Update on Gubbiotti Bankruptcy Decision

Tort talkers may recall that I recently reported on the case of Gubbiotti v. Santey, 880 M.D.A. 2011, 2012 W.L. 2389449 (Pa. Super. June 26, 2012), Petition for Allowance of Appeal Filed, 567 MAL 2012 (July 26, 2012) in which the Pennsylvania Superior Court held that 40 Pa. C.S.A. §117 does not allow the pursuit of a lawsuit to establish liability of a Defendant for the sole purpose of recovering from the Defendant’s carrier after that Defendant has received a discharge in bankruptcy.

I note that in a more recent Berks County Court of Common Pleas trial court decision in the case of MacCaull v. Livingston, 2012 W.L. 6777380 (C.P. Berks Co. Aug. 23, 2012 Schmehl, P.J.) Judge Jeffery L. Schmehl essentially limited the Gubbiotti decision to the facts presented before the Gubbiotti court and also noted that the Gubbiotti case did not “address 11 USC §524(e), which numerous courts have held does allow such a suit to go forward despite a bankruptcy discharge. See MacCaull, 2012 W.L. 6777380*1 fn.1 citing with “See, e.g.” signal First Fidelity Bank v. McAgeer, 985 F.2nd 114, 118 (3d Cir. 1993); Greene v. Welsh, 956 F.2d 30 (2d Cir. 1992); In Re Jet Florida Systems, Inc., 883 F.2d 970, 976 (11th Cir. 1989); In Re Gutches, 430 B.R. 342, 345-47 (E.D. Pa. 2009).

In his decision in the MacCaull case, Judge Schmehl denied a Defendant’s Motion to Amend their New Matter (presumably to add a defense of a discharge in bankruptcy). The court denied this motion without prejudice to the Defendant’s right to reassert a defense in a Motion for Post-Trial Relief, based upon the Defendant’s bankruptcy discharge.

Anyone desiring a copy of this Order may contact me at dancummins@comcast.net.