Knott v. Woodstock Farm & Fleet, Inc.
73 N.E.3d 578
| Ill. App. Ct. | 2017Background
- On April 7, 2013, Terence Knott was injured at Blain’s Farm & Fleet and later (June 11, 2014) sued the store for premises liability, negligence, and spoliation, seeking over $50,000 per count.
- Knott and his wife filed a chapter 7 bankruptcy petition on July 8, 2013; initial Schedule B listed no "other contingent and unliquidated claims."
- After surgery on July 31, 2013, Knott amended Schedules B and C (Oct. 29, 2013) to list a "[p]ossible claim versus" and claimed a $15,000 exemption under 735 ILCS 5/12-1001(h)(4); he averred uncertainty about pursuing litigation when filing bankruptcy.
- The bankruptcy trustee reported no nonexempt property available for distribution; Knott received a discharge on January 7, 2014, and filed his state-court complaint on June 11, 2014.
- Defendant moved for summary judgment arguing judicial estoppel (and alternatively lack of standing because the claim belonged to the bankruptcy estate); the trial court granted summary judgment solely on judicial estoppel.
- The appellate court reversed and remanded, holding judicial estoppel was not properly applied because Knott’s bankruptcy disclosure was not a clear and convincing, factually inconsistent position and intent to deceive could not be presumed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether judicial estoppel bars Knott’s post-discharge personal-injury suit | Knott: his amended schedules disclosed a "possible" personal-injury claim; any omission was inadvertent or based on uncertainty and lack of knowledge that a cause of action is an asset | Woodstock Farm & Fleet: Knott’s sparse disclosure was materially inconsistent with later suing; failure to fully disclose shows intent to deceive and warrants estoppel | Reversed — appellate court: no clear-and-convincing evidence of a factually inconsistent position; incomplete disclosure alone does not establish intent to deceive; judicial estoppel improper here |
| Whether intent to deceive can be inferred from incomplete disclosure | Knott: no intent; he was uncertain and did not know a claim was an asset until amended schedules | Defendant: duty to fully disclose; partial disclosure was a calculated deflection | Held: intent cannot be presumed from nondisclosure or incomplete disclosure under Seymour; here the record does not prove intent to deceive |
| Whether Knott lacked standing because the claim belonged to the bankruptcy estate | Knott: he exempted $15,000 and a full recovery could produce a surplus — giving him a pecuniary interest | Defendant: once a debtor files, unliquidated claims are estate property and only trustee may pursue them | Held: Knott has standing (along with the trustee) because he exempted $15,000 and a potential surplus exists, creating a legally cognizable interest |
| Whether summary judgment was appropriate given disputed facts and equitable nature of judicial estoppel | Knott: genuine issues of material fact exist; judicial estoppel is discretionary and must be applied cautiously | Defendant: estoppel is available where prior position succeeded and disclosure was inconsistent | Held: Summary judgment was improper because reasonable inferences favor Knott and the prerequisite of clear-and-convincing factual inconsistency was not met |
Key Cases Cited
- New Hampshire v. Maine, 532 U.S. 742 (2001) (describing purpose of judicial estoppel to protect judicial integrity by barring deliberate, inconsistent positions)
- Krystal Cadillac-Oldsmobile GMC Truck, Inc. v. General Motors Corp., 337 F.3d 314 (3d Cir. 2003) (applying judicial estoppel where party failed to disclose material litigation to bankruptcy court)
- In re Polis, 217 F.3d 899 (7th Cir. 2000) (debtor’s exemption in part of claim creates a sufficient pecuniary interest to preserve standing to pursue the claim)