Seymour v. Collins

39 N.E.3d 961

Terry L. SEYMOUR et al., Appellants

v.Bradley A. COLLINS et al., Appellees.

No. 118432.

Supreme Court of Illinois.

Sept. 24, 2015.

William T. Cacciatore and Eileen J. McCabe, Rockford, for appellants.

Jeffrey J. Zucchi, of Clark, Justen, Zucchi & Frost, Ltd., of Rockford, for appellee Bradley A. Collins.

Lori E. McGirk, Guyer & Enichen, P.C., Rockford, and Jennifer A. Moriarty, Grant & Fanning, Chicago, for appellees Rockford Country Club et al.

Michael Resis and Marcie Thorp, SmithAmundsen LLC, Chicago, for amicus curiae Illinois Association of Defense Trial Counsel.

OPINION

Justice KARMEIER delivered the judgment of the court, with opinion.

¶ 1 The overarching issue presented in this appeal is whether the circuit court erred in granting defendants summary judgment, dismissing plaintiffs' personal injury action, pursuant to the court's application of the doctrine of judicial estoppel. A divided panel of the appellate court affirmed the judgment of the circuit court. 2014 IL App (2d) 140100, ¶ 50, 385 Ill.Dec. 742. We granted plaintiffs' petition for leave to appeal (Ill. S.Ct. R. 315 (eff. July 1, 2013)), and now reverse the judgments of the appellate court and circuit court.

¶ 2 BACKGROUND

¶ 3 Plaintiffs, Terry L. Seymour and Monica Seymour, filed this personal injury action in the circuit court of Winnebago County on May 20, 2011, alleging negligence and loss of consortium, and seeking money damages, initially from two defendants, Bradley A. Collins and Rockford Country Club (Rockford). Terry's alleged injuries were said to have been sustained in a June 3, 2010, automobile accident.

Plaintiffs alleged, on that date, Terry was being transported in an ambulance owned by ATS Medical Services, Inc. (ATS), and driven by Shaun P. Branney—and in which Terry was attended by Leo Verzani—when the ambulance collided with a vehicle driven by Bradley A. Collins, who was allegedly operating his vehicle within the scope of his employment with Rockford. Plaintiffs subsequently amended their complaint to claim that defendants, ATS, Branney, and Verzani were also legally responsible for Terry's alleged injuries.

¶ 4 Also pertinent to the issue before us is the bankruptcy proceeding the Seymours had previously commenced on April 24, 2008, with the filing of a petition for Chapter 13 bankruptcy (11 U.S.C. § 1301 (2006) ) in the United States District Court for the Northern District of Illinois. The record indicates that a Chapter 13 plan was confirmed on September 19, 2008, though the plan itself does not appear in this record. Docket entries from the bankruptcy proceeding were submitted as evidence in this case and show multiple motions filed by the Seymours to modify the plan. The motions have not been made a part of the record.

¶ 5 The first motion was filed on January 7, 2009. A docket entry indicates that the motion was granted on January 30, 2009. On that same date, an entry evinces an “Order Withdrawing Motion to Dismiss Case for Failure to Make Plan Payments.” On August 8, 2009, another motion was filed to modify the plan. That motion was accompanied by the Seymours' filing of amended bankruptcy schedules. An order was entered on August 28, 2009, granting the motion to modify.

¶ 6 The third motion to modify was filed on February 25, 2010. Docket entries indicate that a response was filed on March 3, 2010, on behalf of the Chapter 13 trustee, Lydia Myer, and the motion to modify was granted on March 19, 2010. In their brief before this court, plaintiffs state: “The March 19, 2010 plan modification entailed a reduction in the monthly payment amount as TERRY L. SEYMOUR had sustained an unrelated work injury in May, 2009, and was only receiving temporary total disability benefits.” Plaintiffs' brief cites to an affidavit subsequently filed in this case by their bankruptcy attorney. That affidavit does not specifically link the March 2010 modification to the alleged injury and reduction in income; however, it does reference a May 2009 injury and a related workers' compensation claim “subsequent to the date of filing of [the] Chapter 13 proceeding.” Moreover, an affidavit filed in this case by Myer references a motion to modify wherein it is stated “that the Debtor was injured at work and unable to work and receiving only worker's compensation benefits since May of 2009.” In any event, the parties apparently do not dispute that the Seymours sought modification via the February 25 motion, alleging that Terry was unable to work and was only receiving workers' compensation payments, and the bankruptcy plan was modified on March 19, 2010.¹

¶ 7 Apparently, it is also undisputed that Terry had not advised the bankruptcy court that he was again working when, on June 3, 2010, he was allegedly injured, twice. The first injury was said to have occurred while he was working for a new employer. As a result of that injury, he was being transported by ambulance when the ambulance collided with a vehicle driven by Collins, allegedly resulting in additional injuries to Terry, and this lawsuit against the various defendants.

