WISCOVITCH RENTAS v. CENTENO FONTANEZ

1
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
In re: :
:
JC ELECTRIC AND AIR : Case No. 06-02885 (GAC)
CONDITIONER, INC., :
:
Debtor : Chapter 7
___________________________________:
:
:
NOREEN WISCOVITCH RENTAS, as :
trustee of the Estate of JC :
Electric and Air Conditioner, Inc.,:
:
Plaintiff :
:
v. : Adv. No. 08-00125 (GAC)
:
JESUS M. CENTENO FONTANEZ, :
:
Defendant :
___________________________________:
DECISION AND ORDER
Before the Court is a motion for summary judgment filed by the
defendant, Jesus M. Centeno Fontanez (“Centeno”)(dkt. #7) and an
opposition filed by the trustee of the Estate of JC Electric and
Air Conditioner, Inc., Noreen Wiscovitch Rentas (“NWR”)(dkt. #13).
On October 22, 2008, NWR filed this adversary proceeding
against Centeno to recover the sum of $24,000, which NWR alleges
was taken by Centeno post-petition, through the issuance of various
checks drawn on the debtor corporation, without the Court’s
authorization. NWR alleges that this occurred while Centeno was
acting as the President, a director and/or a stockholder of the
debtor corporation.
Case:08-00125-BKT Doc#:17 Filed:04/14/09 Entered:04/14/09 16:59:27 Desc: Main
Document Page 1 of 5

2
Centeno seeks summary judgment, contending that the only bank
account that pertained to the debtor corporation, was FlexiCuenta
number 241-2322206 (“corporate account”). Centeno indicates that
on May 19, 2006, he opened an account in his name d/b/a JC
Electric, FlexiCuenta number 321-041029 (“individual account”), and
thereafter was doing business for himself and not for the
corporation. Yet, he indicates that he also continued to conduct
business on behalf of the debtor corporation until July of 2006.
And while the bankruptcy petition was filed on August 21, 2006,
Centeno denies that any checks were issued from the debtor’s
account after July 31, 2006.
NWR opposes the motion for summary judgment, contending that
after the bankruptcy filing, Centeno continued selling generators
and doing repair and warranty work to the same clients that the
corporation served. She contends that Centeno was conducting the
same business, but under his name, and that this should be
considered a continuation of the debtor. NWR also contends that
Centeno was using both the corporate account and the individual
account at the same time, for the same type of work, which
constituted a commingling of funds, assets and clients, which
Centeno controlled as he wished or pleased. NWR indicates that the
funds deposited in the individual account from May to September
2006, could be for work performed or equipment sold by the debtor
corporation since Centeno was operating in his personal capacity,
Case:08-00125-BKT Doc#:17 Filed:04/14/09 Entered:04/14/09 16:59:27 Desc: Main
Document Page 2 of 5

3
as well as maintaining the debtor’s business during the same
period, with the same clients and equipment. NWR details deposits,
wire transfers and a check drawn on the individual account, which
she alleges pertain to the debtor, including a deposit of
$11,500.00 on September 19, 2006, which she contends was payable to
JC Electric, but based on Centeno’s testimony at the 341 meeting,
was a late payment for work performed by the corporation prior to
the bankruptcy filing and thus property of the debtor’s estate.
NWR addresses two wire transfers out of the individual account
after the petition filing, and a payment on Centeno’s mortgage, but
does not address their connection to services performed by the
debtor corporation. NWR also points to two deposits to the
individual account, made near the petition date; one in the amount
of $10,095, made on August 23, 2006 and one in the amount of
$3,000, made on August 25, 2006, which she contends could
reasonably be inferred to be related to work performed by the
debtor or sales prior to the petition date.
Centeno’s motion for summary judgment essentially alleges that
NWR’s complaint fails to state a claim upon which relief may be
granted. Summary judgment is appropriate “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. Civ. P. 56(c).
Case:08-00125-BKT Doc#:17 Filed:04/14/09 Entered:04/14/09 16:59:27 Desc: Main
Document Page 3 of 5

4
The moving party bears the initial burden of demonstrating
that “there is no genuine issue as to any material fact and that
the moving party is entitled to judgment as a matter of law.” Fed.
R. Civ. P. 56(c); see also Razzaboni v. Schifano (In re Schifano),
378 F.3d 60, 66 (1st Cir. 2004) (citing Celotex Corp. v. Catrett,
477 U.S. 317, 323 (1986)). If the initial burden is met, the
burden shifts to the non-moving party to show that genuine issues
of material fact exist. Id. (citing F.D.I.C. v. Ponce, 904 F.2d
740, 742 (1st Cir. 1990)). The non-moving party must set forth
more than conclusory allegations, improbable inferences or
unsupported speculation to establish genuine issues of material
fact. Competent evidence is required. Id. (citing Medina-Munoz v.
R.J. Reynolds Tobacco Co., 896 F.2d 5, 8 (1st Cir. 1990)). But,
the court must view the record in the light most favorable to the
nonmoving party, McCrory v. Spigel (In re Spigel), 260 F.3d 27, 31
(1st Cir. 2001) (citations omitted).
Centeno presented an affidavit, indicating that he did not
write checks on the corporate debtor’s account after the filing of
the petition, but he also conceded that he continued to conduct
business on behalf of the debtor corporation until July of 2006.
NWR failed to present an affidavit, or any other evidence that
Centeno received funds that belonged to the corporate debtor post-
petition. While NWR argues that Centeno admitted at the 341
meeting that he received funds pertaining to the corporate debtor,
Case:08-00125-BKT Doc#:17 Filed:04/14/09 Entered:04/14/09 16:59:27 Desc: Main
Document Page 4 of 5

5
she presented no evidence of that admission. Nonetheless, the
Court concludes that it is not an improbable inference that Centeno
received funds in August for work performed by the corporate debtor
prior to the filing of the petition. Thus, NWR has alleged a
plausible entitlement to relief, but it is barely above the level
of speculation. Accordingly, the Court will reluctantly deny the
motion for summary judgment. At trial, NWR will be required to
establish a sufficient nexus between the transactions in the
individual account and work performed by the corporate debtor.
ORDER
WHEREFORE IT IS ORDERED that the motion for summary judgment
filed by the defendant, Jesus M. Centeno Fontanez (dkt. #7) shall
be, and it hereby is, DENIED.
The pretrial hearing is scheduled for June 24, 2009 at 8:30
a.m. The parties shall comply with the original pretrial order
(dkt. #5) and file the pretrial report five (5) days prior to the
hearing.
SO ORDERED.
San Juan, Puerto Rico, this 2nd day of April, 2009.
BY THE COURT:
s/ Gerardo A. Carlo
_______________________
GERARDO A. CARLO
U.S. Bankruptcy Judge
Case:08-00125-BKT Doc#:17 Filed:04/14/09 Entered:04/14/09 16:59:27 Desc: Main
Document Page 5 of 5