CATALA MORALES v. CONSEJO DE TITULARES DEL CONDOMINIO BOULEVARD DEL

OCR transcription for search; preserved printed pages are authoritative

Casejp7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 1 of 23
! IN THE UNITED STATES BANKRUPTCY COURT
9 FOR THE DISTRICT OF PUERTO RICO
3
4 | IN RE:
5 MIGUEL ANGEL CATALA MORALES : Case No. 03-12453-ESL
6 Chapter 13
Debtor.
7
8 | MIGUEL ANGEL CATALA MORALES
9 :
Plaintiff : Adv. Proc. No, 07-34
10 :
v.
11
12 || CONSEJO DE TITULARES DEL COND.
BOULEVARD DEL RIO II, ET ALS
13
Defendants
14
15
16 OPINION AND ORDER
17 This adversary proceeding is before the court on the motion for summary judgment filed
18 by Consejo De Titulares Del Condominio Boulevard Del Rio II (the “Defendant’”) on July 9,
19
2007. (Dkt. 15)’ (“Defendant’s Motion”). Miguel Angel Catala Morales (the “Plaintiff” or
20
1 “Debtor”’), filed an opposition to Defendant’s Motion and a cross-motion for partial summary
99 || judgment on October 29, 2007. (Dkt. 37) (“Plaintiffs Cross-Motion”). On November 27, 2007,
23 || the Defendant filed its reply in opposition to Plaintiff's Cross-Motion for summary judgment.
24 (Dkt. 44) (“Defendant’s Reply’). Plaintiff was granted leave to file a reply to Defendant’s
25
opposition to Plaintiff's Cross-Motion, which was filed on January 28, 2008. (Dkt. 50)
26
37 (“Plaintiff’s Reply”). The parties submitted their opposing statements of uncontested facts and
28
avruennicaren 73 ' Matters in the docket of the case will be referred to as “Dkt_”.
nD

Case:

ee Ww bt

10
U1
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 2 of 23

responses thereto, as required under Local Rule 56. (Dkt. 15, 38 & 44).* (“Plaintiff's Facts” and
“Defendant’s Facts”). The Plaintiff's Cross-Motion seeks to impose liability on Defendant for
willful violation of the automatic stay provisions in 11 U.S.C. § 362 of the Bankruptcy Code (the
“Code”’). For the reasons set forth below, Defendant’s Motion is hereby denied and Plaintiffs
Cross-Motion for partial summary judgment is hereby granted.
Factual Background

Debtor filed a chapter 13 petition on November 10, 2003 and the instant action on March
5, 2007.5 The Defendant was listed as a creditor in the petition schedules under the name of its
previous management company and duly authorized administrator as follows: McDougall
Management, Condominio Boulevard Dei Rio I, 500 Avenida Los Filtros, Apt. 85, Guaynabo,
P.R. 00971-0228. (Dkt. 1 4 8-9; Dkt. 15 Defendant’s Facts { 3).* Defendant’s current
management company is American Management Maintenance Corp. (“AMMC”). The

Defendant’s current administrator is Francisco Pagan Colon. (“Mr. Pagan”).° (Dkt. 15

? References to the parties’ reply briefs will be to “Dkt._ Plaintiff's Reply” and “Dkt. _ Defendant’s Reply”.
References to the parties’ opposing statements of uncontested facts shall be to “Dkt. _ Plaintiff Facts” and “Dkt. _
Defendant’s Facts”, followed by the paragraph and/or page number. References to the single exhibit filed by Plaintiff
will also say “Exhibit at 0000__”; references to Defendants’ exhibits will say “Exh.”

> Debtor filed a plan and a post-confirmation modification which has been confirmed and is currently in
compliance.

“For purposes of this decision, the acts of any management company, administrator, attorney or employee of
Defendant's managers named in the pleadings, that was acting pursuantto authority granted by Defendant, will be treated
as if the acts were committed by, or the person is, the Defendant itself. Defendant has not disclaimed liability for the acts
of these agents, as well it can’t since it is settled law that Defendant is bound by, and is liable for, the acts of its agents.
See, In re Michaud, 2007 WL 135902 (Bkrtcy.D.N.H. 2007); in re MeCormack, 2003 B.R. 521 (Bkricy.D.N.H. 1996),
There is no dispute that Defendant has the authority to appoint and/or employ the agents identified in the pleadings to
conduct its business, or that Defendant has standing to sue and be sued on behalf of the Condominium. (Dkt. 15 Motion
{] 2-4, 8; Dkt 44 Defendant’s Facts, Exh. 9 (By-laws, art. 30 et. seq.)).

> Defendant’s administrator, Mr, Pagan, is the owner of Defendant’s current management company, AMMC.
He has been involved with Defendant’s management since late 2004, when he was employed by Caribbean Housing
Management Services, Inc. (“Carribean Management”), Defendant’s previous manager. (Dkt. 44 Defendant’s Facts J
43, Exh. 13 at 1).

2.

Case:

SE Ww wv

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 3 of 23

Defendant’s Facts { 4). After McDougall Management’s tenure but before AMMC’s current
tenure, Defendant’s management company was Carribean Management. Defendant is listed in the
petition as a secured creditor for $700 dollars in condominium maintenance fees.° (the “pre-
petition debt”) (Dkt. 1 {jf 7-9). The Defendant’s accounts show that at the time of the petition,
Debtor owed $711 dollars in maintenance fees, and Debtor agrees with that amount. (Dkt 15
Defendant’s Facts 6, Exh. II; Dkt. 38 Plaintiff's Facts | 21). There is no record that Defendant
filed a proof of claim in Debtor’s bankruptcy.

After the petition was filed, Defendant accounted for the pre-petition debt in the ordinary
course, and applied Debtor’s post-petition payments to the pre-petition debt. Debtor specifically
notified Defendant that Defendant was accounting for and collecting the pre-petition debt on at
least three occasions through a series of letters dated in March and September 2004, and June
2005. (the “Letters’”) (Dkt. 38 Plaintiff's Facts §f] 22, 23, & 25; Exhibit at 000023-25).

