Benton v. Benton

• Decision Date: 25 April 2006
• Docket Number: No. S06A0605.,S06A0605.
• Citation: 629 S.E.2d 204
• Parties: BENTON v. BENTON.
• Court: Georgia Supreme Court

629 S.E.2d 204

BENTON v. BENTON.

No. S06A0605.

Supreme Court of Georgia.

April 25, 2006.

COPYRIGHT MATERIAL OMITTED

Philip Titus Raymond, III, Susan Dalton Raymond, Macon, for Appellant.

Susan Yandle Middleton, Kice H. Stone, Stone & Chapman, P.C., for Appellee.

HINES, Justice.

This Court granted estranged husband, Gary Benton, interlocutory appeal in this divorce action against his wife, Diane Benton, to consider whether Mr. Benton was entitled to partial summary judgment on Ms. Benton's counterclaim for alimony and equitable property division based upon the doctrine of federal judicial estoppel. For the reasons which follow, we affirm the trial court's denial of partial summary judgment to Mr. Benton.

Mr. Benton filed for divorce on May 13, 2003. Thirteen days later, Ms. Benton filed an answer and counterclaim, in which she alleged that she was totally dependent upon Mr. Benton for support; she prayed for temporary and permanent alimony, including attorney fees, and an equitable division of the marital property. In February 2005, while the divorce action was pending, Ms. Benton filed a voluntary petition for a Chapter 7 bankruptcy with the United States Bankruptcy Court for the Middle District of Georgia. In connection with her bankruptcy action, she filed a "Statement of Financial Affairs," which listed the pending divorce case as one of three suits to which she was or had been a party in the preceding year. However, in "Schedule B — Personal Property," which asked her to list "[a]limony, maintenance, support, and property settlements to which [she] is or may be entitled," she checked "None." Ms. Benton was granted a discharge by the bankruptcy court on May 19, 2005.

On July 11, 2005, Mr. Benton moved for partial summary judgment in the divorce action on Ms. Benton's claims for property division and alimony, including attorney fees. His motion was based on the doctrine of federal judicial estoppel; he asserted that Ms. Benton's failure to disclose to the bankruptcy court, in Schedule B, that she might be entitled to support and property in the pending divorce case precluded her from pursuing such claims in the divorce action. Ms. Benton responded that her claims for relief in the divorce were inchoate, choses in action, and therefore, she had not made an omission in her bankruptcy petition, but had made an honest and complete disclosure of her financial condition. Following a hearing in the matter, the trial court denied Mr. Benton partial summary judgment on October 3, 2005, after expressly finding a genuine issue as to one or more material facts.¹

On October 28, 2005, Ms. Benton moved the bankruptcy court to reopen her case in order to allow her to amend Schedule B. On December 6, 2005, after notice to all parties in interest and no objections having been filed, the bankruptcy court entered an order granting Ms. Benton's motion to reopen her case and allow her to amend Schedule B. On or about December 16, 2005, she filed an "Amended Schedule B — Personal Property," listing the pending divorce action and the possibility that she might receive alimony and other support.

This Court has determined that a debtor filing for bankruptcy under Chapter 7 is not under any statutory duty to amend his or her schedule of assets, but, as in this case, may voluntarily amend the schedule to avoid consequences such as judicial estoppel. Period Homes, Ltd. v. Wallick, 275 Ga. 486, 487, 569 S.E.2d 502 (2002).

The federal doctrine of judicial estoppel precludes a party from asserting a position in one judicial proceeding after having successfully asserted a contrary position in a prior proceeding. [Cit.] It is most commonly invoked to prevent bankruptcy debtors from concealing a possible cause of action, asserting the claim following the discharge of the bankruptcy and excluding resources from the bankruptcy estate that might have otherwise satisfied creditors. [Cit.] The purpose of judicial estoppel is to protect the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment. [Cit.] This equitable doctrine is invoked by a court at its discretion, and intended to prevent abuse of the judicial process. The circumstances under which it is appropriate are not reduced to any general formula or rule. [Cit.]

Period Homes, Ltd. v. Wallick at 488(2), 569 S.E.2d 502.

As already noted, the basis for Mr. Benton's claim of judicial estoppel is that Ms. Benton failed, under oath, to reveal assets which could be awarded in the divorce action. And in rebuttal to the motion for partial summary judgment, Ms. Benton asserted that she had made no omission, purposeful or otherwise, but had completely disclosed her finances inasmuch as any claims for relief in the divorce were inchoate, the value of which was undetermined, and indeed, could not be determined until the divorce was tried;² consequently, her response to the bankruptcy petition's Schedule B question was accurate. In fact, Ms. Benton submitted both her own affidavit and that of her bankruptcy attorney attesting to that effect.

