Marshall v. Honeywell Tech. Sys. Inc.

• Decision Date: 12 July 2016
• Docket Number: No. 14-7190,14-7190
• Citation: 828 F.3d 923
• Parties: Sandra Marshall, Appellant v. Honeywell Technology Systems Inc., et al., Appellees
• Court: U.S. Court of Appeals — District of Columbia Circuit

828 F.3d 923

Sandra Marshall, Appellant

v.Honeywell Technology Systems Inc., et al., Appellees

No. 14-7190

United States Court of Appeals, District of Columbia Circuit.

Argued December 8, 2015

Decided July 12, 2016

JoAnn Patricia Myles argued the cause and filed the brief for appellant.

Leslie Paul Machado argued the cause for appellees. With him on the brief were Sarah E. Moffett, Alexandria, VA, Paul W. Mengel III, Julia D. Di Vito, Zachary S. Stinson, M. Ginger McCauley, and John B. Flood. Isaias I. Alba, Washington, DC, entered an appearance.

Before: Henderson and Griffith, Circuit Judges, and Randolph, Senior Circuit Judge.

Dissenting opinion filed by Circuit Judge Griffith

.

Randolph , Senior Circuit Judge:

Sandra Marshall's appeal is from the district court's grant of summary judgment dismissing her discrimination complaint on the ground of “judicial estoppel,” stemming from her failure to disclose this lawsuit and related administrative proceedings on the schedules she filed with the bankruptcy court.

Marshall worked at the National Aeronautics and Space Administration in Maryland, making $50,000 a year as a “voice control manager.” Her co-employers were Honeywell Technology Solutions, Inc.,¹ a government contractor, and L–3 Communications Government Services, Inc., a subcontractor now known as Engility. In late 2003, another company, SGT, Inc., took over the subcontract under Honeywell. SGT interviewed Marshall but did not hire her.

On December 29, 2003, Marshall filed charges against SGT with a Maryland human relations commission and with the Equal Employment Opportunity Commission, alleging that SGT had unlawfully discriminated against her based on her race and sex and that SGT retaliated against her because she had filed other discrimination complaints against other companies. In February 2004—the dates and the sequence of filings have some significance—Marshall filed two additional charges with the same agencies, one against Honeywell, the other against Engility. Both of her charges also alleged race and sex discrimination and retaliation. By this time, Marshall therefore had three ongoing administrative proceedings against three separate companies, none of which were affiliated with each other. In August 2005, Marshall retained attorney JoAnn P. Myles to represent her in these proceedings and in any lawsuits that might result from them.

In September 2005, while her three EEOC proceedings were going forward, Marshall filed a Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the District of Columbia. See 11 U.S.C. § 301

. Marshall was then residing in Washington, D.C. Freshstart Solutions, Inc. served as her “bankruptcy petition preparer,” see 11 U.S.C. § 110, charging her a fee of $185.00.² This was Marshall's second bankruptcy petition in ten years. The Bankruptcy Code bars individuals from filing a new Chapter 7 petition within eight years of an earlier petition. 11 U.S.C. § 727(a)(8)

. Marshall had filed her 1995 petition with the assistance of an attorney in federal bankruptcy court in Baltimore, Maryland. That court granted her a discharge.

One of the schedules Marshall submitted with her September 2005 petition required her to list “all suits and administrative proceedings” to which she “is or was a party within one year” preceding her bankruptcy petition. On her “Statement of Financial Affairs,” Marshall listed three such matters. Two were civil actions in which she was a defendant. She gave the name of the court and its location in each case; in both she reported that judgment had been entered against her. The third matter she listed—“Internal Revenue Service vs Sandra McDougald”³ —was an administrative proceeding that had not yet ripened into a judicial proceeding: Marshall left a blank under the form's heading “COURT OR AGENCY AND LOCATION.” The only detail she provided was that the IRS matter was “Pending.” On her Schedule E—“Creditors Holding Unsecured Priority Claims”—she listed the IRS “Insolvency Div” as a creditor in the amount of $5,500.⁴

Nowhere on her Statement of Financial Affairs (or on any other schedule) did Marshall disclose her three administrative proceedings against SGT, Honeywell, and Engility. Under penalty of perjury, she signed the Statement and affirmed that her answers were “true and correct.” She also filed a “Personal Property” schedule, which required her to disclose all “contingent and unliquidated claims of every nature ....” See 11 U.S.C. § 521(a)(1)(B)(ii)

. Again she stated under penalty of perjury that she had “None.” On her Schedule F—“Creditors Holding Unsecured Nonpriority Claims”—Marshall listed “Joann Myles, Esquire.” Myles was the attorney representing Marshall in the three EEOC proceedings. Marshall did not report how much she then owed Myles. Her debts, including priority and nonpriority claims of 50 creditors, totaled $135,884.74. She reported total assets of $100.