Defendant admits having received the Letters. (Dkt. 44 Defendant’s Facts 4] 22, 23 & 25, Exh.

I). The Letters indicated that payment for the post-petition fees was enclosed, and that the
outstanding balance was not paid because it represented the pre-petition debt scheduled in
bankruptcy. The Letters dated March 19, 2004 and June 25, 2005, included a copy of Debtor’s
petition. (Dkt. 44 Defendant’s Facts Jf 22, 23, 25, 43: Exh. I; Dkt. 38 Plaintiff's Facts, Exhibit at
000014-18). Mr. Pagan admitted having seen the Letters at around the time when the collection
complaint was filed. (Dkt. 38 Plaintiff's Facts, Exhibit at 000018). At all times relevant to this
action, Defendant’s account ledgers reflected the pre-petition debt as currently due. (Dkt. 44

Defendant’s Facts, Exh, IU-V). Defendant admits that it did not separately account for the pre-

6 See Case No. 03-12452-ESL at Dkt. 1, Schedule D. Despite being listed as a creditor, Defendant did not file
a proof of claim.

-3-

Case:

OO ~ A

.o)

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

N7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 4 of 23

petition debt and that it applied Debtor’s post-petition payments to his pre-petition debt. (Dkt. 44
Defendant’s Facts ff] 3-4, 31, 56). Defendant’s management company, AMMC, uses the

“yeachtree” accounting software in its computerized accounting system. (Dkt. 44 Defendant’s

Facts {{ 3, 31). The Defendant’s accounting software can be programmed to separately account
for Debtor’s other obligations, such as special assessment fees or “derramas”. (Dkt. 38 Plaintiff s
Facts 456, Exhibit at 000054; admitted at Dkt. 44 Defendant’s Facts { 56).

On February 8, 2006, Defendant’s attorney sent Debtor a collection letter demanding
prompt payment of $1,002 dollars plus legal interests, and threatening legal action. The
collection letter refers to post-petition arrears purportedly accumulated between February 2005
and February 2006 (excluding August 2005, no explanation is given), (Dkt. 44 Defendant’s Facts
| 3, Exh, II; Dkt. 15 Defendant’s Facts 4 9, Exh. V). On or about April 12, 2006, Defendant filed
a complaint for collection of money against Plaintiff before the General Court of Justice of the
Commonwealth of Puerto Rico, First Instance, Guaynabo Part. (alternatively referred to as the
“collection complaint” or the “collection action”) Defendant’s complaint sought the payment of
$1,207.35 for arrears up to April 2006, plus legal interests and fees, (Dkt. 15 Defendant’s Facts
qJ10-11; Dkt. 44 Defendant’s Facts € 37, Exh. VI).’ The amounts owed as provided in the
collection letter and complaint, included the pre-petition debt, plus post-petition arrears. (Dkt. 38
Plaintiff's Facts FJ 9, 11, 36-39, Exhibit at 000055-56; admitted at Dkt. 44 Defendant’s Facts ff
3-4, 36-39).

According to Defendant’s account ledger for Debtor, on February 1, 2005, Debtor had a

total debt of $584 dollars. By April 2006, the date of the collection action, Debtor’s total debt

? The Dkt. 15 Motion, 4] 11, erroneously states thai the mitial demand in the collection complaint was for
$1,720. However, the collection complaint demanded payment of $1,207 in maintenance fees, and $1,720 was the total
debt owed by Debtor as of September 2006, when Defendant moved for default judgment. (Dkt. 15 Defendants Facts,
Exh. VI, XI, XIV at 3-4; Dkt 44 Defendant’s Facts, Exh. V).

-4-

Case:

Oo Wo ~~

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

N7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 5 of 23

was $1,207 dollars. Debtor was obligated to pay monthly maintenance fees at the rate of $102.55

per month. Between February 2005 and April 2006, the time relevant to the collection action,

Defendant received approximately $812 dollars in post-petition maintenance payments from
Debtor. (Dkt. 44 Defendant’s Facts § 5, Exh. V).

On or about July 31, 2006, Debtor’s lawyer faxed a letter to Defendant’s attorney in the
collection action to notify Defendant’s attorney of Debtor’s bankruptcy proceeding and included
a copy of the Notice of Stay issued by this court. In that communication, Debtors’s lawyer also
threatened to seek relief in bankruptcy court if Defendant did not drop the collection action. (Dkt.
38 Plaintiff's Facts 44, Exhibit at 000031-32). Defendant admits that its attorney received the
July 31, 2006 letter from Debtor’s attorney and the copy of the Notice of Stay. (Dkt. 44
Defendant’s Facts | 44; Dkt. 15 Defendant’s Facts { 13, Exh. VI). On August 23, 2006,
Defendant’s attorney served Debtor’s attorney with a copy of Defendant’s complaint and notice
of hearing in the collection action. (Dkt. 38 Plaintiff's Facts J 45; Exhibit at 000033; admitted
at Dkt. 44 Defendant’s Facts J 45). This communication threatened to seek an order of default
judgment if Debtor did not appear at the collection action hearing scheduled for September 25,
2006. (Dkt. 38 Plaintiffs Facts, Exhibit at 000033).

