Scotiabank de Puerto Rico v. Perimetro Properties, Inc.

Filing 18

MEMORANDUM AND ORDER re 17 Motion for Reconsideration. Defendant Perimetro's motion for consideration fails to present new evidence or establish a manifest error of law. Because plaintiff Scotiabank rely on arguments that were raised previously, the motion for reconsideration is DENIED. Signed by Judge Francisco A. Besosa on 04/25/2013. (brc)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
IN RE:
THE PLAZA
INC.,

RESORT

AT

PALMAS,

Debtor.
SCOTIABANK DE PUERTO RICO,

Civil No. 12-1457 (FAB)

Plaintiff,
v.
PERIMETRO PROPERTIES, INC.,
Defendant.

MEMORANDUM AND ORDER1
Before the Court is defendant Perimetro Properties, Inc.’s
(“defendant Perimetro”) motion to reconsider the Court’s Opinion
and Order dated March 5, 2013, (Docket No. 14), which denied
defendant

Perimetro’s

request

for

reference to the bankruptcy court.

the

Court

to

withdraw

(Docket No. 17.)

its

Defendant

Perimetro’s motion is hereby DENIED.
I.

FACTUAL AND PROCEDURAL BACKGROUND
On

November

20,

2011,

The

Plaza

Resort

at

Palmas,

Inc.

(“Debtor”) filed a bankruptcy petition pursuant to Chapter 11 of
the Bankruptcy Code (“Chapter 11”).

Complaint, Scotiabank de

Puerto Rico v. Perimetro Properties, Inc. (In re The Plaza Resort
1

Katherine Hedges, a second-year student at the University of
New Hampshire School of Law, assisted in the preparation of this
Opinion and Order.

Civil No. 12-1457 (FAB)

2

at Palmas, Inc.), No. 11-149 at p. 2 (Bankr. D.P.R. filed Nov. 18,
2011).2

When it filed bankruptcy, Debtor listed its timeshare

owners as secured creditors in Schedule D of its petition.
Plaintiff
objected

Scotiabank
to

Debtor

de

Puerto

listing

creditors.

Id. at pp. 2-3.

groups

of

timeshare

creditors.

Rico

the

(“plaintiff

timeshare

owners

Id.

Scotiabank”)3
as

secured

Id. at 4.

owners

Defendant Perimetro is one of three
that

Debtor

asserts

are

secured

On November 18, 2011, plaintiff Scotiabank filed an adversary
proceeding in bankruptcy court, requesting a declaratory judgment
that defendant Perimetro “is not a secured creditor and may not
benefit from the ‘subordination clause’ in [Mortgage] Deed No. 9.”
Id. at p. 2.

Following a number of motions in the bankruptcy court

that are not relevant to the matter before the Court, defendant
Perimetro filed a request for withdrawal of the reference on
June 8, 2012, which was submitted to the Court on June 12, 2012.
(Docket No. 1.)

On March 5, 2013, the Court issued an Opinion and

Order declining to withdraw the reference to the bankruptcy court.
(Docket No. 14.)

On April 2, 2013, defendant Perimetro submitted

a motion requesting the Court to reconsider.

2

3

(Docket No. 17.)

Hereinafter “Bankr. Adv. Proc. 11-249.”

R-G Premier Bank of Puerto Rico originally filed the claim,
but plaintiff Scotiabank subsequently acquired the claim. (Bankr.
Adv. Proc. 11-249 at Docket No. 1 at p. 2.)

Civil No. 12-1457 (FAB)
II.

3

LEGAL STANDARD
“A motion for reconsideration is treated as a motion under

Rule 59(e) of the Federal Rules of Civil Procedure.”

Rosario

Rivera v. PS Group of P.R., Inc., 186 F.Supp.2d 63, 65 (D.P.R.
2002). Pursuant to Fed.R.Civ.P. 59(e) (“Rule 59(e)”)4, “the moving
party ‘must either clearly establish a manifest error of law or
must present newly discovered evidence’” in order to prevail.
Markel Am. Ins. Co. v. Diaz-Santiago, 674 F.3d 21, 32 (1st Cir.
2012) (quoting F.D.I.C. v. World Univ. Inc., 978 F.2d 10, 16 (1st
Cir. 1992)); see also Marie v. Allied Home Mortg. Corp., 402 F.3d
1, 7 n.2 (1st Cir. 2005) (recognizing that four reasons for
granting a Rule 59(e) motion are: “manifest errors of law or fact,
newly discovered
injustice,

and

or
an

previously
intervening

(internal citation omitted)).

unavailable

evidence, manifest

change

controlling

in

law.”)

