Title: Daniel A. Middleton, Jr. v. Caterpillar Industrial, Inc.

State: alabama

Issuer: Alabama Supreme Court

Document:

This case was originally assigned to another Justice on
1
this Court; it was reassigned to Chief Justice Cobb on January
16, 2007.
Rel 08/17/2007
Notice: This opinion is subject to formal revision before publication in the advance
sheets of Southern Reporter.  Readers are requested to notify the Reporter of Decisions,
Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-
0649), of any typographical or other errors, in order that corrections may be made before
the opinion is printed in Southern Reporter.
SUPREME COURT OF ALABAMA
 SPECIAL TERM, 2007
_________________________
1050939
_________________________
Daniel A. Middleton, Jr.
v.
Caterpillar Industrial, Inc.
Appeal from Mobile Circuit Court
(CV-02-4207)
COBB, Chief Justice.1
Daniel A. Middleton, Jr., the plaintiff in a personal-
injury action in the Mobile Circuit Court, appeals from a
1050939
Middleton's complaint also named Caterpillar, Inc.,
2
Thompson Tractor Company, Inc., and Ryan-Walsh, Inc., n/k/a
Stevedoring Services of America Gulf Terminals, Inc., as
defendants.  During the course of the litigation, Caterpillar,
Inc., Thompson Tractor Company, Inc., and Ryan-Walsh, Inc.,
were dismissed on the joint motions of Middleton and each
respective defendant.
2
summary judgment in favor of the sole remaining defendant,
Caterpillar Industrial, Inc.   We reverse and remand.
2
I.  Background
Middleton was employed as a maintenance mechanic by Ryan-
Walsh, Inc., now known as Stevedoring Services of America Gulf
Terminals, Inc. (hereinafter "SSA"), at its facility in
Charleston, South Carolina.  On December 21, 2000, Middleton
drove a Caterpillar Model T50D industrial lift truck into a
parking lot, raised the mast and carriage of the lift truck
approximately 11 to 13 feet, and, while the lift truck was
still running, stood in front of the lift truck –- and under
the raised mast and carriage -– to troubleshoot a reported
leak in the hydraulics of the lift truck.  He did not attempt
to support the carriage in any manner.  As Middleton searched
for the leak, a loss of hydraulic pressure occurred, causing
the mast and carriage to fall, crushing Middleton's right arm
1050939
3
near his shoulder.  The injury required the surgical
amputation of his right arm.
Shortly before his injury, on September 28, 2000,
Middleton had filed for Chapter 13 bankruptcy protection in
the United States Bankruptcy Court for the District of South
Carolina.  As part of his Schedule B, which requires the
debtor to list personal property, Middleton was obligated to
disclose "[o]ther contingent and unliquidated claims of every
nature, including tax refunds, counterclaims of the debtor,
and rights to setoff claims."  Middleton never amended his
Schedule B after he was injured to show his potential claim
against Caterpillar, and on March 1, 2001, the bankruptcy
court approved Middleton's proposed bankruptcy plan without
disclosure of that claim.  However, the bankruptcy proceeding
was dismissed on June 8, 2001, because of Middleton's failure
to comply with the orders of the bankruptcy court.
Middleton 
again 
filed 
for 
Chapter 
13 
bankruptcy
protection in the Bankruptcy Court for the District of South
Carolina on June 28, 2001.  Middleton did not disclose in his
Schedule B filed in the second bankruptcy proceeding his
potential claim against Caterpillar.  The bankruptcy court
1050939
4
approved Middleton's bankruptcy plan on August 27, 2001.  The
plan allowed Middleton to avoid certain nonpossessory,
nonpurchase-money security interests as well as to pay his
general unsecured creditors only 5 percent of their allowed
claims over a 54-month period. 
Middleton's bankruptcy counsel filed a motion with the
bankruptcy court on February 3, 2005, seeking a three-month
moratorium on Middleton's payments under the bankruptcy plan.
As grounds for his motion, Middleton's bankruptcy counsel
stated that Middleton "has had substantial difficulty making
his required payments due to his short term disability ending
and having no income while he awaits to be put on long-term
disability."  The bankruptcy court granted the motion on
February 28, 2005.
As a result of his injury, Middleton filed a worker's
compensation claim against his employer, SSA, under the
Longshore and Harbor Workers' Compensation Act, 33 U.S.C. §
901 et seq.  On April 28, 2005, the United States Department
of Labor's Office of Workers' Compensation Programs approved
a settlement between SSA and Middleton pursuant to which
Middleton received $69,900.  At no time did Middleton submit
1050939
SSA was subsequently dismissed.  See note 2, supra.
3
5
an amended Schedule B notifying the bankruptcy court and his
creditors of 
his 
worker's 
compensation claim, either 
after 
the
claim was filed or after the settlement was approved.
On December 20, 2002, Middleton filed the underlying
personal-injury action in the Mobile Circuit Court, asserting
that one of the named defendants, Ryan-Walsh, Inc., now known
as SSA, was an Alabama corporation whose principal place of
business was Mobile County.   Even after the personal-injury
3
action was filed, Middleton did not amend his Schedule B to
notify the bankruptcy court of his potential claim against
Caterpillar.  Among the interrogatories propounded upon
Middleton by Caterpillar was the following:
"State whether you have ever been involved in any
other legal action in any country or jurisdiction
(including any bankruptcy matter), and, if so,
identify the date, place, nature of and disposition
of each such action, giving the name of the court,
the name of the other party or parties involved, the
number of such action, and the names of the
attorneys representing each party."
(Emphasis added.)  On August 18, 2005, Middleton submitted to
Caterpillar the following sworn amended answer in response to
the above-quoted interrogatory:  "Plaintiff filed a worker's
1050939
6
compensation claim as a result of this accident."  Middleton
never did disclose in his responses to interrogatories that he
had filed a petition in bankruptcy.
