Judge: Stay, Bifurcation Not Merited In Professional Liability Coverage Dispute

WHEELING, W.Va. - Despite the existence of a parallel proceeding in state court, a West Virginia federal judge on Oct. 25 declined to abstain or remand a real estate firm's declaratory and contractual claims against its insurer, finding no indication of "exceptional circumstances" to warrant such an action (Paull Associates Realty LLC v. Lexington Insurance Co., No. 5:13-cv-00080, N.D. W.Va.; 2013 U.S. Dist. LEXIS 153534).

UAW: Bankrupt City Of Detroit 'Improperly Attempts' To Bar Claims Against Estate

DETROIT - The United Auto Workers (UAW) filed a brief in the U.S. Bankruptcy Court for the Eastern District of Michigan on Oct. 28 objecting to the bankrupt City of Detroit's motion to set a date that would bar claims against the bankruptcy estate (In Re: City of Detroit, No. 13-53846, Chapter 9, E.D. Mich. Bkcy.).

Magistrate Judge Denies Sanctions Request For Bank's Untimely Litigation Hold

NEW YORK - A federal magistrate judge in New York on Oct. 24 refused to sanction a trustee bank over its failure to implement a litigation hold in a timely fashion, ruling that while the failure to do so was negligent, the bank presented sufficient evidence showing that no relevant information was destroyed or lost (Mastr Adjustable Rate Mortgage Trust 2006-0A2, et al. v. UBS Real Estate Securities Inc., No. 12 Civ. 7322, S.D. N.Y.; 2013 U.S. Dist. LEXIS 152441).

Florida Court Certifies Tobacco Punitive Damages Issue To State Supreme Court

LAKELAND, Fla. - The Second District Florida Court of Appeal on Oct. 18 certified to the state Supreme Court whether tobacco injury and wrongful death plaintiffs may recover punitive damages for negligence and strict liability claims, affirming a $2.5 million verdict while acknowledging that the ruling conflicts with others (Philip Morris USA Inc., $(f/k/a Philip Morris Incorporated$), et al. v. Theodore Hallgren, Personal Representative of the Estate of Claire Hallgren, Case No. 2D12-2549, Fla. App., 2nd Dist.; 2013 Fla. App. LEXIS 16640).

Judge Dismisses Couple's Federal Claims Over Force-Placed Flood Insurance

MONTGOMERY, Ala. - A federal judge in Alabama on Oct. 17 dismissed a couple's claims that a bank and a loan servicer violated the Real Estate Settlement Procedures Act (RESPA) and Fair Debt Collection Practices Act (FDCPA) when obtaining force-placed flood insurance for their property after finding that the plaintiffs failed to state a claim under Federal Rule of Civil Procedure 12(b)(6) (Reginald Rex Davis Jr., et al. v. Bank of America, N.A., et al., No. 13-cv-231-WC, M.D. Ala.; 2013 U.S. Dist. LEXIS 149228).

Dewey & LeBoeuf, Creditor Agree To More Than $1.04M Claim Related To 401(k) Plan

NEW YORK - The federal bankruptcy judge presiding over the Chapter 11 case of former law firm Dewey & LeBoeuf on Oct. 17 issued an order approving a stipulation in which the administrator of the former law firm's 401(k) plan will have an allowed claim against the bankruptcy estate valued at $1,044,310.46 (In Re: Dewey & LeBoeuf, No. 12-12321, Chapter 11, S.D. N.Y. Bkcy.).

Real Estate Fraud Case Remanded; 1st Circuit Finds Damages Expert Unreliable

BOSTON - A trial court erred in allowing a damages expert to provide unreliable calculations of hedonic and other damages suffered by a schizophrenic trash truck driver who was induced into a fraudulent scheme by a group of lenders, brokers and closing agents to be a straw buyer for two homes that later went into foreclosure, a First Circuit U.S. Court of Appeals panel held Oct. 15 (Robert Smith, et al. v. Dorchester Real Estate, et al., Nos. 11-2349; 11-2378; 11-2389, 1st Cir.; 2013 U.S. App. LEXIS 20785).

Missouri Court Affirms $255,594 Verdict For Purchasers Of Moldy Home

SPRINGFIELD, Mo. - A Missouri appeals court on Oct. 15 affirmed a trial court's judgment of $255,594 for the purchasers of a home that contained mold and water leaks, refusing to grant the estate of the builder of the house a new trial (Douglas Davies, et al. v. Estate of Keith Broege, No. SD32378, Mo. App.; 2013 Mo. App. LEXIS 1214).

