Batdorf v. Athens Archery, Inc.
ORDER granting Defendant's 33 Motion for Summary Judgment. Signed by Judge Callie V. S. Granade on 5/8/2014. (mab)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
ATHENS ARCHERY, INC.,
Civil No. 13-0316-CG-B
This matter is before the court on the defendant Athens Archery, Inc.’s
(“Athens Archery”) motion for summary judgment (Doc. 33), the plaintiff Richard
Batdorf’s (“Batdorf”) response in opposition (Doc. 48), and Athens Archery’s reply
(Doc. 49). For the reasons stated below, Athens Archery’s motion for summary
judgment is due to be GRANTED.
On June 6, 2005, Batdorf applied for a patent for certain technology involving
a dual cam system1 where the power cords for the bow connect directly from cam to
cam. (Doc. 48-1 at 42). In July 2008, Batdorf contacted Athens Archery’s’ president,
Jason Hudkins (“Hudkins”), about the archery bow cam system he claimed to have
designed. (Doc. 35 Ex. A at 28, Exs. 1, 2; Doc. 38 Ex. B at 19). This discussion led to
A cam system is part of the pulley system of a compound bow. An example of the cam system
at issue here was made an exhibit to the deposition of Jason Hudkins. (See photograph at Ex. A,
Hudkins dep., Ex.5). The cams are identical mirror images of each other: one is an upper cam on
a bow and one is a lower cam, depending on whether the bow is for a left-handed or right-handed
person. (See id., pp. 42-44).
Hudkins’ decision to use Batdorf’s design in developing bows for Athens Archery.
(Doc. 35 at 36-38; Doc. 38 Ex. B at 19-20).
On July 29, 2008, Batdorf sent a proposed license agreement to Athens
Archery. (Doc. 39 Ex. 9; Doc. 40). The license agreement included the following
terms: (1) payment of $5,000 from Athens Archery to Batdorf upon execution and
subsequent annual pre-payments of $5,000 per year; and (2) a $10 royalty payment
per cam system sold, deducted from the pre-paid minimum payment per year, until
the minimum payment amount is exceeded. (Doc. 36 Ex. 7).
After receiving the license agreement, Hudkins suggested four changes to the
contract: (1) correction of the named party to the agreement; (2) clarification on how
to calculate the license fee per bow; (3) correction of the month during which the
license payments were to be made by Athens Archery to Batdorf; and (4) verification
that if Athens Archery were ever sold, the license would be transferable to the
buyer. (Doc. 35 at 71-73; Doc. 36 Exs. 6, 7). Batdorf agreed to these changes and
instructed Hudkins to write the requested changes on the license agreement and
initial them. Id. On August 14, 2008, Hudkins signed and returned the license
agreement to Batdorf with a check for $5,000 as an upfront payment for the license
and coverage for the first 500 sets of bow cams. (Doc. 36 Ex. 7; Doc. 38 at 59).
After mailing the amended license agreement, Hudkins posted a photograph
of the prototype bow on an internet archery forum. (Doc. 35 at 79-80). Two
individuals then contacted Hudkins claiming that they each owed some of the rights
to the design of the prototype bow’s cam system. (Doc. 35 at 80-83). Based on these
representations, Hudkins sent an email to Batdorf on August 15, 2008, saying that
he was “going to have to put a stop payment on the check” and instructed Batdorf
not to deposit or cash the check. (Doc. 35 at 81-88; Doc. 36 Ex. 9; Doc. 38 at 62).
The following day Hudkins called Batdorf to explain the situation in more
detail. (Doc. 35 at 91-93). Hudkins alleges that he “made it very clear to [Batdorf]
that I could not enter into an agreement with him; and I told him to, you know, just
send the check back or tear it up.” Id.
Hudkins emailed Batdorf again on August 16, 2008, saying that the license
agreement needed to be changed to reflect that it would not go into effect unless
Batdorf was awarded the patent.2 (Doc. 34 at 104-07; Doc. 36 Ex. 10). Batdorf had
not signed the license agreement at this time. (Doc. 36 Ex. 7). The license
agreement was never amended to reflect Hudkins’ requested change. (Doc. 35 at
105; Doc. 36 Ex. 7).
