Jones v. Randle

• Decision Date: 04 May 2016
• Docket Number: 130303420,A156059.
• Citation: 373 P.3d 1186,278 Or.App. 39
• Parties: Recarr E. JONES, Plaintiff–Appellant, v. Decarol RANDLE, Defendant–Respondent.
• Court: Oregon Court of Appeals

278 Or.App. 39

373 P.3d 1186

Recarr E. JONES, Plaintiff–Appellant

v.Decarol RANDLE, Defendant–Respondent.

130303420

A156059.

Court of Appeals of Oregon.

Argued and Submitted Feb. 11, 2015.

Decided May 4, 2016.

Elizabeth Savage argued the cause for appellant. On the opening brief were Ivan M. Karmel and Ivan M. Karmel, PC. With her on the reply brief were Ivan M. Karmel and Ivan M. Karmel, PC.

Jonathan W. Henderson, Portland, argued the cause for respondent. On the brief were Daniel S. Hasson and Davis Rothwell Earle & Xochihua, PC.

Before DUNCAN, Presiding Judge, and LAGESEN, Judge, and FLYNN, Judge.

DUNCAN

, P.J.

Plaintiff brought this action seeking to partition real property that she owns as a tenant in common with defendant, her sister. Defendant filed a counterclaim seeking to quiet title to the property in herself. The trial court granted defendant's motions for summary judgment on each claim, concluding that the doctrine of judicial estoppel bars plaintiff from asserting any ownership interest in the property because, in two earlier bankruptcy proceedings, plaintiff had failed to disclose her ownership interest in the house. For the reasons explained below, we conclude that the trial court erred in granting defendant's motions for summary judgment and, therefore, we reverse and remand.

Judicial estoppel is a common law equitable doctrine that applies to prevent a litigant who has benefitted from a position taken in an earlier judicial proceeding from taking an inconsistent position in a later proceeding. Hampton Tree Farms, Inc. v. Jewett, 320 Or. 599, 609, 892 P.2d 683 (1995)

. “The purpose of judicial estoppel is to protect the judiciary, as an institution, from the perversion of judicial machinery.” Id. at 609, 892 P.2d 683 (internal quotation marks omitted); see also

White v. Goth, 182 Or.App. 138, 141, 47 P.3d 550 (2002) (the doctrine serves to protect the sanctity of the oath and prevent inconsistent results in separate proceedings). Thus, the focus of the doctrine is on the relationship between the litigants and the courts rather than the relationship between the parties to the litigation. White, 182 Or.App. at 141, 47 P.3d 550.

Whether the requirements for application of judicial estoppel have been established is a question of law. Hampton Tree Farms Inc., 320 Or. at 611–12, 892 P.2d 683

(applying standard; reversing summary judgment for defendant where the record was insufficient to establish, as a matter of law, that the plaintiff had benefitted from nondisclosure of a claim in bankruptcy); Glover v. Bank of New York, 208 Or.App. 545, 558, 147 P.3d 336 (2006), rev. den., 342 Or. 416, 154 P.3d 722 (2007) (applying standard and holding that the plaintiffs actions posed “the type of harm to the judicial system that warrants invocation of the doctrine of judicial estoppel”).¹ Thus, in reviewing the trial court's rulings that defendant was entitled to summary judgment, we view the record in the light most favorable to plaintiff, the nonmoving party, to determine whether the trial court correctly ruled, based on the record on summary judgment, that defendant was entitled to summary judgment as a matter of law under the doctrine of judicial estoppel or whether there are factual issues that preclude summary judgment. ORCP 47

C; Jones v. General Motors Corp., 325 Or. 404, 420, 939 P.2d 608 (1997).

Viewed, as required, in the light most favorable to plaintiff, the nonmoving party, the relevant facts are as follows. Ferguson, the parties' elderly mother, lived in a house that she owned in Portland. In 2005, Ferguson executed a bargain and sale deed transferring the property to plaintiff and defendant. Shortly thereafter, defendant moved into the house with Ferguson and excluded plaintiff. In 2013, plaintiff brought this partition action, seeking to have the house sold and the proceeds divided pursuant to ORS 105.205

. In response, defendant raised the affirmative defense of judicial estoppel, asserting that plaintiff could not maintain any claim based on her ownership interest in the house, because she had failed to disclose that interest in two separate Chapter 13 bankruptcy proceedings. Defendant also asserted a counterclaim seeking to quiet title in the property to herself as the sole owner, based on having paid the expenses for the property and cared for Ferguson for eight years. Defendant sought summary judgment on plaintiff's partition claim and her own quiet title counterclaim, contending that she was entitled to judgment as a matter of law because the doctrine of judicial estoppel provides a complete defense to plaintiff's partition claim and bars plaintiff from asserting any interest in the house in response to defendant's quiet title counterclaim.

