Duniver v. Clark Material Handling Co.

2023 IL 128141

216 N.E.3d 180

465 Ill.Dec. 929

Darrius DUNIVER, Appellee,

v.CLARK MATERIAL HANDLING COMPANY et al., Appellants.

Docket No. 128141

Supreme Court of Illinois.

Filed January 20, 2023

Julie A. Teuscher and Henry Ortiz, of Cassiday Schade LLP, Richard J. Turiello, of Law Office of Eugena Whitson-Owen, Brian W. Bell, Michael A. McCaskey, Catherine B. Weiler, and Jack A. Gould, of Swanson, Martin & Bell, LLP, and Michael E. Kujawa and Deborah A. Ostvig, of Schain, Banks, Kenny & Schwartz, Ltd., all of Chicago, for appellants.

Michael W. Rathsack, of Park Ridge, for appellee.

JUSTICE HOLDER WHITE delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, forklift operator Darrius Duniver, lost his leg during a July 2017 workplace accident. On January 16, 2019, Duniver filed a personal injury lawsuit seeking recovery for the workplace accident from multiple defendants. He later added Neovia Logistics Services, Inc. (Neovia), as a defendant. On February 8, 2019, Duniver filed for Chapter 13 bankruptcy protection. See 11 U.S.C. § 1301 et seq. (2018). In his bankruptcy filings, Duniver failed to disclose the personal injury lawsuit and answered "no" when asked whether he was suing anyone. Defendants sought summary judgment against Duniver, arguing judicial estoppel prohibited Duniver from pursuing his personal injury lawsuit and also arguing that Duniver lacked standing to sue them where the injury claim belonged to the bankruptcy estate. Duniver filed amended bankruptcy schedules disclosing his personal injury case after receiving the summary judgment motion. Eventually, the bankruptcy case was dismissed. The circuit court granted defendants’ motion for summary judgment, finding Duniver "blatantly deceived" the bankruptcy trustee and that any claim would have to be pursued on behalf of the bankruptcy estate. The appellate court reversed, holding Duniver had standing and judicial estoppel did not apply where Duniver "received no benefit" from failing to disclose the personal injury case in the bankruptcy proceeding and that the evidence presented failed to show an intent to deceive or mislead. We affirm.

¶ 2 BACKGROUND

¶ 3 Duniver was seriously injured in a workplace forklift accident on July 30, 2017, resulting in the loss of his left leg. He filed a workers’ compensation claim, and on January 16, 2019, he filed the personal injury lawsuit at issue here in the circuit court of Cook County against Clark Material Handling Company; Battery Handling Systems, Inc.; and Equipment Depot of Illinois, Inc., while later adding Neovia as a defendant. On February 8, 2019, Duniver filed for Chapter 13 bankruptcy in the United States Bankruptcy Court for the Northern District of Illinois.

¶ 4 In Duniver's bankruptcy petition, he checked "[n]o" in response to a question asking if he had "Claims against third parties, whether or not you have filed a lawsuit or made a demand for payment," where the question noted possible examples included "Accidents, employment disputes, insurance claims, or rights to sue." He then checked "[y]es" in response to a question asking if he had "Other contingent or unliquidated claims of every nature, including counterclaims of the debtor and rights to set off claims." Duniver listed the following:

"Darrius Duniver

Workman's Comp

Desparti Law Goup [sic ]

Rommiumicci & Blanch [sic ]

v[.]"

Notably, the law firm representing Duniver before the circuit court in this case was "Romanucci & Blandin, LLC."

¶ 5 On another form, he checked "[y]es" in response to a question asking "[w]ithin 1 year before you filed for bankruptcy, were you a party in any lawsuit, court action, or administrative proceeding," where the question explained to "[l]ist all such matters, including personal injury cases, small claims actions, divorces, collection suits, paternity actions, support or custody modifications, and contract disputes." A collections action filed against Duniver was listed, but the personal injury case was not included.

¶ 6 Duniver signed the bankruptcy petition multiple times, swearing under penalty of perjury that the above answers were correct. And when asked under oath by the trustee, "[a]re you suing anyone," Duniver answered "[n]o." He also answered "[n]o" when asked whether there was "[a]nyone suing you." A proposed amended bankruptcy plan was confirmed by the bankruptcy court on July 24, 2019.

¶ 7 Neovia filed a motion for summary judgment, which the other defendants joined. The motion argued Duniver should be estopped from pressing this lawsuit because he had failed to disclose it in his sworn bankruptcy petition and all elements of judicial estoppel were satisfied. The motion also argued Duniver lacked standing to bring the lawsuit because the injury claim belonged to the bankruptcy estate.

