Good Faith Creditor of Fraudulent Claimant in BP Settlement Not Liable in Restitution to Settlement Fund
Good Faith Creditor of Fraudulent Claimant in BP Settlement Not Liable in Restitution to Settlement Fund
In re: Deepater Horizon
by: Arthur Crais
Woodbridge Baric Pre-Settlement Funding, L.L.C. v. Freeh, 2017 U.S. App. LEXIS 302 (5th Cir. Jan. 6, 2017)Jarrod Burrle obtained a loan from Woodbridge Baric Pre-Settlement Funding, L.L.C. for $24,000 for his claim for damages due to the BP spill. He was not required to repay the advance if he was not reimbursed by the settlement fund. Burrle was paid $50,000 pursuant to the settlement agreement of 2013; and his attorneys repaid Woodbridge $20,000. But, as a result of the special investigation ordered by the court and conducted by Louis Freeh, Burrle’s claim was deemed to be fraudulent. The trial court ordered Woodbridge to repay the funds it received on the basis of unjust enrichment.The Fifth Circuit reversed on the basis that restitution at common law is an equitable remedy and not a matter of legal right. Woodbridge was a bona fide creditor of Burrle and received the funds in good faith. Its right of reimbursement did not depend on the success of his claim in the settlement. Hence, Woodbridge is not liable in restitution to the settlement program.A copy of the Lexis copy of the decision is attached.Woodbridge Baric Pre-Settlement Funding_ L.L.C. v. Free
