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Robson v. Texas Eastern Corp.8/15/2005
ument, judicial estoppel is inapplicable); In re Atkinson, 62 B.R. 678, 680 (Bankr. D. Nev. 1986) (where the trustee has knowledge of a claim, it is sufficient to put him on inquiry notice and trustee abandonment is considered to be knowingly made); In re Tarpley, 4 B.R. 145, 146 (Bankr. M.D. Tenn. 1980)). TEC asserts that Black's knowledge of the Robsons' claim is irrelevant. Br. of Appellee at 24 (citing Froshiesar, 2002 U.S. Dist. LEXIS 25537 at *4).
We reject both the Robsons' and TEC's interpretation of the case law on this subject and believe that the seemingly contradictory cases cited by each party are reconcilable. Froshiesar did not indicate that a court may not consider trustee notification of an unscheduled claim as evidence of the debtor's good faith; rather, Froshiesar indicated that notification of the trustee is "insufficient" to escape judicial estoppel. Froshiesar, 2002 U.S. Dist. LEXIS 25537 at *11 (citing Hamilton, 270 F.3d at 784).
We agree with Froshiesar and Hamilton's indication that notification of the trustee of an unscheduled asset should not create a hard and fast rule constituting sufficient evidence to defeat a judicial estoppel claim. When determining whether judicial estoppel is applicable, the dispositive question is not whether the trustee was aware of the unscheduled claim; the dispositive question is whether the debtor-plaintiff was playing fast and loose with the courts. Ryan, 81 F.3d at 358.
Trustee notification could suggest a good-faith attempt to comply with bankruptcy disclosure requirements in some contexts and might not in others. For this reason, trustee notification by itself is not "sufficient" evidence of good faith. Rather, trustee notification should be considered in context with the other evidence to make a commonsense determination as to whether the debtor-plaintiff was playing fast and loose with the courts.
Unlike the cases cited by TEC, the Robsons listed their cause of action in their bankruptcy schedules and the cause number for the Robsons' complaint was made part of the bankruptcy proceedings. Appellants' App. pp. 150, 176-77. If the Robsons were attempting to play fast and loose with the bankruptcy court by wording their cause of action in a confusing manner, allowing the person who may oppose their discharge to have knowledge of their allegedly hidden personal injury claim would significantly jeopardize their attempt to deceive the court. See 11 U.S.C. ยง 704(6). TEC's claim that the Robsons attempted to hide their claim and the undisputed fact that the Robsons allowed the person responsible for the oversight of their bankruptcy action to have knowledge of the allegedly hidden claim are incommensurable. Accordingly, Black's knowledge of the Robsons' claim suggests good faith on the part of the Robsons.
TEC also asserts that Black's knowledge of the Robsons' claim is not indicative of good faith because the Robsons did not tell Black that they valued their claim against TEC at nearly $3,000,000 or that they had demanded a settlement from TEC in this amount. Br. of Appellee at 11. Given Black's considerable experience in overseeing Chapter 13 claims, it is simply implausible to believe that Black would be at all surprised by the fact that there are requests for settlement in personal injury /property damage cases and that those requests might be for a substantial amount. Rather, what was of interest to Black was that, should the Robsons' claim actually settle during their bankruptcy , he would receive the proceeds from that settlement for disbursement to the Robsons' creditors.
Moreover, it is equally implausible that Black's decision to allow the Robsons to direct their litigation would
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