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Bankruptcy court denies motion for summary judgment by firm at center of asbestos fraud case

By Jessica M. Karmasek | Feb 20, 2013

CHARLOTTE, N.C. (Legal Newsline) -- A U.S. bankruptcy court has denied a motion by a Houston firm -- alleged to have made inconsistent claims about the origins of a client's mesothelioma -- for summary judgment in its favor.

In a December filing with the U.S. Bankruptcy Court for the Western District of North Carolina Charlotte Division, the defendants -- Williams Kherkher Hart Boundas LLP and attorneys Troy D. Chandler, Charles D. Finley and Samantha Flores -- moved the court to enter a summary judgment in their favor on the grounds that there is "no genuine dispute as to any fact."

However, the bankruptcy court denied the motion "without prejudice to defendants' right to re-assert the motion at a later time," according to a brief, one-paragraph order filed Jan. 28.

The company being sued over a rare type of asbestos -- Garlock Sealing Technologies -- opposed the firm's motion, according to a response filed last month.

Williams Kherkher sued Garlock in 2008 in a Texas state court, alleging that client John Phillips' illness was caused by a rare type of asbestos called crocidolite that came solely from Garlock's products.

Garlock contends it was induced to enter into a far larger settlement than it would have paid. In Texas, juries can allocate a percentage of liability to responsible third parties.

Phillips worked at Triplex, a company that sold parts that contained asbestos, from 1966-68, but no records still exist detailing the company's inventory then.

The company claims the firm could have asserted Johns-Manville's asbestos-containing gaskets were to blame, but Johns-Manville had already filed for bankruptcy.

More than 90 companies have declared bankruptcy from asbestos litigation, and more than 60 bankruptcy trusts have been established to pay out claims.

"Specifically, Plaintiffs have not alleged any facts in support of their contention that Defendants made any misrepresentation of fact as required to prove their claims of fraud and negligent misrepresentation, nor can they produce evidence of any such misrepresentations, so those claims must be dismissed," the defendants wrote in their three-page motion, filed Dec. 5.

"Further, Plaintiffs' conspiracy claim is premised on the existence of fraud, and because Plaintiffs can produce no evidence to support the fraud claim, the conspiracy claim must be dismissed as well."

Garlock, in its Jan. 10 response, said the defendants' motion was "premised on the principle that in the context of litigation, lawyers are permitted to do whatever they want."

"Their brief reads like an exercise in proof of that point, as it is a misstatement of Texas law and further offers a selective and tilted 'record' on which it contends this Court should dismiss claims that Garlock has asserted with every detail possible in a concealment case," the company wrote in its 19-page opposition.

Garlock argued that the bankruptcy court should deny the motion and allow it to conduct discovery.

In October, Judge George Hodges ruled that a committee representing those with asbestos claims against Garlock will be allowed to intervene in the company's fraud case against Williams Kherker.

From Legal Newsline: Reach Jessica Karmasek by email at

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Williams Kherkher Hart Boundas LLP