Matter Of Hendrix

986 F.2d 195 (1993)

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Nature of the Case

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Facts

Hendrix (D) injured Page (P). D had liability insurance. D declared bankruptcy under Chapter 7 on June 5, 1990. On July 13, D added P to the list of creditors. P had filed suit against D, but P did not file a claim in the bankruptcy proceeding. A lawyer nominally representing D, but in fact representing the Atlanta Casualty Company, D's liability insurer, filed a motion for summary judgment in P's state court action against D. The motion was granted. P filed a motion to reopen the bankruptcy proceeding. The bankruptcy judge granted the relief. The state court thought that the discharge did apply to a suit effectively against D's insurer only. P sought to proceed against ACC. On appeal, P and ACC argued over whether a discharge in bankruptcy precludes litigation against D’s liability insurer outside of the bankruptcy. In re Shondel, 950 F.2d 1301 (7th Cir. 1991) was decided, and it held that a discharge does not preclude litigation by P against D’s insurer. P nor D (ACC) cited the case. ACC was an insurance company, and the Shondel case was decided in the same circuit in that ACC’s attorney was located.