Catron v. The Dr. James S. Hayes, Living Home Health Care Agency, Inc.

Filing 14

ORDER granting 9 Motion to Dismiss. Signed by Judge S. Thomas Anderson on 4/22/2013. (Anderson, S.)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

YVETTE F. CATRON,
Plaintiff,
v.
THE DR. JAMES S. HAYES LIVING HOME
HOME HEALTH CARE AGENCY, INC. ,
d/b/a FAMILY HOME HEALTH AGENCY,
Defendant.

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No. 12-2302-STA-dkv

ORDER GRANTING DEFENDANT’S MOTION TO DISMISS

Before the Court is Defendant The Dr. James S. Hayes Living Home Health Care
Agency, Inc. d/b/a Family Home Health Agency’s (“FHHA”) Motion to Dismiss (D.E. # 9) filed
December 10, 2012. Plaintiff Yvette F. Catron (“Catron”) filed a Response (D.E. # 12) on
January 3, 2013. FHHA filed a Reply (D.E. # 13) on January 17, 2013. Although FHHA styles
this motion as a Motion to Dismiss, the Court construes a motion to dismiss filed after the close
of pleadings as a motion for judgment on the pleadings under Rule 12(c).1 For the reasons
discussed below, the Court GRANTS this Motion.

1

See McGlone v. Bell, 681 F.3d 718, 728 n. 2 (6th Cir. 2012) (“Defendants filed an
untimely motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6), as it was filed
after the Defendant’s Answer. The district court, using its discretion to address substance over
form, treated Defendants’ motion to dismiss as a 12(c) motion for judgment on the pleadings.”);
see also Satkowiak v. Bay Cnty. Sheriff’s Dept., 47 F. App’x 376, 377 n. 1 (6th Cir. 2002).
1

BACKGROUND
For purposes of the instant Motion, the Court accepts the following as established.
Catron worked at FHHA for approximately six years, ending in February 2012. (Compl. ¶ 6.)
Catron would work in excess of forty hours per week on a regular and repeated basis. (Id. ¶ 7.)
Catron alleges she performed this excess work “off the clock” so that FHHA might avoid paying
her overtime, and did so at management’s direction. (Id. ¶ 8.)
On August 1, 2011, Catron filed a voluntary petition for protection under Chapter 13 of
the United States Bankruptcy Code. (Mot. to Dism. Ex. A at 3-4, D.E. # 9-2.) As part of her
mandatory disclosures under 11 U.S.C. § 521 and under oath, Catron filed a schedule of her
assets and liabilities with the United States Bankruptcy Court for the Western District of
Tennessee. (Id. at 10-24.) In this schedule, Catron indicated she had no contingent or
unliquidated claims of any nature. (Id. at 12.) Relying in part on this schedule, the Bankruptcy
Court confirmed Catron’s Chapter 13 reorganization plan on December 21, 2011. (Id. at 34-37.)
On May 29, 2012, the Chapter 13 Trustee filed a motion to dismiss Catron’s Chapter 13
plan for failure to make payments. (Resp. to Mot. to Dism. Ex. 2 at 2., D.E. # 12-2.) The
Bankruptcy Court held a hearing on this motion on July 5, 2012. (Id.) Pursuant to that hearing,
the Bankruptcy Court entered an order dismissing Catron’s Chapter 13 case on July 6, 2012.
(Resp. to Mot. to Dism. Ex. 1 at 2-3, D.E. # 12-1.)
FHHA argues Catron’s representations before the Bankruptcy Court judicially estop her
from asserting her claims before this Court. Catron responds judicial estoppel is inappropriate in
the context of a dismissed bankruptcy case, and that in any event her omission was inadvertent.