On October 26, 2005, Caterpillar moved the trial court
for a summary judgment in its favor based on the doctrine of
judicial estoppel, asserting that Middleton had never
disclosed his claim against Caterpillar as an asset in the
bankruptcy proceeding.  Only after Caterpillar filed its
motion for a summary judgment did Middleton amend his Schedule
B to include his claim against Caterpillar, as well as his
worker's 
compensation 
settlement. 
 
In 
response 
to
Caterpillar's summary-judgment motion, Middleton stated that
he was unaware that he should have amended his Schedule B and
that his failure to do so "was inadvertent at most."  The
trial court, however, agreed with Caterpillar that Middleton
was judicially estopped from pursuing his action against
Caterpillar, and it granted Caterpillar's summary-judgment
motion.  Middleton filed a motion to alter, amend, or vacate
the summary judgment, which the trial court denied.  In
denying the motion to alter, amend, or vacate, the trial court
stated that a summary judgment was due to be entered in
1050939
7
Caterpillar's favor based not only on the doctrine of judicial
estoppel, but also on the affirmative defense of assumption of
the risk.
II.  Standard of Review
Caterpillar urges this Court to join the majority of
federal appellate courts and adopt a standard when reviewing
a trial court's application of judicial estoppel that asks
whether the court, in applying that doctrine, exceeded its
discretion.  See, e.g., Alternative Sys. Concepts, Inc. v.
Synopsys, Inc., 374 F.3d 23, 31-32 (1st Cir. 2004); Coastal
Plains, Inc. v. Mims, 179 F.3d 197, 205 (5th Cir. 1999);
Talavera v. School Bd. of Palm Beach County, 129 F.3d  1214,
1216 (11th Cir. 1997); McNemar v. Disney Store, Inc., 91 F.3d
610, 616-17 (3d Cir. 1996); Data Gen. Corp. v. Johnson, 78
F.3d 1556, 1565 (Fed. Cir. 1996); and United States v. Garcia,
37 F.3d 1359, 1367 (9th Cir. 1994).  Judicial estoppel,
however, is an affirmative defense, and this Court's standard
of review when a summary judgment is based on an affirmative
defense is well settled:
"This Court reviews de novo a trial court's
[grant or] denial of a summary judgment.  See Young
v. La Quinta Inns, Inc., 682 So. 2d 402, 403 (Ala.
1996) (citing Hightower v. United States Fid. &
1050939
8
Guar. Co., 527 So. 2d 698 (Ala. 1988)).  Where, as
in this case, the defendant moves for a summary
judgment based on an affirmative defense, this Court
applies the following standard of review:
"'When there is no genuine issue of
material fact as to any element of an
affirmative defense, ... and it is shown
that the defendant is entitled to a
judgment as a matter of law, summary
judgment is proper.  If there is a genuine
issue of material fact as to any element of
the affirmative defense, summary judgment
is inappropriate. Rule 56(c), Ala. R. Civ.
P.  In determining whether there is a
genuine issue of material fact as to each
element of an affirmative defense, this
Court must review the record in a light
most favorable to the plaintiff (the
nonmoving party) and must resolve all
reasonable doubts against the defendant
(the movant).'
"Bechtel v. Crown Central Petroleum Corp., 495 So.
2d 1052, 1053 (Ala. 1986)."
Wal-Mart Stores, Inc. v. Smitherman, 743 So. 2d 442, 444-45
(Ala. 1999).
III.  Judicial Estoppel and Lex Loci Delicti
Our review of the summary judgment in this case is based
upon the principle of lex loci delicti, under which the courts
of this state "will determine the substantive rights of an
injured party according to the law of the state where the
injury occurred."  Fitts v. Minnesota Mining & Mfg. Co., 581
1050939
9
So. 2d 819, 820 (Ala. 1991).  For 115 years, the principle of
lex loci delicti has governed cases such as this one in
Alabama courts.  Fitts, 581 So. 2d 819 (reaffirming the
doctrine of lex loci delicti and declining to adopt the "most
significant 
relationship" 
approach 
of 
the 
Restatement 
(Second)
of Conflict of Laws (1971)); Alabama Great Southern R.R. v.
Carroll, 97 Ala. 126, 11 So. 803 (1892).  Although lex loci
delicti governs substantive law, lex fori –- the law of the
forum –- governs procedural matters.  
"'The 
distinction 
between 
"substance" 
and 
"procedure" 
has
medieval origins: a court will apply foreign law only to the
extent it deals with the substance of the case, i.e., affects
the outcome of the litigation, but will rely on the forum law
to deal with the "procedural" aspects of the litigation.'"
Etheredge v. Genie Indus., Inc., 632 So. 2d 1324, 1326-27
(Ala. 1994) (quoting Eugene F. Scoles & Peter Hay, Conflict of
Laws 57 (1992)).  In its order granting Caterpillar's summary-
judgment motion, the trial court determined that the doctrine
of judicial estoppel is procedural in nature and, thus,
Alabama law applies in this case.  On appeal, Middleton argues
that the doctrine of judicial estoppel is substantive in
1050939
10
nature and that the trial court therefore should have applied
the laws of South Carolina relating to the doctrine of
judicial estoppel.
"'The court before which the question arises is the one
that has to decide whether any rule of law, domestic or
foreign, 
will 
be 
characterized as substantive or as procedural
for choice-of-law purposes.'"  Etheredge, 632 So. 2d at 1326
(quoting Robert A. Leflar et al., American Conflicts Law 333
(1986)).  The question of whether the doctrine of judicial
estoppel sounds in substantive or procedural law is one of
first impression for this Court.  
This Court has defined judicial estoppel in the following
manner:
"'The doctrine of judicial estoppel "applies to
preclude a party from assuming a position in a legal
proceeding 
inconsistent 
with 
one 
previously
asserted.  Judicial estoppel looks to the connection
between the litigant and the judicial system[,]
while equitable estoppel focuses on the relationship
between the parties to the prior litigation."'
