RENDERED: FEBRUARY 4, 2022; 10:00 A.M.

NOT TO BE PUBLISHED

Commonwealth of Kentucky

Court of Appeals

NO. 2020-CA-0922-MR

ELIZABETH HARAC, INDIVIDUALLY APPELLANT

APPEAL FROM JEFFERSON CIRCUIT COURT

v. HONORABLE ANNIE O’CONNELL, JUDGE

ACTION NO. 14-CI-006247

NORTON HOSPITALS, INC. D/B/A NORTON 

HOSPITAL; JORGE L. RODRIGUEZ, M.D.; 

UNIVERSITY SURGICAL ASSOCIATES, P.S.C.;

UNIVERSITY OF LOUISVILLE PHYSICIANS, INC.; 

COMMUNITY MEDICAL ASSOCIATES, INC. D/B/A 

NORTON MEDICAL GROUP D/B/A NORTON SURGICAL 

SPECIALISTS; KATHRYN L. PRY, ESQ., AS TRUSTEE 

FOR THE BANKRUPTCY ESTATE OF ELIZABETH

HARAC; AND UNIVERSITY OF LOUISVILLE 

SCHOOL OF MEDICINE APPELLEES

OPINION

REVERSING AND REMANDING

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BEFORE: GOODWINE, K. THOMPSON, AND L. THOMPSON, JUDGES.
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THOMPSON, L., JUDGE: Elizabeth Harac appeals from orders of the Jefferson 

Circuit Court which granted summary judgment in favor of Norton Hospitals, Inc.

(hereinafter referred to as Norton); Jorge Rodriguez, M.D.; and University Surgical 

Associates, P.S.C. in a medical malpractice action. Appellant argues the trial court 

erred in granting summary judgment on the basis of judicial estoppel. We believe 

that summary judgment is inappropriate at this time because Appellant has raised 

genuine issues of material fact that need to be determined.

FACTS AND PROCEDURAL HISTORY

Appellant underwent a lap band surgical procedure on December 20, 

2013. The procedure was performed by Dr. Rodriguez at Norton Hospital. During 

the procedure, Appellant alleges Dr. Rodriguez perforated her bowel, but failed to 

realize this mistake. Appellant felt unwell after her surgery, but she was eventually 

discharged on December 21, 2013. The next day, she returned to the hospital with 

issues that resembled possible complications from the surgery. She was examined, 

but eventually went into cardiac arrest. She went nearly nine minutes without a 

heartbeat but was revived. Exploratory surgery revealed a gastric leak. Appellant 

remained hospitalized until the end of March of 2014. According to her deposition 

testimony, she recalls very little of her time in the hospital and has been diagnosed 
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with an anoxic brain injury1 with permanent neurocognitive brain deficits and 

speech issues.

During Appellant’s hospitalization, Appellant’s husband, Ian Harac, 

contacted an attorney to begin bankruptcy proceedings for debts unrelated to the 

hospitalization. Those debts totaled around $40,000. In addition, Mr. Harac began 

speaking to attorneys about a possible medical malpractice suit. In March of 2014, 

before Appellant was released from the hospital, Ronald Wilt, Esq. was hired for 

the civil claims and began investigating the potential cause of action. In 

September of 2014, a petition for Chapter 7 bankruptcy was filed. None of the 

documents filed with the bankruptcy petition listed a potential medical malpractice 

claim as an asset of the Haracs.

On November 5, 2014, during a meeting of the creditors, the 

bankruptcy trustee asked the Haracs, under oath, if they were parties to a lawsuit or 

expected to be parties to a lawsuit where they could recover money or property. 

They both responded in the negative. On November 20, 2014, Mr. Wilt informed 

the Haracs that he believed they had a viable medical malpractice case and that he 

would file the cause of action. On December 5, 2014, the underlying medical 

malpractice lawsuit was filed. In January of 2015, the debts of the Haracs were 

discharged by the bankruptcy court. At no time between the filing of the medical 

 

1 A brain injury caused by lack of oxygen.
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malpractice lawsuit and the discharge of the debts did the Haracs inform the 

bankruptcy court or trustee about the medical malpractice lawsuit being filed.

On October 4, 2016, during Appellant’s deposition, counsel for 

Norton asked Appellant if she had ever filed for bankruptcy. She replied in the 

affirmative. On November 16, 2016, Norton filed a motion for summary judgment 

arguing that Appellant should be judicially estopped from pursuing her malpractice 

action because she did not inform the bankruptcy court of the lawsuit. On January 

3, 2017, Appellant moved to reopen her bankruptcy action in order to list the 

lawsuit as an asset. The bankruptcy court granted the motion to reopen. 

