Taylor v. Caiarelli, No. 14-3017 (7th Cir. 2015)
Annotate this CaseTaylor’s brother died in an accident. Caiarelli, the decedent’s ex-spouse and guardian of their minor child, obtained a state court declaration that the child was entitled to assets distributed to Taylor ($1.4 million). The estate assigned the judgment to Caiarelli. Taylor sought a probate court declaration that the assignment was void. Before resolution, Taylor filed for Chapter 11 bankruptcy, triggering the automatic stay. Caiarelli initiated an adversary proceeding, objecting to discharge of the judgment. The bankruptcy court dismissed, finding that Caiarelli failed to establish standing. The judgment was discharged, and Taylor’s creditors enjoined from collecting, 11 U.S.C. 524(a)(2). Caiarelli returned to probate court, which ratified the assignment. Taylor claimed that Caiarelli and her attorneys violated the discharge and plan injunctions. The bankruptcy court entered a civil contempt order and issued a damages order and judgment for $165,662.36 in attorney’s fees. While appeal was pending, Taylor notified the district court that he reached a settlement with the legal malpractice insurance carrier for Caarelli’s attorneys. The attorneys denied that a full settlement had been reached. The bankruptcy court indcated that vacatur would be approved if the parties returned to the court, so the district court denied Taylor’s motion to dismiss but reversed the contempt order, damages order, and judgment, finding no violation of the statutory discharge or plan injunctions. The Seventh Circuit affirmed, finding that the appeal was not moot.
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