2

STANDARD OF REVIEW
“For purposes of a motion for judgment on the pleadings, all well-pleaded material
allegations of the pleadings of the opposing party must be taken as true, and the motion may be
granted only if the moving party is nonetheless entitled to judgment.”2 A court “need not accept
as true legal conclusions or unwarranted factual inferences.”3 A court will grant a motion under
Rule 12(c) “when no material issue of fact exists and the party making the motion is entitled to
judgment as a matter of law.”4 When reviewing a motion under Rule 12(c), “the court considers
all available pleadings, including the complaint and the answer.”5
The court can also consider: (1) any documents attached to, incorporated by, or
referred to in the pleadings; (2) documents attached to the motion for judgment on
the pleadings that are referred to in the complaint and are central to the plaintiff’s
allegations, even if not explicitly incorporated by reference; (3) public records;
and (4) matters of which the court may take judicial notice.6
ANALYSIS
The Court determines judicial estoppel is appropriate in this context. “[J]udicial estoppel
bars a party from asserting a position that is contrary to the one the party has asserted under oath
in a prior proceeding[.]”7 While a court should apply the doctrine of judicial estoppel with

2

JPMorgan Chase Bank, N.A. v. Winget, 510 F.3d 577, 581 (6th Cir. 2007) (internal
quotations omitted.)
3

S. Ohio Bank v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 193 F.3d 398, 400 (6th
Cir. 1999).
4

Paskvan v. City of Cleveland Civil Serv. Comm’n, 946 F.2d 1233, 1235 (6th Cir. 1991).

5

Dudek v. Thomas & Thomas Attorneys & Counselors at Law, LLC, 702 F. Supp. 2d
826, 832 (N.D. Ohio 2010); see Bassett v. Nat’l Collegiate Athletic Ass’n, 528 F.3d 426, 430 (6th
Cir. 2008).
6

Dudek, 702 F. Supp 2d at 832.

7

Eubanks v. CBSK Fin. Group, Inc., 385 F.3d 894, 897 (6th Cir. 2004).
3

caution,8 courts in the Sixth Circuit recognize the doctrine as well-established and utilize it to
“preserve the integrity of the courts by preventing a party from abusing the judicial process
through cynical gamesmanship.”9 Courts will typically evaluate factors such as whether the
party’s position is clearly inconsistent with a prior position, whether the party has convinced a
court to adopt their previous position, and whether the party has derived an unfair advantage by
assertion of the prior position.10 In the context of an omitted claim on a § 521 schedule,
application of judicial estoppel in the Sixth Circuit requires a court to find a party asserted a
position contrary to the one asserted under oath in a prior proceeding, that the prior court adopted
the contrary position in either a preliminary matter or as part of a final disposition, and that the
conduct did not result from mistake or inadvertence.11
It is uncontroverted Catron asserted a position before the Bankruptcy Court contrary to
the one she asserts here. Section 521 of the Bankruptcy Code mandates the debtor must “file . . .
unless the court orders otherwise . . . a schedule of assets and liabilities[.]”12 “[I]t is well-settled
that a legal cause of action is an asset that must be listed.”13 Catron filed a § 521 schedule with
the Bankruptcy Court, but failed to include her claims against FHHA. She now seeks to assert
these claims before this Court.

8

Id.

9

White v. Wyndham Vacation Ownership, Inc., 617 F.3d 472, 475 (6th Cir. 2010)
(internal quotations omitted).
10

New Hampshire v. Maine, 532 U.S. 742, 750-51 (2001).

11

White, 617 F.3d at 476.

12

11 U.S.C. § 521(a)(1)(B)(i).

13

Swanigan v. Nw. Airlines, Inc., 718 F. Supp. 2d 917, 923 (W.D. Tenn. 2010) (Donald,
J.) (citing Lewis, 141 F. App’x at 424).
4

It is likewise clear to the Court the Bankruptcy Court adopted Catron’s assertions in a
preliminary matter. “[W]hen a bankruptcy court—which must protect the interests of all
creditors—approves a payment from the bankruptcy estate on the basis of a party’s assertion of a
given position, that, in our view, is sufficient ‘judicial acceptance’ to estop the party from later
advancing an inconsistent position.”14 The Bankruptcy Court approved Catron’s Chapter 13 plan
and authorized payments from her estate to her creditors, so adopted her assertions.
Therefore, to find judicial estoppel inappropriate, the Court must determine Catron’s
omission of her claims against FHHA were the result of mistake or inadvertence. To evaluate
whether the Catron’s omission resulted from mistake or inadvertence, the Court must consider
whether “(1) [Catron] lacked knowledge of the factual basis of the undisclosed claims; (2)
[Catron] had a motive for concealment; and (3) the evidence indicates an absence of bad faith.”15
The Court finds Catron knew of the facts underlying the claims asserted here before she
filed her bankruptcy petition. Catron bases her claims on hours worked in excess of forty hours
per week for which FHHA did not pay her during a time period that extends approximately five
years prior to the commencement of her bankruptcy case. Catron argues her omission was
inadvertent because she did not know she had any claims against FHHA. However, whether a
debtor knew she had a claim is not the standard in the Sixth Circuit for inadvertence. The
standard is whether the debtor knew of the factual basis for a later-asserted claim. Though
Catron may not have known FHHA’s failure to pay her for her worked hours did not constitute a
claim, she knew of FHHA’s failure to pay her for time in excess of forty hours per week.

