E-Filed Document Feb 18 2016 09:00:06 2015-CA-00959 Pages: 23 IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI NO. 2015-CA-00959 SHANNON ROGERS APPELLANT VERSUS GULFSIDE CASINO PARTNERSHIP APPELLEE APPEAL FROM THE CIRCUIT COURT OF HARRISON COUNTY, MISSISSIPPI FIRST JUDICIAL DISTRICT CAUSE NO. A2401-13-75 BRIEF OF APPELLEE (ORAL ARGUMENT NOT REQUESTED BY APPELLEE) DAVID W. STEWART (MS BAR NO. 9040) BRIAN C. WHITMAN (MS BAR NO. 104477) COPELAND, COOK, TAYLOR & BUSH, P.A. POST OFFICE BOX 10 GULFPORT, MS 39502 (228)863-6101 (228)863-1884 (FAX) ATTORNEYS FOR APPELLEE dstewart@cctb.com bwhitman@cctb.com
IN THE SUPREME COURT OF THE STATE OF MISSISSIPPI NO. 2015-CA-00959 SHANNON ROGERS APPELLANT VERSUS GULFSIDE CASINO PARTNERSHIP APPELLEE CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made in order that the justices of the Supreme Court and/or the judges of the Court of Appeals may evaluate possible disqualification or recusal. 1. Shannon Rogers- Plaintiff/Appellant 2. Michael W. Crosby and William W. Satterfield - Counsel for Appellant 3. Gulfside Casino Partnership d/b/a Island View Casino Resort- Defendant/Appellee 4. David W. Stewart and Brian C. Whitman, Copeland, Cook, Taylor & Bush, P.A. - Counsel for Defendant/Appellee 5. Honorable Lawrence P. Bourgeois, Judge, Harrison County, Mississippi /s/ David W. Stewart DAVID W. STEWART, MSB No. 9040 BRIAN C. WHITMAN, MSB No. 104477 i
TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS....................................... i TABLE OF CONTENTS........................................................ ii TABLE OF AUTHORITIES..................................................... iii STATEMENT OF THE ISSUES................................................... 1 STATEMENT OF THE CASE.................................................... 2 A. Nature of Case..................................................... 2 B. Course of Proceedings............................................... 2 C. Statement of Relevant Facts........................................... 3 SUMMARY OF THE ARGUMENT............................................... 5 ARGUMENT.................................................................. 7 A. Standard of Review................................................. 7 B. Plaintiff Does Not Have Standing...................................... 8 C. Plaintiff had a Duty to Amend Her Bankruptcy Schedules and Disclose the Present Cause of Action................................... 9 D. Plaintiff's Failure to Amend Her Schedules and Subsequent Pursuit of the Present Matter Satisfies all Elements of the Judicial Estoppel Analysis..... 12 E. Plaintiff's "Non-Economic Damages" and M.R.C.P. 1 Arguments have no Support in Case Law............................................ 15 CONCLUSION............................................................... 16 CERTIFICATE OF SERVICE................................................... 17 CERTIFICATE OF SERVICE AS TO FILING...................................... 18 ii
TABLE OF AUTHORITIES CITATION OF CASES Adams v. Graceland Care Ctr. of Oxford, LLC 2015 Miss. App. LEXIS 559 (Miss. Ct. App. 2015)........................... 7, 14 Brandon v. Interfirst Corp. 858 F.2d 266 (5 th Cir. 1988)................................................. 9 City of Madison v. Bryan 763 So. 2d 162 (Miss. 2000)................................................ 8 Copiah County v. Oliver 51 So. 3d 205 (Miss. 2011).............................................. 7, 11 In re Adams 481 B.R. 854 (Bankr. N.D. Miss. 2012).............................. 8, 10, 11, 12 In re Coastal Plains, Inc. 179 F.3d 197 (5 th Cir. 1999)........................................... 9, 10, 12 In re Flugence 738 F.3d 126 (5 th Cir. 2013)............................................. 10, 15 Harris v. Viegelahn 135 S. Ct. 1829 (2015).................................................... 11 Howard v. Fina Oil & Chem. Co. 2016 U.S. Dist. LEXIS 4280............................................... 10 Jenkins v. Wright & Ferguson Funeral Home 215 F.R.D. 518 (S.D. Miss. 2003)............................................ 8 Jethroe v. Omnova Solutions 412 F.3d 598 (5 th Cir. 2005).......................................... 12, 13, 15 Kirk v. Pope 973 So. 2d 981 (Miss. 2007)................................ 7, 8, 9, 12, 13, 15, 16 Love v. Tyson Foods, Inc. 677 F.3d 258 (5 th Cir. 2012)............................................... 15 McKinney v. BancorpSouth Bank 2013 WL 3834878, *4-5 (N.D. Miss. 2013)................................ 12, 13 Pruitt v. Hancock Med. Ctr. 942 So. 2d 797 (Miss. 2006)................................................ 8 Superior Crewboats, Inc. v. Primary P & I Underwriters 374 F.3d 330 (5 th Cir. 2004)............................................. 12, 13 Thompson v. Sanderson Farms, Inc. 2006 U.S. Dist. LEXIS 48409, *12-13 (Bankr. S.D. Miss. 2006)................... 13 United States v. Beard 913 F.2d 193 (5th Cir.1990)............................................... 15 United States ex rel. Long v. GSDMIdea City, L.L.C. 798 F.3d 265 (5th Cir. 2015)............................................... 15 iii