It is inappropriate to use a Rule

59(e) motion “to repeat old arguments previously considered and
rejected.”

Hoffman v. Mercado, No. Civ. 02-2561 (DRD), 2006 WL

940682, at *1 (D.P.R. 2006) (quoting Nat’l. Metal Finishing Co.,
Inc. v. Barclays American/Commercial, Inc., 889 F.2d 119, 123 (1st
Cir. 1990)).

It is also inappropriate to raise new arguments, “if

such arguments ‘could, and should, have been made before judgment

4

Rule 59(e) provides a mechanism for parties to ask the Court
to reconsider its judgment. Fed.R.Civ.P. 59(e).

Civil No. 12-1457 (FAB)
issued.”

4

Markel Am. Ins. Co., 674 F.3d at 32 (quoting ACA Fin.

Guar. Corp. v. Advest, Inc., 512 F.3d 46, 55 (1st Cir. 2008)).
III. DISCUSSION
Defendant Perimetro argues that the Court erred when it
declined to withdraw its reference to the bankruptcy court because
plaintiff Scotiabank’s claims are based on Commonwealth law rather
than the Federal Bankruptcy Code.

(Docket No. 14.)

Defendant

Perimetro reiterates its earlier argument that Stern v. Marshall,
131 S.Ct. 2594 (2011), instructs that bankruptcy courts cannot
decide any state or Commonwealth claims.
Defendant

Perimetro

also

argues

that

Id. at pp. 1 & 3-8.
plaintiff

Scotiabank’s

complaint is premature because its appeal of a decision regarding
another group of Debtor’s timeshare holders to the First Circuit
Court of Appeals has not been decided and because Debtor has not
yet filed a reorganization plan.

Id. at p. 3.

Defendant Perimetro’s motion for reconsideration, however,
“repeat[s] old arguments previously considered and rejected.”

See

Hoffman, 2006 WL 940682, at *1 (quoting Nat’l. Metal Finishing Co.,
Inc., 889 F.2d at 123).
the

Court

addressed

In its March 5, 2013 Opinion and Order,
defendant

Perimetro’s

contentions

that

resolving plaintiff Scotiabank’s claims would require interpreting
Commonwealth law.

(Docket No. 14 at pp. 8-10.)

The bankruptcy

court can consider the Commonwealth claims because the relief
plaintiff Scotiabank requests directly impacts Debtor’s bankruptcy

Civil No. 12-1457 (FAB)

5

because it seeks to have defendant Perimetro removed from Debtor’s
list of secured creditors on Schedule D. (Bankr. Adv. Proc. 11-249
at Docket No. 1 at p. 3-4.)

The Court also found that Stern v.

Marshall is inapplicable to this case.

(Docket No. 14 at pp. 12-

13.)
Finally, the Court finds defendant Perimetro’s argument that
plaintiff
Defendant

Scotiabank’s
Perimetro

complaint

failed

to

is

provide

premature
any

support

unavailing.
for

these

arguments. “Judges are not mind-readers, so parties must spell out
their issues clearly, highlighting the relevant facts and analyzing
on-point authority.”

Rodriguez v. Municipality of San Juan, 659

F.3d 168, 175 (1st Cir. 2011.)

Furthermore, these arguments are

better suited for a motion to stay proceedings, which can be
addressed before the bankruptcy court.5

While the First Circuit

Court of Appeals’ forthcoming decision regarding another group of
Debtor’s

timeshare

holders

may

be

informative

to

this

case,

plaintiff Scotiabank is not barred from bringing its claims against
this defendant.

Additionally, although Debtor’s reorganization

plan is not yet due, resolving this dispute could prevent delays in
implementation, which could result from waiting to address the

5

Plaintiff Scotiabank filed a motion to stay proceedings
before this Court. (Docket No. 10.) Because the Court has denied
the motion for withdrawal of reference, the motions and arguments
contained in the motion to stay will be addressed by the bankruptcy
court.

Civil No. 12-1457 (FAB)
priority

of

lienholders

6
until

after

motion

for

Debtor

submits

its

reorganization plan.
IV.

CONCLUSION
Defendant

Perimetro’s

consideration

fails

to

present new evidence or establish a manifest error of law. Because
plaintiff Scotiabank rely on arguments that were raised previously,
the motion for reconsideration is DENIED.
IT IS SO ORDERED.
San Juan, Puerto Rico, April 25, 2013.
s/ Francisco A. Besosa
FRANCISCO A. BESOSA
UNITED STATES DISTRICT JUDGE