Jinright v. Paulk, 758 So. 2d 553, 555 (Ala. 2000)
(quoting Selma Foundry & Supply Co. v. Peoples Bank
& Trust Co., 598 So. 2d 844, 846 (Ala. 1992),
quoting in turn Oneida Motor Freight, Inc. v. United
Jersey Bank, 848 F.2d 414 (3d Cir. 1988))."
Ex parte First Alabama Bank, 883 So. 2d 1236, 1241 (Ala.
2003).  The United States Court of Appeals for the Seventh
1050939
11
Circuit has described the doctrine of judicial estoppel as  "a
hybrid between substance and process that on occasion affects
the outcome."  Astor Chauffeured Limousine Co. v. Runnfeldt
Inv. Corp., 910 F.2d 1540, 1551 (7th Cir. 1990).  
"'The substance versus procedure issue arises in
four contexts: (1) in application of the conflicts
of laws rule that the procedural law of the forum
must be applied; (2) in determining whether a
retrospective criminal statute is substantive and,
therefore, an invalid ex post facto law; (3) under
the Erie Doctrine when a federal court is asked to
apply a state law; and (4) when the power of a court
or legislature to makes rules is in issue.'"
Schoenvogel v. Venator Group Retail, Inc., 895 So. 2d 225, 247
(Ala. 2004) (quoting Terry A. Moore, Does the Alabama Supreme
Court Have the Power to Make Rules of Evidence?, 25 Cumb. L.
Rev. 331, 346 n. 96 (1994-1995)).  
The issue whether the doctrine of judicial estoppel is
substantive or procedural in nature has arisen most often in
cases where federal courts have applied state law under the
Erie doctrine.  However, no consensus exists among the federal
circuits as to whether the doctrine of judicial estoppel
should be considered 
substantive 
or 
procedural. 
 Some 
circuits
in diversity actions, in which federal procedural law and
state 
substantive 
law 
are 
applied, 
have 
held 
judicial 
estoppel
1050939
12
to be substantive: see, e.g., Original Appalachian Artworks,
Inc. v. S. Diamond Assocs., 44 F.3d 925, 930 (11th Cir. 1995)
("Because this is a diversity case, the application of the
doctrine of judicial estoppel is governed by state law.");
Follette v. Wal-Mart Stores, Inc., 41 F.3d 1234, 1237 (8th
Cir. 1994) ("When a federal court is sitting in diversity, the
preclusive effect of a prior judgment is determined by the
preclusion rules of the forum which provided the substantive
law 
underlying 
the 
prior 
judgment."); 
and 
Tri-State 
Generation
& Transmission Ass'n, Inc. v. Shoshone River Power, Inc., 874
F.2d 1346, 1363 (10th Cir. 1989) ("Inasmuch as the application
of judicial estoppel in this diversity action goes to the
adequacy of Tri-State's legal remedy, we look to the
appropriate state law to determine whether judicial estoppel
is recognized.").  Other circuits have held that the doctrine
of judicial estoppel is procedural in nature: see, e.g.,
Jarrard v. CDI Telecomms., Inc., 408 F.3d 905, 914 (7th Cir.
2005) ("Although Jarrard's complaint was founded on diversity
jurisdiction, we apply federal (not Indiana) caselaw with
respect to judicial estoppel."); Johnson v. Oregon Dep't of
Human Res., 141 F.3d 1361, 1364 (9th Cir. 1998) ("Federal law
1050939
13
governs the application of judicial estoppel in federal
courts."); Pennycuff v. Fentress County Bd. of Educ., 404 F.3d
447, 452 (5th Cir. 1994) ("'Federal standards govern the
application of judicial estoppel in federal court.'" (quoting
Warda v. C.I.R., 15 F.3d 533, 538 (6th Cir. 1994))); and Allen
v. Zurich Ins. Co., 667 F.2d 1162, 1167 n.4 (4th Cir. 1982)
("Although this is a diversity case, we consider that federal
law controls the application of judicial estoppel, since it
relates to protection of the integrity of the federal judicial
process.").
The issue is so unclear that the United States Court of
Appeals for the First Circuit has expressed relief when it has
had the opportunity to pretermit the issue: 
"There is a potential choice of law problem
lurking in the interstices of this case.  A federal
court sitting in diversity jurisdiction is obliged
to 
apply 
federal 
procedural 
law 
and 
state
substantive law. ...  As judicial estoppel appears
neither clearly procedural nor clearly substantive,
there may be a legitimate question as to whether
federal or state law ... should supply the rule of
decision. 
"Having noted this question, we swiftly lay it
to the side."
Alternative Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d at
32.
1050939
14
Although there is no consensus among the federal
appellate courts as to whether the doctrine of judicial
estoppel is substantive or procedural in nature, we find the
argument that judicial estoppel is procedural in nature to be
the more persuasive argument.  The purpose of judicial
estoppel is "'to protect the integrity of the judicial
process' by 'prohibiting parties from deliberately changing
positions according to the exigencies of the moment.'"  New
Hampshire v. Maine, 532 U.S. 742, 749-50 (2001) (quoting
Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598 (6th Cir.
1982), and United States v. McCaskey, 9 F.3d 368, 378 (5th
Cir. 1993)).  Simply stated, "judicial estoppel prevents
parties from 'playing "fast and loose with the courts,"'" New
Hampshire, 532 U.S. at 750 (quoting Scarano v. Central R.R.,
203 F.2d 510, 513 (3d Cir. 1953), quoting in turn Stretch v.
Watson, 6 N.J. Super. 456, 469, 69 A.2d 596, 603 (1949)), and
prevents "the system from being manipulated by 'chameleonic
litigants.'"  Blanton v. Inco Alloys Int'l, Inc., 108 F.3d
104, 108 (6th Cir. 1997).  This Court has observed:
"'Judicial estoppel ... strives to preserve the
sanctity of the oath and protect the integrity of
the judicial process.  Reliance is not a factor
because any inconsistent statement violates the
1050939
15
sanctity of the oath and injures the integrity of
the judicial process, whether or not some party
relied on the first statement.  The inconsistency
itself damages "public confidence in the purity ...
of judicial proceedings."'"
