NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with
Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted May 12, 2010*
Decided May 14, 2010
Before
KENNETH F. RIPPLE, Circuit Judge
ANN CLAIRE WILLIAMS, Circuit Judge
JOHN DANIEL TINDER, Circuit Judge
No. 09‐3772
ANTHONY WILLIAMS, Appeal from the United States District Court
Plaintiff‐Appellant, for the Northern District of Indiana,
Hammond Division.
v.
No. 4:06‐CV‐121‐TLS
ROB HAINJE,
Defendant‐Appellee. Theresa L. Springmann,
Judge.
O R D E R
Anthony Williams filed for bankruptcy without disclosing his pending civil rights
suit, the subject of this appeal. Rob Hainje, the defendant in that suit, is a police officer who
released a police dog that mauled Williams during an arrest. Hainje moved for summary
judgment on grounds that judicial estoppel prevented Williams from prosecuting a claim
that he failed to disclose to his creditors. The district court entered summary judgment in
favor of Hainje. We affirm.
*
After examining the briefs and the record, we have concluded that oral
argument is unnecessary. Thus, the appeal is submitted on the briefs and the record.
See FED. R. APP. P. 34(a)(2)(c).
No. 09‐3772 Page 2
This suit had been pending for nearly two years when Williams filed for Chapter 13
protection in May 2008. But Williams failed to disclose the suit in his bankruptcy filings,
even though in the bankruptcy court he sought relief from medical debts arising from the
dog attack. Months later, without having been informed of the lawsuit, the bankruptcy
court confirmed a reorganization plan that substantially reduced his debts. Two months
after that, still in the dark about the suit, the bankruptcy court entered an order modifying
the plan, which continued to offer debt relief.
When Hainje discovered the omission, he moved for summary judgment on judicial
estoppel grounds. He argued that Williams’s failure to disclose the suit precluded him from
pursuing it. Williams responded by amending his personal property schedules to account
for the lawsuit and then argued that judicial estoppel does not bar a chose in action if it is
disclosed while the bankruptcy case was still pending.
The district court entered summary judgment in favor of Hainje. Having determined
that Williams had intentionally concealed the lawsuit, the court concluded that judicial
estoppel precluded him from pursuing it for his own benefit. The court noted, however,
that a Chapter 13 debtor has standing to sue on behalf of the bankruptcy estate. See Cable v.
Ivy Tech State College,
200 F.3d 467, 474‐75 (7th Cir. 1999). But because the court had no
reason to believe that Williams had been doing so, the court entered summary judgment
against him.
While this case was pending on appeal, Williams defaulted on his reorganization
payments and his Chapter 13 case was dismissed, a fact about which we may take judicial
notice. In re Consol. Indus. Corp.,
397 F.3d 524, 527 (7th Cir. 2005). The dismissal means that,
on appeal, Williams is pursuing this action on his own behalf, as the bankruptcy estate no
longer exists.
On appeal Williams contends that the district court erred in judicially estopping him
from pursuing the claim for himself because his omission was inadvertent and the result of
bad legal advice. Although judicial estoppel is a matter of discretion, pure questions of law
receive plenary review, see Commonwealth Ins. Co. V. Titan Tire Corp.,
398 F.3d 879, 887 (7th
Cir. 2004), and factual determinations are reviewed for clear error, see Robinson v. Tyson
Foods,
595 F.3d 1269, 1273 (11th Cir. 2010); United States v. Are,
590 F.3d 499, 504 (7th Cir.
2009).
The district court’s use of judicial estoppel was not an abuse of discretion. Broadly
speaking, judicial estoppel precludes a party from abandoning positions after they have
prevailed on them in earlier litigation. Zedner v. United States,
547 U.S. 489, 504 (2006);
No. 09‐3772 Page 3
Carnegie v. Household Int’l, Inc.,
376 F.3d 656, 660 (7th Cir. 2004). In the bankruptcy setting, a
debtor who receives a discharge by concealing the existence of a chose in action cannot wait
until the bankruptcy ends and then pursue the claim. See Cannon‐Stokes v. Potter,
453 F.3d
446, 448 (7th Cir. 2006).
