Middleton v. Caterpillar Indus., Inc.

• Decision Date: 17 August 2007
• Docket Number: 1050939.
• Citation: 979 So.2d 53
• Parties: Daniel A. MIDDLETON, Jr. v. CATERPILLAR INDUSTRIAL, INC.
• Court: Alabama Supreme Court

979 So.2d 53

Daniel A. MIDDLETON, Jr. v. CATERPILLAR INDUSTRIAL, INC.

1050939.

Supreme Court of Alabama.

August 17, 2007.

David Michael Huggins and Gordon K. Howell of Turner, Onderdonk, Kimbrough, Howell, Huggins & Bradley, P.A., Mobile; and E. Paul Gibson of Riesen Law Firm, L.L.P., North Charleston, South Carolina, for appellant.

Edward S. Sledge III and W. Craig Hamilton of McDowell Knight Roedder & Sledge, L.L.C., Mobile, for appellee.

COBB, Chief Justice.¹

Daniel A. Middleton, Jr., the plaintiff in a personal-injury action in the Mobile Circuit Court, appeals from a summary judgment in favor of the sole remaining defendant, Caterpillar Industrial, Inc.² We reverse and remand.

I. Background

Middleton was employed as a maintenance mechanic by Ryan-Walsh, Inc., now known as Stevedoring Services of America Gulf Terminals, Inc. (hereinafter "SSA"), at its facility in Charleston, South Carolina. On December 21, 2000, Middleton drove a Caterpillar Model T50D industrial lift truck into a parking lot, raised the mast and carriage of the lift truck approximately 11 to 13 feet, and, while the lift truck was still running, stood in front of the lift truck—and under the raised mast and carriage—to troubleshoot a reported leak in the hydraulics of the lift truck. He did not attempt to support the carriage in any manner. As Middleton searched for the leak, a loss of hydraulic pressure occurred, causing the mast and carriage to fall, crushing Middleton's right arm near his shoulder. The injury required the surgical amputation of his right arm.

Shortly before his injury, on September 28, 2000, Middleton had filed for Chapter 13 bankruptcy protection in the United States Bankruptcy Court for the District of South Carolina. As part of his Schedule B, which requires the debtor to list personal property, Middleton was obligated to disclose "[o]ther contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims." Middleton never amended his Schedule B after he was injured to show his potential claim against Caterpillar, and on March 1, 2001, the bankruptcy court approved Middleton's proposed bankruptcy plan without disclosure of that claim. However, the bankruptcy proceeding was dismissed on June 8, 2001, because of Middleton's failure to comply with the orders of the bankruptcy court.

Middleton again filed for Chapter 13 bankruptcy protection in the Bankruptcy Court for the District of South Carolina on June 28, 2001. Middleton did not disclose in his Schedule B filed in the second bankruptcy proceeding his potential claim against Caterpillar. The bankruptcy court approved Middleton's bankruptcy plan on August 27, 2001. The plan allowed Middleton to avoid certain nonpossessory, nonpurchase-money security interests as well as to pay his general unsecured creditors only 5 percent of their allowed claims over a 54-month period.

Middleton's bankruptcy counsel filed a motion with the bankruptcy court on February 3, 2005, seeking a three-month moratorium on Middleton's payments under the bankruptcy plan. As grounds for his motion, Middleton's bankruptcy counsel stated that Middleton "has had substantial difficulty making his required payments due to his short term disability ending and having no income while he awaits to be put on long-term disability." The bankruptcy court granted the motion on February 28, 2005.

As a result of his injury, Middleton filed a worker's compensation claim against his employer, SSA, under the Longshore and Harbor Workers' Compensation Act, 33 U.S.C. § 901 et seq. On April 28, 2005, the United States Department of Labor's Office of Workers' Compensation Programs approved a settlement between SSA and Middleton pursuant to which Middleton received $69,900. At no time did Middleton submit an amended Schedule B notifying the bankruptcy court and his creditors of his worker's compensation claim, either after the claim was filed or after the settlement was approved.

On December 20, 2002, Middleton filed the underlying personal-injury action in the Mobile Circuit Court, asserting that one of the named defendants, Ryan-Walsh, Inc., now known as SSA, was an Alabama corporation whose principal place of business was Mobile County.³ Even after the personal-injury action was filed, Middleton did not amend his Schedule B to notify the bankruptcy court of his potential claim against Caterpillar. Among the interrogatories propounded upon Middleton by Caterpillar was the following:

"State whether you have ever been involved in any other legal action in any country or jurisdiction (including any bankruptcy matter), and, if so, identify the date, place, nature of and disposition of each such action, giving the name of the court, the name of the other party or parties involved, the number of such action, and the names of the attorneys representing each party."

