Island Portfolio Services, LLC v. Frank E. Torres Rodriguez, et al.

Summary

The United States District Court for the District of Puerto Rico affirms Bankruptcy Court orders holding that Island Portfolio Services, LLC's mortgage lien expired under Puerto Rico law and that its claim was unsecured. The court concludes that a prior collection-of-m monies judgment and payment agreement did not establish or preserve a foreclosure lien because they were not recorded in the Puerto Rico Property Registry. The court also upholds denial of relief from the automatic stay.

Holdings

1. A judgment and payment agreement arising from a collection-of-money claim, rather than a foreclosure action, and not recorded or indexed in the Puerto Rico Property Registry, did not create, preserve, or revive a valid lien against the property.
2. A mistaken, unchallenged classification of an unsecured claim as secured in a prior bankruptcy case does not create or revive a mortgage lien or other property right.
3. Res judicata, judicial estoppel, and the Rooker-Feldman doctrine did not bar consideration of the mortgage lien's status.
4. The Bankruptcy Court did not abuse its discretion in denying relief from the automatic stay because Island Portfolio had no valid lien to enforce and therefore showed no cause to lift the stay.

Questions Presented

1. Whether the Puerto Rico judgment and Judgment Payment Agreement created or preserved a secured mortgage lien when they arose from a collection-of-money action and were not recorded in the Property Registry.
2. Whether res judicata, judicial estoppel, or the Rooker-Feldman doctrine barred consideration of the mortgage lien's legal status.
3. Whether the prior mistaken classification of Island Portfolio's claim as secured created or revived a mortgage lien.
4. Whether the Bankruptcy Court erred in denying Island Portfolio's motion for relief from the automatic stay.

Disposition

affirmed