Cleaver v. Cleaver

140 S.W.3d 771, 2004 Tex. App. LEXIS 5651, 2004 WL 1416009
CourtCourt of Appeals of Texas
DecidedJune 23, 2004
Docket12-03-00427-CV
StatusPublished
Cited by23 cases

This text of 140 S.W.3d 771 (Cleaver v. Cleaver) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cleaver v. Cleaver, 140 S.W.3d 771, 2004 Tex. App. LEXIS 5651, 2004 WL 1416009 (Tex. Ct. App. 2004).

Opinion

OPINION

SAM GRIFFITH, Justice.

Appellant Jimmy Maurice Cleaver (“Jimmy”) appeals the summary judgment granted in favor of Appellee Sally Susan Staton Cleaver (“Sally”). In his sole issue on appeal, Jimmy contends that the trial court erred in granting Sally’s motion for summary judgment based on judicial es-toppel. We affirm.

Background

Jimmy and Sally were divorced on April 12, 1994. In a prior appeal to this court, Jimmy contested the trial court’s characterization that Sally’s income from a testamentary trust, the Sally Staton Trust (the “Trust”), was not community property. Cleaver v. Cleaver, 935 S.W.2d 491, 492 (Tex.App.-Tyler 1996, no writ). In the Trust established by Sally’s father’s will, “the income of the trust shall be distributed to the beneficiary semi-annually or more often, the time of such payments to be in the sole discretion of my Trustee hereunder” upon Sally reaching twenty-one years of age. Id. at 492-93. At the time of the divorce, the trial court found that the Trust held approximately $8,193.74 of undistributed income. We *773 held that Sally had a present possessory interest in funds that should have been, but had not been, timely distributed to her by the trust, and the income earned on such funds, if any, was the couple’s community property. However, no evidence established what part, if any, of these funds was interest earned on trust funds that were distributable to Sally. Therefore, we reversed the judgment of the trial court and remanded for a “determination of the community property interest earned on the funds held in the trust and the amount of [Sally’s] separate funds that came into the trust that were commingled with that interest.” Id. at 492. We instructed the trial court to determine “whether interest was earned on trust funds held but undistributed to the beneficiary/[Sally] in contravention of the trust’s terms, the amount of interest earned and the amount, if any, of trust funds commingled with the interest.” Id. at 497. Otherwise, the judgment of the trial court was affirmed. Id.

Subsequently, on December 12, 1997, Jimmy and his new wife, Ginger Carlene Cleaver (“Ginger”), as joint debtors, filed a voluntary petition for bankruptcy with the United States Bankruptcy Court, Eastern District of Texas, Tyler Division, pursuant to Chapter 7 of the Bankruptcy Code. Jimmy and Ginger were required to complete, upon penalty of perjury, a statement of financial affairs, summaries, and schedules. In the statement of financial affairs, Jimmy’s divorce action was listed under “[s]uits, executions, garnishments and attachments” as a divorce proceeding with a “remanded” status or disposition. However, Jimmy did not list his divorce action in the accompanying schedules as an asset or, more specifically, as a property settlement, interest in trust, claim, or other personal property. Jimmy and Ginger were discharged in bankruptcy on July 29, 1998.

On September 24, 2003, Sally filed a motion for summary judgment and, as grounds, argued that Jimmy’s failure to include his claimed interest in Sally’s trust account as an asset in the bankruptcy schedules judicially estopped Jimmy from asserting this claim following his discharge from bankruptcy. Jimmy responded that he disclosed to the bankruptcy court the fact that he had a divorce case and that it had been remanded. On December 1, 2003, the trial court granted Sally’s motion for summary judgment. This appeal followed.

Summary Judgment

Jimmy contends that the trial court erred when it granted Sally’s motion for summary judgment because Sally did not conclusively prove all the necessary elements of her defense of judicial estoppel. Further, Jimmy argues that he disclosed the existence of a lawsuit between the two parties in this case to the federal bankruptcy court. However, Sally contends that Jimmy did not disclose the underlying claim of this lawsuit as a potential asset, and is, therefore, judicially estopped from pursuing his underlying claim.

Applicable Law

The movant for summary judgment has the burden of showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Nixon v. Mr. Prop. Mgmt. Co., Inc., 690 S.W.2d 546, 548 (Tex.1985). To obtain a summary judgment, the movant must either negate at least one element of the nonmovant’s theory of recovery, Walker v. Harris, 924 S.W.2d 375, 377 (Tex.1996), or plead and conclusively prove each element of an affirmative defense. Id.; City of Houston v. Clear Creek Basin Authority, 589 S.W.2d 671, 678 (Tex.1979). When reviewing a summary judgment, we take as true all evidence favorable to the non- *774 movant. Rhone-Poulenc, Inc. v. Steel, 997 S.W.2d 217, 223 (Tex.1999). We indulge every reasonable inference and resolve any doubts in the nonmovant’s favor. Id.

In the commencement of a case under the bankruptcy title, an estate is created. 11 U.S.C.A. § 541(a) (West 1993). Such estate is composed of all legal or equitable interests of the debtor in property as of the commencement of the case. 11 U.S.C.A. § 541(a)(1). The term “all legal or equitable interests” has been defined broadly to include causes of action belonging to the debtor at the inception of the case. State Farm Life Ins. Co. v. Swift (In re Swift), 129 F.3d 792, 795 (5th Cir.1997); Schertz-Cibolo-Universal City, Indep. Sch. Dist. (In re Educators Group Health Trust), 25 F.3d 1281, 1283 (5th Cir.1994). Further, when a cause of action accrues before the date the bankruptcy petition is filed, the claim is an interest that the debtor possesses when he or she files the bankruptcy petition. Stewart v. Hardie, 978 S.W.2d 203, 208 (Tex.App.-Fort Worth 1998, pet. denied).

The Bankruptcy Code imposes upon a debtor the express, affirmative duty to disclose all assets, including contingent and unliquidated claims. Browning Mfg. v. Mims (In re Coastal Plains, Inc.), 179 F.3d 197, 207-08 (5th Cir.1999). Further, a debtor has an absolute duty to report whatever interests he holds in property, even if he believes the asset is worthless or unavailable to the bankruptcy estate. Stephenson v. LeBoeuf 16 S.W.3d 829, 841 (Tex.App.-Houston [14th Dist.] 2000, pet. denied); Stewart,

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Bluebook (online)
140 S.W.3d 771, 2004 Tex. App. LEXIS 5651, 2004 WL 1416009, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cleaver-v-cleaver-texapp-2004.