Shirley Adams v. Graceland Care Center of Oxford, LLC ( 2015 )

IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI
NO. 2013-CA-00724-COA
SHIRLEY ADAMS, INDIVIDUALLY AND AS APPELLANT
SURVIVOR AND ONLY HEIR OF DOROTHY
TURNER, DECEASED
v.
GRACELAND CARE CENTER OF OXFORD, APPELLEES
LLC, GRACELAND MANAGEMENT
COMPANY, INC., LAFAYETTE LTC, INC., AND
YALOBUSHA GENERAL HOSPITAL AND
NURSING HOME
DATE OF JUDGMENT: 04/04/2013
TRIAL JUDGE: HON. JOHN ANDREW GREGORY
COURT FROM WHICH APPEALED: LAFAYETTE COUNTY CIRCUIT COURT
ATTORNEYS FOR APPELLANT: BOBBY FLOYD MARTIN JR.
RALPH STEWART GUERNSEY
JENNIFER LYN MILLER BERMEL
ATTORNEYS FOR APPELLEES: THOMAS L. KIRKLAND JR.
JOHN G. WHEELER
ANDY LOWRY
NATURE OF THE CASE: CIVIL - MEDICAL MALPRACTICE
TRIAL COURT DISPOSITION: SUMMARY JUDGMENT GRANTED TO
APPELLEES
DISPOSITION: REVERSED AND REMANDED – 11/03/2015
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE GRIFFIS, P.J., FAIR AND JAMES, JJ.
JAMES, J., FOR THE COURT:
¶1. Shirley Adams filed a complaint as the sole heir of her deceased mother, Dorothy
Turner, against Graceland Care Center of Oxford LLC (Graceland Care Center), Graceland
Management Company Inc. (Graceland Management), Yalobusha General Hospital and
Nursing Home (Yalobusha), and Lafayette LTC Inc. (Lafayette) (collectively “Defendants”).
The Defendants moved for summary judgment based on judicial estoppel because Adams
failed to disclose the lawsuit by amending her schedule of assets in her pending bankruptcy
proceeding. The trial court granted the motion and dismissed the case with prejudice. On
appeal, Adams argues that the trial court erred by granting summary judgment. We agree and
remand this case to proceed to trial.
FACTS AND PROCEDURAL HISTORY
¶2. On August 9, 2004, Adams filed a Chapter 13 bankruptcy petition in the United States
Bankruptcy Court, Northern District of Mississippi. On February 1, 2005, Adams’s five-year
bankruptcy plan was confirmed, and she made regular payments in accordance with her plan.
On December 7, 2007, Adams’s mother, Turner, died while living in Graceland Care
Center’s nursing-home facility. On May 14, 2008, Adams initiated a personal-
injury/wrongful-death cause of action against Graceland Care Center, Graceland
Management, and Lafayette in her individual capacity and as the survivor and heir of her
deceased mother. On January 12, 2009, Adams, the only child and sole wrongful-death
beneficiary, filed a second amended complaint adding Yalobusha as a defendant, alleging
that Turner suffered personal injuries and death as a result of substandard healthcare services
provided to her while she was a resident at Yalobusha. Although Adams’s bankruptcy case
was still pending, she failed to amend her schedules to add the cause of action as an asset of
her bankruptcy estate prior to completing her payment plan and the bankruptcy court granting
2
her a discharge on March 31, 2009.
¶3. On August 19, 2009, the Defendants discovered through Adams’s deposition
testimony that she had previously filed bankruptcy, and did not list the cause of action as an
asset in her bankruptcy estate. On August 28, 2009, Yalobusha moved for summary
judgment based on Adams’s failure to disclose her lawsuit, and argued that judicial estoppel
barred her from pursing the claim. The remaining Defendants joined in Yalobusha’s motion.
On October 13, 2009, Adams moved to reopen her bankruptcy case for the purpose of adding
her cause of action to the schedules. On October 16, 2009, the bankruptcy court granted
Adams’s motion, and she amended her schedules listing the cause of action as an asset on
October 20, 2009.1 The trial court, by letter dated September 13, 2010, stated that it would
grant the Defendant’s motion for summary judgment. However, on October 15, 2010,
Adams filed a motion for reconsideration in light of the Mississippi Supreme Court’s
decision in Copiah County v. Oliver, 51 So. 3d 205, 207 (¶12) (Miss. 2011).
¶4. On December 19, 2011, the trial court, following the supreme court’s decision in
Oliver, entered an order staying the proceedings until the bankruptcy court made a decision
on the sole question of “whether Adams had a duty to disclose her personal injury/wrongful
1
Initially, after the case was reopened, Adams attempted to list the cause of action
as exempt personal property, but the trustee filed an objection. The bankruptcy court
sustained the trustee's objection because Mississippi Code Annotated section 85-3-17 (Rev.
