P.R. Electric Power Authority v. Cintron (In Re Cintron)

447 B.R. 82, 2011 WL 291837
CourtUnited States Bankruptcy Court, D. Puerto Rico
DecidedJanuary 28, 2011
Docket13-10689
StatusPublished

This text of 447 B.R. 82 (P.R. Electric Power Authority v. Cintron (In Re Cintron)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Puerto Rico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
P.R. Electric Power Authority v. Cintron (In Re Cintron), 447 B.R. 82, 2011 WL 291837 (prb 2011).

Opinion

OPINION AND ORDER

ENRIQUE S. LAMOUTTE, Bankruptcy Judge.

This case is before the court upon a motion to set aside the Order granting the P.R. Electric Power Authority (hereinafter referred to as “PREPA” or “Plaintiff’) an extension of time to file an adversary proceeding to determine the dischargeability of a debt pursuant to 11 U.S.C. § 523 (Docket no. 45 in lead case) filed by Eli-phaz Sanchez Cintron (hereinafter referred to as “Debtor” or “Defendant”). PREPA filed an opposition to Debtor’s motion to vacate and set aside order on September 9, 2010 (Docket No. 48 in lead case). There is also an adversary proceeding which is before the court upon the motion to dismiss filed by Defendant on September 4, 2010 (Docket No. 8 in adversary proceeding) alleging that the complaint to determine dischargeability of a debt pursuant to 11 U.S.C. § 523 is time barred pursuant to Fed. R. Bankr.P. 4007(c) and that the Order entered by the court on August 23, 2010 (Docket No. 43 in lead case) should be vacated and set aside (Docket No. 45 in lead case). The P.R. Electric Power Authority (hereinafter referred to as “PREPA” or “Plaintiff’) filed an opposition to the motion to dismiss on September 10, 2010 (Docket No. 9). Debt- or’s motions to vacate and set aside Order in the lead case and the motion to dismiss on this adversary proceeding hinge on the same legal issues, and, thus, will be disposed of herein. For the reasons set forth below, Debtor’s motion to set aside order granting extension of time to file an adversary proceeding to determine the dis-chargeability of debt under Section 523(a)(2) and (a)(4) (Docket No. 45 in lead case); and Debtor’s motion to dismiss are hereby granted.

Facts and Procedural Background

Eliphaz Sanchez Cintron filed a Chapter 13 bankruptcy petition on April 28, 2010. Debtor included PREPA (“AEE”) in its Schedule F-Creditors Holding Unsecured Non-priority Claims as an unsecured creditor having a claim for $90,000.00. The clerk of the court issued the “Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors, & Deadlines” on April 29, 2010 and the same was sent to PREPA via first class mail on May 1, 2010 (Docket Nos. 5 & 7 in lead case). Amongst the dates and information disclosed in the notice the fol *84 lowing pertinent information was included: (i) the date of the meeting of creditors (May 28, 2010 at 2:30pm); (ii) the deadline to file a proof of claim for all creditors (August 26, 2010) and for governmental units (180 days after the filing date); and the date for the hearing on confirmation (June 23, 2010 at 9:00am). However, the notice issued by the clerk’s office included the following language: “Deadline to File a Complaint to Determine Dischargeability of Certain Debts” followed by a blank space. No further notice was issued by the clerk’s office regarding the deadline for filing dischargeability complaints. On May 17, 2010, PREPA filed proof of claim # 3-1 as an unsecured nonpriority creditor for services performed which amount to $132, 250.23. The 341 meeting of creditors was initially scheduled for May 28, 2010 (Docket No. 5 in lead case) and was rescheduled and closed on June 8, 2010 (Docket No. 22 in lead case).

On July 30, 2010, PREPA filed a motion requesting an extension of twenty-one (21) days, from July 30, 2010 until August 20, 2010, to file a complaint objecting to Debt- or’s discharge and/ or to determine the dischargeability of Debtor’s debt with PREPA arguing the following: (i) the “Notice of Chapter 13 Bankruptcy Case, Meeting of Creditors, & Deadlines” issued by the court does not give notice of the deadlines for filing complaints to determine the dischargeability of debts or to object to the discharge and the court has not issued any other notice regarding these deadlines; (ii) Fed. R. Bankr.P. 4004(a) and 4007(c) mandate that notice be given to creditors of the deadline to file complaints objecting to discharge and to determine the dischargeability of a debt; (in) Fed. R. Bankr.P. 2002(f) and (k) provide that at least 28 days’ notice of the time so fixed shall be given to the United States Trustee and all creditors; (iv) if the bankruptcy court sends a defective notice, then it can use its equitable powers pursuant to Section 105(a) of the Bankruptcy Code to allow late filed motions for extension of time to file complaints objecting to discharge and to determine the discharge-ability of the debt (citing South Dakota Cement Plant v. Jimco Ready Mix Co., 57 B.R. 396 (D.S.D.1986) and In re Anwiler, 958 F.2d 925, 927-929 (9th Cir.1992)); (v) creditors should not be penalized for the court’s failure to comply with statutory requirements; and (vi) creditors due process rights might be violated since they might be deprived of their property without adequate notice (citing South Dakota Cement Plant v. Jimco Ready Mix Co., 57 B.R. 396, 397-398 (D.S.D.1986) and City of New York v. New York, N.H. & H.R. Co., 344 U.S. 293, 297, 73 S.Ct. 299, 97 L.Ed. 333 (1953)) (Docket No. 35 in lead case).

On August 10, 2010, PREPA filed an adversary proceeding to determine whether part of its prepetition claim ($38,635.20) is nondischargeable pursuant to 11 U.S.C. § 523. The Plaintiff marked in the cover sheet accompanying the filing of the complaint that the nature of the suit was an objection to dischargeability based on Sections 523(a)(2), 523(a)(4) and 523(a)(6) 1 *85 PREPA alleges that Debtor tampered with the electric power equipment in his commercial property to bypass the meter and/or reduce the electric consumption reading of the meter and that his actions constitute undue use of electric power services which equate to actual fraud, larceny, and/or willful and malicious injury by Debtor to PREPA’s property (Docket No. 1 in adversary proceeding, p. 5).

Subsequently, Debtor on August 12, 2010 filed a motion objecting to PREPA’s request for an extension of time to file a complaint objecting to Debtor’s discharge, determine dischargeability of Debtor’s debt to PREPA, and/or object to the dis-chargeability of Debtor’s debt to PREPA which was based on the following: (i) PREPA filed its motion for an extension of time to file a complaint to determine dis-chargeability of a certain debt and/or discharge after the sixty (60) days after the initial scheduled date of the creditors meeting contrary to Fed. R. Bankr.P. 4004

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Cite This Page — Counsel Stack

Bluebook (online)
447 B.R. 82, 2011 WL 291837, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pr-electric-power-authority-v-cintron-in-re-cintron-prb-2011.