By September 2006, Debtor’s total arrears had increased to $1,720 dollars. (Dkt. 44
Defendant’s Facts, Exh. XIV; XV at 3-4; Exh. V). On September 21, 2006, Debtor sent a letter to
Defendant reminding Defendant that Debtor was in bankruptcy. This letter included payment of
$1,025.50 dollars corresponding to post-petition arrears. Based on Debtor’s calculations, he
excluded from payment approximately $695 dollars representing the pre-petition debt. The next
day, September 22, 2006, Debtor’s attorney faxed a letter to Defendant’s counsel to inform him

of the payment, and sent him copies of the letter and check sent to Defendant and copies of

Case:

ee Ww

TN

10
i
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 6 of 23

petition papers. (Dkt. 38 Plaintiffs Facts [| 46-47, Exhibit at 000034-43). Defendant admitted
receiving these communications in September 2006. (Dkt. 44 Defendant’s Facts {| 46-47; Dkt.
15 Defendant’s Facts § 14, Exh. IX & X). On or about September 25, 2006, Defendant moved
for default judgment against Debtor in the collection action, In October 2006, Defendant's lawyer
filed a form of order of default and obtained an order of default judgment against Debtor for
$872 dollars, as follows: $695 in maintenance fee arrears, $167 in statutory penalties allowed by
law, and $10 in legal interests. Plus an additional award of $500 in legal costs and expenses. (Dkt
44 Defendant’s Facts J] 52-53, Exh. VOI, XIV & XV; Dkt. 15 Defendant’s Facts J§ 15-17, Exh.
XI, XIJI-XIV). The default judgement against Debtor has not been vacated. (Dkt. 50 Plaintiff's
Reply at 5).
The parties’ motions for summary judgment

The background to Debtor’s complaint and Cross-Motion is that Debtor sent Defendant
three Letters between March 2004 through June 2005, giving written notice of his bankruptcy,
prior to Defendant’s filing of the collection complaint. (Dkt. 38 Plaintiff's Facts ff 22, 23, 25).
The Letters also advised Defendant that its account statements improperly included the pre-
petition debt. According to Debtor, the Defendant can program its accounting software to
distinguish between operating accounts and special accounts. (Dkt. 38 Plaintiffs Facts {{ 56;
Exhibit at 000008; 54; Dkt. 50 Plaintiffs Reply at 3-4). Notwithstanding the Letters, on February
8, 2006, the Defendant mailed Debtor a collection letter demanding payment of $1,002 dollars
for post-petition arrears plus $57 in legal interests allegedly accumulated since February 2005,
and threatening legal action. (Dkt. 38 Plaintiff's Facts § 33, Exhibit at 000026-27). In April
2006, the Defendant filed the collection action demanding payment of $1,207 in arrears up to

April 2006, plus legal interests and costs. (Dkt. 38 Plaintiff's Facts € 37, Exhibit at 000028-30).

Case:7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 7 of 23

1 || According to Debtor, the amounts demanded were the result of applying his post-petition fee
2 payments during the period in question to his pre-petition debt. As such, Debtor’s actual post-
petition debt was substantially less than the amounts demanded in the collection complaint. (Dkt.
5 1 § 15). Defendants evidence and pleadings support Debtor’s allegations. (Dkt. 44 Defendant’s
6 || Facts (3-5, Exh. V).
7 The gravamen of Debtor’s complaint and Cross-Motion is that in response to the
8 | collection action, Debtor sent written notice of the bankruptcy to Defendant and a copy of the
° Notice of Stay to Defendant’s counsel in July and September of 2006; fully paid the post-petition
, debt in September 2006; and gave Defendant’s attorney a fair warning that this action would
12 || ensue if they did not desist. (Dkt. 38 Plaintiff's Facts {"] 44-47; Exhibit 000031-43). Debtor

13 || alleges that in response to these communications, and despite his warning and payment of the

14 post-petition fees, Defendant obtained an order of default judgment in state court for the unpaid

15 ws .
balance of the pre-petition debt, plus interests and an award of legal costs and expenses. (Dkt 1

16
44] 20-25; Dkt. 38 Plaintiff's Facts 9] 52-53; Exhibit at 000044-51). As added proof of
17

18 Defendant’s willful violation of the stay, Debtor points out that, to this day, Defendant has not

19 || vacated the state court default judgment. (Dkt. 50 Plaintiffs Reply at 5).

20 The crux of the argument in Defendant’s Motion is that everything alleged in the

71 complaint flows from Defendant’s lawful efforts to collect post-petition debt. According to

22
Defendant, “[t]here is no evidence supporting Plaintiff's allegations of a collection of a pre-

23

a4 petition debt.” (Dkt. 15 Motion at 7). Furthermore, Defendant argues that suing to enforce post-

45 || petition debt generally does not violate the stay. Defendant argues that it did not violate the stay

26 || because Defendant never sought to enforce the default judgment and Debtor voluntarily paid

27 | before judgment was entered in October 2006. (Dkt. 15 Motion at 8).
28

Case:

~~

io]

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 8 of 23

The Defendant changes its defensive posture in its Reply to Plaintiffs Cross-Motion.
(Dkt. 44). Defendant’s Reply presents a strategy of “confess and avoid”. Defendant admits that it
sued to collect the pre-petition debt, but argues that Defendant did not violate the stay because it
only intended to enforce Debtor’s post-petition debt. The Defendant’s Reply puts forth a two-
pronged defensive theory based on, 1) reasserting Defendant's subjective belief in the propriety
of its legal actions (Dkt. 44 Defendant’s Reply ff 19-21); and 2) asserting Defendant’s lack of
malicious or wrongful intent to violate the stay because it was relying and suing on
“inadvertently” erroneous accounts. (Id. J] 20, 22, 29). Defendant makes the following
contentions to bolster its defenses: a) that the literal terms of Defendant’s collection letter and
complaint only refer to post-petition debt accumulated since February 2005 (Id. at {] 20); b) that
collecting post-petition debt is not prohibited by the automatic stay (Id. at { 25); and c) that
Defendant’s “unintentional” acts do not reach the requisite level of willfulness required for a
violation, especially considering the minimal $711 dollar amount in question and, therefore,
Debtor cannot claim any damages. (Id. at ff] 28-30).

