Johnson v. Fuller Family Holdings, LLC , 91 N.E.3d 537 ( 2017 )

SIXTH DIVISION
December 8, 2017
No. 1-16-2130
2017 IL App (1st) 162130IN THE
APPELLATE COURT OF ILLINOIS
FIRST JUDICIAL DISTRICT
GREGORY JOHNSON and )
NATASHA JOHNSON, ) Appeal from the
) Circuit Court of
Plaintiffs-Appellants, ) Cook County.
)
v. )
)
FULLER FAMILY HOLDINGS, LLC, a Delaware )
Limited Liability Company, ABM JANITORIAL )
SERVICES-MIDWEST, LLC, a Delaware Limited ) No. 15 L 11122
Liability Company, 30 N. LASALLE, L.P., a )
Delaware Limited Partnership, and TISHMAN )
SPEYER PROPERTIES, L.P., a Delaware Limited )
Liability Partnership, ) Honorable
) William E. Gomolinski,
Defendants-Appellees. ) Judge Presiding.
JUSTICE CONNORS delivered the judgment of the court, with opinion.
Presiding Justice Hoffman and Justice Delort concurred in the judgment and opinion.
OPINION
¶1 Plaintiffs, Gregory Johnson and Natasha Johnson, appeal from the trial court’s order that
granted the motion to dismiss brought by defendants, ABM Janitorial Services-Midwest, LLC
(ABM), Fuller Family Holdings, LLC (Fuller), 30 N. LaSalle, L.P. (30 N. LaSalle), and Tishman
Speyer Properties, L.P. (Tishman) (hereinafter collectively referred to as defendants). The trial
court found that due to plaintiffs’ failure to disclose their personal injury claim during their
bankruptcy proceeding, judicial estoppel barred plaintiffs from bringing the instant lawsuit.
Plaintiffs assert that the trial court’s decision was in error because their failure to disclose was
No. 1-16-2130
inadvertent. We find that the record before us does not evince an intent to deceive or mislead by
plaintiffs. Therefore, we reverse the decision of the trial court, and remand for further
proceedings.
¶2 BACKGROUND
¶3 The underlying case here stems from the personal injuries suffered by plaintiff Gregory
Johnson as a result of a slip and fall in a stairwell at work. On December 15, 2010, Gregory was
working as a security guard for Whelan Security of Illinois, Inc. (Whelan), at 30 North LaSalle
Street in Chicago, which required him to patrol the exterior of the building. While on patrol,
Gregory fell due to the allegedly negligently-maintained condition of the stairs. As a result of his
work-related injury, Gregory filed a workers’ compensation claim against Whelan on August 25,
2011, and received benefits.
¶4 On December 14, 2012, plaintiffs filed their complaint in the circuit court of Cook
County alleging negligence against defendants, specifically that defendants negligently owned,
operated, managed, maintained, or controlled the premises. Plaintiffs’ complaint was brought by
Gregory for his personal injuries and by Gregory’s wife, Natasha, for her loss of consortium.
¶5 Prior to setting forth the pertinent procedural facts from the circuit court, we find it
necessary to address plaintiffs’ bankruptcy proceedings. On June 14, 2012, six months prior to
filing the instant personal injury lawsuit, plaintiffs jointly filed a petition for chapter 7
bankruptcy (11 U.S.C. § 101 (2006)) in the United States District Court for the Northern District
of Illinois and were represented by Peter Francis Geraci Law, LLC, during their bankruptcy
proceeding. Plaintiffs’ petition included various “schedules” that contained their assets and
liabilities. One of the disclosures in Schedule B, which covered personal property, required
plaintiffs to describe, “[o]ther contingent and unliquidated claims of every nature, including tax
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No. 1-16-2130
refunds, counter claims of the debtor, and rights to set off claims.” In response to this item,
plaintiffs listed: “Workers compensation case with Patricia Lannon 312.236.5412.” Plaintiffs
listed the value of that case as “[u]nknown.” Both plaintiffs electronically signed the disclosures
under penalty of perjury.
¶6 On August 8, 2012, a meeting of the creditors occurred, during which plaintiffs were
asked questions regarding their assets and liabilities by the bankruptcy trustee, Mr. Horace Fox.
In relevant part, the following exchange occurred between Mr. Fox and Gregory:
“MR. FOX [bankruptcy trustee]: In the last 2 years, has either of you suffered any
pers—physical injury that would allow you to sue the person that caused you that damage
and make them pay you money?
MR. JOHNSON [plaintiff]: Yes, I have.
MR. FOX: How long ago did that occur?
MR. JOHNSON: Worker’s [c]ompensation. It happened in, uh—
MR. FOX: Did you say [w]orkers [c]ompensation?
MR. JOHNSON: Yes.
MR. FOX: Okay.
MR. JOHNSON: December—
MR. FOX: We don’t have to have this conversation because you get to keep
100% of any [w]orkers [c]ompensation award.
MR. JOHNSON: Okay.
MR. FOX: Okay. But I appreciate your honesty.”
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On October 10, 2012, approximately two months prior to the filing of plaintiffs’ personal injury
lawsuit in circuit court, plaintiffs received a discharge in bankruptcy and their bankruptcy case
was closed.
¶7 As previously stated, plaintiffs’ circuit court complaint was filed on December 14, 2012.
Both plaintiffs gave deposition testimony on November 11, 2013. Natasha testified first, with her
deposition beginning at 1 p.m. Gregory testified after Natasha, with his deposition beginning at
2:50 p.m., and ending after 8 p.m. During his deposition, Gregory testified that he had filed two
lawsuits prior to the instant personal injury case: a personal injury claim related to a 2000
motorcycle accident and a property damage claim related to a 2002 car accident. Gregory also
testified that he and his wife had filed for personal bankruptcy. When asked if the instant lawsuit
had been disclosed as an asset in the bankruptcy, Gregory responded, “No. It wasn’t, no.”