On July 25, 2017, oral argument was had on the motion for summary 

judgment. On July 31, 2017, the trial court granted Norton’s motion. The trial 

court held that because Appellant had made a sworn statement before the 

bankruptcy trustee that she was not a party to any potential lawsuits, judicial 

estoppel was appropriate. The trial court also held that the bankruptcy trustee 

should be added to the cause of action and could pursue the medical malpractice 

action on behalf of the creditors. The court held that any amount won above that 

needed to satisfy Appellant’s creditors would then be returned to Appellees. Soon 

after this order was entered, Dr. Rodriguez and University Surgical Associates 

moved to join in Norton’s summary judgment. That motion was granted, and Dr. 
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Rodriguez and University Surgical Associates were granted summary judgment 

based on judicial estoppel.

Appellant then sought to remove this case to the bankruptcy court. 

Appellant believed the bankruptcy court would be the more appropriate venue to 

decide the judicial estoppel issue. The attempt to do this failed. Appellant then 

moved for a trial date. Norton objected and moved to make the summary judgment 

order final and appealable. On June 24, 2020, the Jefferson Circuit Court entered 

an order making the summary judgment order final and appealable. This appeal 

followed.

ANALYSIS

Appellant’s first argument on appeal is that the judicial estoppel issue 

should be heard by the bankruptcy court. We disagree. Non-bankruptcy courts 

routinely deal with this issue and the Jefferson Circuit Court was the appropriate 

venue. See Mefford v. Norton Hosps., Inc., 507 S.W.3d 580 (Ky. App. 2016); 

Stephenson v. Malloy, 700 F.3d 265 (6th Cir. 2012); White v. Wyndham Vacation

Ownership, Inc., 617 F.3d 472 (6th Cir. 2010); Slater v. United States Steel

Corporation, 871 F.3d 1174 (11th Cir. 2017); Ledesma v. AT & T Corporation, 

No. 2016-CA-000695-MR, 2018 WL 480764 (Ky. App. Jan. 19, 2018).

Appellant’s next argument on appeal is that the trial court erred in 

granting summary judgment because there are still genuine issues of material fact 
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regarding judicial estoppel. We will first set forth the summary judgment standard 

of review and then we will discuss the general tenets of judicial estoppel.

The standard of review on appeal of a summary 

judgment is whether the trial court correctly found that 

there were no genuine issues as to any material fact and 

that the moving party was entitled to judgment as a 

matter of law. . . . “The record must be viewed in a light 

most favorable to the party opposing the motion for 

summary judgment and all doubts are to be resolved in 

his favor.” Summary “judgment is only proper where the 

movant shows that the adverse party could not prevail 

under any circumstances.” Consequently, summary 

judgment must be granted “[o]nly when it appears 

impossible for the nonmoving party to produce evidence 

at trial warranting a judgment in his favor[.]”

Scifres v. Kraft, 916 S.W.2d 779, 781 (Ky. App. 1996) (citations omitted). 

“Because summary judgment involves only legal questions and the existence of 

any disputed material issues of fact, an appellate court need not defer to the trial 

court’s decision and will review the issue de novo.” Lewis v. B & R Corporation, 

56 S.W.3d 432, 436 (Ky. App. 2001).

The doctrine of judicial estoppel evolved as an 

equitable principle intended to protect the integrity of the 

judicial process by prohibiting a party from taking 

inconsistent positions in judicial proceedings. Colston

Investment Co. v. Home Supply Co., 74 S.W.3d 759, 763 

(Ky. App. 2001). However, its consequences are harsh 

and may bind a party to a position without regard to the 

“truth-seeking function of the court.” Eubanks v. CBSK

Financial Group Inc., 385 F.3d 894, 897 (6th Cir. 2004). 

Consequently, it should be cautiously applied and only 

when the integrity of the judicial process will be 

protected. Id.
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Generally, several factors are considered when 

determining whether to apply the doctrine: “(1) whether 

the party’s later position is clearly inconsistent with its 

earlier position; (2) whether the party succeeded in 

persuading a court to accept the earlier position; and (3) 

whether the party seeking to assert an inconsistent 

position would derive an unfair advantage or impose an 

unfair detriment on the opposing party if not estopped.”

