Justia Civil Procedure Opinion Summaries

As part of a redevelopment project partially financed by Sioux City, Iowa, Civic borrowed from Northwest Bank to build a movie theater complex. Main Street leased the space in 2004. Main Street did not fully pay its rent and Civic did not fully make its loan payments. After mediation, Civic and Main Street agreed on an amended lease that substantially lowered the rent. Eventually, Civic filed for Chapter 11 bankruptcy, arguing that the court should subordinate the interests of Northwest and the city because they had defrauded Civic into accepting the amended lease. The bankruptcy court issued orders deciding that the amended lease applied. Civic appealed the lease orders; the Bankruptcy Appellate Panel ruled that Civic’s appeal was improperly interlocutory and dismissed for lack of jurisdiction. Civic filed a second plan, which restated the fraud argument. The bankruptcy court denied confirmation and rejected the fraud argument, but did not dismiss the bankruptcy petition. Civic appealed the new order and, again, the three earlier orders. The BAP again dismissed. Civic appealed all four orders. The Eighth Circuit dismissed for lack of jurisdiction; a determination of the BAP is not final unless the underlying order of the bankruptcy court is final. View "Civic Partners Sioux City, LLC v. Main Street Theaters, Inc." on Justia Law

In 1988 Sutherland received breast implants in North Carolina. She filed suit in North Carolina five years later, after learning that the silicone in her implants could be causing a variety of serious medical problems. The Silicone’s manufacturer, Dow Corning, filed for bankruptcy in Michigan, and Sutherland’s suit was transferred there. In 2012, 24 years after Sutherland received the implants, the district court concluded that Sutherland’s claim was barred by Michigan’s statute of limitations and granted summary judgment to the defendant. The Sixth Circuit reversed, reasoning that the district court should have applied North Carolina’s law instead of Michigan’s, and should have concluded that there was a genuine factual issue as to whether Sutherland’s claim was timely-filed under North Carolina law. View "Sutherland v. DCC Litig. Facility, Inc." on Justia Law

The bankruptcy court imposed sanctions against attorneys stemming from their representation of Debtors in an adversary proceeding in which a creditor and the Trustee sought denial of discharge. The attorney filed notice of appeal regarding the July 16 sanctions order on July 30. On August 1, the bankruptcy court entered an Order Setting Amount of Additional Sanctions. On August 5, the bankruptcy court amended its August 1, order and imposed additional sanctions under 28 U.S.C. 1927, covering attorney fees and expenses incurred by the Trustee and creditor in the adversary proceeding. An August 27 motion to dismiss asserted that the July 16 order was not final and that cause did not exist to allow appeal from an interlocutory order. A September 8 amended motion for leave to appeal and corrected notice of appeal indicated an appeal of all three sanctions orders. In response, a motion to strike asserted failure to timely perfect appeal from the August 1 or August 5 orders. The Sixth Circuit Bankruptcy Appellate panel denied the motions to dismiss and to strike, holding that it had jurisdiction because the amount of sanctions was set forth in a final order. Notice of appeal was timely filed. Resolution of the sanctions issue will have no discernable impact on the pending discharge issue. View "In re: Blasingame" on Justia Law

The law firm represented Raissi in a Chapter 11 bankruptcy case for a year, generating fees and expenses of $329,705.12. The bankruptcy case closed. Raissi failed to pay. The firm sued for breach of contract, account stated, open book account and failure to pay for goods and services rendered.It obtained an order extending the deadline for service and allowing it to serve Raissi via publication. Publication in the San Jose PostRecord generated no response. The firm obtained a default judgment. Its “Declaration of mailing (Code Civ. Proc., 587),” stated that Raissi’s address was “unknown.” Raissi moved to set aside the default, alleging that its counsel made a mistake in changing the address for its registered agent; that the bankruptcy court retained exclusive jurisdiction; and that the request for default was defective because it was not mailed to Raissi’s “last known address.” The firm stated that it had made eight separate attempts to personally serve Raissi at the property, which appeared vacant and had a sign indicating it was available to lease. The court of appeal reversed the ruling in favor of the firm. A mailing address is not “unknown” merely because personal service could not be effected at that address. View "Murray & Murray v. Raissi Real Estate Dev,, LLC" on Justia Law

In a consolidated appeal, Aviva Life & Annuity challenged identical orders of the U.S. District Court for the Western District of Oklahoma sitting in its capacity as a bankruptcy appellate court. The district court entered the orders in two directly related cases brought by Aviva in the nature of interpleader pursuant to the Federal Interpleader Act, and Federal Rule of Civil Procedure 22. Aviva argued the court erred by limiting the scope of the interpleader relief granted. This case stemmed from the Chapter 11 bankruptcy proceedings of the Millennium Multiple Employer Welfare Benefit Plan. Prior to seeking the protection of the bankruptcy court, the Millennium Plan was an employee welfare benefit plan providing medical, disability, long term care, severance, and death benefits. Participants made contributions to the Millennium Plan, which then purchased life insurance policies (Policies) on the lives of the participants from Aviva and other insurance companies. Finding no reversible error in the district court's decision, the Tenth Circuit Court of Appeals affirmed.View "Aviva Life & Annuity v. Millennium Multiple Employer" on Justia Law

