Arbitration is changing the legal game. Be on your guard if you are faced with this. When Dr. Pierce accused her medical group of permitting sexual harassment she was forced to arbitrate in place of the filing a lawsuit. Presiding over the case was not a judge but a corporate lawyer, Mr. Kalogredis. When Dr. Pierce showed up one day for a hearing, she said she noticed Mr. Kalogredis having coffee with the head of the medical group she was suing. Wow!
During the proceedings the practice hid evidence. It destroyed audio tapes. Dr. Pierce thought things could not get any worse until a fellow doctor reversed key testimony she had given in Dr. Pierce’s favor. The reason: Male colleagues had “clarified” her memory. Wow x 2.
When Mr. Kalogredis ruled against Dr. Pierce, his decision contained passages pulled, verbatim, from legal briefs submitted by lawyers for the medical practice. Wow x 3.
“It took away my faith in a fair and honorable legal system,” said Dr. Pierce, who is still paying off $200,000 in legal costs seven years later. If the case had been heard in Maricopa County Civil Court, Dr. Pierce would have been able to appeal, raising questions about testimony, destruction of evidence and conflicts of interest. But arbitration often bears no resemblance to court. You seldom can appeal.
So, if you are forced to arbitrate make sure you hire an experienced lawyer to at least hire an honest arbitrator. An experienced lawyer can then present your case in the best possible light. Call Bill Miller from Scottsdale, Arizona at 602-319-6899 to discuss. Our address is 8170 North 86th Place, Suite 208 Scottsdale, AZ 85258. While, the game may change, the deck need not be stacked against you.

Since the U.S. Supreme Court’s opinion in Stern v. Marshall (all cites omitted) federal courts have issued differing opinions regarding the range of a bankruptcy court’s jurisdiction to enter final judgments in adversary proceedings. In Executive Benefits Insurance Agency v. Arkison, looking at Stern, the Ninth Circuit Court of Appeals held that a bankruptcy court may not enter a final judgment on a claim to avoid a fraudulent conveyance against a noncreditor to a bankruptcy estate.

The situation in the Executive Benefits decision are common of a fraudulent conveyance claim: An insolvent debtor transfers assets (insurance commissions) to a recently formed company and later files for bankruptcy. In the bankruptcy case, the chapter 7 trustee sued the transferee entity (a noncreditor) for, among other things, federal and state law preference and fraudulent transfer claims in order to recover the insurance commissions. In granting the trustee’s motion for summary judgment, the bankruptcy court found the transfers to be fraudulent and entered a final judgment for $373,000. After the district court, on appeal, affirmed the bankruptcy court’s decision, the appellant-transferee appealed to the Ninth Circuit, contesting for the first time the bankruptcy court’s authority to enter a final judgment under Stern.

On appeal, after ruling fraudulent conveyance claims do not fall within the public right exception of in Stern and in Granfinciera S.A. v. Nordberg the Ninth Circuit addressed the argument raised by several amici that bankruptcy courts can render final judgments on fraudulent transfer claims arising under the Bankruptcy Code, as distinguished from fraudulent transfers arising under state law. The Ninth Circuit slammed this position, relying upon Sternand Granfinciera, holding that the Stern court’s characterization of the holding in Granfinanciera would render Stern internally contradictory if a blanket “public right” classification applied for any claim based on federal law.

The Ninth Circuit further said that its decision created a gap in the statutory framework governing the jurisdiction of the bankruptcy courts. Specifically, although federal law authorizes bankruptcy judges to “hear and determine all cases under title 11 and all core proceedings arising under title 11,” the Constitution prohibits bankruptcy judges from entering a final judgment in core proceedings when the primary cause of action is not against a creditor to the estate.

The Ninth Circuit, having found an absence of authority for a bankruptcy court to enter a final judgment against a noncreditor on a fraudulent transfer claim, also held that § 157 permits bankruptcy courts to submit reports and recommendations to the district courts in core proceedings. The court acknowledged that this finding created a split with the Sixth Circuit, which previously held, in dicta, that bankruptcy courts cannot propose findings of facts and conclusions of law in core proceedings.

Although the Ninth Circuit found that a bankruptcy court lacked the authority to enter a final judgment in such a case, it nevertheless affirmed the district court’s opinion, holding that the defendant waived its right to an Article III hearing by litigating in the bankruptcy court without having raised any objection to that court’s jurisdiction to hear the fraudulent transfer claim. Interestingly, this holding also contradicts the Sixth Court’s Waldman opinion, in which the Court of Appeals found that a party could not waive its Article III rights.

At the law firm of William A. Miller, we take these fraudulent conveyance claims serious. We helped draft the UFTA legislation in Arizona years ago. If you need more direction in this or any other business dispute, call us at 602.319.6899 or stop by for a visit at 8170 North 86th place, suite 208 Scottsdale, Arizona 85258

The Supreme Court made it harder for investors to band together to pursue class action claims that they were misled when they bought or sold securities. But the justices did not accept a broader challenge, one that could have put an end to most class actions for securities fraud. So, as we say, class actions…

In the last few years, whistleblower claims are on the rise.  These claims now comprise 41% of the more than 93,000 discrimination charges filed in 2013, according to a February report from the U.S. Equal Employment Opportunity Commission (EEOC).  This is an increase of 28% over 10 years.  At the same time, particularly since the…

On October 15, 2013 after four years plus of bare-knuckle litigation and high stakes legal positioning the investment bankers who financed Ironite have their victory. Case closed. The law firm of William A. Miller represented these investment bankers when the former operator of Ironite Fertilizer sued them for a host of unfounded claims demanding millions…