Javery v. Lucent Technologies, Inc. Long Term Disability Plan for Management

Summarized by Faisal Delawalla , Jones Day
12 years 3 weeks ago

Citation:

Javery v. Lucent Techs., Inc. Long Term Disability Plan for Mgmt., No. 12-3834 (6th Cir. Feb. 3, 2014)

Tag(s):

Ruling:

The court held that the district court's ruling on the issue of judicial estoppel was proper. The court did not decide the applicable standard of review, because the district court's ruling was proper under all of the potential standards--de novo and abuse of discretion. The court concluded that "any omission [in disclosure by the plaintiff-debtor] was almost certainly due to carelessness or inadvertent error as opposed to intentional, strategic concealment or impermissible gamesmanship." The plaintiff had no motive to conceal the claim in his bankruptcy, since proceeds from disability insurance would have been completely exempt from his bankruptcy estate under applicable law.

Procedural context:

Appeal to the United States Court of Appeals for the Sixth Circuit, from the United States District Court for the Southern District of Ohio at Columbus.

Facts:

The plaintiff participated in his employer's ERISA-qualified welfare benefit plan, which offered long-term disability benefits. In 2005, the plaintiff submitted an application for long-term disability benefits to the plan administrator. In 2006, the plan administrator denied the plaintiff's application. In 2007, the plaintiff filed a Chapter 13 bankruptcy petition. In his bankruptcy case, the plaintiff did not disclose any claim against the plan. Two years later, in 2009, the plaintiff filed a complaint in federal court against the plan alleging wrongful denial of benefits in violation of ERISA. The plan argued that the plaintiff should be judicially estopped from pursuing the lawsuit, because the plaintiff failed to disclose the claim in his bankruptcy. In response, the plaintiff asserted that the lack of disclosure was inadvertent, not in bad faith, and lacked any motive to conceal. In support of his argument, the plaintiff submitted affidavits and "other evidence indicating he was not responsible for, and entirely unaware of, any omission." This evidence showed that the plaintiff disclosed the claim to his bankruptcy attorney in writing. After reviewing the parties' arguments, the district court declined to apply judicial estoppel against the plaintiff, because "[t]here [was] simply no basis to infer intentional concealment." For other reasons, the district court granted the defendant's motion for judgment on the administrative record. The plaintiff appealed to the circuit court. [This summary omits parts of the opinion that are not relevant to bankruptcy law.]

Judge(s):

Cole, Clay and Bertelsman.

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