The Defendant’s defense of “inadvertent mistake” is premised on what Defendant depicts

as an accounting error committed by its management company. The inadvertent accounting error

was allegedly caused by the “‘peachtree” accounting software used by the management company,
which was programmed to automatically apply post-petition payments to reduce the pre-petition
debt. (Dkt. 44 Defendant’s Facts 3; Defendant’s Reply { 21). This “involuntary clerical error”
induced Defendant to believe at all times that it was collecting post-petition debt. Defendant
admits that the collection letter demanded “an aggregate amount” that included the pre-petition
debt, and that the collection action also included the pre-petition debt, but claims it was due to

the alleged accounting error. (Dkt. 44 Defendant’s Facts { 3-7, 31, 38).

Case:

oOo CS Ss DH

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 9 of 23

Summary Judgment

Rule 56 of the Federal Rules of Civil Procedure, made applicable to this proceeding by
Rule 7056 of the Federal Rules of Bankruptcy Procedure, provides that summary judgment
should be entered “if the pleadings, depositions, answers to interrogatories, and admissions on
file, together with the affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to a judgment as a matter of law.” Fed. R. Bankr. P. 7056;

see also, In re Colarusso, 382 F.3d 51 (1" Cir. 2004), citing Celotex Corp. v. Catrett, 477 US.

317, 322-23, 106 8.Ct. 2548, 91 L.Ed.2d 265 (1986). “The summary-judgment procedure
authorized by Rule 56 is a method for prompily disposing of actions in which there is no genuine
issue as to any material fact or in which only a question of law is volved.” 10A Wright and
Miller, Federal Practice and Procedure § 2712 (3d ed. 1998). “Rule 56 provides the means by
which a party may pierce the allegations in the pleadings and obtain relief by introducing outside
evidence showing that there are no fact issues that need to be tried.” /d. Summary judgment is
not a substitute for a trial of disputed facts; the court may only determine whether there are issues
to be tried, and it is improper if the existence of a material fact is uncertain. Jd.

For there to be a "genuine" issue, facts which are supported by substantial evidence must
be in dispute thereby requiring deference to the finder of fact. Furthermore, the disputed facts
must be "material" or determinative of the outcome of the litigation. Hahn v. Sargent, 523 F.2d
461, 464 (1st Cir. 1975), cert. denied, 425 U.S. 904 (1976). When considering a petition for
summary judgment, the court must view the evidence in the light most favorable to the
nonmoving party. Poller v. Columbia Broadcasting Systems, Inc., 368 U.S, 464, 473 (1962);
Daury v. Smith, 842 F.2d 9,11 (1st Cir. 1988).

The moving party invariably bears both the initial as well as the ultimate burden in

Case:97-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 10 of 23

1 || demonstrating its legal entitlement to summary judgment. Adickes v. Kress & Co., 398 U.S. 144,

157 (1970). See also Lopez v. Corporacion Azucarera de Puerto Rico, 938 F.2d 1510, 1516 (1st

4 Cir. 1991). It is essential that the moving party explain its reasons for concluding that the record
5 does not contain any genuine issue of material fact in addition to making a showing of support

6 || for those claims for which it bears the burden of trial. Bias v. Advantage International, Inc., 905
7

F.2d 1558, 1560-61 (D.C. Cir. 1990), cert. denied, 498 U.S. 958 (1990).

8 The moving party cannot prevail if any essential element of its claim or defense requires
° trial. Ldpez, 938 F.2d at 1516. In addition, the moving party is required to demonstrate that
, there is an absence of evidence supporting the nonmoving party's case. Celotex, 477 U.S. at 325.
12 | See also, Prokey v. Watkins, 942 F.2d 67, 72 (1st Cir. 1991); Daury, 842 F.2d at 11. In its

13 || opposition, the nonmoving party must show genuine issues of material facts precluding summary

14 || judgment; the existence of some factual dispute does not defeat summary judgment. Kennedy v.

1 .
> Josepthal & Co., Inc., 814 F.2d 798, 804 (1st Cir. 1987). See also Kauffman v. Puerto Rico

16

Telephone Co., 841 F.2d 1169, 1172 (1st Cir. 1988); Hahn, 523 F.2d at 464, A party may not
17
18 rely upon bare allegations to create a factual dispute but is required to point to specific facts

19 || contained in affidavits, depositions and other supporting documents which, if established at trial,

20 || could lead to a finding for the nonmoving party. Over the Road Drivers, Inc. v. Transport

21 | insurance Co., 637 F.2d 816, 818 (Ist Cir, 1980).

22
The moving party has the burden to establish that it is entitled to summary judgment; no

23

D4 defense is required where an insufficient showing is made. Lopez, 938 F.2d at 1517. The

25 || nonmoving party need only oppose a summary judgment motion once the moving party has met
26 |] its burden. Adickes, 398 U.S. at 159. The court must interpret the record in the light most

27 || favorable to the nonmoving party, reconciling all competing inferences in that party’s favor.
28

-10-

Case:

CO —~y DN

Oo

10
ial
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main

Document Page 11 of 23

However, “[n]either wishful thinking ... nor conclusory responses unsupported by evidence will
serve to defeat a properly focused Rule 56 motion.” Velazquez-Garcia v. Horizon Lines of Puerto
Rico, Inc., 473 F.3d 11 (1* Cir. 2007) citing Griggs-Ryan v. Smith, 904 F.2d 112, 115 (1st Cir.

1990),
Discussion

Debior claims that Defendant’s collection action was pursued with knowledge of the stay,
willfully violated the stay provisions in § 362 of the Code, and caused him damages. The
Defendant admits that it received notice of the petition and had knowledge of the stay.
Defendant’s Motion seeks to dismiss the complaint on the basis that none of Defendant’s actions
rise to the level of “willfulness” required to find a violation of the stay. Defendant claims that any
acts constituting violations of the stay were committed “unintentionally” and without “punishable
knowledge of wrongdoing”, based on an “involuntary clerical error” committed by its
management firm’s accounting department. Due to this accounting error, Defendant admits it
made efforts to collect the pre-petition debt because it was acting “under the belief’ that it was
only pursuing post-petition debt. (Dkt. 44 Defendant’s Facts { 3-7; Defendant’s Reply {{{{ 26,
29-30). Debtor countered by filing the Cross-Motion on the issue of liability for willful violation
of the stay. According to Debtor, the defenses raised by Defendant are legally insufficient to

avoid liability for damages for willful violation of the stay. We agree with Debtor.