¶ 8 Prior to the notice of completion of the payment plan filed by the bankruptcy trustee on June 29, 2012, and the order of discharge in bankruptcy granted the Seymours on July 17, 2012, they filed two change of address forms with the bankruptcy court. However, it is apparently undisputed that they never apprised the bankruptcy court that their circumstances had changed subsequent to the March 19, 2010 modification. Specifically, they never informed the bankruptcy court: (1) that Terry had returned to work for a new employer; (2) that he was injured on June 3, 2010; (3) that Terry had, on June 8, 2010, filed another workers' compensation claim, this one related to the June 3 injuries; (4) that Terry believed he had viable personal injury claims against multiple defendants, as a result of the June 3, 2010, accident; and (5) that he had in fact filed suit in state court against those defendants on May 20, 2011, asserting his legal claims.

¶ 9 On July 18, 2013, defendants in this action moved for summary judgment, contending that plaintiffs should be judicially estopped from proceeding with their claims because they failed to disclose their personal injury action in the bankruptcy proceeding.

¶ 10 Plaintiffs responded that judicial estoppel does not apply because they did not assert, under oath, in the bankruptcy proceeding that they did not have a personal injury case. They did not intentionally fail to disclose the claims, and they did not obtain a benefit in the bankruptcy proceeding by reason of the omission. In support of their response, plaintiffs submitted their own affidavits as well as the affidavits of Chapter 13 trustee, Lydia Myer, and their bankruptcy attorney, Jeffrey Dahlberg.

¶ 11 In their affidavits, plaintiffs stated, inter alia, that Myer had told them “at the [section] 341 meeting” that they were “required to report to [their] attorney and to the Trustee, any lump sum funds received in excess of $2,000.00 during the pendency of the Chapter 13 bankruptcy proceeding.” Plaintiffs averred that they did not receive any lump sum funds in excess of $2,000.00 during the pendency of the Chapter 13 bankruptcy proceeding, as a result of the personal injury action or otherwise.²

¶ 12 In her affidavit, Lydia Myer stated that she had been the Chapter 13 trustee of the District Court of the Northern District of Illinois since 1995. She served in that capacity in the Seymours' bankruptcy case. Myer attested that the plan for the Chapter 13 bankruptcy was confirmed on September 19, 2008, and was modified multiple times thereafter. She indicated that Terry Seymour had filed a motion to modify on March 19, 2010,³ stating that he had been injured at his job and was unable to work. As a consequence, he had been receiving only workers' compensation benefits since May of 2009. In a separately numbered paragraph, without correlative reference, Myer stated that workers' compensation proceeds, “pursuant to Illinois Compiled Statutes, are specifically exempt from bankruptcy.”

¶ 13 Myer represented:

“That as the Chapter 13 Trustee * * * all debtors are required by and through their attorneys, to report to me, as trustee, any and all cash or monies received during the Chapter 13 bankruptcy proceeding other than the income listed on the debtor's Schedule I.

That neither the Bankruptcy Code nor the Bankruptcy Rules require a Chapter 13 debtor to disclose the acquisition of any property interest after confirmation of his Chapter 13 plan except if the debtor acquires or becomes entitled to acquire within 180 days after the date of the filing of the petition, property by bequest, device [sic ], or inheritance, or property received as the result of a property settlement agreement with the debtor's spouse or of an interlocutory or final divorce decree; or funds received as a beneficiary of life insurance policy or of a death benefit plan. (11 U.S.C. § 541 and Bankruptcy Rule 1007(h)).”

Myer concluded with her observation that “11 U.S.C. 1322(d)(1) provides that a Chapter 13 plan may not provide for payments over a period that is longer than 5 years.”

¶ 14 In his affidavit, the Seymours' bankruptcy attorney, Jeffrey Dahlberg, first attested to his experience in Chapter 13 bankruptcies, and confirmed relevant filing dates in the bankruptcy proceeding. Dahlberg recited his file notation that Terry had been injured, resulting in a workers' compensation claim around May of 2009, a date subsequent to the date of filing his Chapter 13 proceeding. His personal injury claim, arising from an automobile accident, was also subsequent to the commencement of the bankruptcy proceeding. Dahlberg noted that Meyer advises debtors at the section 341 meeting that they are required to report any lump sum funds received in excess of $2,000.00 during the pendency of the bankruptcy proceeding. Dahlberg stated that nothing in the Bankruptcy Code would prohibit ...