2011) does not permit an exemption until a personal-injury cause of action has been reduced
to a judgment; therefore, Adams's exemption claim was disallowed without prejudice so that
Adams could reassert her exemption claim if the cause of action was ever reduced to a
judgment.
3
death cause of action as an asset of her bankruptcy estate.” The bankruptcy court held an
evidentiary hearing on Adams’s and the Defendants’ cross-motions for declaratory judgments
on whether the affirmative defense of judicial estoppel was applicable. Following the
hearing, the bankruptcy court wished to ascertain whether the Chapter 13 trustee had an
interest in pursuing the state cause of action. The trustee was given an opportunity to review
the factual issues in both the bankruptcy case and the state court proceeding before
submitting a response to the bankruptcy court. On July 30, 2012, the trustee submitted a
letter to the bankruptcy court, which stated:
After reviewing the timely filed and allowed general unsecured claims which
total $4,719.53, the trustee reports that she would abandon any settlement or
judgment proceeds and not administer the payment of such on behalf of the
bankruptcy estate.
¶5. On October 12, 2012, the bankruptcy court rendered its opinion finding “that Adams
had a continuing duty throughout the pendency of her bankruptcy case to disclose the state
law cause of action.” In re Adams, 481 B.R. 854, 859 (Bankr. N.D. Miss. 2012). However,
the bankruptcy court left the issue of judicial estoppel for the trial court to decide. Id. at 861-
862.
¶6. Following the bankruptcy court’s decision, the Defendants renewed their motion for
summary judgment. On April 13, 2013, the trial court granted the Defendants’ motion for
summary judgment finding that “based on [Adams’s] own affidavit and deposition testimony,
she had knowledge of the facts supporting her cause of action prior to the discharge of her
[C]hapter 13 proceeding.” Adams argues that the trial court erred by granting summary
4
judgment. We agree and find that there is a genuine issue of material fact as to whether
Adams’s failure to amend her bankruptcy schedules was an intentional self-contradiction,
knowingly made, or amounted to a willfully false representation. Accordingly, we reverse
the trial court’s decision granting summary judgment and remand the case to proceed to trial.
STANDARD OF REVIEW
¶7. A trial court’s imposition of judicial estoppel is subject to review under an abuse-of-
discretion standard. Kirk v. Pope, 973 So. 2d 981, 986 (¶11) (Miss. 2007) (citing Superior
Crewboats Inc. v. Primary P & I Underwriters, 374 F.3d 330, 334 (5th Cir. 2004); Hall v.
GE Plastic Pacific PTE Ltd., 327 F.3d 391, 396 (5th Cir. 2003)). However, in Oliver, 51 So.
3d at 207 (¶7), the supreme court applied the de novo standard in reviewing a trial court’s
denial of a motion for summary judgment on the basis of judicial estoppel. Because the trial
court granted the Defendant’s motion for summary judgment, we will review the trial court’s
decision under a de novo standard. See id. at 206-07 (¶¶6-8).
¶8. In Karpinsky v. American National Insurance Co., 109 So. 3d 84, 88 (¶10) (Miss.
2013), the Mississippi Supreme Court summarized the summary-judgment standard:
Summary judgment is appropriate and shall be rendered if the pleadings,
depositions, answers to interrogatories and admissions on file, together with
the affidavits, if any, show that there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of law.
Importantly, the party opposing summary judgment may not rest upon the mere
allegations or denials of his pleadings, but his response, by affidavit or as
otherwise provided in this rule, must set forth specific facts showing that there
is a genuine issue for trial. If he does not so respond, summary judgment, if
appropriate, will be entered against him.
5
(Internal citations and quotation marks omitted). “Additionally, the evidence must be viewed
in the light most favorable to the party against whom the motion has been made.” One S. Inc.
v. Hollowell, 963 So. 2d 1156, 1160 (¶6) (Miss. 2007). “The moving party has the burden
of demonstrating that no genuine issue of material facts exists, and the non-moving party
must be given the benefit of the doubt concerning the existence of a material fact.”
Duckworth v. Warren, 10 So. 3d 433, 437 (¶9) (Miss. 2009). “Further, summary judgment
is inappropriate where there are undisputed facts which are susceptible to more than one
interpretation.” Id.DISCUSSION
¶9. The sole issue before this Court is whether the doctrine of judicial estoppel bars
Adams from pursuing her cause of action against the Defendants for failing to amend her
schedule of assets in the bankruptcy court to include her cause of action prior to the
completion of her plan and discharge.2 Adams argues that summary judgment was not proper
because her nondisclosure was inadvertent.