Plaintiff filed the first Chapter 13 bankruptcy in 2008. She was represented by counsel, and she sought to be relieved of debts of approximately $384,000. On “Schedule A—Real Property,” plaintiff listed a half interest in the house, but listed the value as “0.00,” and further described the interest as follows: “Mother's home but on title as beneficiary. FMV $256,000, lien of $10,000 in mother's name only.” Plaintiff did not disclose any claims related to the property. On January 30, 2009, the court confirmed plaintiffs Chapter 13 bankruptcy plan but, on June 25, 2009, the court dismissed the petition on the recommendation of the bankruptcy trustee, without relieving plaintiff of her debts.

Plaintiff filed the second Chapter 13 bankruptcy on December 2, 2010. This time, she was not represented by counsel, and she sought to be relieved of debts of approximately $615,000. Plaintiff did not list the house on any schedule, nor did she disclose any claims related to the house. The court once again confirmed the Chapter 13 bankruptcy plan but, subsequently, on January 20, 2011, the court dismissed the petition without relieving plaintiff of her debts. Thus, it is undisputed that, in violation of the Bankruptcy Code, 11 USC § 521

, plaintiff twice failed to disclose her ownership interest in the house. See

Vucak v. City of Portland, 194 Or.App. 564, 570, 96 P.3d 362 (2004) (“Debtors in bankruptcy have an affirmative duty carefully, completely and accurately to schedule assets and liabilities.” (Internal quotation marks omitted.)).

In a declaration in opposition to defendant's motion for summary judgment on the partition claim, plaintiff explained that her nondisclosure of an ownership interest was inadvertent, because she believed that, despite being listed on the deed, her interest was only that of a beneficiary, because her mother was still living. Plaintiff explained additionally that she listed the value of her interest as “0.00” on the 2008 petition, because she knew that the property was encumbered and had no equity.

As noted, the trial court agreed with defendant and granted defendant's motions for summary judgment based on judicial estoppel, both on plaintiff's partition claim and on defendant's quiet title counterclaim. The separate motions were heard at different times by different judges. In granting defendant's motion on plaintiffs partition claim, the first judge explained that “[plaintiff] will not be permitted to assert that she owns property that she failed to disclose * * *. The consequence of playing fast and loose with the court system is you lose.” Subsequently, with respect to defendant's quiet title counterclaim, the second judge explained that the first judge's ruling was “assumptively correct” and controlled the determination whether plaintiff, “by reason of having been judicially estopped, has any further right to resist” the quiet title counterclaim.

On appeal, plaintiff contends that the trial court erred with respect to both rulings. We agree. As we explained in Glover, 208 Or.App. at 552, 147 P.3d 336

, the general principles of judicial estoppel were formulated by the Supreme Court in Hampton Tree Farms, Inc., 320 Or. at 611, 892 P.2d 683. There, the court held that applicability of the doctrine involves three issues: a “benefit in the earlier proceeding, different judicial proceedings, and inconsistent positions [in the different judicial proceedings].” Hampton Tree Farms, Inc., 320 Or. at 611, 892 P.2d 683.

There is no dispute that plaintiff failed to disclose her interest in the house in the bankruptcy proceedings and that her subsequent assertion of an interest in the property in this proceeding is inconsistent with that earlier nondisclosure. The question here is whether the record on summary judgment establishes as a matter of law that plaintiff derived a “benefit” from her nondisclosure, so as to require summary judgment for defendant based on judicial estoppel. As the Supreme Court noted in Hampton Tree Farms, “[t]he doctrine of judicial estoppel has been applied by federal courts to hold that a debtor who invokes the protection of the bankruptcy court and purports to disclose all of its assets, including claims that it might assert in litigation, is precluded from later asserting a claim that existed at the time of the bankruptcy but was not disclosed.” 320 Or. at 609 n. 7, 892 P.2d 683

(internal quotation marks omitted).² Defendant asserts that the same result should obtain here to bar plaintiff from asserting her partition claim.

Plaintiff asserts that in order for judicial estoppel to bar her claim, she must have derived a benefit from the nondisclosure itself, and that there is no evidence in the record on summary judgment that her failure to disclose her ownership interest in the home in the bankruptcy proceedings had any effect on the outcome of those bankruptcies, which were dismissed without a discharge from debt. Plaintiff further contends that her failure to disclose the ownership interest was inadvertent and should not trigger application of judicial estoppel for that additional reason.

Citing Glover, defendant responds that a discharge of debt is not required for application of judicial estoppel and that, despite the...