Ex parte First Alabama Bank, 883 So. 2d at 1244 (quoting Rand
G. 
Boyers, 
Precluding 
Inconsistent 
Statements: 
the 
Doctrine 
of
Judicial Estoppel, 80 Nw. U.L. Rev. 1244, 1249-50 (1986)).
Other courts have noted that "[j]udicial estoppel is a rule of
procedure under which a party is estopped from taking a
position contrary to that taken in prior proceedings."  Heller
v. Plave, 743 F. Supp. 1553, 1571 (S.D. Fla. 1990) (emphasis
added); see also Oscar Mayer Foods Corp. v. ConAgra, Inc.,
(No. 94-1247, Dec. 22, 1994) (Fed. Cir. 1994) (not reported in
F.3d) ("Judicial estoppel is a procedural matter, reviewed
under the law of the regional circuit in which the trial court
sits." (emphasis added)).
Middleton argues that judicial estoppel is substantive in
nature because, he says, it affects the outcome of the
litigation in that its application would extinguish his right
to pursue this litigation.  However, this Court has noted:
"'[I]t is simplistic to assume that all law is
divided neatly between "substance" and "procedure."
A rule of procedure may have an impact upon the
substantive result and be no less a rule of
1050939
16
procedure on that account. ...  As said in Hanna v.
Plumer, 380 U.S. 460, 471, 85 S. Ct. 1136, 1144, 14
L. Ed. 2d 8, 16-17 (1965), "The line between
'substance' and 'procedure' shifts as the legal
context changes.  'Each implies different variables
depending upon the particular problem for which it
is used.'" ...'"
Schoenvogel, 895 So. 2d at 250 (quoting Busik v. Levine, 63
N.J. 351, 364-65, 307 A.2d 571, 578 (1973)).  Although the
doctrine of judicial estoppel had "an impact upon the
substantive result" in Middleton's case, it is "no less a rule
of procedure on that account."  Schoenvogel, 895 So. 2d at
250.  The primary purpose of the doctrine of judicial estoppel
is to protect the integrity of our judicial system from those
who may play "'fast and loose with the courts.'"  Consolidated
Stores, Inc. v. Gargis, 686 So. 2d 268, 276 (Ala. Civ. App.
1996) (quoting Muellner v. Mars, Inc., 714 F.Supp. 351, 356
(N.D. Ill. 1989)).  Therefore, we conclude that judicial
estoppel is procedural in nature, and the rule of lex fori
shall apply.  Thus, the trial court was correct to apply
Alabama caselaw regarding the doctrine of judicial estoppel.
IV.  Application of the Doctrine of Judicial Estoppel
Middleton argues on appeal that the trial court
incorrectly applied the doctrine of judicial estoppel to his
1050939
17
case because, he says, his failure to report on his Schedule
B in his bankruptcy proceeding his claim against Caterpillar
was unintentional and because, he says, his claim against
Caterpillar was statutorily exempt from the bankruptcy estate
under the laws of South Carolina.  Although we do not agree
with his reasoning, we agree that the trial court misapplied
the doctrine of judicial estoppel, and its misapplication of
the doctrine warrants reversal.
In Ex parte First Alabama Bank, this Court "embrace[d]
the factors set forth in New Hampshire v. Maine[, 532 U.S. 742
(2001),] and join[ed] the mainstream of jurisprudence in
dealing with the doctrine of judicial estoppel."  883 So. 2d
at 1246.  As this Court stated:
"The [New Hampshire v. Maine] Court held that for
judicial estoppel to apply (1) 'a party's later
position must be "clearly inconsistent" with its
earlier position'; (2) the party must have been
successful in the prior proceeding so that 'judicial
acceptance of an inconsistent position in a later
proceeding would create "the perception that either
the first or second court was misled"' (quoting
Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 599
(6th Cir. 1982)); and (3) the party seeking to
assert an inconsistent position must 'derive an
unfair advantage or impose an unfair detriment on
the opposing party if not estopped.'  532 U.S. at
750-51, 121 S. Ct. 1808.  No requirement of a
showing of privity or reliance appears in the
foregoing statement of factors to consider in
1050939
18
determining the applicability of the doctrine of
judicial estoppel."
883 So. 2d at 1244-45.  However, this Court noted in Ex parte
First Alabama Bank that "Jinright [v. Paulk, 758 So. 2d 553
(Ala. 2000)], with its discussion of the effect of an
amendment to the ongoing bankruptcy plan and analysis of a
detriment to the plaintiff and a windfall to the defendant as
determinative factors, is not substantially different from
considerations appropriate to factors (2) and (3) in New
Hampshire v. Maine."   883 So. 2d at 1245.  
In Jinright v. Paulk, 758 So. 2d 553 (Ala. 2000), Paulk's
company applied a product known as "dryvit" to the exterior of
the Jinrights' house during construction.  The Jinrights
experienced problems with the dryvit and entered into
negotiations with Paulk and his company in April 1996 to
repair the house.  On June 27, 1996, the Jinrights filed a
voluntary petition in bankruptcy under Chapter 13 of the
United States Bankruptcy Code.  The Jinrights did not disclose
to the bankruptcy court their potential claim against Paulk,
and in August 1996 the bankruptcy court approved their plan
under Chapter 13.  On November 7, 1996, the Jinrights sued
Paulk, but the Jinrights did not disclose the existence of the
1050939
19
lawsuit to their bankruptcy trustee until January 22, 1998.