¶10. The doctrine of judicial estoppel should be applied to prevent a party from achieving
an unfair advantage by taking inconsistent positions in litigation. Oliver, 51 So. 3d at 207
2
The Defendants filed a motion to strike portions of the record on appeal,
specifically portions of the record containing certain discovery responses. The Mississippi
Supreme Court passed the motion to this Court for consideration with the merits of the
appeal. It was not necessary for the Court to consider these discovery responses to reach a
decision on appeal. Even if the responses were to be considered, they would have no
bearing on the issue presented before the Court. Therefore, the motion is denied as moot.
6
(¶9). “In order to protect the integrity of the judiciary, judicial estoppel must be invoked in
the Court in which the apparent self-serving contradiction occurred and in which the defense
is first asserted." Kirk, 973 So. 2d at 991 (¶31).
¶11. In Kirk v. Pope, the supreme court identified three elements of judicial estoppel.
Clark v. Neese, 131 So. 3d 556, 560 (¶16) (Miss. 2013). “A party will be judicially estopped
from taking a subsequent position if (1) the position is inconsistent with one previously taken
during litigation, (2) a court accepted the previous position, and (3) the party did not
inadvertently take the inconsistent positions.” Id.
¶12. “Judicial estoppel is designed to protect the judicial system and applies where
intentional self-contradiction is being used as a means of obtaining [an] unfair advantage in
a forum provided for suitors seeking justice." Kirk, 973 So. 2d at 991 (¶31) (emphasis
added). “The purpose of judicial estoppel is to prevent parties from knowingly taking a
position in one court that is contrary to a position that party has asserted in, and that has been
accepted by, another court.” Clark, 131 So. 3d at 562 (¶21) (emphasis added).
¶13. In Kirk, this Court applied judicial estoppel against the plaintiff after he failed to
disclose a breach-of-contract action to the bankruptcy court. Kirk, 973 So. 2d at 992 (¶38).
However, we find that this case is distinguishable from Kirk. Kirk was decided under an
abuse-of-discretion standard of review. Id. at 986 (¶11). Like Oliver, this appeal proceeds
from a decision on a summary-judgment motion, which is reviewed de novo. See Oliver, 51
So. 3d at 207 (¶7).
7
¶14. The facts of Kirk are also distinguishable from the facts of this case, specifically the
representations, or lack thereof, made regarding their respective lawsuits. In Kirk, the court
found that Kirk's nondisclosure of the lawsuit was not inadvertent. Kirk, 973 So. 2d at 992
(¶38). There, the trial court determined that Kirk was “less than candid with his bankruptcy
attorney regarding the status of his lawsuit.” Id. at (¶37). Based on Kirk’s
misrepresentations, his bankruptcy attorney operated under the impression that his lawsuit
had been dismissed, and did not list the lawsuit on Kirk’s bankruptcy schedules. Id. at 991-
92 (¶¶36-37). Moreover, Kirk did not disclose his lawsuit to the bankruptcy court until after
he had obtained a final judgment. Id. at 992 (¶37). Specifically, the court found:
While we cannot be certain of Kirk's motivation, we find there was sufficient
evidence for the circuit court to conclude that Kirk's non-disclosure was not
inadvertent and that Kirk notified the bankruptcy trustee only because the
defendants forced his hand. We cannot say that the circuit court abused its
discretion in finding that Kirk intended to conceal his claim from the
bankruptcy court in order to reap a windfall by preventing his creditors from
recovering any proceeds of a potential judgment. See [Superior Crewboats,
374 F.3d] at 336. Therefore, we find that the circuit court did not err in
finding that judicial estoppel applied to Kirk.
Kirk, 973 So. 2d at 992 (¶38).
¶15. The Kirk court remanded the case to the trial court and found that the bankruptcy
trustee should not be judicially estopped from pursuing the claim, but invoked judicial
estoppel against Kirk individually to prevent him from recovering any proceeds of the
judgment. Id. at (¶40). The court reached this conclusion because, “should the trustee
recover more than the amount to satisfy all creditors, judicial estoppel could be invoked by
8
the defendant to limit recovery to only that amount and prevent an undeserved windfall from
devolving on the non-disclosing debtor.” Id. at (¶39).
¶16. Adams’s behavior cannot be equated to the affirmative misrepresentations made by
the plaintiff in Kirk. Here, there is no evidence that Adams made any affirmative
misrepresentation with the intent to mislead the bankruptcy court. Like Kirk, Adams did not
disclose her claim until it was brought out by the defendants, but Adams did not wait until
she obtained a judgment to reopen her bankruptcy case and disclose her cause of action.
