2011 IL App (1st) 103778
Ill. App. Ct.2011Background
- Berge filed under chapter 13 bankruptcy in April 2006; in May 2006 she was involved in an auto accident with DMG America, Inc. vehicle driven by DMG employee Mader.
- In November 2007 Berge filed a state negligence action against Mader and DMG in state court.
- In May 2009 Berge converted her bankruptcy petition to chapter 7.
- In October 2009 Berge received a no-assets discharge and bankruptcy case closed; she did not disclose the state court action in bankruptcy filings.
- Defendants moved for judicial estoppel, arguing Berge failed to disclose the claim; Berge later moved to reopen the bankruptcy to disclose the claim; the trial court granted summary judgment to estop Berge, and the appellate court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether state court may decide judicial estoppel without bankruptcy disclosure | Whether belated amendment to disclosure cures the defect | Remedial reopening after discharge should not undermine estoppel | Belated amendment not permitted to defeat estoppel; dismiss affirmed |
Key Cases Cited
- Bidani v. Lewis, 285 Ill.App.3d 545 (1996) (five-element judicial estoppel test in Illinois)
- Dailey v. Smith, 292 Ill.App.3d 22 (1997) (discharge validity not challenged; relevance to estoppel in nondisclosure)
- Cannon-Stokes v. Potter, 453 F.3d 446 (7th Cir.2006) (federal standard applied to nondisclosure in bankruptcy)
- Jaeger v. Clear Wing Prods., Inc., 465 F.Supp.2d 879 (S.D.Ill.2006) (distinguishes Jaeger standard from Illinois approach)
- Hamilton v. State Farm Fire & Casualty Co., 270 F.3d 778 (9th Cir.2001) (federal circuits’ solidarity on nondisclosure consequences)
- Jethroe v. Omnova Solutions, Inc., 412 F.3d 598 (5th Cir.2005) (non-disclosure consequences across circuits)
- Payless Wholesale Distributors, Inc. v. Alberto Culver (P.R.), Inc., 989 F.2d 570 (1st Cir.1993) (en banc; asset nondisclosure leads to estoppel)
- Krystal Cadillac-Oldsmobile GMC Truck, Inc. v. General Motors Corp., 337 F.3d 314 (3d Cir.2003) (nondisclosure consequences in bankruptcy)
- Barger v. City of Cartersville, 348 F.3d 1289 (11th Cir.2003) (discusses intent and inadvertence in nondisclosure)