Chonah v. Coastal Villages Pollock, LLC

• Citation: 425 P.3d 895
• Decision Date: 04 September 2018
• Docket Number: No. 76201-0-I,76201-0-I
• Court: Court of Appeals of Washington
• Parties: Hishm CHONAH, Respondent, v. COASTAL VILLAGES POLLOCK, LLC, and C/P Northern Hawk, LLC, Appellants.

425 P.3d 895

Hishm CHONAH, Respondent,

v.COASTAL VILLAGES POLLOCK, LLC, and C/P Northern Hawk, LLC, Appellants.

No. 76201-0-I

Court of Appeals of Washington, Division 1.

FILED: September 4, 2018

Michael Alan Barcott, Holmes Weddle & Barcott, 999 3rd Ave. Ste. 2600, Seattle, WA, 98104-4018 for Petitioner.

Michael Healy, Law Offices of Mike Healy, 420 Bell St. Ste. 201, Edmonds, WA, 98020-3230, John W. Merriam, Attorney at Law, 4005 20th Ave. W Ste. 110, Seattle, WA, 98199-1290, Gordon Charles Webb, Webb Law Firm, 225 106th Ave. NE, Bellevue, WA, 98004-5715 for Respondent.

Mann, A.C.J.

¶ 1 Judicial estoppel is an equitable doctrine that precludes a party from asserting one position in a court proceeding and later seeking an unfair advantage by taking an inconsistent position. The purpose of judicial estoppel is to protect the integrity of the judicial process, not to benefit a party. Hishm Chonah was injured at sea while working for Coastal Villages Pollock, LLC and C/P Northern Hawk, LLC (Coastal Villages). After Chonah filed a Chapter 7 bankruptcy petition without listing his maritime claim, Coastal Villages asserted that his claim was barred by judicial estoppel. Because the trial court did not abuse its discretion concluding that judicial estoppel does not bar Chonah’s claim, we affirm.

FACTS

¶ 2 Hishm Chonah moved to the United States from Sudan in 2001, when he was approximately 27 years old. Chonah held a degree in accounting from a Sudanese university, and when he came to the United States he initially hoped to enter that field. But he needed to study English and send money to his family in Sudan, so he started working in the fishing industry instead. In 2002, Chonah began working on fish processing ships in Alaska for Coastal Villages.

¶ 3 In January 2013, Chonah was injured at sea while working as a crewmember on the vessel Northern Hawk. The Jones Act provides seamen injured in the course of employment the right to sue employers for personal injury. 46 U.S.C. § 30104. Over the next three years, Chonah underwent four surgeries on his neck and back. During this time, Coastal Villages paid maintenance to Chonah under the Jones Act, initially at $25 per day and then $45 per day.¹ Chonah was unable to meet his living expenses on this income and he fell into debt.

¶ 4 In December 2013, after Chonah’s bank account was frozen, he sought advice from Brad Puffpaff, an attorney who had been practicing for less than a year. Puffpaff recommended that Chonah declare bankruptcy. Chonah said he didn't understand what that meant, and Puffpaff explained "you won’t owe any money and you would get a new start." Chonah told Puffpaff about his accident, surgeries, and the maintenance payments from Coastal Villages. Chonah explained that he couldn’t return to fishing because he had spacers put into his neck and it would be too dangerous. He said that when his surgeries were completed he expected Coastal Villages would stop paying maintenance and offer payment for lost time and loss of future wages, but he didn’t think he needed a lawyer to help with this because "my employer was treating me OK" and "using a lawyer would slow everything down." However, Chonah expressed concern that Coastal Villages might offer too little. Puffpaff told Chonah he didn’t do that kind of legal work, but could provide a recommendation if Chonah decided he needed an attorney in the future. Puffpaff then gave Chonah a form to take home and fill out in preparation for the bankruptcy filing. But Chonah’s English was not good enough to understand the questions, so Chonah returned to Puffpaff’s office and Puffpaff completed the form for him.

¶ 5 On February 18, 2014, Chonah met with Anissa Olson and Becky Buchan of Polaris Group LTD, an insurance claims adjusting firm retained by Coastal Villages. Tatyanna Drakulovic of Coastal Villages was also present at the meeting. Olson was aware that Chonah was going through a period of financial hardship. She offered Chonah $1,500 as an advance on a future settlement, but Chonah refused it. According to Olson, Chonah said he didn’t take the offer because he planned to file for bankruptcy and he needed to make sure his account showed no income for a year. According to Chonah, he didn’t accept the advance because he didn’t want to sign for something he wasn’t sure about.

