« Case:17-03283-LTS Doc#:24891-2  Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:
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Exhibit Exhibit 2 Page 2 of 2

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CONFIDENTIALITY NOTE: This communication contains information belonging to Saldafia,

Carvajal & Vélez-Rivé, P.S.C., which is confidential and/or legally privileged. The information is
intended only for the use of the individual or entity named above. If you are not the intended recipient,
you are hereby notified that any disclosure, copying, distribution or the taking of any action in reliance
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Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

Case:17-03283-LTS Doc# SABA EXPEL Fade Let E8os/14/23 11:05:59 Desc:
Exhibit Exhibit 1 Page 4 of 8
Page -4-

further order from the Court. Since then, the case has been stayed
and Movant has received no compensation.

5. Cause as to why the stay should be lifted.

Movant seeks relief from the automatic stay of Case No. 13-
1360. It should be lifted pursuant to 11 U.S.C. § 362(d) and 48
U.S.C. § 2194(e) for cause shown, including but not limited to the
reasons stated in this letter. In the alternative, and for the same
reasons that establish just cause to lift the automatic stay
Movant seeks for the Commonwealth to take an exception and modify
the automatic stay to enable Movant to obtain some recovery, and
continue his action against the individual Defendants that
benefitted from the dismissal in view of the Settlement, yet
suffered no pecuniary loss since they were being (and still are)
represented and defended by the Commonwealth under Law 9. Movant
should, at the very least, be allowed to continue the action
against the Defendants until Judgment is issued by the USDC-PR,
since the settlement only benefitted Defendants and Movant has been
deprived of his right to be compensated by Defendants for the
violation of his Civil Rights.

The merits of Movant’s claim are sustained by the U.S.
Constitution, federal laws, and case law.
Since the Bankruptcy Code nor PROMESA offer an all-encompassing
definition of “cause” to lift a stay, the term “cause” must be
determined on a case-by-case basis. Courts have set forth various
multi-factor tests to determine when there is just cause to lift
the stay, See, e.g., In re Sonnax Indus., Inc., 907 F.2d 1280 (2nd
Cir. 1990); In re Rexen Prods. Co., 141 Bankr. 574 (D. Del. 1992);
In re Granati, 271 Bankr. 89 (E.D. Va. 2001); In re Johnson, 115
Bankr. 634 (D. Minn. 1989); In re Pro Football Weekly, Inc., 60
Bankr. 824 (N.D. Ill. 1986); In re Curtis, 40 Bankr. 795 (D. Utah
1984.)

“Although the reach of the automatic stay is broad, it is not
unlimited,” 3 Collier, On Bankruptcy 7 362.01. To be clear, the
automatic stay does not confer absolute immunity to the filer
against claims that are sustained by cause. The Court has the
discretionary power to decide on a case-by-case if sufficient
“cause” has been shown to lift the stay. But, as In re Kerns made
clear: the court does not have “total discretion” in deciding to
lift the stay because § 362(d) of the Bankruptcy Code directs the
court to grant relief from the stay for cause by using the word
“shall” instead of “may,” and therefore, “where cause is found to
exist, the courts have no discretion to deny relief,” In re Unanue-

Suite 800, MCS Plaza, 255 Ponce de Leén Ave., Hato Rey, PR 00917 - P O Box 71449, San Juan, PR 00936-8549
Office Tel.: (787) 756-9640 - Fax (787) 756-9641

www.cmtplaw.com
www.chitolaw.com



» » Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:
Case:17-03283-LTS Doc#548/RL EX PIRI 13/1 Age 24,0128.08/14/23 11:05:59 Desc:

Exhibit Exhibit 4 Page 1 of 3
EXHIBIT 4

*

SN

COTO & AS

W

OCIATES

August 2, 2023

Ramén Coto-Ojeda*

*Also admitted to the District of Columbia Bar

Edna Pérez-Roman
Gabriel A. Rosa-Cruz
Vanellies Santiago-Rivera

Attn:

Hermann Bauer (Hermann.Bauer@oneillborges.com)
Ubaldo M. Fernandez Barrera (ubaldo. fernandez@oneillborges.com)
Diana M. Perez (dperez@omm.com)

Luis C. Marini-Biaggi (lmarini@mpmlawpr.com)
Carolina Velaz-Rivero (cvelaz@mpmlawpr.com)

MATTER: In re: The Financial
Oversight and Management Board for
Puerto Rico, Case No. 17-3283 (LTS);
“LIFT STAY NOTICE FOR CASE NO. 13-
1360(ADC), ROBERT ANEL DIAZ-MORALES
V. LIMARIS CRUZ-VELEZ, ET AL.”

Dear all:

On May 5, 2023, we sent a communication to your offices
informing you of our intention to request the lifting of the stay
imposed by the United States District Court of Puerto Rico ("USDC-
PR") on the claim presented by Mr. Robert Anel Diaz-Morales ("Mr.
Diaz Morales"). As you may recall, through that action, the
procedural process of which is outlined in detail in our previous
communication, Mr. Diaz Morales claimed against various public
officials who were involved in the proceedings against him for
being falsely and unjustly accused, convicted, and incarcerated
for a period of 8 and a half years.

Suite 800, MCS Plaza, 255 Ponce de Leén Ave., San Juan, PR 00917: PO Box 71449, San Juan, PR 00936-
8549 Office Tel.: (787) 756-9640: Fax (787) 756-9641
www.crlawpr.com
www.chitolaw.com



+". Case:17-03283-LTS _Doc#:24891-2 Filed:08/15/23 SORE 08/15/23 17:36:40 | Desc:
Case:17-03283-LTS Doc#:248¥RiphilediMB/44/23 Plat Pagers oP 0844/23 11:05:59 Desc: Main
Document Page 3

reason as an argument for sustaining the stay. Thus, diminishing
the consequence of whether Movant sought to enforce the
Commonwealth to pay or not during the status conference on
September 20, 2021, and/or any other instance. The importance of
the immateriality of this point cannot be stressed enough, since
it was the main reason which led the USDC-PR to grant the
individual defendants’ motion to stay the case under PROMESA. ECF
No. 307, at p. 7.