When she learned of her continuing duty to disclose her cause of action, Adams immediately
moved to reopen her bankruptcy case and amend her schedule of assets, although she was
nearing the completion of her five-year payment plan.
¶17. Adams’s actions should not be imputed as willful, because it involved a ruling to be
made by the court as to whether she had a continuing duty to disclose in her Chapter 13
bankruptcy proceedings. Also, this cause of action accrued when Adams’s mother died on
December 7, 2007. Adams stated that she was not aware that she had to disclose the cause
of action in her bankruptcy case, which had been filed on August 9, 2004. Adams’s
bankruptcy attorney, who assisted in reopening Adams’s bankruptcy case, submitted an
affidavit on her behalf stating that he “was convinced[,] and remains so, that Ms. Adams was
an ‘unsophisticated consumer’ who failed to list her lawsuit as a result of inadvertence only.”
Her plan had been confirmed on February 1, 2005, and her mother died nearly three years
later. She cannot be said to have had the same conscious awareness of her mother’s cause
9
of action that vested with her at her mother’s death that she would have if it were her own
personal cause of action.
¶18. “A debtor's non-disclosure is inadvertent only when, in general, the debtor either lacks
knowledge of the undisclosed claims or has no motive for their concealment.” Kirk, 973 So.
2d at 991 (¶35) (emphasis added) (citing Superior Crewboats., 374 F.3d at 335) (quoting In
re Coastal Plains Inc., 179 F.3d 197, 210 (5th Cir. 1999)). The Fifth Circuit Court of
Appeals decision in Coastal Plains, 179 F.3d at 210, is instructive on this issue. In adopting
this general inadvertence rule, the court cited Dawson v. J.G. Wentworth & Co., 946 F. Supp.
394 (E.D. Pa. 1996), which held that although a debtor disclosed his claim in the amended
bankruptcy schedules, a fact issue regarding the debtor’s good or bad faith in not disclosing
the claim in the original bankruptcy schedules precluded summary judgment based on
judicial estoppel. Coastal Plains, 179 F.3d at 210 n.9. In Dawson, the court refused to infer
bad faith merely from the fact of nondisclosure because the record in that case created
enough of a question regarding the debtor’s intent so as to preclude the application of the
extreme remedy of judicial estoppel. Dawson, 946 F. Supp. at 398. Therefore, the Fifth
Circuit has recognized that a fact issue regarding a debtor’s good or bad faith in not
disclosing a claim may preclude summary judgment. See also McKinney v. BancorpSouth
Bank, No. 1:12-cv-00186-MPM-DAS, 2013 WL 3834878, at *1 (N.D. Miss. July 24, 2013)
(“Judicial estoppel does not apply when the prior position was taken because of a good faith
mistake rather than as part of a scheme to mislead the court.”).
10
¶19. In Kirk, the court stated that “the representation must be willfully false, or must have
the effect of misleading the other party to his injury.” Kirk, 973 So. 2d at 991 (¶35)
(emphasis added) (quoting Miss. Power & Light Co. v. Cook, 832 So. 2d 474, 482 (¶22)
(Miss. 2002)). In Cook, the debtor had knowledge of his pending lawsuit, but he did not
disclose the lawsuit in bankruptcy court because he thought it would not amount to anything,
and his attorney advised him that it was not necessary to disclose it to the bankruptcy court.
Cook, 832 So. 2d at 481-82 (¶¶20-22). The Mississippi Supreme Court held that the debtor
was not barred by the doctrine of judicial estoppel because “[the debtor] did not make a
willfully false statement[.]” Id. at 482 (¶22). The court noted:
[T]he jury heard what [the debtor] said was his reason for not disclosing this
information to the bankruptcy court, and the jury was allowed to take this into
consideration in determining the credibility of [the debtor]. It is for the jury,
not a reviewing court, to determine the credibility of a witness.
Id. at 481-82 (¶21).
¶20. Under the summary-judgment standard, the Defendants have the burden of
demonstrating that no genuine issue of material facts exists, and the nonmoving party must
be given the benefit of the doubt concerning the existence of a material fact. Duckworth,
10 So. 3d at 437 (¶9). We find that the Defendants failed to meet their burden.
¶21. There is no dispute that Adams had a continuing duty to disclose her cause of action.
