Williams v. Smiddy
MEMORANDUM RULING denying 20 Motion for Summary Judgment. The Court will allow until Monday, November 27, 2017, for substitution of the proper party. If action is not taken on or before that date, the Court will dismiss Plaintiff's claims with prejudice. Signed by Judge Elizabeth E Foote on 10/26/2017. (crt,Keifer, K)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF LOUISIANA
CIVIL ACTION NO. 16-1586
JUDGE ELIZABETH FOOTE
CODY SMIDDY, ET AL
MAGISTRATE JUDGE KAREN HORNSBY
Pending before the Court is the Motion for Summary Judgment [Record Document
20] filed by the Defendants, Cody Smiddy, TruCore Energy, LLC, and State National
Insurance Company, which prays for this Court to dismiss Plaintiff’s claims with prejudice
and at her cost. Plaintiff has opposed the motion. Record Document 23. Upon consideration
of the briefs filed by the parties and for the reasons stated below, Defendants’ Motion for
Summary Judgement is DENIED.
Plaintiff, Sherika Williams (“Williams”), filed this personal injury suit on August 22,
2016, in the Louisiana First Judicial District Court in Caddo Parish. In her petition, Williams
alleged that she suffered injuries arising out of a motor vehicle accident that occurred on
March 12, 2016, when a vehicle in which she was a passenger was struck by a truck driven
by Defendant, Cody Smiddy (“Smiddy”). Record Document 1-2. At the time, Smiddy was
acting in the course and scope of his employment with Defendant, TruCore Energy, LLC
(“TruCore”). Id.; Record Document 14-3, p. 1. Williams brought her suit against Smiddy,
TruCore, and TruCore’s insurer, State National Insurance Company. The suit was removed
Page 1 of 9
to federal court on November 16, 2016.
On April 13, 2016, after the accident occurred but before filing this personal injury
suit, Williams filed for bankruptcy in the United States Bankruptcy Court in the District of
Nevada. The claim which gives rise to the present suit was not included as a financial asset
on the “Schedule A/B: Property” form filed in the bankruptcy action.1 On July 19, 2016, the
bankruptcy court confirmed Williams’ Chapter 7 bankruptcy and an order of discharge was
issued. Record Document 20-2. It appears that, in response to the filing of this personal
injury suit, the bankruptcy case was re-opened in January 2017 for the purpose of
administering assets. Record Document 23-2, 23-3. On March 16, 2017, the bankruptcy
court issued an order allowing the law firm of Dudley DeBosier to represent the bankruptcy
estate in the present suit. Record Document 20-3. The order was docketed in this case as
Plaintiff’s proof of authority to pursue this personal injury claim on behalf of the bankruptcy
estate. Record Document 18. Defendants then filed this motion for summary judgment,
arguing that Plaintiff’s claims should be dismissed.
Federal Rule of Civil Procedure 56(a) directs that a court “shall grant summary
judgment if the movant shows that there is no genuine dispute as to any material fact and
Specifically, the parties reference Item 33 of this form, which asks, “Do you own
or have any legal or equitable interest in any of the following? . . . . 33. Claims against
third parties, whether or not you have filed a lawsuit or made a demand for payment.”
Record Document 20-1, p. 3, 7. Williams marked the box indicating a “No” response.
Page 2 of 9
the movant is entitled to judgment as a matter of law.”2 Summary judgment is appropriate
when the pleadings, answers to interrogatories, admissions, depositions, and affidavits on
file indicate that there is no genuine issue of material fact and that the moving party is
entitled to judgment as a matter of law. See Celotex Corp. v. Catrett, 477 U.S. 317, 322,
106 S. Ct. 2548 (1986). When the burden at trial will rest on the non-moving party, the
moving party need not produce evidence to negate the elements of the non-moving party’s
case; rather, it need only point out the absence of supporting evidence. See Celotex, 477
U.S. at 322-323.