RESPONSE TO THE OBJECTION OF THE PROOF OF CLAIM

Under Title III of PROMESA, the automatic stay extends to
actions brought to collect judgment issued before Title III was
filed. Autonomous Municipality of Ponce v. F.O.M.B. (In re
F.O.M.B.), 939 F.3d 356, 360-61 (1st Cir. 2019). Said automatic
stay also extends to the Commonwealth and officers in their
official capacity. Peaje Invs., LLC v. F.O.M.B. (In re F.O.M.B.),
899 F.3d 1, 5-6, 6 n.2 (1st Cir. 2018). The stay applies even if
the payment agreement was struck before the Title III petition
filing and to the remanent of any debt if payment started before
Title III filing. Colon-Torres v. Negron-Fernandez, 997 F.3d 63,
73 (1st Cir. 2021).

There should be no doubt that the individual defendants' actions
are imputable to the Commonwealth and any argument to the contrary,

at this stage of the proceedings, as the Commonwealth’s legal

30 of 36



°

Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

Case:17-03283-LTS Doc# 2HaPa EMU nage tnelre6:08/14/23 11:95:50 . Desc:
Exhibit Exhibit 3 Page 1 of 3

IF YOUR CLAIM IS LISTED HERE, ONE OR MORE OF THE DEBTORS
ARE SEEKING TO DISALLOW YOUR CLAIM FOR THE REASON LISTED BELOW.

NAME CLAIM # DATE FILED DEBTOR ASSERTED CLAIM
AMOUNT
[Diaz-Morales, Robert Anel /46107 5/25/2018 Commonwealth of Puerto Rico \$1,600,000.00

Treatment:

Claim to be Disallowed

Reason:

Proof of Claim fails to provide a basis for asserting a claim against the Commonwealth of Puerto Rico.
Proof of Claim and supporting documentation only show liability between Claimant and individuals in
their personal capacities, who are not part of the Title Ill proceedings.

SISU RECLAMO ESTA INCLUIDO AQUi, UNO O MAS DE LOS DEUDORES |
SOLICITAN QUE SU RECLAMO SEA RECHAZADO POR LA RAZON INDICADA AQUi ABAJO.

NOMBRE

NoDE ;
RECLAMACION

FECHA DE

PRESENTACION

DEUDOR

MONTO DE LA
RECLAMACION ALEGADA

[Diaz-Morales, Robert Anel

46107

5/25/2018

Commonwealth of Puerto
Rico

{$1,600,000.00

Tratamiento:

Reclamo a ser desestimado

Base para:

La Evidencia de Reclamo no proporciona un fundamento para presentar un reclamo contra el Estado
Libre Asociado de Puerto Rico. La Evidencia de Reclamo y la documentacidn de respaldo solo indican
una obligacién entre el Demandante y particulares a titulo personal, que no forman parte de los

procedimientos iniciados al amparo del Titulo Ill.

x

if

you

have

questions,

please contact

Copies of the Omnibus Objection and all other filings in the Title III Cases are available free online at https://
cases,ra.kroll.com/puertorico/.

Kroll _ Restructuring

Administration LLC (formerly known as Prime Clerk LLC) at (844) 822-9231 (toll free for U.S. and Puerto Rico) or
(646) 486-7944 (for international callers), available 10:00 a.m. to 7:00 p.m. (Atlantic Standard Time) (Spanish

available).

Copias de la Objecién global, y todos los escritos radicados en el marco de las causas conforme al Titulo III, estan

disponibles, de

manera

gratuita,

en

https://cases.ra.kroll.com/puertorico/.

Si

tiene

alguna pregunta,

comuniquese con Kroll Restructuring Administracion LLC (anteriormente conocido como Prime Clerk LLC)
lamando al (844) 822-9231 (nimero gratuito para Estados Unidos y Puerto Rico) 0 (646) 486-7944 (para Ilamadas
desde el extranjero), disponible entre las 10:00 a.m. y las 07:00 p.m. (AST) (hablamos espaiiol).



Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

@d:08714723 11:05:59 + Desc:

Kroll Restructuring Administration
PO Box 5293

{2 New York, NY 10150-9998 e
° a
oO
oO

an >
oO
a
~”
3 LEGAL NOTICE ENCLOSED. DIRECT TO ATTENTION OF ADDRESSEE OR PRESIDENT/GENERAL COUNSEL.
od
in
a2 iid etc tie eye
5 [REREVED
i JUL, 3.1 ana3

aon
COTO & ASSGG

Case:17-03283-LTS Doc#'24


Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

Case:17-03283-LTS Doc# S4iRiL EPIL Rage 44,28:08/14/23 11:05:59 Desc:
Exhibit Exhibit 1 Page 8 of 8

Page -8-

person has been prejudiced twice: once when he was improperly
incarcerated for eight and a half years for crimes that he did not
commit, and twice, of being deprived of its just compensation for
the damages caused to him, after the case settled. Defendants, as
defended by the Commonwealth, and beneficiaries under Law 9, are
walking free unharmed although they grossly violated Movant’s civil
rights. We are available to meet in the next fifteen (15) days
after you receive this notice. Please feel free to contact us at
the address and/or phone number shown below.