The stop payment on the $5,000 check was never removed, and Batdorf has
not received a replacement check. (Doc. 35 at 88-89; Doc. 38 at 65, 73; Doc. 39 Ex.
13). Batdorf alleges he signed the license agreement on August 29, 2008, and mailed
it to Hudkins. (Doc. 38 at 24-25). However, Hudkins denies receiving a copy of the
license agreement from Batdorf, and Batdorf has no proof of delivery. (Doc. 35 at
The email stated in pertinent part:
As far as the license if you need me to keep it sign it and send it back I have
no problem if you would add a paragraph stating that if the IP doesn’t issue it
is null and void. I think it is a no Brainer it still gives you a license payment
and I will put the money in escrow and send you a check within 30 days. I
will tell you this for every bow I build I will put 10.00 in an escrow account so
once the [patent] goes through a check will be sent.
See Doc. 36 Ex. 10.
105-06). Subsequently, Athens Archery entered into a license agreement with Rex
Darlington to license cams in 2010. (Doc. 35 at 75-78, 115, 129; Doc. 36 at 148-50,
Exs. 8, 11; Doc. 38 at 43-44).
On July 17, 2012, Batdorf’s patent was issued by the United States Patent
Office on his bow cam system. (Doc. 37 Ex. 12). Once Batdorf knew that his patent
was going to be issued, he emailed Hudkins asking Athens Archery to perform
under the license agreement. (Doc. 35 at 125-26; Doc. 37 Ex. 13). Batdorf claims
Athens Archery owes him license fees of $10 per bow for 2,887 bows produced using
his technology. Batdorf sued Athens Archery in the U.S. District Court for the
Eastern District of Tennessee on August 3, 2012, for patent infringement and two
breach of contract claims, including for breach of license agreement at issue in this
action, but dismissed that case in January 2013. (Doc. 38 at 16-17; Doc. 39 Ex. 1;
On June 14, 2013, Batdorf filed this action against Athens Archery alleging
breach of the license agreement. (Doc. 1). Four months later, on September 13,
2013, Batdorf filed a petition for relief under Chapter 13 of the Bankruptcy Code.
(Doc. 38 at 13; Doc. 43). Batdorf was represented by counsel in the bankruptcy
matter. (Doc. 43). In Schedule B of that bankruptcy petition, Batdorf did not
disclose the instant breach of license agreement action against Athens Archery as
“Personal Property,” despite that Debtor Schedule’s prompt for “[o]ther contingent
and unliquidated claims of every nature.” (Doc. 43 at 18-20). Likewise, in the
section of the bankruptcy petition labeled “Statement of Financial Affairs,” Batdorf
answered “none” when asked to “[l]ist 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.” (Doc. 43 at 10). Batdorf signed both the bankruptcy
petition and Statement of Financial Affairs under penalty of perjury. (Doc. 43 at
13). Batdorf claims that he believed he had disclosed this action by listing a “claim
for patent disputed” as an asset under his schedule for personal property. The
bankruptcy court confirmed Batdorf’s Chapter 13 plan on November 15, 2013. (Doc.
At Batdorf’s deposition on January 21, 2014, the defense counsel discussed
the improper disclosure of this action on the bankruptcy petition. On January 27,
2014, Athens Archery filed an amended answer adding judicial estoppel as a
defense. (Doc. 28). On February 3, 2014, Batdorf amended his Statement of
Financial Affairs to include the instant action. (Doc. 45).
SUMMARY JUDGMENT STANDARD
Federal Rule of Civil Procedure 56(a) provides that summary judgment shall
be granted “if the movant shows that there is no genuine dispute as to any material
fact and that the movant is entitled to judgment as a matter of law.” The trial
court’s function is not “to weigh the evidence and determine the truth of the matter
but to determine whether there is a genuine issue for trial.” Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986). “The mere existence of some evidence to
support the non-moving party is not sufficient for denial of summary judgment;
there must be ‘sufficient evidence favoring the nonmoving party for a jury to return
a verdict for that party.’” Bailey v. Allgas, Inc., 284 F.3d 1237, 1243 (11th Cir. 2002)
(quoting Anderson, 477 U.S. at 249). “If the evidence is merely colorable, or is not
significantly probative, summary judgment may be granted.” Anderson, 477 U.S. at
249-250. (internal citations omitted).
