Summary
granting defendants' motion for summary judgment dismissing plaintiff's complaint based on judicial estoppel due to her failure to disclose her interests in the district court action to the bankruptcy court
Summary of this case from In re HydeOpinion
Civil Action No. 02-10531-RWZ
May 22, 2002
MEMORANDUM OF DECISION
Plaintiff, Theresa Compton, was an employee of defendant Kelly Services ("Kelly") from December 1996 to February 1999. Shortly thereafter, she filed a sex discrimination claim with the Massachusetts Commission Against Discrimination ("MCAD") against Kelly. A year later, she withdrew her MCAD complaint and filed a claim in Massachusetts Superior Court against Kelly and DePuy Orthopaedics ("DePuy"), where plaintiff was once temporarily assigned through Kelly. She alleges violations of Massachusetts General Laws chapter 214 § 1C and chapter 151B by the corporate defendants, as well as assault and battery and intentional infliction of emotional distress by the individual defendant, Fernando Oliveira, who had been her supervisor at DePuy. In November of 2001, the Superior Court dismissed Count I (G.L. c. 214 § 1C) as against Kelly and DePuy. Similarly, in March 2002, it allowed defendant Oliveira's motion for summary judgment on Count I (G.L. c. 214 § 1C) and Count II (G.L. c. 151B). Immediately thereafter, plaintiff amended her complaint to add claims based on violations of the Federal Equal Pay Act ("FEPA") and Massachusetts Equal Pay Act ("MEPA"). Defendants then removed the action to this Court.
Meanwhile, on December 12, 2000, several weeks after she filed this action in Superior Court, plaintiff filed for Chapter 7 bankruptcy (Case No. 00-18427-CJK, United States Bankruptcy Court, District of Massachusetts). In the Debtor Schedules that plaintiff signed on December 18, 2000, she failed to disclose her claims against the defendants. Similarly, in her Statement of Financial Affairs, she answered "none" when asked to list "all suits and administrative proceedings to which the debtor is or was a party within one year immediately proceeding the filing of this bankruptcy case." Plaintiff admits that she never informed the Bankruptcy Court of her suit against the defendants. Nor did she inform the defendants of the bankruptcy proceedings. On August 1, 2001, the Bankruptcy Judge issued an Order, which granted plaintiff a bankruptcy discharge and the case was closed on August 24, 2001. It was not until March of 2002 that plaintiff, during her deposition, informed defendants of the bankruptcy action.
Defendants then filed several dispositive motions based on statute of limitations, procedural inadequacies and judicial estoppel. The Court need only address the compelling judicial estoppel argument, based on the undisputed fact that plaintiff failed to disclose her interests in this action to the Bankruptcy Court before the close of those proceedings. Although plaintiff does not dispute the material facts at issue, she argues that judicial estoppel is not warranted because her error was unintentional and dismissal based upon judicial estoppel would result in a windfall for defendants. Neither argument is legally persuasive here.
The First Circuit squarely addressed this issue in Payless Wholesale Distributors, Inc. v. Alberto Culver (P.R.), Inc., 989 F.2d 570 (1st Cir. 1993). The Payless court held that a debtor, which had obtained Chapter 11 relief based on its representation that it had no monetary claims other than those listed on the petition, was judicially estopped from subsequently asserting pre-petition claims that were never disclosed during the bankruptcy claim. Even though the Payless debtor had not yet filed its civil claims during the pendency of the bankruptcy case, the court still found "palpable fraud that the court [would] not tolerate, even passively." Id. at 571. See also Welsh v. Quabbin Timber, Inc., 199 B.R. 224, 228 (D.Mass. 1996) (debtor judicially estopped from commencing civil action seven months after bankruptcy discharge). By comparison, judicial estoppel in the instant case is even more appropriate. Plaintiff not only knew of possible claims against the defendants, but she had actually filed complaints on two separate occasions — the MCAD action before the bankruptcy petition and the civil action during the pendency of the bankruptcy proceedings. Moreover, she denied those actions outright on two separate bankruptcy filings. This is precisely the type of tactic against which the doctrine of judicial estoppel is designed to protect. See United States v. Levasseur, 846 F.2d 786, 792 (1st Cir. 1998) ("The primary concern of the doctrine of judicial estoppel is to protect the integrity of the judicial process.) (citation omitted).
Defendants' motions for summary judgment are granted. Judgment may be entered for defendants.