¶8 Most relevant to the issues raised in this appeal, is the following exchange from
Gregory’s deposition:
“Q. While you may not have been asked it by the bankruptcy trustee, did you
disclose the fact that you had been involved in an accident that could potentially result in
a third-party action against other entities during the bankruptcy proceedings?
MR. CANTWELL [plaintiffs’ attorney]: Objection. If he disclosed the
workmen’s comp claim, that certainly is about—There’s no other workmen’s comp
claim he ever made, I don’t think. Not that I know of.
Q. [Defendant ABM’s attorney:] Do you understand my question?
A. You’re asking me if I filed a lawsuit for workers’ compensation—
Q. No. What I’m asking is, you testified that you disclosed that you had a
workers’ comp action—
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No. 1-16-2130
A. That’s right.
Q. —proceeding with respect to this incident. Did you disclose that you might
potentially file a lawsuit with respect to something non-workers’ compensation resulting
from the December 15, 2010, accident regardless of whether you were asked it by the
bankruptcy trustee or not?
A. I told him I had no idea. I didn’t know if I would do anything because at that
time I didn’t even have my surgery. 1
Q. Okay.
A. When I first talked to a—the bankruptcy lawyers, I had no idea that I would
even file a lawsuit, period.
Q. But you had been injured as of at least that time, correct?
A. Yes.
Q. And at that point in time that you consulted the—Do you recall when exactly
you first retained the law firm of Peter Francis Geraci to represent you in the bankruptcy
proceeding?
A. Not offhand because they give you a consultation and they give you—they set
up another meeting where you confirm everything and then you go through another
process of them showing you all the records of whatever you owe, funds that you want to
claim on you bankruptcy and so forth and so on.”
¶9 On November 13, 2013, two days after plaintiffs’ depositions, two of defendants, ABM
and Fuller, filed an emergency motion to dismiss pursuant to the doctrines of standing and
judicial estoppel.
1
Earlier in the deposition, Gregory testified that he had surgery on his shoulder in August 2011.
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No. 1-16-2130
¶ 10 On December 13, 2013, plaintiffs filed a motion to reopen their bankruptcy case in
federal court. The motion asked that their case be reopened so as to allow plaintiffs to amend
their bankruptcy schedules to include their personal injury claim that was then pending in circuit
court. The motion stated that plaintiffs “believed that they had disclosed the unliquidated
contingent claims by listing the [w]orker’s [c]ompensation claim on their [s]chedules,” and
explained that “[n]o claim against any third parties had been filed or was pending in any [c]ourt
at the time of [plaintiffs’] filing of their [bankruptcy petition] or during the pendency of the
[b]ankruptcy case, and any failure by [plaintiffs] to disclose the potential third party claims was
inadvertent and an honest mistake.” On December 20, 2013, the bankruptcy court granted 2
plaintiffs’ motion to reopen their case and allow the trustee and the court to address the
disposition of plaintiffs’ circuit court personal injury lawsuit.
¶ 11 On March 17, 2014, the circuit court placed plaintiffs’ case on the bankruptcy stay
calendar.
¶ 12 On July 29, 2014, the parties in the bankruptcy case, including the trustee and plaintiffs’
attorney for their personal injury case, appeared before the bankruptcy court. The trustee
informed the court that he had filed a no-asset report, and that the case was ready to be reclosed.
It was then brought to the court’s attention that plaintiffs had a pending state court case. The
trustee stated that they had not sought to administer that asset other than discussions with
2
We note that the copy of the bankruptcy court’s December 20, 2013, order that is contained in
the record states: “The Debtors Motion to Re-Open Bankruptcy Case is granted/denied.” Neither
“granted” nor “denied” is scratched-out. However, the order subsequently states, inter alia, that the
debtors are granted leave to amend their schedules to include the contingent claims currently pending
before the circuit court and that the matter was set for status on January 7, 2014. The same copy of the
order appears in the bankruptcy court’s online records but the “docket text” contained in the online record
references the order as “granting motion to reopen Chapter 7 [c]ase.” It is well settled that “we may take
judicial notice of public documents which are included in the records of other courts.” Seymour v. Collins,
2015 IL 118432, ¶ 6 n.1. Based on the context of the order and the online docket text, it is clear that
plaintiffs’ motion to reopen was granted.
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No. 1-16-2130
defendants’ counsel regarding a possible settlement of plaintiffs’ personal injury claim, however
“[t]hey were unwilling to offer any kind of settlement that would yield a dividend for the estate
after payment of liens, attorney fees and exemptions to the debtors.” Additionally, the trustee
acknowledged that there was a controversy regarding whether plaintiffs properly disclosed their
personal injury claim, and plaintiffs’ counsel informed the court that defendants filed a motion to
dismiss based on judicial estoppel in the personal injury action. The court responded that judicial
estoppel would not apply against the trustee but asked if the trustee intended to nonetheless
abandon the claim. The trustee confirmed his intent to abandon, explaining that:
“Effectively, we are because we anticipate that, first of all, there are certain
defenses that the defendants have raised that they would assert. Assuming that the
debtors or the trustee as plaintiff could get past there, there’s going to be adjudication on
the topic that you’re discussing with the counsel over whether the trustee abandoned it
when the case was first closed.”
