Berge v. Mader
2011 IL App (1st) 103778
Ill. App. Ct.2011Background
- In April 2006 Berge filed for Chapter 13 bankruptcy; in May 2006 she was in an auto collision with a car owned by DMG America and driven by its employee Mader.
- Berge filed a negligence lawsuit in November 2007 against Mader and DMG America, Inc.
- In May 2009 Berge converted her bankruptcy to Chapter 7 and received a no-assets discharge in October 2009; the case was closed.
- Berge never disclosed the state court claim to the bankruptcy court during both Chapter 13 and Chapter 7 proceedings.
- Defendants sought summary judgment arguing judicial estoppel; Berge later moved to reopen the bankruptcy case to disclose the claim.
- The trial court dismissed the case on judicial estoppel grounds; the appellate court affirmed the dismissal.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the state court may decide judicial estoppel despite bankruptcy nondisclosure | Berge argues bankruptcy court has exclusive jurisdiction over such issues | State court may adjudicate judicial estoppel in this case | State court may adjudicate judicial estoppel; not exclusive |
| Whether Berge’s nondisclosure satisfied all five elements of judicial estoppel | Nondisclosure may be inadvertent and not meet elements | All five elements met, including inconsistent positions and benefit | All five elements present; estoppel applies |
| Whether belated amendment to disclose the asset defeats judicial estoppel | Amending disclosure after discharge should offset nondisclosure | Late amendments do not cure the misconduct and would undermine the doctrine | Belated amendment rejected; estoppel remains |
Key Cases Cited
- Dailey v. Smith, 292 Ill. App. 3d 22 (1997) (discharge implications when advice relied on; relevance to asset disclosure)
- Ceres Terminals, Inc. v. Chicago City Land & Trust Co., 259 Ill. App. 3d 836 (1994) (judicial estoppel aims to preserve integrity of courts)
- Bidani v. Lewis, 285 Ill. App. 3d 545 (1996) (five elements of judicial estoppel)
- Barack Ferrazzano Kirschbaum Perlman & Nagelberg v. Loffredi, 342 Ill. App. 3d 453 (2003) (illustrates application of judicial estoppel principles)
- Cannon-Stokes v. Potter, 453 F.3d 446 (7th Cir. 2006) (federal authority supporting estoppel when nondisclosure occurred)
- Hamilton v. State Farm Fire & Casualty Co., 270 F.3d 778 (9th Cir. 2001) (broad federal agreement on non-disclosure consequences)
- Jethroe v. Omnova Solutions, Inc., 412 F.3d 598 (5th Cir. 2005) (limits relief where disclosure was intentional)
- Payless Wholesale Distributors, Inc. v. Alberto Culver (P.R.), Inc., 989 F.2d 570 (1st Cir. 1993) (en banc; nondisclosure followed by recovery barred)
- Krystal Cadillac-Oldsmobile GMC Truck, Inc. v. General Motors Corp., 337 F.3d 314 (3d Cir. 2003) (jurisprudence supporting estoppel after nondisclosure)
- Barger v. City of Cartersville, 348 F.3d 1289 (11th Cir. 2003) (federal authority on inadvertence vs. intentional concealment)