Petitioners' Brief on the Merits - Supreme Court of Texas

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the reach of judicial estoppel in post-bankruptcy proceedings and would inevitably result in the preclusion of viable claims on the basis of inadvertent or good-faith inconsistencies.”). The debtor’s failure to satisfy its statutory disclosure duty is “inadvertent” only when, in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment. 1 In re Coastal Plains, 179 F.3d at 210; Brown, 178 S.W.3d at 381. The test relating to motive contains subjective components. Wakefield v. SWS Securities, Inc., 293 B.R. 372, 380-81 (N.D. Tex. 2003) (discussing In re Coastal Plains, Inc., 179 F.3d 197 (5 th Cir. 1999)); see also Superior Crewboats, 374 F.3d at 335-36 (discussing numerous subjective facts in determining whether the debtor’s non-disclosure was inadvertent); In re Electro-Motor, Inc., 390 B.R. 859 (E.D. Tex 2008) (same; relevant discussion under headnotes 13 and 14) 2 ; Reyes v. Texas EZPawn, L.P., No V-03-128, 2007 WL 2818053, *2 (S.D. Tex. Sept. 26, 2007) (same); In re Griner, 240 B.R. 432, 438-39 (Bankr. S.D. Ala. 1999) (same); Thompson v. Continental Airlines, 18 S.W.3d 701, 704-05 (Tex. App.—San Antonio 2000, no pet.) (recognizing the existence of a fact issue concerning the debtor’s motive or intent in failing to disclose claims in bankruptcy filings). While it could be said that every debtor could be motivated by a desire to hide assets, because the Superior Crewboats 1 In the bankruptcy context, the Third Circuit has stated that the doctrine of judicial estoppel entails a twopart inquiry: (1) is the party’s present position inconsistent with a position it asserted in its bankruptcy proceedings; and (2) if so, did the party assert either or both of the inconsistent positions in bad faith with intent to play fast and loose with the court. Ryan Operations, 81 F.3d at 361. 2 For some reason, the Westlaw version of this case does not contain page numbers, hence the reference to the relevant headnotes under which the discussion takes place. PETITIONERS’ BRIEF ON THE MERITS 14
court and other courts have conducted a detailed analysis of the subjective facts concerning the element of “inadvertence,” see, e.g., Superior Crewboats, 374 F.3d. at 335-36, it is apparent that the real question is whether a debtor is actually motivated by a desire to hide assets. In the summary judgment briefing in the present case, the Respondents argued that that a debtor in bankruptcy, as a matter of law, has a motivation to conceal assets. (R. at 156-57). However, such a suggestion negates the “motivation” and thus “inadvertence” elements of the judicial estoppel analysis in the bankruptcy setting making those elements superfluous. Because the “motivation” sub element used to determine inadvertence is unique to bankruptcy cases, In re Coastal Plains, Inc., 179 F.3d 197, 210 (5 th Cir. 1999), it would be an odd rule indeed if such elements were satisfied as a matter of law simply because the party was in bankruptcy. Fact issues regarding a debtor’s good or bad faith in not disclosing claims in original bankruptcy schedules preclude summary judgment based on judicial estoppel. In re Coastal Plains, 179 F.3d at 210 n.9 (citing Dawson v. J.G. Wentworth & Co., Inc., 946 F. Supp. 394 (E.D. Pa.1996)); Thompson, 18 S.W.3d at 704-05. Moreover, the Eighth Circuit has concluded that, when a bankruptcy court does not discharge a debtor’s bankruptcy based on inaccurate information provided in the bankruptcy schedules, there is no judicial acceptance of the inaccurate position. Stallings v. Hussmann Corp., 447 F.3d 1041, 1049 (8 th Cir. 2006). Judicial estoppel is particularly inapplicable when a plaintiff amends a PETITIONERS’ BRIEF ON THE MERITS 15
Page 1 and 2: NO. 08-0589 IN THE SUPREME COURT OF
Page 3 and 4: RESPONDENT: BUILDING MATERIALS CORP
Page 5 and 6: D. The primary cases upon which the
Page 7 and 8: In re Okan's Foods, Inc., 217 B.R.
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Page 11 and 12: ISSUES PRESENTED First Issue Presen
Page 13 and 14: Due to a clerical error, this lawsu
Page 15 and 16: Fergusons discovered that the pendi
Page 17 and 18: position simply because his interes
Page 19 and 20: ● In re Coastal Plains, Inc., 179
Page 21: 4. Elements. Stated concisely as el
Page 25 and 26: element of intent as a matter of la
Page 27 and 28: situation which led to bankruptcy.
Page 29 and 30: plaintiffs failed to list the poten
Page 31 and 32: omitted the suit from their bankrup
Page 33 and 34: match the Statement of Financial Af
Page 35 and 36: filings, only after his omission ha
Page 37 and 38: misrepresentations, the bankruptcy
Page 39 and 40: least in part based on its assessme
Page 41 and 42: has not judicially accepted the sin
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Petitioners' Brief on the Merits - Supreme Court of Texas

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