Smith et al v. Werner Enterprises, Inc.
ORDER denying 9 Motion for Summary Judgment. Signed by Chief Judge William H. Steele on 11/21/2014. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
CORNELIUS SMITH, et al.,
) CIVIL ACTION 14-0107-WS-B
WERNER ENTERPRISES, INC.,
This matter is before the Court on the defendant’s motion for summary
judgment as to plaintiff Cornelius Smith. (Doc. 9). The parties have filed briefs
and evidentiary materials in support of their respective positions, (Docs. 10, 19,
20), and the motion is ripe for resolution. After careful consideration, the Court
concludes that the motion is due to be denied.
Smith and other plaintiffs filed this FLSA action on March 10, 2014,
alleging that the defendant has not paid them overtime compensation to which
they are entitled. (Doc. 1). On May 7, 2014, the defendant filed the instant
motion, asserting that Smith is judicially estopped from seeking monetary
compensation for any overtime violation because he had not disclosed this claim
in his Chapter 13 bankruptcy proceedings.
Smith filed his petition in December 2011. The plan was confirmed in May
2012, and it remains in effect until approximately May 2017. (Docs. 10-2, 10-4).
On May 20, 2014, the plaintiff amended his bankruptcy filings to reflect his FLSA
claim. (Doc. 19-2).
Summary judgment should be granted only if “there is no genuine dispute
as to any material fact and the movant is entitled to judgment as a matter of law.”
Fed. R. Civ. P. 56(a). The party seeking summary judgment bears “the initial
burden to show the district court, by reference to materials on file, that there are no
genuine issues of material fact that should be decided at trial.” Clark v. Coats &
Clark, Inc., 929 F.2d 604, 608 (11th Cir. 1991). The moving party may meet its
burden in either of two ways: (1) by “negating an element of the non-moving
party’s claim”; or (2) by “point[ing] to materials on file that demonstrate that the
party bearing the burden of proof at trial will not be able to meet that burden.” Id.
“Even after Celotex it is never enough simply to state that the non-moving party
cannot meet its burden at trial.” Id.; accord Mullins v. Crowell, 228 F.3d 1305,
1313 (11th Cir. 2000); Sammons v. Taylor, 967 F.2d 1533, 1538 (11th Cir. 1992).
“When the moving party has the burden of proof at trial, that party must
show affirmatively the absence of a genuine issue of material fact: it must support
its motion with credible evidence ... that would entitle it to a directed verdict if not
controverted at trial. [citation omitted] In other words, the moving party must
show that, on all the essential elements of its case on which it bears the burden of
proof, no reasonable jury could find for the nonmoving party.” United States v.
Four Parcels of Real Property, 941 F.2d 1428, 1438 (11th Cir. 1991) (en banc)
(emphasis in original); accord Fitzpatrick v. City of Atlanta, 2 F.3d 1112, 1115
(11th Cir. 1993).1
“If the party moving for summary judgment fails to discharge the initial
burden, then the motion must be denied and the court need not consider what, if
Judicial estoppel is an affirmative defense. E.g., Mirando v. United States
Department of Treasury, 766 F.3d 540, 544 (6th Cir. 2014); Nature Conservancy v.
Wilder Corp., 656 F.3d 646, 650 (7th Cir. 2011); Reed v. City of Arlington, 650 F.3d 571,
576 (5th Cir. 2011); Hansen v. Harper Excavating, Inc., 641 F.3d 1216, 1227 (10th Cir.
any, showing the non-movant has made.” Fitzpatrick, 2 F.3d at 1116; accord
Mullins, 228 F.3d at 1313; Clark, 929 F.2d at 608.
“If, however, the movant carries the initial summary judgment burden ...,
the responsibility then devolves upon the non-movant to show the existence of a
genuine issue of material fact.” Fitzpatrick, 2 F.3d at 1116. “If the nonmoving
party fails to make ‘a sufficient showing on an essential element of her case with
respect to which she has the burden of proof,’ the moving party is entitled to
summary judgment.” Clark, 929 F.2d at 608 (quoting Celotex Corp. v. Catrett,
477 U.S. 317 (1986)) (footnote omitted); see also Fed. R. Civ. P. 56(e)(2) (“If a
party fails to properly support an assertion of fact or fails to properly address
another party’s assertion of fact as required by Rule 56(c), the court may …
consider the fact undisputed for purposes of the motion ….”).