The court expressed its belief that “[i]t would seem to me they would have no incentive to give
an attractive offer to the trustee.” The trustee also acknowledged defendants’ position that
plaintiffs do not have a meritorious case. Plaintiffs’ counsel asked that plaintiffs be allowed to
file a motion to amend their assets and liabilities schedules nunc pro tunc to the date of their
original disclosures. The court did not allow plaintiffs’ oral motion, stating, “Counsel, I’m
really—I’m not incentivized to help—a party who did not reveal a cause of action.”
¶ 13 Plaintiffs’ circuit court case remained inactive until November 2, 2015, when it was
removed from the stay calendar.
¶ 14 On February 16, 2016, defendants filed a renewed joint motion to dismiss based on the
doctrines of standing and judicial estoppel. Their motion was brought pursuant to section 2-
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No. 1-16-2130
619(a)(9) of the Code of Civil Procedure (Code), which allows a defendant to move for dismissal
of an action when “the claim asserted against defendant is barred by other affirmative matter
avoiding the legal effect of or defeating the claim.” 735 ILCS 5/2-619(a)(9) (West 2014). Their
renewed motion was similar to their previously filed motion to dismiss with a few notable
exceptions: (1) defendants’ renewed motion was not brought as an emergency, (2) defendants’
renewed motion cited additional portions of the record that came to light through the reopened
bankruptcy proceedings, and (3) defendants’ renewed motion addressed the recently decided
case of Seymour v. Collins, 2015 IL 118432. As to the issue of standing, defendants’ motion
argued that plaintiffs lacked standing because, although the trustee abandoned plaintiffs’
personal injury claim, the claim remained the exclusive property of the trustee. Additionally,
defendants contended that the doctrine of judicial estoppel barred plaintiffs’ personal injury
claim because plaintiffs failed to list it on their bankruptcy disclosures as an unfiled contingent
claim.
¶ 15 Plaintiffs filed their response to defendants’ motion on March 30, 2016, asserting, in
relevant part, that defendants failed to present clear and convincing evidence that plaintiffs
should be judicially estopped from proceeding with their claims. Attached to plaintiffs’ response
were affidavits from both Gregory and Natasha that were substantially similar. Both affidavits
contained the attestation that at the time plaintiffs filed their bankruptcy petition, “they had not
consulted with any attorneys about filing any third party lawsuit against the [d]efendants in the
case at bar, and had no idea if they were going to or could file a lawsuit other than the workers’
compensation case in connection with the December 15, 2010 incident.” Additionally, plaintiffs’
affidavits stated that they “believed that [they] had disclosed all personal injury claims and
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No. 1-16-2130
‘unliquidated contingent claims’ on the [b]ankruptcy [s]chedules by disclosing the workers’
compensation case.”
¶ 16 Defendants filed a reply in support of their motion to dismiss on April 12, 2016.
¶ 17 The circuit court conducted oral argument on defendants’ motion to dismiss on May 4,
2016, and issued its memorandum order and opinion on June 30, 2016. The court’s order
recognized that the law requires a debtor to disclose any conceivable interests, including
speculative future interests, and thus determined that plaintiffs did not satisfy their duty under
federal law to disclose all claims. On the issue of standing, the court noted that “[p]laintiffs do
not identify a single Illinois case standing for the proposition that the abandoned claim reverted
back to [p]laintiffs retroactively, as if the bankruptcy had never been filed[, therefore] ***
[p]laintiffs did not have standing to file their present claims.” Then court’s order further stated
that although it found that plaintiffs lacked standing, it would also address defendants’ arguments
regarding judicial estoppel.
¶ 18 On the issue of judicial estoppel, the court’s order determined that the doctrine applied to
bar plaintiffs’ action. In determining whether the requirements for judicial estoppel were present,
the court noted that even if plaintiffs’ error in failing to disclose their personal injury claim was
corrected through the reopening of the bankruptcy case, such a correction does not erase
plaintiffs’ initial position that they did not possess that asset. Significantly, the court stated that
“[t]he bankruptcy judge also did not grant [p]laintiffs’ motion to amend the bankruptcy schedule
nunc pro tunc, and there is not support for [p]laintiffs’ contention that the trustee’s abandonment
of the claims retroactively cures [p]laintiffs’ initial failure to disclose.” The court found that
“there is sufficient evidence to convince this court that it is not punishing [p]laintiffs for an
innocent mistake.” Also, the court distinguished this case from Seymour, finding that “[i]n the
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No. 1-16-2130
present case, [p]laintiffs, through their bankruptcy counsel, knew to include Gregory’s workers’
compensation claim on the bankruptcy schedule. Gregory Johnson also testified that he knew of
the claim but did not think he would file it when he was making his bankruptcy disclosures.”
¶ 19 The court’s order ultimately stated, “Defendants ABM Janitorial Services-Midwest LLC
and Fuller Family Holdings, LLC’s Joint Motion to Dismiss Pursuant to Doctrines of Standing
and Judicial Estoppel is GRANTED, and Plaintiffs’ Complaint is DISMISSED WITH
PREJUDICE.” The order also contained language pursuant to Illinois Supreme Court Rule
304(a) (eff. Mar. 8, 2016).
¶ 20 Defendants filed their timely notice of appeal on August 1, 2016.
¶ 21 ANALYSIS
¶ 22 Jurisdiction
¶ 23 Prior to addressing the merits of this appeal, we must first address an issue regarding the
proper parties to this appeal and our jurisdiction. We have an independent duty to consider the
issue of jurisdiction and dismiss the appeal where our jurisdiction is lacking. Palmolive Tower
Condominiums, LLC v. Simon, 409 Ill. App. 3d 539, 542 (2011).
¶ 24 The circuit court’s June 30, 2016, order contained an introduction that stated:
“This matter comes for ruling on Defendants ABM Janitorial Services-Midwest
LLC and Fuller Family Holdings, LLC’s Motion to Dismiss Plaintiffs’ Complaint
pursuant to 735 ILCS 5/2-619(a)(9) and the doctrines of standing and judicial estoppel.”
