Metrou v. M.A. Mortenson Company

(7th Cir. Mar. 23, 2015)

The seventh circuit reverses the district court’s order limiting the trustee’s recovery on the debtor’s tort claim to the value of creditor claims not already paid through the bankruptcy. The debtor had scheduled a workers’ compensation claim when he filed the chapter 7 petition, but after receiving the discharge he brought claims for the same injury and sought significant damages. The tort defendants moved for summary judgment, arguing that the debtor was estopped from asserting the claims because he failed to schedule them in the bankruptcy, and the court appropriately granted that motion. The debtor then moved to reopen the bankruptcy so that the trustee could pursue the claims. The district court allowed the substitution but entered an order limiting the damages sought to the value of the amount of the creditor claims not paid in the bankruptcy (because the debtor should not be permitted to benefit when he omitted the claim from his schedules). The claims were not worth pursuing after the reduction and thus the trustee appealed. The seventh circuit holds that the claim should not be reduced so that creditors are harmed. Instead, the district court should determine whether the debtor’s omission was intentional such that he should be barred from sharing in any recovery on the claim. Opinion below.

2015-03-23 – metrou v ma mortenson company

Author: Matt Lindblom

Gambino v. Koonce

(Seventh Circuit July 2, 2014)

The Seventh Circuit affirms the bankruptcy court’s order granting the creditor’s motion for judgment on the pleadings in the nondischargeability action. The debtor’s fraudulent intent was established in the prior state court action, in which he was held liable for fraud and slander of title. Thus, the debtor was collaterally estopped from raising the issue of his fraudulent intent in the nondischargeability action. Opinion below.

2014-07-02 – gambino v koonce

Spaine v. Community Contacts, Inc.

(Seventh Circuit Issued June 24, 2014)

The Seventh Circuit reverses the district court’s grant of summary judgment in favor of the defendant employer. The plaintiff had previously filed bankruptcy and failed to schedule as an asset an employment discrimination claim. The defendant employer moved for summary judgment on the basis that the plaintiff should be estopped from asserting the claim after omitting it from her schedules. The district court granted the motion, but the appellate court reversed, finding the transcript from the 341 meeting reflected that the plaintiff had disclosed the claim and thus there was a genuine issue of material fact as to whether the plaintiff intentionally omitted the claim such that estoppel would apply. Opinion below.

2014-06-24 – spaine v community contacts