Two months after she filed for bankruptcy, in the fall of 2005, Marshall attended a meeting of creditors, although none of her creditors attended. See 11 U.S.C. § 341

. During the session, in response to the trustee's written interrogatories and the trustee's questioning, Marshall revealed that she had “an EEOC claim.” When the trustee asked, “Against whom?” Marshall replied, “Honeywell.” As to the status of her claim, she said it was “pending.” The trustee then asked whether she had an attorney representing her in the Honeywell proceeding. She answered yes and, at the trustee's urging, she identified her attorney as JoAnn Myles and provided Myles' telephone number. Attorney Myles already knew of Marshall's Chapter 7 filing. As a creditor herself, she had received notice from the bankruptcy court. According to Marshall and Myles, her attorney later had a telephone conversation with the trustee and informed him of Marshall's other two administrative proceedings against Engility and SGT.

On December 30, 2005, Myles filed on Marshall's behalf a complaint in federal district court in Washington, D.C. against Honeywell, Engility, and SGT. Marshall's complaint contained a single count alleging age discrimination in violation of the Age Discrimination in Employment Act, 29 U.S.C. § 621 et seq.

She sought more than two million dollars in damages. Paragraph 9 of her complaint stated that “prior to filing this civil action” Marshall had filed “a written charge of age discrimination with” the EEOC and the local human rights commission. That statement was false. Marshall did not lodge an age discrimination charge before those agencies until after she filed the lawsuit. In the next paragraph, Marshall stated that she “filed this action subsequent to the expiration of sixty (60) days from the filing of a charge of age discrimination with the [Maryland human rights commission] and the EEOC ....” That too was false.⁵

Under the bankruptcy rules, “a debtor is under a duty both to disclose the existence of pending lawsuits when he files a petition in bankruptcy and to amend his petition if circumstances change during the course of the bankruptcy.” Moses v. Howard Univ. Hosp. , 606 F.3d 789, 793 (D.C. Cir. 2010)

; see 11 U.S.C. § 541(a)(7). “[W]hen an estate is in bankruptcy under Chapter 7,” as Marshall's estate was at the time, “the trustee is the representative of the estate and retains the sole authority to sue and be sued on its behalf.” Moses , 606 F.3d at 793. Marshall did not amend her bankruptcy petition after she filed her age discrimination lawsuit. Rather, her attorney Myles alleges that she—Myles—spoke with the trustee's secretary over the phone about having filed the December 2005 lawsuit.

In late January 2006 the trustee issued a “Notice of Possible Dividends” informing creditors that Marshall's estate may have assets after all, but giving no other information. In February 2006, the bankruptcy court granted Marshall a discharge from bankruptcy⁶ and in June 2006 the bankruptcy court closed the case because her estate had no assets.

In early 2007, Marshall expanded her lawsuit. By then Marshall had received right-to-sue letters from the EEOC in her three administrative actions, notifying her that the agency had terminated its investigation of her charges against SGT, Honeywell and Engility. Marshall then amended her age discrimination district court complaint against these companies to add a litany of new charges, including counts of race and sex discrimination and retaliation against each defendant.

The district court dismissed many of her new charges and dismissed the age discrimination count because it had not been timely filed. Marshall v. Honeywell Tech. Sols., Inc. , 536 F.Supp.2d 59, 64 n. 4 (D.D.C. 2007)

.

Later, during several years of extensive discovery, the defendants learned for the first time of Marshall's simultaneous bankruptcy case. Then, in February 2009, Marshall's attorney Myles provided the defendants' attorneys with “Supplemental Discovery Documents” consisting of Marshall's filings in the bankruptcy proceeding. The documents revealed that Marshall had omitted her three administrative proceedings on her bankruptcy schedules and that she had not amended her bankruptcy filings to disclose what has become this lawsuit.

The district court—on December 18, 2009—dismissed Marshall's complaint without prejudice, an interim decision Marshall has not challenged on appeal. Marshall v. Honeywell Tech. Sols., Inc. , 675 F.Supp.2d 22 (D.D.C. 2009)

. The court held that Marshall's causes of action, which “existed by the time Marshall filed her bankruptcy petition in September 2005,” became property of the estate under the Bankruptcy Code when she filed her bankruptcy petition. Id. at 25. Because Marshall failed to list these causes of action on her bankruptcy schedules, the bankruptcy trustee did not abandon this estate property when he failed to intervene. Id. The trustee was therefore the real party in interest and Marshall did not have standing to pursue the lawsuit she had...