ENRIQUE S. LAMOUTTE, Bankruptcy Judge.
There are several interrelated issues pending in this bankruptcy case and in adversary proceeding number AP 14-00175. All the controversies involve the debtor, Teresa Guillen Lugo (hereinafter the "Debtor" or "Plaintiff"), and creditors Héctor Baez Rivera, Nancy Casanova Vázquez and Ileana Fontanez, Esq. (hereinafter referred to as "Creditors" or "Defendants"). Creditors rights in this case stem from a judgement entered in Civil case number EAC2007-0500 in the amount of $216, 760.73. Collection of the judgment within the bankruptcy proceedings has generated issues on the extent of the automatic stay, and the responsibility of the conjugal partnership and the non-filing spouse to satisfy the same.
The issues pending in the bankruptcy case are the creditors' motion for clarification of the protection granted by the automatic stay, creditors' motion requesting the lift of stay regarding the private property of the non-debtor spouse, and the Debtor's objection to the proof of claim filed by the creditors.
The Motion Requesting Order Clarifying Protection Granted by Automatic Stay filed by creditors Héctor Baez Rivera, Nancy Casanova Vázquez and Ileana Fontanez, Esq. (Docket No. 105) contends that the automatic stay does not protect Mr. Victor Roberto Fernández, the non-filing spouse, nor his private property, against the Creditors' collection efforts, which are based on a final state court judgment. The Debtor filed her Opposition to "Motion for Order Clarifying Protection Granted by Automatic Stay (Docket No. 121). The Creditors' Motion Requesting Lifting of Stay with Regard to Non-Debtor Spouse and His Private Property (Docket No. 138) and the Debtor's Opposition to Baez and Casanova's Motion for Relief from Stay and Memorandum of Law in Support Thereof in which the Debtor argues that the Creditors' claim is owed by the conjugal partnership formed between Debtor and her husband, Mr. Fernández, without joint and several liability of Mr. Fernández. The Debtor alleges that the Creditors have a community claim pursuant to section 11 U.S.C. §101(7) and that the same will be repaid and discharged through the Chapter 13 plan with community property for the benefit of the conjugal partnership and the non-filing spouse (Docket No. 147). The Creditors filed a Brief in Support of Motion Requesting Lifting of Stay with Regard to Non-Debtor Spouse and his Private Property. (Docket No. 157). The Debtor and Mr. Victor Fernández also filed their Reply as to Movant's Brief (Docket No. 164).
On August 22, 2017, the Debtor's discharge under 11 U.S.C. §1328(a) was entered (Docket No. 199). The Debtor's discharge in the lead case has mooted the Creditors' contention that the automatic stay does not protect Mr. Victor Roberto Fernández, the non-filing spouse, nor his private property, against their collection efforts which are based on a final state court judgment. As explained below, the final decision ("Sentencia") issued by the Supreme Court of Puerto Rico revoked the decision allowing the Creditors to take action and collect from the private property of the non-filing spouse, and stayed all actions until the automatic stay is lifted by this court. However, the legal issue whether the non-Debtor and his private property and the conjugal partnership were protected by the automatic stay is not moot in its entirety and is intertwined with the adversary proceeding which is for an alleged violation of the automatic stay pursuant to 11 U.S.C. §362(a)(2) and (6).
The court has jurisdiction pursuant to 28 U.S.C. §§ 1334(b) and 157(a). This is a core proceeding pursuant to 28 U.S.C. §157(b)(1) and (b)(2). Venue of this proceeding is proper under 28 U.S.C. §§ 1408 and 1409.
The travel of this case before the state (Puerto Rico) courts and the bankruptcy court has a convoluted history. The same is detailed to place the current issues in perspective.
