Mefford v. Norton Hospitals, Inc.

507 S.W.3d 580, 2016 Ky. App. LEXIS 39, 2016 WL 1166120
CourtCourt of Appeals of Kentucky
DecidedMarch 25, 2016
DocketNO. 2014-CA-001036-MR
StatusPublished
Cited by4 cases

This text of 507 S.W.3d 580 (Mefford v. Norton Hospitals, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mefford v. Norton Hospitals, Inc., 507 S.W.3d 580, 2016 Ky. App. LEXIS 39, 2016 WL 1166120 (Ky. Ct. App. 2016).

Opinion

OPINION

THOMPSON, JUDGE:

Jane M. Mefford appeals from a summary judgment dismissing her medical malpractice claim against Norton Hospitals, Inc., d/b/a Norton Audubon Hospital, based on the doctrine of judicial estoppel. The trial court concluded Jane intentionally failed to disclose the existence of her pending malpractice action to the bankruptcy court prior to it granting a Chapter 7 discharge of her debts and was estopped from pursuing her malpractice claim. Jane contends she had no motive to conceal her malpractice claim to the bankruptcy court because if disclosed, the malpractice claim would not have been an asset of her converted Chapter 7 bankruptcy estate. Additionally, Jane argues application of judicial estoppel is not warranted because, in good faith, she relied on her bankruptcy attorney’s advice regarding the applicable law. We agree with Jane that she had no motive to conceal her medical malpractice claim and acted in good faith reliance on her counsel when she did not reveal the claim. We hold the trial court erred in applying judicial estop-pel.

On October 3, 2011, Jane and her husband, represented by counsel, filed a joint petition for Chapter 13 bankruptcy in the Western District of Kentucky. The petition forms required that Jane provide a complete listing of all assets, including contingent and unliquidated claims. She denied having any claims, completed, and then signed the portion declaring under penalty of perjury that the information provided was true and correct.

On April 2, 2012, Jane appeared at Norton’s emergency room for treatment. The basis for this malpractice action is her allegation that Norton negligently failed to assess and treat her alleged stroke-like symptoms in a timely fashion resulting in personal injury.

On June 28, 2012, Jane filed a motion in the bankruptcy court to suspend Chapter 13 plan payments for three months stating [583]*583that she suffered several strokes and was unable to work. The bankruptcy court granted Jane’s motion.

On August 9, 2012, Jane’s medical malpractice counsel notified Norton of her claim. On November 29, 2012, Jane filed this malpractice action. She did not amend any of her pleadings or schedules to inform the bankruptcy court of her malpractice claim.

On March 26, 2013, Jane and her husband appeared before the bankruptcy court seeking to modify her Chapter 13 plan down from 50% payment of debts to 30% payment of debts. Again, she did not advise the bankruptcy court of her malpractice claim against Norton. The bankruptcy court granted the motion.

The malpractice claim remained pending. On September 25, 2013, Jane’s deposition was taken, at which Norton’s counsel inquired whether she had ever filed bankruptcy. She acknowledged she had but stated it was “seven, eight or maybe nine” years prior to that time. She had filed a Chapter 7 bankruptcy seven years prior.

On September 27, 2013, Jane and her husband petitioned the bankruptcy court to convert their debtor status from Chapter 13 to Chapter 7, seeking a full discharge of debts. The petition required that Jane and her husband “[l]ist all suits and administrative proceedings to which the debtor is or was a party within one year immediately preceding the filing of this bankruptcy case[.]” The pending malpractice claim against Norton was not referenced in the petitions.

On September 30, 2013, the bankruptcy court granted the Meffords’ petition to convert from Chapter 13 to Chapter 7. It simultaneously ordered them to submit copies of all complaints for all pending lawsuits in which either of them was a plaintiff. Jane did not provide the trustee with a copy of her complaint against Norton.

A creditors meeting was held on November 5, 2013, at which the Meffords provided sworn testimony regarding their assets and financial condition. Jane affirmed that her schedules and filing were accurate and represented that she had no further information to provide. When specifically asked whether she had any current lawsuits, Jane replied “no.”

On November 19, 2013, Mr. Mefford’s deposition was taken in the malpractice action. At that time, he testified that he and his wife had a pending Chapter 7 bankruptcy. Despite being a creditor in the bankruptcy action, who received notice from the bankruptcy court of the filing, Norton maintains this was the first time it learned of the pending bankruptcy proceeding.

On January 7, 2014, the bankruptcy court entered an order discharging the Meffords’ debts, including debts related to the treatment Jane received at Norton. Just ten days later, Norton moved for summary judgment in the medical malpractice action, arguing that Jane had an affirmative and continuous duty to disclose the malpractice lawsuit to the bankruptcy court and her failure to do so required dismissal of the malpractice action on the basis of judicial estoppel.

Jane argued that judicial estoppel did not apply because she had no duty to disclose the malpractice action that accrued after she and her husband filed their Chapter 13 petition but before they converted to a Chapter 7. She further argued her nondisclosure of the action was done in good faith and upon the advice of her bankruptcy attorneys. In response to Norton’s motion for summary judgment, Jane filed her affidavit stating that she disclosed the claim against Norton to her bankruptcy attorney and relied on her at[584]*584torney’s advice in preparing and filing bankruptcy documents. Her bankruptcy attorney filed an affidavit stating that she advised Jane that her bankruptcy schedules were not required to be amended to add the malpractice claim which occurred after the filing of the original petition because it was not an asset of the estate.

The trial court ruled that the doctrine of judicial estoppel precluded Jane’s malpractice action, finding that on multiple occasions Jane’s bankruptcy schedules were not amended to include the malpractice action as an asset and that it was an intentional misrepresentation or omission. The trial court further found Jane had an incentive to omit the action from her bankruptcy disclosures so that any amount recovered would not be used to pay creditors.

Jane filed a Kentucky Rules of Civil Procedure (CR) 59.05 motion. The motion was denied and this appeal followed.

The standard of review on appeal of a summary judgment is whether the trial court correctly found that there were no genuine issues as to any material fact and that the moving party was entitled to judgment as a matter of law. CR 56.03. Because factual findings are not at issue, we are not required to defer to the trial court. Goldsmith v. Allied Building Components, Inc., 833 S.W.2d 378, 381 (Ky.1992). When summary judgment is granted, “[t]he record must be viewed in a light most favorable to the party opposing the motion for summary judgment and all doubts are to be resolved in his favor.” Steelvest, Inc. v. Scansteel Serv. Ctr., Inc., 807 S.W.2d 476, 480 (Ky.1991). The standard for a summary judgment requires that it be granted “[ojnly when it appears impossible for the nonmoving party to produce evidence at trial warranting a judgment in his favor[.]” Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky.App.1996) (quoting Huddleston v. Hughes,

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Cite This Page — Counsel Stack

Bluebook (online)
507 S.W.3d 580, 2016 Ky. App. LEXIS 39, 2016 WL 1166120, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mefford-v-norton-hospitals-inc-kyctapp-2016.