Judicial estoppel based on bankruptcy filing affirmed in the District of Columbia

I had previously written about judicial estoppel and lack of standing defenses that could arise from a plaintiff's prior bankruptcy filing.  There is a recent decision in the District of Columbia in which judicial estoppel barred a plaintiff's personal injury claim, after the plaintiff had failed to disclose the claim in bankruptcy proceedings.  To prevail on such a motion, however, it is probably necessary to show a clear financial benefit accruing to the plaintiff from the failure to disclose the claim in bankruptcy.

Statutory waiver of insurer's late notice defense in Virginia

I've previously posted about Va. Code § 38.2-2226, which states that in order to disclaim coverage based on an insured’s breach of a policy condition, an insurer has to give notice to the claimant or claimant’s counsel within 45 days after discovery by the insurer of the breach of the condition. Failure to give such notice within 45 days will result in a statutory waiver of the defense. 

The importance of compliance with this statute cannot be overstated in a Virginia claim involving a potential late notice defense. 45 days has a way of slipping past.

This same statute came up in a relatively recent decision from the Virginia Supreme Court, Dabney v. Augusta Mutual Insurance Co., which is discussed here.

The Dabney opinion was also usefully discussed in Zalma on Insurance, from a different perspective. 

Interactive map of U.S. highway fatalities 2001-2009

There were over 369,000 road accident fatalities in the U.S. between 2001 and 2009, and there is an interactive map showing the location of each one.    I'm not sure if this is useful information, unless perhaps you are handling a motor vehicle accident at a particularly dangerous intersection, and you may want to implead the governmental entity responsible for the road design.  If so, don't forget to give the required statutory notice of the claim. 

Hat tip to Simon Rogers of the Guardian and BeSpacific for this link.


More maps of traffic fatalities:

NHTSA maps (showing Maryland)

Google Earth Map of Maryland traffic fatalities

None of these seems as useful as the Crashstat map for New York City.

Why isn't there a Crashstat map for every State?


Plaintiff's bankruptcy filing may create defenses in civil litigation

A search should be conducted early in every case to determine if the plaintiff has filed for bankrtupcy. There are a number of good reasons to do so.

DRI published a recent article on its website concerning the defense of judicial estoppel arising from the plaintiff's failure to disclose his or her claim as an asset in the bankruptcy proceedings.  There is quite a bit of case law on judicial estoppel arising from bankruptcy. 

Another way in which bankruptcy proceedings can negatively impact a plaintiff's suit was recently illustrated by the case of Kocher v. Campbell, a decision of the Virginia Supreme Court that came out last June.  In Kocher, the Court considered the issue whether the plaintiff in an action to recover damages for personal injuries had standing to maintain his action after filing a petition for bankruptcy, causing his claim to become an asset of his bankruptcy estate.  The Court held that the plaintiff lacked standing, and dismissed the case.

The plaintiff was involved in a motor vehicle accident, and before filing a lawsuit the plaintiff filed a voluntary Chapter 7 petition in bankruptcy.  His petition failed to disclose his personal injury claim as an asset in Schedule B, and failed to list it on Schedule C as an exempt property.  About three months later, plaintiff received a standard discharge in bankruptcy.

The plaintiff then filed his civil action based on the motor vehicle accident.  This was nonsuited then refiled and served.  The defense filed a motion for summary judgment on the grounds that the plaintiff lacked standing to bring the action.  During the hearing on the motion, the plaintiff nonsuited the action again.

The plaintiff then persuaded the bankruptcy trustee to file a motion in bankruptcy court to reopen his bankruptcy case, which was granted.  Then the plaintiff obtained leave to file amended schedules, listing the personal injury action and claiming it as exempt property.  The bankruptcy court ruled that the plaintiff had properly exempted the cause of action.

Next, the plaintiff filed his civil suit for the third time. The defense again moved for summary judgment, asserting the lack of standing and the statute of limitations.  The trial court denied the motion, but certified the issue for an interlocutory appeal pursuant to a Virginia statute, and the Virginia Supreme Court awarded the defendant an appeal.

The Virginia Supreme Court reversed, holding that the action was a nullity at the time of its filing and the statute of limitations had run before it was refiled the third time, and dismissed the case.

The Court reasoned first that as a result of the plaintiff's filing a petition for bankruptcy, his inchoate personal injury claim passed to his bankruptcy estate.  Thereafter, the cause of action was one that could only be asserted by the trustee in bankruptcy, unless and until it was restored to the plaintiff by the bankruptcy court.  Here, the cause of action remained a part of the bankruptcy estate until the bankruptcy court ordered it exempted over five years after the motor vehicle accident.  All three complaints were filed during the period when the plaintiff lacked standing to assert the cause of action because it remained in the bankruptcy estate, enforceable only by the trustee. 