¶ 6 On April 21, 2014, Puffpaff filed Chonah’s Chapter 7 bankruptcy petition. In the petition, Puffpaff inaccurately characterized Chonah’s maintenance payments under the Jones Act as "L&l Workman’s Compensation." The bankruptcy petition did not disclose Chonah’s potential Jones Act claim against Coastal Villages.²

¶ 7 On May 27, 2014, Puffpaff accompanied Chonah to the Chapter 7 meeting of creditors. In response to questions from the bankruptcy trustee, Chonah verbally affirmed that his bankruptcy documents listed all of his assets, debts, and creditors, that there were no errors or omissions, and that he did not have a personal injury claim against anyone. Puffpaff did not correct Chonah’s responses. The bankruptcy trustee reported that there was "no property available for distribution from the estate over and above that exempted by law." On July 30, 2014, Chonah was granted a Chapter 7 discharge from the U.S. Bankruptcy Court.

¶ 8 Coastal Villages learned of Chonah’s bankruptcy discharge and summoned him to another meeting. On September 28, 2015, Chonah met again with Olson, Buchan, and Drakulovic. They offered Chonah $40,000 to settle his claim, and encouraged him to contact his bankruptcy attorney immediately. Chonah refused the settlement offer and contacted a maritime attorney. Chonah then spoke with Puffpaff, who told him it would be possible to reopen the bankruptcy case. Chonah subsequently retained a new bankruptcy attorney to address the problem.

¶ 9 On January 4, 2016, the bankruptcy trustee moved to reopen Chonah’s Chapter 7 bankruptcy case based on "information concerning the existence of additional assets requiring further administration." On January 13, 2016, Chonah filed his Jones Act claim against Coastal Villages.

¶ 10 On April 18, 2016, Chonah filed a notice and motion to convert his bankruptcy from Chapter 7 to Chapter 13. Chonah expressly asked the bankruptcy court not to grant the motion "without an express finding that his failure to list the maritime claim was inadvertent, because he is concerned that the defendant in the King County maritime claim action may assert judicial estoppel." Chonah's new bankruptcy attorney argued that Puffpaff was an inexperienced lawyer who prejudiced Chonah by filing under Chapter 7. He explained that under Chapter 7, the interim trustee’s first duty was to collect and reduce the property of the estate as expeditiously as possible to pay Chonah's debts, potentially ignoring Chonah’s interest in the outcome of the litigation and leaving Chonah vulnerable to losing his interim maintenance payments. In contrast, he explained, under Chapter 13, the Jones Act claim remained a part of the bankruptcy estate, leaving Chonah time to manage the claim against Coastal Villages to ensure a recovery that would protect his interests as well as the creditors, protect his maintenance income during the pendency of the claim, and then allow the trustee to pay the full $44,000 debt once the claim was resolved.

¶ 11 On May 25, 2016, the bankruptcy court granted Chonah’s unopposed motion, including an express finding "that the Debtor did not intentionally conceal his maritime claim in his original filing." Chonah then submitted an amended Chapter 13 bankruptcy filing, which stated that he had an employment injury claim for "loss of maritime wages, including future wages" in the amount of $800,000.

¶ 12 On September 29, 2016, Coastal Villages filed a motion for summary judgment seeking to bar Chonah’s suit on the ground that judicial estoppel precluded the action. At oral argument, the trial court asked whether Chonah’s debts had been discharged in Chapter 7 or remained alive under Chapter 13. Counsel for Chonah explained that even though Chonah had initially received a general discharge of debts under Chapter 7, the creditors’ claims remained alive:

[T]he reason the case was reopened was so the bankruptcy trustee could administer the estate for the benefit of the creditors. So if there’s a judgment in this case, if Your Honor doesn’t rule and the case doesn’t stop, and there’s eventually a judgment or a settlement, that money is going to go to the standing trustee, the Chapter 13 trustee, for disbursement. And the creditors are going to get paid - assuming the sum is more than $80,000, they are going to get paid 100 cents on the dollar.

¶ 13 On November 11, 2016, the trial court denied Coastal Villages’ motion for summary judgment, reasoning as follows:

In the present case, this court cannot say that it would be inequitable to allow the plaintiff’s case to proceed. Doing so does not serve to confer upon him any unfair advantage nor to impose any unfair detriment upon the defendant. Looking at what has gone before and focusing on the interest of the court in protecting the integrity of the judicial process, it must be observed that language and cultural barriers, quirks of maritime and bankruptcy law, and questionable legal advice all combine to ameliorate the plaintiff’s actions to a degree that shifts the equities.

¶ 14 On December 27, Coastal Villages filed a motion for discretionary review with this court. Chonah did not oppose the motion. In April 7, 2017, the court commissioner granted the motion for discretionary review. This appeal followed.

DISCUSSION

¶ 15 Coastal Villages argues that the trial court erred in declining to apply the doctrine of judicial estoppel to bar Chonah’s lawsuit. We disagree.

Standard of Review

¶ 16 "An appellate court reviewing a summary judgment places itself in the position of the trial court and considers the facts in a light most favorable to the nonmoving party." Cunningham v. Reliable...