Suite 800, MCS Plaza, 255 Ponce de León 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

Ramón Coto-Ojeda* 

 — 

*Also admitted to the District of Columbia Bar

Edna Pérez-Román 

Patricia Torres-Castellano 

Vanellies Santiago-Rivera 

May 5, 2023 

Attn: 

Hermann Bauer (Hermann.Bauer@oneillborges.com) 

Ubaldo M. Fernández 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 DÍAZ-MORALES 

V. LIMARIS CRUZ-VÉLEZ, ET AL.”

On May 8, 2013, Robert Anel Díaz-Morales (“Movant” or “ Mr. 

Díaz 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-García, hereinafter jointly 

referred to as “Defendants”), in their individual capacity. Díaz 

Morales’ Complaint sought compensatory and punitive damages after 

suffering eight and a half (81⁄2) 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. Díaz 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 

Exhibit 1 

Case:17-03283-LTS Doc#:24878-1 Filed:08/14/23 Entered:08/14/23 11:05:59 Desc:

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Suite 800, MCS Plaza, 255 Ponce de León 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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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. Díaz 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. Díaz 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. 

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Suite 800, MCS Plaza, 255 Ponce de León 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

 Given that it is Mr. Díaz 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: 

 1. Identity of the movant and his contact information: 

 A. Movant: Robert Anel Díaz-Morales 

 B. Contact Information of Movant’s Attorneys for the 

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

• Ramón 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. 

• Ángel E. Rotger-Sabat, USDCPR 208601, arotger@scvrlaw.com, 

Saldaña, Carvajal & Vélez-Rivé, PSC, 166 Ave. de la Constitución, 

San Juan, Puerto Rico 00901, Tel: (787)289-9250, Fax: (787) 289-

9253, Cel: (787) 402-5670. 

 2. 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-García, 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 for 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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Suite 800, MCS Plaza, 255 Ponce de León 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

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 ¶ 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 UnanueCase:17-03283-LTS Doc#:24878-1 Filed:08/14/23 Entered:08/14/23 11:05:59 Desc:

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Suite 800, MCS Plaza, 255 Ponce de León 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

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 (1st 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 

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Suite 800, MCS Plaza, 255 Ponce de León 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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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. 

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Suite 800, MCS Plaza, 255 Ponce de León 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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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 injuredindemnifier 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 

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Suite 800, MCS Plaza, 255 Ponce de León 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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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. 

SALDAÑA, CARVAJAL & VÉLEZRIVÉ,P.S.C. 

166 Ave. de la Constitución 

San Juan, P.R. 00961 

Tel. (787) 289-9250 

Fax (787) 289-9253 

s/ Ángel E. Rotger Sabat 

ANGEL E. ROTGER SABAT 

USDC-PR No. 208601 

arotger@scvrlaw.com 

COTO & ASSOCIATES 

P O Box 71449 

San Juan, P. R 00936-8549 

Tel: (787) 756-9640 

Fax: (787) 756-9641 

s/ Ramón Coto Ojeda 

RAMON COTO-OJEDA 

USDC-PR No. 202006 

rco@crlawpr.com 

 

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