In deciding a motion for summary judgment, “[t]he evidence, and all
reasonable inferences, must be viewed in the light most favorable to the
nonmovant ….” McCormick v. City of Fort Lauderdale, 333 F.3d 1234, 1243
(11th Cir. 2003).
“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). “[J]udicial
estoppel is applied to the calculated assertion of divergent sworn positions. The
doctrine is designed to prevent parties from making a mockery of justice by
inconsistent pleadings.” Id. (internal quotes omitted).
There are “two primary factors for establishing the bar of judicial estoppel.”
Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1273 (11th Cir. 2010). “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.” Id. (internal quotes
omitted). “[T]hese factors are not exhaustive; rather, courts must always give due
consideration to the circumstances of the particular case.” Id.
It is uncontroverted that the plaintiff was unaware of any possible FLSA
claim when he filed his Chapter 13 petition in December 2011 or when his plan
was confirmed in May 2012. (Doc. 19-1). However, a Chapter 13 debtor has a
continuing duty to amend his bankruptcy schedules to disclose new assets arising
after his plan is confirmed but before he receives a discharge, and “a pending
lawsuit seeking monetary compensation qualifies as an asset.” Robinson, 595 F.3d
It is uncontroverted that the plaintiff became aware of a potential FLSA
claim in mid- to late February 2014. (Doc. 19-1). He filed the instant action on
March 10 and amended his bankruptcy schedules to reflect the existence of his
FLSA claim on May 20. In Ajaka v. BrooksAmerica Mortgage Corp., 453 F.3d
1339 (11th Cir. 2006), the plaintiff learned of a possible TILA claim on January 3,
filed a TILA action on April 11, and amended his Chapter 13 bankruptcy
schedules to reflect the TILA claim on June 20. Id. at 1342-43. The Eleventh
Circuit noted that “[t]here is no question that Ajaka failed to timely amend his
Chapter 13 reorganization plan ….” Id. at 1344. The Court concludes that the
plaintiff likewise failed to amend his bankruptcy schedules in a timely manner.
He “therefore took inconsistent positions … under oath in a prior proceeding.”
Id.; accord Robinson, 595 F.3d at 1275 (“Ajaka held that failure to timely amend a
Chapter 13 reorganization plan to reflect a pending claim while simultaneously
purs[u]ing that claim in another court of law constitutes inconsistent positions
under oath.”). The plaintiff makes no argument to the contrary.
“[T]he doctrine of judicial estoppel applies in situations involving
intentional contradictions, not simple error or inadvertence.” Burnes, 291 F.3d at
1286. The “requisite intent to mislead the bankruptcy court” need not be proved
directly; rather, “deliberate or intentional manipulation can be inferred from the
record.” Id. at 1286-87. In particular, “the debtor’s failure to satisfy its statutory
disclosure duty is ‘inadvertent’ only when, in general, the debtor either lacks
knowledge of the undisclosed claims or has no motive for their concealment.”
Robinson, 595 F.3d at 1275 (internal quotes omitted).
The plaintiff plainly had knowledge of his FLSA claim, and “a financial
motive to secret assets exists under Chapter 13 … because the hiding of assets
affects the amount to be discounted and repaid.” DeLeon v. Comcar Industries,
Inc., 321 F.3d 1289, 1291 (11th Cir. 2003). The defendant treats these two facts as
dispositive, (Doc. 10 at 6-9), but they are not.
The defendant assumes that, if knowledge and motive are shown,
inadvertence cannot be shown and intent to make a mockery of the judicial system
is the only remaining conclusion available. The Court disagrees. The Eleventh
Circuit has repeatedly identified knowledge and motive merely as “sufficient”
evidence from which to “infer” the requisite intent. See Barger, 348 F.3d at 129
(the plaintiff’s knowledge and motive “are sufficient evidence from which to infer
her intentional manipulation”); DeLeon, 321 F.3d at 1292 (from knowledge and
motive, “we can infer” intent to make a mockery of the judicial system); Burnes,
291 F.3d at 1287-88 (“[I]t is clear that the record in this case contains sufficient
evidence from which to infer intentional manipulation by [the plaintiff].”). Such
language suggests that an inference of intent from the existence of knowledge and
motive is permissive only.