Paulk then moved for a summary judgment on the basis of
judicial estoppel; the trial court granted the motion.  In
reversing the summary judgment, this Court observed the
distinguishing features of the varying types of bankruptcies:
"'Chapter 13 is a hybrid of chapters 7 and 11.
Chapter 
13 
is 
more 
like 
chapter 
11 
(the
reorganization chapter used primarily by business
debtors) than chapter 7 (the liquidation chapter of
the Bankruptcy code).  Chapter 13 is available to
individuals who earn a regular income.  Debtors
propose a plan by which they will repay some or all
of their debts through regular payments to a chapter
13 trustee.  The trustee pays the sums collected to
creditors according to the plan for a period of up
to five years.  The trustee is not involved in the
daily lives of the debtors.  He or she does not take
possession of debtors' nonexempt assets or monitor
ordinary course usage of assets.  The trustee does
not receive any of the debtors' earnings except what
is paid to him or her as prescribed by the chapter
13 plan.
"'In chapter 11 cases, unless a trustee has been
appointed by the court, there is no trustee.  The
debtor handles all of his or her own affairs.  This
includes use, sale or lease of all assets.  In
chapter 7, a trustee is automatically appointed in
each case.  The debtor relinquishes all authority
over his or her nonexempt assets.
"'A chapter 7 trustee has one power which is
specifically not given to a chapter 13 trustee.
Under 11 U.S.C. § 704(l), a chapter 7 trustee "shall
collect and reduce to money property of the estate."
"Property of the estate" is all nonexempt assets in
which the debtor had an interest before bankruptcy,
1050939
20
such as a cause of action for a work related injury.
11 U.S.C. § 541.  This power therefore compels a
chapter 7 trustee to take over all nonexempt
lawsuits of the debtor.
"'In a chapter 13 case, unless otherwise
specifically provided by the [debtor's] plan, a
debtor remains in possession of all of his or her
assets pre- and postconfirmation.  11 U.S.C. §
1306(b).  This is in contrast to chapter 7 cases
where the trustee "collects (takes control of) and
reduces to money" all nonexempt assets....'"
Jinright, 758 So. 2d at 556 (quoting In re Griner, 240 B.R.
432, 436 (Bankr. S.D. Ala. 1999)).  The Jinright Court noted
that a Chapter 13 plan may be amended at any time and may last
for up to five years.  Thus, at the time the Court issued its
decision the Jinrights had not yet received a discharge in
bankruptcy.  Holding "that a debtor's mere knowledge or
awareness of a potential claim and the debtor's failure to
include the claim as an asset on the bankruptcy schedules
filed with the court, without more, are not sufficient to
invoke the application of the doctrine of judicial estoppel,"
758 So. 2d at 559, this Court reasoned:
"The purpose of the doctrine of judicial
estoppel will not be accomplished, but, rather will
be frustrated if defendants are allowed to use this
doctrine to their advantage at the expense of
plaintiffs with valid claims.  Paulk and Option
Builders will receive a windfall if they are allowed
to escape any potential liability to the Jinrights
1050939
21
on the basis that the Jinrights failed to list their
potential 
claim 
in 
their 
initial 
bankruptcy
proceeding, even though the bankruptcy court and the
trustee have now been fully informed about the
lawsuit and the Jinrights' potential claim."
758 So. 2d at 557.
This Court has previously affirmed summary judgments for
noncreditor defendants based upon the debtor-plaintiffs'
previous failure to list the action as an asset in the
bankruptcy schedules.  This Court first addressed the issue in
Luna v. Dominion Bank of Middle Tennessee, Inc., 631 So. 2d
917 (Ala. 1993).  In Luna, a discharged Chapter 7 debtor sued
Dominion Bank 18 months after he was discharged, alleging
breach of contract, fraud, and negligence, based on the bank's
alleged failure to distribute loan proceeds to which he
claimed he was entitled.  Dominion Bank argued that Luna was
judicially estopped from suing it because Luna had not
disclosed to the bankruptcy court the claim against the bank
as a potential asset.  Luna argued that he was unaware of his
claim against the bank until after he had been discharged from
bankruptcy.  This Court, however, held that if the facts were
as Luna claimed, then Luna, as a reasonable person, should
have known when he filed for bankruptcy protection that he had
1050939
22
a 
claim 
against 
Dominion 
Bank. 
 
Luna, 
however, 
is
distinguishable from this case because Luna brought claims
against a creditor of his and related entities, and the claims
were related to a prepetition claim held by the creditor,
which was discharged in Luna's bankruptcy case before Luna
filed his action in the state court.  Furthermore, the
bankruptcy court relied on Luna's schedules in granting him a
discharge.  The bankruptcy court was never made aware of
Luna's claim against the creditor before granting the
discharge. 
This Court also upheld a summary judgment for a
noncreditor-defendant in  Bertrand v. Handley, 646 So. 2d 16
(Ala. 1994).  In Bertrand a tenant sued, among others, her
landlord for damages arising out of injuries sustained when
she fell down an allegedly defective ramp.  A default judgment
was entered in favor of the tenant.  Subsequently, the trial
court set aside the default judgment.  During the intervening
period between the granting and the setting aside of the
default judgment, the tenant filed for bankruptcy protection
but did not disclose as a potential asset to the bankruptcy
court the default judgment against the landlord.  The trial
1050939
After Caterpillar filed its motion for a  summary
4
judgment, Middleton amended his bankruptcy petition to include
as an asset his action against Caterpillar.  However, it is
apparent from the record that Middleton amended his bankruptcy
petition to disclose the action only in response to
23
court subsequently entered a summary judgment in favor of the
landlord.  This Court affirmed the summary judgment, holding
that "a debtor who does in fact know that a default judgment
has been rendered in her favor and who does not disclose this
fact in a bankruptcy proceeding is judicially estopped from
pursuing the claim on which the judgment was based if the
default judgment is later set aside."  646 So. 2d at 19.
