Opinion
TH 99-215-C-T/H
July 30, 2001
ENTRY ON MOTION FOR RELIEF FROM JUDGMENT AND MOTION FOR LEAVE TO FILE SUR-REPLY
Though this Entry is a matter of public record and is being made available to the public on the court's web site, it is not intended for commercial publication either electronically or in paper form. The reason for this caveat is to avoid adding to the research burden faced by litigants and courts. Under the law of the case doctrine, the ruling or rulings in this Entry will govern the case presently before this court. See, e.g., Tr. of Pension, Welfare, Vacation Fringe Benefit Funds of IBEW Local 701 v. Pyramid Elec., 223 F.3d 459, 468 n. 4 (7th Cir. 2000); Avitia v. Metro. Club of Chicago, Inc., 49 F.3d 1219, 1227 (7th Cir. 1995). However, a district judge's decision has no precedential authority and, therefore, is not binding on other courts, on other judges in this district, or even on other cases before the same judge. See, e.g., Howard v. Wal-Mart Stores, Inc., 160 F.3d 358, 359 (7th Cir. 1998) ("a district court's decision does not have precedential authority"); Malabarba v. Chicago Tribune Co., 149 F.3d 690, 697 (7th Cir. 1998) ("district court opinions are of little or no authoritative value"); United States v. Articles of Drug Consisting of 203 Paper Bags, 818 F.2d 569, 571 (7th Cir. 1987) ("A single district court decision . . . has little precedential effect. It is not binding on the circuit, or even on other district judges in the same district."). Consequently, though this Entry correctly disposes of the legal issues addressed, this court does not consider the discussion to be sufficiently novel or instructive to justify commercial publication of the Entry or the subsequent citation of it in other proceedings.
The Plaintiff has filed a motion entitled, "Motion For Reinstatement Of Action And For Pre-Trial Conference," which appears to be a motion for relief from judgment pursuant to Fed.R.Civ.P. 60(b)(5) and is treated as such. Defendants oppose the motion. Defendants have filed a Motion For Leave To File Sur-Reply To Plaintiff's Reply To Defendant's Response. Plaintiff objects to that motion. The court rules as follows.
Background
On January 8, 1998, Plaintiff, Darren Back, filed a voluntary Chapter 13 bankruptcy petition. Plaintiff's bankruptcy case was assigned Cause Number 98-80022-FJO-7.
Plaintiff did not list his civil rights claim against Defendants as an asset in his petition. On August 6, 1998, Plaintiff sought conversion from Chapter 13 to Chapter 7. The bankruptcy was converted on September 19, 1998. The converted Chapter 7 bankruptcy was determined to be a "no asset" case, and on December 17, 1998, Plaintiff was discharged from the debts listed in his bankruptcy petition.
On August 2, 1999, Plaintiff commenced this Section 1983 action against Defendants, the Town of Cloverdale, Indiana, and others, alleging violations of his civil rights. The claims against Defendants are alleged to have arisen on or before August 1997. The Complaint alleges that the Defendants' conspiratorial acts destroyed Plaintiff economically and compelled him to seek protection from his creditors by filing for bankruptcy under Chapter 13.
On September 27, 1999, Defendants filed a motion to dismiss, contending that Plaintiff's bankruptcy filing deprived him of standing to assert his civil rights claims in the instant case. Plaintiff opposed the motion. On May 3, 2000, the court granted Defendants' motion, holding that Plaintiff lacked standing to assert this action. That same day, judgment was entered dismissing this action with prejudice.
Plaintiff subsequently filed a second voluntary petition for Chapter 13 bankruptcy and listed his civil rights claim against Defendants as an unsecured claim. (See Defs.' Resp. Pl.'s Mot. Reinstatement, Ex. A. at 42.) This bankruptcy case was assigned Cause Number 00-05487-FJO-13. The Chapter 13 Plan states that "The Debtor has a cause of action against the Town of Cloverdale. The case was dismissed by the United States District Court, without prejudice. . . ." (Id.)
This statement is false as the court dismissed Plaintiff's civil rights action with prejudice.
Then, on September 8, 2000, the Trustee filed Trustee's Motion To Vacate No Asset Order And Reopen Case in Plaintiff's Chapter 7 bankruptcy, stating the Trustee "has reason to believe there are assets in the case, which were not properly scheduled. . . ." (Id., Ex. B. at 21.) On September 26, 2000, the bankruptcy court reopened Plaintiff's Chapter 7 case (id. at 20), and, on September 29, 2000, entered an Order Vacating Order In No Asset Case. (Id. at 18.)
