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PaperclipPerfector  2d ago (text post)   1345 thread views

Friday Fun Thread for June 27, 2025

Be advised: this thread is not for serious in-depth discussion of weighty topics (we have a link for that), this thread is not for anything Culture War related. This thread is for Fun. You got jokes? Share 'em. You got silly questions? Ask 'em.

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Court opinion:

  • Keith allegedly sustains injuries from a car crash in which Carlos is at fault. Keith sues Carlos for damages.

  • In federal court, Carlos files for bankruptcy. In state court, Carlos moves to stay (pause) Keith's lawsuit, since Keith's claim must be disposed of as part of the bankruptcy case. Keith opposes the motion, arguing that, since Keith is seeking only Carlos's insurance coverage of 200 k$, and nothing from Carlos's actual funds (which now are part of the bankruptcy estate), Carlos's bankruptcy case will not be affected by Keith's lawsuit. The trial judge accepts Keith's explanation and denies the motion for stay. Likewise, the bankruptcy judge lifts the automatic bankruptcy stay that applies to all demands for payment made against Carlos, solely for purposes of Keith's lawsuit, and explicitly up to a limit of 200 k$. So the lawsuit continues in state court.

  • At trial in state court, the jury finds that Carlos is liable to Keith, not just for 200 k$, but for 1.6 M$! Carlos moves to limit the damages award to 200 k$, in accordance with the prior agreement. But the trial judge rejects this argument, claiming that any limits on the verdict are the province of the bankruptcy judge, not of the trial judge.

  • By this time, Carlos's bankruptcy case has been completed and closed. Keith goes back to the federal bankruptcy judge and moves that Carlos's bankruptcy case be reopened so that the entirety of Carlos's new 1.6-M$ debt to Keith can be ruled nondischargeable. But the bankruptcy judge rejects this argument. Having agreed that he would not seek more than 200 k$, Keith now is estopped from reneging on that agreement.

  • With the bankruptcy judge's opinion in front of him, the state trial judge acknowledges that Carlos need not pay more than 200 k$ to Keith, but still refuses to modify the jury's damages award. Rather, the trial judge thinks that the official damages number should remain listed as 1.6 M$, and Carlos should first pay the 200 k$ and then submit a separate application to discharge the extra 1.4 M$. Carlos does so, but still appeals this rigmarole.

  • The state appeals panel reverses and remands for the trial judge to reduce the official damages number to 200 k$, since the bankruptcy judge's stay was limited only to damages not exceeding 200 k$. (This is in 2025, regarding damages from a car crash that occurred in 2018.)

Is $200k the limit on the amount that Keith's insurance would cover? If not then Keith is entirely in the right here, and the bankruptcy judge should not have required the limit of 200k in the first place. There's no reason the amount should have been relevant for this ruling except if it would be dis-chargeable via the bankruptcy.

If it is the insurance limit then the best outcome would be the $1.6 M being the official amount awarded and the $1.4 M being retroactively discharged by the bankruptcy.

It's unfortunate that the laws aren't smart enough to do the obvious thing.

Is 200 k$ the limit on the amount that Keith's insurance would cover?

No, it's the limit on the amount that Carlos's insurance would cover.

If not then Keith is entirely in the right here, and the bankruptcy judge should not have required the limit of 200 k$ in the first place.

To clarify: This situation arose solely because Keith was impatient. He asked the two judges to impose the 200-k$ limit because he wanted to get his money ASAP, without waiting for the bankruptcy proceedings to finish.

No, it's the limit on the amount that Carlos's insurance would cover.

My bad, that's what I meant to ask but got their names mixed up.

To clarify: This situation arose solely because Keith was impatient. He asked the two judges to impose the 200-k$ limit because he wanted to get his money ASAP, without waiting for the bankruptcy proceedings to finish.

But why was that necessary? Shouldn't there have been an option to do the thing he tried to do? That is, have his case proceed but, because the accident occurred prior to the bankruptcy, anything that exceed the insurance value can retroactively be voided by the bankruptcy? Or is that not possible because it would make him a creditor and the bankruptcy has to figure out how to pay those out?

Wouldn't it make more sense to put a hold on the bankruptcy proceedings and handle the lawsuit first?

Or is that not possible because it would make him a creditor and the bankruptcy has to figure out how to pay those out?

This, I think. But I'm not a lawyer.

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