Justia U.S. 11th Circuit Court of Appeals Opinion Summaries

This appeal arose when the estates of several deceased nursing home patients filed a series of wrongful death suits against a network of nursing homes, which resulted in $1 billion in empty chair judgments against the network. In this case, the Estates appealed the dismissal of claims against Rubin Schron and the bankruptcy court's issuance of a permanent injunction with respect to Schron. The Eleventh Circuit affirmed, holding that the bankruptcy court had jurisdiction to enjoin future claims arising from the 2006 Transaction at issue and that it acted within the scope of its authority under the All Writs Act and the Anti-Injunction Act in issuing the Permanent Injunction; the Permanent Injunction was broad, but its breadth was justified; the court found various claims against Schron implausible as alleged in the Second Amended Complaint; and, given the Estates' inability or unwillingness to remedy the deficiencies in their pleadings, the bankruptcy court exercised proper discretion in dismissing the Second Amended Complaint with prejudice. View "Estate of Juanita Jackson v. Schron" on Justia Law

The United States appeals the district court’s determination that commissions claimed by Defendant F. Gordon Spoor as personal representative of the Louise P. Gallagher Estate and as trustee of the Louise Paxton Gallagher Revocable Trust have priority over a special deferred estate tax lien on property designated by agreement under I.R.C. 6324A. The court agreed with the United States that special estate tax liens on property designated by section 6324A, unlike estate tax liens on the gross estate pursuant to section 6324, are not subject to an executor’s claims for administrative expenses. The court also held that Spoor’s administrative expenses do not take priority over income tax liens imposed pursuant to section 6321. Accordingly, the court reversed and remanded. View "United States v. Spoor" on Justia Law

This is an appeal of a federal income tax refund suit filed by the Estate of George Batchelor (“Estate”). Counts I and II of the Estate’s three-count complaint involve Batchelor’s personal income taxes for 1999 and 2000. Count III concerns the Estate’s attempt to claim a credit for its 2005 income taxes for payments it made in settlement of various lawsuits against Batchelor. The court concluded that the district court erred in applying res judicata to bar the government’s claims in Counts I and II and reversed the district court's decision. Since the Estate has failed to identify an applicable deduction identified in 26 U.S.C. 691(b), the court found no error in the district court’s determination that the Estate cannot avoid section 642(g)’s bar on double deductions, and therefore affirmed on Count III. View "Batchelor-Robjohns v. United States" on Justia Law

Imperial Premium Finance LLC was implicated in a life insurance scheme. Imperial’s primary business involved stranger-originated life insurance (STOLI), yet its business was not a STOLI in its purest form: instead of buying a policy on a person's life outright, Imperial provided financing for life insurance premiums in the form of loans whose terms allowed Imperial to foreclose on the policy and become the policy owner if the borrower defaulted. Seeking to evade "insurable interest" requirements, Imperial drafted its loan agreements to require that during the term of the loan the policy be held in irrevocable trust (with a trustee chosen by Imperial) for the benefit of the insured’s relatives. In late 2007, Florida resident Barton Cotton met with an insurance agent to buy a multimillion-dollar life insurance policy and finance the premium payments. Cotton was ultimately referred to Imperial about financing the premium payments. Cotton and an irrevocable trust in his name applied to Lincoln National Life Insurance Company for an $8 million life insurance policy. The beneficiaries of the trust were Cotton’s wife and children. Cotton falsely stated on the insurance application that he was not buying the policy for resale and that he would not use a third party to finance the premium payments. Lincoln issued Cotton a $5 million policy, which became an asset of the Cotton trust. Premium payments were advanced to the trust until Imperial lent the trust $335,000. The trust used that money to repay the advance and to continue making the premium payments. Because of the high interest rate and an “origination fee," after less than two years, Imperial’s $335,000 loan to the Cotton trust had ballooned to more than $557,000. Cotton was diagnosed with esophageal cancer. The loan used to finance the policy reached maturity and became due, and Cotton died two months after that. At the time of his death the trust had not paid back Imperial for the loan, but Imperial had not yet foreclosed on it, which left the trust for the benefit of Cotton’s family as the record owner of the policy. After learning of Cotton’s death, Lincoln launched an investigation which turned up the fact that Imperial had financed the purchase of the policy on Cotton’s life under a STOLI scheme. Lincoln refused to pay the death benefit. In April 2011 the Cotton trustee sued Lincoln for the benefit. Lincoln counterclaimed, alleging fraud, negligent misrepresentation, and civil conspiracy. Imperial asked its outside counsel to represent the trust. During discovery, Lincoln sought to depose Imperial under Rule 30(b)(6) of the Federal Rules of Civil Procedure. Because the topics included in Lincoln’s subpoena touched on subjects related to the criminal investigation, Imperial’s managers and employees exercised their individual Fifth Amendment rights and all refused to testify in the Rule 30(b)(6) deposition in the Lincoln case. Imperial's proffered expert witness was unable to answer questions at the deposition or at trial specific to the facts of the Cotton trust case. The jury later returned a verdict in favor of the trust, finding that though Cotton and others conspired to commit an unlawful act, Lincoln had not relied on or been damaged by the misrepresentations, and therefore not injured by the conspiracy. The court notified the parties that it was considering sanctions against Imperial and its proffered expert due to the witness' poor "performance" and lack of preparation at trial. After a hearing, the court assessed sanctions against Imperial. Imperial appealed that sanctions order. Finding that the district court's findings were not clearly erroneous and its imposition of sanctions was not an abuse of discretion, the Eleventh Circuit affirmed the sanctions order. View "Lincoln National Life Insurance Company v. Imperial Premium Finance Company, LLC" on Justia Law