The Court rejected the plaintiff's argument that the final order closing the reopened bankruptcy case had the effect of abandoning all property remaining in the estate, and that abandonment causes the abandoned property to revert back to the debtor retroactively, as if the bankruptcy had never occurred.  The Court reasoned that the exemption that preceded the final order had already removed the plaintiff's cause of action from the bankruptcy estate.  Second, under Virginia law concerning standing, an action filed by a party who lacks standing is a legal nullity.  Standing acquired after the statute of limitations has run cannot be retroactively applied to cure the lack of standing that existed when the action was filed.

How a similar scenario would play out in other States would depend on the State law where the action is pending.  The most important step, however, is to run the search, and find out whether there has been a bankruptcy filing. 

D.C. Court of Appeals formally adopts Iqbal and Twombly

In Mazza v. Housecraft LLC, No. 09-CV-1068 (D.C. April 28, 2011), the D.C. Court of Appeals held that the recent Supreme Court decisions articulating the requirements that a complaint must meet in order to survive a motion to dismiss, i.e. Ashcrof v. Iqbal and Bell Atlantic Corp. v. Twombly, apply in the District of Columbia.

In pertinent part, the Court stated:

The Supreme Court has recently articulated two prongs in determining whether acomplaint is sufficient to survive a motion to dismiss: whether the complaint includes well pleaded factual allegations as an initial matter, and whether such allegations plausibly give rise to an entitlement for relief. In Ashcroft v. Iqbal, — U.S. —, 129 S.Ct. 1937, 173 L.Ed.2d868 (2009), the Court elaborated on Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 127 S.Ct.1955, 167 L.Ed.2d 929 (2007). In Iqbal, the Court noted that as an initial matter, Fed. R.Civ. P. 8 (a) “does not require ‘detailed factual allegations [in a pleading],’ but it demands more than an unadorned, the-defendant-unlawfully-harmed-me accusation.” 129 S.Ct. at1949 (quoting Twombly, supra, 550 U.S. at 555, 127 S.Ct. 1955). . . . While only the first prong is relevant to our analysis here, we hold that both requirements apply in our jurisdiction. We have not heretofore expressly adopted both of the requirements articulated in Twombly and Iqbal. . . . However, we take this opportunity to recognize thatTwombly and Iqbal apply in our jurisdiction.

 7/5/2011:  The D.C. Court of Appeals issued an order dated June 30, 2011, vacating the Mazza opinion, on the grounds that the case had settled and therefore was moot.  Therefore, the Mazza opinion is no longer binding precedent in the District.  At the same time, the opinion hasn't been "disappeared":  it is still available.

4th Circuit addresses superseding cause in Virginia in Fletcher v Pizza Hut

"Pizza hut defense verdict upheld". Nice writeup by the Virginia Lawyers Weekly Blog.

Defamation per se in Virginia arising from summary of a judicial opinion

In Vaile v. Willick, 2008 U.S. Dist. LEXIS 53619 (W.D. Va. July 14, 2008), a law student's defamation action against two lawyers survived the defendants' motion for summary judgment.

The defendants practiced family law in Nevada, and represented the plaintiff law student's ex-wife.  The defendants represented the ex-wife and their children in a series of lawsuits in state and federal courts in Nevada to recover damages from Vaile's removal of the children from their mother's custody without her consent.

The plaintiff, who was in law school, decided to cease his defense to one of the civil actions in Nevada federal court, and as a result, the federal judge found against him and awarded compensatory damages of $688,500 and attorneys' fees and costs of $272, 255.

One of the defendants subsequently wrote to the plaintiff's law school to advise that had been found guilty of multiple violations of State and Federal law, including kidnapping, passport fraud, felony non-support of children and violation of RICO.  The letter requested the law school to reconsider the plaintiff's fitness for continued enrollment, and attached a copy of the federal court's decision.

When the law school seemingly took no action, the co-defendant, who was an attorney with the same firm, sent a letter to the ABA to inform it of the law school's recalcitrance, repeated the summary of the Nevada decision, and attached a copy of the Nevada opinion.  The letter called for the ABA to rescind the law school's accreditation as a result of the law school's failure to act.

The plaintiff filed an action for defamation, on the grounds that the letters were false and defamatory.

On cross-motions for summary judgment, the plaintiff argued that the letters were sent with malice and an intent to defame.  Plaintiff argued that he has never been convicted of criminal offenses under state or federal law, and the letters were false and defamatory because they suggested that he was.

Defendants argued that the letters were true or at worst, substantially true, do not necessarily suggest a criminal conviction, and that when read as a whole with the attached judicial opinion, cannot be construed as defamatory per se.

The Court found that the letters were defamatory per se, because they impute the commission of a crime upon the plaintiff that he did not commit.  Further, the letters were defamatory per se as a whole because they suggested that the plaintiff is unfit to continue at law school or lacks the integrity to continue in the study of the law or to perform the duties of a lawyer.

The Court found that the absolute privilege to publish matters of public record applied to the letters.  The publication of public records to which everyone has a right of access is absolutely privileged in Virginia.  The privilege is not lost if the record is incorrect or if it contains falsehoods.  The privilege exists so long as the published account of the public record is a fair and substantially accurate account of the public record or proceeding.  If the publication substantially departs from the proceeding or record, then the privilege is lost.

