Yevonne Van Horn v. Mark Martin ( 2016 )

United States Court of Appeals
For the Eighth Circuit
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No. 15-1710
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Yevonne Van Horn
lllllllllllllllllllll Plaintiff - Appellant
v.
Mark Martin, in his Official Capacity of Arkansas Secretary of State; Darrell S. Hedden
lllllllllllllllllllll Defendants - Appellees
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Appeal from United States District Court
for the Eastern District of Arkansas - Pine Bluff
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Submitted: December 16, 2015
Filed: February 11, 2016
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Before MURPHY, BENTON, and KELLY, Circuit Judges.
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MURPHY, Circuit Judge.
Yevonne Van Horn brought this action against the Arkansas Secretary of State
and the chief of police for the State Capitol Police, alleging employment
discrimination in violation of Title VII and retaliation in violation of the Equal
Protection Clause of the Fourteenth Amendment. The district court1 granted summary
judgment for the defendants, concluding that Van Horn's failure to disclose her claims
in her Chapter 13 bankruptcy proceedings judicially estopped her from pursuing
them. Van Horn appeals, and we affirm.
Van Horn began working as a corporal in the State Capitol Police, a division
of the Arkansas Secretary of State's Office, in 1999. In August 2007 Van Horn filed
for Chapter 13 bankruptcy and the bankruptcy court confirmed her plan in February
2008. Van Horn's employment was terminated in October 2011 after she failed to
pass a required firearms proficiency test. She appealed that decision internally and
was reinstated with back pay in November 2011 after receiving intensive training and
passing a proficiency test. Soon thereafter she received a verbal warning for violating
protocol when turning in her weapon and received an annual twenty eight category
performance evaluation which included two unsatisfactory scores. Van Horn then
filed a charge of discrimination with the EEOC alleging race and sex discrimination
based on the October 2011 termination, her verbal warning, and her performance
evaluation. The EEOC issued Van Horn a right to sue letter, but she did not initiate
an action and never disclosed her claims to the bankruptcy court.
Van Horn was again terminated in June 2012 for falling asleep in her patrol car.
Six days later she filed a second charge of discrimination with the EEOC alleging
retaliation and discrimination on the basis of race and sex. Van Horn unsuccessfully
attempted to mediate her claims in January 2013 and then made her last bankruptcy
payment on February 19, 2013. The Department of Justice issued her a right to sue
letter the next day. She filed this action in March 2013, alleging employment
discrimination and retaliation. One month after filing this lawsuit, the bankruptcy
court discharged $18,391.49 of Van Horn's unsecured debts. In 2014 the Arkansas
1
The Honorable D. Price Marshall, Jr., United States District Judge for the
Eastern District of Arkansas.
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Secretary of State and the chief of the State Capitol Police moved for summary
judgment. The district court granted summary judgment, concluding that Van Horn
did not have standing and was judicially estopped from asserting her claims because
she had not informed the bankruptcy court about her federal lawsuit. Van Horn
appeals.
We review a district court's application of judicial estoppel for an abuse of
discretion. Stallings v. Hussmann Corp., 447 F.3d 1041, 1046 (8th Cir. 2006).
Judicial estoppel is an equitable doctrine which "prevents a party from asserting a
claim in a legal proceeding that is inconsistent with a claim taken by that party in a
previous proceeding." New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting 18
Moore's Federal Practice § 134.30, p. 134-62 (3d ed. 2000)). We look to three factors
to determine whether judicial estoppel should apply: (1) whether a party's later
position is "clearly inconsistent" with its previous position; (2) whether the party
succeeded in persuading the first court to accept its position; and (3) "whether the
party seeking to assert an inconsistent position would derive an unfair advantage . . .
if not estopped." Stallings, 447 F.3d at 1047 (quoting New Hampshire, 532 U.S. at
750–51).
We concluded in Jones v. Bob Evans Farms, Inc., No. 15-2068, slip op. at 3–7
(8th Cir. Jan. 26, 2016) that a Chapter 13 debtor who had not disclosed an
employment discrimination lawsuit arising during the pendency of his bankruptcy
proceedings was judicially estopped from pursuing his claims because all three
estoppel factors supported its application. First, the debtor's "failure to amend his
bankruptcy schedules to include his discrimination claims 'represented to the
bankruptcy court that no such claims existed'" and it was therefore clearly
inconsistent to pursue those claims. Id. at 4 (quoting Stallings, 447 F.3d at 1049).
Second, the bankruptcy court adopted the debtor's position that his discrimination
claim did not exist when it discharged his unsecured debts. Id. at 5. Third, the debtor
could have received an unfair advantage by concealing his claims because if he had
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disclosed his claims the bankruptcy "trustee could have moved the bankruptcy court
to order him to make the proceeds from any potential settlement available to his
unsecured creditors." Id. at 6.
Because Van Horn also failed to amend her Chapter 13 bankruptcy schedules
to include her employment discrimination lawsuit which arose during the pendency
of her bankruptcy proceedings, all three factors support the application of judicial
estoppel in this case. First, Van Horn's employment discrimination suit was clearly
inconsistent with her failure to amend her Chapter 13 bankruptcy schedules to include
such claims. Second, the bankruptcy court adopted her representation that no claims
existed when it discharged $18,391.49 of her unsecured debt. Third, she could have
received an unfair advantage because her trustee could have asked the bankruptcy
court to order her to make any proceeds from a potential settlement available to her
unsecured creditors. The district court did not abuse its discretion in discrediting the
after the fact affidavit by the trustee as "speculating." See, e.g., United States v.
Fairchild, 122 F.3d 605, 613 (8th Cir. 1997) (noting that credibility determinations
are at the discretion of the district court and entitled to great deference on appeal).
Van Horn argues that failure to amend her bankruptcy schedules was a good
faith mistake so judicial estoppel should not apply. If a debtor does not have
knowledge of undisclosed claims or lacks a motive to conceal them, any failure to
disclose them would be a good faith mistake. See Stallings, 447 F.3d at 1048. Here,
it is undisputed that Van Horn had knowledge of her claims while her bankruptcy case
was pending. Our court has recognized in the past that a Chapter 13 debtor who receives
a right to sue letter while her bankruptcy case is pending has a motive to conceal her
employment discrimination claims from the bankruptcy court. Id. at 1048. The district
court therefore did not err in finding that Van Horn's failure to disclose her claims
was not a good faith mistake. Van Horn is thus judicially estopped from pursuing her
claims.
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For these reasons we affirm the judgment of the district court.
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