Mark Fornesa v. Fifth Third Mortgage Compan
897 F.3d 624
5th Cir.2018Background
- Mark purchased property in 2010 with a loan from Fifth Third; he and his father Ricardo entered an unrecorded equity-sharing agreement under which Ricardo made payments on the loan.
- Ricardo filed Chapter 13 bankruptcy in 2012 and listed an “equity sharing agreement” but did not list the property address, Fifth Third as a creditor, or later amend schedules when circumstances changed.
- Ricardo received and recorded a quitclaim deed transferring the property to him in January 2015 while his Chapter 13 case remained open; he did not amend bankruptcy schedules or notify Fifth Third.
- Fifth Third accelerated the loan and held a foreclosure sale on May 5, 2015; Ricardo alleges he sent bankruptcy documents and partial payment to Fifth Third shortly before the sale, which Fifth Third disputes.
- Mark and Ricardo sued pro se for wrongful foreclosure, Emergency Stabilization Act violations, and stay violations; district court found for Fifth Third, concluding Ricardo was judicially estopped from pursuing a § 362(a) stay claim and excluded several plaintiff exhibits.
- The Fifth Circuit affirmed, holding judicial estoppel applied because Ricardo failed to amend schedules and did not act inadvertently; evidentiary exclusions and denial of a new trial were not an abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Ricardo is judicially estopped from asserting a stay violation based on the undisclosed property/claim | Ricardo sought damages for a stay violation and contended he timely notified Fifth Third; he implied lack of culpability for nondisclosure | Fifth Third argued Ricardo failed to disclose the asset/claim in bankruptcy and therefore is estopped from asserting it now | Court: Judicial estoppel applies—Ricardo’s failure to amend was inconsistent with later claim and was not inadvertent |
| Whether Ricardo’s omission was inadvertent (element of judicial estoppel) | Ricardo implied he was unaware of any duty or lacked motive to conceal | Fifth Third argued Ricardo knew of the deed and had motive to conceal for financial benefit | Court: Not inadvertent—Ricardo knew of the deed/claim and had motive to conceal |
| Whether exclusion of several plaintiff exhibits was an abuse of discretion | Plaintiffs argued the excluded evidence supported damages/merits (appraisals, mailing receipts, etc.) | Fifth Third argued untimely disclosure, lack of authentication, and irrelevance | Court: No abuse—exclusions were justified and did not affect estoppel ruling |
| Whether denial of new trial was an abuse of discretion | Plaintiffs sought new trial based on evidentiary and other errors | Fifth Third maintained trial rulings were proper | Court: Denial affirmed—no abuse of discretion |
Key Cases Cited
- Love v. Tyson Foods, Inc., 677 F.3d 258 (5th Cir.) (judicial estoppel elements and application to bankruptcy nondisclosure)
- Allen v. C & H Distribs., L.L.C., 813 F.3d 566 (5th Cir.) (debtor’s continuing duty to amend Chapter 13 schedules; inadvertence standard)
- Flugence v. Axis Surplus Ins. Co. (In re Flugence), 738 F.3d 126 (5th Cir.) (failure to disclose assets implies representation of unchanged finances; court reliance supports estoppel)
- Jethroe v. Omnova Sols., Inc., 412 F.3d 598 (5th Cir.) (judicial estoppel particularly apt where debtor conceals asset then pursues related claim)