Plaintiff, on behalf of herself and the Estate, challenged the district court's grant of summary judgment to Zenith on the Estate's breach of the insurance contract claim. After review and oral argument, the court certified questions to the Florida Supreme Court: (1) Does the estate have standing to bring its breach of contract claim against Zenith under the employer liability policy? (2) If so, does the provision in the employer liability policy which excludes from coverage "any obligation imposed by workers' compensation . . . law" operate to exclude coverage of the estate's claim against Zenith for the tort judgment? (3) If the estate's claim was not barred by the workers' compensation exclusion, does the release in the workers' compensation settlement agreement otherwise prohibit the estate's collection of the tort judgment? View "Morales v. Zenith Ins. Co." on Justia Law

When Edith Entrekin was admitted to a nursing home in Alabama, she signed a contract requiring the arbitration of "all claims or disputes" that she or the executor of her future estate might have against the nursing home. After Entrekin died, the executor of her estate brought an action against the nursing home for damages under Alabama's wrongful death statute. The district court denied the nursing home's motion to compel arbitration. The issue on appeal to the Eleventh circuit centered on whether a decedent's agreement with a nursing home to arbitrate any claims that she or her executor may have in the future against the nursing home bind her executor to arbitrate a wrongful death claim against the nursing home under Alabama law? The Court found it was "compelled" to follow the Alabama Supreme Court's holdings and compel arbitration of the wrongful death claim in this case. The Court reversed the district court's order denying the nursing home's motion to compel arbitration and remanded the case with instructions to compel arbitration. View "Entrekin v. Westside Terrace, LLC" on Justia Law

Debtor appealed the district court's decision affirming the bankruptcy court's determination that an Illinois judgment debt owed to the Bank was not dischargeable, pursuant to 11 U.S.C. 523(a)(4). The court held that the bankruptcy court's order must be affirmed under section 523(a)(4) as a debt arising from a defalcation while debtor was acting in a fiduciary capacity. The court also held that the district court correctly determined that the propriety of the Bank's actions was not a basis for finding that the Illinois judgment debt should be discharged. Instead, the court agreed with the district court that the issue was not properly before the court, but rather should be brought by debtor in an action in Illinois to consider the malfeasance of the trustee. Accordingly, the court affirmed the judgment of the bankruptcy court. View "Bullock v. BankChampaign NA" on Justia Law

Defendant and her husband (Duckworths) purchased two automobile policies and one motorcycle insurance policy from plaintiff (State Farm) where all three insurance contracts contained "anti-stacking" provisions that precluded recovery of uninsured motorist benefits under any policy other than that covering the damaged vehicles. The Duckworths subsequently moved to Florida, where the husband was struck and killed by an uninsured motorist while driving the motorcycle covered under the Maryland policy. State Farm consequently brought this action in the district court, seeking a declaratory judgment that it had satisfied its contractual obligations to the husband's estate. At issue before the district court was the applicability of the public policy exception to Florida's choice of law rule in disputes over contract terms. The district court declared that State Farm had satisfied its contractual obligations to the husband's estate and dismissed defendant's counterclaims. Taking into account all of the undisputed facts, and assuming that defendant informed a State Farm representative that the Duckworths' move from Maryland to Florida would be "permanent," the court held that State Farm still did not receive reasonable notice sufficient to trigger the public policy exception. The court held that, even if defendant informed the representative as alleged, her later actions overwhelmingly indicated to State Farm that the Duckworths' move was not necessarily permanent and that, consequently Maryland law would continue to govern the Duckworths' policies. Therefore, the issue of fact upon which defendant's appeal rested was immaterial and, as State Farm was deprived of reasonable notice, judgment as a matter of law was proper.

Kurt R. Ward, Attorney at Law, LLC, appealed the district court's order denying its motion for judgment on the pleadings and granting the Plan Parties' (the Bert Bell/Pete Rozelle NFL Player Retirement Plan, the Retirement Board of the Plan, and the Bank of New York Mellon Corporation) cross-motion for judgment on the pleadings. Both parties' motions sought a declaration about whether the Plan Parties had to pay the disability benefits of two of the Ward Firm's retired NFL player clients into the firm's client trust account pursuant to state court jurisdiction for unpaid attorney's fees despite a provision in the Plan prohibiting any "benefit under the Plan" from being assigned or reached by creditors through legal process. The court held that its prior panel precedent held that bargained-for provisions barring assignments in ERISA welfare benefits were valid and enforceable and that the Ward Firm had not directed the court's attention to any such intervening en banc or Supreme Court decision. Accordingly, the court affirmed the judgment and held that the district court did not err in declaring that the spendthrift provision in the Plan prevented the Plan Parties from depositing the disability benefits owned by two retired NFL players into the Ward Firm's trust account.

Appellant, the personal representative of the estate of her son, sued two police officers alleging violations of state wrongful death claims and excessive force claims under 42 U.S.C. 1983 when her son died after being arrested and tasered by the officers. At issue was whether a section 1983 excessive force claim survived in Alabama if the injured party died before the lawsuit was filed, or abated pursuant to Ala. Code 6-5-462. The court held that there was no inconsistency between section 6-5-462 and federal law and that the statute was applicable to this case. Therefore, the excessive force claim against one of the officers abated under Alabama law when section 6-5-462 applied to the action, which was not filed prior to the death of the son.