Moore v. Hodge , 2019 Ohio 4752 ( 2019 )

[Cite as Moore v. Hodge, 2019-Ohio-4752.]
IN THE COURT OF APPEALS
FIRST APPELLATE DISTRICT OF OHIO
HAMILTON COUNTY, OHIO
JANE MOORE, : APPEAL NO. C-180633
TRIAL NO. A-1603927
Plaintiff-Appellant, :
vs. : O P I N I O N.
:
JESSICA HODGE,
:
ISAAC HODGE,
:
and
:
NATIONWIDE MUTUAL FIRE
INSURANCE COMPANY, :
Defendants-Appellees, :
:
and
:
ELIAS TSBOURIS,
:
JULIE EICHSTADT,
:
and
:
HUMANA INSURANCE COMPANY,
Defendants. :
Civil Appeal From: Hamilton County Court of Common Pleas
Judgment Appealed From Is: Affirmed
Date of Judgment Entry on Appeal: November 20, 2019
O’Connor Acciani & Levy and Kory A. Veletean, for Plaintiff-Appellant,
OHIO FIRST DISTRICT COURT OF APPEALS
Law Offices of Raymond H. Decker, Jr., and Raymond H. Decker, Jr., for
Defendants-Appellees Isaac Hodge and Jessica Hodge,
Rolfes Henry Co. L.P.A., Jerome F. Rolfes and Matthew F.X. Craven, for Defendant-
Appellee Nationwide Mutual Fire Insurance Company.
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OHIO FIRST DISTRICT COURT OF APPEALS
ZAYAS, Presiding Judge.
{¶1} Plaintiff-appellant Jane Moore appeals the decision of the trial court
granting summary judgment to defendants-appellees Isaac and Jessica Hodge and
Nationwide Mutual Fire Insurance Company and dismissing her complaint based
upon the doctrine of judicial estoppel. The court determined that Moore was
estopped from bringing the claims because she failed to disclose the claims in her
bankruptcy filings. For the following reasons, we affirm the trial court’s judgment.
Facts and Procedural History
{¶2} On April 25, 2012, Jane Moore filed for Chapter 13 bankruptcy. On
July 19, 2012, her plan was confirmed, and her repayment requirements were set
forth. During the pendency of the bankruptcy, Moore was involved in two car
accidents. On July 13, 2014, Moore was in a car accident with Elias Tsbouris, and on
July 19, 2014, she was in an accident with Jessica Hodge.
{¶3} On July 18, 2014, Moore filed a motion to retain insurance proceeds
with the bankruptcy court and notified the court of her receipt of $1,370 in auto
insurance proceeds. She asked to retain $744.18 to purchase a new car. The motion
was granted. On August 6, 2014, she filed a second motion to retain insurance
proceeds, notifying the court that she had received $1,370 as an insurance payout to
scrap her damaged 2003 Ford Taurus. She asked to keep $714 to purchase another
vehicle, and the request was granted.
{¶4} On November 17, 2015, Moore’s bankruptcy was discharged. Her case
was finalized on December 10, 2015, and closed on December 29, 2015.
{¶5} On July 11, 2016, Moore filed a complaint against Elias Tsbouris and
Julie Eichstadt, the owner of the car Tsbouris was driving, Jessica Hodge and Isaac
Hodge, the owner of the car Jessica was driving, Nationwide Mutual Fire Insurance
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OHIO FIRST DISTRICT COURT OF APPEALS
Company, and Humana Insurance Company. Moore raised several claims related to
the car accidents.
{¶6} Both Nationwide and the Hodges filed motions for summary judgment
alleging that Moore was judicially estopped from asserting her claims because she
did not meet her statutory duty to disclose the claims related to the accidents to the
bankruptcy court. After the motions were filed, Moore filed a motion to reopen the
bankruptcy case, which was granted.
{¶7} The trial court granted the motions for summary judgment, and
dismissed Moore’s claims with prejudice against defendants Nationwide and the
Hodges. Moore appealed, and this court dismissed the appeal for a lack of a final
appealable order because the counterclaims remained unresolved. Subsequently, the
parties stipulated that all remaining claims and counterclaims were dismissed, and
the trial court issued a revised entry granting the motions for summary judgment.
Moore timely appealed asserting that the trial court erred in granting summary
judgment on the basis of judicial estoppel because the failure to list her claims on the
bankruptcy filings was inadvertent and without a motive to conceal.
Standard of Review
{¶8} We review an appeal from summary judgment de novo. Duell v. City
of Cincinnati, 2018-Ohio-4400, 122 N.E.3d 640, ¶ 3 (1st Dist.). Additionally, we
review a trial court’s application of the doctrine of equitable estoppel for an abuse of
discretion. See Independence v. Office of the Cuyahoga Cty. Executive, 142 Ohio
St.3d 125, 2014-Ohio-4650, 28 N.E.3d 1182, ¶ 29.
Judicial Estoppel
{¶9} The doctrine of judicial estoppel “precludes a party from assuming a
position in a legal proceeding inconsistent with a position taken in a prior action.”
