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Cloud v. Northrop Grumman Corp.11/12/1998
y did not occur until after the filing of the bankruptcy petition. Plaintiff allegedly did not know that the bankruptcy and her wrongful termination, sexual harassment, etc., claims were legally related and, although she testified truthfully to detailed and specific questions from the bankruptcy trustee, he did not ask any questions about such a claim.
After Northrop's motion for judgment on the pleadings was filed, plaintiff allegedly consulted her bankruptcy attorney again, who advised that he could file amendments to her bankruptcy filings to schedule her claim against Northrop. The bankruptcy attorney requested $400 to perform this service, and plaintiff's declaration alleged that she was in the process of making arrangements to obtain these funds. Plaintiff further alleged that she never attempted to hide the existence of the lawsuit from her bankruptcy attorney, nor the existence of the bankruptcy from the non-bankruptcy attorney. Plaintiff alleged that she testified truthfully about her bankruptcy when asked about it by Northrop's attorneys. She further alleged that it was the actions of Northrop, including an alleged "initial denial" of unemployment benefits, which necessitated her bankruptcy filing in the first instance. She concluded that she would be "greatly harmed, emotionally and financially, if [she was] unable to proceed with lawsuit against" Northrop.
The trial court's minute order does not state whether the trial court did or did not consider plaintiff's declaration, but it appears that the trial court did not, since the trial court treated the motion as one for judgment on the pleadings and made no mention of the evidence contained in plaintiff's declaration. The trial court granted the motion without leave to amend on the grounds (1) that plaintiff lacked standing and (2) that plaintiff was judicially estopped from pursuing her claim. Judgment was entered in favor of Northrop.
We reverse for two reasons. First, as to the standing issue: leave to amend should have been granted either to substitute in the real party in interest (the bankruptcy trustee) or to obtain the trustee's abandonment of the claim. (See, e.g., Klopstock v. Superior Court (1941) 17 Cal.2d 13, 19-22.) Second, as to the judicial estoppel issue: a defense of judicial estoppel raises factual issues. (See, e.g., Ryan Operations G.P. v. Santiam-Midwest Lumber Co. (3d Cir. 1996) 81 F.3d 355.) These factual issues could not be decided solely by reviewing plaintiff's complaint and matters that could be judicially noticed, and hence could not be decided on a motion for judgment on the pleadings. Thus although plaintiff's declaration asserting extrinsic facts was not a proper opposition to a motion for judgment on the pleadings, the facts she alleged highlight the factual nature of the inquiry necessary to determine whether to invoke the doctrine of judicial estoppel.
We will remand with instructions to (1) grant plaintiff leave to amend to substitute in the bankruptcy trustee as the real party in interest or, in the alternative, obtain the trustee's abandonment of her claims, and (2) if again raised, to determine the judicial estoppel issue on the facts, either by way of summary judgment motion or trial by the court.
I. STANDING
a. Plaintiff lacked standing to sue Northrop.
The widely accepted rule is that after a person files for bankruptcy protection, any causes of action previously possessed by that person become the property of the bankrupt estate. (See 11 U.S.C. ยงยง 541 (a)(1) and 323; see also, e.g., United States v. Whiting Pools, Inc. (1983) 462 U.S. 198, 203-204, 205, fn. 9 ["a broad range of property," including causes of action, is incl
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