In re Boyd
| Citation | 618 B.R. 133 |
| Decision Date | 17 July 2020 |
| Docket Number | C/A No. 13-02924-JW |
| Court | United States Bankruptcy Courts. Fourth Circuit. U.S. Bankruptcy Court — District of South Carolina |
| Parties | IN RE: Thomas Levi BOYD, Debtor(s). |
Heather S. Bailey, Bailey Law Offices, LLC, North Charleston, SC, Jason T. Moss, Moss & Associates, Attorneys, Columbia, SC, for Debtor.
Pamela Simmons-Beasley, Columbia, SC, for Trustee.
These matters come before the Court upon the Motion to Reconsider, Alter or Amend this Court's April 26, 2020 Order Granting Debtor's Motion to Reopen Case ("Motion to Reconsider") filed by Thompson Construction Group, Inc. and Roy Laverne Bolyn ("State Court Defendants" or "Defendants") on May 11, 2020; an Objection to Debtor's Claim for Exemption of Personal Injury Claim ("Objection to Exemption") filed by the State Court Defendants on June 3, 2020, and the Application to Employ Mark Bringardner as Personal Injury Attorney filed by Thomas Levi Boyd ("Debtor") on May 5, 2020, to which the State Court Defendants filed objection on May 18, 2020. Debtor filed a response to the Motion to Reconsider on June 4, 2020.
Through their filing of the Motion to Reconsider and Objections to Exemption and Employment, the State Court Defendants are making their first appearances in this case post-closing and subsequent to its reopening. Their appearance in this case is based upon a personal injury lawsuit that Debtor initiated in state court ("Lawsuit" or "Cause of Action") post-petition after suffering significant injuries from an alleged drunk driving accident caused by Roy Bolyn, who was driving a vehicle entrusted to him by his employer, Thompson Construction Group, Inc. The State Court Defendants' only interest in the reopening of Debtor's case appears to be the potential effect that the reopening of the bankruptcy case and amending of his bankruptcy schedules may have on their judicial estoppel defense asserted in the Lawsuit. The judicial estoppel defense is apparently based on Debtor's failure to disclose his interest in the post-confirmation Lawsuit as a bankruptcy estate asset being inconsistent with Debtor's later prosecution of the lawsuit against them. The State Court Defendants argue that if the bankruptcy case is reopened and amendment of the schedules allowed, it may defeat their judicial estoppel defense, the aim of which is to summarily free them from any liability to Debtor due to the drunk driving accident.
After holding a pre-trial hearing on June 11, 2020 and an evidentiary hearing on June 16, 2020, the Court took the matters under advisement. The Court has jurisdiction over this matter pursuant to 28 U.S.C. §§ 157 and 1334. The parties have consented to this Court entering final orders and judgments in these proceedings. Pursuant to Fed. R. Civ. P. 52, which is made applicable to these matters by Fed. R. Bankr. P. 7052 and 9014(c), the Court makes the following findings of fact and conclusions of law.1
1. On May 16, 2013, Debtor filed a voluntary petition for relief under chapter 13 of the Bankruptcy Code, and Joy S. Goodwin was appointed as the chapter 13 Trustee for the case. Simultaneously with the Petition, Debtor filed his Schedules, Statements and Chapter 13 Plan. On Schedule B, which lists Debtor's personal property assets, Debtor listed no contingent or unliquidated claims existing at that time.
2. Debtor subsequently filed a pre-confirmation amendment to the chapter 13 Plan on July 23, 2013, which supplemented all of the provisions of the chapter 13 plan by increasing payments from Debtor to the Chapter 13 Trustee. Section III of Debtor's plan, as amended, provides:
The debtor submits to the supervision and control of the trustee all or such portion of future earnings or other future income as is necessary for the execution of the plan. In addition, the debtor will pay to the trustee any portion of a recovery under a pre-petition claim or cause of action that constitutes disposable income or is not exempt.
(emphasis added). It further provides that (1) Debtor would make payments to the Chapter 13 Trustee in the amount of $855 per month for 26 months, followed by $899 per month for a period of 34 months and (2) "[t]he debtor does not propose to pay 100% of general unsecured claims." In Section V, Property of the Estate, Status and Obligations of the Debtor after Confirmation, the plan provides:
Upon confirmation of the plan, property of the estate will remain property of the estate, but possession of property of the estate shall remain with the debtor. The chapter 13 trustee shall have no responsibility regarding the use or maintenance of property of the estate. The debtor is responsible for protecting the non-exempt value of all property of the estate and for protecting the estate from any liability resulting from operation of a business by the debtor. Nothing herein is intended to waive or affect adversely any rights of the debtor, the trustee, or party with respect to any causes of action owned by the debtor.
