UNITED STATES BANKRUPTCY APPELLATE PANEL FOR THE FIRST CIRCUIT ______________________________

BAP NOS. PR 99-029 and PR 99-057 ______________________________

In re: RAMON A. PABON RODRIGUEZ and ELSA IRIS MEDINA LANDIN, Debtors. _____________________________

RAMON LOPEZ JIMINEZ, CELESTINO LOPEZ JIMINEZ, MANUAL DE JESUS RAMOS RAMOS, MARIA DE LOURDES RAMIREZ MUNIZ, AND THE CONJUGAL PARTNERSHIP CONSTITUTED BETWEEN THEM, and HAYBOT JESUS RAMOS RAMOS, Appellants,

v.

RAMON A. PABON RODRIGUEZ, ELSA IRIS MEDINA LANDIN, and RICHARD A. LEE, TRUSTEE, Appellees. _____________________________

Appeal from the United States Bankruptcy Court for the District of Puerto Rico (Hon. Enrique S. Lamoutte, U.S. Bankruptcy Judge) _____________________________

Before VOTOLATO, Chief Judge, VAUGHN and DEASY, U.S. Bankruptcy Judges. _____________________________

Miguel E. Bonilla Sierra for Appellants.

Antonio Fiol Matta for Appellees.

_____________________________

August 21, 2000

_____________________________ PER CURIAM.

I. INTRODUCTION

Before the panel are two appeals filed by Ramon Lopez

Jiminez, Celestino Lopez Jiminez, Manual De Jesus Ramos Ramos and

Maria De Lourdes Ramirez Muniz and the conjugal partnership

constituted between them, and Haybot Jesus Ramos Ramos

(collectively, the “Appellants”) of bankruptcy court orders

denying (1) their motion for reconsideration of the judgment

entered in favor of Ramon A. Pabon Rodriguez and Elsa Iris Medina

Landin (the “Debtors”) and Richard A. Lee, Trustee (the “Trustee”

and, collectively, with the Debtors, the “Appellees”); (2) their

motion to consider the Appellants’ reply to the Trustee’s motion

for summary judgment; (3) their motion to treat the motion for

reconsideration as a motion under Rules 59 and/or 60 of the

Federal Rules of Civil Procedure; and (4) their motion under Rule

60(b)(3) of the Federal Rules of Civil Procedure to vacate the

bankruptcy court’s judgment. For the reasons set forth below, we

affirm.

II. FACTUAL AND PROCEDURAL BACKGROUND

The Appellants own properties that adjoin property owned by

the Debtors. Sometime during the late 1980s or early 1990s,

disputes erupted between the Appellants and the Debtors as to who

owned land north of the Appellants’ properties. To fully

understand the dispute between the parties, it is necessary to review the history of ownership of the real property at issue as

well as the procedural posture of the litigation that has ensued

since 1991.

A. Appellants’ Properties

On April 24, 1942, Mamerto Lopez Ruiz and his wife purchased

land in Aguada, Puerto Rico, known as Estate No. 572, which

consisted of 8.96 cuerdas.1 In 1963, after Ruiz’s wife passed

away, the couple’s three children, Altagracia, Nicasio, and

Celestino, recorded their hereditary title to one-half of the

property.2 On June 14, 1963, Ruiz and his three children reduced

the area of Estate No. 572 to 5.44 cuerdas in accordance with the

requirements of Puerto Rico law.3 The record supports a finding

that 1.084 cuerdas were used to construct a state road and that

the balance of the reduction occurred as the result of a

surveyor’s certification that the remaining property actually

consisted of only 5.44 cuerdas.

1 “Cuerdas” is a Spanish word for a unit of area for which there is no English translation. At oral argument the parties indicated that a cuerdas is slightly smaller than an acre. 2 Puerto Rico law requires that “hereditary rights” be recorded in Puerto Rico’s property registry. See 30 L.P.R.A. § 2201. 3 The Puerto Rico Mortgage and Property Registry Act provides a mechanism, known as “rectification,” in order to resolve “any disagreement on recordable rights which may exist between the Record and the legal reality outside the Registry.” 30 L.P.R.A. § 2360. According to the statute, “[r]ectification of the Registry may be requested by the titleholder of dominion or real right which is not recorded, which is recorded erroneously, or which is impaired by the inaccurate entry.” Id.