Mississippi Employer Granted Summary Judgment In Suit Alleging Welding Fume Death

OXFORD, Miss. - A Mississippi employer accused by the estate of a dead employee of failing to provide a safe work environment and of exposing the employee to hexavalent chromium and manganese in welding fumes was granted summary judgment on Oct. 17 in the U.S. District Court for the Northern District of Mississippi because the plaintiff failed to meet its burden of showing an intent to harm on the part of the employer (Pinnacle Trust Co. v. Babcock & Wilcox Power Generation Group Inc., et al., No. 11-2, N.D. Miss.).

New York Justice Finds Coworker Testimony Overcomes Judgment

NEW YORK - Coworker testimony creates the possibility of exposure to asbestos in original valve parts, and evidence of work with larger valves invalidates evidence focused on smaller valves, a New York justice held in an opinion posted Oct. 10 (David Kelly, as executor of the estate of David L. Kelly v. Airco Welders Supply, et al., No. 105643/08, N.Y. Sup., New York Co.).

Bankrupt Hotel: Auctioneer Is Disinterested Person Under Bankruptcy Code

TRENTON, N.J. - Bankrupt hotel Lafayette Yard Community Development Corp. (LYCDC) on Oct. 14 filed a brief in the U.S. Bankruptcy Court for the District of New Jersey arguing that its arrangement with the man it proposes to handle the auctioning of the bankruptcy estate is appropriate because he is a disinterested person as defined by the Bankruptcy Code (In Re: Lafayette Yard Community Development Corporation, No. 13-30752, Chapter 11, D. N.J. Bkcy.).

Justice Finds Co-worker Testimony Insufficient For Gasket Maker's Liability

NEW YORK - A coworker's failure to identify when, where or how often he worked with another man dooms asbestos-related lung cancer claims, a New York justice held in an opinion posted Oct. 10 (Joan M. Nolan, individually and as Administratrix for the Estate of Thomas Robert Nolan Sr. v. A.O. Smith Water Products Co., No. 108180/06, N.Y. Sup.).

Pa. Top Court Declines 'Each And Every' Testimony Appeal In Asbestos Case

HARRISBURG, Pa. - The Pennsylvania Supreme Court on Oct. 10 denied a petition for appeal challenging a lower court's admission of "each and every" exposure testimony in a welding rod case when other evidence of causation also exists (Michelle Wolfinger, administratrix of the estate of Robert Wolfinger v. 20th Century Glove Corp. of Texas, et al., No. 283 EAL 2013, Pa. Sup.).

Bankruptcy Judge: Tax Refund Of More Than $373M Belongs To Estate, Not The FDIC

WILMINGTON, Del. - The bankruptcy judge presiding over the Chapter 7 proceeding of Downey Financial Corp. on Oct. 8 ruled that a tax refund of more than $373 million belongs to the bankruptcy estate and cannot be claimed by the Federal Deposit Insurance Corp. (Alfred T. Giuliano, et al. v. Federal Deposit Insurance Corporation $(In Re: Downey Financial Corporation$), No. 08-13041 Adv. No. 10-53731, Chapter 7, D. Del. Bkcy.).

U.S. High Court Will Not Hear Bankruptcy Case Dealing With 'New Value' Defense

WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 7 refused to hear a case in which a Chapter 7 trustee argued that a bankruptcy estate should be permitted to recover more than $1.37 million that an insurance company received from a debtor company because the insurer failed to show that the transfer met the "new value" standard in the Bankruptcy Code, which permitted the insurer to hold on to the property rather than return it to the bankruptcy estate (Stanley Marvin Campbell v. The Hanover Insurance Company, No. 13-16, Chapter 7, U.S. Sup.).

U.S. High Court Will Not Hear Bankruptcy Case Dealing With Fraudulent Transfers

WASHINGTON, D.C. - The U.S. Supreme Court on Oct. 7 refused to hear a case in which the 10th Circuit U.S. Court of Appeals had affirmed that fraudulently transferred property is not part of a bankruptcy estate until it is recovered (Eric C. Rajala v. Robert H. Gardner, et al, No. 12-1447, Chapter 7, U.S. Sup.).

Borrowers' Loan Suit Amounts To 'Speculation,' Federal Judge Rules

ST. LOUIS - A federal judge in Missouri on Oct. 1 dismissed a suit disputing JP Morgan Chase Bank NA's (Chase) ownership of a Washington Mutual Bank (WaMu) loan following WaMu's closure, finding that the borrowers "fail to provide even minimal factual support for their assertion that their loan was one of many acquired by a REMIC $(Real Estate Mortgage Investment Conduit$) prior to the receivership; thus, it could not have been acquired by the defendants" (Bernard Feldman LP, et al. v. JP Morgan Chase Bank NA, et al., No. 13-1229, E.D. Mo.; 2013 U.S. Dist. LEXIS 141457).