The Debtor filed a Chapter 13 bankruptcy petition on July 3, 2012. The Debtor included the Creditors' claim as disputed in Schedule F-Creditors Holding Unsecured Non-Priority Claims and disclosed that the claim was incurred as part of a December 2011 Judgment for damages on account of civil complaint against the legal partnership of Debtor and Mr. Victor Fernández. The amount of the claim for each claimant was $107,000 for a total amount of $214,000 (Docket No. 1, pg. 28). The court notes that the Debtor has no creditors holding unsecured priority claims to report on Schedule E. On October 22, 2012, the Creditors filed proof of claim #4-1 in the amount of $216,760.73 plus legal interest originating from a final state court Judgment in civil case #EAC 2007-0500;
On July 17, 2014, the Debtor filed an adversary proceeding (Adversary proceeding No. 14-00175) against Hector Baez Rivera; Nancy Casanova and Ileana Fontanez premised upon an alleged willful violation of the automatic stay pursuant to 11 U.S.C. §362(a)(2) and (6). On October 20, 2014, the Debtor filed an Objection to Proof of Claim No. 4 Filed by Hector I. Baez Rivera and Nancy Casanova Vazquez requesting the disallowance of proof of claim 4-1 since the Debtor and her spouse filed on August 24, 2012 a relief of judgment complaint in state court requesting that the Judgment be revoked or in the alternative that the disbursement of funds to Creditors be held in abeyance (Docket No. 57).
On October 28, 2014, the Debtor filed a Motion for Order to Stop Trustee Disbursements to Hector I. Baez Rivera and Nancy Casanova Vazquez (Docket No. 61). On November 10, 2014, the Creditors filed their Opposition to Debtor's Urgent Motion to Stop Chapter 13 Trustee's Disbursements to Hector I. Baez Rivera and Nancy Casanova Vazquez on the grounds that the Relief from Judgment was denied by the state court and the appeal was dismissed by the Appellate Court. A certiorari petition was filed by Mr. Fernández with the Supreme Court of Puerto Rico and was pending adjudication at the time. The Creditors also request the Court to order the Chapter 13 Trustee to continue making the disbursements which were stayed on October 3, 2014 (Docket No. 62). On November 26, 2014, the Court denied the motion filed by the Debtor requesting to stop disbursement to the Creditors (Docket No. 63).
On December 4, 2014, the Court ordered that the Debtor's objection to claim #4 filed by Creditors and their reply (Docket No. 62) be continued without a date pending a decision in AP 14-00175 (Docket No. 64). On December 22, 2014, the Creditors filed a Motion for Entry of Order, Instructing Chapter 13 Trustee to Make Disbursements as per Confirmed Plan Dated November 29, 2012 requesting the Court to order the Chapter 13 Trustee to make the payments for the months of October, November and December 2014 and to make future payments to the Creditors (Docket No. 66).
On January 30, 2015, the Court ordered the Trustee to state his position on the Motion requesting entry of Order filed by the Creditors (Docket No. 66) within fourteen (14) days (Docket No. 71). On February 12, 2015, the Chapter 13 Trustee filed a Motion to Comply with Court Order informing the following: (i) the Trustee disbursed to Creditors the amount of $4,970.61; (ii) to avoid erroneous disbursements, and consequently a process to recover funds, the Trustee stopped making disbursements to Creditors after the objection to claim was filed by Debtor. The funds are reserved in the case; and (iii) if the Court understands that the funds must be distributed to Creditors, the same will be disbursed on the next disbursement date. However, if the Court agrees with the Trustee's determination of not making disbursements due to the allegations in the contested matter, then the funds will be reserved until the resolution of Debtor's objection to claim or until a Court Order is entered (Docket No. 74). On February 23, 2015, the court denied the motion filed by the Debtor requesting entry of Order for the Trustee to make disbursements (Docket No. 76), without prejudice to the Debtor may renew request at the hearing being scheduled to consider the motion for post confirmation modification (Docket No. 68) (Docket No. 76). On April 7, 2015, the Creditors filed a Supplement of Their Reply to Debtor's Objection to Claim No. 4 as Filed at Docket No. 62 and Request for an Order to the Chapter 13 Trustee to Continue the Disbursements (Docket No. 79). On April 8, 2015, a hearing was held in which, amongst other matters, the motion to order Trustee to make disbursements (Docket No. 66) was denied for the reasons stated in open court. (Docket No. 81).