Joanne Anderson sued Jackson Hospital and Clinic, Inc., Dr. Stephen K. Kwan, and Dr. Kwan's practice group, Capital Cardio-Thoracic, P.C. asserting medical-malpractice claims against them. The trial court granted a motion to substitute bankruptcy trustee Daniel Hamm for Anderson as the real party in interest because Anderson had filed a petition for Chapter 7 bankruptcy after her medical malpractice claim had accrued. The Jackson Hospital defendants subsequently petitioned the Alabama Supreme Court for permission to file an interlocutory appeal, arguing that Hamm's attempt to be substituted as the real party in interest was untimely. Anderson filed a separate Rule 5 petition for permission to appeal challenging the trial court's decision to remove her as the plaintiff in this case. The Supreme Court granted both petitions; however, treated the parties' petitions for permissive appeals as petitions for writs of mandamus, found that neither were entitle to mandamus relief, and denied the petitions.View "Anderson v. Jackson Hospital & Clinic" on Justia Law

Doe settled his sexual abuse claims against the Archdiocese of Milwaukee for $80,000 after participating in a voluntary mediation program. He later filed a claim against the Archdiocese in its bankruptcy proceedings for the same sexual abuse. Doe responded to the Archdiocese’s motion for summary judgment by contending that his settlement was fraudulently induced. The argument depends upon statements made during the mediation, but Wisconsin law prohibits the admission in judicial proceedings of nearly all communications made during mediation. Doe argued that an exception applies here because the later action is “distinct from the dispute whose settlement is attempted through mediation,” Wis. Stat. 904.085(4)(e). The Seventh Circuit affirmed summary judgment in favor of the Archdiocese. Doe’s bankruptcy claim is not distinct from the dispute settled in mediation. The issue in both proceedings, which involved the same parties, is the Archdiocese’s responsibility for the sexual abuse Doe suffered. Doe sought damages in both the mediation and bankruptcy for the same sexual abuse; he did not seek separate or additional damages for the alleged fraudulent inducement.View "Doe v. Archdiocese of Milwaukee" on Justia Law

In 2005 Greene and his wife had filed for Chapter 7 bankruptcy and obtained a discharge from all their debts except federal student loan debt of $207,000. As part of the bankruptcy case they sought an order that the Department of Education cancel their debt on the ground that having to repay it would inflict undue hardship. The Greenes claimed that the statute of limitations prohibited collection of their loans, penalties and interest on the loans were caused by the DOE’s negligence, and the loans should be discharged as reparations for slavery and discrimination.” The Seventh Circuit rejected the undue hardship defense on the ground that “the Greenes initiated this case and the DOE has not counterclaimed or sought any judgment … there is no actual controversy.” In 2010 the Department began to garnish Greene’s wages and he sought an injunction. The DOE counterclaimed. The district court ordered Greene to pay the debt. The Seventh Circuit affirmed, holding that DOE’s counterclaim was not barred by res judicata, collateral estoppel, or failure to make a compulsory counterclaim in the bankruptcy proceeding.View "Greene v. U.S. Dep't of Educ." on Justia Law

Plaintiff filed suit against defendant, a plastic surgeon, for medical malpractice. Defendant failed to answer the complaint but notified plaintiff that he filed a bankruptcy proceeding. Plaintiff then obtained an order from the bankruptcy court granting her relief from the automatic stay of proceedings against debtor. In this appeal, defendant challenged the subsequent default judgment entered against him. Defendant argued that plaintiff's failure to serve him with a statement of damages prior to entry of his default denied him a last opportunity to plead the complaint and avoid a default. The court found no error in the trial court's proceedings where, under these circumstances, service of the statement of damages on defendant was not necessary or permitted by the bankruptcy stay, would have served no useful purpose, and did not open up the default and allow defendant to answer the complaint. Accordingly, the court affirmed the judgment of the district court.View "Weakly-Hoyt v. Foster" on Justia Law

In 2012 Schmidt, a former shareholder in Genaera, a biotechnology company that dissolved in 2009 and liquidated its assets, brought suit on behalf of himself and other former shareholders against the liquidating trustee (Argyce); the Genaera Liquidating Trust; Argyce’s CEO and Genaera’s former CFO; former major Genaera shareholders Xmark and BVF; former Genara directors and officers (D&O defendants); and the purchasers of certain Genaera assets. The complaint alleged that the liquidating trustee and the D&O defendants breached their fiduciary duties by disposing of promising drug technologies in tainted insider deals for far less than their true value and that Xmark and BVF aided and abetted this behavior so that companies they controlled could acquire Genaera’s assets at fire sale prices. Schmidt did not dispute the applicability of the two-year statute of limitations and that he filed suit more than two years after the assets were sold, but argued that the limitations period should be tolled under Pennsylvania’s discovery rule because he could not have been aware of the insider nature of the sales or that the assets were sold for below actual value until he learned the details of the sales, and subsequent market events suggested to him that the assets were quite valuable. The district court dismissed. The Third Circuit reversed in part, stating that it was premature to determine whether Schmidt exercised reasonable diligence.View "Schmidt v. Skolas" on Justia Law