Black v. State Farm Fire and Casualty Company

Filing 17

ORDER: For the reasons stated in this Order, the defendant's Motion for Summary Judgment 11 is DENIED. Ordered and Signed on 09/10/2013 by Magistrate Judge Mark D. Clarke. (rsm)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON
MEDFORD DIVISION

JAMES BLACK,

Civ. No. 1: 12-cv-02240-CL
Plaintiff,
ORDER

v.
STATE FARM FIRE AND CASUALTY
COMPANY, an Illinois Corporation,
Defendant.

CLARKE, Magistrate Judge.
This case comes before the court on Defendant's Motion for Summary Judgment (#11).
For the reasons stated below, the motion is DENIED.

BACKGROUND
This matter involved an insurance claim made by the Plaintiff James Black pursuant to an
insurance policy with Defendant State Farm Fire and Casualty Insurance Co., (State Farm).
Plaintiff filed a proof of loss with State Farm for a theft and vandalism of property that he claims
occurred at his residence located at 245 Nursery Lane, Grants Pass, Oregon on or about October

Page 1 -ORDER

2, 2010. Plaintifflisted an inventory of items that were damaged or stolen that included fixtures,
jewelry, firearms, hunting and fishing equipment, and office equipment that totaled over
$100,000. State Farm initiated an investigation into the Plaintiffs claim, and discovered that in
2007 and 2008 he filed forms with the Jackson County Circuit Court for a waiver and a deferral
of fees associated with two separate claims in that court. On the forms, he failed to list many of
the items of property that he later included in his proof of loss claim to State Farm. State Farm
asserted that the failure to list the property on the forms, and the subsequent listing of them in his
proof of loss was a material misrepresentation regarding the insurance policy; therefore it denied
the Plaintiffs claim.

LEGAL STANDARD
Summary judgment shall be granted when the record shows that there is no genuine
dispute as to any material of fact and that the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(a); Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986). The
moving party has the initial burden of showing that no genuine issue of material fact exists.
Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986); Devereaux v. Abbey, 263 F.3d 1070, 1076
(9th Cir. 2001) (en bane). The court cannot weigh the evidence or determine the truth but may
only determine whether there is a genuine issue of fact. Playboy Enters .. Inc. v. Welles, 279
F.3d 796, 800 (9th Cir. 2002). An issue of fact is genuine "ifthe evidence is such that a
reasonable jury could return a verdict for the nonmoving party." Anderson, 477 U.S. at 248.

DISCUSSION
Based on State Farm's denial of his claim, Plaintiff brings the current action alleging a
breach of the insurance policy contract. Defendant State Farm asserts that summary judgment is
appropriate under the principles of judicial estoppel.

Page 2- ORDER

Judicial estoppel is an equitable doctrine that precludes a party from gaining an
advantage by asserting one position, and then later seeking an advantage by taking a clearly
inconsistent position. Hamilton v. State Farm Fire & Cas. Co., 270 F:3d 778, 782 (9th Cir. 2001)
citing Rissetto v. Plumbers & Steamfitters Local343, 94 F.3d 597, 600-601 (9th Cir.1996) and
Russell v. Rolfs. 893 F.2d 1033, 1037 (9th Cir.1990). The court invokes judicial estoppel not
only to prevent a party from gaining an advantage by taking inconsistent positions, but also
because of"general consideration[s] of the orderly administration of justice and regard for the
dignity of judicial proceedings," and to "protect against a litigant playing fast and loose with the
courts." Russell, 893 F.2d at 1037.
A court "may" consider three factors in determining whether to apply the doctrine of
judicial estoppel: (1) whether a party's later position is clearly inconsistent with its earlier
position; (2) "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;" 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 esto·pped." Hamilton, 270 F.3d at 782-83, quoting New
Hampshire v. Maine, 532 U.S. 742 (2001) (internal quotations and citations omitted). These
three factors are not, however, "inflexible prerequisites or an exhaustive formula for determining
the applicability of judicial estoppel." New Hampshire, 532 U.S. at 751. Rather, "[a]dditional
considerations may inform the doctrine's application in specific factual contexts." Id.
For instance, courts have also considered a party's bad faith in determining whether the
doctrine applies. See Kitchen v. WSCO Petroleum Corp., 2006 WL 118515 (D. Or. Jan. 13,
2006) citing Helfand v. Gerson, 105 F.3d 530, 536 (9th Cir1997); see also Burnes v. Pemco