The Automatic Stay
Section 362(a)(1) of the Bankruptcy Code provides for a stay, applicable to all entities, of

the commencement or the continuation of any proceeding against the Debtor that was or could
have been commenced prior to the bankruptcy, or to recover a claim against the Debtor that arose

pre-petition. Section 362(a)(6) prohibits “any act to collect, assess or recover a claim against the

-ll-

Case:@7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main

a

~~ GOA

10
ll
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Document Page 12 of 23

debtor that arose before the commencement of the case under this title”. Furthermore, “[t|he
automatic stay provides a debtor with one of the fundamental protections under federal
bankruptcy law—it gives Debtor’s ‘breathing room’ from the pressures of their creditors.” In re
Heghmann, 316 B.R. 395, 404 (1" Cir. BAP 2004). In order to bring a claim for a section 362(h)
violation, “the debtor has the burden of providing the creditor with actual notice [of the stay].
Once the creditor receives actual notice, the burden shifts to the creditor to prevent violations of
the automatic stay.” Fleet Mortgage Group, Inc. v. Kaneb, 196 F.3d 265, 269 (1* Cir. 1999). If
notice of the automatic stay is given and a violation by a creditor is established, the debtor must
prove by a preponderance of the evidence that he suffered damages as a result of the stay

violation. Heghmann, 316 B.R. at 404-05.
Willful Violation

In a section 362(h) action, the debtor bears the burden of establishing the following
elements by a preponderance of the evidence: 1) that the bankruptcy petition was filed; 2) that the
debtor is an “individual” under the automatic stay provision; 3) that the creditors received notice
of the petition; 4) that a violation occurred; 5) that the violation was committed willfully; and 6)
that the debtor suffered damages. See, In re Rijos (“Rijos I’), 260 B.R. 330, 336 (Bkrtcy. D.P.R.
2001) (Order reversed and the case remanded for an evidentiary hearing on damages by, Jn re
Rijos (“Rijos IT”), 262 B.R. 382 (1* Cir. BAP 2001)). On the other hand, creditors bear the same
burden to establish defenses such as immunities, lack of jurisdiction or inapplicability of the stay

to their actions. Rijos 7, 260 B.R. at 336.

in the First Circuit “a willful violation does not require a specific intent to violate the
stay.” Rijos Hf, 262 B.R. at 392 (citing Kaneb). Neither does it require a finding that the creditor

acted with “malice aforethought”. Jn re McCormack, 203 B.R. 521, 525-26 (Bkrtcy.D.N.H.

-13-

Case:

un Uo

Oo © SN

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 13 of 23

1996). The test for willfulness, as articulated by the First Circuit in Kaneb, is “namely knowledge
of the automatic stay and an intent to do those acts that constitute a violation of the stay[.]” Jn re
Ocasio, 272 B.R. 815, 824 (1* Cir. BAP 2002) (citing and quoting Kaneb). “In cases where the
creditor received actual notice of the automatic stay, courts must presume that the violation was
deliberate.” Rijos IZ, 262 B.R. at 392 (citing Kaneb); Ocasio, 272 B.R. at 824 (finding that the
trial court was correct to presume the stay violation was deliberate once creditor’s knowledge of

the stay was established).

All of the elements for a stay violation set out in Rijos J are present in this case. The
Debtor is an individual. Defendant admitted that it received notice of the petition and had
knowledge of the stay when it committed the acts complained of and moved for default judgment
in the collection action. (Dkt. 44 Defendant’s Reply {fj 19, 20, 29; Dkt. 38 Plaintiff's Facts {ff
22, 23, 25, 44-47, admitted at Dkt. 44 Defendant’s Facts ff 22, 23, 25, 44-47). Therefore, we
must presume that Defendant’s violations were deliberate. Rijos Hf, 262 B.R. at 392. We now
review the record to see if Defendant has stated a valid defense to avoid the imposition of
damages. Rijos [, 260 B.R. at 336. Absent any valid defenses to the violation, the only issue

remaining before the court is the determimation of Debtor’s damages.

In this case, Defendant’s defenses of mistake and inadvertence are similar to the defenses
to violation raised by the defendant in Kaneb. In Kaneb, the debtor’s chapter 13 case was
converted to chapter 7 and debtor had already been discharged when he complained that a bank
holding a pre-petition claim filed a foreclosure action over debtor’s “exempt” Florida property
while the stay was still in place. Apparently, the debtor had some equity in the property and
claimed it for the estate. The defendant bank filed the foreclosure action erroneously believing

that the case was over because there was an order of discharge in the debtor’s file. The bank also

-13-

Case:

pS Ww bh

Oo oF “ DA WA

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 14 of 23

thought that the court had granted it relief from the stay, because there was an unsigned order for
relief from the automatic stay in the debtor’s file. 196 F.3d at 267. Once the debtor’s attorney
informed the bank’s attorney of the violation, the bank put the case on hold, but did not dismiss
it. Six weeks later and in response to a letter from debtor strenuously protesting the violation, the
| bank dismissed the action. /d. Nevertheless, the First Circuit found that putting the foreclosure
case on hold and waiting six weeks to dismiss it after receiving notice of the stay and the
violation, constituted a willful violation of the stay. The Circuit Court upheld the award for

damages for emotional distress and attorney’s fees granted by the bankruptcy court.