On November 2, 2015, the Creditors filed a Motion for Entry of Order, Instructing Chapter 13 Trustee to Make Disbursements as per Confirmed Plan (Docket No. 98). On November 6, 2015, the Trustee filed his Position as to Motion for Entry of Order, Instructing Chapter 13 Trustee to make Disbursements as per Confirmed Plan disclosing that he did not have an opposition to said request (Docket No. 99).
On November 23, 2015, the Creditors filed a Motion Requesting Order Clarifying Protection Granted by Automatic Stay arguing that the automatic stay does not protect Mr. Victor Roberto Fernández, the non-filing spouse nor his private property against the Creditors' collection efforts which are based on a final state court judgment (Docket No. 105). On December 2, 2015, the Creditors filed a motion for an Entry of Order Requesting that Payments to Creditor be Resumed and that Funds Held in Escrow be Released (Docket No. 107) and the same was granted on December 9, 2015 (Docket No. 113). On December 9, 2015, the Court granted Debtor's motion to modify the confirmed plan and to confirm the amended plan dated November 10, 2015 (Docket No. 114).
On December 25, 2015, the Debtor filed an Opposition to "Motion for Order Clarifying Protection Granted by Automatic Stay arguing as follows: (i) under the Rooker-Feldman doctrine, the Puerto Rico Supreme Court's determination that the Creditors' claim is strictly owed by the Guillen and Fernández conjugal partnership is precluded from collateral attack. The Puerto Rico Court of Appeals on April 12, 2013 ". . . clarified that the conjugal partnership was protected by the automatic stay, subsequent proceedings before the Puerto Rico Supreme Court strictly entailed a determination whether there was joint and several liability of Mr. Fernández, independent of the conjugal partnership liability, that could allow collection against him, such as in cases of independent co-debtors. The Supreme Court answered that question in the negative;" (ii) the Supreme Court held that the debt's conjugal partnership nature impeded collection from Mr. Fernández's private property; and (iii) the conjugal partnership is subjected to the bankruptcy proceeding and its property and income are satisfying the Creditors' claim. Moreover, the Creditors' claim is being paid with disposable income that is generated by both the conjugal and private property of both spouses (Docket No. 121).
On March 18, 2016, a hearing was held as to the Creditors' motion requesting Order clarifying protection granted by the automatic stay (Docket No. 105) and the Debtor's opposition (Docket No. 121). The Debtor consents that the automatic stay does not extend to the private property of Mr. Fernandez, but that the liability on the debt is subject to the decision by the Supreme Court of Puerto Rico. The Bankruptcy Court stated that it will not review decisions by the Supreme Court of Puerto Rico under the Rooker-Feldman doctrine (See Docket No. 128). The court stated that the matter was taken under advisement and will be decided together with matters pending in AP 14-00175 (Docket No. 132).
On April 16, 2016, the Creditors filed a Motion Requesting Lifting of Stay with Regard to Non-Debtor Spouse and His Private Property pursuant to the Supreme Court's Judgment which proposed the alternate option that this Court lift the stay regarding Mr. Fernández's privately held property (Docket No. 138). On May 2, 2016, the Debtor filed her Opposition to Baez and Casanova's Motion for Relief from Stay and Memorandum of Law in Support Thereof arguing as follows: (i); the Debtor and her husband, Mr. Fernández, as co-administrators of the conjugal partnership, executed the sales contract in favor of the Creditors. The contract was for the benefit of the conjugal partnership; (ii) "[a]s was stated by the Puerto Rico Supreme Court judgment dated June 10, 2015, considering that Guillen and Fernández acted in benefit of the [c]onjugal [p]artnership, and in representation of the same, it is forceful to conclude that the judgment issued by the [i]nstant [c]ourt was imposed upon the [c]onjugal [p]artnership, and not upon Debtor Guillen and Mr. Fernández [i]n their personal capacity. To be clear, there is no joint and several liability of Mr. Fernández, independent of the conjugal partnership liability, which could allow collection against him, such as in cases of independent codebtors, such as in the case of credit contracts in which each spouse expressly becomes jointly and severally obligated to the creditor;" (iii) the Creditors' claim is owed solely by the conjugal partnership formed between the Debtor and Mr. Fernández, without joint and several liability of Mr. Fernández. The distinction between the conjugal partnership and its members precludes the presumption of joint liability between the individual spouses and the conjugal partnership.
