Practicing to Deceive: Using the Doctrine of Judicial Estoppel to Untangle the Web in Employment Cases, Part II

This part of the article talks about some important principles of bankruptcy law that affect the application of judicial estoppel. It mentions that not knowing these principles could have serious consequences for the outcome of a case. It also explains the role of trustees in bankruptcy cases, and how they can impact the judicial estoppel analysis. In the story, a lawyer tried to stop a person from suing by saying they lied in their bankruptcy case. The person then told the bankruptcy court about the lawsuit, and their bankruptcy trustee found out about it too. But the trustee didn’t try to stop the person from suing. When someone files for bankruptcy, the trustee appointed by the court is the only one who can bring a legal claim on behalf of the bankrupt person. This means the bankrupt person can’t sue someone on their own, unless the trustee allows it. Even though the legal term “standing” has caused confusion in court decisions, it is clear that the trustee is the only one who can bring a lawsuit. If the bankrupt person tries to sue someone without the trustee’s permission, the court can dismiss the case. This rule still applies even if the bankrupt person didn’t tell the court about the lawsuit when they filed for bankruptcy. This means the lawsuit might not be over, even if the court has already made a decision. When the trustee takes the place of the debtor in a legal appeal, they can only use the same arguments that the debtor could have used. The trustee can’t get rid of a decision based on judicial estoppel just because they weren’t told about the case. They also can’t argue that the other party should have told them about the case. So, the trustee is limited to arguing why the court was wrong to apply the judicial estoppel rule. They can’t cancel the court’s decision just because the debtor was the one involved in the case. If a trustee takes over a legal case for someone who filed for bankruptcy, they can’t be held to the same contradictory statements made by the person who filed for bankruptcy. However, in certain situations, the trustee may still be stopped from pursuing the claim if it would benefit the person who filed for bankruptcy, or if they agreed to exempt part of the money from the lawsuit. The trustee also has to follow the same time limits for filing a lawsuit as the person who filed for bankruptcy, but in some cases, they might get an extra two years to file. If someone fails to disclose important information in a bankruptcy case, it could end up in court again. This often happens when the person doesn’t mention everything they should have. In some cases, the bankruptcy process may close before the problem is found. But if the problem is discovered later, the bankruptcy case will have to start again. The story of the lawyer and her client shows how complicated and messy legal cases can be. The lawyer and client got into trouble because the client didn’t disclose all of their legal claims in a bankruptcy case. This caused problems in different courts and made the case drag on for a long time. In the end, the court decided that the lawyer and client didn’t break any rules, and the case was finally finished. The moral of the story is that honesty is important in legal proceedings and that it’s important to understand the rules of bankruptcy law. This is about how bankruptcy affects lawsuits. In Chapter 13 bankruptcy, the person who filed for bankruptcy can still sue, but in Chapter 7, the trustee handles lawsuits. If someone doesn’t list a lawsuit as an asset in their bankruptcy, they might not be able to sue for it later. The trustee, as the representative of the bankruptcy estate, is the only one who can file discrimination claims on behalf of the estate. If there is a transfer of interest, the action can still be litigated in the name of the original party unless the court requires the trustee to be substituted in. So, the trustee has the exclusive right to bring and pursue these claims, and if they don’t want to, the case can be dismissed. Legal scholars and court decisions have recognized that the concept of standing, which determines who has the right to bring a case to court, is often confusing and complicated. It is often mixed up with other legal concepts, causing even more confusion. These issues have been debated for a long time, and even experts in the field find them difficult to understand. Standing to sue and real party in interest are related but different concepts. Standing asks whether a person is allowed to bring a case to court, while real party in interest is the actual party who should bring the case. It’s important not to confuse the two because it can affect who can actually bring a case to court. The court found that the person who filed the lawsuit didn’t have the right to do so, so the case was dismissed. These decisions are not a big deal because they are not official rules for future cases. Only a higher court or a change in the law can change the decision. The court said that the person bringing the lawsuit didn’t have the right to do so because only the trustee of the bankruptcy estate can bring the claim. This means the lawsuit is not allowed to continue. Other cases have also been decided this way. In some cases, the lawsuit was dismissed because the person filing it didn’t tell the bankruptcy court about it. This means that only the trustee of the bankruptcy estate can bring the lawsuit. There was a case where a court found that the judgment was void because the plaintiff and trustee hid the bankruptcy proceeding from the defendant until after the judgment was made. Another court said they didn’t agree with this decision, but the first court’s decision still stands. In another case, the trustee could have done more to stop the case, so the judgment stands. The trustee and creditors have other ways to deal with the hiding of the bankruptcy. This passage discusses the legal concept of judicial estoppel in bankruptcy cases. It explains that if a trustee takes over a debtor’s case, the doctrine of judicial estoppel may not apply unless the trustee personally made inconsistent statements under oath. It also mentions that the doctrine could prevent a debtor from getting a windfall if there is a surplus. Additionally, it discusses cases where trustees agreed to split any recovery or settlement with the debtor. When a person files for bankruptcy, their trustee can only pursue claims that the debtor would have been able to pursue. The statute of limitations for claims is put on hold during bankruptcy. If someone intentionally violates the automatic stay in bankruptcy, they can be held responsible. Lawsuits initiated by the debtor are not affected by the automatic stay. The court said that even though the counterclaims may belong to the bankrupt company, they were not stopped by the bankruptcy rules and could be challenged by the defendant. Therefore, it wouldn’t make sense to consider defending against these counterclaims as controlling the company’s property. Some other cases have also supported this idea. The automatic stay in bankruptcy does not prevent someone from defending themselves in a lawsuit brought by the bankrupt person. This means that if someone is sued by a bankrupt person, they can still defend themselves without violating the automatic stay. In some court cases, it was found that filing certain motions in a bankruptcy case violated the automatic stay, which is a legal protection for debtors. In another case, it was said that serving a copy of the motion on the trustee was required, but a higher court said that wasn’t true. In a different case, it was found that filing a certain type of motion without serving the trustee did violate the automatic stay. Sacha Dyson is a lawyer in Tampa who helps businesses and other organizations with legal issues involving labor, employment, education, and civil rights. She is very knowledgeable and has received honors for her work. She is a partner at a law firm in Tampa.

Source: https://www.floridabar.org/the-florida-bar-journal/practicing-to-deceive-using-the-doctrine-of-judicial-estoppel-to-untangle-the-web-in-employment-cases-part-ii/