Georgia Woman’s Suit Against Employer Was Not Judicially Estopped for Failure to Disclose Potential Claim in Bankruptcy Proceeding

An Atlanta employment law case can have many nuances and potential complications. Thus, it is critical that the plaintiff in such an action receive dependable, accurate legal advice. If you think you may have a claim against your employer, you should talk to an attorney right away. A lawyer who is experienced in handling litigation between employees and their current, former, or potential employers can help steer you through the complex process of asserting your legal rights.

Sometimes, an employee may have more than one claim, or an employment-related claim may affect other, pending litigation. Hence, it is important to let your attorney know about litigation to which you may be a current or potential party.

Facts of the Case

In a recent case, the plaintiff was a woman who sent ante litem notice of a whistleblower claim to the defendant county in August 2016, informing it of a claim that may have arisen as early as September 2015 pertaining to alleged retaliation and demotion for her refusal to succumb to the demands of a certain county commissioner to use an amphitheater (which she managed, on the county’s behalf) for his private gain. Her lawsuit followed a few weeks thereafter. Meanwhile, the plaintiff’s Chapter 13 bankruptcy (which she filed in 2014) was proceeding in federal court.

In 2017, the defendant filed a motion for summary judgment, asserting that the plaintiff was judicially estopped from pursuing her claim against it because of her failure to disclose her cause of action as an asset in the bankruptcy proceeding (only after the defendant’s motion for summary judgment did the plaintiff notify the bankruptcy court of the claim.) The Superior Court of Fulton County granted the defendant’s motion after finding that the plaintiff’s failure to disclose the claim was intended to deceive her creditors and that her behavior had made a mockery of both the superior court and the bankruptcy court.

The Court’s Decision

The Court of Appeals of Georgia reversed, holding that it had been error for the trial court to grant the county’s motion for summary judgment. On appeal, the plaintiff argued that, because her positions in the bankruptcy court and the trial court were not inconsistent, did not introduce any risk of inconsistent results, and did not threaten judicial integrity insomuch as her amended bankruptcy schedule disclosed her claim against the county. The court of appeals agreed with these arguments, noting that the Georgia courts follow the federal doctrine of judicial estoppel. Under this doctrine, a party is only precluded from asserting a position that is inconsistent with a position that he or she has “previously successfully asserted” in a prior proceeding.

Georgia law provides for a continuing duty to disclose potential assets during Chapter 13 bankruptcy proceedings, such that a debtor’s failure to initially list a claim as a potential asset does not trigger judicial estoppel so long as he or she later amends the bankruptcy filing (or reopens the bankruptcy, as the case may be) to include the claim. Although the county’s concern with the timing of the plaintiff’s notice to the bankruptcy court of her claim was “not unfounded,” the court found that Georgia precedent did not punish a litigant who amended a pending bankruptcy petition only after the filing of a dispositive motion rooted in judicial estoppel when the claim in question ripened after the original bankruptcy petition was filed.

Speak to an Experienced Atlanta Employment Law Litigator

To get advice about a claim you may have against your employer, please contact seasoned Atlanta employment law attorney John L. Mays at Parks, Chesin & Walbert. You can set up an appointment to discuss your case by calling 404-873-8048.

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