Similarly, the judgment line of the court’s June 30, 2016, order stated:
“Therefore, based upon the pleadings, briefs, and case law cited above,
Defendants ABM Janitorial Services-Midwest LLC and Fuller Family Holdings, LLC’s
Joint Motion to Dismiss Pursuant to the Doctrines of Standing and Judicial Estoppel is
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No. 1-16-2130
GRANTED, and Plaintiffs’ Complaint is DISMISSED WITH PREJUDICE. The court
further finds that there is no just reason for delaying either enforcement or appeal of this
order pursuant to Rule 304(a).”
Notwithstanding the fact that 30 N. LaSalle and Tishman are not listed as movants in either the
introduction or the judgment line of the circuit court’s order from which this appeal stems, the
response brief in this appeal was filed on behalf of all four defendants. We find this perplexing
because the record does not contain any evidence that any defendant ever filed a motion to
modify or correct the circuit court’s June 30, 2016, order to include all four defendants rather
than ABM and Fuller only.
¶ 25 In their statement of jurisdiction, plaintiffs acknowledge that the June 30, 2016, order
contains Rule 304(a) language. Later in their brief, plaintiffs also stated that although all four
defendants jointly filed the motion to dismiss and all four defendants filed appearances in this
appeal, none sought to modify the court’s order to reflect that the motion to dismiss was granted
as to all defendants. Nonetheless, plaintiffs curiously assert that our jurisdiction exists pursuant
to Rules 301 and 303. Plaintiffs’ brief also points out that “[a] judgment for two of four
defendants, with a Rule 304(a) finding entered in the same [o]rder ***, has recognized
jurisdictional meaning, which should not be totally disregarded.” However, plaintiffs fail to
explain this proposition and provide no legal authority to support it.
¶ 26 In defendants’ statement of jurisdiction, defendants posit that “[t]he trial court’s June 30,
2016 [o]rder inadvertently omitted reference to the movants and, thus, to the dismissed parties,
30 N. LaSalle, L.P. and Tishman Speyer Properties, L.P.” Defendants cite two pages of the
record as support for this proposition, however, neither page evinces any inadvertence by the
court. In fact, the two pages that defendants cite are the first and last pages of the court’s June 30,
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No. 1-16-2130
2016, order; both of which list only ABM and Fuller as movants. Defendants then suggest that
the court’s Rule 304(a) language was unnecessary “because all [d]efendants moved for dismissal
jointly and thus all [d]efendants were dismissed per the trial court’s June 30, 2016 [o]rder.”
¶ 27 After a thorough review of the record, we find no evidence that any party ever attempted
to bring to the circuit court’s attention its purported inadvertence in omitting two defendants
from its order. “Failure to raise an issue in the trial court generally results in forfeiture of that
issue on appeal.” Huang v. Brenson, 2014 IL App (1st) 123231, ¶ 22. It is clear from the record
that both the motion to dismiss and the reply were brought on behalf of all four defendants.
Equally clear is the fact that the circuit court, for reasons unknown, believed only ABM and
Fuller were the movants. There are two separate occasions in the court’s June 30, 2016, order in
which the court refers to only ABM and Fuller as the movants. Additionally, as defendants
correctly noted in a somewhat ironic manner, there would be no need for Rule 304(a) language if
the court’s order had disposed of the entire litigation. We find that the court’s two references to
ABM and Fuller as the only movants, coupled with the court’s inclusion of Rule 304(a)
language, indicates that the court only intended to enter judgment in favor of two out of four
defendants. Because defendants never sought to correct what they deemed an inadvertent
mistake by the circuit court, they have forfeited such an argument on appeal. See id. As a result,
we only have jurisdiction over ABM and Fuller pursuant to Rule 304(a). The case as to 30 N.
LaSalle and Tishman remains pending in the circuit court. Thus, any subsequent reference to
“defendants” in this order only refers to ABM and Fuller, who are the only defendants over
which we have jurisdiction, and thus the only two defendants to which this order applies.
¶ 28 Standing
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¶ 29 Plaintiffs made two arguments for reversal in their opening appellate brief—the first of
which was based on the court’s erroneous determination that plaintiffs lacked standing.
Defendants’ response brief does not disagree with plaintiffs’ assertion that they did, in fact, have
standing to file their lawsuit, and goes so far as to acknowledge that there is “no issue presented
for review regarding standing.” The circuit court granted defendants’ motion to dismiss on the
doctrines of both standing and judicial estoppel. The court specifically noted that there was no
Illinois authority holding that upon abandonment, a claim reverted back to a bankruptcy debtor,
such as plaintiffs, retroactively to the claim’s date of filing. However, this court has since issued
its decision in Board of Managers of the 1120 Club Condominium Ass’n v. 1120 Club, LLC,
2016 IL App (1st) 143849, ¶ 42, wherein it held that “once a claim is assigned back to the debtor
by the bankruptcy trustee, standing revests in the debtor, as if the debtor had never lost standing
in the first place.” Due to the clear holding of Board of Managers, and defendants’ concession
that they “do not argue or rely upon lack of standing as a ground for affirmance,” we find the
trial court erred in determining that plaintiffs lack standing to bring their claim. Once the
bankruptcy trustee abandoned their personal injury claim, standing revested in plaintiffs as if
they had never lost it in the first place. As a result, we reverse the court’s decision granting
defendants’ motion to dismiss for lack of standing.