Giving Adams the benefit of the doubt concerning the existence of a disputed material fact,
we find that the evidence and testimony before us does not demonstrate that Adams’s failure
to disclose, standing alone, amounted to a willfully false representation. Although the
11
Mississippi Supreme Court eliminated the adverse-party requirement for judicial estoppel,
it did not disturb the requirement of a willfully false representation. See Clark, 131 So. 3d
at 561-62 (¶21). In viewing the facts in the light most favorable to Adams, we find that no
motive for concealment has been shown. The efforts by Adams to amend her schedules to
list the cause of action are inconsistent with any motive for concealment. We cannot say that
the evidence, when viewed in the light most favorably to Adams, shows that Adams intended
to conceal her claim from the bankruptcy court in order to reap a windfall by preventing her
creditors from recovering any proceeds from a potential judgment.
¶22. Moreover, the evidence in this case does not prove that Adams made an intentional
self-contradiction as a means of obtaining an unfair advantage in a forum provided for suitors
seeking justice. See Kirk, 973 So. 2d at 991 (¶31); see also Clark, 131 So. 3d at 562 (¶23)
(recognizing that lack of inadvertence requires that the positions taken must be knowingly
inconsistent). Likewise, we cannot say that the evidence shows that Adams knowingly took
inconsistent positions in the trial court and bankruptcy court. See Clark, 131 So. 3d at 561
n.22 (citing Cook, 832 So. 2d at 482 (¶22) (holding judicial estoppel did not apply because
the inconsistency was not knowing)).
¶23. The dissent would hold that the three elements of judicial estoppel were satisfied
through a rigid application of the elements without regard to the specific factual context of
this case. "However, judicial estoppel is not governed by inflexible prerequisites or an
exhaustive formula for determining its applicability, and numerous considerations may
12
inform the doctrine's application in specific factual contexts." Love v. Tyson Foods Inc., 677
F.3d 258, 261 (5th Cir. 2012) (citing New Hampshire v. Maine, 532 U.S. 742, 749-50
(2001)). Accordingly, based on the record before us, we hold that the trial court erred in
applying the doctrine of judicial estoppel. We reverse the trial court's grant of summary
judgment in favor of the Defendants and remand this case to the trial court to proceed to trial.
¶24. THE JUDGMENT OF THE CIRCUIT COURT OF LAFAYETTE COUNTY
IS REVERSED, AND THIS CASE IS REMANDED FOR FURTHER PROCEEDINGS
CONSISTENT WITH THIS OPINION. ALL COSTS OF THIS APPEAL ARE
ASSESSED TO THE APPELLEES.
LEE, C.J., GRIFFIS, P.J., AND FAIR, J., CONCUR. IRVING, P.J., CONCURS
IN RESULT ONLY WITHOUT SEPARATE WRITTEN OPINION. WILSON, J.,
DISSENTS WITH SEPARATE WRITTEN OPINION, JOINED BY ISHEE AND
CARLTON, JJ. BARNES AND MAXWELL, JJ., NOT PARTICIPATING.
WILSON, J., DISSENTING:
¶25. I dissent because the plurality opinion applies the wrong standard of review, reaches
the wrong result under applicable precedent, and mistakenly implies that the issue of judicial
estoppel should be resolved by a jury at trial.
¶26. First, the plurality applies the wrong standard of review. Our Supreme Court has
clearly stated that “a trial court’s imposition of judicial estoppel . . . is subject to review
under an abuse of discretion standard.” Kirk v. Pope, 973 So. 2d 981, 986 (¶12) (Miss.
2007). The Court repeated this point in its initial (subsequently withdrawn) opinion in
Copiah County v. Oliver, No. 2009-IA-00809-SCT, at (¶6) (Miss. Sept. 30, 2010) (“This
Court reviews a trial court’s grant or denial of a motion for summary judgment or a motion
13
to dismiss under a de novo standard. A trial court’s decision regarding judicial estoppel is
subject to review under an abuse-of-discretion standard.”3 (citations omitted)), withdrawn
on mot. for reh’g, 51 So. 3d 205 (Miss. 2011). The Court’s opinion on rehearing in Oliver
omitted reference to the abuse-of-discretion standard, but I suggest that it did so because the
opinion only “direct[ed] the trial court to stay the proceedings until the bankruptcy court . .
. had an opportunity to consider” a logically antecedent issue of federal bankruptcy law.
Oliver, 51 So. 3d at 207 (¶12). Thus, the final opinion in Oliver—on which the plurality
relies for its standard of review—did not review the merits of the trial court’s application of
the doctrine of judicial estoppel. We should continue to apply the standard of review that the
Supreme Court expressly adopted in Kirk until Kirk is overruled.
¶27. Applying the proper standard of review,4 the circuit court’s decision must be affirmed.
