321 So.3d 575
Miss. Ct. App.2021Background
- From 2013–2017 Leatrice Smith received opioid prescriptions from Dr. Justin Estess and Brookhaven Anesthesia; LaRue Discount Drugs filled many prescriptions. Plaintiffs allege resulting addiction and injury.
- The Smiths filed a Chapter 13 bankruptcy petition in June 2017 and, in July 2017, filed sworn schedules answering “No” to whether they had any claims against third parties.
- The bankruptcy court confirmed their plan on November 7, 2017. Eight days later counsel sent a notice/settlement demand to defendants asserting negligence claims; a $250,000 demand was rejected.
- The Smiths never disclosed those potential claims during their first bankruptcy (case closed Aug. 2018). They filed a second Chapter 13 in May 2018 and amended schedules in Sept. 2018 to disclose the already-filed suit.
- Defendants moved for summary judgment arguing judicial estoppel based on nondisclosure; the circuit court granted summary judgment. The Smiths appealed, also alleging judicial bias by the trial judge. The Court of Appeals affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Judicial bias/misconduct by the trial judge | Judge adopted defense-proposed order, didn’t read record, showed favoritism toward defense counsel | No improper relationship; judge reasonably accepted a proposed order and permitted counsel to provide a trial binder | Allegations were frivolous; no misconduct shown; violated professional conduct rules; rejected |
| Application of judicial estoppel for nondisclosure in bankruptcy | Smiths: claims didn’t “exist” at filing or later disclosure in second bankruptcy cures omission | Defendants: nondisclosure of known/potential claims and confirmation of plan make positions inconsistent and estoppel applies | Estoppel applies: three-element test met (inconsistent positions; court accepted prior position; nondisclosure not inadvertent) |
| Knowledge/motive and timing of disclosure | Smiths: later amendment in second bankruptcy and ongoing settlement efforts show no concealment | Defendants: plaintiffs knew of claims by Nov. 2017 (notice/settlement demand) and had motive to conceal for creditor advantage | Court finds plaintiffs knew claims by confirmation and had motive to conceal; later disclosure was too late; estoppel bars suit |
Key Cases Cited
- Adams v. Graceland Care Ctr. of Oxford LLC, 208 So. 3d 575 (Miss. 2017) (sets Mississippi standard for judicial estoppel and abuse-of-discretion review)
- In re Coastal Plains Inc., 179 F.3d 197 (5th Cir. 1999) (debtors must disclose contingent and unliquidated claims)
- Love v. Tyson Foods Inc., 677 F.3d 258 (5th Cir. 2012) (potential causes of action are "known" when debtor has enough information to suggest a possible claim)
- In re Superior Crewboats Inc., 374 F.3d 330 (5th Cir. 2004) (omission of a personal injury claim from bankruptcy filings is tantamount to representation no claim existed)
- Jethroe v. Omnova Sols. Inc., 412 F.3d 598 (5th Cir. 2005) (judicial estoppel appropriate where debtor fails to disclose asset then pursues it)
- Rogers v. Gulfside Casino P'ship, 206 So. 3d 1274 (Miss. Ct. App. 2016) (application of judicial estoppel to nondisclosure of claims)
- Kuhn v. High, 302 So. 3d 630 (Miss. 2020) (permissible for judge to request and adopt a prevailing party’s proposed order)
- Watson Labs., Inc. v. State, 241 So. 3d 573 (Miss. 2018) (trial court’s adoption of party-submitted findings is not subject to heightened scrutiny)