14

Reynolds v. C.I.R., 861 F.2d 469, 473 (6th Cir. 1988).

15

Lewis, 141 F. App’x at 426.
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Similarly, the Court finds Catron had a motive for concealment. “It is always in a
Chapter 13 petitioner’s interest to minimize income and assets.”16 Although it is true Catron’s
benefit from minimizing assets here is limited due to the dismissal of her bankruptcy case, the
Court must look to her motives at the time of the omission. The Court must assume Catron filed
her bankruptcy petition with every intention of completing a confirmed plan and receiving a
discharge. Under the law of this circuit, Catron had a motive to conceal her claims against
FHHA.
Finally, the Court finds the evidence does not support a finding of lack of bad faith. To
decide if there is an absence of bad faith, courts will look to the debtor’s attempts to advise the
bankruptcy court of omitted claims.17 Catron concedes she made no attempt to amend her
bankruptcy schedules, even after she filed a complaint in this Court. Catron maintains she failed
to do so because it would have been futile: she filed her complaint with this Court on April 19,
2012, and the Bankruptcy Trustee moved to dismiss her Chapter 13 case on May 29, 2012. Even
were the Court to accept arguendo Catron’s duty to amend her bankruptcy schedule only arose at
the filing of the instant case instead of when she became aware of its factual predicates, forty
days elapsed between filing this suit and the Bankruptcy Trustee’s motion to dismiss. There is
no evidence Catron attempted to amend her schedules at any point in these forty days.
As evidence of lack of bad faith, Catron submits to the Court an affidavit stating she did
not intend to deceive or mislead anyone through her omission, that her bankruptcy attorney never
advised her to amend her bankruptcy schedules if she filed a lawsuit, and that she answered her

16

Lewis v. Weyerhaeuser Co., 141 F. App’x 420, 426 (6th Cir. 2005).

17

White v. Wyndham Vacation Ownership, Inc., 617 F.3d 472, 479-80 (6th Cir. 2010).
6

bankruptcy attorney’s questions completely and honestly.18 She then cites to a decision by this
Court determining an affidavit submitted by a debtor showing the debtor disclosed his claims to
his attorney, and the attorney prepared the schedule of assets omitting the claims may establish
inadvertence.19 However, the Court finds Doughtie inapplicable to the case at bar. First,
although Doughtie concerned a motion to dismiss or in the alternative a motion for summary
judgment, it is clear the Court considered it as a motion for summary judgment.20 The Court is
reviewing the instant motion under Rule 12(c), not Rule 56. It would be inappropriate for the
Court to review affidavit evidence other than those affidavits central to the complaint and
referred to in the pleadings. Second, Catron’s affidavit does not state she disclosed her potential
claim to her attorney, only that her attorney did not tell her she had to disclose her potential
claim. Even were the Court to consider her affidavit, it does not establish the facts of Doughtie.
Catron also argues a number of courts have held judicial estoppel entirely inappropriate
when a Chapter 13 case has been dismissed. The Court finds the cases presented either
distinguishable or unpersuasive. In Wilson v. City of Springfield, the action leading to dismissal
of the bankruptcy case was a failure to file a schedule of assets and liabilities—thus, there was no
judicial adoption of the plaintiff’s contrary position.21 In Wilson v. Guardian Angel Nursing,
Inc., the Middle District of Tennessee, citing no authority and in a conclusory manner announced
that plaintiffs who had filed a subsequently-dismissed Chapter 13 petition would not be
18

Catron Aff. ¶¶ 6-9.

