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Case Summaries

Bankruptcy Law

[07/22] In Re: Repine
Judgment against attorney for attempting to collect fees from debtor in violation of a stay imposed by a bankruptcy court is affirmed in part and vacated in part where: 1) attorney willfully violated the stay in attempting to collect her fees; 2) attorney's refusal to consent to an agreed order to allow debtor to be released from civil incarceration caused debtor actual harm; 3) damages awarded to debtor for lost wages were appropriate; 4) debtor failed to set forth specific information regarding emotional damages; and 5) awarding attorney's fees to debtor was proper.

[07/22] Bondi v. Capital & Fin. Asset Mgmt. S.A.
Denial of motion by debtor in foreign bankruptcy proceedings to enjoin actions brought against it in the United States is affirmed where the district court acted within its sound discretion in interpreting 11 U.S.C. section 304(c)'s instruction to assure an economical and expeditious administration of a foreign estate.

[07/21] In re Reilly
Where a Chapter 7 bankruptcy debtor indicates the intent to exempt her entire interest in a given property by claiming an exemption of its full value and the trustee does not object in a timely manner, the debtor is entitled to the property in its entirety, even if it is later discovered that the property has a higher value than the exempted amount.

[07/17] Phar-Mor, Inc. v. McKesson Corp.
In the bankruptcy context, a vendor's administrative-expense priority on its reclamation claim is not effectively extinguished when the goods subject to reclamation are sold and the proceeds used to satisfy a secured creditor's superior claim.

[07/15] In re: US Med., Inc.
In a bankruptcy proceeding, a ruling finding that defendant-creditor was not a "non-statutory insider" of debtor for purposes of 11 U.S.C. section 547(b)(4)(B) is affirmed where: 1) the bankruptcy court did not make any findings that the transactions between creditor and debtor were not at arm's length, or that there was undue influence or control by creditor; and 2) thus it erred in holding creditor to be a non-statutory insider of debtor. A creditor may only be a non-statutory insider of a debtor when the creditor's transaction of business with the debtor is not at arm's length; a bankruptcy court, however, may find a statutory insider without this requirement.

[07/15] In re Tri-Valley Distrib., Inc.
In a suit alleging state law claims for fraudulent transfer and negligent lending, the parties' motions to dismiss each other's appeals for lack of jurisdiction are granted where: 1) the bankruptcy appellate panel's (BAP) order denying in part and granting in part defendant's motion to dismiss was not final and appealable; 2) a denial of defendant's motion to dismiss was not a final collateral order entitled to review; and 3) the BAP acted within its authority and there was no jurisdiction to review the merits of a section 1334(c)(1) abstention issue.

[07/14] Kane v. Nat'l Union Fire Ins. Co.
In a personal injury suit, summary judgment for defendants finding plaintiffs were judicially estopped based on their failure to include the personal injury action in their Chapter 7 bankruptcy schedules, as well as a denial of the trustee's motion to be substituted in that action as moot, are reversed and the case remanded where: 1) the personal injury claim became an asset of the bankruptcy estate upon filing of the Chapter 7 petition; 2) the trustee was the real party in interest and never abandoned his interest; 3) plaintiffs only stand to benefit in the event there is a surplus after all the debts of the estate are paid; and 4) a prior circuit court case did not control the outcome of this case, and the district court abused its discretion in concluding as a matter of law that it did.

[07/11] Dahlgren v. First Nat'l Bank of Holdrege
In various claims brought under RICO and for fraud and negligent misrepresentation under state law after plaintiffs were allegedly mislead into doing business with a company which was ultimately placed in involuntary receivership and Chapter 7 bankruptcy, denial of judgment as a matter of law for defendant-bank is reversed and jury verdict for plaintiffs on fraud claims is reversed in part where: 1) plaintiffs failed to establish that defendant directed the operations or management of the bankrupt company during the time they were allegedly injured by defendant's pattern of racketeering activity; and 2) the jury failed to consider that transactions entered into with bankrupt company occurred after defendant ended its customer and lending relationship.

