Cause No. 01-52840-399.United States Bankruptcy Court, E.D. Missouri, Eastern Division.
May 3, 2004
ORDER GRANTING ORRS’ MOTION FOR LIMITED RELIEF FROM INJUNCTION
BARRY SCHERMER, Bankruptcy Judge
On February 4, 2004, John and Stacy Orr filed a motion for limited relief from the permanent injunction previously issued by this Court. The motion sought to allow the Orrs to sue Thermadyne Holdings Corp. and Victor Equipment Company as nominal defendants in a lawsuit concerning personal injuries suffered by the Orrs in Pennsylvania. The Orrs represented that they would not seek any direct relief from Thermadyne or Victor but rather would seek to collect from their insurance policies. The Orrs further represented that they would reimburse Victor and Thermadyne for any insurance policy deductible that could apply. Thermadyne and Victor objected to the relief requested in the motion.
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After hearing oral arguments by the parties, this Court holds that Thermadyne and Victor’s discharge does not affect the liability of their insurer for the discharged obligations. Thus, a plaintiff may sue a discharged debtor as a nominal defendant to recover under an insurance policy. Bursch v. Beardsley Piper 971 F.2d 108, 114 (8th Cir. 1992); In re Coho Resources, 345 F.3d 338, 343 (5th Cir. 2003).
While the Orrs have not promised to reimburse Thermadyne or Victor for any litigation related costs, e.g., attorney fees, court costs, etc., such promises are not required. “While the cost of defending in a civil action has been given serious consideration by bankruptcy courts, no case has found the cost of defending, by itself, to be great prejudice as to bar modification of the section 362 stay. The same can be said about required modifications of section 524(a)’s post discharge injunction.” Walker v. Wilde, 927 F.2d 1138, 1143-44 (10th Cir. 1991) (internal citations omitted); In re Lee, 172 B.R. 47, 49
(W.D. Ark. 1994).
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Therefore, it is ordered that the Orr’s motion for limited relief from the permanent injunction is granted and they may sue Victor and Thermadyne as nominal defendants in Pennsylvania or wherever the litigation is eventually litigated.
Prepared by: Reviewed by:
Fernando Bermudez Jennifer Merlo Green, Schaaf Jacobson, P.C. Bryan Cave, LLP 7733 Forsyth Boulevard, Suite 700 One Metropolitan Square Clayton, MO 63105 211 North Broadway Phone: (314) 862-6800 St. Louis, MO 63102-2750 Fax: (314) 862-1606 Phone: (314) 259-2000 Fax: (314) 259-2998
No later than five (5) business days after the date of this order, John and Stacy Orr are directed to serve a copy of the order on all parties listed below and are directed to file a certificate of service no later than two (2) business days after service.