AMILCAR I FIGUEROA BONILLA and ROSA D VELEZ RIVERA

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO
IN RE: :
:
AMILCAR FIGUEROA BONILLA, : CASE NO. 06-01267 (GAC)
ROSA D. VELEZ RIVERA :
:
Debtors : CHAPTER 13
___________________________________:
DECISION AND ORDER
I. Background
On April 27, 2006, Amilcar Figueroa Bonilla and Rosa D. Velez
Rivera (the “Debtors”) filed a petition under Chapter 13 of the
Bankruptcy Code. The Court gave notice that the bar date to file
proofs of claim was on September 12, 2006 (dkt. #5). Creditors,
Ana I. Roman and Carmen I. Amy (“Creditors”), attempted to file on
that date, but ultimately filed the day after. The Debtors filed
an objection to the claim, contending that it was untimely (dkt.
#47) and Creditors responded indicating that they tried to file on
September 12, but that the court was closed (dkt. #50). After a
hearing, the Court ordered both parties to submit post-trial
briefs. Creditors filed a brief (Docket #95) which was later
answered by the Debtors (Docket #99). The issue before the Court
is whether to allow the late filing of Creditors’ proof of claim
under an “excusable neglect” standard and whether Creditors were
denied due process of law when they were unable to access the
court’s filing drop-box during normal operating hours. For the
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reasons set forth below, the Court concludes that Creditors’ due
process rights were violated and thus the objection to claim will
be denied.
II. Position of the Parties
A. Creditors
Creditors contend that Ms. Migdalia Dominguez, Executive
Secretary of the Ramirez Lavandero and Associates Law Firm, arrived
after 4:00 p.m., but prior to 5:00 p.m., on the afternoon of
September 12, 2006 to file the proof of claim. Ms. Dominguez
testified that the gates on the outside of the building were
closed, and that a security guard told her that the building was
not accessible for filing at the time. She filed the proof of
claim the following morning. Creditors argue that the claim should
be allowed under an “excusable neglect” theory.
B. Debtors
Debtors claim that Creditors had more than enough time to file
the corresponding proof of claim in the case, but waited until the
last possible moment to file. Debtors also allege that if Ms.
Dominguez had arrived at the court slightly after 4:00 p.m., as she
contends, she still would have had the opportunity to file in the
drop-box at the entrance of the Courthouse. Thus, debtors argue
that there was no “excusable neglect” on Creditors’ part, but just
plain neglect.
Finally, Debtors argue that if the Court allows this proof of
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claim, it would be extremely prejudicial to them since it would
lead to further litigation on the subject matter. Debtors contend
that they cannot pay the costs, such as attorney’s fees, resulting
from these future proceedings, since it would worsen their economic
situation from what it was when they filed for bankruptcy
protection.
III. Discussion
A. The “Excusable Neglect” Standard
In Pioneer Investment Services v. Brunswick Assoc. Ltd., 507
US 380 (1993), the U.S. Supreme Court discussed the excusable
neglect standard. The Supreme Court decided that an attorney's
inadvertent failure to file a proof of claim on behalf of a
creditor within the deadline set by the bankruptcy court could
constitute “excusable neglect” within the meaning of Fed. R.
Bankr. P. 9006(b)(1). Id at 383. The Court concluded that the
"excusable neglect" standard of Rule 9006(b)(1) governs late
filings of proofs of claim in Chapter 11 cases, but not in
Chapter 7 cases.” Id. at 389.
The present case is a Chapter 13 and the Bankruptcy
Appellate Panel for the First Circuit has determined that the
“excusable neglect” standard does not apply in Chapter 13 cases.
See Aboody v. U.S., 223 B.R. 36 (B.A.P. 1st Cir. 1998). In
Aboody, the bankruptcy court allowed the U.S. Government to file
a proof of claim in the debtor’s Chapter 13 case, one month after
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the claims bar date. The Bankruptcy Appellate Panel unanimously
reversed and remanded on the grounds that Chapter 13 and Chapter
7 are both governed by Fed. R. Bankr. P. 3002(c). The Panel
stated that “if the excusable neglect standard is inapplicable to
the filing of a proof of claim in a case under Chapter 7, the
standard should logically be inapplicable to the filing of a
proof of claim in Chapter 13.” Id. at 38. Therefore, the BAP
concluded that Fed. R. Bankr. P 9006(b), which governs excusable
neglect, was inapplicable. Accordingly, this Court concludes
that the claim of the Creditors in the present case can not be
allowed under an excusable neglect theory.
B. Due Process
The Fifth Amendment to the Constitution of the United States
of America, provides that no person shall be deprived of life,
liberty, or property, without due process of law. U.S. Const.
Amend. V. Proceedings in bankruptcy cases are subject to the
requirements of due process under the Fifth Amendment to the
Unites States Constitution. In re San Miguel Sandoval, 327 B.R.
493 (B.A.P. 1stst Cir. 2005). While the case law, involving due
process in the late filing of proofs of claim, relates to
inadequate notice of the bar date, nonetheless, the prohibition
against allowing late filed claims must accomodate all due
process concerns.
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At the hearing, Ms. Dominguez testified that she arrived at
the Courthouse on the afternoon of September 12, 2006, and found
that the outside gates were locked. She also testified that she
was told by a court security guard that no further filings were
to take place that day and that she did not find a drop-box.
This led her to take the documents she was attempting to file to
her residence. On the morning of September 13, 2006, she arrived
at the courthouse and filed the proof of claim.
This Court is aware that the public entrance to the
courthouse was being closed between 4:00 p.m. and 4:30 p.m.,
after the Clerk’s Office closes to the public, and that the
filing drop-box is inside the building and was not available for
filing. The entrance was being locked in spite of the published
policy indicating that the drop box is available for filing from
8:00 a.m. to 5:00 p.m. Monday through Friday, except holidays.
Thus, the Court accepts Ms. Dominguez’s testimony that she
arrived during filing hours, but could not access the filing
drop-box. If the courthouse had not been locked during normal
operating hours or had Ms. Dominguez been allowed to enter the
building to file the proof of claim, Creditors’ proof of claim
would have been timely filed. The claim was filed early the next
morning. Under this scenario, it would be fundamentally unfair
to disallow the Creditors’ claim and this Court concludes that
disallowing Creditors’ claim would be a denial of due process.
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Accordingly, the Debtor’s objection to the proof of claim will be
denied.
ORDER
Wherefore IT IS ORDERED that the Debtors’ objection to the
Creditors’ proof of claim (dkt. #47) shall be, and it hereby is,
DENIED.
SO ORDERED.
San Juan, Puerto Rico, this 11th day of June, 2008.
BY THE COURT:
s/ Gerardo A. Carlo
_______________________
GERARDO A. CARLO
U.S. Bankruptcy Judge
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