[07/11] Jennings v. Maxfield
In a bankruptcy case, a ruling under 11 U.S.C. section 727(a)(2)(A) denying debtor's discharge is affirmed where: 1) the record contained ample evidence of debtor's actual intent to defraud his creditors by making a premature payment on a contract for improvements to part of his Florida homestead; and 2) the bankruptcy court correctly denied debtor a discharge because he intended the transfer to hinder, delay, or defraud his creditors.

[07/10] In Re Enron Corp. Sec., Derivative & ERISA Litig.
In a series of cases arising from the Enron collapse, dismissal of plaintiffs' claims under the Securities Litigation Uniform Standards Act is affirmed where: 1) the district court had bankruptcy jurisdiction over plaintiffs' claims at the time it issued its decision dismissing the claims with prejudice; and 2) the cases fell within the definition of a "covered class action" and SLUSA preempts the claims.

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Class Actions

[07/22] Brinker Restaurant Corp. v. Superior Ct
In an action involving alleged violations of laws governing rest and meal breaks on transfer from the state supreme court, the court of appeals rules that: 1) while employers cannot impede, discourage or dissuade employees from taking rest periods, they need only provide, not ensure, rest periods are taken; 2) employers need only authorize and permit rest periods every four hours or major fraction thereof and they need not, where impracticable, be in the middle of each work period; 3) employers are not required to provide a meal period for every five consecutive hours worked; 4) while employers cannot impede, discourage or dissuade employees from taking meal periods, they need only provide them and not ensure they are taken; and 5) while employers cannot coerce, require or compel employees to work off the clock, they can only be held liable for employees working off the clock if they knew or should have known they were doing so.

[07/22] Bondi v. Capital & Fin. Asset Mgmt. S.A.
Denial of motion by debtor in foreign bankruptcy proceedings to enjoin actions brought against it in the United States is affirmed where the district court acted within its sound discretion in interpreting 11 U.S.C. section 304(c)'s instruction to assure an economical and expeditious administration of a foreign estate.

[07/21] In re Lugo
In a habeas class action on behalf of parole-eligible life prisoners involving, inter alia, efforts to reduce the backlog of parole suitability hearings, an order by the trial court in the matter is affirmed with respect to an attorney's fee award but reversed to the extent the order required the Board "not to deny further parole consideration for more than one year in the case of prisoners who have formerly been denied for one year, in the absence of a significant change in circumstances, which must be stated on the record." A separate order is reversed to the extent it related to the preparation of parole hearing transcripts or imposed penalties for the untimely preparation of such transcripts.

[07/18] LA ex rel Caldwell v. Allstate Ins. Co.
In a parens patriae action alleging violations of Louisiana's antitrust laws, denial of plaintiff's motion to remand the case back to state court after removal to federal court pursuant to the Class Action Fairness Act is affirmed where: 1) the Louisiana attorney general has power to bring parens patriae antitrust actions and possesses broad powers to vindicate the interests of the state; 2) the policyholders and not the state are the real parties in interest due to the state's request for treble damages; and 3) plaintiff waived its Eleventh Amendment immunity.

[07/18] Fidel v. Farley
In the context of a securities class-action settlement, a nonintervening, nonnamed class member is a "party" for the purpose of appealing approval of a settlement.

[07/17] Owen v. Gen. Motors Corp.
In a putative class action brought against GM after plaintiffs' windshield wipers failed alleging breach of warranty, breach of contract, unjust enrichment, fraudulent concealment and violations of the Missouri Merchandising Practices Act (MMPA), dismissal and other rulings against plaintiffs are affirmed where: 1) the district court did not err in dismissing breach of warranty and fraudulent concealment claims on statute of limitations grounds; 2) dismissal of a breach of contract claim was proper as well; 3) there was no abuse of discretion in denying leave to amend; 4) summary judgment on the state law MMPA claim was proper as plaintiffs presented no evidence from which a jury reasonably could conclude that their loss was the result of the alleged defect that GM failed to disclose.

[07/16] Brack v. Omni Loan Co., Ltd.
In a suit alleging violations of borrower's rights under the Finance Lenders Law, and raising claims under the Consumers Legal Remedies Act and Unfair Competition Law, dismissal of the suit based on choice of law provisions in the loan agreements is reversed where: 1) the Finance Lenders Law represents a fundamental policy of the state and application of the provisions would undermine the policy; and 2) application of Nevada law would impair California's regulatory interests to a far greater extent than application of California law would impair Nevada's interests.