The circuit judge applied precedent that is directly on point (Kirk and Oliver) and did not
abuse his discretion by dismissing Adams’s claims with prejudice based on her failure to
3
This is similar to cases decided on summary judgment in which we review the trial
court’s underlying rulings as to the admissibility of expert testimony for abuse of discretion
but review the grant or denial of summary judgment de novo. McDonald v. Mem'l Hosp.
at Gulfport, 8 So. 3d 175, 178-79 (¶8) (Miss. 2009). The underlying evidentiary ruling may
be dispositive, but that does not change the applicable standard of review. See id. The same
is true here—the trial court’s underlying ruling on the issue of judicial estoppel may be
dispositive, but we still apply the abuse-of-discretion standard.
4
See, e.g., Detroit Marine Eng'g v. McRee, 510 So. 2d 462, 467 (Miss. 1987) (“Our
inquiry is limited to whether the trial judge abused his discretion; we may not rule on
whether he was ‘right’ or ‘wrong’ in our view. And, unless the trial court based its decision
on an erroneous review of law, this Court is not authorized to reverse for an abuse of
discretion unless we find it was arbitrary and clearly erroneous.” (quotation marks and
citations omitted)).
14
disclose her claims in her prior federal bankruptcy.
¶28. “[T]he integrity of the bankruptcy system depends on full and honest disclosure by
debtors of all of their assets.” In re Coastal Plains Inc., 179 F.3d 197, 208 (5th Cir. 1999)
(emphasis omitted) (quoting Rosenshein v. Kleban, 918 F. Supp. 98, 104 (S.D.N.Y. 1996)).
The debtor’s duty to disclose all of her assets, including contingent claims, is a “continuing
duty throughout the pendency of her bankruptcy case.” In re Adams, 481 B.R. 854, 859
(Bankr. N.D. Miss. 2012) (emphasis added) (citing Coastal Plains, 179 F.3d at 207-08;
Jethroe v. Omnova Solutions Inc., 412 F.3d 598, 600 (5th Cir. 2005)). The debtor’s
“omission of [a] personal injury claim from [her] mandatory bankruptcy filings is tantamount
to a representation”—a misrepresentation—“that no such claim existed.” In re Superior
Crewboats Inc., 374 F.3d 330, 335 (5th Cir. 2004). Such omissions impair “[t]he interests
of both the creditors, who plan their actions in the bankruptcy proceeding on the basis of
information supplied in the [debtor’s] disclosure statements, and the bankruptcy court, which
must decide whether to approve the plan of reorganization on the same basis.” Coastal
Plains, 179 F.3d at 208 (emphasis omitted) (quoting Rosenshein, 918 F. Supp. at 104). To
protect these interests, courts apply the doctrine of judicial estoppel and “will not permit a
debtor to obtain relief from the bankruptcy court by representing that no claims exist and then
subsequently to assert those claims for his own benefit in a separate proceeding.” Id.
¶29. When a debtor seeks to recover on a claim that she failed to disclose in a prior
bankruptcy filing, there are only “three requirements for judicial estoppel: ‘(1) the party is
15
judicially estopped only if its position is clearly inconsistent with the previous one; (2) the
court must have accepted the previous position; and (3) the non-disclosure must not have
been inadvertent.’” Oliver, 51 So. 3d at 207 (¶9) (quoting Kirk, 973 So. 2d at 991 (¶32)
(quoting Superior Crewboats, 374 F.3d at 335)).5 Here, because Adams had a continuing
duty to disclose her claim to the bankruptcy court, her failure to disclose “impliedly
represented that she had no such claim,” which “is plainly inconsistent with her . . . assertion
of the claim in state court.” In re Flugence, 738 F.3d 126, 130 (5th Cir. 2013). In addition,
when the bankruptcy court entered an order discharging Adams from bankruptcy, it
effectively accepted her representation that she had made a full and complete disclosure of
her assets. See Superior Crewboats, 374 F.3d at 330; Tubbs v. Huntington Ingalls Inc., No.
1:06CV834HSO-JMR, 2011 WL 3891877, at *6 (S.D. Miss. Aug. 29, 2011). Accordingly,
the first and second requirements of judicial estoppel are satisfied.
¶30. As the circuit court correctly recognized, the only real issue in this case is whether
Adams’s non-disclosure was “inadvertent.” “A debtor’s non-disclosure is ‘inadvertent’ only
when, in general, the debtor either lacks knowledge of the undisclosed claims or has no
5
Oliver and Kirk appropriately applied federal caselaw to determine the preclusive
effect of a debtor’s failure to disclose a claim in federal bankruptcy proceedings. See
Superior Crewboats, 374 F.3d at 334 & n.3; Kamont v. West, 83 F. App’x 1, 3 (5th Cir.
