534 B.R. 460
Bankr. D.P.R.2015Background
- Debtor filed a Motion for Guardian ad Litem supported by two medical certificates (Spanish) from her psychiatrist asserting she should not appear or testify in legal proceedings.
- Debtor has received disability benefits since 2003 and as of the bankruptcy filing date.
- The U.S. Trustee characterized this as the debtor’s third guardian-ad-litem request, noted prior procedural noncompliance, and urged a hearing to determine mental condition under applicable rules.
- The Chapter 7 Trustee’s administration is implicated because unresolved turnover orders total about $22,000 and a determination of competency affects estate administration.
- The court found federal bankruptcy rules and precedent point to using state law standards for incompetency and, under Puerto Rico law (Civil Code and Mental Health Code), competence is presumed and a judicial proceeding with medical opinion is required before appointing a guardian.
- The court ordered an evidentiary hearing to determine the debtor’s mental capacity to proceed and whether appointment of a guardian ad litem is appropriate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court should appoint a guardian ad litem for the debtor | Debtor (through counsel) contends her disability prevents her from confronting or participating in proceedings and requests appointment | U.S. Trustee notes prior denials for procedural noncompliance, treats this as a repeat request, and requests a hearing to establish reasonable grounds | Court did not appoint immediately; ordered an evidentiary hearing to determine competency under Puerto Rico standards |
| Which legal standard governs determination of incompetency | Debtor relies on medical certificates asserting incapacity to appear/testify | U.S. Trustee urges application of Rule 15.2(b) PR Rules and a hearing to assess mental condition; court must follow state substantive standards | Court held federal bankruptcy procedure defers to Puerto Rico law for incompetency standards and will apply Civil Code requirements at hearing |
| Who may invoke a judicial determination of incapacity | Debtor (via counsel) filed to be declared incompetent and obtain guardian | U.S. Trustee challenged procedural history and adequacy of evidence; local Civil Code typically grants standing to relatives or prosecutors, not the alleged incompetent herself | Court acknowledged Civil Code does not ordinarily permit the person herself to petition, but because debtor’s son filed an unsworn statement volunteering and counsel filed motion, court proceeded to consider the petition and set hearing |
| Sufficiency of submitted medical certifications and evidence | Debtor submitted two certificates (in Spanish) from her psychiatrist advising nonappearance/testimony | U.S. Trustee argued documents alone insufficient to decree incapacity and recommended a hearing; noted translations required on appeal | Court found certifications insufficient to establish statutory standard (unable to understand/communicate or not qualified to manage property) and required live evidence and physician opinions at an evidentiary hearing |
Key Cases Cited
- In re Moss, 239 B.R. 537 (Bankr. D. Mo. 1999) (federal bankruptcy rules lack a definition of incompetency and state law standards guide incompetency determinations)
- Moody v. Smith (In re Moody), 105 B.R. 368 (Bankr. S.D. Tex. 1989) (determinations of incompetency should be made by reference to state law)
- Jiménez v. Jiménez, 76 D.P.R. 718 (1954) (presumption of legal capacity and need for continuous/chronic incapacity to rebut competence)
- Rivera v. Banco Popular de P.R., 152 D.P.R. 140 (2000) (confirming presumption of legal capacity for adults under Puerto Rico law)