Farrar v. Burlington Northern Santa Fe Railway Company, C053059 (Cal. App. 11/26/2007)

• Decision Date: 26 November 2007
• Docket Number: C053059
• Court: California Court of Appeals Court of Appeals
• Parties: GARY R. FARRAR, as Trustee in Bankruptcy, etc., Plaintiff and Appellant, v. BURLINGTON NORTHERN SANTA FE RAILWAY COMPANY, Defendant and Respondent.

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GARY R. FARRAR, as Trustee in Bankruptcy, etc., Plaintiff and Appellant, v. BURLINGTON NORTHERN SANTA FE RAILWAY COMPANY, Defendant and Respondent.

C053059

Court of Appeals of California, Third Appellate District, San Joaquin

November 26, 2007

NOT TO BE PUBLISHED

Appeal from the Super. Ct. No. CV026140.

CANTIL-SAKAUYE, J.

James R. Meyers¹ filed this action against his employer Burlington Northern Santa Fe Railway Company (BNSF) under the Federal Employers' Liability Act (FELA) (45 U.S.C. § 51 et seq.) for a work-related injury. After BNSF learned Meyers had a prior bankruptcy proceeding in which Meyers had failed to list his cause of action against BNSF, BNSF brought a motion for summary judgment on the basis of judicial estoppel. The trial court granted summary judgment on that basis and subsequently denied Meyers's motion for new trial.

Meyers appeals, contending judicial estoppel is not appropriate in this type of case, the trial court applied the wrong law in granting BNSF's motion, and Meyers's evidence established the omission of his claim in his bankruptcy schedules was unintentional. We reverse the summary judgment because we conclude Meyers established a triable issue of material fact regarding his intent when he omitted the FELA employment claim from his bankruptcy schedules.

FACTUAL AND PROCEDURAL BACKGROUND

Meyers's complaint alleges he was employed by BNSF as a conductor/brakeman working in and around BNSF's rail yard and on May 1, 2003, he fell and sustained serious injuries. He alleges BNSF's negligence and failure to comply with a railroad safety regulation of the California Public Utilities Commission caused his accident.

According to Meyers's declaration filed in opposition to BNSF's motion for summary judgment, Meyers and his wife had a pending Chapter 13 bankruptcy proceeding at the time of his injury. When he subsequently could not work, they could not make their required monthly payments to the bankruptcy trustee. Meyers contacted his bankruptcy attorneys and informed them of his work-related injury, his inability to work, and his inability to make the required payments. The attorneys advised Meyers to convert his Chapter 13 filing to a Chapter 7 filing. Meyers and his wife filed a Chapter 7 bankruptcy petition on August 13, 2003.

Meyers told his bankruptcy attorneys that he "had started receiving advances (subsistence loans) from BNSF but that the money would have to be paid back from [his] lost earnings, and that [he] planned on going back to work when [his] injuries resolved." The attorneys advised Meyers it was not necessary to list his work-related accident in the bankruptcy, as he was not in a lawsuit. In the bankruptcy schedule for listing personal property, in the category of "other contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims," Meyers checked the box for "none." In September 2003, when the bankruptcy judge asked whether they had any lawsuits pending, Meyers responded "no" because they had not sued BNSF and were not planning to sue. Meyers received a discharge of his debts and his bankruptcy case was closed in November 2003.

In February 2004, Meyers contacted attorney Frederick Nelson about a claim against BNSF for his May 1, 2003 injuries. When Meyers later informed Nelson about his bankruptcy, Nelson asked if he had listed the FELA claim in his petition. Meyers said he had not. He was unaware he had to do so. Nelson told Meyers they would have to notify the bankruptcy trustee about the FELA claim, which should have been listed, and request the bankruptcy be reopened.

Meyers filed his FELA complaint against BNSF in April 2005. He was deposed in September 2005. In November 2005, BNSF filed its motion for summary judgment based on judicial estoppel.

In December 2005, Meyers's Chapter 7 bankruptcy proceeding was reopened upon the motion of the bankruptcy trustee. In January 2006, the bankruptcy court authorized the employment of Nelson as special counsel for the trustee "to prosecute" the FELA action effective September 23, 2005.²

BNSF's motion for summary judgment was heard and granted in February 2006. Judgment was entered in favor of BNSF in April 2006. Meyers filed a motion for new trial on essentially the same grounds as his opposition to the summary judgment. He also contended BNSF had failed to establish every element of judicial estoppel by undisputed evidence. The trial court denied the motion for new trial. This appeal followed.