¶ 30 Judicial Estoppel
¶ 31 Plaintiffs contend that the trial court’s dismissal of their complaint on the basis of judicial
estoppel was also in error because the requirements for judicial estoppel were not met where the
court relied on defendants’ distortion of Gregory’s testimony and other mischaracterized
evidence.
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¶ 32 A motion to dismiss brought pursuant to section 2-619 of the Code admits all well-pled
allegations in the complaint and reasonable inferences to be drawn from the facts. In re Chicago
Flood Litigation, 176 Ill. 2d 179, 184 (1997). All pleadings and supporting documents must be
interpreted in the light most favorable to the nonmoving party. Id. at 189.
¶ 33 Judicial estoppel is an equitable doctrine invoked by the court at its discretion. Seymour,
2015 IL 118432, ¶ 36. “[T]he uniformly recognized purpose of the doctrine is to protect the
integrity of the judicial process by prohibiting parties from ‘deliberately changing positions’
according to the exigencies of the moment.” Id. (quoting New Hampshire v. Maine, 532 U.S.
742, 749-50 (2001)). The doctrine of judicial estoppel applies when a party takes a position,
benefits therefrom, and then attempts to take a contrary position in a subsequent proceeding. Id.“Courts have warned that the doctrine of judicial estoppel is an extraordinary doctrine that
should be applied with caution because it precludes a contradictory position without examining
the truth of either statement.” (Internal quotation marks omitted.) Pepper Construction Co. v.
Palmolive Tower Condominiums, LLC, 2016 IL App (1st) 142754, ¶ 64.
¶ 34 The framework for ascertaining whether judicial estoppel should bar a claim is a two-step
process. Seymour, 2015 IL 118432, ¶ 47. First, the trial court must determine whether the party
to be estopped has (1) taken two positions, (2) that are factually inconsistent, (3) in separate
judicial or quasi-judicial administrative proceedings, (4) intending for the trier of fact to accept
the truth of the facts alleged, and (5) succeeded in the first proceedings and received some
benefit. Id. Judicial estoppel must be proved by clear and convincing evidence. Id. ¶ 39.
¶ 35 Second, if all five factors are found present, the trial court must then exercise its
discretion in deciding whether to apply judicial estoppel. Id. ¶ 47. Numerous factors may inform
a court’s decision, such as “the significance or impact of the party’s action in the first
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proceeding, and *** whether there was an intent to deceive or mislead, as opposed to the prior
position having been the result of inadvertence or mistake.” Id. Our supreme court has
recognized that whether a party intended to deceive or mislead the court is “a critical factor in
the application of judicial estoppel,” and has also noted that even if all five prerequisites are
present, intent to deceive or mislead is not necessarily present because inadvertence or mistake
may account for positions taken and facts asserted. Id. ¶¶ 47, 54.
¶ 36 The parties disagree as to the applicable standard of review. Plaintiffs argue that our
review should be de novo, and defendants assert that we should review for an abuse of discretion.
Prior to the Seymour decision, “it [was] well settled that the standard of review when a trial court
rules on the application of judicial estoppel [was] an ‘abuse of discretion’ standard regardless of
the procedural manner in which it was raised.” Berge v. Mader, 2011 IL App (1st) 103778, ¶ 9.
However, in Seymour, the court created a distinction, specifically holding that “where the
exercise of [a court’s] discretion results in termination of the litigation, and that result is brought
about via the procedural mechanism of a motion for summary judgment, it follows, as well, that
we review that ruling de novo.” Seymour, 2015 IL 118432, ¶ 49; see also Barnes v. Lolling, 2017
IL App (3d) 150157, ¶ 21; Knott v. Woodstock Farm & Fleet, Inc., 2017 IL App (2d) 160329,
¶ 24. In the case before us, defendants brought a section 2-619 motion to dismiss, arguing
judicial estoppel barred plaintiffs’ personal injury lawsuit. Defendants’ motion was granted,
resulting in the dismissal with prejudice of plaintiffs’ complaint. Although the appeal in Seymour
stemmed from the trial court’s grant of a motion for summary judgment, we believe de novo
review should also apply in the context of a section 2-619 motion to dismiss. Like review of a
dismissal based on summary judgment, review of a section 2-619 dismissal is de novo.
Van Meter v. Darien Park District, 207 Ill. 2d 359, 368 (2003). Additionally, our supreme court
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has recognized that “[a section 2-619 dismissal] resembles the grant of summary judgment.”
Epstein v. Chicago Board of Education, 178 Ill. 2d 370, 383 (1997). Thus, our review is de novo.
¶ 37 Plaintiffs argue that the trial court erred in granting defendants’ motion to dismiss
because the requirements for judicial estoppel were not met. Plaintiffs point to the authority
relied on by the trial court, i.e., Berge, 2011 IL App (1st) 103778, and Dailey v. Smith, 292 Ill.
App. 3d 22 (1997), as outdated in light of the Seymour decision. Conversely, defendants assert
that all of the requirements were met. 3 Because our review is de novo, we perform the same
analysis a trial court would perform and we owe no deference to the trial court. Twyman v.
Department of Employment Security, 2017 IL App (1st) 162367, ¶ 20.
¶ 38 We must first determine whether the five prerequisites of judicial estoppel have been
established through clear and convincing evidence: (1) the party to be estopped has taken two
positions, (2) that are factually inconsistent, (3) in separate judicial or quasi-judicial
administrative proceedings, (4) intending for the trier of fact to accept the truth of the facts
alleged, and (5) succeeded in the first proceedings and received some benefit. Seymour, 2015 IL
118432, ¶¶ 39, 47.
