504 B.R. 722
Bankr. D.P.R.2014Background
- Debtor Angel Sanchez Martinez filed a voluntary Chapter 7 bankruptcy on 6/30/2012; trustee appointed 7/1/2012; discharge entered 10/16/2012.
- Plaintiff filed this adversary against Autoridad De Acueducto y Alcantarillados on 6/30/2012 for willful stay violation.
- Plaintiff moved for summary judgment; numerous related filings followed between parties.
- Defendant suspended water service post-petition and issued multiple post-petition invoices and collection notices referencing discharged debt.
- Discharge occurred on 10/16/2012, yet Defendant continued collection efforts into late 2012 and 2013.
- Court DENIED Plaintiff’s Summary Judgment; issues regarding adequate assurance and stay violation to be resolved at trial.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether post-petition collection violated the automatic stay | Sanchez contends stay violation occurred post-petition | Rests on whether charges and collection actions fall outside stay scope or within 366(b) exception | Genuine issues of material fact; trial required |
| Whether Section 366(b) permits termination for lack of adequate assurance | Adequate assurance timely provided; termination improper | Failure to provide adequate assurance allows unilateral termination | Trial needed; factual questions unresolved |
| Whether the date of suspension and invoice amounts are accurately reflected | Invoices post-petition reflect discharged balances; suspension timing within stay period | Invoices and suspension date disputes require factual development | Issues of material fact exist; SJ denied |
Key Cases Cited
- In re PMC Mktg. Corp., 501 B.R. 17 (Bankr.D.P.R. 2013) (definition of ‘utility’ and Section 366 scope in bankruptcy context)
- In re Jones, 369 B.R. 745 (1st Cir. BAP 2007) (366(b) self-executing; no court relief required for adequate assurance decline)
- Begley v. Philadelphia Elec. Co. (In re Begley), 760 F.2d 46 (3d Cir. 1985) (restricts stay termination to prepetition debt nonpayment context)
- Penn Jersey Corp., 72 B.R. 981 (Bankr.E.D. Pa. 1987) (contextual treatment of utility protections under Section 366)