Disclosure of Post-Petition Claims
the bankruptcy case proceeding . For further discussion see NACBA ’ s amicus briefs in Slater v . U . S . Steel Corp . 27 Fla . L . Weekly Fed . C 190 ( U . S . 11th Cir . 2017 ) here , in Jones v . Bob Evans Farms , Inc ., 811 F . 3d 1030 , 1033 ( 8th Cir . 2016 ) here , and Ingram v . AAA Cooper Transp ., Inc ., 551 B . R . 915 , 918 ( S . D . Ga . 2016 ) here .
Again , some courts disagree . Rugiero v . Nationstar Mortg ., LLC , 580 Fed . Appx . 376 , 379 ( 6th Cir . 2014 ) ( test of whether debtor is acting on behalf of estate is whether debtor has properly disclosed the cause of action to bankruptcy court , trustee , and creditors ); Cowling v . Rolls Royce Corp ., Civil Action No . 11-0719 , 2012 WL 4762143 , at * 4-5 ( S . D . Ind . Oct . 5 , 2012 ) ( dismissing civil lawsuit for lack of standing because plaintiff , whose claims arose after he filed for Chapter 13 protection , did not dispute the fact that he never disclosed the civil lawsuit in his Chapter 13 bankruptcy proceeding , and stating that debtors who disclosed pending lawsuits would have standing to pursue their lawsuits on behalf of the bankruptcy estate ); Robertson v . Flowers Baking Co . of Lynchburg , LLC , Civil Action No . 11- 0013 , 2012 WL 830097 , at * 4 ( W . D . Va . Mar . 6 , 2012 ) ( Chapter 13 debtor lost standing regarding undisclosed asset ); Kleschik v . Marshalls , Inc ., No . 17- 2438 , 2017 U . S . Dist . LEXIS 168188 , at * 15 ( E . D . Pa . Oct . 11 , 2017 ). Check your jurisdiction .
Judicial Estoppel Argument 2
Judicial estoppel is a “ doctrine that seeks to prevent a litigant from asserting a position inconsistent with one that she has previously asserted in
2 These cases are distinguishable from chapter 7 cases where the debtor has no standing to pursue undisclosed prepetition claims but post-petition claims would not belong to the chapter 7 estate . the same or in a previous proceeding .” Ryan Operations G . P . v . Santiam- Midwest Lumber Co ., 81 F . 3d 355 , 358 ( 3d Cir . 1996 ). The Supreme Court set out the standard in 2001 .
Under the judicial estoppel doctrine , where a party assumes a certain position in a legal proceeding , and succeeds in maintaining that position , he may not thereafter , simply because his interests have changed , assume a contrary position , especially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him . Davis v . Wakelee , 156 U . S . 680 , 689 , 39 L . Ed . 578 , 15 S . Ct . 555 . The 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 . Courts have recognized that the circumstances under which judicial estoppel may appropriately be invoked are not reducible to any general formulation . Nevertheless , several factors typically inform the decision whether to apply the doctrine in a particular case : First , a party ’ s later position must be clearly inconsistent with its earlier position . Second , courts regularly inquire whether the party has succeeded in persuading a court to accept that party ’ s earlier position , so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled . Third , courts ask whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped . In enumerating these factors , this Court does not establish inflexible prerequisites or an exhaustive formula for determining the applicability of judicial estoppel . Additional considerations may inform the doctrine ’ s application in specific factual contexts .
New Hampshire v . Maine , 532 U . S . 742 , 745 , 121 S . Ct . 1808 , 1812 ( 2001 ). The Supreme Court further stated : (“ it may be appropriate to resist application of judicial estoppel when a party ’ s prior position was based on inadvertence or mistake .”) ( internal quotation marked and citations omitted ). Id . at 1816 .
Defendants typically argue that ( 1 ) the debtor had an obligation to disclose the post-petition claim ( which is usually incorrect ) and failed to do so that ( 2 ) continuing the litigation represents an inconsistent position . Put another way the debtor ’ s lack of an amendment disclosing the claim is a statement that he had no claim . Therefore , a statement in a separate lawsuit asserting the same claim must be dismissed .
Many courts take the position that if the new claim wasn ’ t listed in an amended schedule that the claim should be dismissed . See Eastman v . Union Pac . R . R . Co ., 493 F . 3d 1151 , 1157- 60 ( 10th Cir . 2007 ) (“ Where a debtor has both knowledge of the claims and a motive to conceal them , courts routinely , albeit at times sub silentio , infer deliberate manipulations .”); In re Superior Crewboats , Inc ., 374 F . 3d 330 , 335-36 ( 5th Cir . 2004 ) ( concluding that judicial estoppel applied because plaintiffs knowingly omitted civil claim from bankruptcy disclosures ); Jones v . Bob Evans Farms , Inc ., 811 F . 3d 1030 , 1033 ( 8th Cir . 2016 ) (“… a Chapter 13 debtor who does not amend his bankruptcy schedules to reflect a post petition cause of action adopts inconsistent positions in the bankruptcy court and the court where that cause of action is pending .”)
This position is at odds with the Bankruptcy Code and Rules . Bankruptcy Rule 1009 ( a ) states that a schedule may be amended by the debtor as a matter of course at any time before the case is closed . It also provides that the bankruptcy court may
22 CONSUMER BANKRUPTCY JOURNAL Winter 2018 National Association of Consumer Bankruptcy Attorneys