19

Doughtie v. Ashland, Inc., No. 03-2073 M1/A, 2005 U.S. Dist. LEXIS 43549, at *12
(W.D. Tenn. May 13, 2005) (McCalla, J.).
20

Id. (“The record before the Court reveals the failure to include Mr. Brooks’s claims
against Defendant in his bankruptcy filings was inadvertent.”)
21

Wilson v. City of Springfield, No. 3:08-cv-087, 2009 WL 1687934, at *2, 4 (S.D. Ohio
June 15, 2009).
7

judicially estopped from asserting their claims in an FLSA opt-in collective action.22 The
Middle District rested this holding on the failure of the plaintiffs to persuade a prior court of their
position.23 However, this analysis is contrary to controlling Sixth Circuit precedent, at least as
applied to a debtor with a confirmed Chapter 13 plan.24
In addition, Catron cites state court decisions from Connecticut and Georgia to support
her argument judicial estoppel should not apply to assertions made in a dismissed Chapter 13
case. These cases are inapplicable to the case before the court. In Association Resources v.
Wall, the Connecticut Supreme Court held the trial court’s refusal to apply judicial estoppel was
within its discretion, noting there was no risk of inconsistent results or prejudice to creditors as a
result of the plaintiff’s inconsistent assertions.25 In IBF Participating Income Fund v. DillardWinecoff26 and Pechin v. Lowder,27 Georgia courts applied their own interpretation of New
Hampshire v. Maine to determine the dismissal of a Chapter 13 case precluded application of
judicial estoppel because the debtor had received no unfair advantage. While these are proper
applications of the doctrine of judicial estoppel in Connecticut and Georgia, they are not in the

22

Wilson v. Guardian Angel Nursing, Inc., No. 3:07-0069, 2008 WL 2944661, at *11
(M.D. Tenn. July 31, 2008).
23

Id.

24

Reynolds v. C.I.R., 861 F.2d 469, 473 (6th Cir. 1988).

25

Ass’n Res. v. Wall, 2 A.3d 873, 892 (Conn. 2010).

26

IBF Participating Income Fund v. Dillard-Winecoff, 573 S.E.2d 58, 60 (Ga. 2002).
The Court notes IBF deals with a Chapter 11 reorganization plan, not a Chapter 13
reorganization plan.
27

Pechin v. Lowder, 659 S.E.2d 430, 431 (Ga. Ct. App. 2008) (applying IBF in Chapter
13 context.) The Court notes Catron also cites Battle v. Liberty Mut. Fire Ins. Co., 623 S.E.2d
541 (Ga. Ct. App. 2005). Battle deals with a Chapter 7 liquidation plan, not a Chapter 11 or 13
reorganization plan.
8

Sixth Circuit. The Sixth Circuit makes it clear the adoption of a bankruptcy plan in partial
reliance on a debtor’s incorrect schedule of assets sufficiently prejudices creditors to make
judicial estoppel appropriate, regardless of whether the bankruptcy court subsequently
adjudicates the debtor bankrupt or dismisses the case.28
CONCLUSION
Because Catron failed to disclose her claims against FHHA in her representations to the
Bankruptcy Court, and the Bankruptcy Court adopted Catron’s representations in confirming her
Chapter 13 plan, the Court finds application of the doctrine of judicial estoppel appropriate, as
Catron’s failure to disclose did not result from mistake or inadvertence under settled Sixth
Circuit precedent. Therefore, the Court GRANTS FHHA’s Motion for Judgment on the
Pleadings and dismisses this case with prejudice.
IT IS SO ORDERED.

s/ S. Thomas Anderson
S. THOMAS ANDERSON
UNITED STATES DISTRICT JUDGE
Date: April 22, 2013.

28

Reynolds, 861 F.2d at 473; see also Sexton v. State Farm Fire & Cas. Co., No. 3:09CV-535, 2011 WL 2516742, at *5 (E.D. Tenn. June 23, 2011) (Varlan, J.); Wells v. Barloworld
Truck Ctr., Inc., No. 04-3033 MA/P, 2006 WL 1493245, at *3 (W.D. Tenn. 2006) (Mays, J.).
9