Justia U.S. 10th Circuit Court of Appeals Opinion Summaries

Frances Scott and her husband Galen Amerson filed for Chapter 7 bankruptcy protection. Scott amended her petition to identify as an asset her interest in a Florida state action that she and her half-sister had filed contesting the legitimacy of their father’s will. The bankruptcy trustee retained Florida counsel, who in turn reached a tentative settlement of the ongoing probate contest. The trustee then moved the bankruptcy court to approve the settlement agreement. The bankruptcy court granted the trustee’s motion over Scott’s objection and approved the settlement agreement. Scott appealed to the Tenth Circuit Bankruptcy Appellate Panel (BAP), which affirmed the bankruptcy court’s decision. Scott appealed the BAP’s decision to the Tenth Circuit Court of Appeals. At issue was whether Scott’s interest in a spendthrift trust created by her late father was properly treated as property of the bankruptcy estate, or if that interest was excluded. Finding no error in the BAP's conclusion, the Tenth Circuit affirmed inclusion of that Florida interest in Scott's bankruptcy estate. View "Scott v. King" on Justia Law

Sheldon Hathaway became embroiled in a stranger-originated-life-insurance (STOLI) scheme at the involving his neighbor, Jay Sullivan. Here, Intervenor Defendant-Appellant Windsor Securities, LLC (Windsor) loaned Defendant-Appellant the Sheldon Hathaway Family Trust (the Trust) $200,000 to finance the initial premium on a life insurance policy (the policy) for Hathaway. In exchange, Windsor “receive[d] a moderate return on [its] investment” if a trust repaid the loan. Alternatively, Windsor “foreclose[s] on the life insurance policy that was pledged as collateral” when a trust fails to do so. That’s what happened here. But before Windsor could profit from its investment, Plaintiff-Appellee PHL Variable Insurance Company (PHL) sought to rescind the policy based on alleged misrepresentations in Hathaway’s insurance application. The district court ultimately granted PHL’s motion for summary judgment on its rescission claim, and allowed And it allowed PHL to retain the premiums Windsor already paid. On appeal, Windsor and the Trust (collectively, the defendants) argued the district court erred in granting PHL’s motion for summary judgment because there was at least a genuine dispute of material fact as to whether PHL waived its right to rescind the policy. Alternatively, they argued the district court erred in granting summary judgment because, at a minimum, a genuine dispute of material fact existed as to: (1) whether the application contained a misrepresentation; and (2) whether PHL relied on that misrepresentation in issuing the policy. Finally, even assuming summary judgment was appropriate, defendants argued the district court lacked authority to allow PHL to retain the paid premiums. The Tenth Circuit affirmed, concluding no genuine dispute of material fact existed as to whether PHL waived its right to rescind the policy. Nor was there any genuine dispute of material fact as to whether the application contained a misrepresentation or whether PHL relied on that misrepresentation in issuing the policy. Lastly, the Court held the district court had authority to allow PHL to retain the paid premiums. View "PHL Variable Insurance v. Sheldon Hathaway Family Trust" on Justia Law

Brooklyn Coons (called "Brook" by her estate) died from being shaken and possibly struck on the head while in the care of her father's girlfriend. Her estate, the remaining plaintiff in this case, alleged that Defendant Linda Gillen, a social worker, knew that Brook was in danger and subject to abuse but did not respond to reports of the abuse, increasing Brook's vulnerability to danger. The estate sued Defendant under 42 U.S.C. 1983 for violating Brook's right to substantive due process. The district court granted Defendant summary judgment, holding that she was entitled to qualified immunity because she did not take any affirmative action that increased the child's vulnerability to danger and because there was no clearly established law that her alleged conduct violated Brook's due-process rights. Finding that Defendant’s conduct was not a violation of clearly established law, the Tenth Circuit affirmed.View "Estate of B.I.C., et al v. Gillen" on Justia Law

THI of New Mexico at Hobbs Center, LLC and THI of New Mexico, LLC (collectively THI) operate a nursing home in Hobbs, New Mexico. When Lillie Mae Patton's husband was admitted into the home, he entered into an arbitration agreement that required the parties to arbitrate any dispute arising out of his care at the home except claims relating to guardianship proceedings, collection or eviction actions by THI, or disputes of less than $2,500. After Mr. Patton died, Mrs. Patton sued THI for negligence and misrepresentation. THI then filed a complaint to compel arbitration of the claims. The district court initially ruled that the arbitration agreement was not unconscionable and ordered arbitration. Under New Mexico law a compulsory-arbitration provision in a contract may be unconscionable, and therefore unenforceable, if it applies only, or primarily, to claims that just one party to the contract is likely to bring. The question before the Tenth Circuit was whether the Federal Arbitration Act (FAA) preempted the state law for contracts governed by the FAA. The Court held that New Mexico law was preempted in this case and the arbitration clause should have been enforced. View "THI of New Mexico at Hobbs v. Patton" on Justia Law