[07/15] Sony Computer Enter. Am., Inc. v. Am. Home Assurance Co.
In a suit brought by Sony against insurers for failing to indemnify and defend it in a class action suit alleging product defects in the Sony PlayStation 2 video game system, summary judgment for defendants is affirmed where neither insurance company had a duty to indemnify or defend Sony in the underlying lawsuit, primarily since the suit did not assert claims within the meaning of the term "negligent publication." The circuit court defines the term "negligent publication" as a narrow tort in which the publication of material encourages or instructs readers to engage in harmful conduct.

[07/11] Huber v. Taylor
In a suit for compensatory damages, disgorgement of attorneys' fees, and punitive damages against defendants-attorneys who represented the plaintiffs in asbestos personal injury actions, dismissal rulings against plaintiffs and a sua sponte determination that plaintiff's local counsel were necessary and indispensable parties who had not been named in the complaint is reversed and the case remanded where: 1) the court had subject matter jurisdiction since there was no basis for a finding that the legal impossibility of recovery was so certain as to negate plaintiffs' allegations regarding the amount in controversy; and 2) there was no basis for treating local counsel as necessary parties who must be joined under Rule 19(a)(2)(i).

[05/30] Harney v. Speedway SuperAmerica, LLC
In a class action alleging that the manner in which defendant paid and forfeited its employees' bonuses violated Indiana's Wage Payment Statute and Wage Claims Statute, summary judgment for defendant is affirmed where: 1) the bonuses were condition on continued employment and plaintiffs failed to meet this criteria; 2) even if the unpaid bonuses could be considered "wages" they are considered deferred compensation and subject to forfeiture; 3) plaintiffs were not entitled to damages from defendant's failure to pay the bonuses within a statutory ten day period since bonuses are not wages; and 4) certification of certain questions of state law to the Indiana Supreme Court is denied.

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Consumer Protection

[07/17] Owen v. Gen. Motors Corp.
In a putative class action brought against GM after plaintiffs' windshield wipers failed alleging breach of warranty, breach of contract, unjust enrichment, fraudulent concealment and violations of the Missouri Merchandising Practices Act (MMPA), dismissal and other rulings against plaintiffs are affirmed where: 1) the district court did not err in dismissing breach of warranty and fraudulent concealment claims on statute of limitations grounds; 2) dismissal of a breach of contract claim was proper as well; 3) there was no abuse of discretion in denying leave to amend; 4) summary judgment on the state law MMPA claim was proper as plaintiffs presented no evidence from which a jury reasonably could conclude that their loss was the result of the alleged defect that GM failed to disclose.

[07/16] Sovereign Bank v. BJ's Wholesale Club, Inc.
Orders dismissing claims arising from the theft of credit card information from a retailer's computer files are affirmed in part and reversed in part where: 1) respective grants of summary judgment to defendant-acquirer on question of whether plaintiffs-card issuers were intended third-party beneficiaries under state law of the contract between defendant-acquirer and defendant-merchant required reversal, as plaintiffs had met their burden to show the existence of a genuine issue of material fact; 2) dismissal of equitable indemnification claims for cardholders' losses due to unauthorized charges was proper since TILA section 1643 addresses only the liability of cardholders, not card issuers, for unauthorized charges; 3) the economic loss doctrine barred recovery for negligence where plaintiff suffered only monetary losses without any accompanying physical or property damage; 4) for purposes of an unjust enrichment claim, plaintiff could not show that defendants derived more than an incidental benefit from plaintiff's conduct.

[07/16] Brack v. Omni Loan Co., Ltd.
In a suit alleging violations of borrower's rights under the Finance Lenders Law, and raising claims under the Consumers Legal Remedies Act and Unfair Competition Law, dismissal of the suit based on choice of law provisions in the loan agreements is reversed where: 1) the Finance Lenders Law represents a fundamental policy of the state and application of the provisions would undermine the policy; and 2) application of Nevada law would impair California's regulatory interests to a far greater extent than application of California law would impair Nevada's interests.