If the movant satisfies its initial burden of showing that there is no genuine dispute
of material fact with the motion for summary judgment, the nonmovant must demonstrate
that there is, in fact, a genuine issue for dispute at trial by going “beyond the pleadings”
and designating specific facts for support. Little v. Liquid Air Corp., 37 F.3d 1069, 1075
(5th Cir. 1994). “This burden is not satisfied with ‘some metaphysical doubt as to the
material facts,’” by conclusory or unsubstantiated allegations, or by a mere scintilla of
evidence. Id. (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574,
586 (1986)). However, “[t]he evidence of the non-movant is to be believed, and all
justifiable inferences are to be drawn in his favor.” Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 255 (1985) (internal citations omitted); Reid v. State Farm Mut. Auto Ins. Co.,
Rule 56 was amended effective December 1, 2010. Per the comments, the
2010 amendment was intended “to improve the procedures for presenting and deciding
summary judgment motions and to make the procedures more consistent with those
already used in many courts. The standard for granting summary judgment remains
unchanged.” Therefore, the case law applicable to Rule 56 prior to its amendment
remains authoritative, and this Court will rely on it accordingly.
Page 3 of 9
784 F.2d 577, 578 (5th Cir. 1986) (the court must “review the facts drawing all inferences
most favorable to the party opposing the motion”). While not weighing the evidence or
evaluating the credibility of witnesses, courts should grant summary judgment where the
critical evidence in support of the nonmovant is so weak and tenuous that it could not
support a judgment in the nonmovant’s favor. Little, 37 F.3d at 1075.
Additionally, Local Rule 56.1 requires the moving party to file a statement of
material facts as to which it contends there is no genuine issue to be tried. Pursuant to
Local Rule 56.2, the party opposing the motion for summary judgment must set forth a
“short and concise statement of the material facts as to which there exists a genuine issue
to be tried.” All material facts set forth in the statement required to be served by the
moving party “will be deemed admitted, for purposes of the motion, unless controverted
as required by this rule.” Local Rule 56.2.
LAW AND ANALYSIS
In their motion, Defendants argue that judicial estoppel should operate to bar
Plaintiff’s claim due to her failure to list the claim on her bankruptcy petition and filings.
Judicial estoppel is a common law doctrine that prevents a litigant from assuming
inconsistent positions for self-interest. In re Superior Crewboats, Inc., 374 F.3d 330, 334
(5th Cir. 2004). “It is ‘an equitable doctrine invoked by a court at its discretion’ to ‘protect
the integrity of the judicial process.’” Reed v. City of Arlington, 650 F.3d 571, 574 (5th Cir.
2011) (quoting New Hampshire v. Maine, 532 U.S. 742, 749–50 (2001)). The doctrine
“must be applied in such a way as to deter dishonest debtors, whose failure to fully and
Page 4 of 9
honestly disclose all their assets undermines the integrity of the bankruptcy system, while
protecting the rights of creditors to an equitable distribution of the assets of the debtor's
estate.” Reed, 650 F.3d at 574. In assessing whether judicial estoppel should apply, this
Court must find that three elements are satisfied: “(1) the party against whom judicial
estoppel is sought has asserted a legal position which is plainly inconsistent with a prior
position; (2) a court accepted the prior position; and (3) the party did not act
inadvertently.” Id. Despite these elements, the Fifth Circuit has noted that "judicial estoppel
is not governed by ‘inflexible prerequisites or an exhaustive formula for determining [its]
applicability,’ and numerous considerations ‘may inform the doctrine's application in specific
factual contexts.'" Love v. Tyson Foods, Inc., 677 F.3d 258, 261 (5th Cir. 2012) (quoting
New Hampshire v. Maine, 532 U.S. at 751).
Application of the Estoppel Elements
First, Plaintiff has asserted a legal position that is inconsistent with her earlier
position. In her bankruptcy proceedings, she did not disclose her pending claim even
though the accident giving rise to the claim had already occurred. She had a duty to
disclose the claim, but did not, and in failing to do so, she essentially made a
representation that no claim existed. See In re Superior Crewboats, Inc., 374 F.3d at 335.
Now, she asserts the claim in this suit. Thus, her position is inconsistent and the first
element is satisfied.
Next, the bankruptcy court accepted Plaintiff’s prior position when it issued an order
of discharge. See Alexander v. C.R. Bard, Inc., No. 3:12-CV-5187-O, 2014 WL 12602871,
Page 5 of 9
at *3 (N.D. Tex. Feb. 26, 2014) (collecting cases). Thus, the second element is also
As to the third element, a debtor’s failure to satisfy her disclosure duty is
“inadvertent” when the debtor “either lacks knowledge of the undisclosed claims or has no
motive for their concealment.” Love, 677 F.3d at 262 (quoting In re Coastal Plains, Inc.,
179 F.3d 197, 210 (5th Cir. 1999)). A lack of awareness of the duty to disclose a legal
claim is not the relevant inquiry; rather, Plaintiff must show she was unaware of facts
giving rise to her claim. See Jethroe v. Omnova Solutions, Inc., 412 F.3d 598, 601 (5th Cir.