In order to prevail on a motion for summary judgment under OCGA § 9-11-56, the moving party must show that there exists no genuine issue of material fact, and that the undisputed facts, viewed in the light most favorable to the nonmoving party, demand judgment as a matter of law. Home Builders Assn. of Savannah v. Chatham County, 276 Ga. 243, 245(1), 577 S.E.2d 564 (2003). Moreover, on appeal from the denial or grant of summary judgment the appellate court is to conduct a de novo review of the evidence to determine whether there exists a genuine issue of material fact, and whether the undisputed facts, viewed in the light most favorable to the nonmoving party, warrant judgment as a matter of law. Home Builders Assn. of Savannah v. Chatham County, supra at 245(1), 577 S.E.2d 564. See also Progressive Cas. Ins. Co. v. Evans, 276 Ga.App. 594, 623 S.E.2d 767 (2005).

In this case, Ms. Benton's evidentiary response to Mr. Benton's motion for partial summary judgment created a genuine issue of material fact about the existence of any omission at all, which is the sole ground for the sought application of judicial estoppel. Therefore, the trial court did not err in denying summary judgment on the issue of judicial estoppel on this basis alone. However, pretermitting this dispute of material fact, and accepting arguendo that there was an omission in the bankruptcy filing, the application of federal judicial estoppel is still not warranted in this case.

Generally, judicial estoppel is inapplicable when a plaintiff has successfully amended his or her bankruptcy petition to include any claim against the defendant as a potential asset because then it cannot be said that the position in the trial court is inconsistent with the position asserted by the plaintiff in the bankruptcy proceeding and, therefore, judicial estoppel does not bar his or her claim. Clark v. Perino, 235 Ga.App. 444, 446, 509 S.E.2d 707 (1998); Johnson v. Trust Co. Bank, 223 Ga.App. 650, 651, 478 S.E.2d 629 (1996).

Mr. Benton cites, inter alia, Cochran v. Emory University, 251 Ga.App. 737, 555 S.E.2d 96 (2001), in support of his position that judicial estoppel is warranted. In Cochran, the Court of Appeals affirmed the grant of summary judgment to the defendant in the plaintiff/debtor's suit for medical malpractice on the basis of judicial estoppel, holding that it was not an abuse of discretion for the trial court to find that the plaintiff/debtor "did not act with the requisite diligence" after the issue of judicial estoppel was raised. However, even assuming that "requisite diligence" can be the determinative factor, in that case the plaintiff/debtor did not initially disclose her potential claim to the bankruptcy court and sought to amend her bankruptcy petition only after she received an adverse ruling from the trial court on summary judgment. In this case, Ms. Benton, from the beginning, disclosed the pending divorce action to the bankruptcy court and she received a favorable ruling from the trial court on the issue of judicial estoppel.³ Moreover, Cochran makes plain that, after judicial estoppel is raised, the question of whether the debtor acted with requisite diligence is within the sound discretion of the trial court. Cochran v. Emory University, supra at 739(2), 555 S.E.2d 96. Under the circumstances of this case, an abuse of discretion can not be found in a refusal to apply the doctrine of federal judicial estoppel.

Several factors weigh against the application of judicial estoppel. Ms. Benton did not mislead or manipulate the bankruptcy court about the existence of the pending divorce action; she listed it as one of the three suits to which she was or had been a party in the preceding year, and her claims for alimony and marital property are not inconsistent with any position taken during the pendency of the bankruptcy action. See Period Homes, supra at 488(2), 569 S.E.2d 502. What is more, there is no evidence of any benefit that accrued to Ms. Benton by any initial failure to elaborate in the bankruptcy petition about her claims in the divorce action for support and property. Indeed, there was no objection to the reopening of the bankruptcy case by any of the parties in interest. Finally, but certainly no less significantly, a court should be hesitant to apply federal judicial estoppel to defeat the important rights of a spouse to potential support and an equitable share of marital property. See Southworth v. Southworth, 265 Ga. 671, 675, 461 S.E.2d 215 (1995), Fletcher, P.J., concurring specially (public policy requires that divorce be treated differently because of the unique and important issues involved, including support of spouses and division of property); Dial v. Adkins, 265 Ga.App. 650, 651(2), 595 S.E.2d 332 (2004), citing Brookins v. Brookins, 257 Ga. 205, 207-208, 357 S.E.2d 77 ...