SALDANA, CARVAJAL & VELEZ- COTO & ASSOCIATES
RIVE,P.S.C. P O Box 71449
166 Ave. de la Constitucién San Juan, P. R 00936-8549
San Juan, P.R. 00961 Tel: (787) 756-9640
Tel. (787) 289-9250 Fax: (787) 756-9641

Fax (787) 289-9253

s/ Angel E. Rotger Sabat s/ Ramon Coto Ojeda
ANGEL E. ROTGER SABAT RAMON COTO-OJEDA

USDC-PR No. 208601 USDC-PR No. 202006
arotger@scvrlaw.com rco@crlawpr.com

Suite 800, MCS Plaza, 255 Ponce de Le6n Ave., Hato Rey, PR 00917 - P O Box 71449, San Juan, PR 00936-8549
Office Tel.: (787) 756-9640 - Fax (787) 756-9641

www.cmtplaw.com
www.chitolaw.com


“+ G886:1/-0aeeLrS> OBS 2B Fed idles lerpslelan2s 16s Bek: Meare

Movant also requests that his undesigned counsel be allowed to
participate in the hearing to be held on August 30, 2023.

RESPECTFULLY SUBMITTED.

In San Juan, Puerto Rico, on August 14, 2023

IT IS HEREBY CERTIFIED that the foregoing was filed with the
Clerk of the Court using the CM/ECF system, which will send

notification electronically to all attorneys of record.

SALDANA, CARVAJAL & VELEZ- COTO & ASSOCIATES
RIVE, PSC P O Box 71449
166 Ave. de la Constituci6én San Juan, P.R. 00936-8549
San Juan, Puerto Rico 00901 Tel: (787) 756-9640
Tel: (787) 289-9250 Fax: (787) 756-9641

Fax: (787) 289-9253
Cel: (787) 402-5670

s/Angel E. Rotger-Sabat s/Ramén Coto-Ojeda

ANGEL E. ROTGER-SABAT RAMON COTO-OJEDA
USDC-PR No.208601 USDC-PR No. 202006
arotger@scvrlaw.com reo@crlawpr.com

35 of 36



“+ Gaset/ OSee LTS Dock 2aSfR ilegBdeS caierpa naa aied LPOSey “Bete Nain

jocumen' age

the Commonwealth and the officials would use PROMESA as a
subterfuge to prevent him from being properly compensated as agreed
in the Settlement Agreement. Finally, there is no doubt that Movant
relied on the Commonwealth's actions to his detriment. Movant
agreed to have the State Court action against the Commonwealth
dismissed with prejudice by virtue of a settlement between him and
the Commonwealth that has not been satisfied. Now, the
Commonwealth's legal representatives temerariously claim that
Movant’s Proof of Claim does not assert a claim against the
Commonwealth because the liability asserted was between Movant and
the individual defendants.

Respectfully, and in conclusion, the Objection made by the
Commonwealth to Movant’s Proof of Claim is reckless, frivolous,
contradictory, and constitutes a vexatious action that should be
punished by this Honorable Court. Originally, the PROMESA stay of
the Federal Court action filed by Movant was not extended to the
individual defendants, as they were government officials, and the
Commonwealth was not a party to the action before the USDC-PR.
Nevertheless, Peaje Invs., LLC v. F.O.M.B. (In re F.O.M.B.), supra,
confirmed PROMESA’s stay was to be extended to individuals that
were officers of the Commonwealth. Therefore, the counsel for the
individual defendants, who were defense counsel from the
Department of Justice of the Commonwealth, moved to apply the stay

because they claimed that the action was against the Commonwealth

32 of 36



" . Gasex17 ogp89-11S Docs 24gor.7. lec:0R15/29 Entered S/AS/29.17-96:40
C8581 7- 088s LTS DOGS 248 Bl edge 4s Feelergds P84 4/23 11.08.59 “Desc: Main”
jocument age 3: 5

representatives have done in the Objection, is inconsistent and
contradictory to the Commonwealth's past actions and arguments,
and, consequently, they are estopped from doing so. In this sense,
the doctrine of equitable estoppel prevents one “from denying the
consequences of his conduct where that conduct has been such as to
induce another to change his position in good faith or such that
a reasonable man would rely upon the representations made.” Clauson
v. Smith, 823 F.2d 660, 662 (18t Cir.1987). There are four
requirements for this estoppel to apply: (1) the party to be
estopped know the facts; (2) that party must intend that his
conduct be acted upon (or must act in a way that leads the party
asserting the estoppel to believe it is so intended); (3) the
latter must be ignorant of the true facts; and (4) he must rely on
the estopping conduct to his detriment. Id.

In this case, this Court will find the four (4) requirements to
apply the doctrine of equitable estoppel. First, The Commonwealth
knew the facts because it was party to the State Court proceedings
in which they were defending themselves because of the individual
defendants’ actions and by virtue of the settlement agreement they
consented to pay Movant a compensation in several installments.
Second, Movant voluntarily dismissed the two lawsuits pursuant to
the settlement agreement, and therefore acted on the premise that
he would be compensated for the damages he suffered as a result of

his wrongful incarceration. Third, Movant was unaware that both

31 of 36



« . Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

Case:17-03283-LTS Doci#25ainit Expipit Rage 49,0f28.08/14/23 11:05:59 Desc:
Exhibit Exhibit 2 Page 1 of 2 met
Exhibit 2

From: Angel E. Rotger-Sabat <arotger@scvrlaw.com>

Sent: Thursday, June 8, 2023 9:32 AM

To: hermann.bauer@oneillborges.com; ubaldo.fernandez@oneillborges.com; dperez@omm.com;
Imarini@mpmlawpr.com; cvelaz@mpmlawpr.com

Cc: Ramon Coto-Ojeda <rco@crlawpr.com>; Wanda Mossetty <wmm@crlawpr.com>; Lcdo. William
Maisonet Rodriguez <bufetemaisonet@yahoo.com>; Yoshira Montes <ymontes@scvrlaw.com>
Subject: The Financial Oversight and Management Board for PR - Lift Stay Notice for Case NO. 13-1360
//O/File no. 608-1

Greetings:

As you know, counsel Ramon Coto-Ojeda, and | represent the interests of our client, Robert A.
Dfaz-Morales, in the matter of Case No. 13-1360 (ADC), Robert Anel Diaz-Morales v. Limaris Cruz-
Vélez, et al. This action was stayed under the Commonwealth’s PROMESA case.

