Co-debtor in this case (“Debtor”), filed a Motion for the court to “Determine Product Liability Settlement Is Not Property Of The Bankruptcy Estate.” Chapter 7 Trustee (“Trustee”), filed an Opposition to the Motion.
he Debtor requests that this court determine that the product liability settlement proceeds, flowing from a transvaginal mesh patch implant (the “Device”), which claim is now listed on Amended Schedule B, are not property of the Bankruptcy Estate. The Class Action lawsuit (Debtor was not the class action plaintiff, but subsequently determined to be a class member) has resulted in the claims and rights at issue having a value of $240,000.00 — the “Class Action Settlement Proceeds” distribution for Debtor’s claim. Debtor has now claimed an exemption of $240,000.00 pursuant to state law in the Class Action Settlement Proceeds on Amended Schedule C.
Debtor’s bankruptcy case was filed on February 6, 2009, with Debtor receiving her discharge on May 19, 2009. Debtor relates that she had a transvaginal mesh patch implanted on August 22, 2003 (five and one-half years prior to the bankruptcy case being filed), which resulted in subsequent medical issues, leading to Debtor pursuing her rights to the class action recovery in 2015.
Debtor argues that she did not “know” about any “legal claim” that was available to her until 2014, and as such, the claim was not “sufficiently rooted” in her prepetition past such that it would be an interest of the Bankruptcy Estate. Debtor argues that her claim did not accrue until 2014 when she learned of a United States Food and Drug Administration (“FDA”) warning and when she subsequently that year learned about being able to sue the manufacturer of her transvaginal mesh patch.
Therefore, Debtor argues that the settlement proceeds are not part of the Bankruptcy Estate in this case and requests that the court issue an order holding the same.
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