Wieburg v. GTE Southwest Inc. 272 F.3d 302 (5 th Cir. 2001)................................................. 8 Youngblood Group v. Lufkin Fed. Sav. & Loan Ass n 932 F. Supp. 859 (E.D.Tex 1996)........................................... 10 CITATIONS OF CONSTITUTION/STATUTES 11 U.S.C. 521(1)............................................................. 10 11 U.S.C. 1306............................................................ 8, 10 OTHER iv
STATEMENT OF ISSUE I. Whether the lower court erred in dismissing Plaintiff s case through the application of judicial estoppel when the undisputed facts established that: (a) Plaintiff failed to amend her bankruptcy schedule of assets to disclose the existence of a potential cause of action, inconsistent with her later pursuit of the present matter; (b) The bankruptcy court relied upon Plaintiff s non-disclosure of the existence of a potential cause of action in discharging Plaintiff s debt; and (c) Plaintiff knew of the facts giving rise to the potential cause of action. Page 1 of 18
STATEMENT OF THE CASE A. NATURE OF CASE The underlying matter is a personal injury action arising out of an incident which occurred on March 30, 2010 on the premises of the Defendant, Gulfside Casino Partnership d/b/a Island View Casino Resort, located in Gulfport, Mississippi. The Plaintiff, Shannon Rogers, alleges that while a patron on the Defendant s premises, she sustained injuries when she slipped and fell near the buffet. (R. p. 10-11, VI) 1. Plaintiff alleges general negligence on the part of the Defendant. (R. p. 11, VII). Plaintiff seeks damages for medical expenses, future medical expenses, pain and suffering, mental anguish, permanent physical impairment, and the loss of the ability to enjoy life due to injuries and constant pain. (R. p. 12, VIII). B. COURSE OF PROCEEDINGS AND DISPOSITION IN COURT BELOW On March 28, 2013, Plaintiff filed her Complaint in the Circuit Court of Harrison County, First Judicial District. (R. p. 9). The Complaint alleges that on March 30, 2010, the Plaintiff, slipped and fell on the Defendant s premises, causing her personal injury. (R. p. 10-11, VI). Plaintiff seeks both economic and non-economic damages in the Complaint. (R. p. 12, VIII). On May 30, 2013, the Defendant filed its Answer and Defenses to Complaint, in which it denied its employees were negligent in anyway and further denied that it was legally liable to the Plaintiff in anyway. (R. p. 24-29). The Defendant raised estoppel as a defense in its Answer and Defenses. (R. p. 25). 1 R refers to the appeal record, followed by the page number of the appeal record referenced. Page 2 of 18
After the depositions of the Plaintiff and her fact witnesses (R. p. 64-75), the Defendant filed its Motion for Summary Judgment and accompanying memorandum on September 9, 2014. (R. p. 76-80 and 130-139). Plaintiff filed her Response to Defendant s motion on January 21, 2015. (R. p. 142-145). The Defendant then filed its Rebuttal on February 3, 2015. (R. p. 168-174). A hearing on Defendant s Motion to Dismiss was held on May 21, 2015. (R. p.177-178). On May 21, 2015, the Circuit Court of Harrison County entered an Order granting the Defendant s motion and dismissed the Plaintiff s case. (R. p. 179). Plaintiff filed her Notice of Appeal on June 19, 2015. (R. p. 180). C. STATEMENT OF RELEVANT FACTS On October 12, 2005, the Plaintiff filed a Chapter 13 Petition for bankruptcy protection in the U.S. Bankruptcy Court for the Southern District of Mississippi, Southern Division (cause no. 05-54727-KMS). (R. p. 91-92). During the bankruptcy proceedings, the Plaintiff and her husband, Johnny Rogers, were required to disclose their assets on a Summary of Schedules. (R. p. 95-125). As the bankruptcy filing preceded the date of the incident alleged in the present