We write to you because we still have not received a response to our May 5,2023-letter giving
you notice of our client’s intent to file a Motion for Relief from Stay. We wish to reach an
agreement in the manner of some sort of monetary compensation for our client before having
to file the Motion for Relief from Stay pursuant to the latest Amended Case Management
Procedure Order in the matter of Case no. 17-03283 (LTS), In re the Financial Oversight and
Management Board for Puerto Rico as representative of the Commonwealth of Puerto Rico.

Attached is the Lift Stay Notice sent on May 5, 2023, for ease of reference.
Therefore, we ask you to meet and confer with us in order to try to reach an agreement.
Please, let us know your availability.

Truly,

Angel E. Rotger Sabat, Esq.

SALDANA,

C V R CARVAJAL &

VELEZ-RIVE, PSC

Saldafia, Carvajal & Vélez-Rivé, PSC
166 Ave. de la Constitucion

San Juan, PR 00901

Tel. (787) 289-9250

Fax. (787) 289-9253

Cel. (787) 402-5670

e-mail: arotger@scvrlaw.com

http://www.scvrlaw.com


G888:1/- CRBS DOORS AITE ec Bes enlecph puNeS 12s.od Bak. veitTM

we request that Movant’s Claim be detached from PROMESA related
procedures, and that Movant be allowed to proceed with his action
against the individual defendants. This is because we would not be
making a claim against Commonwealth, and there would be no obstacle
to Movant's ability to seek damages for the eight and a half (8 %)
years he was unjustly and illegally incarcerated for a crime he
did not commit.

Regardless of how this Honorable Court decides to exercise
its wisdom in resolving Movant's present Response, we request that
we be allowed to participate in and present Movant's position at
the hearing to be held on August 30, 2023.

WHEREFORE, Movant respectfully requests that this Honorable
Court DENY the Omnibus Objection filed at D.E. 24749 regarding
Movant's Proof of Claim, that the stay be lifted, and his claim be
deemed allowed for the entire agreed upon amount of one million
six hundred thousand dollars ($1.6M). Otherwise, if this Honorable
Court should find that the Objection has a legal basis, that the
procedures be detached from PROMESA related procedures and
Movant’s Proof of Claim be allowed to pursue his claim against the
individual defendants. Because of the Commonwealth’s actions
before the USDC-PR and before this Honorable Court, and its failure
to try to reach an agreement and having forced Movant to file this
Response, Movant requests that this Honorable Court awards Movant

reasonable attorney’s fees incurred in the filing of this Response.

34 of 36



, «© « Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

Case:17-03283-LTS Doc#:SXBIUE*PIPI A RA9* BR Bf 48os14/23 11:05:59 Desc:
Exhibit Exhibit4 Page 2 of 3
Page 2

In this regard, you will also recall that initially, the USDC-
PR denied the request of the defendants to stay the proceedings,
because the Commonwealth was not named as a party in the lawsuit.
This Court's decision was appealed to the United States Court of
Appeals for the First Circuit, which affirmed the inapplicability
of the stay enjoyed by the Commonwealth against its creditors under
PROMESA. However, following a ruling by Judge Swain that the stay
provisions of PROMESA were applicable to the Commonwealth
officials, on April 13, 2022, the USDC-PR extended the automatic
stay to Mr. Diaz Morales' claim.

After outlining the legal reasons for the lift of the stay
applied to Mr. Diaz Morales' claim, we sincerely requested to
schedule an in-person meeting with you to reach a fair resolution
to the claim of a person who was harmed by an unjust and erroneous
judicial decision. However, to our surprise, on July 31, 2023, we
received your objection to Proof of Claim number 46107, and you
based it on the following:

“Proof of Claim fails to provide a basis for asserting
a claim against the Commonwealth of Puerto Rico. Proof
of Claim and supporting documentation only show
liability between Claimant and individuals in their
personal capacities, who are not part of the Title III
proceedings.”

Not only is the reason provided as the basis for your
opposition erroneous and in bad faith, but it is also frivolous
and reckless. You will recall that, at the state level, it was the
Commonwealth that, under the provisions of PR Law No. 104 of 1955,
the Claims and Demands against the State Act, 32 LPRA § 3077 et
seq., assumed the legal representation of the sued public officials
and, furthermore, committed through a settlement agreement to
indemnify Mr. Diaz Morales for the violations of his civil rights
that arose as a result of his incarceration. At the federal level,
it was the USDC-PR itself that acted based on its previous decision
and extended the application of the stay to the actions of the
officials sued by Mr. Diaz Morales.

Upon receiving the frivolous and reckless objection to Mr.
Diaz Morales' Proof of Claim and acting in accordance with the
good faith that has characterized Mr. Diaz Morales throughout the
proceedings in various state and federal forums, on July 31, 2023,
Counselor Gabriel A. Rosa-Cruz of Coto & Associates attempted to

Suite 800, MCS Plaza, 255 Ponce de Ledn Ave., San Juan, PR 00917: PO Box 71449, San Juan, PR 00936-
8549 Office Tel.: (787) 756-9640: Fax (787) 756-9641
www.crlawpr.com
www.chitolaw.com



Case:1. J-03283- LTS Doss: nik siege 0) f1 5123 E Wai 9git P68 17:36:40 | Desc:
: reg psi. 5:59 Desc: Main

ument Bene 26 of

this case to avoid the settlement payment. This suggests that the
individual defendants’ motives are to circumvent and avoid
delivering justice after it was established that individual
defendants, and the Commonwealth in the Commonwealth action,
incurred in illegal actions that cost eight and a half (8 %) years
of Movant’s life. By analogy, one can see that the debtor’s bad
faith as cited in In re Unanue Casal, applies when a third party
incurs in bad faith by requesting the debtor’s stay.