On May 10, 2016, a hearing was held as to the Creditors' motion requesting relief from the automatic stay in which the final hearing was continued to July 5, 2016 and the thirty (30) day determination period was waived. The movant was ordered to file a legal memorandum within thirty (30) days (Docket No. 149). On May 13, 2016, the Creditors filed a Motion Requesting that Order be Entered Lifting Stay as to Party that Did Not Oppose Creditors' Motion (Docket No. 153). On May 17, 2016, Mr. Fernandez filed a Motion Adopting by Reference Opposition to Creditors Baez and Casanova's Motion for Relief from Stay and Memorandum of Law in Support Thereof (Docket No. 155). On May 18, 2016, Mr. Fernandez filed his Opposition to Motion for Entry of Order Lifting Stay against respondent and his private property (Docket No. 156).
On June 8, 2016, the Creditors filed a Brief in Support of Motion Requesting Lifting of Stay with Regard to Non-Debtor Spouse and his Private Property contending the following: (i) the Supreme Court of Puerto Rico in its June 10, 2015 Judgment did not determine that the debt owed by the Debtor and her husband was a conjugal debt owed solely by the conjugal partnership and not by the individuals that comprise the conjugal partnership; (ii) in the case of
On July 8, 2016, the Debtor and her non-filing spouse filed a Reply as to Movant's Brief in Support of Motion Requesting Lifting Stay with Regard to Non-Debtor Spouse and His Private Property based upon the following: (i) the Puerto Rico Supreme Court has already adjudicated that the debt is a conjugal debt, without joint and several liability of Mr. Fernandez; (ii) the Supreme Court in its June 10, 2015 Judgment held that, ". . . the debt at issue was a conjugal debt, that it was included in Debtor's bankruptcy case and that for such reason, the automatic stay protected both spouses, unless there was a contrary order of this Honorable Court concerning the stay's procedural application;" (iii) joint and several liability is never presumed, it has to be clearly expressed for the same to be valid pursuant to Article 1090 of the PR Civil Code, 31 L.P.R.A. §3101; (iv) the Supreme Court has established that if the action or conduct of a spouse (inclusive of non-contractual claims) provides economic benefit to the conjugal estate, the liability will also lie with the conjugal estate.
On August 3, 2016, an evidentiary hearing regarding the Creditors' motion for relief from stay and the Debtor's opposition was held in which counsel for the parties argued their respective positions. Moving Creditors requested to lift the stay as to Mr. Fernandez and his private property because the Supreme court of Puerto Rico determined that the stay was in effect until the bankruptcy proceedings conclude or the stay is lifted. Debtor's counsel alleges that it is a conjugal partnership debt and not of the individuals constituting the conjugal society and that the conjugal partnership is protected under §362(a). Debtor's counsel was ordered to submit copy of Court of Appeals of Puerto Rico judgment dated April 12, 2013 within five (5) days. Thereafter, the matter would be deemed submitted (Docket No. 170).
