Wells Fargo Bank, N.A. v. Oparaji (In re Oparaji)

Summarized by John Jones , J. R. Jones Law PLLC
13 years 4 months ago

Citation:

Case No. 11-20871 (5th Cir. October 5, 2012)

Tag(s):

Ruling:

REVERSED and REMANDED Amended Order of United States District Court for the Southern District of Texas granting Debtor's motion for summary judgment on the theory of judicial estoppel and holding that judicial estoppel was not warranted. Judicial estoppel is designed to protect the integrity of the judicial system and not the litigants. Because judicial integrity was not threatened by allowing Wells Fargo to pursue its increased proof of claim in the second bankruptcy, the District Court abused its discretion in determining that judicial estoppel was appropriately applied.

Procedural context:

Debtor filed two bankruptcies. In the first bankruptcy, Wells Fargo filed multiple proofs of claim that included some but not all of the post-petition arrearages. The first bankruptcy was subsequently dismissed without an order of discharge. Debtor filed a second bankruptcy and Wells Fargo filed a substantially larger proof of claim that incuded all arrearages. Debtor objected to proof of claim in second bankruptcy and filed an adversary based on defense of judicial estoppel for portions of proof of claim filed in second bankruptcy that could have but were not filed in first bankruptcy. Both parties filed motions for summary judgment and the Bankruptcy Court granted summary judgment for Debtor on theory of judicial estoppel holding Wells Fargo could not pursue claim amounts in the Second Bankruptcy that could have been, but were not, claimed in the first bankruptcy. Wells Fargo appealed to to the District Court which affirmed the Bankruptcy's Court's order granting the sumary judgment.

Facts:

Titus Chinedu Oparji ("Debtor") defaulted on a ballon note mortgage with Wells Fargo Home Mortgage ("Wells Fargo") and filed for protection under Chapter 13. Debtor ultimated filed two bankruptcies after the first bankruptcy was dismissed without discharge. In the first bankruptcy, Wells Fargo filed multiple proofs of claim that included some but not all of the post-petition arrearages. The first bankruptcy was subsequently dismissed without an order of discharge. Debtor filed a second bankruptcy and Wells Fargo filed a substantially larger proof of claim that incuded all arrearages. Debtor objected to proof of claim in the second bankruptcy and filed an adversary based on defense of judicial estoppel for portions of the proof of claim filed in second bankruptcy that could have but were not filed in first bankruptcy. Both parties filed motions for summary judgment and the Bankruptcy Court granted summary judgment for Debtor on theory of judicial estoppel holding Wells Fargo could not pursue claims in the Second Bankruptcy for any amounts that could have been, but were not, claimed in the first bankruptcy. Wells Fargo appealed to to the District Court which affirmed the Bankruptcy's Court's order granting the sumary judgment by analogizing the situation to that in which a debtor fails to disclose an asset in bankruptcy court.

Judge(s):

Reavley, Smith and Clement, Circuit Judges

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