matter, the personal injury claim of Plaintiff was not listed as an asset. (R. p. 95-125). After the Plaintiff purported to disclose all debts and assets, the bankruptcy debt was discharged on October 4, 2010, subsequent to the incident alleged by Plaintiff in the present lawsuit. (R. p. 93-94). Further, the Order closing the bankruptcy proceeding was not entered until March 14, 2011. (R. p. 125). The bankruptcy file contains no amendment to the Plaintiff s scheduled assets to reflect the existence of the present claim. As indicated previously, Plaintiff filed her Complaint in the present matter March 28, 2013, alleging she slipped and fell inside the Defendant s premises on March 30, 2010. (R. p. 10-11, VI). The day after the incident, Plaintiff called Mr. Tony Vanderslice, Risk Manager for the Page 3 of 18
Defendant, and made a claim for personal injury arising from the incident. (R. p. 126-127). Mr. Vanderslice informed Plaintiff that he would submit her claim to the Defendant s insurance carrier, which he subsequently did. (R. p. 126-127). Mr. Vanderslice submitted an affidavit confirming the occurrence of these events. (R. p. 126-127). The Plaintiff s deposition was taken on February 21, 2014. (R. p. 128-129). Regarding her bankruptcy, Mrs. Rogers testified that her bankruptcy was still pending at the time of the incident. (R. p. 129, lines 5-11). Further, Mrs. Rogers testified that she did not notify her bankruptcy trustee regarding the incident at the Gulfside Casino Partnership property and potential cause of action. (R. p. 129, lines 12-18). Page 4 of 18
SUMMARY OF ARGUMENT The undisputed facts before this Court establish that Plaintiff had a pending bankruptcy at the time of Plaintiff s alleged slip and fall. Plaintiff admitted in her deposition that the existence of a potential lawsuit against this Defendant was never disclosed to the bankruptcy trustee. This failure to disclose occurred despite the fact that Plaintiff called the Defendant s Risk Manager the day after the incident to make a claim regarding her alleged injuries and she pursued the claim forward thereafter. The law is clear that a debtor has an ongoing and continuous duty throughout the pendency of her bankruptcy to amend her schedule of assets to include any potential cause of action accruing during the bankruptcy, despite the fact that the potential cause of action may be contingent, dependent, or conditional. A Plaintiff who fails to disclose a potential cause of action, which eventually ripens into a lawsuit lacks standing to prosecute that claim and is precluded from pursuing that lawsuit through the application of judicial estoppel. Plaintiff does not have standing to assert the claims alleged in the present matter. The bankruptcy trustee is the real party in interest with exclusive standing to pursue the present lawsuit. Further, Plaintiff has not put forth any evidence tending to show that the trustee has ratified Plaintiff s continued pursuit of this lawsuit. Accordingly, the Defendant asserts that Plaintiff lacks standing and the Circuit Court s dismissal of Plaintiff s claims should be affirmed. If this Court should find that Plaintiff does have standing, the application of judicial estoppel should operate to dispose of all of Plaintiff s claims. In order for judicial estoppel to apply three elements must be satisfied: 1) Plaintiff s position in the present lawsuit must be inconsistent with her position in the bankruptcy proceedings, 2) the bankruptcy court must have Page 5 of 18
accepted the Plaintiff s previous position, and 3) Plaintiff s failure to disclose must not have been inadvertent. In the present matter, Plaintiff s position that she has a viable cause of action against the Defendant is inconsistent with her position in her bankruptcy proceedings, which was that she had no potential causes of action during the pendency of her bankruptcy. The bankruptcy court accepted Plaintiff s claim that she had no potential cause of action through that court s discharge of Plaintiff s debt and closing of her bankruptcy. Finally, Plaintiff s failure to disclose the existence of her cause of action was not inadvertent through her knowing of the facts giving rise to the present lawsuit. This third element is reinforced through Plaintiff making a claim with the Defendant, and the Defendant s insurance carrier, on the day following the date of the incident. Plaintiff does not dispute any material facts which