The first issue that the court must determine is to whom do the provisions of the automatic stay pursuant to 11 U.S.C. §362(a) apply in the case in which only one of the spouses files for bankruptcy and the economic regime of the marriage is the conjugal partnership pursuant to the provisions of the PR Civil Code. Determining the extent of the automatic stay provisions is the basis for all pending issues in the bankruptcy case and the adversary proceeding. This issue has been the subject of extensive litigation in the state courts. The court will provide an overview of the various state court judgments and orders/resolutions that have addressed the same.
On August 9, 2007, the Creditors filed a complaint in state court (Case No. EAC 2007-0500) against the Debtor and her husband requesting that they comply with a purchase sale contract, and in the alternative, that the contract be voided and that damages be awarded. On August 16, 2010, the court determined that the Debtor and her husband acted in bad faith and incurred in serious deceit by deliberately portraying that the plot of land they sold to the Creditors could be segregated, when in fact they knew that the plot was in an agricultural conservation area, and thus segregation was not possible. On December 16, 2011 a final Judgment was rendered by the Court of Appeals modifying the Court of First Instance, Caguas Part's Judgment only as to the amounts that had been awarded for damages and mental anguish and the amount of attorney's fees. The Appellate Court affirmed the remainder of the state court's Judgment which held that Mr. Victor Fernández and Teresa Guillen incurred in serious deceit ("dolo causante" and not "dolo incidental") pursuant to Article 1222
On July 3, 2012, Mrs. Teresa Guillen Lugo filed her Chapter 13 bankruptcy petition.
On September 4, 2012, Mr. Victor Fernández requested the state court to stay the proceedings in case #EAC-2007-0500. The state court ordered that the proceedings be stayed and reserved its jurisdiction to enact its reopening at any time. On September 18, 2012, the Creditors/Defendants filed a Motion for Reconsideration in state court requesting that the proceedings should only be stayed as to the Debtor in case No. 12-05293. On September 25, 2012, the state court rendered an Amended Resolution to stay proceedings only as to Debtor Teresa Guillén Lugo, and to continue proceedings against Victor Fernández and the conjugal partnership. The Amended Resolution was notified to the parties on October 9, 2012.
On September 28, 2012, Mr. Victor Fernández filed in state court a Motion in Opposition for Reconsideration requesting that the proceedings be stayed to protect the property of the conjugal partnership comprised of the Debtor and Mr. Victor Fernández. On October 1, 2012, the Creditors filed a Response to the Motion in Opposition to Reconsideration requesting that the proceedings be stayed only as to the Debtor Teresa Guillén Lugo. On October 12, 2012, Mr. Victor Fernández filed a Request for Reconsideration of the Order of September 4, 2012-10-12 requesting that the Order from the Federal Court staying the proceedings be complied with to protect the assets of the conjugal partnership comprised of Teresa Guillén Lugo and Victor Fernández Ramos. On October 17, 2012, the Creditors filed their Opposition to "Request for Reconsideration of the Order of September 4, 2012-10-12 requesting the state court to deny Mr. Fernández's reconsideration request because the same is contrary to the law. On October 18, 2012, the state court denied Mr. Fernández's request for reconsideration.
On October 30, 2012, Mr. Fernández filed a certiorari petition before the Puerto Rico Court of Appeals requesting that the September 25, 2012 Amended Resolution be revoked and for compliance with the Order from Federal Court staying the proceedings to protect the property of Teresa Guillén Lugo, Victor Fernández and the conjugal partnership constituted by them
On June 5, 2013, Mr. Fernández filed a certiorari of the Amended Judgment to the Supreme Court of Puerto Rico requesting compliance with the automatic stay order regarding the proceedings to execute the Judgment against Mrs. Teresa Guillén Lugo, her husband, Mr. Víctor Fernández Ramos and the conjugal partnership comprised by them be stayed.
