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In re Settlement Facility Dow Corning Trust

March 25, 2010


The opinion of the court was delivered by: Denise Page Hood United States District Judge

Honorable Denise Page Hood



On June 15, 2009, Paula Purvis filed a letter-appeal to this Court on behalf of her twin sister, Lynn Yvonne Purvis, who passed away in 1976. Lynn Yvonne Purvis was a claimant before the Settlement Facility--Dow Corning Trust ("SF-DCT") pursuant to the Amended Joint Plan of Reorganization ("Plan") in the Dow Corning Corporation ("Dow Corning") bankruptcy action. Ms. Purvis claims that her sister's disease claim was denied by the SF-DCT and the Appeals Judge. Ms. Purvis also refers to her option of filing a lawsuit against the DCC Litigation Facility, Inc. ("Litigation Facility").

Dow Corning Corporation ("Dow Corning") filed a Motion to Dismiss the Appeal of Paula Purvis on July 6, 2009. Ms. Purvis filed a response to the Motion on July 20, 2009. Ms. Purvis also filed a Motion to Continue the Appeal on October 14, 2009, a Motion for Summary Judgment on November 10, 2009 and a Motion of Probable Cause of Product Liability on February 9, 2010. Dow Corning filed a response to the Motion for Summary Judgment on December 4, 2009.

Ms. Purvis filed a disease claim on behalf of Lynn Yvonne Purvis before the SF-DCT on October 21, 2005 claiming Systemic Lupus Erythematosus (SLE) under Options 1 and 2. The disease claim was initially denied by way of a Status Letter on May 31, 2007. The disease claim was also denied on direct appeal to the Claims Administrator on August 2, 2007 and again on September 26, 2007. (Motion, Doc. No. 2, Ex. 1) On January 25, 2008, the Appeals Judge denied the claim. (Id.) A Notification of Status letter was sent on February 18, 2008 stating that the rupture claim was deficient because the implants must have been removed prior to her death, which they had not been. (Id.)

For the reasons set forth below, Ms. Purvis' appeal must be dismissed.


A. Appeal

Dow Corning argues that appeals to this Court by claimants before the SF-DCT are expressly and unambiguously barred by the Plan. Dow Corning cites cases issued by the Court holding that the Plan language does not permit individual claimants to appeal the decisions of the Claims Administrator or the Appeals Judge to this Court. Ms. Purvis' response and statements in her subsequent motions claim that on behalf of her sister, she is entitled to funds from the SF-DCT, with interest. Ms. Purvis also claims that she is entitled to opt-out of the settlement options and file an action against the Litigation Facility.

Section 8.7 of the Amended Plan of Reorganization states that this Court retains jurisdiction to resolve controversies and disputes regarding the interpretation and implementation of the Plan and the Plan Documents, including the Settlement Facility and Fund Distribution Agreement ("SFA"), and, to enter orders regarding the Plan and Plan Documents. (Plan, §§ 8.7.3, 8.7.4, 8.7.5) The Plan provides for the establishment of the SF-DCT, which is governed by the SFA. (Plan, § 1.131) The SF-DCT was established to resolve Settling Personal Injury Claims in accordance with the Plan. (Plan, § 2.01) The SFA and Annex A to the SFA establish the exclusive criteria by which such claims are evaluated, liquidated, allowed and paid. (SFA, § 5.01) Resolution of the claims are set forth under the SFA and corresponding claims resolution procedures in Annex A. (SFA, § 4.01)

The Plan establishes administrative claim review and appeals processes for Settling Personal Injury claimants. Any claimant who does not agree with the decision of the SF-DCT may seek review of the claim through the error correction and appeal process. (SFA, Annex A, Art. 8) A claimant may thereafter obtain review by the Appeals Judge. (SFA, Annex A, Art. 8) The Plan provides that "[t]he decision of the Appeals Judge will be final and binding on the Claimant." (SFA, Annex A, § 8.05) Claimants who seek review under the Individual Review Process also have a right to appeal directly to the Appeals Judge. The Plan provides that "[t]he decision of the Appeals Judge is final and binding on both Reorganized Dow Corning and the claimant." (SFA, Annex A, § 6.02(vi))

Generally, the provisions of a confirmed plan bind the debtor and any creditor. 11 U.S.C. § 1141(a). Section 1127(b) is the sole means for modification of a confirmed plan which provides that the proponent of a plan or the reorganized debtor may modify such plan at any time after confirmation of such plan and before substantial consummation of the plan. 11 U.S.C. § 1127(b).

"In interpreting a confirmed plan courts use contract principles, since the plan is effectively a new contract between the debtor and its creditors." In re Dow Corning Corporation, 456 F.3d 668, 676 (6th Cir. 2006); 11 U.S.C. ยง 1141(a). "An agreed order, like a consent decree, is in the nature of a contract, and the interpretation of its terms presents a question of contract interpretation." City of Covington v. Covington Landing, Ltd. P'ship, 71 F.3d 1221, 1227 ...

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