As noted by Judge Barkett in Barger, “Burnes and De Leon do not hold that
the failure to meet the specific ‘inadvertence criteria’ automatically implies an
intent to ‘make a mockery of the judicial system.’ Although a finding of
inadvertence completely precludes judicial estoppel under Burnes, failure to meet
the specific inadvertence criteria does not mean that judicial estoppel must apply.”
348 F.3d at 1298 (Barkett, J., dissenting). And numerous sister courts have agreed
that the inference of intent drawn from the existence of knowledge and motive is
permissive only, not mandatory. See Melton v. National Dairy Holdings, L.P.,
2009 WL 653024 at *5 (M.D. Ala. 2009) (Moorer, M.J.); Roots v. Morehouse
School of Medicine, Inc., 2009 WL 4798217 at *7 (N.D. Ga. 2008); Thompson v.
Quarles, 392 B.R. 517, 527 (S.D. Ga. 2008); Jackson v. Advanced Disposal
Services, Inc., 2008 WL 958110 at *4 (M.D. Fla. 2008) (Covington, D.J.);
Snowden v. Fred’s Stores, Inc., 419 F. Supp. 2d 1367, 1373 (M.D. Ala. 2006)
(Thompson, D.J.); Wheeler v. Florida Department of Corrections, 2006 WL
2321114 at *6 n.7 (M.D. Fla. 2006) (Corrigan, D.J.).
Even if the inference of intent derived from knowledge plus motive is
mandatory rather than permissive, the inference does not arise in every case but
only “in general.” Robinson, 595 F.3d at 1275. In Robinson, the Court stated that
a trial court’s finding of intent based on knowledge and motive can be
“overturn[ed]” should the plaintiff “presen[t] sufficient evidence.” Id. at 1276. In
Ajaka, despite evidence of knowledge and motive, the Court ruled “there is
insufficient proof of Ajaka’s intent to support” summary judgment for the
defendant based on judicial estoppel. 453 F.3d at 1346 & n.8. As Robinson and
Ajaka make clear, other facts may appear in the record taking a particular case out
of the general and supporting a determination that, despite knowledge and motive,
the plaintiff did not harbor an intent to make a mockery of the judicial system – or
at least creating a genuine issue of material fact in that regard. The Court
concludes that this is such a case.
The following facts are key to the Court’s determination. First, the plaintiff
did not fail to disclose an existing claim in his original bankruptcy filings but
failed to amend those filings in a timely manner once the claim arose. Second, the
plaintiff did amend his bankruptcy schedules, and he did so barely two months
after filing this action and barely three months after first hearing that he might
have a claim. Third, his discovery of a claim, filing of a lawsuit, and amendment
of his schedules all transpired in the second year of a confirmed five-year reorganization plan, and no events significant to the bankruptcy occurred, and no
deadlines passed or were imminent, during this period. The facts of this case are
thus unlike those of any of the Eleventh Circuit cases on which the defendant
The plaintiff in De Leon failed to disclose an existing EEOC charge in his
original schedules and then failed to amend his schedules when he filed suit. The
plaintiff’s non-disclosure lasted 17 months after filing his petition and 11 months
after filing suit, and during this prolonged period of non-disclosure the plaintiff
obtained confirmation of his Chapter 13 plan of re-organization. 321 F.3d at
The plaintiff in Barger failed to disclose an existing lawsuit in her original
schedules and then failed to amend her schedules when she amended her
complaint to seek compensatory and punitive damages. The plaintiff’s nondisclosure lasted five to nine months after filing her petition and three to seven
months after filing her amended complaint, and during this period the plaintiff was
granted a complete discharge. 348 F.3d at 1291-92.
The plaintiff in Burnes failed to amend his schedules when he filed an
EEOC charge and then a lawsuit. The plaintiff’s non-disclosure never ended but,
36 months after filing his charge and 13 months after filing his lawsuit, he was
granted a complete discharge. 291 F.3d at 1284.
