Bankruptcy — judicial estoppel

Listen to this article

U.S. Court of Appeals for the 7th Circuit

Civil

Bankruptcy — judicial estoppel

A debtor’s failure to include a contingent claim, such as an employment discrimination lawsuit, can be cured by oral disclosure.

“Viewing the summary judgment record in the light reasonably most favorable to plaintiff Spaine, judicial estoppel does not apply here. Spaine’s affidavit testimony that she had disclosed her lawsuit against Community Contacts during the bankruptcy case is material. Without considering the creditors meeting transcript submitted on appeal, her testimony on this point is not even disputed. Spaine’s disclosure made the trustee aware of the litigation, and the trustee made a decision about its value to her creditors. That testimony protects Spaine from an inference on summary judgment that she deliberately concealed her claim from the bankruptcy trustee and her creditors.”

Reversed and Remanded.

13-3059 Spaine v. Community Contacts Inc.

Appeal from the United States District Court for the Northern District of Illinois, Kendall, J., Hamilton, J.