Rachelle Kimberlin v. Dollar General Corporation , 520 F. App'x 312 ( 2013 )

NOT RECOMMENDED FOR FULL-TEXT PUBLICATION
File Name: 13a0279n.06
No. 12-3584
UNITED STATES COURT OF APPEALS
FILED
FOR THE SIXTH CIRCUIT
Mar 20, 2013
DEBORAH S. HUNT, Clerk
RACHELLE KIMBERLIN, )
)
Plaintiff-Appellant, )
)
v. ) ON APPEAL FROM THE UNITED
) STATES DISTRICT COURT FOR THE
DOLLAR GENERAL CORPORATION, ) SOUTHERN DISTRICT OF OHIO
)
Defendant-Appellee. )
Before: GUY, SUTTON, and COOK, Circuit Judges.
COOK, Circuit Judge. Rachelle Kimberlin appeals the dismissal of her Ohio “public policy
tort” claim alleging retaliation for reporting that her Dollar General supervisor assaulted her. She
argues that the district court erred in barring her suit on judicial estoppel grounds. Because
Kimberlin failed to disclose the potential claim in her bankruptcy filings and she had a motive to
conceal the retaliation claim, we AFFIRM.
I.
Kimberlin worked for nine years as a repack order filler in a Dollar General distribution
center until her termination on June 9, 2010. Dollar General attributes Kimberlin’s termination to
her failure to reach production-related targets. Kimberlin surmises that Dollar General terminated
No. 12-3584
Kimberlin v. Dollar Gen. Corp.
her because nine months earlier, she and her husband reported to the company’s corporate office that
supervisor Darryl Strouse “berate[d]” her and “thr[e]w a stack of ‘totes’” at her while she stood in
a mesh-enclosed area. Kimberlin maintains that after reporting the incident, she was “singled out”
for “adverse and discriminatory” treatment, including a “humiliating” level of supervision and
observation. Afterward, she was also “disciplined at least five times, including for failures to reach
her production targets.”
Some five years before her termination, Kimberlin and her husband filed a voluntary petition
for Chapter 13 bankruptcy. As part of the petition, they submitted a Statement of Financial Affairs,
which required the listing of all “suits and administrative proceedings to which the debtor is or was
a party within one year immediately preceding the filing of this bankruptcy case.” The Kimberlins
also submitted a schedule of personal property, which required identifying “contingent and
unliquidated claims of every nature” and estimating values for each claim. In July 2005, the
bankruptcy court confirmed the Kimberlins’ Chapter 13 plan, which required monthly payments of
$225 for up to five years, and would pay secured creditors in full and unsecured creditors less than
3% of the amount owed. On July 20, 2010, the Kimberlins made their final plan payment. The
bankruptcy court discharged the case on September 7, 2010 and closed it on November 24, 2010.
Although Kimberlin was terminated during the repayment period, she never amended her schedules
or filings to reflect a potential suit against Dollar General.
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Nearly a year after the bankruptcy case closed, Kimberlin filed the instant action in state
court. Dollar General removed the case and moved for judgment on the pleadings. The district court
granted Dollar General’s motion after applying judicial estoppel to bar this action. In a footnote, the
court also held that Section 4113.52 of the Ohio Revised Code preempted Kimberlin’s “claims for
violation of public policy regarding workplace safety” and that Kimberlin could not maintain a
Section 4113.52 action because she filed her complaint outside the 180-day statute of limitations and
failed to allege that she provided a written report to her employer.
II.
We review de novo a judgment on the pleadings under Federal Rule of Civil Procedure 12(c),
“constru[ing] the complaint in the light most favorable to the plaintiff, accept[ing] all of the
complaint’s factual allegations as true, and determin[ing] whether the plaintiff undoubtedly can
prove no set of facts in support of his claim that would entitle him to relief.” Ziegler v. IBP Hog
Mkt., Inc., 249 F.3d 509, 511–12 (6th Cir. 2001). We also give fresh review to the district court’s
judicial estoppel finding. White v. Wyndham Vacation Ownership, Inc., 617 F.3d 472, 476 (6th Cir.
