Palcsesz v. Midland Mut. Life Ins. Co., CIV. A. 98-2944(DRD).

• Decision Date: 14 March 2000
• Docket Number: No. CIV. A. 98-2944(DRD).,CIV. A. 98-2944(DRD).
• Citation: 87 F.Supp.2d 409
• Parties: Dominique PALCSESZ, Plaintiff, v. The MIDLAND MUTUAL LIFE INSURANCE COMPANY, a corporation of the State of Ohio, Defendant.
• Court: U.S. District Court — District of New Jersey

87 F.Supp.2d 409

Dominique PALCSESZ, Plaintiff, v. The MIDLAND MUTUAL LIFE INSURANCE COMPANY, a corporation of the State of Ohio, Defendant.

No. CIV. A. 98-2944(DRD).

United States District Court, D. New Jersey.

March 14, 2000.

Ronald F. Esposito, Elizabeth, NJ, for Plaintiff.

David R. Kott, Edward J. Fanning, Jr., McCarter & English, LLP, Newark, NJ, for Defendant.

OPINION

DEBEVOISE, Senior District Judge.

This diversity insurance action arises from the death of Imre Palcsesz. Mr. Palcsesz's wife, plaintiff Dominique Palcsesz, seeks to recover life insurance proceeds on a policy issued to her husband by defendant Midland Mutual Life Insurance Company ("Midland"). The manner of decedent's death is the primary issue in the case, as it will determine Midland's liability under the insurance policy. Defendant Midland moves for summary judgment on the grounds of judicial estoppel. For the reasons set forth herein, Midland's motion will be granted and the complaint will be dismissed with prejudice.

STATEMENT OF FACTS

On May 2, 1997, decedent Imre Palcsesz was found dead at his place of work, his body face down on the pavement near the base of a 116-foot clock tower building. An investigation conducted by detectives from the Summit Police revealed evidence to suggest that his death may have been a suicide.

Decedent took out a $350,000 life insurance policy with Midland approximately twenty-three months before his death, naming plaintiff as a beneficiary. The policy contains a standard clause limiting Midland's liability to repayment of premiums if the insured commits suicide within two years of the issue date of the policy ("the suicide clause"). Plaintiff filed a claim on the insurance policy on August 27, 1997. Midland has refused to pay plaintiff the face amount of the policy, citing the suicide clause.

On June 4, 1998, plaintiff filed this lawsuit in the Superior Court of New Jersey for Union County, demanding payment of the face value of the insurance policy. Midland removed the case to this Court on June 23, 1998, and filed its answer on July 15. In its answer, Midland interposes both the suicide clause and judicial estoppel as defenses to the action. Plaintiff denies that her husband committed suicide.

Prior to filing this action, plaintiff sought to recover workers' compensation benefits for her husband's death. On August 22, 1997, she filed a Workers' Compensation Dependency Claim Petition with the New Jersey Department of Labor, Division of Workers' Compensation. On the claim form, under a section titled "How Injury Occurred," plaintiff wrote "occupational stress-caused susicide [sic]." The workers' compensation action was eventually settled and dismissed. Plaintiff received a lump sum settlement in the amount of $10,000.

STANDARD OF REVIEW

Summary judgment will be granted if the record establishes that "there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c).

Rule 56(c) imposes a burden on the moving party simply to point out to the district court that there is an absence of evidence to support the nonmoving party's case. Celotex Corp. v. Catrett, 477 U.S. 317, 325, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). Once the moving party has met this burden, the burden then shifts to the opposition to "set forth specific facts showing that there is a genuine issue for trial." Fed.R.Civ.P. 56(e). The evidence need not be in a form that would be admissible at trial. Celotex, 477 U.S. at 324, 106 S.Ct. 2548. However, the nonmoving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986).

At the summary judgment stage, the court's function is not to weigh the evidence and determine the truth of the matter, but rather to determine whether there is a genuine issue for trial. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). The mere existence of some alleged factual dispute between the parties will not defeat an otherwise properly supported motion for summary judgment. Id. at 247, 106 S.Ct. 2505. In determining whether there exists a material issue of disputed fact, however, the facts and the inferences to be drawn from the facts are to be viewed in the light most favorable to the nonmoving party. Pollock v. American Tel. & Tel. Long Lines, 794 F.2d 860, 864 (3d Cir.1986).

In addition to being genuine, the disputed facts must be material, as determined by the substantive law. Anderson, 477 U.S. at 248, 106 S.Ct. 2505. Debate over extraneous issues will not suffice; "only disputes over facts that might affect the outcome of the suit under the governing law will properly preclude the entry of summary judgment." Id.

DISCUSSION

Midland contends that plaintiff is judicially estopped from claiming that her husband's death was accidental by her prior assertion, in her workers' compensation claim, that her husband's death resulted from an occupational stress-related suicide.

