.jpg)
Collateral Estoppel effect of Default Judgment re "Actually Litigated"
A client has presented circumstances wherein he and his company were
sued for trademark infringement in March 2004. For personal
reasons, he was not paying attention until recently. His corporate
lawyer allegedly informed him that he was answering the complaint
for the business and the client personally. I called the attorney
(when PACER was down) and he confirmed what the client had
indicated. However, when PACER came up, I confirmed that the
attorney never appeared and a default was taken against both
entities in US District Court over six months ago. The judgment
will be entered within a few days. Given that the plaintiff is
Fortune500 and my client has limited resources, initiating a
bankruptcy case and precipitating non-disch lit. now appears less
favorable than waiting until he exhausts his attempt to settle with
the plaintiff using a pledge of funds potentially obtained from a
malpractice action against the attorney. Given that the judgment
will become final very shortly, his sole means of preserving he
ability to litigate non. disch. before the bankruptcy court, after
final judgment, is the "actually litigated" element. Barry
Russell's opinion in In re Silva, 190 BR 889 appears to protect this
client on the fact presented. Does anyone have recent experience
with this issue? What results?
Thanks Peter.
The post was migrated from Yahoo.