(Emphasis added.) On August 18, 2005, Middleton submitted to Caterpillar the following sworn amended answer in response to the above-quoted interrogatory: "Plaintiff filed a worker's compensation claim as a result of this accident." Middleton never did disclose in his responses to interrogatories that he had filed a petition in bankruptcy.

On October 26, 2005, Caterpillar moved the trial court for a summary judgment in its favor based on the doctrine of judicial estoppel, asserting that Middleton had never disclosed his claim against Caterpillar as an asset in the bankruptcy proceeding. Only after Caterpillar filed its motion for a summary judgment did Middleton amend his Schedule B to include his claim against Caterpillar, as well as his worker's compensation settlement. In response to Caterpillar's summary-judgment motion, Middleton stated that he was unaware that he should have amended his Schedule B and that his failure to do so "was inadvertent at most." The trial court, however agreed with Caterpillar that Middleton was judicially estopped from pursuing his action against Caterpillar, and it granted Caterpillar's summary-judgment motion. Middleton filed a motion to alter, amend, or vacate the summary judgment, which the trial court denied. In denying the motion to alter, amend, or vacate, the trial court stated that a summary judgment was due to be entered in Caterpillar's favor based not only on the doctrine of judicial estoppel, but also on the affirmative defense of assumption of the risk.

II. Standard of Review

Caterpillar urges this Court to join the majority of federal appellate courts and adopt a standard when reviewing a trial court's application of judicial estoppel that asks whether the court, in applying that doctrine, exceeded its discretion. See, e.g., Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 31-32 (1st Cir. 2004); Coastal Plains, Inc. v. Mims, 179 F.3d 197, 205 (5th Cir.1999); Talavera v. School Bd. of Palm Beach County, 129 F.3d 1214, 1216 (11th Cir.1997); McNemar v. Disney Store, Inc., 91 F.3d 610, 616-17 (3d Cir.1996); Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565 (Fed.Cir.1996); and United States v. Garcia, 37 F.3d 1359, 1367 (9th Cir.1994). Judicial estoppel, however, is an affirmative defense, and this Court's standard of review when a summary judgment is based on an affirmative defense is well settled:

"This Court reviews de novo a trial court's [grant or] denial of a summary judgment. See Young v. La Quinta Inns, Inc., 682 So.2d 402, 403 (Ala.1996) (citing Hightower v. United States Fid. & Guar. Co., 527 So.2d 698 (Ala.1988)). Where, as in this case, the defendant moves for a summary judgment based on an affirmative defense, this Court applies the following standard of review:

"`When there is no genuine issue of material fact as to any element of an affirmative defense, ... and it is shown that the defendant is entitled to a judgment as a matter of law, summary judgment is proper. If there is a genuine issue of material fact as to any element of the affirmative defense, summary judgment is inappropriate. Rule 56(c), Ala. R. Civ. P. In determining whether there is a genuine issue of material fact as to each element of an affirmative defense, this Court must review the record in a light most favorable to the plaintiff (the nonmoving party) and must resolve all reasonable doubts against the defendant (the movant).'

"Bechtel v. Crown Central Petroleum Corp., 495 So.2d 1052, 1053 (Ala.1986)."

Wal-Mart Stores, Inc. v. Smitherman, 743 So.2d 442, 444-45 (Ala.1999).

III. Judicial Estoppel and Lex Loci Delicti

Our review of the summary judgment in this case is based upon the principle of lex loci delicti, under which the courts of this state "will determine the substantive rights of an injured party according to the law of the state where the injury occurred." Fitts v. Minnesota Mining & Mfg. Co., 581 So.2d 819, 820 (Ala.1991). For 115 years, the principle of lex loci delicti has governed cases such as this one in Alabama courts. Fitts, 581 So.2d 819 (reaffirming the doctrine of lex loci delicti and declining to adopt the "most significant relationship" approach of the Restatement (Second) of Conflict of Laws (1971)); Alabama Great Southern R.R. v. Carroll, 97 Ala. 126, 11 So. 803 (1892). Although lex loci delicti governs substantive law, lex fori—the law of the forum—governs procedural matters.

"`The distinction between "substance" and "procedure" has medieval origins: a court will apply foreign law only to the extent it deals with the substance of the case, i.e., affects the outcome of the litigation, but will rely on the forum law to deal with the "procedural" aspects of the litigation.'" Etheredge v. Genie Indus., Inc., 632 So.2d 1324, 1326-27 (Ala. 1994) (quoting Eugene F. Scoles & Peter Hay, Conflict of Laws 57 (1992)). In its order granting Caterpillar's summary-judgment motion, the trial court determined that the doctrine of judicial estoppel is procedural in nature and, thus, Alabama law applies in this case. On...