Another clearcut indication of the individual defendants’ bad
faith in requesting the stay is that it does not align with the
purpose which Congress enacted it for. As stated above, Congress
intended for the fundamental purpose of the stay to be a “breathing
spell” for debtors in bankruptcy proceedings, H.R. Rep. No. 95-
595, at 340 (1977). The individual defendants are not gaining a
“breathing spell” by adhering to the debtor’s stay, rather they
are abusing the automatic stay by maliciously delaying the payments
that were settled upon. “It has been long recognized that one who
invokes the protective provisions of the bankruptcy laws must do
so in order to accomplish and further the expressed: legislative
aim of the particular Chapter and not for any other purpose.” In
re Mogul, 17 Bankr. 680, 681 (M.D. Fla. 1982).

In contrast, Movant’s action expresses his good faith since the
confidential settlement reached on February 3, 2017, in Civil No.

13-1360 (PG) before the USDC-PR with the individual defendants

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Exhibit Exhibit 1 Page 2 of 8
Page -2-

first one due by December 31, 2017. Yet, before the first
installment was due, on May 3, 2017, the Financial Oversight and
Management Board filed a petition for bankruptcy relief on behalf
of the Commonwealth under Title III of PROMESA.

On September 4, 2017, the Defendants, invoking the alleged
rights of the non-party Commonwealth, and without submitting the
Commonwealth to the jurisdiction of the United States District
Court of Puerto Rico (“USDC-PR”), through an informative motion,
moved to stay the action solely based on the filing of the Title
III case. The USDC-PR denied said motion on the grounds that the
Commonwealth was never a party to the action and never waived its
sovereign immunity. It also ruled that Mr. Diaz Morales did not
have any debt-related claim against the Commonwealth.

Defendants appealed the USDC-PR‘s Order after two
reconsiderations were denied, and on May 10, 2021, the United
States Court of Appeals for the First Circuit affirmed the District
Court’s order denying the applicability of the PROMESA stay.

On June 8, 2021, after receiving the mandate from the First
Circuit, Mr. Diaz Morales moved to schedule a status conference to
“address pending matters and properly schedule [the action] going
forward.” The District Court scheduled the status conference to
discuss possible solutions viable solutions.

On November 22, 2021, another settlement conference was held,
and the conference report and order were issued. In hopes that the
parties could or would identify alternatives for settlement, the
Court instructed counsel for Defendants to meet with their
superiors, including the Commonwealth's Secretary of Justice, and
identify mechanisms that may bring the case to a resolution.
Nevertheless, before the Court could dispose of the motion for the
applicability of the stay and before the follow up conference set
for December 23, Defendants appealed from the settlement conference
report and order of November 22, 2021.

On April 13, 2022, the USDC-PR extended the automatic stay to
this case pending the resolution of In re: The Financial Oversight
and Management Board for Puerto Rico, Case No. 17-3283 (LTS) or
further order from the Court. This was in response to Defendants’
informative motion regarding the applicability of the automatic
stay provision of PROMESA.

Suite 800, MCS Plaza, 255 Ponce de Ledn Ave., Hato Rey, PR 00917 - P O Box 71449, San Juan, PR 00936-8549
Office Tel.: (787) 756-9640 - Fax (787) 756-9641

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Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

Case:17-03283-LTS Doc#5XBIRILEXPIRIEHB Rage H,ef2808/14/23 11:05:59 Desc:
Exhibit Exhibit 1 Page 1 of 8
Exhibit 1

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COTO & ASSOCIATES

Ramén Coto-Ojeda*

*Also admitted to the District of Columbia Sar
Edna Pérez-Roman

Patricia Torres-Castellano
Vanellies Santiago-Rivera

May 5, 2023

Attn:

Hermann Bauer (Hermann.Bauer@oneillborges.com)

Ubaldo M. Fernandez Barrera (ubaldo.fernandez@oneillborges.com)
Diana M. Perez (dperez@omm.com)

Luis C. Marini-Biaggi (lmarini@mpmlawpr.com)

Carolina Velaz-Rivero (cvelaz@mpmlawpr.com)

“Dear all:”

MATTER: In re: The Financial
Oversight and Management Board for
Puerto Rico, Case No. 17-3283 (LTS);
“LIFT STAY NOTICE FOR CASE NO. 13-
1360(ADC), ROBERT ANEL D{fAZ-MORALES
V. LIMARIS CRUZ-VELEZ, ET AL.”

On May 8, 2013, Robert Anel Diaz-Morales (“Movant” or “ Mr.
Diaz Morales”) filed a Complaint for violations of his civil rights
under 42 U.S.C. § 1983 against the law enforcement officer that |
investigated his murder charge as well as the two (2) district
attorneys who prosecuted his case (Limaris Cruz-Vélez, Sergio |
Rubio-Paredes, and Emilio Arill-Garcia, hereinafter jointly
referred to as “Defendants”), in their individual capacity. Diaz
Morales’ Complaint sought compensatory and punitive damages after
suffering eight and a half (8%) years of unjust imprisonment due to
the illegal acts of the Defendants in the action.

On February 3, 2017, the parties reached a _ settlement
agreement that dismissed the action, with prejudice. The settlement
agreement indicated that the settlement amount would “be paid to
[Mr. Diaz Morales] by the Commonwealth of Puerto Rico” because
“Defendants are beneficiaries of [Puerto Rico Law 9].” It also
indicated that payment was to be made in installments, with the

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Ns GBSETT SB EES DOCH 2A ide Gai as Spier PUGNIES 120s! “Bete Maire

(as the Commonwealth had to pay the settlement), and because the
PROMESA stay applied to the individual defendants’ officers.
However, on July 31, 2023, the Commonwealth made a completely
contradictory argument in order to object to the Proof of Claim
filed by Movant in this case.

