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Hart v. Special Electric (2018)

January 8, 2019

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Horvitz & Levy successfully defended the trial court’s decision to grant summary judgment in favor of Special Electric Company, Inc., a dissolved corporation that once brokered asbestos. The plaintiff claimed an asbestos-related injury but did not file suit until more than two years after notice of Special Electric’s dissolution in Wisconsin. The appellate court agreed with the trial court that the lawsuit was time-barred.

Special Electric, a Wisconsin company, declared bankruptcy in 2004, was dissolved under Wisconsin law in 2012, and published notice of the dissolution in 2014. Under Wisconsin law, once Special Electric published notice of its dissolution in a newspaper of general circulation, all future claims against Special Electric were barred unless made within two years of publication of the notice. The plaintiff in this case brought a lawsuit against Special Electric in California in 2016. The trial court dismissed plaintiff’s claims because California defers to the state of incorporation regarding the capacity to sue a dissolved corporation, and plaintiff did not file suit until more than two years after the notice of Special Electric’s dissolution in Wisconsin.

The plaintiff appealed and Horvitz & Levy was retained to defend the summary judgment ruling. The California Court of Appeal (First Appellate District, Division Four) agreed with Horvitz & Levy that (1) Special Electric’s bankruptcy plan of reorganization authorized the insurers and the attorneys they hired to take all actions to defend Special Electric, including authority to publish notice to cut off liability for future claims; (2) the notice adequately informed all potential claimants where to direct any claim and that any claim not filed within two years would be barred, and the failure to include within the notice the information to be included in the claim was a mere technical statutory violation not fundamental to the statutory purpose; and (3) federal law did not preempt the Wisconsin statute because the federal bankruptcy plan directed that all defenses would be decided under the applicable state law, which included the Wisconsin dissolution statutes and their limitation on filing suit after publication of notice of dissolution.

The decision will aid Special Electric in defeating a number of other untimely law suits filed around the country.

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