United States District Court, N.D. Indiana, Fort Wayne Division
BAYSAH J. KORTI, Plaintiff,
A.W. HOLDINGS, LLC, d/b/a Anthony Wayne Services, Defendant.
OPINION AND ORDER
RUDY LOZANO, District Judge.
This matter is before the Court on the Defendant's Motion for Summary Judgment, filed by Defendant, A.W. Holdings, LLC d/b/a Anthony Wayne Services, on July 8, 2013 (DE #25). For the reasons set forth below, the motion is DENIED.
Defendant first argued that Plaintiff, Baysah J. Korti ("Korti") is judicially estopped from pursuing his race and national origin claims against Defendant, A.W. Holdings, LLC d/b/a Anthony Wayne Services ("AWS") under Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000(e) et seq. and 42 U.S.C. § 1981 because he failed to identify his purported claim as a potential asset in his sworn declaration of assets that he submitted in a Chapter 13 bankruptcy proceeding. Defendant originally contended that, because Plaintiff failed to disclose the potential asset, Korti should be estopped from pursuing this lawsuit and summary judgment is appropriate. What proceeds next is the product of many rounds of briefs.
Plaintiff filed a response in opposition (DE #32) arguing that when Plaintiff's original bankruptcy case was filed on November 3, 2011, he honestly believed he did not have an interest in any pending or potential lawsuit. On April 4, 2012, Plaintiff was terminated from his employment with AWS (which termination is the basis for his discrimination claims) and he could not sustain his bankruptcy petition, so he dismissed his bankruptcy petition. After dismissal, Korti received his right to sue letter from the EEOC. Then, Plaintiff filed a second Chapter 13 bankruptcy on February 14, 2013. During the second bankruptcy proceeding, Korti disclosed his claim to the Trustee at a meeting of the creditors and his counsel drafted an amendment and modification to his bankruptcy Plan, agreeing to turn over any proceeds from any settlement or disposition of this litigation. Thus, Plaintiff believes he should not be estopped because he contends his initial failure to disclose was not done in bad faith, and in the current bankruptcy proceeding, he informed the Trustee of the lawsuit and filed an amendment and modification to the Plan.
In its reply, Defendant argues for the first time that Plaintiff should be judicially estopped from bringing the present claims for his own benefit, and that any and all damages recovered should go toward paying Korti's creditors and the bankruptcy Trustee, capping the amount of damages at the amount owed in the bankruptcy proceeding. (DE #35.)
Plaintiff then argues in his sur-response that Defendant seemingly concedes that Korti may proceed with his current claim and that Defendant's argument that Korti's damages should be capped and he cannot personally benefit from any recovery is an argument improperly set forth for the first time in a reply brief, and the Bankruptcy Court should be the entity to hear that argument. (DE #38.)
Defendant then filed a sur-reply (DE #42). Defendant argues that Korti only belatedly amended his Schedule B to his second bankruptcy petition after Defendant filed the instant motion for summary judgment based upon judicial estoppel. Once again, Defendant argues that Korti is judicially estopped from recovering any damages for his personal benefit, or any more than he may owe to his creditors, but states that Rainey v. UPS, 466 F.App'x, 542 (7th Cir. 2012) "does permit the present lawsuit to proceed." (DE #42, p. 5.)
Then, Plaintiff filed a sur-sur-response, and quoted recent case law while continuing to argue that Korti's claims should not be dismissed on the theory of judicial estoppel. (DE #45.)
Finally, in the last brief submitted to this Court, Defendant conceded that in light of Rainey, Korti is not judicially estopped from proceeding with this case. AWS then "withdr[ew] its request that the Court dismiss this case in its entirety on the grounds of judicial estoppel because Korti rectified his nondisclosure of this litigation." (DE #46, p. 2.) AWS then argues that Korti should still be precluded from recovering any damages for his personal benefit and that AWS could not have raised that issue before its reply brief because Korti did not disclose the lawsuit to his bankruptcy counsel until after the motion for summary judgment was filed. Id.
This case is fully briefed and ripe for adjudication.
The undisputed facts in this case are straightforward. On November 3, 2011, Korti filed a Voluntary Petition for Chapter 13 bankruptcy. Schedule B listed his personal property, and Korti swore under penalty of perjury that he did not have any "contingent and unliquidated claims of every nature, including tax refunds, counterclaims of the debtor, and right to set offs." (Def.'s Ex. B, Not. Of Bankr. Case Filing, 11-14138.)
While that claim was pending, on April 4, 2012, Plaintiff was terminated from his employment with Defendant. Plaintiff claims the termination was wrongful, and it is the basis for the wrongful termination claims in the present suit. Korti then filed a Charge of Discrimination against AWS on April 9, 2012. (Pl.'s Ex. C.) In his Charge of Discrimination, Korti alleges ...