[07/15] Campfield v. State Farm Mut. Auto. Ins. Co.
In a suit alleging violations of the Sherman Act, the Colorado Consumer Protection Act (CCPA), and tortious interference with contractual relations, dismissal and summary judgment for defendant, and a decision not to rule on plaintiff's objection to discovery orders are affirmed where: 1) plaintiff's claims under section 2 of the Sherman Act failed to allege an appropriate market; 2) defendants dod not engage in per se horizontal restraint of trade under section 1 of the Act; 3) claims under section 1 of the Sherman Act failed for failure to allege a legally relevant market; 4) plaintiff has failed to provide sufficient evidence for a CCPA claim; 5) tortious interference claims failed for lack of evidence; and 6) there was no abuse of discretion in not ruling on plaintiff's discovery motion.

[07/15] Sony Computer Enter. Am., Inc. v. Am. Home Assurance Co.
In a suit brought by Sony against insurers for failing to indemnify and defend it in a class action suit alleging product defects in the Sony PlayStation 2 video game system, summary judgment for defendants is affirmed where neither insurance company had a duty to indemnify or defend Sony in the underlying lawsuit, primarily since the suit did not assert claims within the meaning of the term "negligent publication." The circuit court defines the term "negligent publication" as a narrow tort in which the publication of material encourages or instructs readers to engage in harmful conduct.

[07/14] Tammi v. Porsche Cars N. Am., Inc.
In a suit brought under Wisconsin's Lemon Law for a Porsche leased by plaintiff, a jury verdict for plaintiff is affirmed where: 1) there was sufficient evidence presented that the vehicle plaintiff leased suffered a nonconformity that substantially impaired its use; and 2) the jury's verdict was not against the clear weight of the evidence regarding the substantial impairment of the use of the vehicle. However, the circuit court stays remand of the appeal and certifies four questions to the Wisconsin Supreme Court regarding pecuniary loss under Wisconsin law.

[05/22] TJX Companies, Inc. v. Superior Court (Caldwell)
In a review of lower court rulings of a pending class action based on alleged violations of a statute prohibiting businesses from requiring credit cards users to provide certain personal identification information, the court of appeals rules that: 1) because the statute imposes a "penalty", it is subject to the one-year statute of limitations of Code of Civil Procedure section 340; and 2) based on the plain meaning of the statutory language, the statute does not apply to merchandise returns.

[05/14] Saunders v. Branch Banking and Trust Co. of Virginia
In an action alleging violation of defendant-lender's duties as a furnisher of information under the Fair Credit Reporting Act (FCRA), judgment against defendant including a denial of defendant's motions for judgment as a mater of law and for remittitur is affirmed where: 1) a decision by defendant to report a debt to credit reporting agencies without mention of a dispute was in violation of section 1681s-2 of the FCRA; 2) plaintiff was able to demonstrate that defendant knowingly and intentionally withheld information of a valid dispute from credit reporting agencies; 3) there were sufficient facts for a jury to find that plaintiff had an excuse for failing to make payments; and 4) an $80,000 punitive award was not grossly excessive in light of defendant's reprehensible conduct and the fact that a lower award would not have a punitive or deterrent effect.

[05/06] Pludeman v. N. Leasing Sys., Inc.
The court of appeals rules that plaintiffs sufficiently pleaded a cause of action for fraud against individually-named corporate defendants pursuant to CPLR 3016(b) where it was not unequivocal, as a matter of law, that a finder of fact could not reasonably infer the requisite knowledge or participation by the individual defendants in an act of fraud.

[04/30] Trans-Spec Truck Serv., Inc. v. Caterpillar Inc.
In a case applying the accrual and statute of limitations provisions of the Massachusetts U.C.C. to breach of warranty claims brought against an engine manufacturer, dismissal of plaintiff's warranty and Massachusetts Gen. Laws chapter 93A claims as time-barred, as well as summary judgment for defendant on plaintiff's negligence claims, are affirmed where: 1) the breach of warranty claim, accruing on the date of delivery of goods, was filed after the expiration of the limitations period, and plaintiff's equitable estoppel arguments were unavailing; and 2) plaintiff made no compelling argument and cited no specific facts which would invalidate the exculpatory language contained in a negligence exclusion clause.

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