contracts

punitive damages

Overview

Punitive damages are awarded in addition to actual damages in certain circumstances. Punitive damages are considered punishment and are typically awarded at the court's discretion when the defendant's behavior is found to be especially harmful. Punitive damages are normally not awarded in the context of a breach of contract claim. See e.g. O'Gilvie Minors v.

quasi

The word quasi is Latin for “as if” meaning, almost alike but not perfectly alike. In law, it is used as a prefix or an adjective to inform some measure of similarity with a critical difference. A quasi-item is not an accurate example of the item, but it is close to the item minus some critical elements of the item.

Ray Haluch Gravel Co. v. Central Pension Fund

Issues

Can a district court’s decision that does not resolve a request for contractual attorney’s fees be a “final decision” under 28 U.S.C. § 1291?

On June 17, 2011, a federal district court issued a decision on a dispute between Ray Haluch Gravel Company and the Central Pension Fund (“CPF”). Although this order addressed the central issue of whether or not Haluch owed certain contributions to CPF, it did not address attorney’s fees and costs. The district court issued a second order on June 25, 2011 on attorney’s fees and costs. CPF filed an appeal on both orders, but the thirty day statute of limitations for notice of appeal had expired on the first order. The First Circuit accepted the appeal, stating that the first order was not a “final judgment” under 28 U.S.C. § 1291 because the contractual attorney’s fees decided in the second order were an issue on the merits, rendering the second order the final judgment. Haluch argues that under Budinich v. Becton Dickinson & Company, attorney’s fees should always be considered collateral to the merits, and a separate judgment on the merits should be considered final. CPF argues that Budinich applies only to statutory fees, which are considered costs, whereas contractual fees are considered damages and therefore part of the merits, rendering any judgment that does not resolve an issue concerning the merits—i.e., damages in the form of contractual fees—a non-final judgment. The Court’s decision will clarify what constitutes a “final judgment” and guide litigants seeking to make timely appeals.

Questions as Framed for the Court by the Parties

In Budinich v. Becton Dickinson & Co., 486 U.S. 196 (1988), this Court held that a district court’s decision on the merits that left unresolved a request for statutory attorney’s fees was a “final decision” under 28 U.S.C. § 1291. The question presented in this case, on which there is an acknowledged conflict among nine circuits, is whether a district court’s decision on the merits that leaves unresolved a request for contractual attorney’s fees is a “final decision” under 28 U.S.C. § 1291. 

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Facts

Petitioner Ray Haluch Gravel Company (“Haluch” or “the Company”) began as a gravel company and later became a landscape supply company. See Cent. Pension Fund of Int’l Union of Operating Engineers & Participating Employers v. Ray Haluch Gravel Co., 695 F.3d 4 (1st Cir.

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Truck Insurance Exchange v. Kaiser Gypsum Company, Inc.

Issues

Does an insurance company whose underlying liability exposure under a proposed bankruptcy plan is no greater than prior to bankruptcy have standing to challenge a plan as a “party in interest” under § 1109(b) of the Bankruptcy Code?

This case asks the Court to resolve whether the prudential bankruptcy doctrine of “insurance neutrality” may be applied to exclude an insurance company from Section 1109(b)’s “party in interest” requirement. The insurance neutrality doctrine prohibits an insurance company from challenging a bankruptcy plan as a “party in interest” when that plan does not increase its liability exposure from pre-bankruptcy levels. This case arises from the Chapter 11 bankruptcy proceedings of Kaiser Gypsum Co. and Hanson Permanente Cement, who negotiated a plan to settle claims with asbestos tort claimants either through the tort system or via application to a special trust. The companies’ liability insurer, Truck Insurance Exchange, objected on the grounds that only the trust application process––not the tort-claim alternative––required significant disclosures from claimants to prevent duplicate or frivolous claims. Truck Insurance Exchange contends that “party in interest” encompasses any person materially affected by the bankruptcy plan. Kaiser Gypsum Company, Inc. and other co-respondents dispute that the fact that an insurer might have been better off under another plan constitutes an “interest” in the proceedings. The case has major implications for settlement of mass tort claims and fairness to creditors. The Court must balance interests in the speedy and consensual settlement of legitimate claims, a core function of bankruptcy proceedings, with the legitimate desire of creditors to prevent collusive suits between debtors and claimant parties.

Questions as Framed for the Court by the Parties

Whether an insurer with financial responsibility for a bankruptcy claim is a “party in interest” that may object to a plan of reorganization under Chapter 11 of the Bankruptcy Code.

Section 524(g) of the Bankruptcy Code permits debtors with significant asbestos liabilities to channel claims into a trust established pursuant to Chapter 11 reorganization (called a “channeling injunction”). Truck Insurance Exchange v. Kaiser Gypsum Co.

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