where an insufficient showing is made. See López, 938 F.2d at 1517. The 21 nonmoving party need only oppose a summary judgment motion once the moving party has met 22 its burden. See Adickes, 398 U.S. at 159. 23 (B) The Automatic Stay – 11 U.S.C. § 362 24 The automatic stay provision is one of the fundamental debtor protections in the 25 Bankruptcy Code. It gives debtors a “breathing spell” from creditors and stops all collection 26 efforts, all harassment, and all foreclosure actions. H.R. Rep. No. 95-595, 95th Cong. 1st Sess. 27 340-342 (1977); S. Rep. No. 989, 95th Cong., 2d Sess. 54-55 (1978), reprinted in 1978 1 U.S.C.C.A.N. 5787, 5840, 6296-97. See also ICC v. Holmes Transp., Inc., 931 F.2d 984, 987 (1st 2 Cir. 1991); In re Smith Corset Shops, Inc., 696 F.2d 971, 977 (1st Cir. 1982), “It allows the debtor 3 to attempt a repayment or reorganization plan or simply be relieved of the financial pressures that 4 drove him into bankruptcy.” Id., In re Smith Corset Shops, Inc., 696 F.2d at 977. 5 Section 362 of the Bankruptcy Code provides that, upon filing for bankruptcy, a debtor is 6 immediately protected by an automatic stay that prohibits, inter alia, the “continuation ... or other 7 action or proceeding against the debtor that was or could have been commenced before the 8 [bankruptcy petition] or to recover a claim against the debtor that arose before the commencement 9 of the case under this title” and “any act to collect, assess, or recover a claim against the debtor 10 that arose before the commencement of the case ...” 11 U.S.C. § 362(a)(1) and (6). “This respite 11 enables debtors to resolve their debts in a more orderly fashion and at the same time safeguards 12 their creditors by preventing different creditors from bringing different proceedings in different 13 courts, thereby setting in motion a free-for-all in which opposing interests maneuver to capture 14 the lion's share of the debtor's assets.” Soares v. Brockton Credit Union (In re Soares), 107 F.3d 15 969, 975 (1st Cir. 1997) (citations omitted). “Section 362(a)(6) is intended to prevent creditor 16 harassment of the debtor in attempting to collect pre-petition debts. The conduct prohibited ranges 17 from that of an informal nature, such as by telephone contact or by dunning letters, to more formal 18 judicial and administrative proceedings that are also stayed under subsection (a)(1).” 3 Collier on 19 Bankruptcy ¶ 362.03[8][a] (16th ed. 2025). 20 “The automatic stay imposes on non-debtor parties an affirmative duty of compliance.” 21 Whitman-Nieves v. P.R. Fed. Credit Union (In re Whitman-Nieves), 519 B.R. 1, 8 (Bankr. D.P.R. 22 2014), quoting Otero-Lopez v. Dep't of Treasury of P.R. (In re Otero-Lopez), 492 B.R. 595, 607 23 (Bankr. D.P.R. 2013). To ensure compliance of the automatic stay, Section 362(k) of the 24 Bankruptcy Code provides the necessary means to redress its violation: “an individual injured by 25 a willful violation of a stay provided by this section shall recover actual damages, including costs 26 and attorneys' fees, and in appropriate circumstances, may recover punitive damages”. 11 U.S.C. 27 § 362(k)(1). “A debtor seeking damages under this section bears the burden of proving by a 1 preponderance of the evidence the following three elements: (1) that a violation of the automatic 2 stay occurred; (2) that the violation was willfully committed; and (3) that the debtor suffered 3 damages as a result of the violation.” Slabicki v. Gleason (In re Slabicki), 466 B.R. 572, 577-578 4 (1st Cir. BAP 2012), citing In re Panek, 402 B.R. 71, 76 (Bankr. D.Mass. 2009). 5 “A willful violation does not require a specific intent to violate the automatic stay.” In re 6 Otero, 492 B.R. at 607. “The standard for a willful violation of the automatic stay ... is met if 7 there is knowledge of the stay and the defendant intended the actions which constituted the 8 violation.” Fleet Mortgage Group v. Kaneb, 196 F.3d 265, 269 (1st Cir. 1999). “The debtor has 9 the burden of providing the creditor with actual notice. Once the creditor receives actual notice, 10 the burden shifts to the creditor to prevent violations of the automatic stay.” Id. (citation omitted). 