District Judge Joseph F. Bianco


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Ross sought Chapter 7 relief on Nov. 23, 2004. Bankruptcy court issued a discharge on March 22, 2005. Under an Aug. 2006 final decree her bankruptcy case was closed as an “asset” case. Ross received a $105,172 settlement award in connection with her 2012 product liability claim over a defective medical device implanted in 1999. She opposed trustee Mendelsohn’s Sept. 30, 2015 motion to reopen Ross’s bankruptcy case to administer her undisclosed product liability claim. Bankruptcy court denied reopening, finding no cause of action accrued as of the Nov. 23, 2004 petition date and thus the settlement proceeds were not bankruptcy estate property. Informed by Segal v. Rochelle, 382 U.S. 375 and Cartschlaa v. Nationwide Mut. Ins. Co., 538 F.3d 116, district court affirmed bankruptcy court’s April 14, 2016 decision that proceeds from Ross’s settlement—resulting from a defective medical device implanted prior to filing for bankruptcy but which was not determined to be defective until after her bankruptcy proceeding had closed—did not constitute bankruptcy estate property. Ross’s interest in the settlement agreement was not sufficiently rooted in her pre-bankruptcy past to render the settlement proceeds property of her bankruptcy estate.