Rothbard v. Dalkon Shield Trust (In re A.H. Robins Co.)

197 B.R. 509, 1996 Bankr. LEXIS 974
CourtDistrict Court, E.D. Virginia
DecidedFebruary 12, 1996
DocketNo. 85-01307-R
StatusPublished
Cited by4 cases

This text of 197 B.R. 509 (Rothbard v. Dalkon Shield Trust (In re A.H. Robins Co.)) is published on Counsel Stack Legal Research, covering District Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Rothbard v. Dalkon Shield Trust (In re A.H. Robins Co.), 197 B.R. 509, 1996 Bankr. LEXIS 974 (E.D. Va. 1996).

Opinion

MEMORANDUM

MERHIGE, District Judge.

This matter is before the Court on a Motion by Daikon Shield Claimant Cynthia A. [510]*510Rothbard (“Rothbard”) for Reinstatement of her Claim to Permit her to Proceed under Option 3. The Daikon Shield Claimants Trust (“Trust”) disallowed Rothbard’s Dai-kon Shield Claim for failing to elect an option and to submit her claim materials by the June 30, 1995 deadline that had been established by the Trust. For the reasons which follow, the Motion will be denied.

I.

On March 30, 1990, this Court entered an Order requiring the Trust to accept claims that had not been filed before the April 30, 1985 Bar Date. All claims filed after the Bar Date were considered “Late Claims” by the Trust. The Trust notified all potential Late Claimants that June 30, 1994, was the deadline for filing a Late Claim. Rothbard mailed her claim to the Trust on March 22, 1993, and her claim was appropriately classified as a Late Claim.

By 1994, the Trust was prepared to begin processing Late Claims. The Trust, however, was concerned with the necessity of fully, fairly and expeditiously processing all Late Claims. Therefore, on or about January 16, 1994, the Trust sent packets to all Late Claimants that included Option 1, 2 and 3 election forms. Also, this packet explained that June 30, 1995, had been set as the deadline for Late Claimants to elect an option and return their claim materials to the Trust. Anyone who failed to return the required materials by this time would have their Late Claim disallowed. Rothbard, however, failed to meet the June 30, 1995 deadline, and her Late Claim was subsequently disallowed by the Trust.

II.

Rothbard moves this Court for reinstatement of her claim. She argues that her failure to submit an option election form in a timely manner was the result of mistake, inadvertence or excusable neglect on the part of her attorney, J. Patrick Butler (“Butler”). In support of this motion, Rothbard has filed affidavits from Butler and Butler’s paralegal, Shirley Duran (“Duran”).

Rothbard’s motion claims that on June 29, 1995, one day before all election forms were due at the Trust offices in Richmond, Virginia, she sent an Option 1 election form from her home in San Diego, California, to Butler’s office in Tucson, Arizona.1 The motion alleges that within the next twenty-four hours, after consulting with independent counsel, Rothbard changed her mind and decided to proceed under Option 3.

Duran’s affidavit states that Rothbard telephoned her on June 29, 1995, and explained that she wished to proceed under Option 3. This call apparently took place on the same day that Rothbard’s Option 1 election form was allegedly sent to Butler’s office. Duran claims that after consulting the Option 1 election form, she concluded that it was unnecessary to send an Option 3 election form to the Trust by the June 30, 1995, deadline. Duran admits, however, that after completely reviewing Rothbard’s file in July, 1995, she realized that an error had been made.

Butler’s affidavit states that he spoke with Rothbard on June 30,1995, when she advised him of her desire to proceed under Option 3. Butler, like his paralegal, claims to have referred to the Option 1 form and concluded that the language referring to the June 30, 1995, deadline only applied to Option 1 elections. Therefore, Butler claims no Option 3 form was filed by the June 30 deadline. Butler further states that his file reflects “some correspondence” from the Trust advising him that the June 30 deadline applied to all three options, and that “he did not have all of the correspondence committed to memory as of June 30, 1995.” Butler’s affidavit, however, fails to mention the numerous warnings sent to him by the Trust. In fact, as discussed below, the Trust delivered clear warnings on numerous occasions of the June 30, 1995 deadline and the consequences of failing to meet that deadline. The motion does not allege that Butler failed to receive this correspondence.

In December, 1994, the first warning was included in a document mailed to all Late Claimants entitled Late Claims Report. Among other things, this newsletter an[511]*511nounced that the Trust would be sending claim packets to all Late Claimants in January, 1995, and described the three options available to claimants under the CRF. Additionally, the newsletter clearly stated in bold print that “Completed claim forms and required medical records must be returned to the Trust by June 30, 1995.”

The second warning was sent on or about January 16, 1995, when the Trust mailed the previously announced claim packets to over 19,000 Late Claimants. Along with the option election forms, the packets included a document entitled “What You Need to Know to File Your Daikon Shield Claim.” Inside the packet were conspicuous warnings advising lawyers and claimants that no matter which option they elected, all completed claim materials had to be received by the Trust no later than June 30, 1995. These warnings were prominently placed on the first page of the instruction booklet2, as well as on the top of the Option 1 Form and Withdrawal Forms, and on the face of the claim booklets for Option 2 and Option 3.3

On February 28, 1995, this Court directed the Trust to treat and consider all Late Claims as Timely Claims. This action permitted the Trust to begin paying off Late Claims. Accordingly, in a letter dated March 3, 1995, the Trust notified all Late Claimants of the Court’s Order and advised them that their claims could be paid as soon as an option election form and supporting documentation were received. Additionally, the letter served as a third warning, stating: “Please remember that the deadline for submitting a claim form and any necessary documentation is June SO, 1995.”

On May 1, 1995, the Trust sent a letter via certified mail to a number of Late Claimants, including Rothbard, who had failed to submit the required documentation. The letter was entitled ’"WARNING OF JUNE 30, 1995 DEADLINE*, and explained:

[i]f the Trust does not receive an Option 1, Option 2, or Option 3 claim form by June 30, 1995, your claim will be disallowed and you will never receive any money for your Daikon Shield Claim. Be sure that you mail your claim materials in time for the Trust to receive your materials by June 30, 1995. Under no circumstances will the Trust accept a claim form that is received after June 30,1995.

The letter concluded with the following paragraph:

You must make sure the Trust receives complete claim materials on your claim no later than June 30, 1995, or the Trust will disallow your claim and you will be forever barred from getting any money from the Trust or any other person for the injuries related to the Daikon Shield.

Butler signed for and received the May 1, 1995, warning letter on May 4, 1995. (Trust Ex. F)

The final warning to Late Claimants was sent by the Trust on June 1, 1995, in the form of a postcard. This card advised claimants that the Trust had not received their forms and reminded them of the June 30, 1995 deadline. Once again the card clearly explained that if the claim form was not received by June 30, 1995, their claim would be disallowed and they would never be able to receive money from the Trust for their injuries.

III.

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Related

In re A.H. Robins Co.
215 B.R. 112 (E.D. Virginia, 1997)

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Bluebook (online)
197 B.R. 509, 1996 Bankr. LEXIS 974, Counsel Stack Legal Research, https://law.counselstack.com/opinion/rothbard-v-dalkon-shield-trust-in-re-ah-robins-co-vaed-1996.