2003) (“We apply federal law where judicial estoppel is applied based on a debtor’s failure
to disclose assets in violation of the federal Bankruptcy Code.”); Bailey v. Barnhart Interest
Inc., 287 S.W.3d 906, 910 (Tex. Ct. App. 2009) (“Because the [defendants] invoked judicial
estoppel in the bankruptcy context, we apply federal law to determine whether the doctrine
applies here.”); 19 Wright, Miller & Cooper, Federal Practice and Procedure § 4514 (2d
ed.) (“[F]ederal common law is truly federal law in the sense that, by virtue of the
Supremacy Clause, it is binding on state courts” (footnotes omitted)).
16
motive for their concealment.” Kirk, 973 So. 2d at 991 (¶35) (quoting Superior Crewboats,
374 F.3d at 335 (quoting Coastal Plains, 179 F.3d at 210)). Here, the evidence was clear that
Adams had ample “knowledge” of her claim because Adams testified that she decided to talk
to a lawyer about suing the defendants in 2004 or 2005, she actually hired a lawyer in March
2006, and she filed her initial complaint in May 2008—all well before she was discharged
from bankruptcy by order dated March 31, 2009. See Adams, 481 B.R. at 857.
¶31. Because Adams had “knowledge” of her potential claim, the issue narrows further to
whether she had a “motive for . . . concealment” of the claim. Kirk, 973 So. 2d at 991 (¶35).
The Fifth Circuit rightly has observed that “the motivation sub-element is almost always met
if a debtor fails to disclose a claim or possible claim to the bankruptcy court. Motivation in
this context is self-evident because of potential financial benefit resulting from the
nondisclosure.” Love v. Tyson Foods Inc., 677 F.3d 258, 262 (5th Cir. 2012) (emphasis
added) (quoting Thompson v. Sanderson Farms Inc., No. 3:04CV837-WHB-JCS, 2006 WL
7089989, at *4 (S.D. Miss. May 31, 2006) (Barbour, J.)). The debtor’s motive not to disclose
is the same as her motive not to disclose any other asset. If the debtor does not disclose her
claim, she may keep the net proceeds of any settlement or judgment for herself rather than
pay her debts to creditors who are not repaid in full under the terms of her bankruptcy plan.
This gives the debtor “an incentive to conceal her claims from creditors.” Jethroe v. Omnova
Solutions Inc., 412 F.3d 598, 601 (5th Cir. 2005) (citing Coastal Plains, 179 F.3d at 210).
¶32. In this case, the unsecured debts that Adams was not obligated to repay under her
17
bankruptcy plan are sufficient support for the circuit court’s finding that her non-disclosure
was “not inadvertent.” Adams’s self-evident motive not to disclose her claim satisfies the
third and final requirement of judicial estoppel because the relevant question under Kirk is
whether “the debtor . . . has no motive for . . . concealment.’” Kirk, 973 So. 2d at 991 (¶35)
(emphasis added) (quoting Superior Crewboats, 374 F.3d at 335 (quoting Coastal Plains,
179 F.3d at 210)); see Jethroe, 412 F.3d at 601 (debtor had a “motive for concealment”
because her bankruptcy confirmation plan did not require her to repay an unsecured debt of
$8,373). Accordingly, the circuit court’s finding that all three requirements of judicial
estoppel are met was not an abuse of discretion, and its ruling should be affirmed.6
¶33. The plurality argues that judicial estoppel should not apply despite Adams’s evident
motive not to disclose her debts, but the facts that the plurality highlights are not persuasive.
For instance, the plurality gives Adams credit for moving to reopen her bankruptcy case
before she “obtained a judgment” in state court. Ante at (¶16). However, Adams moved to
reopen only because the defendants first discovered the bankruptcy and moved for summary
judgment on that basis. “Allowing the debtor to back-up, re-open the bankruptcy case, and
amend his bankruptcy filings, only after his omission has been challenged by an adversary,
suggests that a debtor should consider disclosing personal assets only if he is caught
6
In Kirk, we concluded, “While we cannot be certain of Kirk’s motivation, we find
there was sufficient evidence for the circuit court to conclude that Kirk’s non-disclosure was
not inadvertent and that Kirk notified the bankruptcy trustee only because the defendants
forced his hand.” Kirk, 51 So. 3d at 992 (¶38) (emphasis added). The same must be said
here.