Considering this, we respectfully submit that this Honorable
Court is in a position to understand why both Movant and his
counsel were flummoxed when informed of opposing counsel's grounds
for objecting Movant's Proof of Claim. Therefore, we respectfully
ask this Court to find the Objection to Movant’s Proof of Claim to
be frivolous and temerarious, find it baseless, lift the stay and
allow the entire amount arising from Movant’s Proof of Claim of
one million six hundred thousand dollars ($1.6M) as compensation
for the violation of Movant’s constitutional rights settled at
arm’s length in the USDC-PR action.

CONCLUSION

We respectfully submit that the Honorable Court has been
positioned to deny Commonwealth's counsel's frivolous and reckless
Objection to Movant's Proof of Claim, to lift the stay, and to
deem the Proof of Claim to be allowed for the entire agreed upon
settlement of one million six hundred thousand dollars ($1.6M).

Should this Honorable Court find our Opposition to the

Commonwealth’s Objection to Movant’s Proof of Claim is misplaced,

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Exhibit Exhibit 3 Page 2 of 3

***CUST PR 1845 SRF 71422 PackID: 5 AdrID: 3288571 SVC: Omni 578
Diaz-Morales, Robert Anel
C/O Coto & Associates
Angel E. Rotger-Sabat, Esq.
PO Box 71449
San Juan PR 00936-8549


"+ SENSES ROR Ae

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age 29°0

discriminate and to act against Federal laws and the U.S.
Constitution, and (6) the individual defendants’ motives in
requesting the application of the debtor’s automatic stay are in
bad faith since they are simply using it to circumvent and avoid
settlement payment and they are not gaining a “breathing spell” by
adhering to the stay as Congress intended its fundamental purpose
to be.

We hold that, having met these six (6) factors of this Court’s
multi-factor test, it is more than enough for this Court to
determine that just cause exists for lifting the stay. This Court
has the inherent discretionary power to prevent the continuation
of the stay if it perceives an intent to abuse the purpose of the
Bankruptcy Code, see R. L. Ordin, The Good Faith Principle in the
Bankruptcy Code: a Case Study, 38 Bus. Law. 1795 (1983). The
automatic stay of Case No. 13-1360, should be lifted pursuant to
11 U.S.C. § 362(d) and 48 U.S.C. § 2194(e) for cause shown,
including but not limited to reasons stated in this motion for
relief from stay.

It is important here to highlight that the fact that the
Commonwealth is the only party that has expressly committed to
paying the agreed-upon settlement amount, is immaterial for the
purposes of lifting the automatic stay. If this Court evaluates,
as it has done before, the “balance of hurt” in the present case,

it will find that it alone suffices to dim the Opinion and Order's

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Casal, 159 Bankr. 90, 94 (D. P. R. 1993) (quoting In re Kerns 111
Bankr. 777, 782 footnote 2 (S.D. Ind. 1990.) For this reason, the
Court should engage in an equitable balancing of the various harms
at stake and determine that there is more than sufficient cause to
lift the stay.

In our District Court of Puerto Rico, there has been at least
one case decided that provided a multi-factor test which was later
affirmed by the First Circuit, that is, In re Unanue-Casal, 159
Bankr. 90 (D. P. R. 1993); later aff’d by In re Unanue-Casal, 23
F.3d 395 (lst Cir. 1994). The USDC-PR in In re Unanue-Casal, in an
effort to consider the harms at stake, took guidance from the
multi-factor test put forward in In re Curtis, 40 Bankr. 795 (D.
Utah 1984), which consists of the following 12twelve factors:

(1) whether the relief will result in a partial or complete

resolution of the issues; (2) the lack of any connection with or
interference with the bankruptcy case; (3) whether the foreign
proceeding involves the debtor as fiduciary; (4) whether a

specialized tribunal has been established to hear the particular
cause of action and that tribunal has the expertise to hear such
cases; (5) whether the debtor's insurance carrier has assumed full
financial responsibility for defending the litigation; (6) whether
the action essentially involves third parties, and the debtor
functions only as a bailee or conduit for the goods or proceeds in
question; (7) whether litigation in another forum would prejudice
the interest of other creditors, the creditors' committee and other
interested parties; (8) whether the judgment claim arising from the
foreign action is subject to equitable subordination under section
510(c); (9) whether movant's success in the foreign proceeding
would result in a judicial lien avoidable by the debtor; (10) the
interest of judicial economy and the expeditious and economical
determination of litigation for the parties; (11) whether the
foreign proceedings have progressed to the point where the parties
are prepared for trial; (12) the impact of the stay on the parties
and the “balance of hurt.” (Emphasis added)

Additionally, the Court relied on two (2) more factors:
namely, the misconduct or bad faith of the debtor, and whether the
creditor has a probability of prevailing on the merits, In re
Unanue-Casal, supra, at 96.

In consideration of what has been stated by the Bankruptcy
Court for the Southern District of Georgia in In re R. J. Groover
Construction, 411 Bankr. 460, 464 (S.D. Ga. 2008), the Court only
needs to rely on the relevant factors of its standard multi-factor

Suite 800, MCS Plaza, 255 Ponce de Leén Ave., Hato Rey, PR 00917 - P O Box 71449, San Juan, PR 00936-8549
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. , Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

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Constitution, and (b.) it will cut any incentive for the
victims to seek reparation (in sum, civil rights actions
should be categorically differentiated from other
creditor-debtor actions because of the nature of the
damages and the consequences of the automatic stay)
Additionally, staying civil rights actions under
PROMESA’s automatic stay certainly implies due process
issues to uphold fundamental constitutional guarantees.
Conversely, lifting the stay runs parallel to the equal
protection of the law that the Movant is entitled to
receive under the U.S. Constitution. The Court should be
flexible enough to grant the process that is due in civil
rights actions and allow the action to continue to
settlement or to trial against the individual defendants
who are represented by the Commonwealth under Law 9. This
becomes more evident when faced with the fact that here,
there is no simple creditor-debtor relation, rather the
relation here is more aptly defined as an injured-
indemnifier one, and

(6) Defendants’ motives in requesting the application of the
automatic stay are in bad faith since: (a.) they are
simply using it to circumvent and avoid having to deliver
the payments that were already settled upon, and (b.)
they are not gaining a “breathing spell” by adhering to
the stay as Congress intended its fundamental purpose to
be.

