In re Webb (09-70165)

The Chapter 7 trustee moved to reopen a closed case to administer settlement proceeds as property of the estate.  The settlement was on account of a injury caused by prepetition by prescription medication, but the debtor did not know the cause of the injury until after the bankruptcy case was closed. Georgia's discovery rule states that a cause of action does not accrue until a plaintiff knows what caused the injury. Inconsistent Eleventh Circuit authority put the Court in a difficult position, but the Court denied the trustee's Motion to Reopen.  The debtor's product liability lawsuit did not accrue under Georgia law until he knew the cause of his injury.  Because the lawsuit did not accrue prepetition, the settlement proceeds were not property of the estate.

Friday, October 12, 2012