However, Bertrand is also distinguishable from this case
because the tenant in Bertrand filed her action before she
filed for Chapter 7 bankruptcy protection, and the bankruptcy
court discharged all the tenant's debts without ever knowing
of the pending action against the landlord.
In the present case, Caterpillar failed to establish all
three of the New Hampshire v. Maine elements of judicial
estoppel.  As established in Luna and Bertrand, a debtor-
plaintiff's failure to disclose the existence of his civil
action as a potential asset of the bankruptcy estate meets the
inconsistent-positions element of judicial estoppel.   Here it
4
1050939
Caterpillar's summary-judgment motion asserting judicial
estoppel.  As discussed previously, the record shows at least
four prior instances in which Middleton failed to disclose his
potential 
claim 
against Caterpillar in his bankruptcy
petitions under circumstances that support the inference that
the omission was not inadvertent.
24
is undisputed that Middleton did not amend his bankruptcy
petition to disclose the existence of the underlying action
until after Caterpillar's summary-judgment motion had been
filed.  Caterpillar, however, has failed to prove the second
prong of the New Hampshire test, i.e., that Middleton was
successful in the bankruptcy proceeding.  As noted in Griner,
a Chapter 13 debtor remains in possession of his assets during
the pendency of his bankruptcy.  In addition, the Chapter 13
bankruptcy petition can be amended at any time, and the
bankruptcy plan can last up to five years.  When Caterpillar
filed its motion for a summary judgment, Middleton had not
been discharged from his bankruptcy.  Because the bankruptcy
plan may be amended at any time, we conclude that Middleton
was not successful in the prior proceeding so that the
acceptance of an inconsistent position in a later proceeding
"would create 'the perception that either the first or second
court was misled.'" Ex parte First Alabama Bank, 883 So. 2d at
1050939
25
1244 (quoting New Hampshire v. Maine, 532 U.S. at 750).
Similarly, because Middleton's bankruptcy plan may be amended
at any time, Middleton did not "'derive an unfair advantage or
impose an unfair detriment on the opposing party,'"  Ex parte
First Alabama Bank, 883 So. 2d at 1245 (quoting New Hampshire
v. Maine, 532 U.S. at 751), and thus failed to meet the third
prong to the New Hampshire test.
As we noted in Ex parte First Alabama Bank, by adopting
the New Hampshire test for the application of judicial
estoppel, this Court did not abandon the concerns that a
detriment may be imposed on a plaintiff with a potentially
meritorious claim and that a defendant may receive an
unwarranted windfall by the application of the doctrine of
judicial estoppel.  Should this Court permit the trial court's
ruling to stand, Caterpillar would be the undeserving
recipient of an unwarranted windfall, i.e., the dismissal of
Middleton's potentially meritorious claim.  Such a result
would thwart the goals of our justice system.
In reversing the trial court's judgment, this Court in no
way condones Middleton's delay in amending his bankruptcy
petition to notify the bankruptcy court of his potential claim
1050939
26
against Caterpillar.  The Bankruptcy Court for the District of
South Carolina, the court in which Middleton filed his
bankruptcy petition, has noted the responsibility of a debtor
to promptly file with that court accurate petitions and
amendments:
"The Bankruptcy Code provides that Debtors'
foremost responsibility is to cooperate with the
Court and the Trustee and to facilitate the accurate
and proper performance of their duties.  See 11
U.S.C. § 521.  Since bankruptcy schedules and
statements are carefully designed to elicit certain
information necessary for the proper administration
of cases, Debtors[] have a duty to complete these
documents thoughtfully and thoroughly.  See In re
Phillips, C/A No. 02-10461, slip op. at 4 (Bankr. D.
S.C. Feb. 21, 2003).  Furthermore, accuracy,
honesty, and full disclosure are critical to the
functioning of a bankruptcy and are inherent in the
bargain for a debtor's discharge.  See id. at 3
(citing Kestell v. Kestell, 99 F.3d 146, 149 (4th
Cir. 1996)).  Therefore, debtors are responsible for
disclosing an accurate and complete schedule of
assets with proper values and a truthful statement
of affairs in order to convey a complete and
accurate portrayal of their financial situation.
See id. at 3 ('Debtors bear the burden of proving
that their Plan meets the confirmation requirements
of § 1325(a), and part of this burden includes
proving that the values used in their Plan are
adequate'); Siegel v. Weldon (In re Weldon), 184
B.R. 710, 715 (Bankr. D. S.C. 1995) ('The critical
time for disclosure is at the time of the filing of
a petition and the Debtor has the responsibility to
do so.  Bankruptcy law requires debtors to be honest
and to take seriously the obligation to disclose all
matters.').  Furthermore, there is no allowance for
selectivity in asset disclosure.  Id. ('To allow the
1050939
27
Debtor to use his discretion in determining the
relevant information to disclose would create an
end-run around this strictly crafted system.')."
In re Simpson, 306 B.R. 793, 797-98 (Bankr. D. S.C. 2003).
Because Caterpillar did not meet its burden in proving
the elements of judicial estoppel as set forth in New
Hampshire v. Maine, as developed in Ex parte First Alabama
Bank, supra, the trial court erred in entering the summary
judgment.  
V.  Assumption of Risk
After the trial court entered the summary judgment,
Middleton filed a motion to alter, amend, or vacate the
judgment.  Caterpillar then filed a motion in response,
arguing that the evidence in the record "strongly supports
summary judgment for Caterpillar based on the doctrine of
assumption of the risk."  In its order denying Middleton's
motion to alter, amend, or vacate the trial court stated that
summary judgment was proper not only on the basis of the
doctrine of judicial estoppel, but also on the basis of the
doctrine of assumption of risk.  The trial court stated:
"Quite 
simply, [Middleton's] 
own 
testimony, 
which 
is
undisputed, 
establishes 
that 
he 
freely 
and 
voluntarily 
exposed
1050939
28
himself 
to 
a 
known 
danger 
which 
he 
understood 
and
appreciated."  On appeal, Middleton argues that the trial
court erred in finding that summary judgment was proper on
assumption-of-the-risk grounds because, he argues, the issue
was not properly before the trial court.  Further, he argues
that South 
Carolina 
caselaw precluded 
a summary judgment based
on the doctrine of assumption of the risk.