The basic issue before the court on a motion for summary judgment is
“whether the evidence presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must prevail as a matter of law.”
See Anderson, 477 U.S. at 251-252. The moving party bears the burden of proving
that no genuine issue of material fact exists. O'Ferrell v. United States, 253 F.3d
1257, 1265 (11th Cir. 2001). In evaluating the argument of the moving party, the
court must view all evidence in the light most favorable to the non-moving party,
and resolve all reasonable doubts about the facts in its favor. Burton v. City of Belle
Glade, 178 F.3d 1175, 1187 (11th Cir. 1999). “If reasonable minds might differ on
the inferences arising from undisputed facts, then a court should deny summary
judgment.” Hinesville Bank v. Pony Exp. Courier Corp., 868 F.2d 1532, 1535 (11th
Cir. 1989) (citing Mercantile Bank & Trust v. Fidelity & Deposit Co., 750 F.2d 838,
841 (11th Cir. 1985)).
Once the movant satisfies his initial burden under Rule 56(a), the nonmoving party “must make a sufficient showing to establish the existence of each
essential element to that party's case, and on which that party will bear the burden
of proof at trial.” Howard v. BP Oil Co., 32 F.3d 520, 524 (11th Cir. 1994) (citing
Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986)). Otherwise stated, the nonmovant must “demonstrate that there is indeed a material issue of fact that
precludes summary judgment.” Clark v. Coats & Clark, Inc., 929 F.2d 604, 608
(11th Cir. 1991). The non-moving party “may not rely merely on allegations or
denials in its own pleading; rather, its response...must be by affidavits or as
otherwise provided in this rule be set out specific facts showing a genuine issue for
trial.” Vega v. Invsco Group, Ltd., 2011 WL 2533755, *2 (11th Cir. 2011). “A mere
‘scintilla’ of evidence supporting the [non-moving] party’s position will not suffice;
there must be enough of a showing that the jury could reasonably find for that
party.” Walker v. Darby, 911 F.2d 1573, 1577 (11th Cir. 1990) (citation omitted).
“[T]he nonmoving party may avail itself of all facts and justifiable inferences in the
record taken as a whole.” Tipton v. Bergrohr GMBH-Siegen, 965 F.2d 994, 998 (11th
Cir. 1992). “Where the record taken as a whole could not lead a rational trier of fact
to find for the non-moving party, there is no genuine issue for trial.” Matsushita
Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986) (internal
quotation and citation omitted).
A. Judicial Estoppel
Athens Archery argues that the doctrine of judicial estoppel prevents Batdorf
from pursuing the breach of license agreement claim in the district court, having
sworn in the bankruptcy court that no claims existed. “Judicial estoppel is an
equitable doctrine invoked at a court's discretion.” Burnes v. Pemco Aeroplex, Inc.,
291 F.3d 1282, 1285 (11th Cir. 2002) (citing New Hampshire v. Maine, 532 U.S. 742,
750, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001)). This doctrine “prevents a party from
asserting a claim in a legal proceeding that is inconsistent with a claim taken by
that party in a previous proceeding.” New Hampshire, 532 U.S. at 749, 121 S.Ct.
1808 (internal quotations omitted). Although there are no “inflexible prerequisites
or an exhaustive formula for determining the applicability of judicial estoppel,” the
U.S. Supreme Court has elucidated several factors which typically inform the
decision whether or not to apply judicial estoppel in a particular case. Id. at 751,
121 S.Ct. 1808. “First, a party's later position must be ‘clearly inconsistent’ with its
earlier position.” Id. at 750, 121 S.Ct. 1808 (string citation omitted). “Second, courts
regularly inquire whether the party has succeeded in persuading a court to accept
that party's earlier position, so that judicial acceptance of an inconsistent position
in a later proceeding would create ‘the perception that either the first or the second
court was misled...’ ” Id. (quoting Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 599
(6th Cir. 1982)). “[T]hird...is whether the party seeking to assert an inconsistent
position would derive an unfair advantage or impose an unfair detriment on the
opposing party if not estopped.” Id. at 751, 121 S.Ct. 1808
Courts in the Eleventh Circuit consider two additional factors in applying the
doctrine of judicial estoppel to a particular case. “First, it must be shown that the
allegedly inconsistent positions were made under oath in a prior proceeding.
