Santana Olmo v. Quiñones Rivera (In Re Quiñones Rivera)

184 B.R. 178, 1995 U.S. Dist. LEXIS 10231, 1995 WL 431565
CourtDistrict Court, D. Puerto Rico
DecidedJune 13, 1995
DocketCiv. 95-1038(SEC)
StatusPublished
Cited by11 cases

This text of 184 B.R. 178 (Santana Olmo v. Quiñones Rivera (In Re Quiñones Rivera)) is published on Counsel Stack Legal Research, covering District 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
Santana Olmo v. Quiñones Rivera (In Re Quiñones Rivera), 184 B.R. 178, 1995 U.S. Dist. LEXIS 10231, 1995 WL 431565 (prd 1995).

Opinion

OPINION AND ORDER

CASELLAS, District Judge.

This case is before the Court on appeal from an Opinion and Order of the United States Bankruptcy Court for the District of Puerto Rico, Lamoutte, J., granting appel-lee’s motion for summary judgment and accordingly denying appellants’ discharge under 11 U.S.C. § 727(a)(4)(A). The parties agree that this Court has jurisdiction to entertain this appeal under 28 U.S.C. § 158(a) and Rules 8001(a) and 8002(a) of the Federal Rules of Bankruptcy Procedure.

PROCEDURAL BACKGROUND 1

Appellants filed a joint petition for relief under the provisions of Chapter 7 of the Bankruptcy Code on September 6, 1990. In its notice of the commencement of the suit, the Bankruptcy Court scheduled the Section 341(a) meeting of creditors for November 6, 1990, and consequently established the filing deadline for complaints under 11 U.S.C. § 523 and § 727 as January 7, 1991. At that time, Mr. Jesús Jiménez was appointed as trustee for the duration of the Chapter 7 proceedings. 2 For their part, appellants filed schedules in compliance with Bankruptcy Rule 1007 on November 2, 1991, listing their assets and liabilities. Among their liabilities, appellants included appellee Héctor Santana Olmo as an undisputed creditor with a claim for $385,000.00 plus interest, as a result of a judgment issued by the Commonwealth’s Superior Court in 1989. 3

On January 7, 1991, the last day to file objections under 11 U.S.C. § 727, appellee Santana Olmo filed a motion requesting an additional sixty (60) days to file objections to appellants’ discharge, pursuant to Bankruptcy Rule 4004(b). 4 The reason adduced as a justification for the request was that according to appellee’s records, and upon information and belief, further discovery was needed to expediently pursue the case. Appellee’s motion for an extension of time was not *182 served upon appellants. Nevertheless, on January 10, 1991, three days after appellee moved for additional time to file a complaint, the Bankruptcy Court granted his request via margin order. Meanwhile, unaware that appellee’s request had been granted, appellants filed on January 14, 1995 an opposition to said motion, attacking appellee’s statement regarding the perceived need for further discovery as an insufficient basis upon which to grant such an extension of time. Appellants further charged that no good cause was shown, as required by Bankruptcy Rule 4004(b), so as to warrant an additional sixty (60) day extension of the previous deadline.

The Bankruptcy Court seemingly agreed with appellants, at least in part, for on January 17, 1991 it limited the sixty (60) day extension originally granted to appellee to thirty (30) days, counting from the date of issuance of the order granting the original extension of sixty (60) days. The new deadline was therefore set to expire on February 9, 1991. 5 Despite the new deadline however, appellee’s complaint objecting to appellants’ discharge was not filed until March 4, 1991. In order to excuse this delay, appellee attached a verified statement from his then counsel attesting to the fact that he did not receive the margin order limiting the extension to thirty (30) days until after the thirty days had elapsed.

In essence, the complaint consisted of two separate objections to appellants discharge. The first, predicated on 11 U.S.C. § 727(a)(2)(A), charged that during the year prior to appellants’ bankruptcy petition, they allowed the holder of a second mortgage to acquire a piece of property owned by them for less than its value at a public sale, thereby hindering and delaying the trustee and creditors. In the alternative, appellee objected to the discharge on the grounds that appellants had failed to keep adequate financial records from which their financial condition could be accurately ascertained. 11 U.S.C. § 727(a)(3).

On January 13, 1992, the Bankruptcy Court, addressing appellants’ motion to dismiss the complaint as time-barred, issued an opinion and order vacating its order shortening the extension of time to thirty days and restoring its original sixty (60) day extension, thereby allowing appellee’s complaint as timely and denying appellants’ motion to dismiss on these grounds. Thereafter, appellee requested leave to amend the complaint to include an additional objection to discharge based on 11 U.S.C. § 727(a)(4)(A), alleging that appellants knowingly and fraudulently made false oaths in connection with their schedule of assets and liabilities filed in this case. Over appellants’ objections, the Bankruptcy Court on June 16, 1993 entered an interlocutory order allowing the amendments to the complaint.

On November 16, 1993, appellee filed a motion for summary judgment alleging that, specifically as to the causes of action under sections § 727(a)(3) and § 727(a)(4)(A), there existed no material facts in controversy and that the same could be decided as a matter of law. On January 5, 1994 appellants opposed said motion. On October 12,1994, the Bankruptcy Court entered the opinion and order subject of this appeal, denying appellants’ discharge pursuant to § 727(a)(4)(A) and finding that appellants knowingly and fraudulently made a false oath by signing and filing their schedules and statement under penalty of perjury, even though the financial information contained therein was not complete and accurate. On November 1, 1994, judgment was entered in accordance with the Bankruptcy Court’s opinion and order.

As a preliminary matter, the Court finds the procedural history of this case a bit worrisome. As noted above, the Bankruptcy Court improperly extended the deadline to file objections to discharge by an additional sixty (60) days without notice to appellants as required by Bankruptcy Rule 4004(b). See In re Coggin, 30 F.3d 1443, 1450 (11th Cir.1994). In addition, no hearing was scheduled in compliance with Rule 4004(b) to afford appellants an opportunity to present to the Court their objections to said extension. In fact, as the Bankruptcy Court granted the *183 requested extension only three days after appellee’s motion was filed, appellants were not even afforded the ten day period prescribed by Local Rule 311.5 to respond to appellee’s petition to the Court.

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Bluebook (online)
184 B.R. 178, 1995 U.S. Dist. LEXIS 10231, 1995 WL 431565, Counsel Stack Legal Research, https://law.counselstack.com/opinion/santana-olmo-v-quinones-rivera-in-re-quinones-rivera-prd-1995.