What is “Judicial Estoppel” in Florida?

Judicial estoppel in Florida may be found where a party has previously maintained an inconsistent claim or position as a preliminary matter or part of a final disposition in a judicial proceeding. A party is “estopped” from maintaining the later inconsistent position. In a recent case, a Florida husband and wife appealed a final summary judgment against them, granted on the basis of judicial estoppel.

Their case arose from personal injuries experienced by the husband in his work as a condominium security guard. In 2008, a ladder being used by DirectTV fell on him. A few months later the couple consulted a firm that agreed to take their personal injury case. The law firm sent a letter to the condominium’s insurance carrier summarizing the husband’s case.

Later the couple filed for Chapter 13 bankruptcy (in which debts must be repaid according to a plan). The lawsuit was not listed on the portion of the bankruptcy petition for contingent claims. A few months later, the court approved the couple’s debt repayment plan.

Next year the lawsuit was filed against the owner or user of the ladder (Mastec North America). A few months later, the defendant moved for summary judgment, claiming judicial estoppel. The bankruptcy case was pending. Subsequently, the couple filed amended bankruptcy documents and told the court that any damages from the personal injury suit would be included as part of the assets to be distributed in bankruptcy. Shortly thereafter, the defendant’s summary judgment motion was granted.

The husband and wife appealed. The defendant argued that the couple lacked “standing” or the ability to bring the suit because once they started bankruptcy proceedings, all their property became the trustee’s. The defendant also argued that judicial estoppel prevented the case.

The appellate court explained the defendant’s first argument was incorrect. In a Chapter 13 bankruptcy case (unlike Chapter 7), the bankrupt individual keeps possession of his property, including any basis for a lawsuit acquired before bringing the petition. Therefore the couple had standing.

However, with respect to judicial estoppel the defendant relied on an earlier case in which a man alleged an insurance agent had negligently procured the wrong coverage. In a previous suit, the man had inconsistently alleged coverage and gotten a jury verdict in his favor.
The appellate court explained that in this case there was no inconsistent verdict. When they filed the bankruptcy petition, it wasn’t certain that a lawsuit would be filed. Two different lawyers had prepared the petition versus the tort claim and as laypeople, they might not have understood “contingent and unliquidated claim.” The couple amended their schedules and plan once the issue was raised. No creditor was defrauded as in the prior case.

The defendant argued that in another earlier case a Chapter 13 debtor failed to report his potential claim for employment discrimination and never amended the schedule, eventually converting to Chapter 7 and never disclosing the lawsuit.

The defendant also relied on a case in which a doctor filed for Chapter 11 bankruptcy after an adverse medical malpractice judgment. He had listed two personal disability insurance policies as having zero value because he wasn’t sure he was disabled. At a creditor’s meeting he testified to a recent disability and amended his bankruptcy petition to claim a state exemption for the policies. He then sued his disability insurers.

However, his Chapter 7 trustee testified that the doctor had told him he was not disabled. Accordingly, the circuit court granted the insurers’ motion for summary judgment on the basis of judicial estoppel. However, in that case, the summary judgment was reversed because the insurers weren’t parties to the bankruptcy action.

In the instant case, the appellate court found there had been no recovery to date and any recovery would be part of the amended debt repayment plan. Since the defendant was not involved in the bankruptcy case, the summary judgment was reversed.

If you are seriously hurt in an accident that is somebody else’s fault, contact the knowledgeable Florida personal injury attorneys at Friedman, Rodman & Frank toll-free for a free consultation at (877) 448-8585.

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