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Iesha C. Cole v. Convergys Customer Management Group

May 16, 2013


The opinion of the court was delivered by: Sam A. Crow, U.S. District Senior Judge


This case comes before the Court on Defendant's motion for summary judgment based on judicial estoppel.

I. Procedural History

Defendant's current motion seeks summary judgment based on judicial estoppel. Based on representations made in Defendant's memorandum, the Court became concerned about whether the Plaintiff had any ability to pursue this case. Accordingly, the Court permitted the trustee to intervene in the case, but he declined by a letter saying he knew about the claims made in this case during the bankruptcy proceedings, he decided not to pursue those claims on behalf of the Plaintiff's bankruptcy estate, and he intended to abandon those claims to the debtor. The Court then asked the parties to show cause why the trustee's letter should not be included in the record for purposes of resolving both the standing issue and the pending summary judgment motion. Both parties responded, stating no objection.

The trustee's letter dated April 16, 2013, attached to Dk. 44 as Exh. A, shall thus be considered part of the record.

Based upon the record, the Court finds that Plaintiff has the authority to pursue her Title VII claims. Accordingly, the Court examines Defendant's motion for summary judgment based on judicial estoppel. The Court incorporates by reference all prior orders in this case, including the summary judgment standard and findings of uncontested facts in Dk. 40.

II. Judicial Estoppel

Defendant originally argued that this Court should apply judicial estoppel to prevent Cole's lawsuit from proceeding because Cole "never disclosed her claims against Convergys to the Bankruptcy Trustee or the Bankruptcy Court" and thus misled them as to the existence of the claims she now asserts. Dk. 34, p. 1. Id, p. 3, 6. But Plaintiff's response, validated by the trustee's letter, shows that she in fact told the trustee of her discrimination claims and presented the EEOC's right to sue letter to him during the course of her bankruptcy proceedings. Defendant now argues that Plaintiff's disclosure to the bankruptcy trustee makes no difference to its estoppel argument because by not disclosing on her bankruptcy filings her claims in this lawsuit, Plaintiff misled the bankruptcy court. Dk. 47.

A. Governing Law

Judicial estoppel is an equitable doctrine which protects " 'the integrity of the judicial process by prohibiting parties from deliberately changing positions according to the exigencies of the moment.' " Eastman v. Union Pac. R.R., 493 F.3d 1151, 1156 (10th Cir. 2007). Judicial estoppel exists primarily to prevent abuse of the judicial process. Under federal law, no "inflexible prerequisites" must be met in judicial estoppel cases. Instead, the Court considers three factors in determining whether to apply the doctrine:

(1) whether "a party's later position [is] clearly inconsistent with its earlier position"; (2) "whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled"; and (3) "whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped." New Hampshire v. Maine, 532 U.S. 742, 750--51 (2001) (quotation marks omitted); Johnson v. Lindon City Corp., 405 F.3d 1065, 1069 (10th Cir. 2005). Judicial estoppel should be applied "both narrowly and cautiously." Hansen v. Harper Excavating, Inc., 641 F.3d 1216, 1227 (10th Cir. 2011) (quotation omitted).

The Tenth Circuit has previously applied judicial estoppel in the context of bankruptcy proceedings. In Eastman v. Union Pacific Railroad Co., 493 F.3d 1151 (10th Cir. 2007), the Tenth Circuit upheld judicial estoppel of a Chapter 7 debtor (Gardner) who swept his personal injury suit "under the rug" before the bankruptcy court, then asserted it later in district court. Id. at 1159. Gardner filed a personal injury lawsuit, and later filed for bankruptcy but did not list his lawsuit as an asset or disclose it on his bankruptcy petition, schedules, or statements. Unlike here, however, the debtor affirmatively misled the trustee - when the trustee specifically asked Gardner whether he had a personal injury suit pending, he denied it.

The Tenth Circuit recognized that it may be appropriate not to apply judicial estoppel when a party's prior position was based on inadvertence or mistake. But the Tenth Circuit found that a debtor's failure to satisfy the legal duty of full disclosure to the bankruptcy court may be inadvertent or mistaken "only when, in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment. (citation omitted)." Eastman, 493 F.3d at 1157. Gardner argued that he fit this exception because early in the bankruptcy proceedings he had informed his bankruptcy attorney of his pending lawsuit. Id. But the Court nonetheless found that Gardner had knowledge of his lawsuit and a motive to conceal it from his creditors.

The ever present motive to conceal legal claims and reap the financial rewards undoubtedly is why so many of the cases applying judicial estoppel involve debtors-turned-plaintiffs who have failed to disclose such claims in bankruptcy. The doctrine of judicial estoppel serves to offset such motive, ...

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