IN THE UNITED STATES BANKRUPTCY COURT

FOR THE WESTERN DISTRICT OF PENNSYLVANIA

IN RE: :

:

DKW LAW GROUP, PC, :

: Bankruptcy No. 03-28186-MBM

 Debtor. :

................................................................:...............................................................

Natalie Lutz Cardiello, : Chapter 7

Plaintiff-Trustee, :

:

v. : Adversary No. 05-2756-MBM

:

Mylan Laboratories, Inc., :

Defendant. :

MEMORANDUM AND ORDER OF COURT

AND NOW, this 15th day of September, 2005, upon consideration of (a)

the adversary complaint brought by Natalie Lutz Cardiello, the Chapter 7 Trustee

in the instant bankruptcy case (hereafter “the Trustee”) and plaintiff herein,

wherein the Trustee pleads five counts, two of which are for fraudulent

conveyance and one each for breach of contract, conversion, and unjust

enrichment, and (b) the Rule 12(b)(6) motion to dismiss brought by Mylan

Laboratories, Inc. (hereafter “Mylan”), the instant defendant;

and subsequent to notice and a hearing on Mylan’s motion to dismiss held

on September 14, 2005,

it is hereby ORDERED, ADJUDGED, AND DECREED that:

(a) Mylan’s motion to dismiss is DENIED WITH PREJUDICE with respect to

the Trustee’s two fraudulent conveyance causes of action (Counts 1

and 4),

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(b) Mylan’s motion to dismiss is GRANTED with respect to the Trustee’s

causes of action for breach of contract, conversion, and unjust

enrichment (Counts 2, 3 and 5), and

(c) to the extent that the Trustee’s two fraudulent conveyance actions are in

any way predicated upon duress or coercion that the instant debtor

(hereafter “the Debtor”) is perhaps alleged to have been subjected to by

Mylan, such fraudulent conveyance actions shall fail.

The Court must dismiss the Trustee’s breach of contract action because,

the Court holds in turn, the Trustee, in her complaint, pleads all of the facts that

would serve to establish the presence of an accord and satisfaction between the

Debtor and Mylan. In so holding, the Court follows the decision in Occidental

Chemical Corp. v. Environmental Liners, Inc., 859 F.Supp. 791, 793-94 (E.D.Pa.

1994) (citing Cohen v. Sabin, 307 A.2d 845, 849 (Pa. 1973)), which decision, this

Court holds, is indistinguishable from the instant matter because (a) “[a]n offer to

pay any portion of ... [an unliquidated or disputed] claim as payment in full for the

whole disputed claim is valid consideration, see Id. at 794, and (b) such offer to

pay, and thus valid consideration, is found to have existed in both Occidental

Chemical and in the instant matter. The Court rejects the Trustee’s attempt to

distinguish Occidental Chemical from the instant matter on the basis that, in

contrast to Occidental Chemical, the partial payment in the instant matter may

have been for a distinct liability not part of the disputed debt because, as the

Court understands it, the parties herein do not contest that the invoice that was

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the subject of controversy between the Debtor and Mylan contained only charges

incurred under one standing contract of retention between the parties.

Because of the presence of an accord and satisfaction between the

parties, the Trustee’s causes of action for conversion and unjust enrichment must

also necessarily fail. The Trustee’s conversion action also fails because (a) no

chattel, including money, was taken or interfered with by Mylan, and (b) the

Debtor’s account receivable due from Mylan, as a matter of law, was not

converted by Mylan by virtue of its actions – i.e., an account receivable cannot be

the subject of an action for conversion.

IN SUMMARY, Mylan’s motion to dismiss is (a) DENIED WITH

PREJUDICE with respect to the Trustee’s two fraudulent conveyance causes

of action (Counts 1 and 4), and (b) GRANTED with respect to the Trustee’s

causes of action for breach of contract, conversion, and unjust enrichment

(Counts 2, 3 and 5).

BY THE COURT

 /s/ 

M. BRUCE McCULLOUGH,

U.S. Bankruptcy Judge

cm: Richard A. Finberg, Esq.

Bradley S. Gelder, Esq.

Malakoff Doyle & Finberg, P.C.

The Frick Building, Suite 200

Pittsburgh, PA 15219

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Stanley E. Levine, Esq.

Campbell & Levine

1700 Grant Building

Pittsburgh, PA 15219

(Case Administrator to serve)

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