The defendant in Kaneb claimed that its actions “were an innocent mistake” because the
bank thought and believed they could proceed with foreclosure, and denied any causal
connection between the acts complained of and the damages claimed by the debtor. 196 F.3d at
268-69. In this case, the Defendant also raises its subjective belief and inadvertent error as
defenses to liability, by alleging that it was proper to pursue what it thought was post-petition
debt. However, the Defendant admitted receiving each of Debtor’s notices of the bankruptcy,
before and after filing the collection action. (Dkt. 44 Defendant’s Facts 4 22, 23, 25, 44, 47, 51).
The Defendant blames its accounting software for the mistake in suing for the pre-petition debt
and claims that its administrator, Mr. Pagan, referred the case for collection to the attorney not
knowing how the attorney would proceed. (Dkt. 44 Defendant’s Facts J 31, 42; Dkt. 44
Defendant’s Reply { 27). In another statement Defendant claims that Mr. Pagan did not have
notice of the petition but admits that soon after filing the collection action, Mr. Pagan “explained
[to Defendant’s attorney] that there was a comment regarding a bankruptcy petition filed by
Plaintiff’. (Dkt. 44 Defendant’s Facts § 41). Additionally, Mr. Pagan admitted having seen the

Letters at around the time when the collection action was filed. (Dkt. 38 Plaintiffs Facts, Exhibit

-|4-

Case:

ff WW

Oo CO ~T AH

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 15 of 23

at 000018). Defendant does not claim that its attorney was unable to inquire whether there was
pre-petition debt involved in the collection action. Instead, Defendant proceeded to collect the

debt despite the Letters in Debtor’s file indicating that he was in bankruptcy.

Similar to the situation in Kaneb, Defendant asserts that it is immune from liability
because it thought its actions were lawful and was acting on inadvertently erroneous accounting
data, by mistake, and without malicious intent. (Dkt. 44 Defendant’s Reply { { 23, 26, 29-30). In
that regard, Defendant claims that “plaintiff may recover damages when the defendant acted with
actual knowledge that he was violating a federally protect right or with reckless disregard that he
was doing so.” (Dkt. 44 Defendant’s Reply {| 30). Defendant misapprehends the standard
applicable to finding a willful violation of the stay in the First Circuit. In Kaned, the First Cireuit
specifically declined “to create a new [flagrant or reckless disregard] standard for willfulness.”
Kaneb, 196 F.3d at 268. The First Circuit held that a creditor is not “inmmune from sanctions
because it made a mistake. A good faith belief in a right to the property is not relevant to a
determination of whether the violation was willful. A willful violation does not require a specific
intent to violate the automatic stay.” Jd. at 268-69. (citations omitted). In that regard, the
Defendant’s knowledge of the stay and its ongoing failure to dismiss the default judgment is
critical to finding willfulness on its part. The standard “is met if there is knowledge of the stay

and the defendant intended the actions which constituted the violation.” /d. at 269.

Notwithstanding Defendant’s claims of computer and clerical errors and its self-righteous
allegations of mistaken belief and lawful intent, Debtor has a well-pleaded case of willful
violation. The record makes it clear that Defendant acted willfully in pursuing the collection
action with knowledge of the stay. In Kaneb, the creditor waited six weeks to dismiss the law suit

once it received notice of the violation of the stay from the debtor. In this case, the Defendant

-15-

Case:

oO CF SDH

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

)7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 16 of 23

litigated the collection action through default judgment despite multiple notices from Debtor that
Defendant was collecting the pre-petition debt. But unlike the defendant in Kaneb, the Defendant
in this case has not dismissed its two-year-old collection action, a year after Debtor filed the
instant proceeding. Consequently, Defendant’s allegations of mistaken belief and inadvertent
computer errors are insufficient as a matter of law to avoid liability for willfully violating the

stay.

In fact, fhe Defendant’s “peachtree” version of the “computer did it” defense has been
rejected as a “non-starter” by a court in this circuit in a § 362(h) proceeding. McCormack, 203
B.R. at 524. In McCormack, a defendant bank blamed its accounting system for that defendant’s
repeated failure to reverse or credit in its books, the excess attorneys fees disallowed by the
bankruptcy court and wipe the excess fees off of the account statements sent to the debtor in that
case. The McCormack court held that such accounting practices violated the stay and awarded
punitive and other damages to a debtor. The court held that a creditor who persists in sending
account statements after having “clear knowledge of the bankruptcy” in an apparent effort to
collect amounts no longer presently due except under the terms of a plan, and collect fees
disallowed in bankruptcy, can be presumed to be acting with knowledge that the creditor “was
violating federally protected rights, or at the very least acting with reckless disregard as to
whether it was doing so.” /d. (citations omitted).* Contrary to the facts in McCormack, in this
case Mr. Pagan testified that they could program their accounting software to distinguish between

certain accounts, such as those for operating accounts and those for special “derrama” fees owed

® The McCormack court rejected an argument similar to Defendant’s argument that there cannot be liability
for damages because Defendant did not seek to enforce the debt embodied in the default judgment. The issue must be
viewed from Debtor’s point of view, and Debtor had every right to believe that Defendant would enforce it. 203 B.R.
at 525. This defense is inapt because it is undisputed that Defendant collected the pre-petition debt well before the
collection action, and that the default judgment corresponds to pre-petition debt mentally accounted for by Debtor and,
under the Horizontal Property Law of Puerto Rico, the obligation to pay arrears in maintenance fees becomes a lien over
Debtor’s apartment. (31 L.P.B.A. 1293(e)). Defendant’s collection complaint prays for such lien to attach, and its By-
laws provide for such a lien. (Dkt. 44 Defendant’s Facts, Exh. VII at 2 (par. c); Exh. IX, By-Laws at 15, art. 67).

-16-

Case:

10
11
12
13
14
15
16
17
18
19
20
2]
22
23
24
25
26
27
28

)7-O0034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 17 of 23

by Debtor. (Dkt. 50 Plaintiff's Reply at 4; Dkt. 38 Plaintiffs Facts 56, Exhibit at 000008; Dkt.
44 Defendant’s Facts J 56). Regardless of the “peachtree” software capabilities, once Debtor
complained of the improper accounting, Defendant had to prevent the violation, even if it meant
“setting a quill pen and ledger book to keep track of the effects of a chapter 13 [case] in progress
if indeed it was beyond the powers of mortal men and women to re-program their computer.”
McCormack 203 B.R. at 524, fn. 2. Therefore, we find that Defendant’s allegation that it acted
induced by an inadvertent accounting mistake is not a proper defense to a claim for willful

violation, and does not withstand scrutiny under the facts of this case.