concern the judicial estoppel analysis. Instead, in her brief, Plaintiff asserts various claims which have no bearing on the issue before this Court. Those irrelevant claims include: 1) that Plaintiff was disabled and unable to earn wages, 2) that Plaintiff is not making a claim for lost wages, 3) that the Defendant disputed the merits of Plaintiff s premises liability claim, 4) that Plaintiff did not intentionally or in bad faith conceal the existence of the present matter from the bankruptcy trustee, and 5) that Plaintiff s lawsuit was dismissed based upon a technicality. In summary, there is no genuine issue as to any material fact regarding Plaintiff s nondisclosure of her cause of action against the Defendant. Accordingly, the Defendant asserts that the lower court did not err in dismissing Plaintiff s claim. Page 6 of 18
ARGUMENT A. STANDARD OF REVIEW Standing is a question of law which is reviewed under a de novo standard. Kirk v. Pope, 973 So. 2d 981, 986 (Miss. 2007). The proper standard of review for a trial court s dismissal of an action pursuant to the application of judicial estoppel has been called into question by the recent Court of Appeals opinion in Adams v. Graceland Care Ctr. of Oxford, LLC, 2015 Miss. App. LEXIS 559 (Miss. Ct. App. 2015). In Adams, the Court cites Kirk v. Pope for authority that a trial court s judicial estoppel analysis is subject to an abuse of discretion standard. Id. at *6. (citing Kirk v. Pope, 973 So. 2d 981, 986 (Miss. 2007)). The Adams Court then cites to Copiah County v. Oliver, where the Supreme Court used a de novo standard to review a trial court s denial of a defendant s summary judgment motion. Id. (citing Copiah County v. Oliver, 51 So. 3d 205, 207 (Miss. 2011)). The dissent in Adams noted that the Court in the original withdrawn opinion in Copiah County employed an abuse of discretion standard in the judicial estoppel analysis. Id. at *19. Subsequently the Court used a de novo standard in the second Copiah County opinion because the Court did not review the merits of the judicial estoppel arguments, and instead simply directed the trial court to stay proceedings until the bankruptcy court could make a decision regarding the plaintiff s duty to amend her schedule of assets. Id. at *19. Accordingly, the Defendant asserts that the abuse of discretion is the proper standard for cases involving review of a trial court s dismissal of an action based upon imposition of judicial estoppel. Page 7 of 18
B. PLAINTIFF DOES NOT HAVE STANDING Standing is a jurisdictional issue which may be raised by any party or the Court at any time. Kirk, 973 So. 2d at 989 (quoting City of Madison v. Bryan, 763 So. 2d 162, 166 (Miss. 2000)). In order to have standing there must be a present, existent actionable title or interest which must be completed at the time the cause of action is filed. Id. As will be explained more completely later in this brief, a cause of action which accrues during the pendency of a bankruptcy is part of the bankruptcy estate. See In re Adams, 481 B.R. 854, 858 (Bankr. N.D. Miss. 2012) (citing 11 U.S.C. 1306) ( Property of the estate includes... all property... the debtor acquires after the commencement of the case but before the case is closed, dismissed, or controverted... ). As a part of the bankruptcy estate, the bankruptcy trustee is the real party in interest with exclusive standing to pursue a debtor s personal injury claim which accrued during the pendency of a bankruptcy. Kirk, 973 So. 2d at 980 (quoting Wieburg v. GTE Southwest Inc., 272 F.3d 302, 306 (5 th Cir. 2001)). See also Pruitt v. Hancock Med. Ctr., 942 So. 2d 797, 802 (Miss. 2006). However, a trustee may confer standing on a debtor through ratification. Id. A proper ratification requires for the trustee to authorize continuation of the lawsuit, to agree to be bound by the result, and the ratification must satisfy the purpose of Rule 17(a), which is to assure that the judgment will be final and that res judicata will protect the defendant from having to defend a separate action. Id. (quoting Jenkins v. Wright & Ferguson Funeral Home, 215 F.R.D. 518, 522 (S.D. Miss. 2003)). In the present matter, Plaintiff s cause of action against the Defendant accrued during the pendency of her bankruptcy. Despite the fact that Plaintiff failed to list the potential cause of action in her schedule of assets, the claim was still a part of the bankruptcy estate. Therefore, the Page 8 of 18
