In the seemingly never-ending post-Stern
quest to elucidate what constitutes a “core” versus “non-core” matter – and exactly what impact that distinction has on the bankruptcy court’s authority to enter a final judgment – the Bankruptcy Court for the Southern District of New York recently set out to answer the question of whether a claim for intentional infliction of emotional distress properly is considered a “personal injury tort claim” for purposes of 28 U.S.C. § 157(b)(5). As explained by Judge Glenn in In re Residential Capital, LLC
, if the answer is “yes,” absent consent of the parties, only a district court may try and enter a final judgment on the claim.
What Got the Claimants so Riled Up
In 2010, the claimants in ResCap
commenced an action against the debtors alleging that the debtors had wrongfully foreclosed on the claimants’ home after agreeing to approve a permanent loan modification. The complaint asserted various causes of action, including fraud, negligent misrepresentation, breach of contract, promissory estoppel, and intentional infliction of emotional distress.