UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS

EASTERN DIVISION

PETER METROU, )

)

Plaintiff, ) No. 11 C 9187

) 

v. ) Judge George M. Marovich

) 

M.A. MORTENSON COMPANY ) 

d/b/a MORTENSON CONSTRUCTION, )

and SCHUFF STEEL CO., )

)

Defendants. )

MEMORANDUM OPINION AND ORDER

Plaintiff Peter N. Metrou (“Metrou” or the “Trustee”), as trustee of the bankruptcy estate

of David Matichak (“Matichak”), has claims against defendants M.A. Mortenson Company

(d/b/a Mortenson Construction) (“Mortenson”) and Schuff Steel Co. (“Schuff”). Originally,

Matichak was the plaintiff, but the Court substituted Metrou as plaintiff after: (1) defendants

filed a motion for summary judgment in which they argued, among other things, that Matichak

lacked standing; and (2) the Trustee informed the Court that he planned to pursue the case on

behalf of the creditors. Defendants have now asked the Court to limit their liability in this case

and to rule that Matichak is judicially estopped from receiving any proceeds from this case. For

the reasons set forth below, the Court grants in part and denies in part defendants’ motions.

I. Background

The following facts are undisputed, unless otherwise noted.

In his second-amended complaint against defendants Mortenson and Schuff, Matichak

alleged that he had been injured on August 11, 2009 when he was struck by a beam at a

construction site. 

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 1 of 8 PageID #:1389
On August 26, 2010, Matichak retained the law firm Parente & Norem to represent him. 

On or about September 8, 2010, Parente & Norem filed with the Illinois Workers’ Compensation

Commission a workers’ compensation claim on Matichak’s behalf. Also on September 8, 2010,

Parente & Norem sent Mortenson Construction a notice of attorney’s lien, which stated:

You are hereby notified that, DAVID MATICHAK, has placed in my hands as

his/her attorney, for suit or collection, a claim demand or cause of action against

you growing out of the accident which happened on or about August 11, 2009,

and has contracted with and agreed to pay me as a fee for my services in the

matter a sum of money equal to 33 1/3% of whatever amount may be recovered

therefrom by settlement, suit or otherwise and that I claim a lien upon said claim,

demand or cause of action for such fee.

On September 14, 2010, Matichak and his then-wife filed a Chapter 7 bankruptcy petition

in the United States Bankruptcy Court for the Northern District of Illinois. In connection with

his bankruptcy, Matichak was represented by Scott L. Bedford. In the bankruptcy petition,

Matichak did not disclose the existence of the claims at issue in this case. Matichak did,

however, disclose his workers’ compensation claim, which he valued at $7,500.00. On

December 21, 2010, the bankruptcy court granted the Matichaks an order of discharge, and on

December 27, 2010, the bankruptcy court closed the petition and discharged the trustee. The

deadline for the trustee and creditors to ask a court to revoke the discharge was December 26,

2011. 11 U.S.C. § 727(e)(1). The next day, on December 27, 2011, Matichak filed this suit,

although his lawyer says the timing was a coincidence. 

The attorneys (Horwitz, Horwitz & Associates) who filed this suit on Matichak’s behalf

were not the attorneys who originally filed Matichak’s workers’ compensation claim and the lien

with Mortenson. Horwitz, Horwitz & Associates replaced Matichak’s original injury attorneys

no later than April 12, 2011, the date on which Horwitz, Horwitz & Associates filed a stipulation

-2-

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 2 of 8 PageID #:1390
with the Illinois Workers’ Compensation Commission to substitute as Matichak’s attorney. A

“couple of months” before Matichak filed his suit in this case, Horwitz, Horwitz & Associates

told Matichak that it intended to file suit against Mortenson. Before that time, the claim was not

“economically viable due to the high cost of litigation.”

Defendants learned of Matichak’s bankruptcy discharge on May 23, 2013, when they

deposed him. At his deposition, Matichak was asked the following questions and gave the

following answers:

Q: In regards to Mortenson, you criticized them for not requiring your tie-on

to be above your head. Did you form this opinion shortly after this

accident, was it six months later? When was it in relationship to time?

A: It was after the accident.

Q: Do you know how long after?

A: Within a day or two.

(Matichak Dep. at p. 202). 