We respectfully submit that, having met these six (6) factors
of USDC-PR’s multi-factor test adopted in In re Unanue-Casal,
supra, it is more than enough to determine that cause exists for
lifting the stay. By its general equitable powers, the Court has
the inherent discretionary power to prevent the continuation of the
stay if it perceives an intent to abuse the purpose of the
Bankruptcy Code, see Ordin, R. L., The Good Faith Principle in the
Bankruptcy Code: a Case Study, 38 BUS. LAW. 1795 (1983). The
automatic stay of Case No. 13-1360, should be lifted pursuant to 11
U.S.C. § 362(d) and 48 U.S.C. § 2194(e) for cause shown, including
but not limited to reasons stated in this motion for relief from
stay.

For all of the above, the Movant requests a meeting (in
person) to try to resolve, in whole or in part, his request for
relief from the automatic stay or, in the alternative, a
modification to it which permits Movant to obtain some recovery or
continues his action against the Defendants. All in all, only one

Suite 800, MCS Plaza, 255 Ponce de Leén Ave., Hato Rey, PR 00917 - P O Box 71449, San Juan, PR 00936-8549
Office Tel.: (787) 756-9640 - Fax (787) 756-9641
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* SELES DoS a fed ites Spereaplst2s 110858" Bese. Main

been shown as it has effectively been done here. Following both,
subsection (d) (1) of section 362 of the Bankruptcy Code, 11 U.S.C.
§ 362(d), and section 405(e) of PROMESA, 48 U.S.C. § 2194(e), this
Court “shall grant relief from the stay” if cause has been shown.
As interpreted in In re Kerns, supra, if cause has been shown and
found to exist, this Court has no discretion to deny relief
precisely because our laws direct the courts of our country to
grant relief from stay by using the word “shall” instead of “may.”

Of the multi-factor test acknowledged by this Court in In re
Unanue-Casal, supra, six (6) factors have been shown to be relevant
and to constitute just cause for this Court to grant relief from
the automatic stay. In short, it has been shown that: (1) the
relief will result in a complete resolution of the issues; (2)
Movant’s claim will have no significant effect on the bankruptcy
case nor will it cause interference on the effective reorganization
of the debtor; (3) there is no more litigation needed in this case,
other creditors’ interest will remain unaffected regardless of the
outcome of Movant’s claim; (4) any other proceeding unrelated to
the payment of the settlement would be a waste of judicial
resources and an attack against the principle of judicial economy;
(5) the balance of hurt weighs heavily for the victims of civil
rights violations since it will cut any incentive to seek
reparation of civil rights violations and it will provide a carte

blanche to Puerto Rico’s officials in their personal capacities to

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» Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

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‘5 Exhibit Exhibit 4 Page 3 of 3
Page

reach Mr. Hermann Bauer by phone, but his secretary informed him
that he was not available. Counselor Rosa-Cruz left his cell phone
number, hoping that Mr. Bauer would get in touch to, at the very
least, arrange an in-person meeting as soon as possible and reach
a resolution. However, as of the date of this communication,
neither Mr. Bauer nor his team have shown good faith or had the
courtesy to respond to our various communications to resolve the
issue at hand.

Finally, we remind you that this claim is not merely a
collection effort by a creditor. Our client was deprived of his
constitutional right to freedom and to have his innocence
safeguarded beyond a reasonable doubt for eight and a half years.
There is no doubt that the Commonwealth’s officials, acting under
color of law, violated Mr. Diaz Morales' rights, then a 21-year-
old accounting major, and that our judicial system failed him in
one of the worst ways imaginable. This resulted in him enduring
incredible horrors during his incarceration, cutting short his
youth, depriving him of enjoying the fruits of his efforts, and
hindering for almost ten years his willingness to be a productive
and law-abiding member of our society.

Based on the above, we request an in-person meeting on or
before Friday, August 11, 2023, to reach an agreement regarding
the compensation to which Mr. Diaz Morales is entitled for all the
damage he has been forced to endure up to this day. Otherwise, we
will proceed with our objection to your opposition of the Proof of
Claim and submit our Motion to Lift Stay for the Court's
consideration. Please feel free to get in touch with Counselor
Rosa-Cruz via the contact information provided to Mr. Bauer’s
secretary or any of the addresses or phone numbers provided below.

SALDANA, CARVAJAL & VELEZ COTO & ASSOCIATES
RIVE,P.S.C. P O Box 71449
166 Ave. de la Constitucién San Juan, P. R 00936-8549
San Juan, P.R. 00961 Tel: (787) 756-9640
Tel. (787) 289-9250 Fax: (787) 756-9641
Fax (787) 289-9253
s/ Angel E. Rotger Sabat s/ Ramén Coto Ojeda
ANGEL E. ROTGER SABAT RAMON COTO-OJEDA
USDC-PR No. 208601 USDC-PR No. 202006
arotger@scvrlaw.com rco@crlawpr.com

Suite 800, MCS Plaza, 255 Ponce de Leén Ave., San Juan, PR 00917: PO Box 71449, San Juan, PR 00936-
8549 Office Tel.: (787) 756-9640: Fax (787) 756-9641
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Limaris Cruz Vélez, Emilio Arill Garcia, and Sergio Rubio Paredes
—all sued in their individual personal capacities— benefited the
Commonwealth of Puerto Rico. This is because the settlement
resulted in the dismissal with prejudice of a parallel state case
styled Robert Anel Diaz Morales, et al. v. ELA, et al., Civil No.
DDP 2013-0403 (505). In that case, the Commonwealth and some of
its instrumentalities, as opposed to the action before the USDC-
PR, were indeed named parties.