¶ 39 As to the first and second prerequisites, it is clear that plaintiffs took two factually
inconsistent positions by not disclosing the possibility of their personal injury claim as an asset
in their federal bankruptcy proceedings, which essentially amounted to ignoring the claim’s
existence, and then subsequently bringing this personal injury action in circuit court. The third
3
We briefly note that defendants contend that plaintiffs “made no argument in their [a]ppellant
[b]rief that the trial court erred in finding that the five elements were satisfied, and thus [p]laintiffs have
waived this issue.” We find such a contention perplexing because plaintiffs’ opening brief contains a
section titled “THE REQUIREMENTS FOR JUDICIAL ESTOPPEL WERE NOT MET,” that consists of
over 20 pages of argument related to this issue. Further, plaintiffs specifically argue that certain
prerequisites were not met. It is clear from a cursory reading of the arguments in that section that
plaintiffs, in fact, asserted that the requirements of judicial estoppel were not met and, therefore, properly
asserted this issue on appeal. Thus, we need not address defendants’ baseless argument regarding waiver.
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prerequisite is also clearly satisfied where the first proceeding, which was in federal bankruptcy
court, is separate from the instant personal injury lawsuit that was filed in the circuit court of
Cook County, a state court. We also find that the fourth prerequisite is satisfied where plaintiffs
intended the court to accept their alleged facts as true. Plaintiffs’ disclosures in federal court
were signed under oath. Additionally, plaintiffs both gave deposition testimony under oath and
submitted affidavits in support of their response to defendants’ motion to dismiss in their circuit
court case. Testimony under oath certainly evinces an intent for the court to accept their
assertions as true.
¶ 40 The fifth prerequisite, requiring that plaintiffs succeeded in the first proceeding and
received some benefit from it, is also satisfied. Plaintiffs argue that defendants cannot satisfy this
requirement because they did not receive any benefit in their bankruptcy case where the trustee
ultimately abandoned their personal injury case. Defendants respond that, notwithstanding the
trustee’s abandonment of the claim, plaintiffs were still able to receive a discharge of their debts
without disclosing their possible personal injury claim.
¶ 41 We find the recent Barnes decision instructive. In Barnes, the plaintiff filed a bankruptcy
petition and was subsequently involved in an automobile accident. Barnes, 2017 IL App (3d)
150157, ¶ 1. The plaintiff did not disclose her accident or possible personal injury claim. Id. Her
debts were discharged in bankruptcy, and five months later, she filed a personal injury lawsuit
based on the injuries suffered in the accident that occurred during the pendency of her
bankruptcy case. Id. The trial court granted summary judgment on the basis of judicial estoppels
and was affirmed on appeal. Id. ¶ 2. The court found that the plaintiff “received a benefit from
the bankruptcy proceeding by having more than $92,000 of her unsecured debt discharged in
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bankruptcy without having to increase her payments to her creditors in light of the claim.” Id.
¶ 22.
¶ 42 Here, plaintiffs succeeded in their bankruptcy proceeding when they received a discharge
of their debts. They also received some benefit from that victory, namely avoiding the addition
of their personal injury claim to their assets prior to discharge of their debts. We do not find that
the trustee’s eventual abandonment of their claim negates the benefit plaintiffs received through
the initial discharge of their debts without their creditors having access to this claim. Although
we appreciate plaintiffs’ argument that a debtor-plaintiff’s discharge in bankruptcy cannot per se
satisfy the benefit prerequisite, we have not determined that the benefit here is the discharge
alone, but rather the discharge of their original bankruptcy petition having been granted with the
trustee, the creditors, and the court being unaware of plaintiffs’ personal injury claim. Therefore,
we find that even where the trustee eventually abandoned plaintiffs’ personal injury claim, the
fact that plaintiffs received a discharge of their debts without disclosure of an asset is enough
evidence to clearly and convincingly establish a benefit.
¶ 43 Having determined that all five prerequisites are met, we must next exercise our
discretion in determining whether to apply the doctrine of judicial estoppel. Seymour, 2015 IL
118432, ¶ 47. In exercising our discretion, we consider factors such as “the significance or
impact of the party’s action in the first proceeding, and *** whether there was an intent to
deceive or mislead, as opposed to the prior position having been the result of inadvertence or
mistake.” Id. Primarily, we look to whether plaintiffs had an intent to deceive or mislead, which
our supreme court has deemed “a critical factor in the application of judicial estoppel.” Id. ¶ 54.
¶ 44 Plaintiffs argue that their failure to divulge their possible personal injury claim at the time
they filed their bankruptcy disclosures was inadvertent. Plaintiffs supported this contention by
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No. 1-16-2130
attaching affidavits to their response to defendants’ motion to dismiss, in which plaintiffs both
attested that they did not “purposefully or intentionally omit[ ] any personal injury claims or
‘unliquidated contingent claims’ from their [b]ankruptcy [s]chedules.” Defendants respond that
Gregory’s deposition testimony establishes that he was aware of his potential personal injury
claim at the time the disclosures were filed. Specifically, defendants point to Gregory’s
deposition when he was asked if he told the trustee that he might potentially file a lawsuit with
respect to something not related to workers’ compensation, and he answered, “I told him I had no
idea. I didn’t know if I would do anything because at that time I didn’t even have my surgery.”
¶ 45 The trial court determined that there was “sufficient evidence to convince this court that it
is not punishing [p]laintiffs for an innocent mistake.” The court specifically found that
“[p]laintiffs, through their bankruptcy counsel, knew to include Gregory’s workers’
compensation claim on the bankruptcy schedule.” Most significantly, the court observed that,
“Gregory *** also testified that he knew of the claim but did not think he would file it when he
was making the bankruptcy disclosures.” The court further determined that the circumstances
under which plaintiffs brought their motion to reopen their bankruptcy case “do not afford
[plaintiffs] the benefit of the doubt regarding intent.” Plaintiffs argue that the trial court’s order
misstated Gregory’s testimony and was likely due to defendants’ distortion of his actual
testimony.
