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Access over workers' compensation decisions, including En Banc, Significant Panel Decisions, and writ-denied cases.

Case No. 04-15739
Regular Panel Decision
Jun 19, 2006

Continental Casualty Co. v. Pfizer, Inc. (In re Quigley Co.)

Plaintiffs Continental Casualty Company and Continental Insurance Company initiated an adversary proceeding against Pfizer, Inc., Quigley Company, Inc. (a debtor-in-possession and Pfizer's subsidiary), and numerous other insurance companies. The plaintiffs sought a declaratory judgment that certain policies excluded coverage for asbestos-related claims, or alternatively, to reform them and apportion liability. Pfizer and Quigley moved to dismiss for lack of subject matter jurisdiction and failure to state a claim regarding anticipatory repudiation. A group of defendant insurers (Certain Insurers) sought to stay the proceeding and lift the automatic stay for arbitration. The court denied the motion to dismiss for lack of subject matter jurisdiction. It stayed Counts One, Two, and Three, and Guildhall's cross-claim, pending the arbitration of coverage disputes, granting the Certain Insurers relief from the automatic stay to commence arbitration. Count Four, concerning anticipatory repudiation, was dismissed without prejudice.

BankruptcyInsurance Coverage DisputeAsbestos LiabilityDeclaratory Judgment ActArbitration AgreementStay of LitigationMotions to DismissAnticipatory RepudiationWellington AgreementPolicy Exclusions
References
52
Case No. 196-1545-260
Regular Panel Decision

Montague Pipeline Technologies Corp. v. Grace/Lansing & Grace Industries, Inc. (In Re Montague Pipeline Technologies Corp.)

The case involves a motion by Grace-Lansing and Grace Industries, Inc. (Grace) to remand an adversary proceeding back to the New York State Supreme Court, Kings County, and for relief from an automatic stay. The Debtor, Montague Pipeline Technologies, Inc., had removed the action, which concerned the confirmation of an arbitration award in favor of Grace, after filing for Chapter 11 bankruptcy. The Court, presided over by Chief Judge Conrad B. Duberstein, applied the 'Drexel factors' to evaluate the request for remand, concluding that equitable grounds favored sending the action back to state court due to efficient administration of the bankruptcy estate, predominance of state law, and comity. The Court also granted Grace's motion for relief from the automatic stay, finding 'cause' based on the 'Sonnax factors,' to allow the state court to finalize the arbitration award and fix Grace's claim, thereby facilitating the Debtor's reorganization plan.

BankruptcyRemandAutomatic StayArbitration AwardState LawFederal Arbitration ActJudicial EconomyComityChapter 11Dispute Resolution
References
38
Case No. MISSING
Regular Panel Decision

Greenwald v. Axelrod (In Re Greenwald)

The Commissioner of the New York State Department of Health sought relief from an automatic stay in a Chapter 11 liquidation case to complete administrative proceedings concerning the debtor's medicaid reimbursement entitlements. The debtor, Sidney Greenwald d/b/a Maple Leaf Nursing Home, opposed the application, arguing the state's interest was pecuniary, not regulatory, thus precluding the 11 U.S.C. § 362(b)(4) exception. The court found that the Commissioner's interest was indeed pecuniary, aiming to recoup approximately $911,500 in medicaid overpayments, and thus the regulatory exception did not apply. However, considering that the debtor's nursing home was sold, no patients were at risk, and the case was a liquidation, the court granted the relief from the stay, allowing the administrative appeals to conclude, with any enforcement subject to the bankruptcy court's review of the developed administrative record.

Automatic StayBankruptcyChapter 11Medicaid ReimbursementGovernmental Regulatory PowerPecuniary InterestAdministrative ProceedingsLiquidation CaseAudit AppealsNew York State Department of Health
References
14
Case No. MISSING
Regular Panel Decision

In Re Hunt

Nassau Educators Federal Credit Union (NEFCU) moved for relief from the automatic stay to set off outstanding loan balances against deposits in the co-debtors' share accounts, citing New York State Debtor and Creditor Law § 151. The co-debtors, William E. Hunt and Ernelle Hunt, argued that these funds, derived from their pensions, were exempt under New York City Administrative Code §§ 13-312 and 13-375 and NYDCL § 282, and that NEFCU's administrative freeze violated the automatic stay. The court denied NEFCU's motion, ruling that New York's exemption statutes for pension funds should be broadly interpreted to protect the proceeds from 'any other process,' including setoff, to prevent the exemptions from becoming a nullity. Consequently, the court ordered NEFCU to remove the administrative freeze and permit the co-debtors to access their funds.

Automatic StaySetoff RightsPension ExemptionsBankruptcy Chapter 7Debtor ProtectionStatutory InterpretationCreditor's ClaimsNew York State LawAdministrative FreezeEquitable Remedies
References
21
Case No. MISSING
Regular Panel Decision

In Re Herrera

This case concerns motions filed by Capital One Auto Finance and Marco Herrera in a Chapter 7 bankruptcy proceeding. Capital One sought relief from the automatic stay, while the Debtor, Marco Herrera, cross-moved to redeem his 2006 Yukon Denali under 11 U.S.C. § 722. The central issue revolved around determining the appropriate replacement value of the vehicle for redemption. The Debtor's proposed valuation of $6,425, supported by a Kelley Blue Book report for a different vehicle model, was rejected by the Court. The Court considered Capital One's expert appraisal and determined the replacement value to be $17,000. Additionally, the Court ruled that the automatic stay terminated due to the Debtor's failure to timely perform his stated intention to redeem, but clarified that this did not extinguish his underlying right to redeem the vehicle.