On June 10, 2015, the Supreme Court rendered its Judgment revoking the Amended Judgment of the Court of Appeals and ordering that all the proceedings be stayed until the bankruptcy process which was initiated by Mrs. Guillén Lugo has culminated or the relief from the automatic stay is granted by the federal forum. The translated Supreme Court Judgment states as follows:
Whether the provisions of the automatic stay are extensive to the private property of the non-debtor spouse and, thus, protecting the same from collection is a related but different legal issue from whether a creditor is entitled to recover (collect on) a "community debt/claim" ("deuda ganancial") from the private assets of the non-debtor spouse (irrespective of whether the other spouse has filed a bankruptcy petition). A creditor must first determine whether it has a community claim based upon the type of debt it is owed and whether the community property is liable under state law. An overview of the pertinent sections of the Bankruptcy Code and the applicable state law will be discussed below.
The tern "debtor" is a defined term which ". . . means person or municipality concerning which a case under this title has been commenced." 11 U.S.C. §101(13). Only a person may file a voluntary petition under chapters 7, 11, 12 and 13. 11 U.S.C. §109. The term "person" is a defined term which ". . . includes individual, partnership, and corporation, but does not include governmental unit . . ." 11 U.S.C. §101(41). Only individuals may file for bankruptcy under Chapter 13. 11 U.S.C. §109(e). The conjugal partnership or community property are not considered as entities for the purpose of commencing a case.
Once a married debtor files a bankruptcy petition (without her or his spouse) an estate is created, which consists of both the debtor's separate property and community property pursuant the provisions of section 541(a)(2). Section 541(a)(2) provides that the commencement of a case creates an estate, comprised of property which includes:
It is a well-established principle in Bankruptcy Law that property interests are determined pursuant to state law unless a particular federal interest requires a different result.
The term "community property" is not defined in the Bankruptcy Code but is employed to refer to those states in which marital property is regulated through a community property economic regime.
A community claim is defined as, ". . . a claim that arose before the commencement of the case concerning the debtor for which property of the kind specified in section 541(a)(2) of this title is liable, whether or not there is any such property at the time of the commencement of the case." 11 U.S.C. §101(7). To have a community claim, three (3) factors must be satisfied; namely: "(1) it must be a debt owed by one of the spouses; (2) it must be satisfiable from community property under applicable state law; and (3) the community property from which the debt could be satisfied under state law must be included within the assets which would pass to the debtor's bankruptcy estate, whether or not such assets exist at the commencement of the case. Thus, under the foregoing tests, whether a creditor holds a community claim will be determined by state law" Alan N. Resnick & Henry J. Sommer, 2
In the instant case, the claim in controversy satisfies all the three requirements for it to be a community claim since it is a debt owed by both spouses, the creditors may recover payment for that debt from the community property (or the assets of the conjugal partnership), and the community property has been included as part of the bankruptcy estate.
The liability in the community property is also determined on whether the state law classifies the claim as a "community debt" or as a "separate debt." "Under state law, there are two prevailing theories of liability in community property states. In those states that follow the `community debt' doctrine, the community is considered to have the capacity to incur debts, and is liable for an obligation of a spouse if that spouse was acting as an agent of the marital community. Otherwise, the obligation is classified as a `separate debt,' which typically results in restrictions on the type or amount of community property from which it can be satisfied, or wholly bars the claim from satisfaction from community property. The alternative theory of liability under state law rejects the community debt doctrine and attributes a liability to the spouse who incurs it. In these states, it is irrelevant (except for marshaling considerations) whether or not the debt was incurred for separate or community purposes. Debts are attributable to a particular spouse and may be satisfied from that spouse's separate and community property"
The PR Civil Code is the body of law that regulates the conjugal partnership in Puerto Rico, the assets that are considered community property and thus, pertain to the conjugal partnership, the types of debts that may be recovered against community property, and the types of debts that may be recovered against a spouse's separate property (private property).
Articles 1295 through 1326 of the PR Civil Code, 31 L.P.R.A. §§3621-3701, provide the legal structure for the juridical figure of the conjugal partnership in Puerto Rico.
Article 1296 of the PR Civil Code provides: "the conjugal partnership is created on the day of marriage, 31 L.P.R.A. §3622.
