Rehberg et al v. Flowers Foods, Inc et al
Filing
90
ORDER denying 82 Motion for Summary Judgment. Signed by District Judge Max O. Cogburn, Jr on 7/23/14. (mga)
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:12-cv-00596-MOC-DSC
WILLARD ALLEN RILEY
MARIO RONCHETTI
SCOTT REHBERG,
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Plaintiffs,
Vs.
FLOWERS BAKING COMPANY OF
JAMESTOWN, LLC
FLOWERS FOODS, INC.,
Defendants.
ORDER
THIS MATTER is before the court on defendants’ Motion for Summary Judgment.
Plaintiff James A. Fields filed a timely Response (#89) to that motion and defendants neither
filed a Reply, which was dues to be filed not later than July 21, 2014, nor notified the court that
they did not intend to file a Reply as provided in Local Civil Rule 7.1(E), L.Civ.R. (W.D.N.C.).
Having considered defendants’ motion and reviewed the pleadings, the court enters the following
Order denying defendants’ Motion for Summary judgment based on a theory of judicial estoppel.
FINDINGS and CONCLUSIONS
I.
Background
Defendants have moved for summary judgment on opt-in plaintiff James A. Fields’
FLSA claim based on a theory that he is judicially estopped from asserting such claim in this
court because he failed to bring that claim to the attention of the bankruptcy court when he filed
for personal bankruptcy protection under Chapter 13 on or about August 31, 2011.
It is
undisputed that he did not include his potential claim against his employer under the FLSA in his
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sworn schedule of assets. When asked about such omission during his deposition in this case,
Mr. Fields testified that while he questioned defendants’ pay practices at that time, he had no
knowledge in 2011 that he had a potential legal claim against his employer under the FLSA until
he received the class notice this court approved in the Spring of 2013. Mr. Fields’ Chapter 13
Petition was converted into a Chapter 7 and he received a discharge on September 26, 2012.
Nearly eight months later, Mr. Fields opted-into this action.
II.
Summary Judgment
The court has considered the arguments of the parties alongside the evidentiary material
provided by the parties. Rule 56(a), Federal Rules of Civil Procedure, provides:
A party may move for summary judgment, identifying each claim or defense —
or the part of each claim or defense — on which summary judgment is sought.
The court shall grant summary judgment if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law. The court should state on the record the reasons for granting or
denying the motion.
Fed.R.Civ.P. 56(a). The rule goes on to provide procedures for plaintiff to use in responding to a
Motion for Summary Judgment:
(c) Procedures.
(1) Supporting Factual Positions. A party asserting that a fact
cannot be or is genuinely disputed must support the assertion by:
(A) citing to particular parts of materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations (including those made for
purposes of the motion only), admissions, interrogatory answers,
or other materials; or
(B) showing that the materials cited do not establish the absence or
presence of a genuine dispute, or that an adverse party cannot
produce admissible evidence to support the fact.
(2) Objection That a Fact Is Not Supported by Admissible
Evidence. A party may object that the material cited to support or
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dispute a fact cannot be presented in a form that would be
admissible in evidence.
(3) Materials Not Cited. The court need consider only the cited
materials, but it may consider other materials in the record.
(4) Affidavits or Declarations. An affidavit or declaration used to
support or oppose a motion must be made on personal knowledge,
set out facts that would be admissible in evidence, and show that
the affiant or declarant is competent to testify on the matters stated.
Fed.R.Civ.P. 56(c). On a motion for summary judgment, the moving party has the burden of
production to show that there are no genuine issues for trial. Upon the moving party's meeting
that burden, the non-moving party has the burden of persuasion to establish that there is a
genuine issue for trial.
When the moving party has carried its burden under Rule 56(c), its opponent must
do more than simply show that there is some metaphysical doubt as to the
material facts. In the language of the Rule, the nonmoving [sic] party must come
forward with "specific facts showing that there is a genuine issue for trial."
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 Electric Industrial Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986) (citations
omitted; emphasis in the original) (quoting Fed. R. Civ. P. 56). There must be more than just a
factual dispute; the fact in question must be material and readily identifiable by the substantive
law. Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986).
By first reviewing substantive law, the court may determine what matters constitute
material facts. Anderson, supra. "Only disputes over facts that might affect the outcome of the
suit under governing law will properly preclude the entry of summary judgment." Id. at 248. A
dispute about a material fact is "genuine" only if the evidence is such that "a reasonable jury
could return a verdict for the nonmoving party." Id. The court must credit factual disputes in
favor of the party resisting summary judgment and draw inferences favorable to that party if the
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inferences are reasonable, however improbable they may seem. Cole v. Cole, 633 F.2d 1083,
1092 (4th Cir. 1980). Affidavits filed in support of a Motion for Summary Judgment are to be
used to determine whether issues of fact exist, not to decide the issues themselves. United States
ex rel. Jones v. Rundle, 453 F.2d 147 (3d Cir. 1971). When resolution of issues of fact depends
upon a determination of credibility, summary judgment is improper. Davis v. Zahradnick, 600
F.2d 458 (4th Cir. 1979).
