Boeing’s Attempt to Use Couple’s Bankruptcy to Avoid Mesothelioma Liability Overruled by Court of Appeals
Right before John Edward Clark was diagnosed with malignant mesothelioma in 2015, he and his wife were near the end of another personal nightmare. The couple had filed for personal bankruptcy in 2010 under Chapter 13, had spent more than five years repaying their debts, and were months away from all of their remaining obligations having been paid off.
They paid those debts off but their bankruptcy proceeding remain formally open for another year, and one week before its official close they initiated a personal injury action against
The Boeing Company and others for having exposed him to asbestos and causing his fatal illness. Upon learning of the bankruptcy proceedings, Boeing moved to have the personal injury suit dismissed, claiming that the couple’s failure to disclose his diagnosis during his bankruptcy barred them from pursuing personal injury claims.
Though a district court agreed, the U.S. Court of Appeals, Second Circuit recently overturned that decision, allowing Mrs. Clark to continue her journey for justice.
The Clark’s mesothelioma story represents a true tragedy. The couple found themselves $100,000 in debt, but instead of avoiding their obligations under Chapter 7 they reorganized them, paying off their creditors in full and with interest at the federal judgment rate over a five year period through monthly payroll deductions.
They paid $2,152 every month from Mr. Clark’s paycheck, and three weeks before the sixtieth and final deduction was to be taken in July 2015, he got his fatal diagnosis. Having served for two decades in the Air Force and in private sector environments that exposed him to asbestos, he brought suit against Boeing and several other companies.
He specifically asked his attorney whether the bankruptcy asset scheduled needed to be updated, but his attorney chose not to alert the bankruptcy court. Boeing moved to dismiss after the couple had received their final discharge, arguing that there is a legal technicality that “prevents a party from asserting a factual position in one legal proceeding that is contrary to a position that is successfully advanced in another proceeding.”
In its review of the case, the Appeals court said that the decision, though technically appropriate, was equitably inappropriate, and that “the principles of equity require the courts to entertain Mrs. Clark’s personal injury claims.”
Being diagnosed with mesothelioma is a nightmare. It can feel like all of the world’s forces are aligned against you, but there are compassionate advocates ready to help. For information, contact the Patient Advocates at Mesothelioma.net at 1-800-692-8608.
Written by Terri Oppenheimer
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