The Chapter 13 Plan was confirmed by the bankruptcy court's Confirmation Order on November 28, 2000. (Id., Ex. A at 3.) That order provides that "net proceeds of debtor's pending chose in action, being handled by Court-appointed counsel John D. Raikos, shall be paid to the trustee, for the Court to then determine the portion thereof the trustee shall retain for the benefit of plan creditors." (Id.)
On January 8, 2001, Plaintiff filed a document entitled, "Motion For Reinstatement Of Action And For Pre-Trial Conference." Plaintiff requests the court to set aside its judgment and reinstate this action on the basis of the bankruptcy court's November 28th Confirmation Order.
Discussion
Defendants move to file a sur-reply, contending that Plaintiff's reply to their response addresses issues not raised in the response. The court has reviewed Plaintiff's reply; indeed, it raises new issues. Therefore, the court finds that the motion to file sur-reply should be granted.
Plaintiff moves, pursuant to Rule 60(b)(5), for relief from this court's judgment dismissing this cause with prejudice. Rule 60(b)(5) provides in pertinent part:
On motion and upon such terms as are just, the court may relieve a party or a party's legal representative from a final judgment, order, or proceeding for the following reasons:. . . (5) the judgment has been satisfied, released, or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application[.]
FED. R. CIV. P. 60(b)(5). Defendants contend that Plaintiff should be judicially estopped from pursuing his civil rights claim against them because he knew about that claim yet failed to timely disclose it to the bankruptcy court. In his reply brief, Plaintiff argues Defendants are collaterally attacking the orders of the bankruptcy court and renews arguments he made in opposing Defendants' motion to dismiss, including arguments that the Defendants were required to join the bankruptcy Trustee as a party and that this action should not be dismissed for failure to be prosecuted in the name of the real party in interest. Plaintiff is simply wrong: the Defendants are not mounting a collateral attack on the bankruptcy court's orders. Plaintiff's other arguments are so meritless, and moreover, were previously raised in opposing Defendants motion to dismiss, that they bear no discussion here. Such arguments were to be made the on appeal, if at all, and Plaintiff did not appeal this court's judgment.
It seems that Plaintiff attempts to invoke the middle clause of Rule 60(b)(5), that is, that a prior judgment upon which this court's final judgment was based has been reversed or otherwise vacated. The first clause clearly is inapplicable; the third is inapplicable as well as since this court's judgment dismissing Plaintiff's case did not have prospective application. See Cincinnati Ins. Co. v. Flanders Elec. Motor Serv., Inc., 131 F.3d 625, 630 (7th Cir. 1997) ("Judgments are prospective when they are `executory' or `involve the supervision of changing conduct or conditions.'"). In the end, it does not matter which clause is invoked because the court concludes Plaintiff is barred from asserting his claims against Defendants.
Under the doctrine of judicial estoppel, "[a] litigant is forbidden to obtain a victory on one ground and then repudiate that ground in a different case in order to win a second victory." Chaveriat v. Williams Pipe Line Co., 11 F.3d 1420, 1427 (7th Cir. 1993) (citations omitted). Judicial estoppel "is an equitable doctrine invoked by a court at its discretion," New Hampshire v. Maine, ___ U.S. ___, 121 S.Ct. 1808, 1815 (2001) (quotation omitted), intended "to protect the integrity of the judicial process . . . by prohibiting parties from deliberately changing positions according to the exigencies of the moment[.]" Id. at 1814 (quotations omitted). The doctrine is used as a deterrent "to prevent litigants from playing fast and loose with the courts." In re Cassidy, 892 F.2d 637, 641 (7th Cir. 1990) (quotation omitted); see also McNamara v. City of Chicago, 138 F.3d 1219, 1225 (7th Cir. 1998) ("If repudiation were permitted, the incentive to commit perjury and engage in other litigation fraud would be greater."); Chaveriat, 11 F.3d at 1428 ("By making [the plaintiffs] choose one position irrevocably, the doctrine of judicial estoppel raises the cost of lying."). The Seventh Circuit has identified the following as prerequisites for application of the doctrine: (1) a party's subsequent position is clearly inconsistent with an earlier position; (2) the party convinced the first court to adopt its position, and (3) the facts at issue are the same in both cases. See United States v. Hook, 195 F.3d 299, 306 (7th Cir. 1999), cert. denied, 529 U.S. 1082 (2000); Levinson v. United States, 969 F.2d 260, 264 (7th Cir. 1992).