(emphasis added). No provision in Debtor's plan creates or maintains a duty to amend schedules or to disclose future assets, including post confirmation causes of action acquired by Debtor during the bankruptcy case.
3. On July 25, 2013, the Court entered an Order Confirming Debtor's Chapter 13 Plan ("Confirmation Order"). The Confirmation Order provides, in pertinent part, that "[t]he debtor shall not incur indebtedness nor sell, encumber, or otherwise transfer any interest in estate property outside the ordinary course of business without approval of the court." No provision in the Confirmation Order creates or maintains a duty to amend schedules or to disclose future assets, including causes of action, acquired post-confirmation by Debtor during the bankruptcy case.
4. On July 1, 2016, Debtor's bankruptcy case was reassigned to Pamela Simmons-Beasley as Chapter 13 standing trustee ("Trustee").
5. Debtor regularly made all the payments provided for by the Chapter 13 Plan to the Trustee and distributions were made to his creditors, which resulted in the payment of more than 90% of the claims of his unsecured creditors. Due to Debtor making all the payments provided for by the Plan, Debtor qualified for a discharge under 11 U.S.C. § 1328(a).2
6. According to the allegations of the complaint filed in state court, on June 23, 2017, Debtor was seriously injured in a hit-and-run automobile accident caused by Roy Bolyn while he was driving a truck owned and entrusted to him by Thompson Construction Group, Inc. As a result of his injuries, Debtor had to have cervical fusion surgery and knee surgery, resulting in significant medical bills of nearly $200,000. Roy Bolyn pled guilty to reckless driving in exchange for a reduction of the DUI charge and dismissal of the hit-and-run charge.
7. On June 26, 2017, Debtor retained Joye Law Firm, LLP to represent him in filing a personal injury lawsuit against the State Court Defendants.
8. On June 26, 2018, Debtor filed a personal injury lawsuit against the State Court Defendants in the Third Judicial Circuit, County of Williamsburg, State of South Carolina, Case No. 2018-CP-45-0288 ("Lawsuit"). The Complaint includes causes of action for Automobile Collision/Negligence, Negligent Entrustment, and Negligent Hiring, Retention, Supervision and Training related to the June 23, 2017 automobile collision.
9. Debtor did not amend his bankruptcy schedules to report the causes of action in the Lawsuit but, despite his injuries, continued making all payments required by his confirmed Plan to the Trustee.
10. On July 2, 2018, the Trustee reported to the Court that Debtor had completed his plan payments pursuant to the confirmed Plan in the case and was eligible for a discharge.
11. On August 15, 2018, Debtor filed his certification of plan completion and request for discharge (a local form in this District) in accordance with 11 U.S.C. § 1328, wherein he certified that all payments due under the plan had been completed. The certification did not require Debtor to disclose undetermined and unliquidated post confirmation causes of action.
12. On September 6, 2018, the Court entered an Order granting Debtor a discharge under 11 U.S.C. § 1328(a).
13. On September 12, 2018, the Trustee filed her Final Report and Account, which states that the case was completed on May 24, 2018, that Debtor paid $55,002.48 to the Trustee and received a refund of $2,206.48. It also states that the number of months from the filing of the case to last payment was 60 months. It further states that $7,197.82 was paid to general unsecured creditors out of the total allowed claims of $7,989.87. which represented a 90% payment of claims to these creditors.
14. The bankruptcy case was routinely closed by Order filed on September 12, 2018.
15. On October 14, 2019, Debtor made an Offer of Judgment in the amount of $16,000,000 to the State Court Defendants in the Lawsuit pursuant to S.C. Code Ann. § 15-35-400 and SCRCP 68. The $16,000,000 Offer of Judgment represents the total of the applicable, stacked insurance policies covering the State Court Defendants.
16. On November 21, 2019, the State Court Defendants' counsel took the deposition of Debtor in connection with the Lawsuit and discovered that Debtor had a pending bankruptcy proceeding at the time of his injury and at the time the Lawsuit was filed.
17. On February 19, 2020, the State Court Defendants' counsel filed and served a motion for summary judgment in the Lawsuit seeking summary dismissal of Debtor's claims based on judicial estoppel for Debtor's failure to disclose the personal injury claim as an asset in his bankruptcy case.
18. On March 2, 2020, Debtor filed a second bankruptcy case, C/A No. 20-01097, with different bankruptcy counsel to address a pending foreclosure action. That case was voluntarily dismissed on April 17, 2020 on Debtor's motion before the filing of schedules or statements.
19. On March 5, 2020, in response to the motion for summary judgment filed in the...
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