bankruptcy trustee is the real party in interest with exclusive standing to assert the claim. Additionally, the Plaintiff has failed to present any evidence to support the idea that the trustee ratified Plaintiff s pursuit of the present matter. Plaintiff has only presented a letter from the office of the bankruptcy trustee indicating that the trustee was declining to reopen the bankruptcy case. (R. P. 167) Accordingly, the Defendant asserts that Plaintiff lacks standing and the Circuit Court s dismissal of Plaintiff s claims should be affirmed. C. PLAINTIFF HAD A DUTY TO AMEND HER BANKRUPTCY SCHEDULES AND DISCLOSE THE PRESENT CAUSE OF ACTION If this Court finds that Plaintiff does have standing, the Defendant asserts that Plaintiff should be judicially estopped from pursuing the present matter. Although the doctrine of judicial estoppel has been more thoroughly discussed in cases from the 5 th Circuit and Federal District Courts of this State, the Mississippi Supreme Court has extended this principle to State court actions. See Kirk v. Pope, 973 So. 2d 981 (Miss. 2007). In the case of In re Coastal Plains, Inc., 179 F.3d 197 (5 th Cir. 1999), the 5 th Circuit Court of Appeals discussed at length the doctrine of judicial estoppel. The Court stated that Judicial estoppel is a common law doctrine by which a party who has assumed one position in his pleadings may be estopped from assuming an inconsistent position. Id. at 205 (quoting Brandon v. Interfirst Corp., 858 F.2d 266, 268 (5 th Cir. 1988)). The purpose of this doctrine, the Court stated, is to protect the integrity of the judicial process, by prevent[ing] parties from playing fast and loose with the courts to suit the exigencies of self-interest. Id. Further, the Court stated that [b]ecause the doctrine is intended to protect the judicial system, rather than the litigants, detrimental reliance by the opponent of the party against whom the doctrine is applied is not necessary. Id. Page 9 of 18
In regard to bankruptcy proceedings, the Court stated that the Bankruptcy Code and Rules impose upon bankruptcy debtors an express, affirmative duty to disclose all assets, including contingent and unliquidated claims. Id. at 207-08 (citing 11 U.S.C. 521(1)). Quoting a case from another jurisdiction, the Court stated that Any claim with potential must be disclosed, even if it is contingent, dependant or conditional. Id. at 208 (quoting Youngblood Group v. Lufkin Fed. Sav. & Loan Ass n, 932 F. Supp. 859, 867 (E.D.Tex 1996)). (Emphasis In Original Text). The Court thus held in In re Coastal Plains, Inc. that regardless of whether the omission was inadvertent or intentional, the debtor was precluded from pursuing any claim that was not listed as an asset in the bankruptcy schedule. Id. at 212-13. The 5 th Circuit has more recently emphasized the debtor s need to disclose all potential post-petition assets even if it is not certain that the property is part of the bankruptcy estate. In re Flugence, 738 F.3d 126 (5 th Cir. 2013). In addressing the uncertainty of whether post-confirmation property belongs to the estate, and consequently must be disclosed, the Court held that our decisions have settled that debtors have a duty to disclose to the bankruptcy court notwithstanding uncertainty. The reason for the rule is obvious: Whether a particular asset should be available to satisfy creditors is often a contested issue, and the debtor's duty to disclose assets even where he has a colorable theory for why those assets should be shielded from creditors allows that issue to be decided as part of the orderly bankruptcy process. Id. at 130. (Emphasis Added). See also Howard v. Fina Oil & Chem. Co., 2016 U.S. Dist. LEXIS 4280. Mississippi Bankruptcy courts have established that any asset a Chapter 13 debtor acquires after confirmation of a Chapter 13 plan is part of the debtor s bankruptcy estate. In re Adams, 481 B.R. 854, 858 (Bankr. N.D. Miss. 2012) (citing 11 U.S.C. 1306) ( Property of the estate includes... all property... the debtor acquires after the commencement of the case but Page 10 of 18