On June 27, 2013, defendant Schuff moved for summary judgment, and on July 10, 2013

Mortenson moved for summary judgment. Each defendant argued that Matichak lacked standing

to pursue the claims in this case and that Matichak was judicially estopped from pursuing his

claims. Within weeks, on July 26, 2013, Matichak moved to reopen his bankruptcy case.

II. Discussion

When the Court denied defendants’ prior motions for summary judgment, the Court

explained:

Defendants are correct that a claimant who failed to schedule his claim in

bankruptcy is judicially estopped from pursuing the claim in federal court. 

-3-

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 3 of 8 PageID #:1391
Cannon-Stokes v. Potter, 453 F.3d 446, 448 (7th Cir. 2006). But, the claim is no

longer Matichak’s; it belongs to the trustee. In a nutshell:

Under § 541 of the Bankruptcy Code, all of a debtor’s property,

including legal claims, become part of the bankruptcy estate at the

time the petition is filed. 11 U.S.C. § 541(a)(1); Cannon-Stokes,

453 F.3d at 448. The trustee may abandon a legal claim, but until

then only the trustee, as the real party in interest, has standing to

sue. Cannon-Stokes, 453 F.3d 448; Biesek, 440 F.3d at 413. 

Moreover, if a legal claim is not scheduled or otherwise

administered by the time the bankruptcy is closed, it forever

remains property of the estate, and the trustee remains the real

party in interest. 11 U.S.C. § 554(d); Parker v. Wendy’s Int’l, Inc.,

365 F.3d 1268, 1272 (11th Cir. 2004).

Matthews v. Potter, 316 Fed.Appx. 518, 2009 WL 741875 at *3 (7th Cir. 2009). 

So, the trustee is the real party in interest. Matichak’s counsel informed

the Court on October 3, 2013 that the trustee wants to pursue the claim and has

hired Matichak’s counsel to do so. Therefore, the caption shall be changed to

reflect that the real party in interest is Peter N. Metrou, as trustee for the

bankruptcy estate of David Matichak. Fed.R.Civ.P. 17(a)(1) (“An action must be

prosecuted in the name of the real party in interest.”)

The defendants also argue that they are entitled to summary judgment on

the grounds of judicial estoppel. The trustee, though, is not judicially estopped

from pursuing the claim. Cannon-Stokes, 453 F.3d at 448 (“the estate in

bankruptcy, not the debtor, owns all pre-bankruptcy claims, and unless the estate

itself engages in contradictory litigation tactics the elements of judicial estoppel

are not satisfied”). Defendants do not argue that the trustee engaged in

contradictory legal tactics. Accordingly, defendants’ motions for summary

judgment are denied.

(Docket entry 140 at 2-3).

Both defendants now ask the Court to hold that Matichak is judicially estopped from

receiving any recovery beyond that which is required to pay the creditors. Defendants also ask

that their liability be limited. Essentially, defendants are asking for reconsideration of their prior

-4-

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 4 of 8 PageID #:1392
motions for summary judgment, although they have labeled their requests as motions for

“summary adjudication.”1

In Cannon-Stokes v. Potter, 453 F.3d 446 (7th Cir. 2006), the Seventh Circuit held that a

debtor who concealed a claim on her bankruptcy petition could not pursue the claim after the

discharge. There, the Seventh Circuit explained:

It is impossible to believe that such a sizeable claim--one central to her daily

activities at work--could have been overlooked when [plaintiff] was filling in the

bankruptcy schedules. And if [plaintiff] were really making an honest attempt to

pay her debts, then as soon as she realized that it had been omitted, she would

have filed amended schedules and moved to reopen the bankruptcy, so that the

creditors could benefit from any recovery.

Cannon-Stokes, 453 F.3d at 449. 

Here, the Court agrees that Matichak is judicially estopped from recovering on the claims

against defendants in this case. It is clear that Matichak failed to schedule the claim when he

filed his bankruptcy petition. Yet, it is also clear that he was aware of the facts supporting the

claim. Within two days after the accident, Matichak had concluded that Mortenson was partially

at fault for his accident. The same day Matichak’s original injury attorney filed a workers’

compensation claim on Matichak’s behalf, the attorney also sent a notice of attorney’s lien to

Mortenson. The notice informed Mortenson that Matichak had a cause of action against

Mortenson arising out of the August 9, 2009 accident and that Matichak had agreed to give his

1

Because defendants’ motions are essentially seeking reconsideration of the Court’s

denial of their earlier motions for summary judgment, the Court considers the statements of fact

they put forth in their original motions for summary judgment and plaintiff’s responses thereto. 