By disposing of all the claims against the Commonwealth and its
instrumentalities after the settlement, the Commonwealth benefited
since the dismissal of the Commonwealth Action was also dismissed,
with prejudice, and it covered claims of Movant’s relatives against
the Commonwealth. There is no doubt that the aforementioned should
be taken as a sign of good faith since Movant merely seeks speedy
and economic justice under 42 U.S.C. § 1983, after his
constitutional rights were violated by state officials.

We now bring the attention of the Court to what was stated by
the Bankruptcy Court for the Southern District of Georgia in In re
R. J. Groover Construction, supra, this Court only needs to rely
on the relevant factors of its standard multi-factor test as
acknowledged in In re Unanue-Casal, supra, to grant the relief
from stay here petitioned. Moreover, the automatic stay’s reach is
limited, that is, it does not confer absolute immunity to the

debtor against its creditors if sufficient cause for relief has

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Given that it is Mr. Diaz Morales intention to submit a Motion
for Relief from Stay in order to lift the stay in the case under
USDC-PR Civil No. 13-1360(ADC), and pursuant to the “Lift Stay
Notice” of Paragraph III.R of the Fifteenth Amended Case Management
Procedures, we supply the following information:

Ls Identity of the movant and his contact information:
A. Movant: Robert Anel Diaz-Morales
B. Contact Information of Movant’s Attorneys for the

case under USDC-PR Civil No. 13-1360(ADC) are:

. Ramén Coto-Ojeda, USDCPR 202006, rco@crlawpr.com, Coto &
Associates, PO BOX 71449, San Juan, PR 00936-8549, Tel. (787) 756-
9640, Fax. (787) 756-9641.

. Angel E. Rotger-Sabat, USDCPR 208601, arotger@scvrlaw.com,
Saldafia, Carvajal & Vélez-Rivé, PSC, 166 Ave. de la Constitucién,
San Juan, Puerto Rico 00901, Tel: (787)289-9250, Fax: (787) 289-
9253, Cel: (787) 402-5670.

2s The claim(s), lawsuit(s), or other proceeding(s) for
which the movant seeks relief from the automatic stay, including
the relevant case number and court information. Civil action under
42 U.S.C. § 1983 against Limaris Cruz-Vélez, Sergio Rubio-Paredes,
and Emilio Arill-Garcia, Case No. 13-1360(ADC), pending before the
USDC-PR. The case was dismissed, with prejudice, after a settlement
agreement was reached between the parties. Movant is seeking relief
in order to execute the Judgment or continue the action against the
individual Defendants to Judgment.

3: The amount of the claim(s) and the asserted causes of
action The Movant MOVANT claims $1,600,000, with interest up to
and including the date before the PROMESA case was filed. The
asserted cause of action is civil action under 42 U.S.C. § 1983 for
violation of Movant’s civil rights.

4. Brief description of the status of the underlying
claim(s), lawsuit(s), or proceeding(s)Since February 3, 2017, after
the settlement agreement was reached, the case was dismissed, with
prejudice. The USDC-PR has kept jurisdiction over the parties until
the agreed-upon installments are fulfilled. After five (5) years of
requesting the payments and conferring with Defendants to find
alternate options, no compensation Lor Movant was ever
accomplished. On April 13, 2022, the USDC-PR extended the automatic
stay to this case pending the resolution of the PROMESA case or

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Case:17-03283-LTS Doc#:24891-2 Filed:08/15/23 Entered:08/15/23 17:36:40 Desc:

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test as acknowledged in In re Unanue-Casal, supra, to grant the
relief from stay that will be requested. In other words, the
examination of all the factors of the test is unnecessary; only the
relevant factors are to be taken into account considered.

Following the case law cited above, you must only consider the
factors which are relevant to this proceeding and assign them the
whole weight of the criterion. Selecting only those highlighted in
bold above, these are our six (6) arguments that correspond to the
six (6) highlighted factors above:

(1) the relief will result in a complete resolution of the
issues since the only step yet taken is that the
Settlement is paid, it is further settled, or that Movant
may continue its claims against the individual Defendants

to Judgment;

(2) Movant’s claim will have no significant effect on the
bankruptcy case, nor will it cause interference on the
effective reorganization of the debtor because: a. The
Plan has been confirmed; b. Defendants are not complying
with the purpose of the automatic stay which is to give
the debtor a “breathing spell”; c. the amount settled
upon is insignificant compared to the estate of the
debtor; d. Movant is not a secured creditor, that is, it
has no interest nor lien on any property of the debtor,
and e. Movant’s claim will have no real effect on the
effective reorganization of the debtor;

(3) other creditors’ interest will be unaffected regardless
of the outcome of Movant’s claim;

(4) any other proceeding unrelated to the payment of the
settlement reached by the parties involved, or allowing
Movant to pursue the individual Defendants, would be a
waste of judicial resources and an attack against the
principle of judicial economy;

(5) the balance of hurt weighs heavily for the victims of
civil rights violations, but not because of the issue of
who will be paying for the damages (as it has been argued
by the USDC-PR to support the staying of the case),
rather because: (a.) staying civil rights cases under 42
U.S.C. § 1983 will provide a carte blanche to Puerto
Rico’s officials in their personal capacities to
discriminate and to act against Federal laws and the U.S.

Suite 800, MCS Plaza, 255 Ponce de Ledn Ave., Hato Rey, PR 00917 - P O Box 71449, San Juan, PR 00936-8549
Office Tel.: (787) 756-9640 - Fax (787) 756-9641

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