Advanced Analytics Laboratories, Inc. v. Kegler, Brown, Hill & Ritter, L.P.A., 148
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OHIO FIRST DISTRICT COURT OF APPEALS
Ohio App.3d 440, 2002-Ohio-3328, 773 N.E.2d 1081, ¶ 37 (10th Dist.), citing Bruck
Mfg. Co. v. Mason, 84 Ohio App. 3d 398, 616 N.E.2d 1168 (8th Dist.1992). In order
to apply the doctrine of judicial estoppel, the proponent must show that his opponent
“(1) took a contrary position; (2) under oath in a prior proceeding; and (3) the prior
position was accepted by the court.” Greer-Burger v. Temesi, 116 Ohio St. 3d 324,
2007-Ohio-6442, 879 N.E.2d 174, ¶ 25. The purpose of judicial estoppel is to
preserve the integrity of the courts by preventing a party from abusing the judicial
process. Id.
{¶10} In a bankruptcy proceeding, “[a] debtor seeking shelter under the
bankruptcy laws must disclose all assets, or potential assets, to the bankruptcy
court.” Chrysler Group, L.L.C. v. Dixon, 8th Dist. Cuyahoga No. 104628, 2017-Ohio-
1161, ¶ 17, 18, citing 11 U.S.C. 521, 541(A)(7). “[T]he duty to disclose is a continuing
one that does not end once the forms are submitted to the bankruptcy court.”
Chrysler Group at ¶ 26, quoting Tennyson v. Challenge Realty (In re Tennyson), 313
B.R. 402 (Bankr.W.D.Ky.2004).
{¶11} “A cause of action is an asset that must be scheduled” under federal
bankruptcy law. Chrysler Group at ¶ 17. The debtor need not “ ‘know all the facts or
even the legal basis for the cause of action, rather, if the debtor has enough
information * * * to suggest that it may have a possible cause of action, then it is a
“known” cause of action such that it must be disclosed.’ ” Id. at ¶ 19, citing In re
Coastal Plains, Inc., 179 F.3d 197, 208 (5th Cir.1999). A debtor’s subsequent pursuit
of an undisclosed cause of action “creates an inconsistency sufficient to warrant
application of judicial estoppel.” Chrysler Group at ¶ 18.
{¶12} However, “judicial estoppel is not appropriate when a debtor’s failure
to disclose a claim in a prior bankruptcy proceeding is inadvertent” or due to a
“mistake.” Saha v. Research Inst. At Nationwide Children’s Hosp., 10th Dist.
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OHIO FIRST DISTRICT COURT OF APPEALS
Franklin No. 12AP-590, 2013-Ohio-4203, ¶ 16. An omission may be deemed
inadvertent where the debtor lacked knowledge of the factual basis of the
undisclosed claims, had no motive for concealment, and the evidence supports an
absence of bad faith. See White v. Wyndham Vacation Ownership, Inc., 617 F.3d
472, 478 (6th Cir.2010).
{¶13} In this case, Moore admits she was aware of the claims, but mistakenly
believed she did not have a duty to disclose the claims. Therefore, her actions should
be deemed inadvertent because she had no motive for concealment.
{¶14} However, “[a] motive to conceal claims from the bankruptcy court
always exists as a matter of law, since ‘it is always in a Chapter 13 petitioner’s interest
to minimize income and assets.’ ” Saha at ¶ 19, quoting Lewis v. Weyerhaeuser Co.,
141 Fed.App. 420, 426 (6th Cir.2005). Because the defendants provided evidence to
show Moore’s omission, and that she knew the facts underlying her claims and had a
motive to conceal, Moore had the burden of establishing an absence of bad faith. See
White at 478.
{¶15} The “absence of bad faith” inquiry focuses on affirmative actions taken
by the debtor to notify the bankruptcy court of the claims. 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. Group., Inc.,
385 F.3d 894, 895-897 (6th Cir.2004) (declining to apply judicial estoppel 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).
{¶16} During the bankruptcy proceeding, Moore did not take “affirmative
action to fully inform the court and the trustee of the asset’s existence.” See Greer-
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OHIO FIRST DISTRICT COURT OF APPEALS
Burger, 116 Ohio St. 3d 326, 2007-Ohio-6442, 879 N.E.2d 174, at ¶ 29. She did not
inform the court until after the issue was raised in litigation, 15 months after the
bankruptcy was closed. Courts do not look favorably on efforts to correct an
omission that occurs after an opposing party raises the issue. See White, 617 F.3d at
481.
{¶17} Given the record before us, we cannot say that the trial court abused its
discretion. The record shows that Moore was represented by counsel throughout the
bankruptcy proceedings, and that she informed counsel of the proceeds she received
for the damage to her car after each accident. Moore did not submit any evidence
that she or her bankruptcy attorney informed or attempted to inform the trustee or
the bankruptcy court of the claims.
{¶18} Consequently, Moore’s actions indicate that the failure to include the
claims in the bankruptcy schedule was not mere inadvertence or mistake, and the
trial court did not abuse its discretion in finding that judicial estoppel applied to bar
Moore’s claims.
Conclusion
{¶19} Accordingly, we overrule the sole assignment of error and affirm the
judgment of the trial court.
Judgment affirmed.
BERGERON and WINKLER, JJ., concur.
Please note:
The court has recorded its own entry on the date of the release of this opinion.
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