Editor’s note: This article is part of a series examining evidence submitted in Garlock Sealing Technologies’ bankruptcy proceeding that was recently unsealed as a result of Legal Newsline’s legal challenge.
CHARLOTTE, N.C. (Legal Newsline) – In a 2013 deposition, prominent asbestos plaintiffs attorney Joseph Belluck tried to explain the difference between intending to file a claim with a bankruptcy trust on behalf of a client, and merely anticipating the filing of a claim.
Belluck, the founder of the Belluck & Fox firm of New York, was asked about a certain provision governing the disclosure of such claims to solvent companies that sought to use the trust claims as evidence in lawsuits they faced.
“It’s my understanding that if we intend to file the claim, the claim is filed,” Belluck testified.
Belluck
The practice of waiting to file trust claims until after the completion of civil lawsuits in order to maximize recovery against solvent defendants in those lawsuits led to a landmark 2014 ruling by a federal bankruptcy judge and four racketeering lawsuits filed by Garlock Sealing Technologies against plaintiffs firms, including Belluck’s.
In 2003, Judge Helen Freedman amended the case management order that guides litigants in the New York City Asbestos Litigation docket, which was recently ranked as the No. 1 Judicial Hellhole in the country by a national tort reform association.
Key in Freedman’s amendment was the use of the word “intends.”
The amendment said any plaintiff who “intends” to file a claim with any bankruptcy trust must do it no later than 10 days after his or her case is set for trial.
For NYCAL’s in extremis docket, which is designed for plaintiffs with the most serious medical conditions, the proof of claim form must be filed 90 days before trial.
“(I)t’s a case-by-case determination, but in general, I give you an example: A witness testified to it in a deposition, a claim probably would be filed,” Belluck said.
“That’s what I would consider to be an intended claim. I don’t believe, and I think the judge confirmed that we are under no obligation to file any anticipated claims.”
Defendants seek trust claim forms in order to use them as evidence that the plaintiff’s injury was caused in whole or in part by other companies.
Garlock attorney Garland Cassada asked Belluck when an “anticipated” claim becomes an “intended” claim.
“When I say I’m intending to file it, otherwise, it’s an anticipated claim,” Belluck said.
“That’s what I take from the word intent, that there is an intent to file, you have decided to file.”
Cassada responded, “Almost seems like under that interpretation, the provision has no meaning.”
Because Cassada had not asked a question, Belluck did not respond.
In 2012, Judge Sherry Heitler was asked by plaintiffs attorneys to strike the provision from the case management order on the claims that it conflicts with the time limitations provided by the trusts.
She did not to do so. Her interpretation of the provision seems to have been in line with Belluck’s.
“The CMO requires plaintiffs to file their intended claims with the various bankruptcy trusts within certain time limitations, not claims they may or may not anticipate filing,” she wrote.
Belluck’s deposition was part of Garlock’s argument that asbestos attorneys had been manipulating their clients’ exposure evidence in order to maximize recovery from Garlock in civil lawsuits.
Hodges agreed, ruling that Garlock’s history in the tort system was not a proper indicator of its future liabilities.
He ordered Garlock to put $125 million in its asbestos trust, more than $1 billion less than plaintiffs attorneys had requested.
Belluck & Fox is accused of working with The David Law Firm, of Woodlands, Texas, to hide exposure evidence during lawsuits on behalf of clients like Peter Homa, who eventually filed 22 trust claims after a civil lawsuit.
Garlock said it was specifically told that Homa had no trust claims.
Belluck said his firm handled a client’s civil case, while The David Law Firm handled the trust claims.
“Do you know that on the very next day, within 24 hours of reaching that settlement, The David Law Firm filed at least eight trust claims for Mr. Homa?” Cassada asked. “Is that a coincidence?”
Belluck responded, “I don’t know.”
Cassada said, “You don’t know. Did someone from your law firm call The David Law Firm and tell them they could file their trust claims now?”
Belluck said, “I don’t remember a communication to The David Law Firm that would have encompassed that. It certainly was our practice to keep them posted on the progress of the case and tell them when settlements were reached.”
From Legal Newsline: Reach editor John O’Brien at [email protected].
