QAREEB HAYDEN, et. al., Plaintiffs,
GR SPRING & STAMPING, INC., Defendant.
MEMORANDUM OPINION & ORDER
JOSEPH M. HOOD, District Judge.
This matter is before the court on Defendant's motion to dismiss Plaintiff Johnetta Williams as a Plaintiff in this action. [D.E. 7]. Plaintiff has responded [D.E. 9], and Defendant has replied [D.E. 10]. Thus, this motion is now ripe for review. For the reasons which follow, Defendant's motion [D.E. 7] will be granted.
I. FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff Johnetta Williams was a temporary employee at Defendant's Berea, Kentucky, facility from October to November 2011. [D.E. 1-5 at 5]. In the Amended Complaint, Plaintiff alleges that she suffered from repeated racial harassment from her coworkers at Defendant's facility, which she claims was ignored by her supervisors. [D.E. 1-5 at 5]. After leaving work on November 3, 2011, to find her car vandalized, Plaintiff claims that she felt unsafe at work and quit her job at Defendant's facility. [D.E. 1-5 at 5-6].
On July 24, 2012, Williams filed a voluntary Chapter 7 bankruptcy petition in the United States Bankruptcy Court for the Eastern District of Kentucky. [D.E. 9 at 1]. In the required schedules and disclosures, Williams did not disclose a potential claim against Defendant GR Spring & Stamping as an asset, a fact that she admits in her response. [D.E. 9 at 1]. In fact, Williams failed to disclose her claim despite specific instructions in the schedules that she must "list all personal property of the debtor of whatever kind, " and list "contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and rights to setoff claims." [D.E. 7-2 at 10-11]. Williams was represented by counsel during her bankruptcy proceedings. Williams also signed the "Declaration Concerning Debtor's Schedules, " in which she declared "under penalty of perjury that I have read the foregoing summary and schedules, consisting of 19 sheets, and that they are true and correct to the best of my knowledge, information and belief." [D.E. 7-2 at 28].
On August 21, 2012, the United States Bankruptcy Trustee filed the "Chapter 7 Trustee's Report of No Distribution" and reported that, after he reviewed the information in the schedules, there was no property available for distribution from the estate over and above that exempted by law. [D.E. 7-3 at 3]. In reliance on the trustee's report, the bankruptcy court discharged Williams on October 22, 2012. [D.E. 7-4].
The present action, alleging employment discrimination in violation of the Kentucky Civil Rights Act, was filed on March 27, 2013, and Plaintiff Williams was added to the lawsuit as a party in the Amended Complaint on April 23, 2013. [D.E. 1-1; 1-5]. Defendant timely removed the action to this court on April 30, 2013, on the basis of diversity jurisdiction, 28 U.S.C. § 1332. Because Plaintiff did not disclose her potential employment discrimination claim in her bankruptcy schedules, Defendant filed this motion to dismiss Plaintiff as a party pursuant to judicial estoppel. Simultaneous with her response to Defendant's motion to dismiss, Plaintiff amended her bankruptcy schedules to add her claim against Defendant as an asset. [D.E. 9-1].
II. STANDARD OF REVIEW
A motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) tests the sufficiency of the plaintiff's complaint. The court views the complaint in the light most favorable to the plaintiff and must accept as true all well-pleaded factual allegations contained within it. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citing Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.'" Id. (citing Bell Atlantic Corp., 550 U.S. at 570).
"Where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position." New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting Davis v. Wakelee, 156 U.S. 680, 689 (1895)) (internal quotation marks and alterations omitted). "This rule, known as judicial estoppel, generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.'" Id. (quoting Pegram v. Herdrich, 530 U.S. 211, 227 n.8 (2000)).
In White v. Windham Vacation Ownership, Inc., 617 F.3d 472 (6th Cir. 2010), the Sixth Circuit outlined the factors that must be analyzed when applying the doctrine of judicial estoppel to the bankruptcy context. White, 617 F.3d at 478. Specifically, the court noted the following:
In short, to support a finding of judicial estoppel, we must find that: (1) [the plaintiff] assumed a position that was contrary to the one that she asserted under oath in the bankruptcy proceedings; (2) the bankruptcy court adopted the contrary position either as a preliminary matter or as part of a final disposition; and (3) [the plaintiff's] omission did not result from mistake or inadvertence. In determining whether [the plaintiff's] conduct resulted from mistake or inadvertence, this court considers whether: (1) she lacked knowledge of the factual basis of the undisclosed claims; (2) she had a motive for concealment; and (3) the evidence indicates an absence of bad faith. ...