before the case is closed, dismissed, or controverted... ). 2 The United States Supreme Court has recently confirmed that all post confirmation property is bankruptcy estate property. Harris v. Viegelahn, 135 S. Ct. 1829, 1835 (2015) ("the Chapter 13 estate from which creditors may be paid includes both the debtor's property at the time of his bankruptcy petition, and any wages and property acquired after filing.") (emphasis added). Because potential causes of action that arise after plan confirmation are bankruptcy estate property, the debtor has an affirmative duty to amend his or her bankruptcy schedules to disclose the assets to the debtor s creditors. In re Adams, 481 B.R. at 858. In the present matter, Plaintiff filed for bankruptcy protection on October 12, 2005. The incident alleged herein occurred on March 30, 2010. Plaintiff then made a claim with the Defendant regarding her alleged injuries on March 31, 2010. Six months after the incident, on October 4, 2010, the Plaintiff s debt was discharged. The Order closing Plaintiff s bankruptcy case was not entered until March 14, 2011, almost one year after the occurrence of the incident at issue. Accordingly, the Defendant asserts that Plaintiff had an ongoing and continuous duty to disclose her potential cause of action and claim for injuries against the Defendant. Further, Plaintiff had nearly one year to disclose her claim to the bankruptcy court prior to her bankruptcy matter being closed. 2 In Copiah County v. Oliver, 51 So. 3d 205 (Miss. 2011), the Mississippi Supreme Court declined to reach the issue of whether Chapter 13 debtors had a duty to disclose assets that arose after plan confirmation. Instead, the Court explained it would reserve to the Bankruptcy Court the determination of whether such a duty existed under the bankruptcy code. Following Copiah County, Mississippi bankruptcy courts, including In re Adams, have affirmatively stated that Chapter 13 debtors have an ongoing duty to disclose all assets acquired until the bankruptcy is closed. Page 11 of 18
D. PLAINTIFF S FAILURE TO AMEND HER SCHEDULES AND SUBSEQUENT PURSUIT OF THE PRESENT MATTER SATISFIES ALL ELEMENTS OF THE JUDICIAL ESTOPPEL ANALYSIS In order for judicial estoppel to bar Plaintiff from pursuing this action based on her nondisclosure of this action, the Court must find that: 1) Plaintiff s position in the current matter was inconsistent with her previous position in the bankruptcy proceeding, 2) the bankruptcy court accepted the Plaintiff s previous position, and 3) the non-disclosure must not have been inadvertent. Kirk, 973 So. 2d at 991 (citing Superior Crewboats, Inc. v. Primary P & I Underwriters, 374 F.3d 330, 334 (5 th Cir. 2004)). According to Mississippi law, the failure of a bankruptcy debtor to list a lawsuit or cause of action as a scheduled asset is equivalent to asserting that such lawsuit or cause of action does not exist. Id. The debtor s obligation to disclose all assets, including all potential causes of action, is an ongoing one that continues until the termination of the bankruptcy. In re Adams, 481 B.R. 854, 858 (Bankr. N.D. Miss. 2012) (quoting In re Coastal Plains, Inc., 179 F.3d 197, 207-08 (5 th Cir. 1999)). This continuous obligation of disclosure is left unfulfilled by the debtor s failure to amend her list of scheduled assets while having knowledge of, or pursuing, a potential undisclosed cause of action. McKinney v. BancorpSouth Bank, 2013 WL 3834878, *4-5 (N.D. Miss. 2013). The subsequent pursuit of an undisclosed cause of action is inconsistent with the debtor s prior and ongoing affirmation, through failing to amend her schedule of assets, that no cause of action exists. Kirk, 973 So. 2d at 991. These inconsistent positions satisfy the first element of the test to apply judicial estoppel. Id. The reliance element is satisfied simply by the fact that the bankruptcy court relied upon the debtor s schedules in discharging her debt. Jethroe v. Omnova Solutions, 412 F.3d 598, 600 (5 th Cir. 2005); McKinney, 2013 WL at *5; Kirk, 973 So. 2d at 991. If a bankruptcy court grants a Page 12 of 18
discharge of debt, it must have relied on that information given to it by the debtor, including her schedules, thereby satisfying the reliance element. Kirk, 973 So. 2d at 991. In regard to the third element of the test, non-disclosure is inadvertent only when, in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment. Id. (quoting Superior Crewboats, Inc., 374 F.3d at 335). The controlling inquiry, with respect to inadvertence, is the knowing of facts giving rise to inconsistent positions. McKinney, 2013 WL at *6 (quoting Jethroe, 412 F.3d at 601). I.e., knowing those facts giving rise to the potential cause of action not listed in the schedules. Further, a debtor s lack of awareness of her ongoing