Middleton is correct; this court need not reach the
merits 
of 
the 
assumption-of-the-risk 
defense 
because 
the 
issue
was not properly before the trial court.  A motion to alter,
amend, or vacate judgment or a response to such a motion is
not a proper vehicle for presenting a new ground on which to
base a summary judgment.  See generally Rules 56 and 59(e),
Ala. R. Civ. P.  Thus, the merits of the assumption-of-the-
risk defense were never properly before the trial court; we
therefore do not consider this issue.
VI.  Conclusion
The trial court erred in entering a summary judgment for
Caterpillar because Caterpillar failed to meet the necessary
burden of establishing the applicability of the doctrine of
judicial estoppel as set forth in New Hampshire v. Maine, as
1050939
29
adopted by Ex parte First Alabama Bank, and because the issue
of the assumption-of-the-risk defense was never properly
before the trial court.  Therefore, the summary judgment in
favor of Caterpillar is reversed, and the case is remanded for
proceedings consistent with this opinion.
REVERSED AND REMANDED.
See, Woodall, Stuart, Bolin, and Murdock, JJ., concur.
Smith and Parker, JJ., concur in the result.
1050939
30
PARKER, Justice (concurring in the result).
I agree with the majority's conclusion that the trial
court's summary judgment in favor of Caterpillar should be
reversed and the case remanded because the trial court erred
in holding that Middleton was judicially estopped from
pursuing his action against Caterpillar.  I, however, believe
that the proper standard when reviewing a trial court's
application of the doctrine of judicial estoppel should be an
exceeding-discretion standard, rather than a de novo standard,
even when the issue of judicial estoppel is raised on appeal
from a summary judgment. 
The respective inquiries involved in a ruling based on
judicial estoppel, on the one hand, and a summary judgment, on
the other, are quite different and therefore invoke different
standards of review.  Judicial estoppel requires that the
trial court make factual determinations.  Judicial estoppel
asks whether a party has given factually inconsistent
testimony 
under 
oath 
in 
a 
prior 
proceeding 
and 
has
intentionally misled the court to gain an unfair advantage.
"Whether [a plaintiff] knew or should have known about causes
of action that should be disclosed as assets in bankruptcy
1050939
31
proceedings are questions of fact to be decided by the trier
of fact."  Nollie v. Jim Wilson & Assocs., Inc., 781 So. 2d
962, 968 (Ala. Civ. App. 2000).  
Although the application of judicial estoppel turns
primarily on the particular facts, not legal issues, a trial
court is precluded from making factual determinations in
deciding whether to enter a summary judgment.  A summary
judgment that is premised on factual findings by the trial
court is defective, even in a nonjury case.  It is not within
the trial court's prerogative to find facts on a motion for a
summary judgment.  Ufford v. American Indem. Co., 631 So. 2d
959 (Ala. 1994).  The grant or denial of a motion for summary
judgment raises a legal question and, therefore, a de novo
standard of review applies. 
Judicial estoppel is an equitable doctrine invoked by a
court at its discretion.  New Hampshire v. Maine, 532 U.S.
742, 750 (2001).  The trial court determines whether the party
against whom judicial estoppel is being asserted has
intentionally attempted to mislead the court to gain an unfair
advantage, and it does not apply the doctrine of judicial
estoppel when the party's inconsistent position in the
1050939
32
subsequent litigation resulted from mere inadvertence or
mistake.  John S. Clark Co. v. Faggert & Frieden, P.C., 65
F.3d 26, 29 (4th Cir. 1995).  Even when a debtor has failed to
amend her bankruptcy schedules to disclose an action of which
she learned before the confirmation of her debt-adjustment
plan, the district court has held that the appropriate remedy
is not an order dismissing the action brought by the debtor on
judicial-estoppel grounds, but an order barring the  debtor
from personally benefiting from the pursuit of those claims.
The court, therefore, required the debtor to recover all
damages in the adversary action and to distribute all damages
recovered among the creditors of her estate.  Autos, Inc. v.
Gowin, 330 B.R. 788 (D.Kan. 2005).  In determining whether to
apply the doctrine of judicial estoppel, the trial court
exercises its broad discretion, considering all the relevant
facts and circumstances of each case and weighing equity
matters involved in a specific case.
Such discretion in the trial court should be respected by
an appellate court, because the trial court is in a better
position to determine whether a litigant is "playing 'fast and
loose' with the courts."  New Hampshire v. Maine, 532 U.S. at
1050939
33
750.  Trial court judges have intimate knowledge of a given
case and can observe the parties and lawyers and their
litigation strategies.  Therefore, the United States Supreme
Court has noted that trial courts are more adept than are
appellate courts at fact-finding, supervising litigation, and
applying fact-dependent legal standards.  Salve Regina Coll.
v. Russell, 499 U.S. 225, 233 (1991). 
A survey of opinions from other jurisdictions indicates
that 
Alabama 
would 
join 
the 
mainstream 
of 
American
jurisprudence in adopting an exceeding-discretion standard in
matters involving judicial estoppel.  See, e.g., Alternative
Sys. Concepts, Inc. v. Synopsys, Inc., 374 F.3d 23, 31-32 (1st
Cir. 2004); Jaffe v. Accredited Sur. & Cas. Co., 294 F.3d 585,
595 n. 7 (4th Cir. 2002); Coastal Plains, Inc. v. Mims, 179 F.