The pleadings and exhibits suggest that after filing the petition, Debtor would pay the
bulk of the post-petition fees that accumulated periodically, while mentally keeping track of the
pre-petition debt and not paying that amount. (Dkt. 44 Defendant’s Facts, Exh. III-V). However,
section 362 does not impose a burden on debtors to keep a mental record of pre-petition debt,
while creditors demand and collect the pre-petition debt with total disregard for the stay. The law
is clear, once creditors have actual notice of the stay, they bear the burden to “prevent violations

of the automatic stay.” Kaneb, 196 F.3d at 269.

There being no valid defenses to the Debtor’s allegations of stay violations, we now turn
to the record to see “if the pleadings, depositions [...} and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.” Fed. R. Bankr. P. 7056; Jn re Colarusso, supra

382 F.3d at 31.

The Defendant raises a point of law in the Motion in order to avoid liability. Defendant
argues that “proceedings or claims arising post-petition are not subject to the automatic stay”...

(Dkt 15 Motion at 4) citing nm re Gull Air, Inc., 890 F.2d 1255, 1263 (1* Cir. 1989). The Motion

-~|7-

Case:@7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main

oo “sb Hf ft Of

SO

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Document Page 18 of 23

goes on to explain that application of the “conduct theory” is required to determine whether a
claim arises pre- or post-petition and, furthermore, that such post-petition claims are generally
not subject to discharge and therefore, not subject to the stay. (Dkt. 15 Motion at 4) citing Jn re
Parker, 313 F.3d 1267 (10 Cir. 2002). Defendant argues that only enforcement of the state court
default judgment obtained against Debtor would trigger the provisions of the stay, if executed
without prior authorization and approval from this court. (Id. at 4-5) (citations omitted).

Defendant denies enforcing the default judgment at any time relevant to this action.

Defendant’s argument regarding the inapplicability of the stay to post-petition claims, is
correct. However, the same is legally unavailing, misplaced and irrelevant to the facts of this
case. The conduct theory adopted by the Tenth Circuit in Parker “concerns [the] determination of
the date on which a claim arose for purposes of classifying it as a pre- or post-petition claim.”
313 F.3d at 1269. The date of a claim is determined by the date of the conduct giving nse to the
claim. The conduct theory is different from the accrual theory, “which determines the date of a

claim pursuant to the state law under which liability for the claim arose.” Jd.

The date when a claim arises is important in determining which debts are discharged and
which debts are subject to the automatic stay provisions of section 362(a) of the Code. The
automatic stay applies to claims against the debtor as of the commencement of the case. There is
no question that the violation of the stay alleged by Debtor in this case is for a pre-petition claim,

be it under the conduct or accrual theory.

The issue facing Defendant in this proceeding is to avoid liability given the facts
constituting Defendant’s multiple instances of willful violations of the stay regarding the pre-
petition debt, to wit: sending invoices charging pre-petition debt; actually collecting pre-petition

debt; failing to separately account for Debtor’s pre-petition debt; sending a collection letter

-18-

Case:

& We

a re)

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

()7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main

Document Page 19 of 23

demanding pre-petition debt and threatening legal action; filing and prosecuting the collection
action to collect pre-petition debt, despite having notice of the stay; and, finally, Defendant’s
inexplicable failure to dismiss the default judgment in light of the instant action filed by Debtor.
Consequently, Debtor’s point of law regarding the inapplicability of the stay to post-petition

claims is inapplicable in this case.

The Defendant also raises several factual disputes to avoid liability which are not
“genuine” and do not concem any fact “material” to the issues under consideration. The
Defendant focuses much attention on Debtor’s allegation that interests were improperly charged
as part of the collection action. (Dkt. 44 Defendant’s Reply {J 21, 24-25, Exh. I, VID. The
Defendant argues that charging interests 1s not a violation because these are allowed pursuant to
Defendant’s By-laws and were charged as part of the collection letter and complaint, but not as
part of Debtor’s maintenance fee account statement. However, Plaintiff only alleged that interests
were charged by Defendant as part of the amount demanded in the collection action. (Dkt. 1 {ff
14, 15). Thus, there is no dispute as to the place or account where the interests were computed,
and any such dispute would be immaterial to the issue of Defendant’s liability for violating the

stay.

Defendant also implies that Debtor’s reliance on the deposition testimony of Mr. Pagan is
misplaced because Mr. Pagan is not the person in charge of the management firm’s accounting.
(Dkt 44 Defendant’s Reply 4 22; Dkt. 44 Defendant’s Facts §] 54-55, Exh. 17). This argument is
anon sequitur. Debtor does not raise any dispute concerning the identity of Defendant’s
accountant. According to Mr. Pagan, the accountant works for AMMC and her name is
“Brenda”. She also worked for Caribbean Management, as did Mr, Pagan. Caribbean

Management kept Defendant’s books and accounts in much the same way as AMMC does and

-19-

Case:97-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main

oO Oo ~ DH

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Document Page 20 of 23

turned them over to AMMC when the management changed. (Dkt. 38 Plaintiff's Facts, Exhibit at
000014; Dkt. 44 Defendant’s Facts 7 55, Exh. 13 at 1). The record reveals that Debtor wrote
Brenda at Caribbean Management in September 2004, and again wrote Caribbean Management
in June 2005 to discuss his bankruptcy situation and the improper accounting that included his
pre-petition debt. (Dkt. 38 Plaintiff's Facts [23, 25, Exh. I at 2-3, Dkt. 38 Plaintiff's Facts,
Exhibit at 000024-25). Therefore, Debtor’s reliance on Mr. Pagan’s deposition testimony is not
misplaced in view of Defendant’s own admissions in the record, and any dispute as to the

identity of Defendant’s accountant would be immaterial to the inquiry at hand.’

