Order Form (01/2005)

United States District Court, Northern District of Illinois

Name of Assigned Judge

or Magistrate Judge

Elaine E. Bucklo Sitting Judge if Other

than Assigned Judge

CASE NUMBER 04 C 1051 DATE 8/9/2011

CASE

TITLE

Bullock, et al. v. Dart, et al.

DOCKET ENTRY TEXT

Plaintiff Jack Reid’s motion for reconsideration [483] is granted to the

extent discussed in this minute order. Accordingly, I vacate my earlier

ruling granting defendant’s motion to bar, and I leave the matter to be

decided in the course of the proceedings currently pending before the

bankruptcy court.

O[ For further details see text below.] Docketing to mail notices.

STATEMENT

In April 2011, defendants moved to bar plaintiff Jack Reid (“Reid”)

from receiving an incentive payment of $25,000 for his role as one of the

class representatives in the instant lawsuit. Defendants argued that Reid

was judicially estopped from receiving the payment because he failed to

include the claim during earlier bankruptcy proceedings that ultimately

resulted in a discharge of his debts. In an order dated May 23, 2011, I

granted the motion. 

 Reid has moved for reconsideration of the order. In support of the

motion, he has submitted sworn testimony that lend credence to his earlier

unsupported statements that his failure to disclose the claim was

inadvertent. Among other things, Reid avers (and defendants do not contest)

that although he was involved in the initial stages of the litigation, he

has had essentially no involvement with the suit since 2005. Reid also

testifies that the period in question was one of significant hardship. As

a result, he had no permanent address during this time, and at some points

was living out of his van. Given the amount of time that had passed, and

given the disarray into which his life had fallen during these years, his

claim that he had forgotten about his claim in this suit at the time that

he filed for bankruptcy is credible. 

 To be sure, courts have often applied judicial estoppel even where a

plaintiff’s failure to disclose a claim appears to have been entirely

innocent. See, e.g., Becker v. Verizon North, Inc., No. 06-2956, 2007 WL

1224039, at *1 (7th Cir. Apr. 25, 2007)(citing Cannon-Stokes v. Potter, 453

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Case: 1:04-cv-01051 Document #: 492 Filed: 08/09/11 Page 1 of 2 PageID #:9663
STATEMENT

F.3d 446, 448 (7th Cir. 2006)); Hawkins v. Securitas Sec. Services, No. 09

C 3633, 2011 WL 2837269, at *1 (N.D. Ill. July 18, 2011). Nevertheless,

“[j]udicial estoppel is an equitable concept” to be “invoked by a court at

its discretion.” In re Airadigm Communications, Inc., 616 F.3d 642, 661 (7th

Cir. 2010) (quotation marks omitted). While courts are not required to

consider a plaintiff’s subjective intentions and motivations in deciding

whether to apply judicial estoppel, neither are they prohibited from doing

so. See, e.g., New Hampshire v. Maine, 532 U.S. 742, 753 (2001) (“We do not

question that it may be appropriate to resist application of judicial

estoppel when a party’s prior position was based on inadvertence or

mistake.”) (quotation marks omitted). Under the circumstances present here,

I vacate the May 23 order granting defendants’ motion to bar. 

 However, in reviewing the instant motion, I have detected a problem

that neither party raised in their briefing on the motion to bar – namely,

that Reid no longer appears to be the proper party in interest here. This

is because the claim at issue existed prior to Reid’s bankruptcy. As such,

the claim is part of Reid’s estate, and the proper party in interest is the

estate’s trustee. See, e.g., Biesek v. Soo Line R. Co., 440 F.3d 410, 413

(7th Cir. 2006). If the trustee has abandoned the claim, Reid might have

standing to assert it; but there is no evidence of abandonment by the

trustee. 

 Whatever the ultimate facts on this point turn out to be, the parties’

failure to address this issue makes it impossible for me to meaningfully

adjudicate the dispute over the incentive payment. Since Reid has reopened

proceedings in the bankruptcy court, and since resolution of the dispute

turns on questions within the bankruptcy court’s purview, the dispute over

the incentive payment is most sensibly resolved in that forum. 

 Indeed, even if Reid were the proper party in interest, the dispute

over the incentive payment still would most appropriately be settled in the

bankruptcy court. As Reid points out, the parties’ settlement agreement

expressly provides that the claims of class members who have been declared

bankrupt are to be handled in accordance with federal bankruptcy laws. See

Settlement Agreement ¶ 21 (“Where a Class Member has been declared bankrupt,

or is the subject of an open and ongoing bankruptcy proceeding, and a

payment is due to the Class Member, upon receipt of proper notification and

documentation, the settlement payment shall be made to such Class Member in

accordance with applicable United States Bankruptcy laws.”). For this

reason, too, the bankruptcy court is the appropriate forum for addressing

the question of Reid’s entitlement to the incentive payment.

 Accordingly, I vacate my earlier ruling granting defendant’s motion to

bar, and I leave the matter to be decided in the course of the proceedings

currently pending before the bankruptcy court.

 

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