Combs, Jr v. Citifinancial Inc, 5:13-cv-03291

In 2002 Willie and Deloice Combs executed a mortgage with CitiFinancial for ~$36,913, granting a security interest in their home; they later claimed they never received consideration for the mortgage and defaulted.
The Combs filed Chapter 13 bankruptcy on November 6, 2003; their bankruptcy schedules did not disclose any claims against CitiFinancial. The Chapter 13 plan was confirmed and a discharge entered in 2009.
In 2013 the Combs sued (state court, removed to federal court) alleging unjust enrichment, RICO/Louisiana racketeering, fraud (based on statements in the bankruptcy proof of claim), and breach of the mortgage agreement; they sought cancellation of the mortgage, treble damages, refunds, fees, and emotional damages.
Defendant moved to dismiss, arguing unjust enrichment is unavailable because other remedies exist, and that the other claims are prescribed and/or barred by the bankruptcy court’s prior orders (res judicata/judicial estoppel).
The magistrate judge found plaintiffs conceded the unjust enrichment claim and, sua sponte, applied judicial estoppel because plaintiffs failed to disclose these claims in bankruptcy, the bankruptcy court relied on those omissions, and the nondisclosure was not inadvertent.
Recommendation: grant defendant’s motion and dismiss the complaint with prejudice; the court did not reach res judicata or prescription because judicial estoppel was dispositive.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Unjust enrichment available	Plaintiffs allege CitiFinancial was unjustly enriched by collecting money it was not owed	Other legal remedies exist; unjust enrichment is subsidiary and unavailable if other remedies exist	Dismissed — plaintiffs conceded unjust enrichment is unavailable
Judicial estoppel (failure to disclose claims in bankruptcy)	Plaintiffs pursue claims post-discharge despite omitting them from bankruptcy schedules and amendments	Plaintiffs are judicially estopped because they omitted claims, the bankruptcy court relied on schedules, and omission was intentional/not inadvertent	Held: Judicial estoppel bars the claims; dismissal with prejudice recommended
Res judicata / prescription	Plaintiffs’ claims arise from 2002 mortgage and pre-bankruptcy events	Defendant argues claims are time-barred and/or precluded by prior bankruptcy confirmation/orders	Not decided on merits — court declined to reach because judicial estoppel disposed of the case; noted these defenses would also likely favor defendant
Dismissal procedure (sua sponte)	Plaintiffs should have notice and an opportunity to respond to dismissal grounds	Court may raise judicial estoppel sua sponte when issue is glaring, but must afford fair notice	Held: Recommendation constituted sufficient notice; sua sponte dismissal deemed fair

Ashcroft v. Iqbal, 556 U.S. 662 (2009) (pleading must state a plausible claim to survive dismissal)
Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) (standards for plausibility under Rule 8)
Ferrer v. Chevron Corp., 484 F.3d 776 (5th Cir. 2007) (accept well‑pleaded facts as true on motion to dismiss)
In re Coastal Plains, Inc., 179 F.3d 197 (5th Cir. 1999) (judicial estoppel doctrine and duty to disclose claims in bankruptcy)
In re Superior Crewboats, Inc., 374 F.3d 330 (5th Cir. 2004) (three‑part test for judicial estoppel and omissions tantamount to representation no claim existed)
New Hampshire v. Maine, 532 U.S. 742 (2001) (judicial estoppel is equitable and discretionary)
Love v. Tyson Foods, Inc., 677 F.3d 258 (5th Cir. 2012) (debtors have ongoing duty to amend bankruptcy schedules; motivation to conceal claims is usually self‑evident)
Jethroe v. Omnova Solutions, Inc., 412 F.3d 598 (5th Cir. 2005) (bankruptcy court confirmation may reflect reliance on schedules)
Lozano v. Ocwen Federal Bank, FSB, 489 F.3d 636 (5th Cir. 2007) (district court may dismiss sua sponte if notice and opportunity to respond are provided)