¶ 46 Contrary to the trial court, our exercise of discretion results in our finding that the record
before us does not contain sufficient evidence to convince this court that plaintiffs intended to
deceive or mislead the bankruptcy court when they failed to disclose their unliquidated personal
injury claim. Defendants rely on Berge, which was decided prior to Seymour. We find this
problematic for a few reasons. In Berge, the court listed the elements of judicial estoppel as: “(1)
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No. 1-16-2130
the two positions must be taken by the same party; (2) the positions must be taken in judicial
proceedings; (3) the positions must be given under oath; (4) the party must have successfully
maintained the first position, and received some benefit thereby; and (5) the two positions must
be totally inconsistent.” (Internal quotation marks omitted.) Berge, 2011 IL App (1st) 103778,
¶ 13. The Seymour court expressly rejected the five elements set forth in Berge, holding that “a
statement under oath is not required for the doctrine of judicial estoppel to apply.” Seymour,
2015 IL 118432, ¶ 38. Additionally, Seymour created the new requirement that a court must
exercise its discretion in determining whether to apply judicial estoppel by examining factors,
such as whether there was an intent to deceive. Id. ¶ 47. In Berge, the court noted that the
plaintiff in that case “certainly knew of the undisclosed claim and had motive to conceal it.”
Berge, 2011 IL App (1st) 103778, ¶ 19. However, the court did not state that such a
determination was the result of its exercise of discretion, as is now required by Seymour. We
further find Berge lacking in guidance because the court there relied on federal authority wherein
the courts did not show much forgiveness when a party failed to disclose assets in a bankruptcy
case. Id. ¶ 20. In fact, the Berge decision went so far as to state “we see no reason to deviate
from either Dailey v. Smith, 292 Ill. App. 3d at 25, or this long line of federal cases.” Berge,
2011 IL App (1st) 103778, ¶ 20. Conversely, in Seymour, the court stated, “[w]e are not willing,
as appears to be the case in prevailing federal authority given these circumstances [citations], to
presume that the debtors’ failure to disclose was deliberate manipulation.” (Emphasis in
original.) Seymour, 2015 IL 118432, ¶ 62. The Seymour court felt so strongly about its deviation
from the majority of federal opinion on this issue that it later in its opinion stated, “[w]e are not
so ready, as the federal courts appear to be, to penalize, via presumption, the truly inadvertent
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No. 1-16-2130
omissions of good-faith debtors in order to protect the dubious, practical interests of bankruptcy
creditors.” Id. ¶ 63.
¶ 47 We find it pertinent to highlight these distinctions between Seymour and Berge because
we believe these distinctions are great enough such that a court’s reliance on Berge subsequent to
Seymour seems erroneous. Defendants argue that Seymour did not criticize, limit, question, or
overturn Berge. We disagree based on the aforementioned discrepancies between the analyses
undertaken by the courts. Thus, we decline to consider Berge as instructive and decline to rely on
any authority prior to Seymour that conflicts with the supreme court’s holding in that case.
Instead, we follow the explicit framework set forth in Seymour and subsequently decided cases,
such as Barnes, in reaching our determination that the record evidence, when viewed in a light
most favorable to the nonmovants, does not establish plaintiffs’ intent to mislead or deceive the
court below.
¶ 48 Defendants rely on Barnes to support their appellate arguments, but we find that case
more helpful to plaintiffs. In Barnes, 4 the plaintiff filed a bankruptcy petition and was
subsequently involved in an automobile accident, which she did not disclose in her bankruptcy
case. Barnes, 2017 IL App (3d) 150157, ¶ 1. Her debts were discharged in bankruptcy, and five
months later, she filed a personal injury lawsuit based on the injuries suffered in the accident that
occurred during the pendency of her bankruptcy case. Id. On appeal, the court affirmed the trial
court’s grant of summary judgment on the basis of judicial estoppel. Id. ¶ 28. The court found
significant the fact that plaintiff waited to attempt to settle her personal injury claim until after
receiving her discharge in bankruptcy. Id. ¶ 25. The court found her failure to disclose to be
intentional because her conduct in waiting to settle until after discharge was the exact behavior
4
Although we have already set forth the facts of Barnes in this decision, we resummarize some of
those pertinent facts for purposes of clarity. Supra ¶ 41.
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No. 1-16-2130
that the Seymour court recognized as an indication that the plaintiff was trying to avoid creditors.
Id. In fact, the court found “ample evidence” to suggest that the plaintiff’s failure was a
deliberate attempt to mislead, including the following pieces of evidence: the plaintiff retained a
personal injury attorney 18 days after the accident; the plaintiff’s attorney wrote a letter to the
defendants’ attorney stating that the plaintiff’s personal injury claim was worth over $50,000,
including lost wages; the plaintiff did not file her personal injury lawsuit or attempt to settle it
until after her bankruptcy was discharged; and the plaintiff never informed her bankruptcy
attorney about her personal injury claim and vice versa. Id. ¶¶ 24-25.
¶ 49 We find Barnes to be helpful because the type of conduct that warranted the application
of judicial estoppel there is not present here. In this case, the primary evidence that defendants
rely on to show that plaintiffs intended to deceive or mislead the court is Gregory’s deposition
testimony wherein he stated that he “didn’t know if [he] would do anything” when asked if he
disclosed he might potentially file a personal injury lawsuit. We find that Gregory’s statement,
when read in context, does not evince an intent to deceive. The trial court stated that Gregory
“testified that he knew of the claim but did not think he would file it when he was making his
bankruptcy disclosures.” This is simply not accurate. When viewed critically, Gregory’s
testimony raises more questions than it answers. The following is the critical exchange from
Gregory’s deposition:
“Q. While you may not have been asked it by the bankruptcy trustee, did you
disclose the fact that you had been involved in an accident that could potentially result in
a third-party action against other entities during the bankruptcy proceedings?
