June 4, 2013 4th Circuit published opinions

Westmoreland Coal Company v Cochran

Cochran filed for black lung benefits and the administrative Law Judge awarded benefits. The appeal board affirmed. The panel, 2-1, affirmed. The majority held that the administrative law judge properly considered the medical conclusions in the preamble to the governing regulations, properly placed the burden of proof on Cochran, and properly gave Westmoreland’s expert testimony less weight as it was directed at clinical pneumoconiosis not legal pneumoconiosis. The majority also held there was sufficient supporting evidence from Cochran’s expert that coal dust was a contributing cause to Cochran’s lung disorder. The dissent argued that Cochran’s expert testimony was based on speculation and that the administrative law judge incorrectly used the preamble to cast doubt on Westmoreland’s expert testimony which covered both types of pneumoconiosis.

SG Homes Associates, LP v Marinucci

Marinucci did work on a building project for SG. As conditions o f the contract, Marinucci agreed to purchase a performance bond and use funds from the contract only to pay subcontractors and suppliers. He never purchased a bond and used the funds to pay other creditors in addition to subcontractors and suppliers. SG discovered these facts and cancelled the contract. Marinucci filed for bankruptcy. After an adversary proceeding, the bankruptcy court ruled that Marinucci committed fraud by promising to obtain a bond with no intention of obtaining one and by falsely certifying that he used SG funds to pay subcontractors and suppliers. Thus SG’s bankruptcy claim was not dischargeable. The district court affirmed. The panel affirmed. It held that the bankruptcy court did not err in finding that SG reasonably relied on Marinucci’s payment certifications because Marinucci testified that he understood the contract and Maryland law required him to pay subcontractors and suppliers with SG funds and SG would have stopped payment if he had not signed the certifications. The panel also held that the bankruptcy court did not err in finding damages from Marinucci’s fraud as SG paid Marinucci for work and then paid the subcontractors and suppliers for the same work. Marinucci stipulated to these payments and the bankruptcy court correctly found that Marinucci’s unsupported assertions that SG owed him money failed to prove any offset to SG’s payment.

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