13 B 01449, 13 A 01050
Prepetition, the parties to the medical malpractice suits participated in a mediation conference presided over by a former Chief Judge of the Circuit Court of Cook County, Illinois. The mediation was successful, and resulted in the entry of a July 21, 2008 settlement order in state court. Prior to the mediation session, one Plaintiff's claim proceeded to trial in state court, where a jury returned a verdict of $30,000,000 against the Debtor and other defendants.
The crux of the Complaint is that the Debtor falsely stated that the settlement would be secured by property at 1101 Dodge, Evanston, Illinois (“Dodge Property”) in violation of 11 U.S.C. § 523(a)(2)(A) which excepts from discharge debts incurred fraudulently under certain circumstances. The Debtor did not arrange for the Dodge Property to be titled in a land trust as required by the 2008 court order. The Plaintiffs also allege that the Debtor wilfully and maliciously injured them in violation of 11 U.S.C. § 523(a)(6).
The Court entered judgment in favor of the Plaintiffs, finding that the Debtor intentionally misled the Plaintiffs when he represented that he would pledge the Dodge Property to secure the settlement amount, and that fraud created the debt. In so ruling, the Court relied, in part, on Dr. Eisenstein's admission at trial that he had no intention of having the property placed into a land trust to secure payment of the $1.275 million settlement until a formal settlement agreement got executed. The July 21, 2008 order did not condition the settlement on the entry of a subsequent agreement.