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The Second Circuit handed down a key creditors' rights decision on April 1 in <i>Sharp Int'l Corp. v. State Street Bank & Trust Co. (In re Sharp Int'l Corp. & Sharp Sales Corp.)</i>, 2005 U.S. App. LEXIS 5241(2d Cir. Apr. 1, 2005). The court affirmed the lower courts' finding that a secured lender was not liable for aiding and abetting management's breach of fiduciary duty, and not liable for receiving a $12.25 million loan repayment from a closely held borrower it correctly suspected of engaging in massive fraud. The decision limits the scope of a lender's duties to its borrower and other creditors. Absent the lender's participation in its borrower's fraud, the lender should have no liability on a fraudulent transfer theory or on any other basis, at least in New York, where Sharp arose.
The national settlement of the fen-phen lawsuits was intended, among other things, to help defendant Wyeth, one of the world's largest pharmaceuticals manufacturers, put the lawsuits behind it. However, the number of claimants who opted out of the settlement is huge, and many of their cases are now coming to trial, with mixed results. Recently approved changes to the settlement process are also altering plaintiffs' rights. In short, the last chapter of this epic litigation is a long way from being written. So, what is happening with the fen-phen settlement and litigitions?
Each year, millions of Americans, including some children, suffer non-penetrating, or closed, head injuries. When lawsuits result, they involve complex medical, academic, and legal issues. When the plaintiff is a child, the defense attorney faces numerous additional challenges in defending the matter. Certain discovery tools are necessary to simplify and defend the pediatric traumatic brain injury (TBI) lawsuit. These tools, although also used in traditional personal injury cases, take on added significance because of the age of the plaintiff and the nature of the injury.
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The old maxim, "the earlier the treatment, the better the outcome" has been a longtime staple in plaintiffs' collection of so-called "expert medical opinions." Let's face it -- the notion that earlier treatment is preferable, while imprecise, seems like a logical conclusion for most of us. However, the Eleventh Circuit's recent decision in <i>McDowell v. Brown</i>, 392 F.3d 1283 (11th Cir. 2004), establishes that such general medical principles, which are typically based on no more than the expert physician's common-sense and anecdotal experience, are far too speculative to overcome an evidentiary challenge pursuant to <i>Daubert v. Merrell Dow Pharmeceuticals, Inc.</i>, 509 U.S. 579 (1993) and therefore fail to establish causation in a medical negligence case. This is particularly so in those cases where the defendant medical provider maintains that the plaintiff's unavoidable and unpredictable underlying condition -- and not an alleged delay in treatment -- caused the plaintiff's injury, such that the plaintiff would have experienced the same level of injury despite any alleged delay.
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Highlights of the latest insurance cases from around the country.
In its April 2005 issue, <i>ICLB</i> published an article discussing the varying approaches courts have taken when addressing whether an insurer may conditionally defend its insured and later obtain reimbursement of defense costs if it is determined that a claim is outside the scope of coverage. <i>See</i> Pastor, Sherilyn: Insurers' Rights to Recoup Defense Costs, <i>Insurance Coverage Law Bulletin</i>, Vol. 4, No. 3 at p. 1 (Apr. 2005). As the issue was going to press, the Illinois Supreme Court issued an opinion rejecting the purported right of recoupment. <i>See General Agents Ins. Co. of Am., Inc. v. Midwest Sporting Goods Co.</i>, No. 98814, 2005 WL 674685 (Ill. March 24, 2005). Noting that its position was the "minority" view, the court in <i>General Agents</i> declined to recognize the so-called "right of recoupment" both as a matter of contract law and a matter of policy. (For an in-depth review of the <i>General Agents</i> decision, <i>see</i> Case Notes at p. 7.) The court was right on both counts.
In light of the numerous high-profile securities fraud scandals over the last few years, insurers have more frequently sought to rescind insurance policies on the basis that the insureds supplied false information in applying for such policies, just as they did in misleading their investors, regulators and others. For example, insurers have pursued rescission of policies issued to WorldCom, HealthSouth, Adelphia, Tyco and Xerox. As a result, courts across the country have had more opportunities to clarify the law in this area. Although the law varies somewhat from state to state, judicial opinions on this subject have addressed issues that are fundamentally important to insurers.