Article 1298 of the PR Civil Code provides:
Article 1299 of the PR Civil Code provides:
"The following is the separate property of each spouse:
Article 1301 of the PR Civil Code provides:
"To the conjugal partnership belong:
Article 1307 of the PR Civil Code provides:
Article 1308 of the PR Civil Code provides:
"Chargeable to the community property shall be:
Article 1310 of the PR Civil Code provides:
It is important to note that the Judgment ("Sentencia") from the Puerto Rico Supreme Court already determined that the Creditors' claim is a conjugal debt or a debt owed by the conjugal partnership.
A Dissenting Opinion was rendered by Associate Judge Roberto Feliberti Cintrón in which he concluded that a spouse's private assets respond in a supplementary manner for the conjugal debt that resulted from the intentional tortious conduct of both spouses. In his analysis, Judge Feliberti also concludes that the debt is a conjugal debt and therefore this type of debt is paid from the community (conjugal) assets. Judge Feliberti explains that contrary to the dispositions of the Appellate Court, there is no statutory provision which allows for community debts (conjugal debts) to be paid in a subsidiary (supplementary) manner from the private assets of the members that comprise the conjugal partnership. However, the conjugal partnership is liable (in a subsidiary manner) pursuant to Article 1310 of the PR Civil Code for the private debts of the husband or wife as long as the financial solvency of the partnership is not at risk, that is, that after the obligations of the conjugal partnership pursuant to Article 1308 of the PR Civil Code have been satisfied. He further explains that the private assets of Mr. Fernández would be liable if he were personally responsible for the debt such as in the case of an obligation in which there was joint and severally liable responsibility ("responsabilidad solidaria") as in the case of
After considering the interaction of applicable state law and bankruptcy code provisions, this court concludes that the provisions of the automatic stay are not extensive to the non-debtor spouse or to his private property. However, as discussed herein, the provisions of the automatic stay are extensive to community property pursuant to sections 362(a) and 541(a)(2). 11 U.S.C. §§ 362(a) and 541(a)(2). The automatic stay provisions of § 362(a) only protect the debtor and property of the estate.
In the instant case, the creditors' claim is a conjugal debt (or a community debt) and the provisions of the PR Civil Code do not provide for a conjugal debt (community property debt) to be satisfied (collected) in a supplementary manner from the private assets of a spouse.
The case of
In this case, requesting that the conjugal debt claim be satisfied from the non-debtor's private assets is inappropriate because the creditors are not going to be able to go against the private assets of Mr. Fernández pursuant to the provisions of the PR Civil Code (state law).
This court notes that a creditor may use 11 U.S.C. §1328(a)(2) as a mechanism to except a particular debt from discharge if it is a debt included in section §523(a)(2)
The creditor bears the burden to pursue the exception to dischargeability of a debt and objection to discharge within sixty (60) days of the first date set for the meeting of creditors in conformity with Fed. R. Bankr. P. 4007.
In view of the foregoing, the court concludes that the provisions of the automatic stay are not extensive to the non-debtor spouse or to his private property. However, the provisions of the automatic stay are extensive to community property pursuant to 11 U.S.C. §541(a)(2).
In reaching its conclusion the court differentiates the legal issues in this case, namely, whether the provisions of the automatic stay are extensive to the private property of the non-debtor spouse protecting the same from collection, and whether a creditor is entitled to collect on a community claim ("deuda ganancial") from the private assets of the non-debtor spouse as a purely state law issue (irrespective of whether one of the spouses has filed for bankruptcy protection). The classification of a debt (whether it is a community debt or a private debt) incurred during marriage affects the way a creditor may collect on the debt in conformity with state law.
Consequently, the court orders as follows:
1. The court grants the creditors' motion requesting clarification of the protection granted by the automatic stay and concludes that the automatic stay provisions are not extensive to the non-debtor spouse or to his private property. However, the automatic stay provisions do extend to community property.