duty to disclose her legal claims is irrelevant to the analysis of the inadvertence element. Id. Further, the motivation sub-element is almost always met if a debtor fails to disclose a claim or possible claim to the bankruptcy court. Motivation in this context is self-evident because of potential financial benefit resulting from the non-disclosure. Thompson v. Sanderson Farms, Inc., 2006 U.S. Dist. LEXIS 48409, *12-13 (Bankr. S.D. Miss. 2006). In the present case, the first element is met by Plaintiff affirming that during the pendency of her bankruptcy she had no potential causes of action and then subsequently pursuing the present matter. The second element is met by the bankruptcy court discharging Plaintiff s debt based partially on the courts reliance on Plaintiff s schedules, which contained no mention of the present matter. Finally, the third element is satisfied simply based upon the fact that Plaintiff knew of the facts giving rise to the present matter prior to the discharge of her debt. Her knowledge of a claim and/or a potential cause of action is reinforced by the fact that she contacted the Defendant the day after the occurrence, regarding the incident. In her brief, Plaintiff failed to address, and apparently does not dispute that the first two elements of the judicial estoppel test are met. Plaintiff does however appear to allege that the Page 13 of 18
inadvertence element has not been satisfied. While Plaintiff does not cite any authority to support her position, the Defendant is aware of the recent decision in Adams v. Graceland Care Ctr. of Oxford, LLC, in which the Court of Appeals adopted the position that a debtor/plaintiff s failure to disclose the existence of a cause of action must be intentional and willful in order to satisfy the inadvertence element of the judicial estoppel analysis. 2015 Miss. App. LEXIS 559 (Miss. Ct. App. 2015). In addition to Court of Appeals opinion in Adams being non-binding on the Supreme Court, the Defendant asserts that the facts in Adams are distinguishable from the facts of the present matter. In Adams, the underlying lawsuit arose out of plaintiff s mother s death in the defendant s nursing home. Id. at 3. The daughter of the decedent in Adams was involved in a pending bankruptcy at the time of the mother s death. Id. The plaintiff/daughter failed to amend her bankruptcy schedule of assets to reflect the existence of this wrongful death cause of action. Id. In addressing the inadvertence element, the Court of Appeals noted that the plaintiff cannot be said to have had the same conscious awareness of her mother's cause of action that vested with her at her mother's death that she would have if it were her own personal cause of action. Id. at 13. It is clear that the fact that plaintiff s cause of action in Adams resulted from underlying facts not directly involving the plaintiff was of considerable importance to the Court. Unlike Adams, the Plaintiff in the present matter was directly involved in the underlying facts from which the present matter arose. Plaintiff slipped and fell on the Defendant s premises, therefore she certainly knew the facts underlying her premises liability claim. Further, she displayed knowledge that those facts may give rise to a cause of action through her making a claim with the Defendant and the Defendant s insurance carrier on the day after the incident and she pursued the claim thereafter. Accordingly, the Defendant asserts that Plaintiff s knowledge of Page 14 of 18
the facts of the incident, and her knowledge that she made a claim regarding her alleged injuries, sufficiently distinguishes the present matter from Adams. E. PLAINTIFF S NON-ECONOMIC DAMAGES AND M.R.C.P. 1 ARGUMENTS HAVE NO SUPPORT IN CASE LAW In her brief, Plaintiff asserts multiple times that the damages pursued in the present matter would likely not be subject to creditor recovery. Plaintiff also appears to assert that she is seeking only non-economic damages in the present matter. However, in her Complaint, Plaintiff seeks no less than $750,000.000" for among other things, medical expenses and future medical expenses. Simply put, medical expenses and future medical expense are economic damages. Plaintiff cites no authority for the proposition that non-economic damages are outside the scope of creditor recovery authority in bankruptcy proceedings. The Defendant asserts that prior case law in Mississippi and the 5 th Circuit have established