Williams never received a discharge because the bankruptcy court eventually
dismissed his case, and in that respect his case differs from Cannon‐Stokes. The difference,
however, is immaterial. Williams still received significant financial benefits during his short
stint in bankruptcy. His filing, for instance, triggered the automatic stay, see
11 U.S.C. §
362, holding creditors at bay for some 20 months and thereby enabling him to keep his
house and car, and to avoid new interest charges on his mortgage arrearage while he
pursued his undisclosed civil‐rights suit. In the meantime, the bankruptcy court confirmed
a reorganization plan that temporarily relieved Williams of most of his debts without
further interest or penalty.
Williams’s debts may not have been permanently wiped away, but a debtor who
receives even preliminary benefits from concealing a chose in action from his creditors can
still be estopped from pursuing the suit in the future. See Krystal Cadillac‐Oldsmobile GMC
Truck v. General Motors, Corp.,
337 F.3d 314, 319 n.6 (3d Cir. 2003)(affirming the application
of judicial estoppel to an undischarged debtor); In re Coastal Plains, Inc.,
179 F.3d 197, 206
(5th Cir. 1999); Oneida Motor Freight, Inc., v. United Jersey Bank,
848 F.2d 414, 415 (3d Cir.
1988); see also Carnegie,
376 F.3d at 660 (judicial estoppel applies where party received
temporary benefit of an approved class settlement); Hamilton v. State Farm Fire & Casualty
Co.,
270 F.3d 778, 784 (9th Cir. 2001)(judicial estoppel was appropriate even though the
debtor’s discharge had been vacated). To hold otherwise would give debtors an incentive to
game the bankruptcy system. See Eastman v. Union Pac. R.R. Co.,
493 F.3d 1151, 1159 (10th
Cir. 2007); Krystal Cadillac‐Oldsmobile GMC Truck,
337 F.3d at 325. Debtors could take a
wait‐and‐see approach to disclosure by prosecuting an undisclosed claim while waiting to
see how favorably the bankruptcy proceeding unfolds before discharge. That approach
would undermine both the primary aim of judicial estoppel, which is to protect the integrity
of the judicial process, see New Hampshire v. Maine,
532 U.S. 742, 749‐50 (2001); Biesek v. Soo
Line R.R. Co.,
440 F.3d 410, 412‐13 (7th Cir. 2006); Carnegie,
376 F.3d at 660, and the
bankruptcy law’s goal of unearthing all assets for the benefit of creditors.
Williams’s argument that his omission was inadvertent is unavailing. He pleads
ignorance, claiming he did not intend to conceal the lawsuit. His bankruptcy counsel, he
says further, knew about the civil‐rights suit, and his counsel in the civil‐rights suit knew
about the bankruptcy case. The Supreme Court has indeed recognized that judicial estoppel
may be inappropriate where there is evidence that nondisclosure was inadvertent. New
Hampshire,
532 U.S. at 753. But here the district court did not clearly err in finding that the
No. 09‐3772 Page 4
evidence suggests the opposite. When Williams filed for bankruptcy, his suit against Hainje
was active and well into discovery. He failed to disclose the potentially lucrative claim
twice, both times by personally signing incomplete disclosure declarations under penalty of
perjury. His civil‐rights suit was on his mind as he prepared those disclosures because he
reported as unsecured debt the medical expenses that he allegedly incurred from the
underlying injury. From those facts, the district court reasonably inferred that Williams
made a knowing misrepresentation. See Eastman,
493 F.3d at 1157; Cannon‐Stokes,
453 F.3d
at 448. And blaming his lawyers’ advice for his own incomplete disclosure is legally
unavailing. Cannon‐Stokes,
453 F.3d at 448‐49.
Accordingly, we AFFIRM the judgment of the district court.