Page 3- ORDER

Aeroplex, Inc., 291 F.3d 1282, 1284 (11th Cir2002); In re Coastal Plains, 179 F.3d 197, 206 (5 1h
Cir 1999) ("many courts have imposed the additional requirement that the party to be estopped
must have acted intentionally, not inadvertently" (citations omitted)). Thus, judicial estoppel
does not apply "[i]f incompatible positions are based not on chicanery, Johnson v. State, Oregon
Dept. of Human Resources, Rehab. Div., 141 F.3d 1361, 1369 (9th Cir. 1998), or "when a party's
prior position was based on inadvertence or mistake." Helfand, 105 F.3d at 136. Mere
inconsistency is not enough to permit a conclusion that a party has been playing fast and loose.
General Signal Corp. v. MCI Telecomm. Corp., 66 F.3d 1500, 1505 (9th Cir. 1995), cert denied,
516 U.S. 1146 (1996).
State Farm concedes that "the majority of cases dealing with judicial estoppel concern
initial representations made in the context of a bankruptcy proceeding, with the party then taking
an inconsistent position in a subsequent judicial proceeding." However, State Farm asserts that
judicial estoppel is not limited to bankruptcy proceedings.
Indeed, in Sugar v. Sugar, 212 Or. App. 465, 157 P.3d. 1263 (2007), the court applied
judicial estoppel to prevent the former wife from asserting that her income at the time of the
original divorce proceeding was higher than she stated at that proceeding. The wife benefitted
from her originally-stated lower income when the court awarded her spousal support; thus she
could not subsequently argue that her income was actually higher all along in order to avoid
termination of the spousal support, and thereby gain a second benefit from her inconsistent
position. Id. Under Oregon law, then, the application of judicial estoppel depends on the
existence ofthree predicates: (1) a benefit; (2) obtained in a different judicial proceeding; (3) by
means of asserting a position inconsistent with a position asserted in a later judicial proceeding.
Id. at 470.

Page 4- ORDER

The case at bar is distinguishable from the case law cited. The bankruptcy cases, as well
Sugar and other non-bankruptcy cases, all deal with a judicial proceeding in which the person
benefitted from a substantive decision by a court based on the person's intentional
representations of assets. By contrast, here we have two instances of administrative paperwork,
filled out at the clerk's counter without legal counsel or assistance from an accountant, and
submitted merely to determine whether the Plaintiff had to pay a filing fee in a matter unrelated
to State Farm or the insurance claim. Plaintiff asserts that he had good faith reasons for his
failure to list on his filing fee forms the assets identified by State Farm, including his belief that
he did not own certain items due to foreclosure or lack of equity, and his confusion about terms
on the form such as "household goods." He claims he was getting advice from the person who
handed him the forms to fill out.
Certainly, submitting a filing fee waiver or deferral is not, per se, outside the realm of "a
judicial proceeding." However, here the forms did not affect the substantive outcome of the
Plaintiffs prior cases, and it is unclear how they misled or prejudiced the current defendant,
considering State Farm first became aware of the forms' existence when it conducted an
investigation into Plaintiffs insurance claim.
There are too many questions of fact surrounding Plaintiffs conduct, including his intent
in submitting the forms, whether those submissions are "clearly inconsistent" with his current
position, and whether he intentionally misled the court or the parties in a substantive way that
should prevent him from submitting his insurance claim in the interest of justice. The Court
simply cannot find that he intentionally misrepresented his assets in the ways contemplated by
the prior case law such that judicial estoppel is appropriate. The unique facts of this case create a
scenario that must submitted to a jury to decide, based on all the evidence, including the forms at

Page 5- ORDER

issue here, whether the Plaintiff made material misrepresentations about the assets and property
subject to his insurance claim.
ORDER
For the reasons stated above, the defendant's motion (#11) is

MARK D. CLARKE
United States Magistrate Judge

Page 6- ORDER