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No. 1-16-2130
MR. CANTWELL [plaintiffs’ attorney]: Objection. If he disclosed the
workmen’s comp claim, that certainly is about—There’s no other workmen’s comp
claim he ever made, I don’t think. Not that I know of.
Q. [Defendant ABM’s attorney:] Do you understand my question?
A. You’re asking me if I filed a lawsuit for workers’ compensation—
Q. No. What I’m asking is, you testified that you disclosed that you had a
workers’ comp action—
A. That’s right.
Q. —proceeding with respect to this incident. Did you disclose that you might
potentially file a lawsuit with respect to something non-workers’ compensation resulting
from the December 15, 2010, accident regardless of whether you were asked it by the
bankruptcy trustee or not?
A. I told him I had no idea. I didn’t know if I would do anything because at that
time I didn’t even have my surgery. 5
Q. Okay.
A. When I first talked to a—the bankruptcy lawyers, I had no idea that I would
even file a lawsuit, period.
Q. But you had been injured as of at least that time, correct?
A. Yes.”
¶ 50 Gregory’s testimony does not indicate an intent to deceive. In fact, the meaning behind
Gregory’s testimony is unclear. Perhaps this is because at the time Gregory made the statement
at issue he was already five hours into his deposition. In part, Gregory stated that, “I told him I
had no idea.” Although somewhat unclear whom “him” refers to, the context of the preceding
5
Earlier in the deposition, Gregory testified that he had surgery on his shoulder in August 2011.
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No. 1-16-2130
questions seems to point to the trustee. However, in reviewing the transcript of the sole
conversation between Gregory and the trustee, 6 which occurred at the August 8, 2012, meeting
of the creditors, at no point does Gregory say he “had no idea” whether he would file a personal
injury claim. In fact, Gregory’s potential personal injury case is never addressed because after
Gregory mentions his workers’ compensation claim, the trustee does not ask any further
questions, and actually tells Gregory that: “We don’t have to have this conversation because you
get to keep 100% of any [w]orkers [c]ompensation award.” We find this statement by the trustee
to be somewhat similar to the factual scenario of Seymour. In Seymour, the uncontroverted
affidavits of the plaintiffs and their bankruptcy attorney established that the trustee advised the
plaintiffs that they had to disclose any lump sum of funds received in excess of $2000, thus, the
court observed that it would be understandable that the plaintiffs, who were laymen, might have
inferred that smaller sums, and perhaps even unliquidated claims for money, did not have to be
disclosed. Seymour, 2015 IL 118432, ¶ 61. Here, the trustee informed Gregory, who is also a
layman like the Seymour plaintiffs, that they need not have a conversation regarding his workers’
compensation case, which could have led Gregory to infer that he need not disclose any more
information about his injury or any potential claim arising therefrom. Defendants attempt to
make plaintiffs out to be sophisticated, serial litigants. However, both of Gregory’s prior lawsuits
stemmed from motor vehicle accidents. Neither prior lawsuit involved workers’ compensation
and there is no record evidence that plaintiffs ever filed for bankruptcy on another occasion.
Additionally, unlike plaintiffs’ workers’ compensation case, which was filed on August 25,
2011, plaintiffs’ personal injury claim was not filed at the time Gregory spoke to the trustee.
6
Defendants repeatedly assert that plaintiffs were represented by counsel throughout their
bankruptcy proceedings. While we do not doubt that they were, we believe it best to clarify that the
transcript of the question and answer session between the trustee and Gregory does not indicate that
plaintiffs’ counsel was present.
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No. 1-16-2130
Thus, the record before us does not establish that plaintiffs are the savvy litigants that defendants
make them out to be.
¶ 51 Gregory’s deposition testimony, that “at that time I didn’t even have my surgery,” raises
another issue. This statement evinces confusion because the plaintiffs’ bankruptcy petition was
filed in June 2012 and Gregory had his shoulder surgery in August 2011; thus, Gregory had
already had his shoulder surgery at the time he was examined by the trustee. Thus, his statement
of “I didn’t know if I would do anything because at that time I didn’t even have my surgery” is
nonsensical. In light of the Seymour decision and its emphasis on the importance on a party’s
intent to deceive, we refuse to presume that Gregory’s testimony, which was unclear at best,
evinced an intent to deceive or mislead.
¶ 52 Viewing all of the evidence before us in a light most favorable to plaintiffs, we find that
the evidence presented fails to show that plaintiffs intended to deceive or mislead the bankruptcy
court when filing their disclosures. Perhaps prior to the Seymour decision the result here may
have been different. However, our supreme court has made it clear that they believe it best to
deviate from the federal court’s strict application of judicial estoppel regardless of intent.
Because we have not found that plaintiffs were “deliberately changing positions,” dismissal of
their complaint would not satisfy the purpose of the doctrine of judicial estoppel. Id. ¶ 36.
Therefore, where, as here, the record is void of sufficient evidence to establish that the party to
be estopped intentionally failed to disclose a potential personal injury claim in order to deceive
or mislead the court, dismissal on the basis of judicial estoppel is unwarranted.
¶ 53 CONCLUSION
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No. 1-16-2130
¶ 54 Based on the foregoing, we reverse the decision of the trial court that granted defendants’
section 2-619 motion to dismiss, vacate any judgments entered thereto, and remand for further
proceedings.
¶ 55 Reversed and remanded.
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