Hisle v. Lexington-Fayette Urban Cty. Gov’t, 258 

S.W.3d 422, 434-35 (Ky. App. 2008). These same 

factors have been applied on a modified basis in the 

bankruptcy context where a debtor fails to disclose an 

asset either in the original bankruptcy petition or by 

subsequent amendment.

Quoting Teledyne Indus. v. N.L.R.B., 911 F.2d 

1214, 1218 (6th Cir. 1990), Browning v. Levy, 283 F.3d 

761, 775-76 (6th Cir. 2002), stated the rule: A debtor 

may be precluded “from (1) asserting a position that is 

contrary to one that the party has asserted under oath in a 

prior proceeding, where (2) the prior court adopted the 

contrary position ‘either as a preliminary matter or as part 

of a final disposition.’” The Court in Browning

emphasized that “judicial estoppel is inappropriate in 

cases of conduct amounting to nothing more than mistake 

or inadvertence.” Id. at 776. Two circumstances in 

which a debtor’s failure to disclose might be deemed 

inadvertent are “where the debtor lacks knowledge of the 

factual basis of the undisclosed claims,” and the other 

where “the debtor has no motive for concealment.” Id.

Mefford, 507 S.W.3d at 584-85. Additionally, the case of White, 617 F.3d 480, 

added a bad faith element when determining whether judicial estoppel is 

appropriate. This bad faith element was cited with approval by this Court in 

Ledesma, 2018 WL 480764. In Ledesma, this Court stated that
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the absence of bad faith prevents the application of

judicial estoppel. White, 617 F.3d at 480; Stephenson v.

Malloy, 700 F.3d 265, 268 (6th Cir. 2012) (“White added

a bad-faith inquiry to the inadvertence prong of the 

judicial-estoppel test[.]”). A debtor can demonstrate the 

lack of bad faith by “showing her attempts to correct

her initial omission.” Id. Thus, “even if the debtor has 

knowledge of a potential cause of action and a motive to 

conceal it, if the plaintiff does not actually conceal it and 

instead takes affirmative steps to fully inform the trustee 

and the bankruptcy court of the action, it is highly 

unlikely that the omission in the bankruptcy petition was 

intentional.” Lewis [v. Weyerhaeuser Co., 141 Fed. 

Appx. 420, 436 (6th Cir. 2005)]. “Furthermore, since

judicial estoppel seeks to prevent parties from

abusing the judicial process through cynical

gamesmanship, the timing of [the debtor’s] effort is

also significant.” White, 617 F.3d at 480.

Id. at *5 (emphasis in original).

Moreover, bad faith is not simply bad judgment or 

negligence. “[I]t implies the conscious doing of a wrong 

because of dishonest purpose or moral obliquity; . . . it 

contemplates a state of mind affirmatively operating with 

furtive design or ill will.” U.S. v. True, 250 F.3d 410, 

423 (6th Cir. 2001).

Because bad faith necessarily operates to benefit 

the actor, whether there was evidence of a ‘“motive or 

intention’ to conceal the potential claim [is] critical to a 

finding of bad faith[.]” White, 617 F.3d at 477.

Mefford, 507 S.W.3d at 588. All of the above-mentioned factors are not

“inflexible prerequisites or an exhaustive formula for determining the applicability 

of judicial estoppel. Additional considerations may inform the doctrine’s 
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application in specific factual contexts.” New Hampshire v. Maine, 532 U.S. 742, 

751, 121 S. Ct. 1808, 1815, 149 L. Ed. 2d 968 (2001).

To reiterate, the primary factors to consider when determining 

whether to apply the judicial estoppel doctrine in the bankruptcy context are as 

follows: (1) whether a party’s later position is inconsistent with an earlier position; 

(2) whether the party was successful in persuading a court to accept the earlier 

position; and (3) this conduct was not simply due to mistake or inadvertence. 

Mefford, 507 S.W.3d at 584-85. Courts should also consider whether there was an 

element of bad faith involved when examining the third factor. White, 617 F.3d at 

480. 

In the case at hand, we agree with Appellees that the first two factors 

have been met. Appellant did not inform the bankruptcy court about her intention 

to file the medical malpractice lawsuit even though it was filed before the 

bankruptcy case was completed. These are inconsistent positions. In addition, she 

successfully persuaded the bankruptcy court that she had no assets, even though 

contingent lawsuits should be included as an asset in bankruptcy proceedings, id. at 

479 n.5, which resulted in her debts being discharged. 