2. Debtor's objection to the Creditors' proof of claim number 4 is denied. The claim is allowed as a community claim for the amount filed.
3. The motion to lift the automatic stay to allow collection action from the private property of the non-debtor spouse is denied as the debt is a conjugal debt, and pursuant to state law may not be satisfied from the private assets of the non-filing spouse.
IT IS SO ORDERED.
El dolo incurrido por los vendedores es del tipo causante, puesto que la información omitida y la representación hecha, especialmente al requerirle la gestión de la segregación y aportar el dinero para ello, en las circunstancias antes relatadas, incidían sobre una cuestión medular y esencial en esta contratación. Se trató de información que por su naturaleza, de haberla conocido el comprador, probablemente no hubiese entrado en esta transacción." (Exhibit 47, pg. 50).
The Appellate Court also determined the following in the Spanish language: "Por ser el dolo incurrido por los Fernández-Guillén uno de naturaleza causante, ello produce la nulidad del contrato, como correctamente concluyó el TPI, y, por consiguiente, la devolución de las contraprestaciones" (Docket No. 47, Exhibit A, pg. 51).
The court cites verbatim from the original document in Spanish for clarity purposes. The same applies to all future references in Spanish.
Dado lo anterior, procede dejar sin efecto el dictamen recurrido y devolver el caso al foro de primera instancia para que, en primer lugar, paralice los procedimientos según dispone la Ley de Quiebras y, en Segundo lugar acoja en dicha paralización a la Sra. Teresa Guillén, el Sr. Victor Fernández y la Sociedad Legal de Gananciales compuesta por ambos, reservándose jurisdicción para decretar su reapertura cuando así lo amerite.
Por todo lo anterior, se expide el auto de Certiorari y se dicta sentencia mediante la cual se revoca la orden recurrida. Devolvemos el caso al foro de origen para que actúe de conformidad con lo antes expuesto" (Adversary Procceding 14-00175, Docket No. 31-8, pgs-14-15).
The conclusion of the Opinion in Agreement reads as follows in the Spanish language:
"En consecuencia con lo anterior, los esposos Fernández-Guillén incurrieron en conducta dolosa grave. Es decir, participaron en los actos deliberados que propiciaron en los actos deliberados que propiciaron el vicio en el consentimiento de los recurridos y la eventual nulidad del negocio. De este modo, se conjugaron los requisitos cardinales del dolo grave que provocan la captación del consentimiento en la formación del contrato y permiten su nulidad, según dispone el Art. 1222 del Código Civil. A base de ello, entendemos que la conducta dolosa antes descrita sobre la cual se asienta la reclamación en este caso no debe quedar impune. Las circunstancias exigen que concibamos medidas especiales de justicia y equidad para atender los perjuicios sobrevenidos a los recurridos como resultado de la nulidad contractual que, de otro modo, quedarían al descubierto aun cuando existan haberes en el patrimonio privativo. `La equidad, como se sabe, quiere decir algo que es justo.'
En situaciones extremas como la presente, no existe justificación para que uno de los esposos se escude detrás del manto ganancial con el propósito de evitar responder con sus bienes privativos por daños deliberadamente ocasionados mediante sus propios actos. Opinamos, por lo tanto, que en escenarios de responsabilidad ganancial por la conducta intencional grave de los esposos que resulte en el menoscabo de derechos, el perjudicado tiene la potestad de reclamar el resarcimiento de sus daños subsidiariamente de los bienes privativos de los cónyuges" (Lead case, Docket No. 121, pgs. 49-51.
Moreover, "[a] misrepresentation by a debtor of his or her intention to perform contractual duties, however, may be a false representation under section 523(a)(2)(A). Thus, section 523(a)(2)(A) may make a creditor's claim nondischargeable if the debtor had no intention of performing any of the obligations under the contract. This intent may be inferred from the fact that the debtor failed to take any steps to perform under the contract."