Plaintiff seems to have recognized that these are motions for summary judgment, because

plaintiff filed a statement of facts with its response to these motions. Defendants did not respond

to plaintiff’s statement of facts, so those facts are deemed admitted, pursuant to Local Rule 56.1.

-5-

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 5 of 8 PageID #:1393
attorney 1/3 of any recovery for the claim. So, Matichak was aware of his claim, even if he did

not know until much later that the claim would actually be filed.

Unlike the plaintiff in Cannon-Stokes, Matichak eventually reopened his bankruptcy case

in order to schedule the claims at issue in this case. Matichak did not, however, do so until after

defendants moved for summary judgment on the estoppel issue. This Court agrees with the

courts which have held that plaintiffs are judicially estopped from recovering on a claim when

they fail to reopen their bankruptcy petitions to schedule the claim until after the defendant

moves for summary judgment on the estoppel issue, because to rule otherwise would encourage

debtors to conceal assets. Viette v. Hospitality Staffing, Inc., Case No. 12 C 2327, 2013 WL

2450101 at *3-4 (N.D. Ill. June 5, 2013) (“Allowing amendment now would not be appropriate

because such a ruling would only encourage debtors to conceal assets since they would have an

escape hatch if they are caught.”); Esparza v. Costco Wholesale Corp., Case No. 10 CV 5406,

2011 WL 6820022 at *4 (N.D. Ill. Dec. 28, 2011) (“We agree with these courts that allowing

[plaintiff] to avoid the consequences of her deception by amending her filings only after being

caught would diminish the incentive to provide truthful disclosures to the bankruptcy court, and

we will not take her amendment into consideration.”). The Seventh Circuit seems to agree with

this approach as well. See Spaine v. Community Contacts, Inc., 756 F.3d 542, 543-44 (7th Cir.

2014) (“This appeal presents a recurring issue that can arise when a debtor files for bankruptcy

protection without disclosing a contingent claim, such as an employment discrimination lawsuit,

and later seeks to correct the failure to disclose the claim. . . . The district court granted the

employer’s motion [for summary judgment], finding that the plaintiff had intended to conceal the

claim and tried to correct her failure only after her omission had been caught. If the facts were

-6-

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 6 of 8 PageID #:1394
as described by the district court, we would affirm.”). In Spaine, the Seventh Circuit reversed a

grant of summary judgment, because plaintiff had put forth an affidavit in which she stated that

she had, in fact, told the bankruptcy judge about her claim, which meant the trustee had had the

chance to decide the claim’s value to the creditors. Spaine, 756 F.3d at 547. This case is

distinguishable from Spaine, because Matichak has not put forth any evidence that, before his

discharge, he informed the bankruptcy judge or the trustee about the claims he failed to schedule.

For these reasons, the Court agrees that Matichak is judicially estopped from recovering

on these claims.

Defendants, though, wish to take the matter one step further. Defendants would like the

Court to rule that their liability in this case is limited to $2,696.12, the most, according to

defendants, that the creditors are owed. The Court will not grant defendants such a windfall. To

begin with, judicial estoppel is not meant to protect defendants; it is meant to protect courts by

raising the cost to parties who take contrary positions in different courts. Furthermore,

“[j]udicial estoppel is an equitable doctrine, and it is not equitable to employ it to injure creditors

who are themselves victims of the debtor’s deceit.” Cannon-Stokes, 453 F.3d at 448. The

Trustee put forth an affidavit in which he stated that he is in the process of providing notice to

creditors of the re-opened bankruptcy and that the period of time allowed for creditors to file a

proof of claim will remain open at his discretion. In other words, it is not clear, as a matter of

law, that the creditors’ recovery will be limited to $2,696.12. Thus, defendants’ motion to limit

their liability to that amount is denied.

III. Conclusion

-7-

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 7 of 8 PageID #:1395
For the reasons set forth above, the Court grants in part and denies in part defendants’

motions [145, 147] for summary judgment. 

ENTER:

 

George M. Marovich

United States District Judge

DATED: September 22, 2014

-8-

Case: 1:11-cv-09187 Document #: 161 Filed: 09/22/14 Page 8 of 8 PageID #:1396