11 “In cases where the creditor received actual notice of the automatic stay, courts must presume 12 that the violation was deliberate.” Id. (citation omitted). “A violation may also be willful if the 13 creditor’s original action in violation of the stay occurred without notice of the bankruptcy filing, 14 but it failed to take prompt action to remedy the violation after receipt of notice.” Hon. W. Homer 15 Drake, et al., Chapter 13 Practice & Procedure § 15:6 (June 2025 Update). Also see In re Abrams, 16 127 B.R. 239, 243-244 (9th Cir. BAP 1991); In re Combs, 2006 Bankr. LEXIS 3569, 2006 WL 17 6591825 (Bankr. N.D.Ga. 2006); In re Smith, 180 B.R. 311 (Bankr. N.D.Ga. 1995) (failure to 18 vacate judgment entered post-petition constituted a willful violation of the automatic stay); 19 Commercial Credit Corp. v. Reed, 154 B.R. 471, 476 (E.D.Tex. 1993) (“[A] creditor must act 20 immediately to restore the status quo once it learns that it has violated the stay.”); In re Warmer, 21 16 B.R. 216 (Bankr. N.D.Tex. 1981) (“A creditor has an affirmative duty to return the property 22 and restore the status quo once it learns its actions violated the stay.”); In re Miller, 10 B.R. 778 23 (Bankr. D.Md. 1981) (creditor has an affirmative obligation to return vehicle repossessed post- 24 petition; failure to do so constituted a willful stay violation and supported an award of damages); 25 In re Taylor, 190 B.R. 459, 461 (Bankr. S.D.Fla. 1995) (“once notice was given [to creditor] that 26 the petition relief had been filed, [he] had an affirmative duty to undo the technical violation.”).

27 1 (C) Discussion 2 As an introductory matter, the court notes that Defendant filed Proof of Claim No. 5-1 in 3 the amount of $172.28, that is, less than the $296.00 claimed by the Debtor in the Schedule E/F, 4 and that the amounts owed on account of Debtor’s pre-petition debt with Defendant were debited 5 directly from Debtors’ bank account. Therefore, the amounts deducted post-petition from 6 Debtor’s account appear to have been deducted from the amount owed. Moreover, the confirmed 7 plan provides for the full payment of Defendant’s claim, as a secured claim and for the amounts 8 filed. 9 The court will focus on whether summary judgment in favor of Debtor-Plaintiffs is 10 appropriate because the uncontested facts establish that Defendant violated the automatic stay 11 provisions of Section 362(a). Although the facts do not show significant harm, even if the court 12 were to finds in favor of Debtor-Plaintiffs, such a determination would only be considered after 13 a finding that the Defendant is liable for a violation of the automatic stay. 14 The key to determining liability hinges on whether Defendant had knowledge of the stay 15 and intended the actions which constituted the violation. Defendant has admitted having 16 knowledge of the automatic stay. Thus, the second part remains to be established. Specific intent 17 is not a requirement for there to be a willful violation of the automatic stay. However, the action 18 should have been “intended”. 19 The alleged collection actions were the post-petition deductions from debtors’ account. 20 The Defendant alleges that issues of timing and circumstances exist and given such ambiguities, 21 “for example, whether an automated debit that occurred just days after notice was sent could have 22 been stopped in time – the determination of willfulness should be reserved for trial.” dkt. #69, p. 23 6. Such an allegation must be weighed with the fact that the proof of claim filed by the Defendant 24 was for less than the amount scheduled by the Debtors. Thus, it appears that Defendant took an 25 affirmative action to undo the violation and follow bankruptcy procedures for the payment of its 26 debt.

27 ] Conclusion 2 In view of the foregoing, the court concludes that the Debtor-Plaintiffs have failed to 3 establish, at this juncture, that the Defendant intended the actions and did not take corrective 4 || action to undue the same. Therefore, Debtor-Plaintiffs’ Motion for Summary Judgment (dkt. #66) 5 hereby DENIED. 6 A status conference is hereby scheduled for January 26, 2026, at 10:00 AM. 7 IT IS SO ORDERED. 8 In San Juan, Puerto Rico, this 6" day of November 2025. 7 acre aque S. Lamoutte 10 unitdéd states Bankruptcy Judge 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 -11-