that a cause of action, or potential cause of action, must be disclosed to the bankruptcy trustee and court regardless of the type of action or damages sought in the underlying lawsuit. See Kirk v. Pope, 973 So. 2d 981 (Miss. 2007) (Breach of contract action); Love v. Tyson Foods, Inc., 677 F.3d 258 (5 th Cir. 2012) (EEOC discrimination action); and Jethroe v. Omnova Solutions, Inc., 412 F.3d 598 (5 th Cir. 2005) (Title VII action). Further, the 5th Circuit has held that the fact that an asset might not lead to a recovery in favor of the creditors (e.g., where the plan already calls for a repayment of 100% of unsecured claims) does not prevent the application of judicial estoppel because the debtor still has a motive to conceal. United States ex rel. Long v. GSDMIdea City, L.L.C., 798 F.3d 265, 273-274 (5th Cir. 2015). In addition, the debtor has a duty to disclose all assets, even ones the debtor thinks are worthless. In re Flugence, 738 F.3d 126, 130 n.4 (5th Cir. 2013) (quoting United States v. Beard, 913 F.2d 193, 197 (5th Cir.1990) (explaining that debtors have a duty to Page 15 of 18
disclose to the court the existence of assets whose immediate status in the bankruptcy is uncertain, even if that asset is ultimately determined to be outside of the bankruptcy estate ). Plaintiff also asserts that her action should not be dismissed based upon mere technicalities. Further, Plaintiff asserts that the rule followed by the lower court is not a Mississippi Rule but a rule of the Federal Court via case law. Outside of reciting Rule 1 of the Mississippi Rules of Civil Procedure and the corresponding Advisory Committee Note, Plaintiff cites no authority for her argument. Additionally, the Defendant was unable to find any authority in which Rule 1 was cited to prevent the application of judicial estoppel. Contrary to the assertion by Plaintiff, judicial estoppel has been recognized and its imposition has been affirmed by the Mississippi Supreme Court. See Kirk v. Pope, 973 So. 2d 981 (Miss. 2007). CONCLUSION The Defendant asserts that there is no genuine issue of fact regarding whether the Plaintiff failed to amend her schedule of assets during the pendency of her bankruptcy to include the claim or potential cause of action which eventually became the present lawsuit. The lower court did not err in dismissing Plaintiff s lawsuit through application of judicial estoppel. Accordingly, the Defendant respectfully requests that this Court affirm the lower court s dismissal of Plaintiff s claims. This the 18 th day of February, 2016. Respectfully submitted, GULFSIDE CASINO PARTNERSHIP D/B/A ISLAND VIEW CASINO RESORT BY: BY: COPELAND, COOK, TAYLOR & BUSH, P.A. /s/ David W. Stewart DAVID W. STEWART, MSB No. 9040 BRIAN C. WHITMAN, MSB No. 104477 Page 16 of 18
C E R T I F I C A T E I, the undersigned, being the attorney of record for the Defendant/Appellee, Gulfside Casino Partnership d/b/a Island View Casino Resort, in Cause No. 2015-CA-00959, in the Supreme Court of Mississippi, do hereby certify that, I have this day filed the Brief of Appellee using the MEC system, and that pursuant to Mississippi Rules of Appellate Procedure 25 and 31, I have this day delivered a copy of the foregoing Brief of Appellee, via Regular United States Mail, postage prepaid, to: Michael W. Crosby 2111 25 th Avenue Gulfport, MS 39501 Honorable Lawrence Bourgeois Circuit Court Judge 1801 23 rd Avenue Gulfport, MS 39501 This, the 18 th day of February, 2016. /s/ David W. Stewart DAVID W. STEWART BRIAN C. WHITMAN David W. Stewart Brian C. Whitman Copeland, Cook, Taylor & Bush, P.A. Post Office Box 10 Gulfport, Mississippi 39502 (228) 863-6101 (228)863-1884 (Fax) Page 17 of 18
CERTIFICATE OF SERVICE AS TO FILING I, the undersigned, being the attorney of record for the Defendant/Appellee, Gulfside Casino Partnership d/b/a Island View Casino Resort, in Cause No. 2015-CA-00959, in the Supreme Court of Mississippi, do hereby certify that, I have this day filed the Brief of Appellee using the MEC system, and that pursuant to Mississippi Rules of Appellate Procedure 25 and 31, I have this day delivered for filing, the original and three (3) copies of the foregoing Brief of Appellee to Muriel B. Ellis, Supreme Court Clerk, Post Office Box 249, Jackson, Mississippi, 39205-0249, via Regular United States Mail, postage prepaid. THIS, the 18 th day of February, 2016. /s/ David W. Stewart DAVID W. STEWART BRIAN C. WHITMAN Page 18 of 18