A. Applicable Law

Midland observes that "there is a question as to whether state or federal judicial estoppel law applies in a diversity action." National Utility Serv., Inc. v. Chesapeake Corp., 45 F.Supp.2d 438, 445 (D.N.J.1999); Ryan Operations v. Santiam-Midwest Lumber Co., 81 F.3d 355, 358 n. 2 (3d Cir.1996). See also 18 MOORE'S FEDERAL PRACTICE § 134.34[2] (3d ed.) (noting that the federal circuit courts are split on the question of whether the Erie doctrine requires application of state judicial estoppel law in diversity cases). This district has previously deemed the question irrelevant, however, in the belief that "New Jersey judicial estoppel law is consistent with the federal law." National Utility, 45 F.Supp.2d at 445.

Midland urges a reconsideration of that belief, claiming that while federal law requires the court to determine whether the inconsistent positions were asserted in bad faith, see Motley v. New Jersey State Police, 196 F.3d 160, 163 (3d Cir.1999), New Jersey courts will apply judicial estoppel regardless of a party's intent. In support of this claim, Midland relies almost exclusively on Levin v. Robinson, Wayne & La Sala, 246 N.J.Super. 167, 586 A.2d 1348 (Law Div.1990).

In Levin, plaintiff sued his former partnership, claiming that the partnership owed him a balance under the terms of the partnership agreement. Id. at 170, 586 A.2d 1348. In a prior matrimonial action, however, he advanced a contrary position, asserting that he had received all funds to which he was entitled under the partnership agreement. Id. Plaintiff argued that he should not be judicially estopped because his prior inconsistent position was based on a mistake of law and had not been intended to mislead the matrimonial court. Id. at 183, 586 A.2d 1348.

The Levin court rejected this argument, stating that "regardless of Levin's purported motives or intent for doing so, he cannot now contradict the position which he intentionally advanced in his prior action." 246 N.J.Super. at 183, 586 A.2d 1348. The court went on to state that "when considering whether to estop a party from taking a position, a court should consider whether that party took the opposite position in a prior judicial proceeding, not whether the party now taking a contradictory position intended to deceive the court." Id. at 186, 586 A.2d 1348, quoting Wang Lab. v. Applied Computer Sciences, Inc., 741 F.Supp. 992, 996 (D.Mass.1990). See also North Jersey Sav. & Loan Assoc. v. Fidelity & Deposit Co., 283 N.J.Super. 56, 81, 660 A.2d 1287 (Law Div.1993) ("[i]t is difficult to understand how... inconsistent positions can be taken unintentionally. But even if they were, there is no good faith exception to the doctrine").

Notwithstanding the language found in these two cases, I find that application of judicial estoppel under New Jersey law requires some degree of culpable conduct. The mechanical rule urged by Midland conflicts with the established understanding that judicial estoppel is an equitable doctrine designed to protect the integrity of the judicial system by preventing litigants from playing fast and loose with the court to suit the exigencies of self-interest. See Bahrle v. Exxon Corp., 279 N.J.Super. 5, 22-23, 652 A.2d 178 (App. Div.1995); Cummings v. Bahr, 295 N.J.Super. 374, 387, 685 A.2d 60 (App.Div. 1996). It naturally follows that, where there is no evidence of an intent to play fast and loose with the courts, there is no reason to apply the doctrine. In Estate of Kathryn Sherrer v. Barnes, A-5666-96T5, at p. 18 (N.J.App.Div. Aug. 5, 1999), an unreported case provided by Midland, the New Jersey Appellate Division observed that "[i]t is not the plaintiff's uncertainty that triggers judicial estoppel; it is his willingness to take advantage of that uncertainty by insisting on one fact in one case, and the opposite fact in another, without any identifiable or objective facts to justify or warrant a change in position." See also Lowery v. Stovall, 92 F.3d 219, 224 (4th Cir.1996) (describing intent to mislead the court to gain unfair advantage as the determinative factor in the application of judicial estoppel to a particular case).

Moreover, "[t]he application of judicial estoppel is discretionary, depending upon the merits of each case." New Jersey Div. of Motor Vehicles v. Caruso, 291 N.J.Super. 430, 438, 677 A.2d 795 (App.Div.1996). New Jersey courts have refused to apply judicial estoppel where a party adopts an inconsistent position in good faith. See, e.g., C.R. v. J.G., 306 N.J.Super. 214, 238-39, 703 A.2d 385 (Chancery Div.1997) (holding that judicial estoppel requires knowledge of the facts and would not apply where a party's statement in the prior litigation was based on an ignorance of the facts and not an attempt at deception); Naporano Assocs. v. B & P Builders, 309 N.J.Super. 166,...