North Dakota Supreme Court Affirms Quitclaim Deed, Reserves Mineral Estate Interests

MINOT, N.D. - The North Dakota Supreme Court issued a unanimous opinion on Oct. 2 affirming a lower court judgment in a quitclaim dispute over the ownership of the mineral estate under a tract of land in McKenzie County, N.D. (Debbora Rolla, et al. v. Greggory G. Tank, et al., No. 20130035, N.D. Sup.; 2013 ND 175).

U.S. Trustee Says AgFeed Not Allowed To Waive Bankruptcy Code Requirements

WILMINGTON, Del. - The U.S. trustee in the Chapter 11 bankruptcy of AgFeed USA LLC on Sept. 30 filed a brief objecting to the company's motion seeking a waiver of Bankruptcy Code requirements on grounds that the specific section of the Bankruptcy Code at issue is required to protect the bankruptcy estate's cash (In Re: AgFeed USA LLC, No. 13-11761, Chapter 11, D. Del. Bkcy.).

Attorney For Bankrupt 'Girls Gone Wild' Says Services 'Valuable,' Fees Deserved

LOS ANGELES - The attorney representing bankrupt GGW Brands LLC, the company that makes adult videos carrying the name "Girls Gone Wild," on Sept. 27 filed a brief in the U.S. Bankruptcy Court for the Central District of California arguing that he should not have to disgorge compensation he has received from GGW because he has provided "valuable" services to the bankruptcy estate (In Re: GGW Brands LLC, No. 13-15130, Chapter 11, C.D. Calif. Bkcy.).

West Virginia Supreme Court Upsets Defense Judgment In Natural Gas Extraction Suit

CHARLESTON, W.Va. - A divided West Virginia Supreme Court of Appeals ruled Sept. 26 that summary judgment for the owner of a mineral estate accused of breach of contract was in error; the dissenting justices argued that the natural gas company has a common-law right to use the surface estate to exploit the subsurface estate (Arthur Thornsbury, et uxor v. Cabot Oil & Gas Corp., No. 12-152, W.Va. Sup.; 2013 W.Va. LEXIS 958).

Federal Judge: Creditors Lack Standing To Pursue Claims Against Tribune

NEW YORK - The New York federal judge presiding over the multidistrict litigation that consolidated fraudulent conveyance litigation against bankrupt Tribune Co. on Sept. 23 ruled that individual creditors who have claims against Tribune lack standing to pursue their claims while the Official Committee of Unsecured Creditors is asserting the same claims against the bankruptcy estate (In Re: Fraudulent Conveyance Litigation, MDL No.11-2296, S.D. N.Y.).

Judge Dismisses Proposed Class's Pennsylvania Consumer Protection Claim

BALTIMORE - A proposed class's claim under Pennsylvania's Unfair Trade Practices and Consumer Protection Law (UTPCPL) against a real estate settlement services company was dismissed by a federal judge in Maryland on Sept. 25 after holding that Maryland law applies to the claim because it is the location where the plaintiffs' alleged economic injury occurred when closing on a loan refinancing their mortgage (Lisa Garland, et al. v. ServiceLink L.P., et al., No. GLR-13-1472, D. Md.; 2013 U.S. Dist. LEXIS 137143).

ResCap: $7.5M Claim By Investment Board That 'Bet' On RMBS Should Be Rejected

NEW YORK - Bankrupt Residential Capital LLC (ResCap) on Sept. 19 filed a brief in the U.S. Bankruptcy Court for the Southern District of New York objecting to a $7.5 million claim filed against its estate by the West Virginia Investment Management Board (WVIMB) (In Re: Residential Capital LLC, No. 12-12020, Chapter 11, S.D. N.Y. Bkcy.).

Bankruptcy Judge: Rothstein Trustee To Get 9.99 Percent Of Mansion Sale Proceeds

FORT LAUDERDALE, Fla. - The federal bankruptcy judge presiding over the Chapter 11 bankruptcy of the former mansion of Gianni Versace, Casa Casuarina LLC, on Sept. 16 issued an order approving a settlement between the mansion and the bankruptcy estate of former law firm Rothstein Rosenfeldt Adler (RRA) which gives the RRA trustee 9.99 percent of the $41.5 million in proceeds from the mansion's auction (In Re: Casa Casuarina LLC, No. 13-25645, Chapter 11, S.D. Fla. Bkcy.).