BankruptcyChapter 7Automatic StayRedemptionVehicle ValuationSecured ClaimReplacement ValueDebtor's Statement of IntentionTimelinessEvidentiary Hearing
References
20
Case No. MISSING
Regular Panel Decision
Jan 03, 1994

In Re Whitefield

Terry Wayne Whitefield and Carol Wright Whitefield filed a joint Chapter 13 bankruptcy petition. The Child Support Division of the Sumner County Office of the District Attorney General inadvertently violated the automatic stay by initiating contempt proceedings and a wage assignment against Terry Wayne Whitefield for child support. The debtors filed a contempt petition seeking declaratory relief and attorney's fees. The court granted declaratory relief, finding the Child Support Division violated the automatic stay, and ordered the State of Tennessee to pay $200.00 in attorney's fees, ruling that Eleventh Amendment sovereign immunity does not bar such an award when ancillary to prospective relief. However, the petition for sanctions against Tonja Whitefield was denied due to insufficient evidence of her direct action.

BankruptcyAutomatic StayContemptEleventh AmendmentSovereign ImmunityAttorney's FeesDeclaratory ReliefChapter 13Child Support EnforcementState Immunity
References
10
Case No. MISSING
Regular Panel Decision

In Re Pelham Fence Co., Inc.

Lilliam Roberts, Commissioner of Labor for New York, moved for a declaratory judgment to establish that she is not barred by an automatic bankruptcy stay from pursuing funds withheld from the debtor, Pelham Fence Co., Inc., by the New York State Department of Audit and Control (DAC). The Commissioner argued these funds were not part of the bankruptcy estate. Alternatively, she sought relief from the stay, citing a lack of equity in the fund (approximately $57,000 against liens exceeding $600,000). The Chapter 7 bankruptcy trustee opposed the motion, contending the funds were estate property and that he might avoid prior liens for the estate's benefit. The court, citing precedents regarding segregated funds and lack of debtor equity, granted the Commissioner's motion, ruling that the withheld funds, subject to a pre-petition withholding order, do not constitute property of the bankruptcy estate and are not subject to the automatic stay.

BankruptcyAutomatic StayProperty of the EstateDeclaratory JudgmentWithheld FundsLabor LawNew York StateChapter 7Lien AvoidancePrevailing Wage
References
5
Case No. MISSING
Regular Panel Decision

Air Line Pilots Ass'n, International v. Eastern Air Lines, Inc. (In Re Ionosphere Clubs, Inc.)

The Air Line Pilots Association International (ALPA) moved to lift the automatic stay imposed during Eastern Air Lines, Inc.'s Chapter 11 bankruptcy proceedings. ALPA sought to continue three arbitration proceedings related to a pay-parity provision in their collective bargaining agreement, which had been automatically stayed. The court considered the federal policy favoring labor arbitration, the potential impact on the bankruptcy estate, and the willingness of arbitrators to allow the Official Unsecured Creditor’s Committee to participate. Finding that 'cause' existed to modify the stay and noting the availability of claims estimation under 11 U.S.C. § 502(c) as a safeguard against undue delay, the court granted ALPA's motion, allowing the arbitration proceedings to resume.

Bankruptcy ProceedingsAutomatic Stay ReliefLabor ArbitrationCollective BargainingRailway Labor ActPay Parity GrievanceChapter 11 ReorganizationCreditors' Committee ParticipationSection 362(d)Dispute Resolution
References
23
Case No. MISSING
Regular Panel Decision

In re Voll

The debtors, Patrick L. Voll and Linda P. Voll, filed for Chapter 13 bankruptcy. The New York State Department of Taxation and Finance ("Tax Department") willfully violated the automatic stay by continuing to garnish Mrs. Voll's wages post-petition, despite receiving notice of the bankruptcy filing. The garnishment ceased, and the improperly deducted funds were returned after the Debtors filed a motion for sanctions. The court found that the Tax Department willfully violated the automatic stay. However, the court denied the Debtors' claim for emotional distress damages, finding they failed to provide clear and convincing evidence of significant emotional harm distinct from the general stressors of bankruptcy and other life events. The court awarded the Debtors $13,625.00 in attorneys' fees as actual damages for the willful violation of the stay.

Bankruptcy LawAutomatic Stay ViolationWage GarnishmentSanctions MotionAttorneys' Fees AwardChapter 13 BankruptcyTaxation and FinanceActual DamagesEmotional Distress ClaimsWillful Violation
References
28
Case No. MISSING
Regular Panel Decision

In Re Willis

The debtor, Trennis Earl Willis, filed for Chapter 7 bankruptcy. An asset in his estate is a personal injury claim, for which he had a contingency fee contract with attorney Frank L. Supercinski. Supercinski sought approval for his fees ($20,000 plus expenses) from a $50,000 settlement of the personal injury claim and approval of a disbursement scheme. Both the Debtor and the Chapter 7 Trustee objected, arguing the contingency fee contract was executory and rejected by the estate. The Court, presided over by Judge Donald R. Sharp, found the contingency fee agreement to be executory and deemed rejected as not assumed by the Trustee. However, applying the common fund doctrine, the Court acknowledged Supercinski's entitlement to fees from the settlement proceeds with priority. Despite this, all of Supercinski's motions (for fees, settlement approval, and relief from stay) were denied due to procedural flaws, such as the settlement not being finalized or approved, and the lack of a settlement agreement copy. The Court clarified that the settlement check is property of the Debtor's estate and must be administered under bankruptcy rules, instructing Supercinski to file a proper application once the settlement is finalized and approved.

Chapter 7 BankruptcyContingency Fee AgreementAttorney's FeesExecutory ContractAutomatic Stay ReliefCommon Fund DoctrineQuantum MeruitTexas LawPersonal Injury SettlementBankruptcy Estate
References
29
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