Alvarez v. Royal Atlantic Developers, Inc.
854 F. Supp. 2d 1219
S.D. Fla.2011Background
- This case began as an employment discrimination action filed May 23, 2007, alleging Cuban-origin discrimination and retaliation under Title VII and the Florida Civil Rights Act.
- The Trial Order required continuing supplementation of discovery, including a 2007 interrogatory asking for all civil, criminal, or bankruptcy actions; Alvarez answered in the negative.
- Alvarez later filed Chapter 7 bankruptcy in December 2008; she did not disclose the discrimination suit in bankruptcy filings, later discharged in March 2009.
- The Eleventh Circuit partially reversed and remanded on September 2, 2010, affirming summary judgment on discrimination but remanding retaliation issues; mandate filed September 14, 2010.
- Plaintiffs substituted Roberto Alvarez and Omar Gonzalez as co-Personal Representatives after Alvarez’s death; settlement conferences occurred but were unsuccessful.
- After discovery of Alvarez’s bankruptcy in 2011, the Trustee sought special counsel; a plan developed to proceed with the litigation with renewed Trustee involvement.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing after bankruptcy | Trustee not substituted; estate not abandoned; standing remains with plaintiffs. | Bankruptcy estate is sole real party in interest; plaintiffs lack standing post-filed bankruptcy. | Judgment vacated; only Trustee had standing; plaintiffs lacked standing. |
| Judicial estoppel | No deliberate attempt to game the system; illness and timing mitigate intent. | Non-disclosures and strategic direction by counsel show intentional concealment to manipulate proceedings. | Judicial estoppel established; inconsistent positions intended to mock the judiciary. |
| Effect of newly discovered evidence (Rule 60(b)(2)) | Bankruptcy disclosure was discovered after judgment; no timely basis to reopen under Rule 60(b)(2). | Newly discovered evidence of bankruptcy is sufficient to vacate judgment. | Rule 60(b)(2) relief warranted; judgment vacated. |
| Discovery violations | Any non-disclosures were inadvertent due to illness and procedural complications. | Non-disclosures violated orders and federal rules, prejudicing defendant. | Non-disclosures deemed serious; prejudice supported vacatur. |
| Substitution and real party in interest | Substitution of Trustee unnecessary; practical realities did not require substitution. | Trustee is the real party in interest; substitution essential to proper proceedings. | Substitution not mandatory; nonetheless standing and estoppel issues control vacatur outcome. |
Key Cases Cited
- Parker v. Wendy's Int’l, Inc., 365 F.3d 1268 (11th Cir.2004) (pre-petition asset generally belongs to bankruptcy estate; standing considerations)
- Jones v. Clayton County, 184 F.Appx. 840 (11th Cir.2006) (failure to disclose a claim in bankruptcy equals lack of standing)
- Baxley v. Pediatric Servs. of Am., Inc., 147 F.Appx. 59 (11th Cir.2005) (non-disclosed employment claims remain property of the estate)
- Robinson v. Tyson Foods, Inc., 595 F.3d 1269 (11th Cir.2010) (intent required for judicial estoppel; can infer from record)
- Burnes v. Perneo Aeroplex, Inc., 291 F.3d 1282 (11th Cir.2002) (factors for judicial estoppel; misconduct and inconsistency origin)
- New Hampshire v. Maine, 532 U.S. 742 (U.S. 2001) (principles underlying judicial estoppel; integrity of judicial process)
- Parker v. Wendy’s Int’l, Inc. (duplicate entry for clarity), 365 F.3d 1268 (11th Cir.2004) (reiterates standing principles in bankruptcy contexts)