In re Upshur, 03-82229.

• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Northern District of Georgia
• Writing for the Court: Joyce Bihary
• Citation: 317 B.R. 446
• Parties: In re Carolyn Denise UPSHUR, Debtor.
• Docket Number: No. 03-82229.,03-82229.
• Decision Date: 15 October 2004

317 B.R. 446 In re Carolyn Denise UPSHUR, Debtor. No. 03-82229. United States Bankruptcy Court, N.D. Georgia, Atlanta Division. October 15, 2004.

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Lorna Sills Katica, Atlanta, GA, for Debtor.

Louis R. Cohan, Atlanta, GA, for National Asset Recovery, Inc.

Tamara Miles Ogier, Atlanta, GA, for Chapter 7 Trustee.

ORDER

JOYCE BIHARY, Chief Judge.

This Chapter 7 case is before the Court on the debtor's motion to reopen the case to add an asset in the form of an employment discrimination claim filed by the debtor in the United States District Court. The debtor seeks to reopen the case so that a Chapter 7 trustee can administer the asset. The defendants in the district

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court action oppose debtor's motion to reopen the bankruptcy case, arguing that they have filed a motion to dismiss in the district court in which they contend that the claims are barred by the doctrine of judicial estoppel. They ask the bankruptcy court to defer any ruling on the debtor's motion to reopen until the district court has ruled on their motion to dismiss. After carefully considering the motion to reopen, the objection filed by the district court defendants, the replies filed by both parties, the record of this case and the applicable law, the Court concludes that debtor's motion to reopen should be GRANTED.

The debtor Carolyn Denise Upshur (hereinafter "Debtor" or "Ms. Upshur") filed a pro se Chapter 7 case on November 13, 2003. Tamara Miles Ogier was appointed as the Chapter 7 trustee. With her initial petition, Debtor filed schedules of assets and liabilities. In Schedule B, which includes a listing of personal property, Debtor checked "None" next to the type of property listed as follows:

20. Other contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to set off claims. Give estimated value of each.

On November 24, 2003, Ms. Upshur signed a request for notice of right to sue with the Equal Employment Opportunity Commission (EEOC) in which she stated a charge based on race discrimination and disability against National Asset Recovery, Inc. On December 11, 2003, the EEOC issued to Debtor a notice of her right to sue advising her that any claim under Title VII of the Civil Rights Act or the Americans with Disabilities Act must be filed within 90 days of her receipt of the notice or the right to sue based on those charges would be lost. Approximately one month later, on December 26, 2003, Debtor filed some amendments to her schedules in the bankruptcy case. Among the restated schedules was Schedule B, but Debtor still answered "None" to question No. 20 in Schedule B.

The docket shows that the trustee conducted the first meeting of creditors on January 14, 2004. On February 13, 2004, Debtor resubmitted Schedule C dealing with exempt property and filed a revised Schedule F of creditors holding unsecured claims. She did not file any revised Schedule B to list any claim against National Asset Recovery, Inc. or Trauner, Cohen and Thomas, LLP.

On March 8, 2004, Debtor received a discharge under 11 U.S.C. § 727. It appears from the schedules that she discharged approximately $34,000.00 in debt, approximately 45% of which related to medical expenses.¹ On March 22, 2004, the trustee in this bankruptcy case submitted a No Distribution Report indicating that there was no property available for distribution, and the bankruptcy case was closed on June 3, 2004.

In the meantime, before the trustee filed her report of no assets, Debtor, along with two other plaintiffs, Kimberly Weekes and Hayward Harris, filed a complaint on March 10, 2004, in the United States District Court for the Northern District of Georgia against Trauner, Cohen and Thomas, LLP, and National Asset Recovery, Inc. (the "District Court Defendants"), Civil Action No. 1-04-cv-0686-CC. The

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complaint was filed through counsel, Lorna Sills Katica, and alleges claims under Title VII of the Civil Rights Act and the Americans with Disabilities Act, for overtime pay under the Fair Labor Standards Act, for intentional infliction of emotional distress under Georgia law, and alleged violations of the Family Medical Leave Act. On June 8, 2004, during a deposition in the district court action, Debtor acknowledged having filed the instant bankruptcy case and having not disclosed these claims in her schedules or statement of financial affairs. On June 16, 2004, Debtor filed a motion to reopen this bankruptcy case to add the claims as an asset, and the motion was filed through Debtor's counsel in the district court action, Ms. Katica. The District Court Defendants filed a response opposing the reopening. On June 23, 2004, the District Court Defendants filed a motion to dismiss the claims asserted by Ms. Upshur in the district court on the grounds that she is judicially estopped from asserting the claims by virtue of her failure to disclose the claims in this bankruptcy case.

The motion before the bankruptcy court is the motion by Ms. Upshur to reopen the bankruptcy case to add the claims asserted in the district court as an asset and to appoint a trustee to administer the asset. The motion before the district court is the motion filed by the District Court Defendants to dismiss Ms. Upshur's claims on the grounds of judicial estoppel.

A motion to reopen a bankruptcy case is governed by 11 U.S.C. § 350(b) and Federal Rule of Bankruptcy Procedure 5010. "A case may be reopened in the court in which such case was closed to administer assets, to accord relief to the debtor, or for other cause." § 350(b). Motions to reopen are made for a variety of reasons, and they can be made by the debtor, the trustee, or any party in interest. Fed. R. Bankr.P. 5010. The decision on whether to reopen a case is within the sound discretion of the bankruptcy court. Lopez v. Specialty Restaurants Corporation (In re Lopez), 283 B.R. 22, 27 (9th Cir. BAP 2002); In re Rochester, 308 B.R. 596, 600 (Bankr.N.D.Ga.2004); In re Daniel, 205 B.R. 346, 348 (Bankr.N.D.Ga.1997).

The most common reasons that a debtor might seek to reopen a case are to add a creditor, to file a motion to avoid a judicial lien, or to add an omitted asset. In deciding whether to grant a motion to reopen to add a creditor, courts often look at whether the party affected by the reopening has been prejudiced in some way or whether the debtor was intentionally committing fraud. For example, in In re Baitcher, 781 F.2d 1529, 1534 (11th Cir.1986), when a debtor sought to reopen a bankruptcy case to add a creditor, the Court found the debtor could reopen her Chapter 7 case as long as her failure to list the creditor originally was due to an "honest mistake, not `fraud or intentional design.'" See also Rosinski v. Boyd (In re Rosinski), 759 F.2d 539, 541 (6th Cir.1985).² But when the purpose of the motion to reopen is to add an undisclosed asset, the most important consideration is the benefit to the creditors. In re Rochester, 308 B.R. 596, 601 (Bankr.N.D.Ga.2004)(granting debtor's motion to reopen a Chapter 7 case to schedule undisclosed products liability claims, stating that the potential benefit to creditors appears to be the most important factor in the analysis); In re Lewis, 273 B.R. 739, 747 (Bankr.N.D.Ga.2001)(granting

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debtor's motion to reopen to administer an undisclosed interest in a wrongful death action); See also Daniel, 205 B.R. 346 (Bankr.N.D.Ga.1997) (granting debtor's motion to reopen to add undisclosed personal injury claim); Cf. In re Dewberry, 266 B.R. 916, 921 (Bankr.S.D.Ga.2001) (granting debtor's motion to reopen to add an...