In re Carter (16-50723)

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Debtor caused a vehicular collision while driving under the influence, killing the victim. At the time of the accident, two insurance policies covered the Debtor, and neither policy was fully able to settle with the decedent's estate. A lawsuit resulted in a judgment in favor of the estate, upon which the estate was unable to collect. The estate and the decedent's wife then filed an involuntary petition, placing the Debtor into Chapter 7 bankruptcy. An order for relief was entered, and special counsel was appointed to pursue potential first party claims against the insurer relating to their conduct in representing the Debtor prepetition. One of the insurance carriers moved to dismiss the case, asserting that the case had been filed in bad faith as an attempt to bring third party claims against the carriers, which is not allowed under North Carolina law. The court determined that, as no adversary proceeding had yet been filed, and as the carrier was not otherwise parties in interest, it lacked standing to make a motion to dismiss. Further, even if the carrier had standing, the types of claims contemplated by the Trustee would have alone been insufficient for a finding of bad faith. Motion denied.

Date: 
Friday, January 20, 2017
Published: 
No
Index Heading: 
Standing