18
concealing them.” Love, 677 F.3d at 265-66 (quotation marks and brackets omitted) (quoting
Superior Crewboats, 374 F.3d at 336 (quoting Burnes v. Pemco Aeroplex Inc., 291 F.3d
1282, 1288 (11th Cir. 2002)). This is not the sort of full and complete disclosure that the
bankruptcy system requires, and we should not “invite such abuses.” Id.7
¶34. The plurality also finds it significant that Adams seeks to recover for her mother’s
injuries and death rather than for “her own personal cause of action.” Ante at (¶17). This
distinction might be relevant if Adams could argue that she “lack[ed] knowledge” of the
claims because they were not her own personal claims. Kirk, 973 So. 2d at 991 (¶35). But
as discussed above, that simply is not the case. Adams began contemplating the undisclosed
claims years before she was discharged from bankruptcy, and actually filed the lawsuit more
than ten months prior to the order granting her discharge. Because Adams’s own testimony
and actions clearly establish her knowledge of her claims, this distinction is irrelevant.
¶35. My final disagreement with the plurality opinion is that it seems to view the question
as simply whether there is a “genuine issue of material fact” precluding summary judgment;
7
Likewise, the trustee’s decision to abandon the claim when it was first disclosed
“well after the bankruptcy discharge is irrelevant to whether the judicial estoppel doctrine
should apply.” Kaufman v. Robinson Prop. Grp. L.P., No. 2:07CV048-P-A, 2009 WL
3003261, at *2 (N.D. Miss. Sept. 16, 2009) (Pepper, J.); accord Superior Crewboats, 374
F.3d at 335 (applying the doctrine despite the trustee’s abandonment of the claim); Robey
v. Cleveland Sch. Dist., No. 2:12CV101–SA–SAA, 2013 WL 5775306, at *3 (N.D. Miss.
Oct. 25, 2013) (Aycock, J.) (same; collecting cases). The relevant question is whether
Adams had a motive to conceal the claim when she failed to disclose it, not whether the
trustee has an interest in pursuing it when it is brought to her attention post-discharge. As
the bankruptcy court put it, “[t]he trustee’s lack of knowledge [at the appropriate time] of
Adams’s state court cause of action does not provide Adams a ‘safe harbor.’” Adams, 481
B.R. at 858.
19
having decided that such a factual dispute exists, the plurality implies that the issue of
judicial estoppel should be decided at trial by a jury. However, whether the doctrine of
judicial estoppel applies is a decision for the court, not the jury. “Judicial estoppel is
designed to protect the integrity of the judicial system . . . .” Oliver, 51 So. 3d at 207 (¶9)
(quoting Kirk, 973 So. 2d at 991 (¶31)). Our Supreme Court has also explained that
“[j]udicial estoppel is a doctrine of law applied by a trial court.” Lone Star Indus. Inc. v.
McGraw, 90 So. 3d 564, 569-70 (¶18) (Miss. 2012) (emphasis added) (quoting Miss. Power
& Light Co. v. Cook, 832 So. 2d 474, 482 (¶22) (Miss. 2002)); see also New Hampshire v.
Maine, 532 U.S. 742, 750 (2001) (“[J]udicial estoppel is an equitable doctrine invoked by
a court at its discretion.” (quotation marks omitted)); Thore v. Howe, 466 F.3d 173, 178 (1st
Cir. 2006) (“[W]hether to apply the judicial estoppel doctrine is . . . an issue for the court,
not the jury, to decide.”). The nature and purpose of the doctrine are such that the issue
should be resolved by a court; whether the “integrity of the judicial system” is in need of
protection is not an issue that a jury is well-suited to determine. Therefore, any suggestion
that we can simply find “a genuine issue of material fact” and remand the case for a jury trial
is a mistake; this Court must decide whether the circuit judge committed an abuse of
discretion in his application of the doctrine to the facts of this case.8
8
In Mississippi Power & Light Co. v. Cook, there was a brief discussion of the
doctrine of judicial estoppel followed the statement that the plaintiff “explained his actions
in the bankruptcy proceeding, and it was correctly left to the jury to determine his
credibility.” Cook, 832 So. 2d at 482 (¶22). The opinion’s brief analysis of this issue is
confusing, but it appears that the issue on appeal was an evidentiary one—namely, the
circuit court’s ruling that certain of the plaintiff’s “bankruptcy documents could be used for
20
¶36. In summary, I dissent because the plurality opinion applies the wrong standard of
review, reaches the wrong result, and apparently remands the case for a jury trial on an issue
that must be decided by the court.
ISHEE AND CARLTON, JJ., JOIN THIS OPINION.
impeachment, but the entire bankruptcy file could not be admitted into evidence because it
might confuse the jury.” Id. at 481 (¶21). The Supreme Court framed the issue raised by
the appellant as “[w]hether the circuit ‘mishandled’ Cook’s bankruptcy ‘manifold.’” Id. at
481 (capitalization altered). I do not read the opinion to indicate that the issue of judicial
estoppel was or should have been submitted to the jury—only that some of the plaintiff’s
bankruptcy filings were properly admitted for impeachment purposes.
21