2 On November 13, 1964, Ruiz and his children partitioned

their interest in Estate No. 572 as follows:

a. 1.82 cuerdas were transferred to Altagracia, reducing Estate No. 572;

b. 1.82 cuerdas were transferred to Nicasio, creating Estate No. 2072; and

c. 1.80 cuerdas were transferred to Celestino, creating Estate No. 2073.

Ruiz retained an interest in the building situated on Estate No.

572.

On October 22, 1966, Celestino sold Estate No. 2073. The

property was subsequently transferred several times during the

next two decades. On May 10, 1986, Manual De Jesus Ramos Ramos

and Haybot Jesus Ramos Ramos, two of the Appellants, obtained

title to Estate No. 2073 through their parents’ donation. On

January 16, 1967, a few months after Celestino sold Estate No.

2073, Altagracia sold Estate No. 572 to Celestino.

On November 16, 1976, Nicasio attempted to increase the area

of Estate No. 2072 from 1.82 cuerdas to 2.646 cuerdas. Pursuant

to Puerto Rico law, the registrar of property permitted an

increase to 2.18 cuerdas (or by twenty percent) based upon a

survey and measurement by a licensed surveyor.4

4 Puerto Rico law provides:

Rectification of the size of all properties already recorded may be entered in the Registry by any of the following means:

First: By an unappealable verdict handed down in a regular procedure of judicial survey or to establish the dimensions.

Second: By a public document when it is a question of

3 At all times relevant to the litigation described below,

Celestino, Nicasio, and the Ramoses held title to Estates No.

572, 2072, and 2073, respectively.

B. Debtors’ Property

On December 27, 1985, the Debtors purchased property in

Aguada, Puerto Rico, known as Estate No. 1169, from Nicolas de

Cardona and his wife, Clementina Yumat. This property borders

Estates No. 572, 2072, and 2073 on the south, which property is

owned by Celestino, Nicasio, and the Ramoses, respectively. The

deed into the Debtors recited that Estate No. 1169 was recorded

at the registry with an area of 72.10 cuerdas, but that the

correct area, pursuant to a land survey, was 91.6 cuerdas. Under

the terms set forth in the deed, the sellers became obligated to

rectify the recorded area by instituting the appropriate

proceedings.5 The sellers failed to do so. As a result, the

Debtors agree that they have record title to only 72.10 cuerdas.

On March 20, 1993, Julio Cajigas prepared a survey of Estate

No. 1169 for the Debtors that showed that the Debtors’ property

reduction of the area or an excess of no more than twenty percent of the recorded area, and it is done by proven technical surveying methods, in accordance with the provisions of section 2765 of this title.

Third: By means of judicial proceedings to record a title in fee simple for the entire excess when it is more than twenty percent. In this case the immediate former owner shall be summoned even though he has conveyed the property by public document.

30 L.P.R.A. § 2772. 5 See footnotes 3 and 4 supra.

4 consists of 69.103 cuerdas, excluding the area over which there

currently is a dispute with the Appellants, or 2.997 cuerdas

short of the 72.10 cuerdas recorded with the registry and recited

in the deed to the Debtors.

C. Litigation

In 1991, Celestino brought an action in the Puerto Rico

courts against the Debtors seeking to obtain recordable title to

certain land north of his property, Estate No. 572. In 1993,

Nicasio brought a similar action with respect to his property,

Estate No. 2072. In 1996, the Ramoses brought a third action

against the Debtors seeking to obtain title to land north of

their property, Estate No. 2073.

On May 9, 1995, the Debtors filed a bankruptcy petition

under Chapter 13. On August 15, 1996, the bankruptcy case was

converted to Chapter 11. On October 21, 1996, a Chapter 11

trustee was appointed. After his appointment, the Trustee

removed the state court cases filed by the Appellants to the

bankruptcy court, and on March 7, 1997, all three matters were

consolidated.

On September 5, 1997, the Trustee filed a motion for summary

judgment claiming that the Debtors own the property at issue and

that the Appellants were estopped by their own acts from claiming

a right to the property in controversy. The Appellants missed

the September 16, 1997 deadline for filing a response to the

5 motion for summary judgment.6 On December 3, 1997, the

bankruptcy court granted the Trustee’s unopposed motion by

endorsing it in the margin.

