Williams v. Hainje

375 F. App'x 625
Court of Appeals for the Seventh Circuit·Decided May 14, 2010·No. No. 09-3772·Published·Cited by 19 cases

Opinion

ORDER

Anthony Williams filed for bankruptcy without disclosing his pending civil rights suit, the subject of this appeal. Rob Hainje, the defendant in that suit, is a police officer who released a police dog that mauled Williams during an arrest. Hainje moved for summary judgment on grounds that judicial estoppel prevented Williams from prosecuting a claim that he failed to disclose to his creditors. The district court entered summary judgment in favor of Hainje. We affirm.

This suit had been pending for nearly two years when Williams filed for Chapter 13 protection in May 2008. But Williams failed to disclose the suit in his bankruptcy filings, even though in the bankruptcy court he sought relief from medical debts arising from the dog attack. Months later, without having been informed of the lawsuit, the bankruptcy court confirmed a reorganization plan that substantially reduced his debts. Two months after that, still in the dark about the suit, the bankruptcy court entered an order modifying the plan, which continued to offer debt relief.

[627] When Hainje discovered the omission, he moved for summary judgment on judicial estoppel grounds. He argued that Williams’s failure to disclose the suit precluded him from pursuing it. Williams responded by amending his personal property schedules to account for the lawsuit and then argued that judicial estoppel does not bar a chose in action if it is disclosed while the bankruptcy case was still pending.

The district court entered summary judgment in favor of Hainje. Having determined that Williams had intentionally concealed the lawsuit, the court concluded that judicial estoppel precluded him from pursuing it for his own benefit. The court noted, however, that a Chapter 13 debtor has standing to sue on behalf of the bankruptcy estate. See Cable v. Ivy Tech State College, 200 F.3d 467, 474-75 (7th Cir.1999). But because the court had no reason to believe that Williams had been doing so, the court entered summary judgment against him.

While this case was pending on appeal, Williams defaulted on his reorganization payments and his Chapter 13 case was dismissed, a fact about which we may take judicial notice. In re Consol. Indus. Corp., 397 F.3d 524, 527 (7th Cir.2005). The dismissal means that, on appeal, Williams is pursuing this action on his own behalf, as the bankruptcy estate no longer exists.

On appeal Williams contends that the district court erred in judicially estop-ping him from pursuing the claim for himself because his omission was inadvertent and the result of bad legal advice. Although judicial estoppel is a matter of discretion, pure questions of law receive plenary review, see Commonwealth Ins. Co. v. Titan Tire Corp., 398 F.3d 879, 887 (7th Cir.2004), and factual determinations are reviewed for clear error, see Robinson v. Tyson Foods, 595 F.3d 1269, 1273 (11th Cir.2010); United States v. Are, 590 F.3d 499, 504 (7th Cir.2009).

The district court’s use of judicial estop-pel was not an abuse of discretion. Broadly speaking, judicial estoppel precludes a party from abandoning positions after they have prevailed on them in earlier litigation. Zedner v. United States, 547 U.S. 489, 504, 126 S.Ct. 1976, 164 L.Ed.2d 749 (2006); Carnegie v. Household Int’l, Inc., 376 F.3d 656, 660 (7th Cir.2004). In the bankruptcy setting, a debtor who receives a discharge by concealing the existence of a chose in action cannot wait until the bankruptcy ends and then pursue the claim. See Cannon-Stokes v. Potter, 453 F.3d 446, 448 (7th Cir.2006).

Williams never received a discharge because the bankruptcy court eventually dismissed his case, and in that respect his case differs from Cannon-Stokes. The difference, however, is immaterial. Williams still received significant financial benefits during his short stint in bankruptcy. His filing, for instance, triggered the automatic stay, see 11 U.S.C. § 362, holding creditors at bay for some 20 months and thereby enabling him to keep his house and car, and to avoid new interest charges on his mortgage arrearage while he pursued his undisclosed civil-rights suit. In the meantime, the bankruptcy court confirmed a reorganization plan that temporarily relieved Williams of most of his debts without further interest or penalty.

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Williams v. Hainje, 375 F. App'x 625 (7th Cir. 2010).

375 F. App'x 625 (Williams v. Hainje) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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