In determining whether a genuine issue of material fact exists, the admissible evidence of
the non-moving party must be believed and all justifiable inferences must be drawn in his or her
favor. Anderson, supra, at 255. In the end, the question posed by a summary judgment motion is
whether the evidence "is so one-sided that one party must prevail as a matter of law." Id., at 252.
III.
Judicial Estoppel
For judicial estoppel to apply, “the party sought to be estopped must be seeking to adopt
a position that is inconsistent with a stance taken in prior litigation. And the position sought to be
estopped must be one of fact rather than law or legal theory.” Lowery v. Stovall, 92 F.3d 219,
224 (4th Cir.1996) (citation omitted). As a starting point, the Supreme Court provides three
factors to determine when judicial estoppel should apply: (1) the party's later position must be
clearly inconsistent with the earlier position; (2) the party must have succeeded in persuading a
court to adopt the earlier position in the earlier proceeding; and (3) 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. New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (finding
that if a litigant “assumes a certain position in a legal proceeding, and succeeds in maintaining
that position, he may not thereafter, simply because his interests have changed, assume a
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contrary position”). “Additional considerations may inform the doctrine's application in specific
factual contexts.” Id. at 751.
The Court of Appeals for the Fourth Circuit has also interpreted judicial estoppel to
prevent a party from taking a position in a judicial proceeding that is inconsistent with a stance
previously taken in court. Zinkand v. Brown, 478 F.3d 634, 638 (4th Cir.2007). Instead of
factors, the Fourth Circuit has a three-part test which must be satisfied before applying judicial
estoppel: (1) defendant must seek to adopt a position that is inconsistent with a stance taken in
prior litigation; (2) the prior inconsistent position must have been accepted by the court; and (3)
defendant must have “intentionally misled the court to gain unfair advantage.” Id. The bad faith
requirement is the “determinative factor.” Id. (internal citation omitted).
Assuming that defendants can satisfy parts one and two of the test, the crucial
consideration for this court is whether plaintiffs have shown that Mr. Fields intentionally misled
the bankruptcy court to gain an unfair advantage. Mr. Fields testified, as follows:
Q
A
Q
A
Q
A
Q
A
In the bankruptcy paperwork you filed with the court, did you list your claims in
this lawsuit as an asset? As something of value that you had?
***
I didn't even know about this claim in the bankruptcy. I had no recollection of
this until I done moved to Wilmington and I was notified.
Did you, at the time you left - - that you sold your distributorship back in - - was it
August 4th of 2012? Is that right?
Yes.
At that time did you believe that you had been unfairly compensated by Flowers
of Jamestown?
In somewhat way, yes.
Did you believe at that time, when you last August 4th of 2012, at that time did
you believe that Flowers of Jamestown should have paid you overtime pay?
Yes. I mean, because - - I don't know who come up with the numbers. I've seen
some numbers….
Fields Depo. At 106-107 (Def. Ex 1. (#83-1)) (errors in the original). Construing the excerpts of
testimony submitted in favor of the party resisting summary judgment, and considering all
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reasonable inferences that testimony raise, plaintiff has testified that he did not know in 2011 that
he had a claim against his employer under the FLSA, that when he ended his relationship with
defendants in August 2012 he believed he had not been fairly compensated, that he received a
discharge later that fall from the bankruptcy court, and he received a notice from this court the
following year of his right to opt-into this action.
A debtor's estate consists of “all legal or equitable interests of the debtor in property as of
the commencement of the case.” 11 U.S.C. § 541(a). “The estate under § 541(a) succeeds only to
those interests that the debtor had in property prior to commencement of the bankruptcy case.”
In re FCX, Inc., 853 F.2d 1149, 1153 (4th Cir.1988) (emphasis added). An order of confirmation
“is treated as a final judgment with res judicata effect,” In re Varat Enterprises, Inc., 81 F.3d
1310, 1315 (4th Cir.1996); however, a bankruptcy court's jurisdiction does not extend to
property that is not part of a debtor's estate. In re Signal Hill-Liberia Ave. Ltd. Partnership, 189
B.R. 648, 652 (Bkrtcy.E.D.Va.1995) (citing cases).
While defendants are correct that Mr. Fields claim was technically extant at the time he
filed his petition in 2011, and that he became cognizant of the fact that he was not being fairly
compensated in 2012, there is no evidence that he actually knew he had a colorable claim under
the FLSA when he made the contested representation to the bankruptcy court in 2011. Without
actual knowledge or willful ignorance at the time the statement is made, there can be no bad
faith. Danley v. State Farm Mut. Auto. Ins. Co., 808 F.Supp. 399, 402 (M.D.Pa.1992) (finding
that bad faith conduct “implies an actual, subjective decision to commit a wrong act.”). The lack
of evidence of bad faith at the time the filing was made with the bankruptcy court is
determinative of this summary judgment motion.
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ORDER
IT IS, THEREFORE, ORDERED that defendants’ Motion for Summary Judgment
(#82) is DENIED.
Signed: July 23, 2014
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