This case involves a bankruptcy trustee's action against Post Welding Supply Co. to recover approximately $3,500 paid via garnishment on an antecedent debt, claiming it was a voidable preference under Section 60 of the Bankruptcy Act. The court found that the debtor K.B.S. was insolvent when the garnishment was served in June 1979 and when the funds were received in July 1979, with the creditor having reasonable cause to know of the insolvency due to prior collection attempts, discussions with counsel about financial troubles, and the debtor's pattern of late payments. The garnishment lien was ruled void under Section 67(a) because it was obtained within four months of the bankruptcy filing while the debtor was insolvent. As a result, the court held the transfer to be a voidable preference and ordered the defendant to return the funds to the trustee.
This case involves a dispute over professional liability insurance coverage where architects James & Hackworth were sued by Rives Construction Company for breach of contract in designing apartment projects, resulting in a $783,159 judgment against them. After the judgment, Rives and the architects sought to recover from Continental Casualty Company under a policy that had lapsed for nonpayment of premiums after May 1974, with the claim first reported in 1975. The court granted summary judgment to the insurer, holding that the policy was a "claims-made" policy requiring both the error and the claim to occur during the policy period, that the rider requiring 30 days' notice of cancellation applied only to the benefit of the mortgagee and HUD and not the plaintiffs, and that such provisions did not violate Alabama public policy. The court further found that the policy had validly expired without renewal, precluding coverage under Alabama Code §§ 27-23-1 & 2 for direct recovery against the insurer.
This case under the Federal Tort Claims Act involved plaintiff Thomas Brazil suing the United States for alleged negligence by staff at the Birmingham VA Hospital in failing to diagnose his thoracic spine fracture after a May 1977 car accident, including not ordering appropriate X-rays, not palpating for injury, and discharging him without proper instructions. The court found the physicians negligent in their initial examination and treatment, and that this negligence proximately contributed to his worsened condition and resulting paralysis. However, it also determined that Brazil's own post-admission conduct on May 24, such as excessive movement against medical advice, applied the avoidable consequences rule and contributed 55% to his enhanced damages. The court apportioned the remaining 45% of increased damages to the hospital's negligence and awarded the plaintiff $140,000.
This case concerned a motion by the Secretary of Health, Education, and Welfare to reconsider a district court's award of attorney's fees in a Social Security benefits action. The underlying benefits award had been made by the Appeals Council on remand rather than by the court itself, and the claimant had not first sought fees from the agency under 42 U.S.C. § 406(a). After reviewing precedents from multiple circuits, the court granted the motion and vacated its prior fee award, holding that the Secretary must first fix fees for administrative services before the court may consider fees for court-related work, to avoid overlapping determinations and to respect the statutory division of authority between § 406(a) (mandatory agency award) and § 406(b) (permissive court award).
This case involved a title insurance policy issued by St. Paul Title Insurance Co. to Madison National Bank covering a $150,000 mortgage on 571 acres in Alabama. After the borrowers defaulted, the bank foreclosed and later attempted to sell the property, but prior unexcepted mortgages totaling over $50,000 on portions of the land prevented clear title and blocked the sale. The court held that the insurer was liable under the policy for actual loss caused by the undisclosed liens but limited recovery to the amount needed to satisfy only those liens not removed within a reasonable time after notice, awarding the bank $26,453.33. The decision rested on policy provisions capping liability at actual loss and requiring prompt removal of covered defects, finding some liens timely cleared while others remained outstanding at the time of the failed sale.
This case is a shareholder derivative action brought by plaintiff Katz on behalf of United Security Life Insurance Company (USLIC) against its directors or officers. After the suit began, USLIC underwent a court-approved rehabilitation leading to a judicial dissolution in Alabama state court in 1970, with all assets transferred to another insurer. Defendants moved for summary judgment, arguing the dissolution eliminated any corporate claim that shareholders could pursue derivatively. The court granted the motions, holding that under Alabama precedent a judicially dissolved corporation ceases to exist as a legal entity for suing or being sued, abating pending actions and barring new ones absent a statute that does not apply here; the derivative nature of the suit did not change the outcome.
