RIVERA VELEZ et al v. GE CAPITAL CORP

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF PUERTO RICO

IN THE MATTER OF

LUTS RIVERA SANCHEZ & NANCY : CASE NO. 05-07953 (SEK)
SANCHEZ MARTINEZ,
DEBTORS : CHAPTER 11

DEBTORS AS THE,

PLAINTIFFS ; ADV. NO. 06-0029
Vv. :
GENERAL ELECTRIC CAPITAL CORP. FILED & ENTERED
AND THE U.S. TRUSTEE ; ;
’ NOV 716 2006
DEFENDANTS : oLEne

U.S. BANKRUPTCY COUR’
SAN IUAN, PUBRTO RICO

— ee ee ee ee i ee ee Ee ee

OPINION AND ORDER

Pending before the court is co defendant, General Electric
Capital Corporation’s (GE Capital), motion to dismiss the
complaint. For reasons that follow, we only dismiss the first
count of the complaint.

Background

The first count of the complaint seeks a court ruling
approving the bifurcation of GE Capital’s proof of claim based on
the value of collateral, as follows: $278,500 secured and
$221,890.28 unsecured. The second and third counts are requests
for entry of actual and punitive damages due to GE Capital’s
alleged violation of the automatic stay.

We adopt as our own paragraphs 1-18 of the motion to

AUTHENTICATED /
U.S. GOVERNMENT
INFORMATION
GPO

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dismiss because these reflect events that transpired in this
case. We also note, Debtors filed a motion to set aside the
Judgment in Superior Court of Puerto Rico, Mayaguez Part. We
based much of our rulings granting GE Capital’s amended motion to
set aside the automatic stay on the challenged judgment.
According to Debtors, that state court denied their motion. It
is currently under appeal before the Estado Libre Asociado de
Puerto Rico, Tribunal General de Justicia, Tribunal de
Apelaciones, Circuito Regional IV, Regién Judicial de Mayaguez.
Discussion

We dismiss the first count because we granted the motion for
lift of stay so that GE Capital could execute its collateral. The
process of execution is the best way of determining the value of
the collateral, which in turn will provide an accurate picture of
this creditor’s claim against the estate in bankruptcy.
Furthermore, challenges to the validity of the state court
judgment which give rise to the execution process, are on going
before the state courts. Therefore, we dismiss this count I
because the timing of this action shows its not ripe for

adjudication, '

1 The ripeness doctrine has both constitutional and
prudential dimensions. [citations omitted] Its basic rationale is
‘to prevent the courts, through avoidance of premature
adjudication, from entangling themselves in abstract
disagreements.’” Stern v. U.S. District Court for the District of
Massachussetts, et al., 214 F. 3d 4, 10 (15* Cir. 2000).

2

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With respect to counts ITI and III of the complaint, the
allegations seem to admit there was a period of time wherein the
automatic stay might have been violated due to the peculiar facts
of this case. Therefore, the motion concerning these two counts
is denied. This are matters for resolution after the trial on
merits.

We deny dismissal as a sanction for Debtors absconding with
the collateral apparently preventing GE Capital from executing
its lien. Our order for lift of stay does not require that
Debtors turnover the collateral to GH Capital. It only removes
an impediment to collection of the loan in rem, It is up to the
state courts to sanction this alleged unlawful behavior.

SO ORDERED, in San Juan, Puerto Rico, on November 15, 2006.

Y/0

SARA DE JS
U.S./Bankrufstcy Judge