Second, such inconsistencies must be shown to have been calculated to make a
mockery of the judicial system.” Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282,
1285 (11th Cir. 2002). However, these two factors are not “inflexible or exhaustive,”
and therefore the court must give due consideration to all of the circumstances of a
particular case when considering the applicability of judicial estoppel. Id. at 1286.
As a general matter, “while privity and/or detrimental reliance are often
present in judicial estoppel cases, they are not required.” Id. This is because judicial
estoppel protects the integrity of the judicial system, and not the litigants. Id.
(quoting Ryan Operations G.P. v. Santiam–Midwest Lumber Co. et al., 81 F.3d 355,
362 (3rd Cir. 1996)).
“The duty to disclose all assets and potential assets to the bankruptcy court is
a continuing duty that does not end once the forms are submitted.” Robinson v.
Tyson Foods, Inc., 595 F.3d 1269, 1274 (11th Cir. 2010) (quoting Burnes, 291 F.3d
at 1286); Burnes, 291 F.3d at 1286 (“Full and honest disclosure in a bankruptcy
case is crucial to the effective functioning of the federal bankruptcy system.”)
(internal quotations and citations omitted)).
1. Statement submitted under oath in a prior proceeding
Batdorf argues that “the evidence supports a finding that Plaintiff’s position
in his pending bankruptcy case in not clearly inconsistent with his position in the
instant case.” See Doc. 48 at 8. Specifically, Batdorf asserts that he believed he
adequately disclosed the instant action because he listed “a claim for a patent
dispute” as an asset in Schedule B of his bankruptcy petition. However, this
disclosure is not sufficient to put the bankruptcy court on notice of Batdorf’s suit in
The instant action is a claim against Athens Archery for breach of license
agreement, not a dispute over Batdorf’s patent. In response to questions in the
bankruptcy petition, Batdorf unambiguously represented to the bankruptcy court
that he had no contingent or unliquidated claims of any nature and that he was not
a party to any suit within one year immediately preceding the filing of the
bankruptcy case. Although the patent dispute and license agreement are related in
sense, Batdorf’s failure to identify his claim against Athens Archery for breach of
license agreement in his sworn, signed bankruptcy schedules amounts to the taking
of inconsistent positions under oath in a prior proceeding. Therefore, this matter
turns upon the question of intent.
Judicial estoppel may be applied only in situations involving intentional
manipulation of the courts, and not when the litigant's contradictory positions are
“the product of inadvertence or mistake.” Burnes, 291 F.3d at 1287 (quoting Matter
of Cassidy, 892 F.2d 637, 642 (7th Cir. 1990)). In cases where a debtor fails to
disclose a claim or potential claim in a bankruptcy proceeding, the court will find
the failure inadvertent only when the debtor lacks knowledge of the undisclosed
claim or has no motive for its concealment. Burnes, 291 F.3d at 1287 (citing In re
Coastal Plains, Inc., 179 F.3d 197, 210 (5th Cir. 1999)). Otherwise, intent may be
It is undisputed that Batdorf knew about his claim for breach of license
agreement against Athens Archery when he filed for bankruptcy as Batdorf filed
this action four months before he filed his bankruptcy petition. Nor can Batdorf
“deny a motive for concealing this claim, given Eleventh Circuit authorities
expressly recognizing a debtor’s direct financial motive for doing so.” See Hands v.
