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Case Summaries

Bankruptcy Law

[05/18] Wright v. Owens Corning
In a suit for damages related to defects in roofing shingles manufactured by a defendant who had filed for Chapter 11 bankruptcy, summary judgment to the defendant is reversed, where: 1) the district court correctly determined that the plaintiffs held "claims" under the Bankruptcy Code, based on JELD-WEN, Inc. v. Van Brunt (In re Grossman’s Inc.), 607 F.3d 114 (3d Cir. 2010); but 2) it should not have held that those claims were discharged, because at the time of the confirmation date, Avellino v. M. Frenville Co. (In re M. Frenville Co.), 744 F.2d 332 (3d Cir. 1984), controlled the status of their "claims," so the notice given did not afford the plaintiffs due process.

[05/14] Hall v. US
In Chapter 12 bankruptcy proceedings in which the debtors proposed treating a capital gains tax on the postpetition sale of their farm as an unsecured claim to be paid to the extent funds were available, with the unpaid balance being discharged, the objection of the IRS is sustained, as the federal income tax liability resulting from the sale was not "incurred by the estate" under section 503(b) of the Bankruptcy Code, and thus was neither collectible nor dischargeable in the Chapter 12 plan.

[05/14] In re Heritage Highgate, Inc.
In a residential home builder's Chapter 11 proceedings, the Bankruptcy Court's determination that the secured claims of a group of secondary creditors should be valued at zero is affirmed, where: 1) in proceedings to value secured claims under section 506(a) of the Bankruptcy Code, a burden-shifting analysis is appropriate; 2) the Bankruptcy Court properly concluded that the fair market value of the debtor's project as of the plan confirmation date controlled whether the creditors' claims were secured; 3) denying the creditors future lot sale proceeds that exceed the project's judicially determined value as of confirmation did not constitute a form of impermissible lien stripping; and 4) the Bankruptcy Court did not clearly err in determining the value of the collateral securing the secured debt.

[05/04] In re VistaCare Group, LLC
In a case in which the purchaser of a retirement and assisted living facility alleged that the seller had damaged the purchaser's interests by wrongfully selling lots within the same subdivision plan, an order of the district court affirming the order of the bankruptcy court granting the purchaser's motion for leave to sue the seller's Chapter 7 bankruptcy trustee in state court is affirmed, where: 1) under the doctrine established in Barton v. Barbour, 104 U.S. 126 (1881), leave of the bankruptcy court is required before instituting such an action; and 2) the bankruptcy court did not abuse its discretion in concluding that the purchaser had met its burden of establishing that its claims against the trustee were "not without foundation."

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Commercial Law

[05/16] Alphas Co., Inc. v. Dan Tudor & Sons Sales, Inc.
In a case in which a grower of grapes filed a successful reparation complaint against a supplier under the Perishable Agricultural Commodities Act of 1930 (PACA) for recovery of payment due on 17 shipments of table grapes, the district court's dismissal of the supplier's appeal is affirmed, where the supplier failed to file the required appeal bond.

[05/08] Belk, Inc. v. Meyer Corp., U.S.
In litigation over competing lines of high-end cookware in which the appellees claimed trade dress infringement and unfair and deceptive trade practices, the district court's judgment in favor of the appellees is affirmed, where: 1) the appellant's failure to move pursuant to Rule 50(b) forfeited its challenge on appeal to the sufficiency of the evidence; 2) the district court did not abuse its discretion in qualifying an expert or in admitting his testimony and survey; 3) the appellant engaged in unfair and deceptive trade practices as a matter of law; 4) the infringement was not innocent or unintentional, and the unfair and deceptive trade practices statutes covered it; and 5) the trial judge properly treated the award of profits as damages subject to trebling under state statute.

[04/27] Coors Brewing Co. v. Mendez-Torres
In a dormant Commerce Clause challenge to Puerto Rico's differential tax treatment of large and small brewers, the district court's dismissal on comity grounds is affirmed, where: 1) the plaintiff sought review of regulatory matters over which Puerto Rico enjoys wide regulatory latitude under the Butler Act, 48 USC section 872; 2) the plaintiff was explicitly seeking to improve its competitive position with respect to Puerto Rico's local brewer; 3) Puerto Rico's courts were better positioned than were the federal courts to address and remedy any potential constitutional violations; 4) none of the defendant's actions amounted to voluntary consent to suit in federal court; 5) the equities favored dismissal; and 6) Puerto Rico courts met the adequate state-court forum test.

[04/27] Aresty International Law Firm P.C. v. Citibank, N.A.
In a suit by a law firm claiming that a bank on which a check was drawn violated Regulation CC by failing to notify the law firm's bank in a timely manner that it would not honor the check, and that it had negligently breached a duty it owed the law firm under Regulation CC, the district court's grant of a motion to dismiss is affirmed, where: 1) the claim of violation of Regulation CC was time-barred, and equitable tolling did not apply; and 2) the state claim was preempted by federal law.

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Consumer Protection

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Dispute Resolution & Arbitration

[05/15] DMS Services, Inc. v. Superior Court (Zurich Services Corp.)
In a suit by a provider of commercial janitorial services against the third-party administrator for its workers' compensation insurance claims, a petition for writ of mandate seeking to vacate the trial court's order compelling arbitration is granted, where: 1) none of the plaintiffs' agreements with their administrator contained an arbitration clause; and 2) the trial court erred in compelling arbitration under the doctrine of equitable estoppel, because the plaintiffs' claims against the administrator were not founded in, or inextricably intertwined with, the deductible agreement with the insurer, which contained the arbitration clause.

[05/10] Amerex Group, Inc. v. Lexington Insurance Co.
In a dispute between an outerwear distributor and its excess insurers over coverage for lost business income after a warehouse flood, the district court's dismissal of the complaint is affirmed, where: 1) the excess insurers did not waive their contractual appraisal rights by asserting them after the plaintiffs initiated litigation, so their demand for appraisal was timely; 2) the appraisal panel did not improperly decide questions of law in valuing damages; and 3) the appraisal's procedures did not violate the plaintiff's due process rights.

[05/10] Dan Ryan Builders, Inc. v. Nelson
In an action against a homebuilder seeking damages for certain alleged defects in the construction of a home, the Fourth Circuit certifies the following question to the Supreme Court of Appeals of West Virginia: Does West Virginia law require that an arbitration provision, which appears as a single clause in a multi-clause contract, itself be supported by mutual consideration when the contract as a whole is supported by adequate consideration?

[05/08] Samaniego v. Empire Today LLC
In a putative class action challenging an employer's allegedly unlawful misclassification of its carpet installers as independent contractors, the trial court's denial of the employer's motion to compel arbitration is affirmed, where: 1) the agreement to arbitrate was unconscionable and, therefore, unenforceable under California law; 2) the trial court properly declined to enforce the entire arbitration clause rather than sever unconscionable provisions; and 3) the trial court correctly applied California law despite an Illinois choice-of-law provision in the agreement; and 4) AT&T Mobility LLC v. Concepcion 131 S.Ct. 1740 (2011) did not extend the Federal Arbitration Act so broadly as to preempt each unconscionability-based rationale that supported the trial court's refusal to compel arbitration.

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