On December 12, 1997, after the bankruptcy court granted the

Trustee’s motion, the Appellants filed a late response to the

motion for summary judgment. On December 29, 1997, the

bankruptcy court entered a judgment dismissing the Appellants’s

claims and holding that the Debtors had title to the disputed

property. On January 7, 1998, the Appellants filed a motion to

reconsider the bankruptcy court’s December 3, 1997 order and to

vacate the December 29, 1997 judgment. On January 13, 1998, the

Appellants filed another motion requesting that the bankruptcy

court consider its late response to the motion for summary

judgment.

The bankruptcy court issued an opinion and order on March 2,

1999 denying the Appellants’ requests to reconsider its December

3, 1997 order, to vacate its December 29, 1997 judgment, and to

consider their opposition to the motion for summary judgment. On

March 11, 1999, the Appellants appealed the bankruptcy court’s

December 3, 1997 order granting summary judgment and its March 2,

1999 opinion and order denying their motions to reconsider and

vacate.

6 The Appellants claim they filed a motion for an extension of time to respond to the motion which was never acted upon by the bankruptcy court. The bankruptcy court has no record of ever having received such a motion, either orally or in writing.

6 While their case was pending on appeal, the Appellants filed

a motion under Rule 60(b)(3) of the Federal Rules of Civil

Procedure on May 6, 1999 with the bankruptcy court seeking relief

from the court’s judgment. They argued that the survey relied

upon by the Trustee in his motion for summary judgment was false

and misleading. On July 2, 1999, the bankruptcy court issued an

opinion and order denying the motion for relief from judgment.

The Appellants appealed that order on July 8, 1999. The

Bankruptcy Appellate Panel consolidated the Appellants’ two

appeals on August 11, 1999. The Panel heard oral argument on May

4, 2000.

III. DISCUSSION

On appeal, the Appellants challenge the bankruptcy court’s

orders and judgment that (1) granted relief in favor of the

Trustee; and (2) denied the Appellants’ requests for

reconsideration and for relief from judgment. Specifically, the

Appellants argue on appeal that (1) the bankruptcy court erred in

granting summary judgment in favor of the Appellees; (2) the

bankruptcy court erred in failing to consider the Appellants’

reply to the motion for summary judgment and in failing to vacate

the order granting summary judgment pursuant to Federal Rules of

Civil Procedure 59 and/or 60; and (3) the bankruptcy court abused

its discretion when it denied the Appellants’ motion under

Federal Rule of Civil Procedure 60(b)(3).

7 A. SUMMARY JUDGMENT

In his motion for summary judgment, the Trustee requested

that the Court determine that the Debtors and their bankruptcy

estate hold title to the property in controversy. The Court

granted the motion on December 3, 1997; however, the bankruptcy

court’s reason for granting the Trustee’s motion was not stated

in its order. Rather, the order merely recited: “Granted. No

opposition filed. Judgment shall be entered.”

The standard for appellate review of an order granting or

denying summary judgment is de novo. See Printy v. Dean Witter

Reynolds, Inc.,

(1st Cir. 1997; Adam Co-

operative Bank v. Greenberg (In re Greenberg),

(B.A.P. 1st Cir. 1999). The appellate court must review the

evidence in the light most favorable to the party against whom

judgment was entered to determine whether there are genuine

issues of material fact and whether the lower court correctly

applied the law to the undisputed facts. See McCrory v. Spigel

(In re Spigel), BAP No. RI 00-109 (B.A.P. 1st Cir. July 13, 2000)

(citing Lemelle v. Universal Mfg. Corp.,

(5th

Cir. 1994)). “[S]ummary judgment should be bestowed only when no

genuine issues of material fact exists and the movant has

successfully demonstrated an entitlement to judgment as a matter

of law.” Desmond v. Varrasso (In re Varrasso),

(1st Cir. 1994) (citing Fed. R. Civ. P. 56(c)).

8 “As to issues on which the movant, at trial, would be

obliged to carry the burden of proof, he initially must proffer

materials of evidentiary or quasi-evidentiary quality—say,

affidavits or depositions—that support his position.”

