Dunn v. Advanced Medical Specialties, Inc., et al. (11th Cir.)

Summarized by David Bury , Stone & Baxter, LLP
12 years 3 weeks ago

Citation:

Dunn v. Advanced Medical Specialties, Inc., et al., Nos. 12-11152 and 12-15989 (11th Cir. Feb. 10, 2014)

Tag(s):

Ruling:

The Eleventh Circuit affirmed a District Court’s orders (i) granting summary judgment in a Chapter 7 Debtor’s discrimination suit and (ii) denying a Chapter 7 Trustee’s motion to vacate the judgment. On the Debtor’s appeal, the Court affirmed, holding that judicial estoppel precluded the Debtor from pursuing the suit because the Debtor had knowledge of the suit and a motive to conceal it, but failed to disclose it on her bankruptcy schedules, despite having multiple opportunities to do so. On the Trustee’s appeal, the Court affirmed, holding that the Trustee received adequate notice of the suit, but elected to “sleep on her rights,” rather than object to the Debtor’s continued prosecution of the suit. The Court also explained that the Trustee had confused jurisdictional standing under Article III of the Constitution with the principle of real party-in-interest, with only the former impacting jurisdiction.

Procedural context:

A Chapter 7 Debtor appealed a District Court’s entry of summary judgment in her federal discrimination suit, which judgment was based on judicial estoppel. The Chapter 7 Trustee appealed the District Court’s denial of the Trustee’s motion to vacate the judgment, which motion was based on a real party-in-interest theory. The appeals were consolidated. The Eleventh Circuit reviewed the summary judgment order for abuse of discretion (because it was based on judicial estoppel) and the order denying the motion to vacate, de novo.

Facts:

Ms. Tronge-Knoepffler ("Debtor") worked as a recruiter for Advanced Medical Specialties, Inc. ("AMS") from 2006 until her termination in 2008. She sued AMS in federal court, alleging that AMS had discriminated against her based on her disability and sex. She sought compensatory damages, back and front pay, unpaid benefits, and the like. Two months later, she and her husband filed a Chapter 7 bankruptcy in Florida. She did not disclose the discrimination suit as a contingent asset. The Debtor and her husband received their bankruptcy discharge. Subsequently, AMS sought summary judgment, arguing that judicial estoppel precluded the discrimination suit because the Debtor had a motive to conceal it and intentionally failed to disclose it in the bankruptcy. The District Court granted summary judgment. Dunn, the Chapter 7 Trustee, moved to vacate the judgment under F.R.C.P. 60(b)(4). She argued that she became the real party-in-interest upon the Chapter 7 filing, such that the judgment was void for lack of subject matter jurisdiction. The District Court denied the Trustee’s motion.

Judge(s):

Marcus and Dubina, Circuit Judges; Hodges, District Judge

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