Brandon v. Interfirst Corp.

• Decision Date: 26 October 1988
• Docket Number: No. 88-1305,88-1305
• Citation: 858 F.2d 266
• Parties: Faye BRANDON, Plaintiff-Appellant, v. INTERFIRST CORPORATION, and John Hancock Mutual Life Insurance Company, Defendants-Appellees. Summary Calendar.
• Court: U.S. Court of Appeals — Fifth Circuit

Page 266

858 F.2d 266

Faye BRANDON, Plaintiff-Appellant, v. INTERFIRST CORPORATION, and John Hancock Mutual Life

Insurance Company, Defendants-Appellees.

No. 88-1305

Summary Calendar.

United States Court of Appeals, Fifth Circuit.

Oct. 26, 1988.

Stephen R. Marsh, Wichita Falls, Tex., for plaintiff-appellant.

Stephen Briley, Wichita Falls, Tex., for defendants-appellees.

Mikal S. Lambert, Wichita Falls, Tex., for John Hancock.

Appeal from the United States District Court for the Northern District of Texas.

Before CLARK, Chief Judge, JOHNSON and JOLLY, Circuit Judges.

E. GRADY JOLLY, Circuit Judge:

Faye Brandon appeals from the judgment dismissing her claim against John Hancock Mutual Life Insurance Co. ("Hancock"), as administrator of the benefit plan of Brandon's former employer, for the plan's refusal to cover her medical expenses. Brandon contends on appeal that the district court erroneously rejected her argument that Hancock was judicially estopped from raising ERISA preemption as a defense because, Brandon contends, the defense was inconsistent with Hancock's earlier positions. We affirm the district court.

I

In 1983 and 1984, Brandon incurred medical expenses for which she made a claim to an employee benefit plan sponsored by her former employer, Interfirst Corporation. Interfirst and Hancock had a contract under which Hancock administered (but did not insure) the plan. The employee benefit plan denied Brandon's claim on the grounds that her treatments were not medically necessary for the care and treatment of an illness.

In 1986 Brandon sued Interfirst Corporation and Hancock in Texas state court. She claimed that before she obtained the medical treatments the defendants had represented to her that her medical expenses would be covered under the employee benefit plan. Brandon alleged numerous causes of action based on promissory estoppel, fraud and various Texas statutes regarding deceptive trade practices and insurance. A year later, she amended her original complaint to include causes of action based on breach by fiduciaries of a duty of good faith and fair dealing and violations of Texas insurance regulations.

After Brandon amended her complaint, the defendants jointly petitioned for removal of the action to federal district court. In their petition, the defendants stated that Brandon's claim that they were fiduciaries who had breached their duty of good faith and fair dealing was a claim arising under the laws of the United States, specifically the Employee Retirement Income Security Act, 29 U.S.C. Sec. 1001 et seq. ("ERISA"). It does not appear that Brandon ever moved to remand the case to state court.

After the case had proceeded in federal court, Interfirst was voluntarily dismissed. In the meantime, Hancock moved for dismissal, or, in the alternative, summary judgment, on the grounds that all of Brandon's state law claims were preempted by ERISA and that Hancock was entitled to judgment as a matter of law on the ERISA claim. Brandon then moved for partial summary judgment, arguing that Hancock was barred by judicial estoppel from raising the ERISA preemption as a defense to the state law causes of action alleged in her first original complaint in the state court. Brandon based this argument on Hancock's statement in its Petition for Removal that the petition was being filed within thirty days of the time from which the case could be removed, i.e., the date of filing of Brandon's amended complaint. According to Brandon, since Hancock had stated in a sworn pleading that the case was only then removable, Hancock was estopped from later raising the ERISA preemption as a defense to the causes of action filed more than thirty days before the Petition for Removal.

The district court denied Brandon's motion without comment and granted Hancock's Motion for Summary Judgment, holding that ERISA preempted Brandon's state law claims and that Brandon had failed to state a claim against Hancock under ERISA. The district court entered a judgment against Brandon dismissing the complaint.

II

The sole issue on appeal is whether judicial estoppel should have barred Hancock from raising ERISA preemption as a defense to the state law causes of action alleged in Brandon's original complaint in state court. Brandon's argument on this issue is misguided, and we conclude that the district court properly denied her motion for partial summary judgment.

Judicial estoppel is a common law doctrine by which a party who has assumed one position in his pleadings may be estopped from assuming an inconsistent position. Generally, the doctrine applies in cases where a party attempts to contradict his own sworn statements in the prior litigation. USLIFE Corp. v. U.S. Life Ins. Co., 560 F.Supp. 1302, 1304-05 (N.D.Tex.1983). The purpose of the doctrine is "to prevent parties from 'playing fast and loose' with (the courts) to suit the exigencies of self interest." Id. at 1305 (citing Scarano v. Central Ry. Co. of New Jersey, 203 F.2d 510, 513 (3d Cir.1953)). Although the law of the Fifth Circuit is scant on the subject of judicial estoppel, the doctrine is recognized and has been applied here. USLIFE, 560 F.Supp. at 1305 & n. 2 (citing cases); see, e.g., Jett v. Zink, 474 F.2d 149, 154-55, reh'g denied, 474 F.2d 1347, 1348 (5th Cir.), cert. denied, sub nom. Sterling Oil of Oklahoma, Inc. v. Chamberlain, 414 U.S. 854, 94 S.Ct. 153, 38 L.Ed.2d 104 (1973) (party who argued that action was quasi in rem was precluded from arguing at a later stage in the litigation that the action was in personam ); In re Double D Dredging Co., 467 F.2d 468, 469 (5th Cir.1972) (party who argued that a ship had been in navigable waters was later estopped from arguing that the ship had not been in navigable waters).

Brandon argues that Hancock has maintained inconsistent positions in this case. Hancock represented in its petition for removal that it was filing that petition

within thirty (30) days after receipt by Petitioners of Plaintiff's First Amended Original Petition from which it could be first ascertained that the case could be removed, in that, the First Amended Original Petition, for the first time, contains the allegation that Petitioners breached their fiduciary duty, a claim over which this Court has exclusive jurisdiction pursuant to [ERISA].

Brandon argues that these statements by which Hancock gained removal are inconsistent with Hancock's assertion of ERISA preemption as a defense to the state law claims filed more than thirty days before Hancock's petition for removal. Brandon's argument implicitly assumes that Hancock could have removed the case to federal court solely because of its claim that ERISA preempted the state law causes of action. Thus, Brandon argues, Hancock adopted in its petition...