2005); Alexander, 2014 WL 12602871, at *4.
Plaintiff claims that she disclosed the personal injury claim to her attorneys in the
bankruptcy action, and was advised that the issue would be properly addressed. It was not
until this suit was filed that she discovered that the claim was not reflected in her
bankruptcy filings. She submits an affidavit to this effect. Record Document 23-6. Plaintiff’s
explanation does not establish inadvertence as it has been defined by the Fifth Circuit. She
has shown neither that she was unaware of the facts giving rise to her claim nor that she
had no motive to conceal the claim. Moreover, the Fifth Circuit has rejected a similar
argument. See In re Flugence, 738 F.3d 126, 130 (5th Cir. 2013) (finding a plaintiff’s
argument that she relied on the advice of her attorney in failing to disclose her claim as
“unavailing”). Here, Plaintiff knew of the facts underlying her personal injury claim.
Additionally, she had a motive to conceal because her claim, if disclosed, would be
available to her creditors. See id. at 131; Love, 677 F.3d at 262. Thus, the third element
Page 6 of 9
Estoppel as an Equitable Doctrine
Notwithstanding that all elements of judicial estoppel are met, this Court retains
discretion in application of the doctrine. See Reed, 650 F.3d at 576 (“Because judicial
estoppel is an equitable doctrine, courts may apply it flexibly to achieve substantial
justice.”). Here, the Court believes that, at this juncture, dismissal is an overly harsh
remedy that would not properly account for the interest of Williams’ creditors. See Wieburg
v. GTE Sw. Inc., 272 F.3d 302, 309 (5th Cir. 2001); see also Kane v. Nat'l Union Fire Ins.
Co., 535 F.3d 380, 387 (5th Cir. 2008).
The Court finds the case of Kane v. National Union Fire Insurance Co., instructive.
In Kane, the Fifth Circuit reversed a district court’s finding that judicial estoppel applied as
a matter of law in a case involving a similar set of facts. As a preliminary matter to the
estoppel issue, the Court explained:
Section 541 of the Bankruptcy Code provides that virtually all of a debtor's
assets, including causes of action belonging to the debtor at the
commencement of the bankruptcy case, vest in the bankruptcy estate upon
the filing of a bankruptcy petition. Thus, a trustee, as the representative of
the bankruptcy estate, is the real party in interest, and is the only party with
standing to prosecute causes of action belonging to the estate once the
bankruptcy petition has been filed.
Kane, 535 F.3d at 385 (internal citations omitted); see also Wieburg, 272 F.3d at 306.
Accordingly, setting the estoppel issue aside, the Court would note that Plaintiff does not
appear to be the proper party to bring this suit.
Not long after removal, Plaintiff’s right to pursue this action was questioned by the
Page 7 of 9
Magistrate Judge. Record Document 10. In response, Plaintiff filed an order from the
bankruptcy court that authorized the law firm representing her in this action, Dudley
DeBosier, to act as special counsel for the estate. Record Document 18. A status
conference was set, but then canceled in response to Defendants’ motion for summary
judgment. No further action was taken.
In this case, it is clear that the trustee, as the representative of the bankruptcy
estate, is the proper party to prosecute this claim. There is evidence that the trustee
intends to pursue the claim on behalf of the estate, and, “absent unusual circumstances,
an innocent trustee can pursue for the benefit of creditors a judgment or cause of action
that the debtor fails to disclose in bankruptcy.” Reed, 650 F.3d at 573. As noted above, the
Nevada bankruptcy trustee obtained an order in the Nevada proceedings allowing the
hiring of special counsel to represent the trustee in this action. Record Document 20-3.
Therefore, the Court will allow the real party in interest an opportunity to pursue this
Federal Rule of Civil Procedure 17(a)(1) provides, in part, “An action must be
prosecuted in the name of the real party in interest.” Accordingly, the Court will allow until
Monday, November 27, 2017, for substitution of the proper party. If action is not taken
on or before that date, the Court will dismiss Plaintiff’s claims with prejudice.
Thus, summary judgment is DENIED at this time.
Page 8 of 9
For the foregoing reasons, Defendants’ motion for summary judgment is DENIED.
THUS DONE AND SIGNED this 26th day of October, 2017, in Shreveport,
Page 9 of 9
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?