“As

to issues on which the nonmovant has the burden of proof, the

movant need do no more than aver ‘an absence of evidence to

support the nonmoving party’s case.’ . . . The burden of

production then shifts to the nonmovant, who, to avoid summary

judgment, must establish the existence of at least one question

of fact that is both ‘genuine’ and ‘material.’” Id. at n.1

(citations omitted). An inadequate opposition to a summary

judgment motion can eliminate the objecting party’s ability to

raise factual issues warranting trial. See Greenberg,

. The mere fact that a party has failed to file a timely

opposition does not mean, however, that the movant’s summary

judgment motion should be granted. See Mendez v. Banco Popular

de Puerto Rico,

(1st Cir. 1990). Rather, the court

must make a determination that based on the uncontroverted,

undisputed facts, the moving party is entitled to judgment in the

movant’s favor. Thus, while the absence of a dispute over

material facts is a necessary condition for granting summary

judgment, it is not a sufficient condition. See Varrasso,

.

In the instant action, the Appellants sought to rectify the

records of Puerto Rico’s registry of property and “to obtain

9 recordable title to certain land north of their properties, which

they claimed was part of the property each owned.” Appellants’

Brief at 3. In any action seeking to rectify the registry’s

records and/or to obtain recordable title to real property, the

parties seeking relief must comply with Puerto Rico’s Mortgage

and Property Registry Act, 30 L.P.R.A. §§ 2051-2821. “The

purpose of the Property Registry [of Puerto Rico] is the

registration of transactions and contracts relating to real

property through a public record system of titles containing

acquisitions, modifications and extinctions of domain and other

real rights on said property, and the recordable rights on same,

and those judicial opinions which may affect the legal capacity

of the owners of record.” 30 L.P.R.A. § 2051.

The Mortgage and Property Registry Act “recognizes the fact

that an inscription or recording may not reflect the real status

of the property; therefore, . . . a process of rectification of

inaccuracies is reserved for the benefit of ‘the title holder of

dominion or real right which is not recorded, which is recorded

erroneously, or which is impaired by the inaccurate entry.’ . . .

[The statute] provides that when a required correction affects a

third party’s rights, the same can be accomplished if (a) the

third party consents, or (b) a judicial order is entered to that

effect.” Juarbe Alicea v. Juarbe Auto Sales, Inc.,

(D.P.R. 1986) (citations omitted); see 30 L.P.R.A. §

2502 (“When rectification might affect the rights of registered

10 titleholders, their consent or a judicial resolution ordering the

rectification of the entries shall be required.”); 30 L.P.R.A. §

2771 (“When the owner of a recorded property or of a real right

on it does not appear as owner of record, he must bring a regular

action against those appearing in the Registry as titleholders,

and if he wins the lawsuit, the Court shall order a registration

in the name of the plaintiff, and the cancellations which are in

order.”). Here, the Appellants sought not only to change the

registry’s records to reflect that the surface area of their

property was larger but also to obtain recordable title to a

portion of the Appellees’ property. The Appellees objected

claiming they own the property at issue and that the Appellants

are estopped by their own acts from claiming any right to the

property.

Pursuant to 30 L.P.R.A. § 2772, the only way to rectify each

of the Appellants’ properties is “by means of judicial

proceedings” as the Appellants seek to increase their property by

more than twenty percent.7 Each of the Appellants brought a

judicial proceeding in the Puerto Rico courts, and all three

actions were removed by the Trustee to the bankruptcy court. As

the parties seeking to change the registry’s records and obtain

title to registered property, the Appellants have the burden of

proving that there was some inaccuracy in the registry’s record,

i.e., that there was a disagreement with respect to recordable

7 See footnote 4 supra.

11 rights that existed between the record and the legal reality

outside the registry. See 30 L.P.R.A. § 2360.

“In order to be recordable, titles . . . must appear in

deeds, judgments or official documents issued by judicial

authority or a competent official, in the manner prescribed by

law and regulations, except in cases where the law establishes a

different procedure.” 30 L.P.R.A. § 2205. Here, the unopposed

summary judgment record contains no evidence that would support a

finding that the Appellants’s alleged rights in the property

appear in any “deeds, judgments or official documents” as

required by the statute.