DISCUSSION

I. The Applicable Standard of Review For Summary Judgment Based On Judicial Estoppel

"`"`Judicial estoppel precludes a party from gaining an advantage by taking one position, and then seeking a second advantage by taking an incompatible position. [Citations.] . . .'" [Citation.]'" (MW Erectors, Inc. v. Niederhauser Ornamental & Metal Works Co., Inc. (2005) 36 Cal.4th 412, 422 (MW Erectors); see Koo v. Rubio's Restaurants, Inc. (2003) 109 Cal.App.4th 719, 735.) The doctrine's goals are to maintain the integrity of the judicial system and to protect parties from opponents' unfair strategies. (Aguilar v. Lerner (2004) 32 Cal.4th 974, 986 (Aguilar).)

Judicial estoppel may be invoked when a number of factual predicates are met (MW Erectors, supra, 36 Cal.4th at p. 422; Aguilar, supra, 32 Cal.4th at pp. 986-987; see In re Marriage of Dekker (1993) 17 Cal.App.4th 842, 850 ["trial court's determination on the issue of estoppel is a factual finding"]; Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 510 [if determination of facts is necessary to rule on judicial estoppel, claim should be decided on summary judgment or at trial] (Haley)), but even when all necessary elements are present, its application, as an equitable doctrine, is discretionary. (MW Erectors, supra, at p. 422.)

"[W]e review de novo the trial court's decision to apply judicial estoppel in granting a summary judgment motion, and we apply the same standards of law as the trial court in determining whether the defendant has met its burden of establishing that there are no triable issues on the application of judicial estoppel." (Kelsey v. Waste Management of Alameda County (1999) 76 Cal.App.4th 590, 597-598 (Kelsey), fn. omitted.) That is, a motion for summary judgment "shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Code Civ. Proc., § 437c, subd. (c).) If summary judgment is granted and appealed, we independently examine the record to determine whether triable issues of material fact exist. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 767.) "In performing our de novo review, we must view the evidence in a light favorable to plaintiff as the losing party [citation], liberally construing [plaintiff's] evidentiary submission while strictly scrutinizing defendants' own showing, and resolving any evidentiary doubts or ambiguities in plaintiff's favor. [Citations.]" (Id. at p. 768.)

Assuming there is no triable issue as to any material fact necessary to establish the elements of judicial estoppel, we review for abuse of discretion the trial court's ultimate decision whether to apply the doctrine. (See, e.g., Hartford Casualty Ins. Co. v. Travelers Indemnity Co. (2003) 110 Cal.App.4th 710, 724 ["`Summary judgment motions usually raise matters of law, but not when the trial court grants or denies such a motion on the basis of equitable determinations. [Citation.] The matter then becomes one of discretion, which this court reviews under the abuse of discretion standard'"].)

II. The Trial Court Erred In Granting BNSF's Motion For Summary Judgment

A. The Evidence Submitted On The Motion For Summary Judgment

Judicial estoppel applies most appropriately "`when: "(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake."'" (MW Erectors, supra, 36 Cal.4th at p. 422, quoting Aguilar, supra, 32 Cal.4th 974, 986-987; Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 183.) It is an extraordinary remedy to be applied with caution. (Haley, supra, 72 Cal.App.4th at p. 511.)

The first four elements are not in dispute. The evidence submitted by BNSF in its motion for summary judgment based on judicial estoppel showed Meyers took two positions in judicial proceedings. Meyers filed a bankruptcy schedule in which he denied having any contingent or unliquidated claims of any kind and subsequently filed this lawsuit against BNSF based on a prepetition FELA claim. BNSF submitted to the trial court a copy of the bankruptcy trustee's report to the bankruptcy court that Meyers's Chapter 7 case was a "no asset" case. Thereafter, the bankruptcy court granted Meyers a discharge of debts. In granting the discharge, the bankruptcy court impliedly accepted and relied on the representation of Meyers's assets, including the lack of any potential, recoverable claims. The two positions were totally inconsistent with respect to Meyers's claim under the FELA for his permanent injuries. BNSF clearly showed evidence establishing the first four elements of judicial estoppel.

With respect to the fifth element, that the first position was not taken as a result of ignorance, fraud, or mistake, BNSF submitted the following evidence. Meyers filled out a BNSF Employee Personal Injury/Occupational Illness Report on the day of his injury, May 1, 2003. In such report, Meyers stated he received injuries to his lower back, neck and upper left arm when he fell because of loose rocks that were left piled in a toe path by a yard cleaner....