Winn-Dixie Stores, Inc., CIV.A. 09-0619-WS N, 2010 WL 4496798, at *4 & *4 n.7
(collecting Eleventh Circuit cases). Batdorf appeared to gain an advantage when he
failed to list his claim against Athens Archery for breach of license agreement in his
Debtor’s Schedule because, by omitting the claim, he could keep any proceeds
resulting from his claim for himself and not have them become part of the
bankruptcy estate. See Barger v. City of Cartersville, Ga., 348 F.3d 1289, 1296
(11th Cir. 2003); see also Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1275 (11th
Bartdorf argues that “[t]he initial disclosure of the dispute and the
subsequent amendment” of the bankruptcy petition mitigate against a
determination that he intended to conceal the action. See Doc. 48 at 8. The court
disagrees. Batdorf’s initial disclosure of the patent dispute made no reference to any
claim against Athens Archery for breach of license agreement. Not only did Batdorf
fail to disclose the instant action despite unambiguous questions in the bankruptcy
petition requiring him to do so, but he did not attempt to modify his bankruptcy
petition until after Athens Archery filed an amended answer adding the defense of
judicial estoppel. See, e.g., Barger, 348 F.3d at 1297 (“Barger's attempt to reopen
the bankruptcy estate to include her discrimination claim hardly casts her in the
good light she would like. She only sought to reopen the bankruptcy estate after the
defendants moved the district court to enter summary judgment against her on
judicial estoppel grounds.”); De Leon v. Comcar Industries, Inc., 321 F.3d 1289,
1292 (11th Cir. 2003) (claimant's effort to “amend his bankruptcy filings [ ] only
after his omission has been challenged by an adversary, suggests that a debtor
should consider disclosing potential assets only after he is caught concealing them”)
(citation omitted)); Burnes, 291 F.3d at 1288 (correction of bankruptcy schedules
after omission is subject of dispositive motion “would only diminish the necessary
incentive to provide the bankruptcy court with a truthful disclosure of the debtors'
assets”). Furthermore, Batdorf did not request approval of his counsel by
bankruptcy court until two weeks after Athens Archery moved for summary
judgment on judicial estoppel grounds. (Doc. 49 Ex. A)
Bartdorf also argues that his bankruptcy counsel’s statement that “this suit
was disclosed in the schedules” in an email sent to Batdorf’s counsel in this action
supports a finding that he intended to disclose the case. Even assuming for the
purpose of the argument that this statement is not inadmissible hearsay, Batdorf is
bound by any error of his attorney in not including the claim in his bankruptcy
schedules. Barger, 348 F.3d 1289, 1295 (recognizing that although the debtor
informed his attorney about his pending lawsuit, the attorneys omission of the
claim from the schedule of assets was “no panacea”); see also Link v. Wabash R.R.
Co., 370 U.S. 626, 633-34, 82 S.Ct. 1386, 1286, 8 L.Ed.2d 734 (1962). (“[I]f an
attorney's conduct falls substantially below what is reasonable under the
circumstances, the client's remedy is against the attorney in a suit for
malpractice.”); Cavaliere v. Allstate Ins. Co., 996 F.2d 1111, 1115 (11th Cir. 1993)
(“This Court rejected that argument even though such a result appear[ed] to
penalize innocent clients for the forgetfulness of their attorneys.”) (citations
omitted)). For the same reason, Batdorf’s assertion that he believed, in relying on
an attorney to prepare his bankruptcy petition, that the description “a claim of
patent disputed” fully disclosed this action fails to show inadvertence or mistake.
Accordingly, the court finds that Batdorf’s knowledge of his claim against
Athens Archery for breach of license agreement and his motive to conceal is
sufficient evidence from which to infer his intentional manipulation. See Burnes,
291 F.2d at 1287. The court further finds that the doctrine of judicial estoppel is
appropriate in this case, where Batdorf failed to disclose his claim for breach of
license agreement to the bankruptcy court, and then failed to amend his bankruptcy
petition until after Athens Archery raised the issue of judicial estoppel in its
amended answer. Batdorf’s estoppel from asserting this claim obviates the need to
address the claim on the merits.
For the reasons stated above, the Court concludes that there is no genuine
dispute as to any material fact, and that the defendant is entitled to judgment as a
matter of law. Accordingly, Athens Archery’s motion for summary judgment (Doc.
34) is GRANTED.
DONE and ORDERED this 8th day of May, 2014.
/s/ Callie V. S. Granade
UNITED STATES DISTRICT JUDGE
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