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In re Ricky Joe Jones, Cheryl Ann Jones, Debtors

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  • In re Ricky Joe Jones, Cheryl Ann Jones, Debtors

    Date Decided: Jan 25th, 2011
    Decided By: U.S. Court of Appeals, Tenth Circuit(Bankruptcy) (Federal)
    Court: United States Bankruptcy Court for the District of Kansas
    Citation: 446 B.R 466

    Ricky Joe Jones ("Jones") was severely injured whileemployed by Kansas City Southern Railway ("KCS"). He brought a FELA claim in1987 alleging KCS was negligent and sought damages for a permanent disability.The parties ultimately settled the suit, whereby KCS agreed to pay Jonesmonthly payments of $700, and increasing lump sum payments every 5 years. Per thesettlement agreement, payments owed to Jones pursuant to the RailroadRetirement Act ("RRA"), 45 U.S.C. 231awere reduced, and Jones waived his seniority rights and future employment withKCS.

    In 1998, Jones and his spouse ("Debtors") sold the rights toall of the lump sum payments with the exception of one $200,000 payment due in2023. In 2001, Debtors filed for bankruptcy. Debtors informed their bankruptcycouncil of the $200,000 payment, but failed to disclose it for the purposes ofthe bankruptcy proceedings.

    In 2003, Debtors attempted to sell the rights to the$200,000 payment. The potential buyer informed the bankruptcy Trustee and theTrustee filed a motion to reopen the bankruptcy proceedings. The Trustee soughtto include the $200,000 payment into the schedule of assets available tocreditors. In response, Debtors claimed the remaining payment was exempt.

    The Trustee objected to Debtors' exemption. Trustee claimsthat the settlement was for personal injury, which proceeds are not exemptunder Kansas state law. Additionally, it claims the exemptions for disabilitybenefits and employment-related benefits under the bankruptcy code do not applyto Debtors' settlement.

    Debtors argue that the injury disabled Jones, thus thesettlement should be exempt because it was a disability benefit under thebankruptcy code.


  • #2
    This is not a very legal comment but I like this case because sometimes...just sometimes..the law works to protect the little guy and that's kind of what has kept me into the game as long as I have been in it.

    Steve Gordon
    Gordon, Elias & Seely, L.L.P.
    FELA Lawyer
    FELA Lawyer Blog
    Serving Injured Railroad Employees Nationwide
    Call for a FELA Lawyer 24/7/365