¶ 8 Duniver filed a response, stating in an attached affidavit that he had relied on his bankruptcy counsel to tell him what information needed to be included in his petition. Duniver asserted his attorney asked him about any debts, collection matters, and income but had not told him of a duty to disclose pending lawsuits or injury claims and that, had his attorney asked him about pending lawsuits, he would have told the attorney about the injury lawsuit. Duniver stated he had not intended to deceive anyone and directed his attorney to correct the plan once he learned the injury claim should have been included in the bankruptcy case.

¶ 9 Duniver argued that his failure to disclose this case during the bankruptcy proceedings was an inadvertent mistake but did not challenge defendants’ analysis on the prerequisites of judicial estoppel. Duniver also argued he still maintained standing in this case because the complaint could be amended to substitute the correct plaintiff. Neovia filed a reply in which it noted ignorance of the law is not a defense and argued that reliance on legal advice "does not relieve a debtor of his or her obligation for candor to the bankruptcy court." Neovia also reasserted its argument on standing and argued no late disclosure of the case in bankruptcy filings should moot its summary judgment motion.

¶ 10 The circuit court issued an order granting summary judgment against Duniver on February 24, 2020. Highlighting Duniver's negative response to the question of whether he was suing anyone, the court determined Duniver "blatantly deceived" the bankruptcy trustee and held that judicial estoppel applied. The court noted on the issue of standing that, although Duniver "technically does have standing to pursue the claim, it must be done on behalf of the estate " and, although "this could be corrected," it "would be futile in light of" the court's ruling for summary judgment on judicial estoppel. (Emphasis in original.)

¶ 11 Duniver filed a motion for reconsideration on March 24, 2020, in which he informed the circuit court that (1) he had filed amended schedules in the bankruptcy proceedings disclosing the personal injury case on January 22, 2020, and (2) the bankruptcy case was nonetheless dismissed on February 19, 2020, due to Duniver's failure to make payments under the plan. Duniver argued for the first time against one of the prerequisites of judicial estoppel, asserting his bankruptcy case did not provide a benefit where it was dismissed without a discharge of debt. On June 19, 2020, the court issued an order denying the motion for reconsideration.

¶ 12 The appellate court reversed. 2021 IL App (1st) 200818, 452 Ill.Dec. 840, 186 N.E.3d 564. The First District determined the dismissal of the bankruptcy case "in effect" revested Duniver with standing in this case. Id. ¶ 15. It elected to overlook forfeiture on Duniver's argument that he had received no benefit from taking contrary positions because it was "necessary to obtain a just result." Id. ¶ 18. The court then held judicial estoppel did not apply where it determined Duniver "received no benefit" from failing to disclose this case in bankruptcy proceedings ( id. ¶ 20 ) and "the evidence presented fails to show an intent to deceive or mislead" ( id. ¶ 24 ). This court allowed defendants’ joint petition for leave to appeal. Ill. S. Ct. R. 315 (eff. Oct. 1, 2020).

¶ 13 ANALYSIS

¶ 14 On appeal, defendants argue (1) Duniver does not have standing to bring this lawsuit and (2) the circuit court did not abuse its discretion in applying judicial estoppel. We address those arguments in turn.

¶ 15 I. Standing

¶ 16 In Illinois, a lack of standing is an affirmative defense that defendants have the burden to plead and prove. Chicago Teachers Union, Local 1 v. Board of Education of Chicago , 189 Ill. 2d 200, 206, 244 Ill.Dec. 26, 724 N.E.2d 914 (2000). "The doctrine of standing is intended to assure that issues are raised only by those parties with a real interest in the outcome of the controversy." Id.

¶ 17 Defendants assert a debtor in bankruptcy is required to file schedules of all assets and liabilities ( 11 U.S.C. § 521(a)(1)(B)(i) (2018) ) and any unscheduled property is not automatically abandoned when a bankruptcy case is dismissed. Because Duniver did not disclose the injury lawsuit in his initial bankruptcy filings, defendants assert that any right to bring the case resides solely with the bankruptcy trustee, not Duniver. Duniver notes defendants ignore the circuit court's recognition that any "deficiency in the plaintiff's status could be corrected by simply amending the complaint." He also asserts, in line with the appellate court's holding, that upon dismissal of the bankruptcy case, "no matter the reason, the claim had to revest in Duniver; it did not move to some kind of legal purgatory."

¶ 18 We conclude Duniver, who filed for Chapter 13 bankruptcy, has standing. As the circuit court noted, to the extent Duniver should have brought the action on behalf of the estate, this could be corrected by amendment. "Misnomers most commonly occur when defendants are misnamed, but plaintiffs also sometimes misname themselves," and such an error "may be...