The plaintiff in Robinson failed to amend her schedules when she filed a
lawsuit. The plaintiff’s non-disclosure never ended but, nine months after filing
her lawsuit, she was granted a full discharge. 595 F.3d at 1272.2
The difference between the failure to disclose an existing claim in an
original filing and the actual but untimely disclosure of a new claim in an amended
filing is significant. The former involves the judicial submission of an affirmative
misrepresentation, one that is wrong when filed and that is never corrected. The
This case is also unlike Hands v. Winn-Dixie Stores, Inc., 2010 WL 4496798
(S.D. Ala. 2010), a decision of the Court often cited by the defendant. The plaintiff in
Hands failed to disclose an existing EEOC charge in his original schedules and then
failed to amend his schedules when he filed suit. The plaintiff’s non-disclosure lasted 34
months after filing his petition and eleven months after filing suit, and during this
prolonged period of non-disclosure the plaintiff obtained confirmation of his Chapter 13
plan of re-organization. Id. at *1-2, *3, *5.
latter involves the judicial submission of an accurate representation that later
events cause to become inaccurate and that is eventually corrected. See Snowden,
419 F. Supp. 2d at 1373 (the plaintiff “did not affirmatively misrepresent that her
claims did not exist [but] merely failed to amend her schedule for four months
after she learned about the claims”); Roots, 2009 WL 4798217 at *7 (“The failure
to amend does not create the same inference as the case where the debtor has
knowledge of or has filed his non-bankruptcy claim prior to filing for Chapter 13
The length of time a misstatement remains uncorrected is also significant.
The longer a debtor permits a misrepresentation to remain, the stronger the
inference that the reason is intent. This is especially so when an initially accurate
schedule becomes wrong due to subsequent events, since there is no precise
deadline for amending schedules and since it is no more uncommon or suspicious
to briefly delay filing an amended schedule than it is to delay filing an original
petition or any other pleading. The Ajaka Court found that two months and nine
days between the filing of suit and the submission of amended schedules did not
constitute timely amendment, 453 F.3d at 1343, 1344, but it also deemed that time
period sufficiently short to suggest a lack of intent to make a mockery of the
judicial system. Id. at 1346. The delay here was two months and ten days.
“Judicial estoppel does not operate because a party did not move as quickly as she
could have; it operates only against cold manipulation ….” Snowden, 419 F.
Supp. 2d at 1373-74 (finding a delay of four months, standing alone, too short to
be conclusive as to intent).
The occurrence of key events, or the passage of key deadlines, while a
debtor delays correcting a schedule is also significant, because it reflects the
debtor’s receipt of a benefit from his delay and supports an inference that he
sought by delay to obtain the benefit. Thus, in Strauss v. Rent-A-Center, Inc., 192
Fed. Appx. 821 (11th Cir. 2006), the Court reversed the lower court’s finding of
judicial estoppel because, unlike in Barger, “[t]he bankruptcy court never entered
any order discharging any of Strauss’s debts.” Id. at 823.3
The defendant argues that judicial estoppel must apply here because the
plaintiff did not amend his bankruptcy schedules until after the defendant filed the
instant motion. (Doc. 20 at 2-3). “Such a bright-line rule, however, represents an
unprecedented extension of judicial estoppel,” and such evidence “has never been
treated as dispositive proof of intent to mislead.” Snowden, 419 F. Supp. 2d at
1374. When, as in the defendant’s cited cases, the passage of substantial time and
the receipt of benefit have already occurred, the debtor’s amendment in response
to a motion for summary judgment on judicial estoppel grounds cannot easily
undo their damage. Here, however, the plaintiff amended his schedules barely two
months after suit was filed and long before any possible benefit from nondisclosure could be realized. In light of those circumstances, that the plaintiff
amended after the defendant asserted judicial estoppel is at best ambiguous.
Because this matter is before the Court on motion for summary judgment, the
defendant does not win in the face of ambiguity.
For the reasons set forth above, the defendant’s motion for summary
judgment is denied.
DONE and ORDERED this 21st day of November, 2014.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
“The application of judicial estoppel does not require that the nondisclosure
must lead to a different result in the bankruptcy proceeding.” Robinson, 595 F.3d at 1275
(emphasis added). The failure to affect the result, however – and in this case, the absence
of any real possibility of affecting the result – is a circumstance that may weigh in the
determination whether the plaintiff intended to make a mockery of the judicial system.
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