Banco Popular de Puerto Rico v. Gómez Alayón y otros
2023 TSPR 145
| Supreme Court of Puerto Rico | 2023Background
- Banco Popular de Puerto Rico (BPPR) obtained a summary judgment against Andrés Gómez Alayón, Nelia López del Valle, and their marital community for unpaid credit card debt.
- To collect, BPPR sought and received an order to execute on the debtors’ bank accounts, including accounts held at Scotiabank (now Oriental Bank).
- On June 18, 2018, the court's order was executed by the marshal, and funds in the debtor's Scotiabank account were frozen pending transfer to the court.
- On June 21, 2018, debtor filed for bankruptcy under Chapter 13, after which Scotiabank released the hold on the funds and debtor withdrew the money, claiming the automatic stay compelled this.
- BPPR sought sanctions against Scotiabank for releasing funds, alleging violation of the court's order. The trial court found Scotiabank acted reasonably given the bankruptcy, declined to sanction, and marked the show cause order as complied.
- The Court of Appeals reversed, holding Scotiabank should have consulted the bankruptcy trustee/court before releasing funds. The Supreme Court reinstated the trial court's ruling, finding no abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Was Scotiabank (Oriental Bank) required to consign frozen funds to court after bankruptcy was filed? | BPPR: Bank should have consigned funds (already frozen) to the court and allowed the debtor to argue for their return in bankruptcy proceedings. | Oriental Bank: The bankruptcy filing and automatic stay required lifting the hold and releasing funds to the debtor. | Not required; the trial court acted within its discretion given the circumstances. |
| Did the trial court err in not sanctioning Scotiabank for releasing funds? | BPPR: Court should have imposed sanctions for violation of the embargo order. | Oriental Bank: The bank reasonably released the funds to avoid violating the automatic stay. | No error; denying sanctions was within trial court's reasonable discretion. |
| Should the Court of Appeals have intervened in the trial court's discretion on post-judgment enforcement? | BPPR: Court of Appeals acted properly to prevent miscarriage of justice. | Oriental Bank: Only clear abuse of discretion justifies appellate intervention. | The Court of Appeals erred; no abuse of discretion existed. |
| Did the bankruptcy filing affect the status or control of the frozen funds? | BPPR: Funds already effectively in custody and subject to court order; bankruptcy did not change status. | Oriental Bank: Bankruptcy automatic stay changed jurisdiction and compelled release. | Bankruptcy stay immediately impacted jurisdiction; trial court's resolution proper. |
Key Cases Cited
- IG Builders et al. v. BBVAPR, 185 D.P.R. 307 (P.R. 2012) (outlines standards for reviewing post-judgment enforcement orders and appellate discretion)
- Peerless Oil v. Hnos. Torres Pérez, 186 D.P.R. 239 (P.R. 2012) (explains significance and automatic effect of the bankruptcy stay on state court proceedings)
- Vives Vázquez v. ELA, 142 D.P.R. 117 (P.R. 1996) (discusses deference to trial court discretion in case management)