Cunningham v. Reliable Concrete Pumping, Inc.
| Decision Date | 07 March 2005 |
| Docket Number | No. 53732-6-I.,53732-6-I. |
| Court | Washington Court of Appeals |
| Parties | Richard and Marci CUNNINGHAM, husband and wife, both individually and on behalf of their marital community, Appellants, v. RELIABLE CONCRETE PUMPING, INC., a Washington corporation; Reliable Hardware & Equipment Co., a division of Reliable Concrete Pumping, Inc. "ABC Co." and "XYZ Co.", Respondents. |
Richard Cunningham, Everett, WA, for Appellant.
David M. Jacobi, Jennifer A. Williams, Wilson Smith Cochran Dickerson, Seattle, WA, for Respondent.
¶ 1 Judicial estoppel is an equitable doctrine that precludes a party from gaining an advantage by asserting one position in a court proceeding and later seeking an advantage by taking a clearly inconsistent position.1 "The purposes of the doctrine are to preserve respect for judicial proceedings without the necessity of resort to the perjury statutes; to bar as evidence statements by a party which would be contrary to sworn testimony the party has given in prior judicial proceedings; and to avoid inconsistency, duplicity, and ... waste of time."2 In this case, Richard and Marci Cunningham (Cunningham) filed their petition in bankruptcy under Chapter 7 of the Bankruptcy Code, but failed to list in their schedules a third-party personal injury claim arising out of a workplace injury. Following receipt of a discharge and closing of their bankruptcy as a no-asset case, Cunningham sued Reliable Concrete Pumping, Inc. and its division, Reliable Hardware & Equipment, Inc. (collectively "Reliable") for this workplace injury. Because the trial court properly granted Reliable's motion for summary judgment of dismissal based on judicial estoppel, we affirm.3
¶ 2 Richard Cunningham suffered a workplace injury in September 1997 and developed related symptoms two years later. It appears that he filed a claim for worker's compensation with the Department of Labor and Industries, which the Department later closed.
¶ 3 In November 1999, Reliable sued Cunningham to collect payment for building materials and supplies. Cunningham asserted a personal injury counterclaim based on the 1997 workplace injury. The collection action and the related personal injury counterclaim were dismissed in January 2003.
¶ 4 In May 2000, Cunningham filed a petition under the Bankruptcy Code, but did not list the personal injury claim against Reliable in the bankruptcy schedules. It is unclear from the record that is before us whether Cunningham disclosed the claim to either the trustee or creditors at the first meeting of creditors. The bankruptcy court granted a discharge, and the trustee determined there was no property available for distribution to creditors.
¶ 5 Eleven days after the discharge, Cunningham commenced this personal injury action against Reliable based on the 1997 workplace injury that was the subject of Cunningham's counterclaim against Reliable in 1999. Upon learning of Cunningham's claim against Reliable, the trustee for the Cunningham bankruptcy re-opened the bankruptcy case and revoked her previously filed report of no distribution.
¶ 6 Reliable moved for summary dismissal of this action, arguing that judicial estoppel barred the personal injury claim. The trial court granted the motion and denied Cunningham's motion for reconsideration.
¶ 7 Cunningham appeals.
¶ 8 Cunningham argues that there were genuine issues of material fact that precluded summary judgment. Specifically, Cunningham contends that although the claim against Reliable was not listed in the bankruptcy schedules, it was orally disclosed both at the first meeting of creditors and in a post-discharge letter to the bankruptcy trustee. Accordingly, Cunningham argues that the position he took in the bankruptcy proceeding was not inconsistent with his position in this action, and therefore the application of judicial estoppel to bar this action is inappropriate. We disagree.
¶ 9 In a summary judgment motion, the moving party bears the initial burden of showing the absence of an issue of material fact.4 5 In making this responsive showing, the nonmoving party cannot rely on the allegations made in its pleadings.6 The evidence and all reasonable inferences therefrom is considered in the light most favorable to the plaintiff, the nonmoving party.7 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.8 We review the trial court's application of the doctrine of judicial estoppel to the facts of this case for an abuse of discretion.9
¶ 10 Numerous federal circuits hold that pre-petition claims must be disclosed in the bankruptcy reorganization plan or otherwise mentioned in the debtor's schedules or disclosure statements.10 In Hamilton v. State Farm Fire & Casualty Co., the Ninth Circuit Court of Appeals held that "notifying the trustee by mail or otherwise is insufficient to escape judicial estoppel."11 That court affirmed the application of judicial estoppel barring Hamilton's undisclosed pre-petition claim against his insurance company. The court concluded that "[i]n the bankruptcy context, a party is judicially estopped from asserting a cause of action not raised in a reorganization plan or otherwise mentioned in the debtor's schedules or disclosure statements."12 Hamilton asserted inconsistent positions by not listing his claim against State Farm in bankruptcy filings and then later suing State Farm on those same claims.