We believe the third factor, however, precludes summary judgment at 

this stage because there are still genuine issues of material fact. The trial court 

held that because Appellant did not inform the bankruptcy court of her potential 
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medical malpractice lawsuit, she should be estopped from moving forward with the 

case. In our judgment, Appellant has raised enough genuine issues of material fact 

to question whether her failure to inform the bankruptcy court was done in bad 

faith. “Because direct evidence of motive is difficult to produce, claims involving 

proof of a defendant’s intent seldom lend themselves to summary disposition[.]” 

Kennedy v. City of Villa Hills, Ky., 635 F.3d 210, 218 (6th Cir. 2011) (internal 

quotation marks and citation omitted). Appellant introduced evidence that while 

she was hospitalized, her husband and mother controlled the bankruptcy process. 

In addition, when the bankruptcy petition was filed, the potential medical 

malpractice claims were still being investigated by counsel and no definitive 

decision had been made about whether a complaint would be filed. The same goes 

for when Appellant was questioned by the bankruptcy trustee. At that time, no 

decision had been made regarding the filing of a medical malpractice claim. Also 

relevant is the fact that evidence in the record indicates that Appellant has suffered 

from memory issues and cognitive decline since her anoxic brain injury. Also, 

during Appellant’s deposition, when trial counsel for Norton asked her if she had 

ever filed for bankruptcy, she honestly informed counsel that she had. Finally, 

bankruptcy courts allow petitioners to reopen cases to administer assets left out of 
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the proceedings the first time. 11 U.S.C.2 § 350(b). This suggests that not all 

omissions are done in bad faith.

In summary, Appellant provided evidence to the court that suggests 

she did not know that a potential medical malpractice claim was subject to the 

bankruptcy proceedings and that she was hardly involved with the bankruptcy 

proceedings due to her injuries. When reviewing an order granting summary 

judgment, we must view the record in a light most favorable to the opposing party, 

which in this case is Appellant. Appellant has raised enough issues regarding her 

mental state and her limited involvement with the bankruptcy proceedings to make 

summary judgment premature at this time. 

We also considered relevant to this Opinion the fact that the trial court 

did not hold an evidentiary hearing where Appellant and her husband could be 

questioned and the court could gauge their credibility. We believe a finding of bad 

faith requires a judgment of a person’s intent. Additionally, the summary 

judgment order being appealed was short and did not include a great amount of 

detail regarding the trial court’s reasoning for finding judicial estoppel was 

applicable. 

Appellant’s final argument is that the trial court erred when it held 

that the bankruptcy trustee could pursue the medical malpractice case and pay the 

 

2 United States Code.
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creditors with any proceeds won. Then, any funds left over would then be returned 

to Appellees so as to preclude Appellant from benefiting from her alleged bad faith 

actions. The trial court cited to Reed v. City of Arlington, 650 F.3d 571 (5th Cir. 

2011), which crafted a similar remedy. We believe this is appropriate. It would 

protect the innocent creditors and punish Appellant if she acted in bad faith.

CONCLUSION

Based on the foregoing, we reverse and remand. Appellant has shown 

that there are still genuine issues of material fact regarding whether she omitted the 

potential medical malpractice lawsuit from her bankruptcy proceedings in bad 

faith.

ALL CONCUR.
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BRIEFS FOR APPELLANT:

T.J. Smith

Louisville, Kentucky

ORAL ARGUMENT FOR

APPELLANT:

Ronald Wilt 

Louisville, Kentucky

BRIEF FOR APPELLEE NORTON 

HOSPITALS, INC.:

Patricia C. Le Meur

Joseph M. Effinger

Ryan D. Nafziger

Louisville, Kentucky

ORAL ARGUMENT FOR 

APPELLEE NORTON HOSPITALS, 

INC.:

Joseph M. Effinger

Louisville, Kentucky 

BRIEF FOR APPELLEES JORGE L. 

RODRIGUEZ, M.D. AND 

UNIVERSITY SURGICAL 

ASSOCIATES, P.S.C.:

Beth H. McMasters

Ashley J. Butler

Amy L. Cooper

Louisville, Kentucky

ORAL ARGUMENT FOR 

APPELLEES JORGE L. 

RODRIGUEZ, M.D. AND 

UNIVERSITY SURGICAL 

ASSOCIATES, P.S.C.:

Ashley J. Butler

Louisville, Kentucky