In support of his motion for summary judgment, the Trustee

supplied the bankruptcy court with certified copies and

translations of various deeds. In particular, he included copies

of a deed executed on June 14, 1963 pursuant to which Ruiz and

his three children, Altagracia, Nicasio, and Celestino rectified

the area of Estate No. 572 from 8.96 cuerdas to 5.44 cuerdas.

The Trustee further included two deeds executed on November 13,

1964 that partitioned Estate No. 572 into three smaller estates,

two of which contained 1.82 cuerdas and the third of which

contained 1.80 cuerdas, together totaling 5.44 cuerdas. The

deeds indicated that, to the north, these properties bordered

land owned by Nicolas Cardona, the person from whom the Debtors

purchased Estate No. 1169 in 1985. The Trustee also attached to

his motion additional deeds in which the Appellants continued to

12 recite that their properties contained fewer cuerdas than they

now claim.8 The deeds also recite that the three properties

bordered Cardona’s property on the north. It is undisputed that

these deeds were all recorded with the registry of property in

Puerto Rico.

The Puerto Rico Mortgage and Property Registry Act provides:

For all legal purposes, it shall be presumed that the recorded rights exist and belong to their titleholder in the form specified by the respective entry. It shall also be presumed that the person who has recorded the ownership of the real properties or rights has possession thereof. This assumption, as well as the preceding one, admits proof to the contrary, but the courts will take care that in a case of doubt as to possession, the recorded titleholder be recognized as the owner, subject to the actions that his contradictor can exercise in the corresponding regular proceedings.

30 L.P.R.A. § 2354. The statute makes clear that in the instant

case the Panel should presume that the Appellants and the Debtors

have rights to property as recorded in the registry and that they

have possession of the property. Given this presumption and the

lack of evidence in the unopposed summary judgment record that

the Appellants hold title to the Debtors’ property, the Trustee

was entitled to judgment in his favor, i.e., that the Debtors and

their bankruptcy estate are the owners of the property.

Examining the summary judgment record in the light most favorable

to the Appellants, the Panel finds that the record lacks any

8 As indicated above, Nicasio did previously rectify the surface area of his property by twenty percent resulting in an increase to 2.18 cuerdas. Despite this increase, Nicasio apparently was attempting to increase the size of his property even more in the bankruptcy proceeding.

13 basis upon which to find that the Appellants have legal title to

the property.

B. LATE REPLY TO MOTION AND COURT’S REFUSAL TO VACATE ORDER

The bankruptcy court denied the Appellants’ late reply to

the motion for summary judgment as moot. Rules 311(5) and (12)

of the Local Rules of the United States District Court for the

District of Puerto Rico, as adopted and amended by Local Rules

7001(1) and (b)(1) of the United States Bankruptcy Court for the

District of Puerto Rico, provide that a respondent has eleven

days to oppose a motion for summary judgment after it is served.

It is undisputed that the Appellants filed their reply eighty-

seven days after it was due and nine days after the bankruptcy

court ruled on the Trustee’s motion for summary judgment. The

Appellants concede that there is no valid explanation for their

failure to comply with the established procedural requirements of

the bankruptcy court. While it is unclear whether the Appellants

are challenging the bankruptcy court’s order denying their reply

as moot, assuming that the Appellants are seeking review of that

order, the Panel finds that the bankruptcy court acted properly

in refusing to consider the reply. See Smith v. Severn,

(7th Cir. 1997) (holding that the district court did not

abuse its discretion in refusing to consider a plaintiff’s late

response to a motion for summary judgment where the pleading was

“a few months late” and “no good reason for the delay” was

offered).

14 The Appellants challenge the bankruptcy court’s denial of

their motion requesting that the bankruptcy court consider their

reply to the Trustee’s motion and their motion for

reconsideration as motions under Rules 59 and/or 60 of the

Federal Rules of Civil Procedure. As the bankruptcy court

properly explained, a motion to reconsider is not among the

motions recognized by the Federal Rules of Civil Procedure. See

Opinion dated March 2, 1999 at 9. Rather, a motion so

denominated, which challenges the prior judgment on the merits,

should be treated as either a motion to alter or amend under Rule

59(e) or a motion for relief from judgment under Rule 60(b). See

id. at 9-10.