Numerous courts have applied judicial estoppel to bar a party from asserting a claim where the party knew of the claim but failed to disclose it in a bankruptcy proceeding. See In re Coastal Plains, Inc., 179 F.3d 197, 210-13 (5th Cir. 1999) (holding judicial estoppel barred debtor's successor from asserting claims against creditor where claims were not disclosed in bankruptcy schedules but debtor knew of claims and had motive to conceal them); Payless Wholesale Distribs. v. Alberto Culver (P.R.) Inc., 989 F.2d 570, 571-72 (1st Cir. 1993) (holding debtor who obtained relief in bankruptcy based on representation that it had no claims other than those listed in petition was judicially estopped from asserting undisclosed pre-petition claim); Hay v. First Interstate Bank of Kalispell, 978 F.2d 555, 557 (9th Cir. 1992) (holding debtor was judicially estopped from asserting claims in subsequent action not disclosed in bankruptcy case where debtor knew enough about the claims prior to the close of the bankruptcy case to have required disclosure of said claims); Oneida Motor Freight, Inc. v. United New Jersey Bank, 848 F.2d 414, 419-20 (3d Cir. 1988) (holding plaintiff's failure to disclose potential claims against defendant or raise claims defensively in prior bankruptcy case judicially estopped plaintiff from asserting claims in subsequent action); Scoggins v. Arrow Trucking Co., 92 F. Supp.2d 1372, 1375-76 (S.D.Ga. 2000) (holding debtor judicially estopped from asserting claim because of his failure to disclose claim in bankruptcy petition); Chandler v. Samford Univ., 35 F. Supp.2d 861, 864-65 (N.D.Ala. 1999) (holding employee judicially estopped from asserting race discrimination claim against her employer where she filed a charge with the Equal Employment Opportunity Commission during the pendency of her bankruptcy case but failed to identify claim as asset in bankruptcy); Rosenshein v. Kleban, 918 F. Supp. 98, 104-05 (S.D.N.Y. 1996) (granting summary judgment on grounds of judicial estoppel because plaintiffs failed to list claim as an asset in bankruptcy proceedings though they were aware of claim before filing for bankruptcy). The reopening of a closed bankruptcy case to disclose a claim previously known but not disclosed as an asset does not render judicial estoppel inapplicable. See Scoggins, 92 F. Supp.2d at 1376. The bankruptcy and district courts are still burdened by the party's attempt at deception, see id., and the doctrine is intended to protect the integrity of the judicial process. See New Hampshire v. Maine, 121 S.Ct. at 1814.
The court finds that judicial estoppel bars Plaintiff from asserting his civil rights claim against Defendants in this action. The doctrine is applicable because Plaintiff's assertion of a claim against Defendants in this case is inconsistent with his position in the prior bankruptcy proceeding that he had no assets; Plaintiff obtained relief in that bankruptcy case on the basis of his representation of no assets; and the facts regarding the claim are the same in this case as in the bankruptcy case, see Oneida, 848 F.2d at 419-20 (concluding that claims raised in present suit and prior bankruptcy were the same where plaintiff alleged defendant's actions caused it to file bankruptcy). Moreover, Plaintiff was aware of his civil rights claim during the pendency of that bankruptcy proceeding; indeed, in this case he alleges the Defendants' actions caused him to petition for bankruptcy, see, e.g., Payless Wholesale Distrib., 989 F.2d at 571 (noting that plaintiff failed to list claims in bankruptcy case but alleged that the bankruptcy resulted from defendants' conspiracy). Yet, Plaintiff failed to disclose the civil rights claim in his prior bankruptcy proceeding, and only disclosed the claim in his second Chapter 13 petition once his failure was discovered by his adversaries in this case, see Scoggins, 92 F. Supp. 2d at 1375 (concluding plaintiff's efforts to amend bankruptcy filings to disclose claim were too late because he only disclosed his claim "when forced by his adversary to do so").
The court finds that Plaintiff's failure to disclose the claim was a deliberate effort to play fast and lose with the courts. Plaintiff has offered absolutely no explanation for his failure to list his civil rights claim in the prior bankruptcy proceeding, see Scoggins, 92 F. Supp. 2d at 1375-76 (noting that plaintiff offered no explanation to negate the inference that he was attempting to disclose claim only because forced to do so). And, he had a clear motive to conceal the claim from his creditors. The court further finds that the interest of protecting the integrity of the judicial system outweighs any interest of Plaintiff's creditors in the civil rights claim as well as the prevention of a windfall to Defendants. See Payless Wholesale Distrib., 989 F.2d at 571; Hay, 978 F.2d at 556.
Conclusion
For the foregoing reasons, Defendants' Motion For Leave To File Sur-Reply To Plaintiff's Reply To Defendants' Response is GRANTED; Defendants' Sur-Reply To Plaintiff's Reply To Defendants' Response, attached as Exhibit A to defendants' motion, is DEEMED filed as of this date; and Plaintiff's Motion For Reinstatement Of Action And For Pre-Trial Conference is DENIED.