2010).1
1
In Lewis v. Weyerhaeuser, 141 F. App’x 420, 423–24 (6th Cir. 2005), we questioned the
continuing viability of our de novo standard for judicial estoppel, noting the Supreme Court’s
characterization of the doctrine as an equitable remedy “invoked by the court at its discretion,” New
Hampshire v. Maine, 532 U.S. 742, 750 (2001) (citation omitted), and recognizing that the “majority
of federal courts” review for abuse of discretion. Yet, because the district court’s decision survived
under either standard, we declined to resolve the matter. Lewis, 141 F. App’x at 424. The district
court’s decision in this case likewise withstands de novo review. Thus, we have no need to revisit
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III.
A footnote in Dollar General’s brief suggests that Kimberlin lacks standing. Normally, a
passing reference in a footnote is insufficient to preserve an argument on appeal. To the extent
Article III standing is in question, however, we must consider whether we have subject matter
jurisdiction. We do. Kimberlin's garden-variety employment claim satisfies the minimum
constitutional requirements of a concrete injury (she was fired), causation (by Dollar General), and
redress (money damages). See Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992). The standing
problem here—whether a debtor or only a bankruptcy trustee has the right to prosecute legal claims
related to the bankruptcy estate—is better characterized as a real-party-in-interest question governed
by Rule 17. See Auday v. Wet Seal Retail, 698 F.3d 902 (6th Cir. 2012); Dunmore v. United States,
358 F.3d 1107, 1112 (9th Cir. 2004); Barger v. City of Cartersville, 348 F.3d 1289, 1292 (11th Cir.
2003). But given that Rule 17 contains a built-in forfeiture clause, see United HealthCare Corp. v.
Am. Trade Ins. Co., 88 F.3d 563, 569 (8th Cir. 1996), Dollar General has done itself no favors by
failing to develop this issue on appeal.
To countenance Dollar General’s two-sentence footnote as properly raising a standing
argument would require this panel to resolve several thorny issues of bankruptcy law, including an
apparent conflict between two code provisions, 11 U.S.C. §§ 1306 and 1327. That conflict has led
courts down four different paths (each with its own set of difficulties) for allocating property
the issue now.
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between the debtor and the trustee. See In re Jones, 657 F.3d 921, 927–28 (9th Cir. 2011); In re
Waldron, 536 F.3d 1239, 1242–43 (11th Cir. 2008); In re Heath, 115 F.3d 521, 524 (7th Cir. 1997);
Sec. Bank of Marshalltown, Iowa v. Neiman, 1 F.3d 687, 690 (8th Cir. 1993); In re Petruccelli, 113
B.R. 5, 15 (Bankr. S.D. Cal. 1990); David Gray Carlson, The Chapter 13 Estate and Its Discontents,
17 Am. Bankr. Inst. L. Rev. 233 (2009). We decline to resolve, without briefing, these difficult
bankruptcy issues. The better approach, we think, is to bypass the Rule 17 aspect and resolve the
judicial-estoppel issue on the parties’ shared assumption that Kimberlin was obliged to
disclose her employment claim to the bankruptcy court.
IV.
The equitable doctrine of judicial estoppel bars Kimberlin’s action. Judicial estoppel seeks
“to preserve ‘the integrity of the courts,’” Browning v. Levy, 283 F.3d 761, 776 (6th Cir. 2002)
(citation omitted), by “generally prevent[ing] a party from prevailing in one phase of a case on an
argument and then relying on a contradictory argument to prevail in another phase.” New Hampshire
v. Maine, 532 U.S. 742, 749 (2001) (citation omitted). Though there are no “inflexible prerequisites”
for judicial estoppel, id. at 751, we have applied the doctrine to bar employment related claims not
disclosed in prior bankruptcy proceedings where (1) the debtor assumed a position contrary to one
she asserted under oath while in bankruptcy; (2) the bankruptcy court adopted the contrary position
either as a preliminary matter or as part of a final disposition; and (3) the debtor’s omission did not
result from mistake or inadvertence. See White, 617 F.3d at 478. Applying judicial estoppel under
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these circumstances recognizes the importance of the bankruptcy debtor’s affirmative and ongoing
duty to disclose assets, including unliquidated litigation interests. See id. at 479 & n.5; Burnes v.
Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002); In re Coastal Plains, Inc., 179 F.3d at
207–08; see also 11 U.S.C. §§ 521(a)(1), 541(a)(7).
On appeal, Kimberlin challenges only the mistake-or-inadvertence prong. On this point, we
consider whether “(1) [the debtor] lacked knowledge of the factual basis of the undisclosed claims;
(2) she had a motive for concealment; and (3) the evidence indicates an absence of bad faith.” White,
617 F.3d at 478. Kimberlin disputes motive and bad faith, arguing that insufficient time remained
in the payment plan for the bankruptcy estate or her creditors to benefit from her disclosure. She
emphasizes that 60 months is the maximum repayment period for a Chapter 13 plan, and that
modifications to a confirmed plan can only occur “before the completion of payments under such
plan.” See 11 U.S.C. § 1329(a), (c). Given that only 41 days passed between her termination and
the final payment in her 60-month plan, she argues it was not possible (practically) to “liquidate her
claim and incorporate the proceeds into a modification of her plan that would increase payments to
creditors.”
We disagree. Assuming that 60 months is the maximum repayment period, see 11 U.S.C.
§§ 1322(d), 1329(c), the bankruptcy court still had options for protecting the estate’s and creditors’
potential interest in the retaliation claim. Had Kimberlin notified the court of her potential claim
within the 41-day period, it could have modified her Chapter 13 plan to grant creditors some
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percentage of any future recovery. See id. § 1322(b)(9) (“A Chapter 13 plan may “provide for the
vesting of property of the estate, on confirmation of the plan or at a later time, in the debtor or in any
other entity.”) (emphasis added). The court could also have converted the Kimberlins’ Chapter 13
petition to Chapter 7 or dismissed the petition “for cause.” See 11 U.S.C. § 1307(c) (identifying a
nonexclusive list of “causes”). Because Kimberlin never amended her filings or otherwise disclosed
the potential claim, she deprived the bankruptcy trustee, court, and creditors of any opportunity to
consider possible options. Accordingly, we are not persuaded that Kimberlin lacked motive to
conceal the claim.
Kimberlin next argues that the record lacks evidence of bad faith, relying on her sworn
statement that “[i]t was never my intent to hide anything from the bankruptcy court handling my and
my husband’s chapter 13 case.” Though we view the record in the light most favorable to Kimberlin,
this court’s “absence of bad faith” inquiry focuses on affirmative actions taken by the debtor to notify
the trustee or bankruptcy court of an omitted claim. See Stephenson v. Malloy, 700 F.3d 265, 274
(6th Cir. 2012) (declining to apply judicial estoppel where trustee’s affidavits acknowledging
awareness of suit presented a factual dispute regarding whether the debtor’s omission was in bad
faith); Eubanks v. CBSK Fin. Grp., Inc. 385 F.3d 894, 895–97 (6th Cir. 2004) (same, where evidence
showed that debtor notified trustee of claim, asked trustee to pursue the claim on behalf of the estate,
moved for a status conference on the claim, and moved to substitute the trustee as plaintiff in the
suit). Kimberlin’s affidavit alleging unintentional omission “pale[s] in comparison” to the evidence
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of good faith presented in Stephenson and Eubanks. See Lewis v. Weyerhaeuser Co., 141 F.
App’x 420, 427 (6th Cir. 2005).
In light of her ongoing duty to disclose assets during bankruptcy, we cannot say that the
omission resulted from mistake or inadvertence. See White, 617 F.3d at 480. Because judicial
estoppel bars Kimberlin from pursuing this action, we do not reach her arguments regarding Ohio’s
public policy tort.
V.
For the above reasons, we AFFIRM.
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