The Court found that the issue whether the letters substantially departed from the Nevada opinion, such that the privilege was lost, is a question left for the jury, because reasonable people could disagree whether the letters are an impartial and accurate account of the opinion.

Liability of DC Halfway House For Acts of Former Resident

In Smith v. Hope Village, Inc., No. 05-633 (RBW)(D.D.C. Apr. 12, 2007), the district court denied the defendant's motion for summary judgment, in which the defendant had argued in part that, as a matter of law, a halfway house owes no duty to unknown parties with whom it has no relationship for harm caused by an offender previously housed at the halfway house approximately five months prior to the offender's harmful act. 

An inmate named Kelly had been released from prison into the custody of the Hope Village halfway house in December, 2001.  (Although the opinion doesn't say, the pleadings indicate that the date was Dec. 12, 2001).  On March 7, 2002, less than three months later, Kelly was discharged from Hope Village and was placed under the supervision of the DC Court Services and Offender Supervision Agency.  About five months after that, on August 6, 2002, Kelly allegedly broke into a house in Silver Spring where he shot and killed two people -- one of whom was the plaintiff's nine year old daughter.

Kelly had a long rap sheet with numerous felonies, including one involving a loaded gun.

Plaintiff brought a wrongful death and survival action against Hope Village.  The theory of liability was that Hope Village was negligent in its supervision of Kelly, and as a result, the halfway house was responsible for his improper and untimely release into the community.  Plaintiff alleged that Hope Village knew, or should have known, of Kelly's violations of the terms of his conditional release while at Hope Village, yet it never disciplined him.

In its motion for summary judgment, Hope Village argued, among other things, that it does not owe any legally cognizable duty to the plaintiff, or to any parties with whom it has no pre-existing relationship, for injuries resulting from Kelly's criminal conduct five months after he was discharged from the halfway house program.  It also argued that there was no proximate cause due to a lack of foreseeability, and due to remoteness and superseding and intervening negligence.

In a lengthy opinion, Judge Walton rejected all of Hope Village's arguments, finding that Hope Village did owe a duty to people in the local community such as the plaintiff and her daughter, and that the question of foreseeability was for the jury.  Judge Walton also reinstated plaintiff's wrongful death claim, finding that the 3 year statute of limitations under the Maryland Wrongful Death Act applied, not the shorter period of limitations under the D.C. Act.

Violation of Immigration Laws

Further to my previous post on this subject, I should note that in 1992, the D.C. Court of Appeals in Portillo v. United States, 609 A.2d 687 (D.C. 1992), considered the issue whether in a criminal case, the prosecutor committed reversible error by cross examining the defendant as to his illegal immigrtation status and for arguing that that negatively impacted defendant's credibility. The Court affirmed, as the cross examination at issue was not properly objected to at trial and it did not rise to the level of plain error. However, the Court criticized the prosecutor for improperly cross examining a witness on a prior bad act not involving a criminal conviction:

"Where the prosecutor went wrong concerning appellant's immigration status, however, was to suggest that the illegal entry itself was 'the grandest deception,' which rendered appellant's testimony incredible. This implies that anyone who -- for whatever reason -- has crossed our borders in violation of the government's immigration procedures should not be believed. Appellant, however, had not been convicted of an immigration-related offense. '[A] witness may be cross-examined on a prior bad act that has not resulted in a criminal conviction only where '(1) the examiner has a factual predicate for the question, and (2) the bad act 'bears directly upon the veracity of the witness in respect to the issues involved in the trial.' . . . Appellant's unlawful presence in this country did not bear directly upon his veracity in respect to the issue of his guilt on the charge of distributing drugs. Thus, the prosecutor could not properly use appellant's illegal status to argue against his general credibility."

Given that the U.S. Supreme Court in Hoffman has stated that illegal entry into this country amounts to criminal fraud, the argument seems stronger now that cross examination on such illegal entry goes directly to truth and veracity.

Violation of Immigration Laws

An alien's use of a false identity when working or obtaining employment in the United States is a violation of federal immigration laws, amounting to a criminal fraud. Hoffman Plastic Compounds, Inc. v. NLRB, 122 S.Ct. 1275, 1283-84 (2002). Even if a claim of a plaintiff who was working in violation of federal immigration laws has merit, the immigration law violations may disqualify such a plaintiff from any recovery. Permitting such a plaintiff to recover would be contrary to federal immigrtation law because it would reward their unlawful conduct and encourage future violations of the immigration laws. Hoffman, 122 S.Ct. at 1283-84.

Later: However, that argument has not succeeded in at least one jurisdiction, Massachusetts, which has refused to deny workers' compensation benefits to an undocumented immigrant worker. See the very interesting opinion in Guillermo Medellin v. Cashman, KPA and National Union Fire Ins. Co. (Reviewing Board of the Department of Industrial Accidents of Massachusetts, Dec. 23, 2003). The latter opinion has been appealed.

The National Immigration Law Center has collected cites to decisions applying Hoffman Plastic:
Immigrants Employment Rights and Remedies