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Robson v. Texas Eastern Corp.8/15/2005
. Appellants' App. p. 374. With his experience, Black is likely far more familiar with the practical application of the bankruptcy's full disclosure requirement than any party associated with this action. Accordingly, Black's unequivocal indication that the Robsons' schedule complied with the bankruptcy disclosure requirements is of no small significance in our determination. Moreover, TEC offers absolutely no evidence of practical bankruptcy practice or procedure to contradict Black's indication that the Robsons' schedule complied with bankruptcy's requirement of full disclosure.
TEC also states, " he Robsons' bankruptcy filings and orders, four in number, repeatedly referred only to environmental damage to the debtors' residential property." Br. of Appellee at 11. As TEC does not provide a citation for this assertion, it is difficult to surmise to which four filings and orders TEC is referring to. Id. However, in TEC's statement of facts, TEC repeatedly refers to alleged omissions in documents and orders prepared by the bankruptcy court or bankruptcy officials unaffiliated with the Robsons. Br. of Appellee at 2-5. Because we do not review the propriety of actions taken by federal bankruptcy courts or officials, the propriety of the documents prepared by such individuals are of no import to the case at bar. Furthermore, because the Robsons did not prepare the documents, it can hardly be said that the documents are indicative of their bad faith.
TEC next contends the Robsons failed to attach a copy of their complaint to their Chapter 13 schedules. Br. of Appellee at 11, 17. However, TEC fails to point us to a federal rule that requires the Robsons to attach a copy of their complaint to their Chapter 13 schedules, and Black specifically indicated that "nobody ever does that." Appellants' App. p. 382.
To deny a debtor-plaintiff access to state courts for failing to comply with a non-bankruptcy requirement has the practical effect of impermissibly adding substantive state law requirements to federal bankruptcy procedure. See Hammes, 659 N.E.2d at 1028 (Indiana courts are without jurisdiction to peripherally affect federal bankruptcy proceedings). Accordingly, absent an assertion that federal bankruptcy law required the Robsons to attach a copy of their complaint to their schedule and proof that we have concurrent state jurisdiction in this regard, we have no authority to consider TEC's claim.
TEC also asserts Black permitted the closing of the bankruptcy action and procured the Robsons' receipt of discharge without accounting for the Robsons' potential recovery under their complaint. Br. of Appellee at 11. As stated above, the propriety of Black's actions as a United States bankruptcy trustee are a matter for the federal courts.
TEC finally asserts the Robsons should be judicially estopped from pursuing their claims because they did not cure their defective scheduling by reopening the bankruptcy estate and amending their Chapter 13 schedule. Br. of Appellee at 11, 22-23.
Assuming for the sake of argument that the Robsons filed a defective schedule, the majority of jurisdictions hold that reopening a bankruptcy estate has no effect on the application of judicial estoppel. These jurisdictions conclude that allowing reopening to cure nondisclosure encourages parties to play fast and loose with the courts, as debtor-plaintiffs would be able to use reopening to avoid any negative consequences of nondisclosure should they get caught. See Burnes, 291 F.3d at 1288; De Leon, 321 F.3d at 1291-92.
As aptly stated by the Third Circuit, such reopening merely amounts to "eleventh-hour candor" and should not be mistaken as good faith. Krystal Ca
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