Barnes v. Lolling
80 N.E.3d 727
| Ill. App. Ct. | 2017Background
- Plaintiff Jerry Barnes filed Chapter 13 bankruptcy in 2008, remained on a 5‑year repayment plan, and received a discharge on April 11, 2013. She did not amend schedules or notify the bankruptcy court of new assets during the case.
- On October 7, 2011 (while bankruptcy was pending) Barnes was injured in an automobile accident involving defendant Daniel Lolling (allegedly acting for United Contractors).
- Eighteen days after the accident Barnes retained a personal‑injury attorney who wrote the defendants’ insurer estimating damages in excess of $50,000.
- Barnes never disclosed the potential personal‑injury claim in her bankruptcy schedules or to the trustee, and did not attempt settlement while the case remained open.
- After discharge and case closure, Barnes filed the personal‑injury suit on October 7, 2013. Defendants moved for summary judgment arguing lack of standing (claim remained estate property) and judicial estoppel (failure to disclose). Trial court granted summary judgment on judicial estoppel; appellate court affirms, also holding Barnes lacked standing absent reopening the bankruptcy.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing: Whether Barnes could prosecute the personal‑injury claim individually after bankruptcy closed when the claim accrued while the Chapter 13 case was pending | Barnes proceeded in her own name after discharge; implied that she had the right to sue | Claim accrued during bankruptcy and was estate property; because it was undisclosed/unandministered, Barnes lacked individual standing after case closure | Held for defendants: claim accrued during the bankruptcy and, because it was not disclosed/abandoned/administered, Barnes lacked standing to sue individually unless she first reopens the bankruptcy or the trustee abandons the claim |
| Judicial estoppel: Whether failure to disclose the claim in bankruptcy bars the subsequent suit | Barnes asserted inadvertence and lack of knowledge of duty to disclose; no intent to deceive | Defendants argued inconsistent positions (nondisclosure in bankruptcy vs later suing) and benefit obtained from nondisclosure (discharge of debts) | Held for defendants: prerequisites for judicial estoppel met and trial court did not abuse discretion in applying doctrine to bar suit |
Key Cases Cited
- In re Jones, 657 F.3d 921 (9th Cir.) (Chapter 13 estate includes claims acquired after petition filing)
- In re Willett, 544 F.3d 787 (7th Cir.) (Chapter 13 estate includes post‑petition claims)
- In re Waldron, 536 F.3d 1239 (11th Cir.) (debtor’s duty to schedule newly acquired assets; estate includes claims while case pending)
- Cable v. Ivy Tech State College, 200 F.3d 467 (7th Cir.) (debtor‑in‑possession may prosecute estate claims; debtor lacks individual standing to benefit personally)
- Smith v. Rockett, 522 F.3d 1080 (10th Cir.) (debtor lacks standing to bring estate claims for personal benefit)
- Seymour v. Collins, 2015 IL 118432 (Ill.) (judicial estoppel framework and inquiry into intentionality vs inadvertence)