An appellate court reviews an order denying such a motion

for abuse of discretion. See In re Sun Pipe Line Co.,

(1st Cir. 1987), cert. denied,

(1988); Salem

Five Cents Sav. Bank v. Tardugno (In re Tardugno),

(B.A.P. 1st Cir. 1999); Neal Mitchell Assocs. v. Braunstein

(In re Lambeth Corp.),

(B.A.P. 1st Cir. 1998). The

First Circuit Court of Appeals has explained that “[a]buse occurs

when a material factor deserving significant weight is ignored,

when an improper factor is relied upon, or when all proper and no

improper factors are assessed, but the court makes a serious

mistake in weighing them.” Tardugno,

(quoting

Independent Oil & Chem. Workers of Quincy, Inc. v. Procter &

Gamble Mfg. Co.,

(1st Cir. 1988)).

15 In the instant case, the bankruptcy court took painstaking

effort to fully consider the arguments made by the Appellants in

support of their motion for reconsideration (as well as some

arguments the court assumed the Appellants were attempting to

make). The Panel concludes that the bankruptcy court articulated

sound reasons for denying the motion. As there was no abuse of

discretion, the Panel affirms the bankruptcy court’s order dated

March 2, 1999 denying the Appellant’s request to vacate the

court’s judgment.

C. RULE 60(b)(3) MOTION

Rule 60(b)(3) allows a court to relieve a party from a final

judgment, order, or proceeding on account of “fraud (whether

heretofore deemed intrinsic or extrinsic), misrepresentation, or

other misconduct of an adverse party.” A bankruptcy court’s

decision on a Rule 60(b)(3) motion is committed to the discretion

of the court and may be reversed only upon a finding of an abuse

of that discretion. See Ojeda-Toro v. Rivera-Mendez,

(1st Cir. 1988). In considering a Rule 60(b)(3) motion on

appeal, the appellate court does not review the merits of the

underlying judgment. See

To prevail under Rule 60(b)(3) in this case, the Appellants

were required to show that they were prevented from fully and

fairly presenting their defense to the summary judgment motion by

the Trustee’s alleged misconduct in presenting allegedly false

and misleading evidence in the form of the Cajigas survey. See

16 In re M/V Peacock,

, 1404-05 (9th Cir. 1987). The

Appellants argued in their motion that they were entitled to

relief from judgment because the Appellees committed fraud and

misrepresentation by submitting the Cajigas survey in support of

their motion for summary judgment and by making false and

misleading representations about the information contained in it.

The Appellants argue that the Cajigas survey is inaccurate

because it was prepared at the Debtors’ request and in accordance

with the boundaries set by the Debtors and because the adjoining

property owners were not notified that the survey was being

conducted. The Appellants conclude that the bankruptcy court’s

judgment must be vacated because it is based on erroneous and

misleading information submitted by the Appellees.

The Panel agrees with the bankruptcy court, for the reasons

set forth in that court’s opinion and order dated July 2, 1999,

that the Appellants have failed to meet their burden under Rule

60(b)(3). Specifically, the Appellants have failed (1) to

establish that they would have a meritorious defense against the

Appellees’ motion for summary judgment; (2) to demonstrate by

clear and convincing evidence that the Appellees engaged in fraud

or misrepresentation; (3) to show that they were unaware of the

facts upon which they now base their claim of fraud and

misrepresentation at the time they responded to the Appellees

motion for summary judgment; and (4) to exercise due diligence in

obtaining the sworn statement of the surveyor.

17 Because the Appellants have failed to demonstrate how the

Trustee’s alleged misconduct interfered with their ability to

prepare a defense to the motion for summary judgment, the Panel

rules that the bankruptcy court did not abuse its discretion in

determining that the Appellants could not rely on the Appellees’

alleged misconduct in submitting the survey as a reason for

relief from judgment under Rule 60(b)(3). Accordingly, the

bankruptcy court’s order dated July 2, 1999 denying the motion

for relief from judgment is hereby affirmed.

V. CONCLUSION

For the reasons outlined above, the bankruptcy court’s order

granting the Appellees’ motion for summary judgment is AFFIRMED.

The bankruptcy court’s orders denying the Appellants’ motions to

reconsider and for relief from judgment are also AFFIRMED.

SO ORDERED.

18