The parties disagree on Debtor’s fact allegation that Mr. Pagan “openly discussed”
Debtor’s bankruptcy with Defendant’s attorney at around the time when the collection action was
filed. (Dkt. 38 Plaintiff's Facts {9 42-43, Exhibit at 000016-18; 000023-25). The Defendant
denies that Mr. Pagan “openly discussed” Debtor’s bankruptcy with the attorney. (Dkt. 44
Defendant’s Facts {§ 41-42). As previously discussed, Defendant has admitted receiving notice
of the petition before and after filing the collection complaint. (Dkt. 38 Plaintiff's Facts {fj 22,
23, 25, 44, 46-47, 51; admitted at Dkt. 44 Defendant’s Facts ff] 22, 23, 25, 44, 46-47, 51, Exh. J;
Dkt. 15 Motion §ff 13-14, Exh. VII, [X). It is undisputable that Defendant’s attorney was put on
notice of the stay on July 31, 2006, prior to moving for default.'° Consequently, any discussion of
the bankruptcy between Defendant and is attorney for purposes of filing or prosecuting the
collection action would constitute an aggravating factor of the conduct at issue, but will not add
to the main violation complained of by Debtor, which is Defendant’s obstinate prosecution of the

collection action with knowledge of the stay.

Ina printout of Debtor’s account ledger dated November 10, 2004, it appears that someone, possibly Brenda,
made a handwritten notation acknowledging Debtor’s bankruptcy. (Dkt. 44 Defendant’s Facts, Exh. IV).

'0 The Dkt. 15 Motion {[ 13 reads June 31, 2006, but should read July 31, 2006, per Dkt. 15 Defendant’s Facts,
Exh. VIL

-20-

Case:Q7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main

10
1
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

Document Page 21 of 23

Finally, Debtor claims that Defendant’s attorney purposefully misinformed and deceived
the state court into granting the default judgment against Debtor, notwithstanding the attorney’s
actual knowledge of the stay and that Debtor had paid the post-petition fees. (Dkt. 37 Cross-
Motion at 13, 15-16; Dkt. 38 Plaintiff's Facts | 52). The Defendant denies the fact “as alleged”
but does little more than ignore the charge of deception. (Dkt. 44 Defendant’s Facts {| 52). As
previously discussed, the Defendant is bound by and is liable for the acts of its agents. Without
question, the actions taken by Defendant’s counsel in state court where “on behalf of Consejo.”
(Dkt. 15 Motion { 8). The Defendant (Consejo) admits that its attorney “had knowledge of the
bankruptcy petition” when Defendant and the attorney proceeded to collect the pre-petition debt
and moved for default judgment, even though they “knew [that] the automatic stay” was in place.
(Dkt. 44 Defendant’s Reply §] 19-20, 29). It was then when Defendant’s actions in violation of
the stay reached the “willfulness” point of no return. Therefore, consideration of Debtor’s
allegations of deceit of a sister court in violation of the stay is best withheld for the damages

phase of this proceeding.
Summary

Over the course of more than two years between March 2004 and September 2006,
Debtor sent Defendant several notices of his bankruptcy proceeding and copies of the petition
notifying the stay. Throughout this period, Debtor also notified Defendant that its accounting
included the pre-petition debt. Actual notice of the bankruptcy and the stay notwithstanding,
Defendant filed and prosecuted a collection action for Debtor’s pre-petition debt. Defendant
claims that it acted involuntarily and without wrongful intent to violate the stay, due to its own
accounting error, but admits collecting and suing for the pre-petition debt. Construing the

evidence and the allegations in the light most favorable to Defendant, nevertheless we must

-21-

Case:

“BA tT BR HH

Co

10
1
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

()7-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main

Document Page 22 of 23

conclude that it was within Defendant's exclusive power to correct the “erroneous” computerized
accounting after receiving repeated notices from Debtor to that effect, starting in March 2004.
The erroneous computerized accounting is depicted by Defendant as the foundation and trigger
for the collection letter and complaint improperly filed against Debtor. Also, after filing the
collection action, Defendant pursued the case all the way to default with clear knowledge of the
bankruptcy. Defendant did so, despite payment of the post-petition debt and a fair warning from
Debtor that he would file this action if Defendant did not relent. Such conduct constitutes a
willful violation of the stay. To this day, Defendant maintains the propriety of its actions, despite
facing this proceeding for damages for violating the stay. The least that can be said about this
case is that Debtor gave Defendant repeated opportunities and ample time to investigate whether

Defendant was violating Debtor’s federally protected nights.

On the other hand, applying the same standards to Plaintiff's Cross-Motion, Plaintiff has
established that the Defendant willfully violated the automatic stay by sending him account
statements with pre-petition amounts, by applying Plaintiff's post-petition payments to his pre-
petition debt, by sending him a coercive collection letter threatening Plaintiff to pay or face legal
action, and by pursuing a collection action in a state court to the point of obtaining a default
judgment against Plaintiff for the pre-petition debt, plus interests and an award of legal fees and

expenses.
Conclusion

In view of the foregoing, Defendant’s Motion for summary judgment is hereby denied.
Plaintiffs Cross-Motion for partial summary judgment on the issue of Defendant’s liability for
willful violation the automatic stay, is hereby granted. Pursuant to section 362(h) of the Code and

applicable case law, the case will be scheduled for an evidentiary hearing on the issue of

-22-

Case;07-00034-ESL Doc#:51 Filed:04/08/08 Entered:04/08/08 11:10:22 Desc: Main
Document Page 23 of 23

1 | Plaintiff's damages.

SO ORDERED. th

4 In San Juan, Puerto Rico, this E day of April 2008.

“ED

ENRIQUE 8. LAMOUTTE
U.S. Bankruptcy Judge

10

11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

- 33 -