3d 197, 205 (5th Cir. 1999); Talavera v. School Bd. of Palm
Beach County, 129 F.3d  1214, 1216 (11th Cir. 1997); Blanton
v. Inco Alloys Int'l, Inc., 108 F.3d 104, 108 (6th Cir. 1997);
McNemar v. Disney Store, Inc., 91 F.3d 610, 616-17 (3d Cir.
1996); United States v. Garcia, 37 F.3d 1359, 1367 (9th Cir.
1994); In re Cassidy, 892 F.2d 637, 642 (7th Cir. 1990);
Evenson v. Athena Assurance Co., 111 Wash. App. 1033 (2002)
1050939
34
(unpublished opinion); Bidani v. Lewis, 285 Ill. App. 3d 545,
549-50, 675 N.E.2d 647, 650-51, 221 Ill. Dec. 452, 455-56
(1996); Ceres Terminals, Inc. v. Chicago City Bank & Trust
Co., 259 Ill. App. 3d 836, 851-52, 635 N.E.2d 485, 496, 200
Ill. Dec. 146, 157 (1994); Hamilton v. State Farm Fire & Cas.
Co., 270 F.3d 778, 780 (9th Cir. 2001); Ahrens v. Perot Sys.
Corp., 205 F.3d 831, 833 (5th Cir. 2000); Meronk v. Arter &
Hatton, LLP (In re Meronk), 249 B.R. 208, 212 (9th Cir. B.A.P.
2000); Anjelino v. New York Times Co., 200 F.3d 73, 100 (3d
Cir. 1999); and Data Gen. Corp. v. Johnson, 78 F.3d 1556, 1565
(Fed. Cir. 1996).  The California state courts apply a
"substantial evidence" test to a trial court's ruling based on
judicial estoppel, see International Engine Parts, Inc. v.
Feddersen & Co. 64 Cal. App. 4th 345, 354, 75 Cal. Rptr. 2d
178 (1998); however, there is no meaningful difference between
a substantial-evidence test and an exceeding-discretion test
in this context.  See Pack v. Kings County Human Servs.
Agency, 89 Cal. App. 4th 821, 838, 107 Cal. Rptr. 2d 594
(2001) 
(explaining 
the 
difference 
between 
substantial 
evidence
and abuse of discretion in the California courts).
1050939
35
Many, though not all, courts in other jurisdictions,
have ruled that the fact that the case arises in the summary-
judgment context does not affect the decision to review the
trial court's determination to see whether the trial court
exceeded its discretion.  For example, in Whitacre Partnership
v. Biosignia, Inc., 358 N.C. 1, 591 S.E.2d 870 (2004), the
Supreme Court of North Carolina held that the exceeding-
discretion standard of review should apply, even when judicial
estoppel is the basis for a summary judgment:
"We note that a trial court's application of
judicial 
estoppel 
is 
reviewed 
for 
abuse 
of
discretion.  See New Hampshire[v. Maine], 532 U.S.
[742] at 750, 121 S.Ct. [1808] at 1814-15, 149 L.Ed.
2d [968] at 977-78 [(2001)] ('[J]udicial estoppel is
an equitable doctrine invoked by a court at its
discretion.'); see also Hamilton v. State Farm Fire
& Cas. Co., 270 F.3d 778, 782 (9th Cir. 2001);
Taylor v. Food World, 133 F.3d 1419, 1422 (11th Cir.
1998); McNemar v. Disney Store, 91 F.3d 610, 616-17
(3d Cir. 1996), cert. denied, 519 U.S. 1115, 117
S.Ct. 958, 136 L.Ed. 2d 845 (1997), overruled on
other grounds by Cleveland v. Policy Mgmt. Sys.
Corp., 526 U.S. 795, 119 S.Ct. 1597, 143 L.Ed. 2d
966 (1999); State v. Taylor, 128 N.C. App. [394] at
400, 496 S.E.2d [811] at 815-15 [(1998)].  Moreover,
as the Court of Appeals properly recognized, '[w]hen
an action pled is barred by a legal impediment, such
as judicial estoppel, there are no triable issues of
fact as a matter of law.' Whitacre P'ship, 153 N.C.
App. [608] at 614, 574 S.E.2d [475] at 479 [(2002)]
(citing Andrews v. Davenport, 84 N.C. App. 675, 677,
353 S.E.2d 671, 673 (1987), disc. review denied, 319
N.C. 671, 356 S.E.2d 774 (1987)).  Thus, when a
1050939
36
trial court has acted within its discretion in
applying judicial estoppel, leaving no triable
issues of material fact, summary judgment is
appropriate.  See Montrose [Med. Group Participating
Sav. Plan v. Bulger], 243 F.3d [773] at 779 [(2001)]
('Summary judgment is appropriate when operation of
judicial estoppel renders a litigant unable to state
a prima facie case.'); West Delta Oil Co. v. Hof,
[(No. CIV. A 01-1163, August 21, 2002)] (E.D. La.
2002) [(not published in F. Supp. 2d)] (application
of judicial estoppel in context of summary judgment
motion is reviewed for abuse of discretion); cf.
Gen. Elec. Co. v. Joiner, 522 U.S. 136, 142-43, 118
S.Ct. 512, 517, 139 L.Ed. 2d 508, 516 (1997)
(rejecting argument that ruling of admissibility of
expert testimony should be reviewed de novo simply
because it arose in the 'outcome determinative'
context of a summary judgment motion, and instead
reviewing for abuse of discretion)."
358 N.C. at 38-39, 591 S.E.2d 870 at 894-95.
     I therefore believe that this Court should employ an
exceeding-discretion 
standard 
when 
reviewing 
the 
trial 
court's
application of judicial estoppel.  Consequently, I differ on
the standard of review applied in the majority opinion, but I
concur fully in the result reached.