¶ 11 Here, it is undisputed that Cunningham had a personal injury claim against Reliable arising out of his 1997 workplace injury. The personal injury counterclaim against Reliable in the earlier case shows that. Likewise, it is undisputed that the claim should have been scheduled under Schedule B-Personal Property when Cunningham filed for bankruptcy in 2000. It was not scheduled. Specifically, under question 20 in Schedule B-Personal Property, which requires the debtor to list "Other contingent and unliquidated claims of every nature, including. . . counterclaims of the debtor, and rights to setoff claims," Cunningham stated "NONE."13
¶ 12 Richard Cunningham asserts that he disclosed the claim against Reliable during the first meeting of creditors following the bankruptcy filing. The record reflects that the bankruptcy trustee does not share that recollection. Her treatment of the case as a "no asset" matter is consistent with her recollection that Cunningham failed to disclose the claim during the first meeting of creditors. But for purposes of the summary judgment motion before us for review, Cunningham is entitled to the inference that he disclosed the claim at the first meeting of creditors. However, even with this inference, there is no genuine issue of material fact regarding his prior inconsistent position as to the third-party claim against Reliable for the reasons we now discuss.
¶ 13 The record supports the inference that Richard Cunningham disclosed to the trustee his "potential L & I" claim at the bankruptcy court's July 2000 first meeting of creditors. But there is no indication that he ever informed her of the personal injury counterclaim against Reliable, which was not his employer, that he had filed in Reliable's collection action. The object of an L & I claim is to obtain compensation for a workplace injury through the worker's compensation statute. Richard Cunningham filed such a claim. On the other hand, a third-party claim against one not an employer is not a "potential L & I" claim. It is this latter type of claim that is at issue here.
¶ 14 The day after filing this lawsuit, Cunningham sent a letter to the trustee to inform her that he had "filed a lawsuit . . . to force responsibility on the Company who's negligence caused my injury." The trustee interpreted the letter as a reference to the previously discussed "potential L & I claim" and took no action.
¶ 15 The question is whether anything short of listing the claim in the bankruptcy schedules is sufficient to avoid the effect of judicial estoppel. We conclude that under the facts of this case, the failure to list the claim in the bankruptcy schedules fulfills the first criterion of judicial estoppel. The Bankruptcy Code and court rules "impose upon bankruptcy debtors an express, affirmative duty to disclose all assets, including contingent and unliquidated claims."14 Possible causes of action should be listed, even if the likelihood of success is unknown.15 Cunningham failed to fulfill this duty.
¶ 16 The failure to disclose the claim by failing to list it in the schedules was an inconsistent position from the one now taken. We note that Cunningham not only failed to disclose the third-party claim, he affirmatively represented that he had no such claim by answering "none" to the relevant question. The fact that he also made an affirmative incorrect representation is not significant for purposes of the relevant criterion. The failure to disclose is sufficient in and of itself. There was no genuine issue of material fact regarding the inconsistent position that Cunningham took in the bankruptcy proceeding. Thus, the next question is whether the bankruptcy court accepted that position for purposes of the trial court in this case applying the doctrine of judicial estoppel to bar Cunningham's personal injury claim.
¶ 17 Cunningham argues that judicial estoppel is only applicable if his prior inconsistent...
To continue reading
Request your trial
-
Kitsap Alliance of Prop. Owners v. Cent. Puget Sound Growth Mgmt. Hearings Bd.
...an advantage by asserting one position in court and later taking a clearly inconsistent position. Cunningham v. Reliable Concrete Pumping, Inc., 126 Wash.App. 222, 224, 108 P.3d 147 (2005). Hood Canal's assertion on appeal to this court that the County relied on the best available science i......
-
State v. Peck
...benefiting from shifting contradictory positions during continuing litigation. See, e.g., Cunningham v. Reliable Concrete Pumping, Inc., 126 Wash. App. 222, 224-25, 108 P.3d 147 (2005) ("Judicial estoppel is an equitable doctrine that precludes a party from gaining an advantage by asserting......
-
Gosney v. Fireman's Fund Ins. Co.
...an abuse of discretion.29 Arkison v. Ethan Allen, Inc., 160 Wash.2d 535, 538, 160 P.3d 13 (2007) ; Cunningham v. Reliable Concrete Pumping, Inc., 126 Wash. App. 222, 227, 108 P.3d 147 (2005) ; see Taylor v. Bell, 185 Wash. App. 270, 283 n.13, 340 P.3d 951 (2014) (reviewing a trial court's s......
-
Lee v. Jasman
...preserve respect for judicial proceedings and to avoid inconsistency, duplicity, and waste of time. Cunningham v. Reliable Concrete Pumping, Inc., 126 Wash.App. 222, 225, 108 P.3d 147 (2005); Johnson v. Si–Cor, Inc., 107 Wash.App. 902, 906, 28 P.3d 832 (2001). Three factors inform whether j......