Mujica v. FirstBank (In Re Mujica)
470 B.R. 251
Bankr. D.P.R.2012Background
- Debtor Nivea V. Perez Mujica and Plaintiff filed an adversary proceeding against FirstBank Puerto Rico over mortgage status and stay-violation issues.
- Defendant moved for reconsideration of a Judgment entered Oct. 26, 2011, which held the mortgage unsecured and denied a stay-violation claim.
- Court analyzed whether the motion is properly treated under Rule 59(e) or Rule 60(b) and concluded it is governed by Rule 59(e).
- Court rejected FirstBank’s interpretation of Puerto Rico Mortgage Law provisions (Article 69.1) as salvaging perfection of the lien after defects and lapse.
- Court reaffirmed that under Puerto Rico law, a mortgage lien cannot attach to unregistered property, as recording is essential to validity of a mortgage; the presentation entry had lapsed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the motion is properly treated under Rule 59(e) or Rule 60(b). | FirstBank seeks reconsideration under Rule 60; timely within 14 days, but the court should evaluate under Rule 59(e). | Motion titled as 9024 but timely under 59(e) analysis; seeks to discuss new legal theories. | Rule 59(e) governs the timely post-judgment motion. |
| Whether FirstBank satisfied Soto-Rios prongs for 362(b)(3) perfection. | Pre-petition interest established; lien should be perfected. | Argues PR Mortgage Law mechanisms can perfect lien despite defective prior deed. | Court found no compliance with the second prong; perfection not established. |
| Whether Article 69.1 of PR Mortgage Regulation salvages the lien despite an expired presentation entry. | Defect not cured; presentation entry expired; lien extinguished. | Article 69.1 can harmonize filings to re-establish tract and perfect lien. | Article 69.1 does not apply to an expired/extinguished presentation entry; lien not perfected. |
| Whether Puerto Rico Mortgage Law requires recording for validity of a mortgage lien; impact on this case. | Recording is essential; without registration, lien is null. | Argues potential corrective mechanisms could salvage lien. | Mortgages under PR law are null unless recorded; unregistered property cannot have a valid lien. |
Key Cases Cited
- Jimenez v. Rodriguez (In re Rodriguez), 233 B.R. 212 (Bankr.D.P.R.1999) (motion practice and reconsideration standards under 59(e)/(60) policy considerations)
- Global NAPs, Inc. v. Verizon New Eng., Inc., 489 F.3d 13 (1st Cir.2007) (59(e) standard and reconsideration abuse of discretion considerations)
- Lavespere v. Niagara Mach. & Tool Works Inc., 910 F.2d 167 (5th Cir.1990) (manifest-error standard for Rule 59(e) motions)
- In re Wedgestone Financial, 152 B.R. 786 (Bankr.D.Mass.1993) (treatment of motions to alter or amend judgment under Rule 59(e))
- United States v. Borden Fin. Corp., 164 B.R. 260 (E.D. La.1994) (context for reconsideration standards)
- ACA Fin. Guar. Corp. v. Advest, Inc., 512 F.3d 46 (1st Cir.2008) (standards for post-judgment relief and finality)