The district court permitted the government to foreclose on federal tax liens on a ski cabin titled in the name of the D.E. Brown Family Trust, whose beneficiaries were Douglas Brown's wife and children. The taxes were owed by Douglas Brown (Brown) and his wife, not the trust, but the court found that the Browns were the beneficial owners of the cabin because Brown had a purchase-money resulting trust (PMRT) arising from his having purchased the cabin and then conveyed it to the Family Trust. The trustee of the Family Trust, Robert Tingey, appealed. He argued: (1) that the government waived its claim that the Browns held the beneficial interest in the cabin; and (2) that the district court erroneously concluded that a PMRT arose under Utah law. Upon review, the Tenth Circuit concluded that the government did not intentionally relinquish its claim to the cabin, and the evidence supported the district court's determination that Brown intended the trust to hold the cabin for his benefit. Accordingly, the Court affirmed the district court's judgment. View "United States v. Tingey" on Justia Law

This case arose from the death of a minor child, 23-month-old Brooklyn Coons (BIC) at the hands of her father's girlfriend. Plaintiffs-Appellants, Larry and Mary Crosetto and the Estate of BIC, filed an action alleging that a social worker, Defendant-Appellee Linda Gillen, created the danger that resulted in the death of their granddaughter and denied them their rights to familial association. The district court granted summary judgment in favor of Ms. Gillen, and declined to hear a supplemental state law claim. On appeal, Plaintiffs argued that qualified immunity was unwarranted on their state danger-creation and familial association claims. Upon review, the Tenth Circuit agreed that qualified immunity was not appropriate on the state danger-creation claim given genuine issues of material fact. Thus the Court reversed in part. The Court affirmed summary judgement on the familial association claims. View "The Estate of B.I.C., et al v. Gillen" on Justia Law

At issue in this interlocutory appeal was the scope of the special relationship doctrine and whether it would apply to the facts alleged to expose two human services employees to potential individual liability for the death of a seven-year-old child in foster care. After their son Chandler died while in the care of Jon Phillips and Sarah Berry, Chandler's biological parents, Christina Grafner and Joshua Norris, and Melissa R. Schwartz, personal representative and administrator of Chandler’s estate, filed suit against two county human services departments and two employees alleging, among other things, a 42 U.S.C. 1983 claim for violation of Chandler's substantive due process rights. The two employees, Defendants-Appellants Margaret Booker and Mary Peagler, appealed denial of their Rule 12(b)(6) motion to dismiss on the basis of qualified immunity. Upon review, the Tenth Circuit concluded that the district court correctly determined that plaintiffs sufficiently pled facts, when taken as true, showed Booker and Peagler plausibly violated Chandler's substantive due process right to be reasonably safe while in foster care, which right was clearly established at the time. Accordingly, the Court affirmed the district court. View "Schwartz, et al v. Booker, et al" on Justia Law

Plaintiff Donna Morris brought a 42 U.S.C. 1983 action for unlawful arrest and excessive force on behalf of her deceased husband, William Morris III, against Defendants Officer Jaime Noe and the City of Sapulpa, Oklahoma. She alleged Defendants violated her husband's rights when Noe forceably arrested him and caused him injury. Defendant Noe moved for summary judgment based on qualified immunity, and the district court denied his motion. Defendant Noe then appealed. Finding that Mr. Morris "posed no threat to Noe or others," and that the officer had reason to believe Mr. Morris was "at most, a misdemeanant," the Tenth Circuit held Defendant was not entitled to qualified to immunity on either of Plaintiff's claims. Accordingly, the Court affirmed the trial court. View "Morris v. Noe" on Justia Law

Defendant-Appellant, The Siebel Living Trust Dated 7/27/93 (Trust), appealed a district court’s order denying the Trust’s motion to recover its attorney fees and costs pursuant to a real estate sales contract with Plaintiff-Appellee Michael J. Ward (Ward). In addressing the question of whether the Trust or Ward was the "prevailing party" (and thereby entitled to recover reasonable fees and costs under the contract), the Tenth Circuit followed Colorado law to review the competing claims of the parties to the contract. Although Ward recovered the commission he sought, he did not recover against the Trust. The Trust was successful defending itself from Ward's claims brought against it and, therefore, as between Ward and the Trust, the Trust prevailed. The Tenth Circuit reversed the district court and remanded the case for further proceedings.