Rivera v. Lake Berkley Resort Master Ass'n (In re Rivera)

511 B.R. 6, 2014 WL 2458000, 2014 Bankr. LEXIS 2338
CourtUnited States Bankruptcy Court, D. Puerto Rico
DecidedMay 29, 2014
DocketBankruptcy No. 09-04089 (ESL); Adversary No. 11-00043 (ESL)
StatusPublished
Cited by5 cases

This text of 511 B.R. 6 (Rivera v. Lake Berkley Resort Master Ass'n (In re Rivera)) 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
Rivera v. Lake Berkley Resort Master Ass'n (In re Rivera), 511 B.R. 6, 2014 WL 2458000, 2014 Bankr. LEXIS 2338 (prb 2014).

Opinion

OPINION AND ORDER

ENRIQUE S. LAMOUTTE, Bankruptcy Judge.

This case came before the court on March 21, 2014 for an evidentiary hearing to determine the damages Leida Otero Rivera (“Plaintiff’) suffered as a consequence of the Defendants’ willful violation of the automatic stay. Partial judgment (Docket No. 58) had been entered for the Plaintiff on the issue of liability after the Defendants Lake Berkley Resort Master Association, Inc., The Manors at Lake Berkley Home Owners Association, Inc. and SRK Residential Communities, LLC, failed to show cause why Plaintiffs motion for partial summary judgment should not be granted on the issue of their liability for the willful violation of the automatic stay provisions (Docket No. 51). The Defendants’ default was entered for their failure to show cause (Docket No. 58). The court notes that the Defendants did not appear at the hearing on damages to defend their position. The hearing was held as sched[9]*9uled. The Plaintiffs testimony, which the court found credible, and the documents submitted constitute the evidence heard by the court.

Procedural Background

On February 14, 2011, the Plaintiff filed a verified complaint that initiated this adversary proceeding. The Defendants made their first appearance on March 21, 2011, when they requested through local counsel leave to temporarily file pleadings and other documents in physical form (Docket No. 13). On the very same date, the Defendants’ stateside attorney applied for admission pro hac vice (Docket No. 14). Both requests were granted by the court (Docket Nos. 15 and 16). Also on March 21, 2011, separate Answers to the Verified Complaint were filed by Lake Berkley Resort Master Association, Inc., The. Manors at Lake Berkley Home Owners Association, Inc. and SRK Residential Communities, LLC. See Docket Nos. 17, 19 and 21, respectively.

Thereafter, multiple requests for the continuance of the pretrial conference were filed, mostly by the parties jointly (Docket Nos. 28, 33, 37, 41 and 47). On October 25, 2012, the court continued the pretrial conference without a date (Docket No. 48). On August 5, 2013, the Plaintiff moved for partial summary judgment against Defendants for their willful violation of the automatic stay (Docket No. 50). On September 5, 2013 the court ordered the Defendants to “show cause within twenty one (21) days why partial summary judgment should not be entered in favor of plaintiff on the issue of liability for having willfully violated that automatic stay provisions” and “scheduling an evidentiary hearing on damages” (Docket No. 51). The Defendants did not reply to the court’s order to show cause, and on October 15, 2013, the Plaintiff moved the court to adjudicate the pending motion for partial summary judgment. The motion was granted (Docket No. 54).

Meanwhile, while this adversary proceeding was pending, a hearing was held on November 20, 2013 in the lead case, in which Plaintiffs main bankruptcy case was dismissed in open court due to her failure to make current payments to the Chapter 12 Trustee as per the terms of the confirmed plan. See Lead Case Docket No. 118. The Plaintiff moved the court to retain jurisdiction over the instant adversary proceeding in the lead case and in the instant case. See Lead Case Docket No. 122 and Docket No. 56. The motion pleaded with particularity the facts leading to the request and included the legal support for the same. On January 21, 2014, the court granted such request in the instant case. See Docket No. 57. On February 11, 2014, the court also granted such request in the lead case. See Lead Case Docket No. 124. The dismissal of a bankruptcy petition does not automatically divest the bankruptcy court of jurisdiction over an adversary proceeding. In re Morris, 950 F.2d 1531 (11th Cir.1992); In re Carrahar, 971 F.2d 327 (9th Cir.1992); Porges v. Gruntal & Co. (In re Porges), 44 F.3d 159, 162 (2nd Cir.1995); In re Lower Bucks Hosp., 471 B.R. 419 (Bankr.E.D.Pa.2012); Certain Underwriters at Lloyd’s, London v. ABB Lummus Global, Inc., 337 B.R. 22, 25 (S.D.N.Y.2005) (“[e]ven the dismissal of an underlying bankruptcy case does not automatically strip a federal court of jurisdiction over an adversary proceeding which was related to the bankruptcy case at the time of its commencement”). The bankruptcy court may retain jurisdiction over an action for damages under 11 U.S.C. § 362(k) despite the dismissal of the bankruptcy petition due to a default in payments. See Johnson v. Smith (In re Johnson), 575 F.3d 1079, 1083 (10th Cir.2009) (“[t]he great weight of case authority [10]*10supports our conclusion that a § 362(k)(l) proceeding remains viable after termination of the underlying bankruptcy case”). The dismissal of a bankruptcy petition does not validate a violation of the automatic stay. See In re D’Alfonso, 211 B.R. 508, 513 (Bankr.E.D.Pa.1997).

On January 21, 2014, the court entered a Partial Judgment against Defendants Lake Berkley Resort Master Association, Inc., The Manors at Lake Berkley Home Owners Association, Inc. and SRK Residential Communities, LLC, finding them to have violated the automatic stay provisions of 11 U.S.C. § 862(a), and scheduled an evidentiary hearing to be held on March 21, 2014 to determine the extent of the Plaintiffs damages. See Docket No. 58. The hearing was held on March 21, 2014. See Docket No. 61 (Audio File).

Findings of Fact

1. Leida A. Otero Rivera filed a Chapter 12 petition under the Bankruptcy Code on May 20, 2009. See Lead Case Docket No. 1.

2. The Plaintiff was living in the municipality of Aibonito, Puerto Rico, when she filed for bankruptcy.

3. The Plaintiff was in the business of poultry production for the Picú company.

4. The Plaintiffs late husband, Máximo Rodríguez, was also in the business of poultry production with the Plaintiff.

5. When the Plaintiff filed for bankruptcy on May 20, 2009, the Picú company had been closed for two years.

6. Defendant Lake Berkley Resort Master Association, Inc. is a non-profit corporation with standing to sue and be sued. Its address is 6220 South Orange Blossom Trail, Suite 105, Orlando, FL 32809. See Docket Nos. 1, ¶ 6, and 17, ¶ 6.

7. Defendant The Manors at Lake Berkley Home Owners Association, Inc. (“Manors at Lake Berkley HOA”) is a nonprofit corporation with standing to sue and be sued. Its address is 6220 South Orange Blossom Trail, Suite 105, Orlando, FL 32809. See Docket Nos. 1, ¶ 7, and 19, ¶ 7.

8. Defendant SRK Residential Communities, LLC (“SRK”) is a limited liability company organized under the laws of the State of Florida, and Stephen Klosterman serves as its President. See Docket No. 21, ¶ 79.

9. SRK administered both associations.

10. Defendant SRK Residential Communities, LLC voluntarily submitted to the jurisdiction of this Court.

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Cite This Page — Counsel Stack

Bluebook (online)
511 B.R. 6, 2014 WL 2458000, 2014 Bankr. LEXIS 2338, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rivera-v-lake-berkley-resort-master-assn-in-re-rivera-prb-2014.