 |
 |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|
|
|
|
Cloud v. Northrop Grumman Corp.11/12/1998
decision "does not explain why it finds more even-handed alternatives inadequate. I see no reason, for example, why we could not allow this suit to proceed and simply make reference to the fact that the bankruptcy court has jurisdiction to entertain motions to amend or rescind the debtor's reorganization plan if such motions are brought by unsecured creditors who feel that [debtor's] nondisclosure has prejudiced them." (Id. at p. 423.) The Dissent stated that judicial estoppel was an "extraordinary" remedy which should be invoked only "when a party's inconsistent behavior will otherwise result in a miscarriage of Justice" and concluded by finding that "the court should not have applied estoppel doctrines to this case." (Id. at p. 424.)
A number of subsequent lender liability cases, occasionally with some equivocation, followed the majority opinion in Oneida to hold that the failure to disclose a claim against a lender-creditor in a bankruptcy action, coupled with adjudication of the lender's claims against the debtor in the bankruptcy action, estopped the debtor from suing that lender later. (See, e.g., Billmeyer v. Plaza Bank of Commerce, supra, 42 Cal.App.4th 1086, 1091 fn. 2 [treating res judicata and judicial estoppel as components of "the general concept of issue preclusion as applied to claims in the bankruptcy context"]; Conrad v. Bank of America (1996) 45 Cal.App.4th 133, 148 [finding Oneida Motor Freight rule "is specific to the circumstances presented, namely, where a chapter 11 debtor fails to list or otherwise identify a claim against a creditor during the proceedings leading up to confirmation of a reorganization plan;" later suit against that creditor is barred].)
In Matter of Baudoin (5th Cir. 1993) 981 F.2d 736, a lender liability claim against a former creditor of the bankrupt estate in a Chapter 7 proceeding was found to be within the scope of the bankruptcy "core proceeding" concept, and hence barred by the res judicata effect of the bankruptcy proceedings. Inasmuch as res judicata was found to apply, the Baudoin court declined to reach the issue of judicial estoppel. In Billmeyer, supra, also a Chapter 7 proceeding, the trial court had ruled on res judicata grounds (just as had the trial court in Oneida.) The Court of Appeal, however, lumped res judicata, equitable estoppel and judicial estoppel within the general rubric of "issue preclusion," and found that "issue preclusion" applied to bar a subsequent lender liability claim. Louden, supra, 106 B.R. 109, 111 was a Chapter 7 case in which the court specifically found a claim by the debtor against a bank barred by judicial estoppel. No suggestion has been offered that the law of "issue preclusion" applies differently in a Chapter 7 as opposed to a Chapter 11 context, and we therefore consider as precedent cases originating with both Chapter 7 and Chapter 11 proceedings.
The law of judicial estoppel in the bankruptcy context thus originated with trial court rulings of res judicata, but was expanded into the related but distinct concept of judicial estoppel. Absent from most of these decisions is any significant concern for the rights of the creditors of the bankruptcy estate, who generally are not parties to the action in which judicial estoppel is applied and who may be deprived of a potentially valuable asset by the application of judicial estoppel. (But see Hay v. First Interstate Bank of Kalispell, N.A. (1992) 978 F.2d 555, 557 [lender liability action barred by estoppel because of failure to disclose in bankruptcy action, but no ruling made on "rights of creditors themselves to move to reopen the bankruptcy proceedings."].)
b. Extension of judicial estoppel to the "non-privity" context.
Page 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 California Personal Injury Attorneys
Personal Injury Lawyers
|
| |
to fill out a simple form to connect to Personal Injury Lawyers in your area.
|
|