United States District Court, W.D. Louisiana, Shreveport Division
ELIZABETH ERNY FOOTE UNITED STATESPKCTJUDGE
the Court is a motion for summary judgment filed by
Defendants Zurich American Insurance Company
("Zurich"), Arnold Transportation Services
("Arnold"), and David G. Dixon ("Dixon")
(collectively, "Defendants"). [Record Document 20].
Defendants argue that because Plaintiff, Daniel Siau
("Siau"), failed to disclose this suit in his
bankruptcy petition, he should be judicially estopped from
proceeding. [Id. at 1]. Although Siau's conduct
would allow this Court to apply judicial estoppel, the Court
declines do so and DENIES the motion at this
time. However, because the bankruptcy trustee is the proper
plaintiff, the Court will allow until May 21,
2018 for his substitution as the real party in
case arises out of an vehicle collision involving Siau and
Dixon, while the latter was allegedly in the course and scope
of his employment with Arnold. [Record Document 1-2 at 3-4].
Zurich is Arnold's liability insurer. [Id. at
4]. Siau filed suit in state court, and Defendants removed
the action following Siau's admission that his total
damages exceeded $75, 000. [Record Documents 1 at 2 and 1-2
at 3, 13-15].
months later, Siau filed a Chapter 7 bankruptcy petition,
which did not disclose this suit. [Record Document 20-4 at
15]. After the bankruptcy court discharged Siau's debts,
Defendants moved for summary judgment. [Record Documents 20
and 20-7]. In response, Siau amended his bankruptcy petition
to disclose this suit. [Record Document 22-4 at 5]. The
bankruptcy trustee then reopened the bankruptcy case,
noticing the creditors that the bankruptcy estate may have
assets to distribute and moving for authorization to hire
Siau's counsel to represent the trustee in the instant
suit. [Record Documents 22-5 and 22-6]. The bankruptcy court
has granted the motion. [Record Document 28]. Although Siau
argues that these actions have corrected the initial
omission, Defendants maintain that disclosure only after an
omission is discovered by a litigation opponent constitutes
the sort of behavior that judicial estoppel is designed to
combat. [Record Documents 22 at 2-3, 7-8 and 23 at 9-10].
Summary Judgment Standard
Rule of Civil Procedure 56(a) directs a court to "grant
summary judgment if the movant shows that there is no genuine
dispute as to any material fact and the movant is entitled to
judgment as a matter of law." Summary judgment is
appropriate when the pleadings, answers to interrogatories,
admissions, depositions, and affidavits on file indicate that
there is no genuine issue of material fact and that the
moving party is entitled to judgment as a matter of law.
Celotex Corp. v. Catrett, Ml U.S. 317, 322 (1986).
When the burden at trial will rest on the non-moving party,
the moving party need not produce evidence to negate the
elements of the non-moving party's case; rather, it need
only point out the absence of supporting evidence. See
Id. at 322-23.
movant satisfies its initial burden of showing that there is
no genuine dispute of material fact, the nonmovant must
demonstrate that there is, in fact, a genuine issue for trial
by going "beyond the pleadings" and
"designating] specific facts" for support.
Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th
Or. 1994) (citing Celotex, 477 U.S. at
325). "This burden is not satisfied with some
metaphysical doubt as to the material facts, " by
conclusory or unsubstantiated allegations, or by a mere
"scintilla of evidence." Id. (internal
quotation marks and citations omitted). However, "[t]he
evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in his favor."
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1985) (cixing Adickes v. S. H. Kress <& Co.,
398 U.S. 144, 158-59 (1970)). While not weighing the evidence
or evaluating the credibility of witnesses, courts should
grant summary judgment where the critical evidence in support
of the nonmovant is so "weak or tenuous" that it
could not support a judgment in the nonmovant's favor.
Armstrong v. City of D all, 997 F.2d 62, 67 (5th
Law and Analysis
argue that judicial estoppel should bar Siau's claim.
[Record Document 20 at 1]. Judicial estoppel is a common-law
doctrine designed to prevent litigants from assuming
inconsistent positions for self-interest. In re Superior
Creivboats, Inc., 374 F.3d 330, 334 (5th Cir. 2004).
"It is 'an equitable doctrine invoked by a court at
its discretion' to 'protect the integrity of the
judicial process."' Reed v. City of
Arlington, 650 F.3d 571, 574 (5th Cir. 2011) (en banc)
(quoting New Hampshire v. Maine, 532 U.S. 742,
749-50 (2001)). The doctrine "must be applied in such a
way as to deter dishonest debtors, whose failure to fully and
honestly disclose all their assets undermines the integrity
of the bankruptcy system, while protecting the rights of
creditors to an equitable distribution of the assets of the
debtor's estate." Id. To judicially estop a
claim, this Court must find three elements present: "(1)
the party against whom judicial estoppel is sought has
asserted a legal position which is plainly inconsistent with
a prior position; (2) a court accepted the prior position;
and (3) the party did not act inadvertently."
Id. Nevertheless, "judicial estoppel is not
governed by 'inflexible prerequisites or an exhaustive
formula for determining [its] applicability, 5 and numerous
considerations 'may inform the doctrine's application
in specific factual contexts.'" Love v. Tyson
Foods, Inc., 677 F.3d 258, 261 (5th Cir. 2012) (quoting
New Hampshire, 532 U.S. at 751).
Application of the Estoppel Elements
bankruptcy petition, Siau did not disclose this claim even
though he had already filed suit, effectively representing to
the bankruptcy court that no claim existed. See Superior
Cmvboats, 374 F.3d at 335 (citing In re Coastal
Plains, Inc., 179 F.3d 197, 210 (5th Cir. 1999)). By
maintaining this action, he asserts an inconsistent position,
thereby satisfying the first prong of the test for judicial
estoppel. The second prong is also satisfied because the
bankruptcy court accepted Siau's prior position when it
issued a "no asset" discharge. See id.
the third element, a debtor's failure to disclose is
inadvertent when the debtor "either lacks knowledge of
the undisclosed claims or has no motive for their
concealment." Coastal Plains, 179 F.3d at 210.
Siau argues that non-disclosure in itself does not warrant an
inference of deceitful intent and that his efforts to correct
his error support an inference of inadvertence. [Record
Document 22 at 6-7]. However, this explanation fails to
establish inadvertence as defined by the Fifth Circuit.
See Coastal Plains, 179 F.3d at 210. Here, Siau not
only knew of the facts underlying his claim, he had also
filed suit. [Record Document 1-2 at 3]. Because his creditors
could seek to recover from a disclosed claim, he had a motive
to conceal it. See In re Flugence,738 F.3d 126, 131
(5th Cir. 2013). Suspiciously, the amended schedule of assets
Siau filed in the bankruptcy court states that the case
before this Courtis actually pending in the City Court of
Shreveport, Louisiana. [Record Document 22-4 at 5]. That
court has a jurisdictional upper ...