In
this medical malpractice case, appellant Heidi C. Horsley-Layman appeals
the trial court=s
order granting summary judgment to appellees Adventist Health System/Sunbelt,
Inc. d/b/a Huguley Memorial Medical Center, Dr. Kalman S. Narayan, and
Dr. Fernando S.M. Angeles based on judicial estoppel. In
three issues, appellant argues that fact issues remain regarding the doctrine
of judicial estoppel, the ostensible agency of appellee Huguley, and appellant=s
affirmative defense of waiver. We affirm.
II. Background
Facts and Procedural History
Appellant,
a physician, filed for Chapter 13 bankruptcy on November 30, 1992. Along
with the filing, appellant and her husband signed several sworn schedules
under oath. These schedules reflected outstanding
creditor claims totaling $337,180.71 and indicated that appellant did not
own any contingent or liquidated claims. Appellant
also swore in her Statement of Financial Affairs that she was not a party
to any lawsuit. On September 21, 1993, the
bankruptcy court issued an Order Confirming Chapter 13 Plan, Value of Collateral
and Allowing Attorney Fees, which provided for appellant=s
payments under the Chapter 13 plan.
At
the suggestion of her sister, Dr. Shelia Horsley, appellant visited Huguley
Memorial Medical Center on December 6, 1993 for gastrointestinal problems. Appellant
noticed no posting, notation, or verbal instruction that the physicians
practicing in the hospital were not employed by the hospital, and appellant
did not choose any of the physicians that treated her. Dr.
Kalman S. Narayan performed tests to determine the source of appellant=s
problems and scheduled a gallbladder surgery for December 7, 1993. Dr.
Fernando S.M. Angeles performed the surgery, which resulted in the complications
that are the source of this litigation. Appellant
developed three hematomas due to the bleeding in her abdomen and as a result,
experienced seizures, incontinence, negative personality changes, and short-term
memory loss. Because of these disabilities,
appellant could no longer maintain her physician=s
practice.
On
February 18, 1994, the trustee in appellant=s
Chapter 13 bankruptcy filed a motion to dismiss because appellant had fallen
behind on the payments required by her original Chapter 13 plan. In
response, on April 4, 1994, appellant filed a motion to abate the original
plan payments. In this motion, appellant described
the injuries she sustained from the gallbladder
surgery. On May 3, 1994, the bankruptcy court,
noting that abatement was in the best interest of all parties because of
appellant's catastrophic illness, granted the abatement motion.
On
September 19, 1995, after appellant continued to miss payments, the bankruptcy
trustee filed a second motion to dismiss, and the bankruptcy court granted
it. Appellant then filed a motion for rehearing
of the dismissal, and the bankruptcy court reinstated the proceedings on
October 24, 1995, after determining that appellant cured the deficiencies
in the plan payments.
Based
on the injuries appellant suffered as a result of her gallbladder surgery,
appellant filed suit against appellees on February 16, 1996. The
case against Dr. Angeles was appealed twice over the next five years. See
Horsley-Layman v. Angeles, 968 S.W.2d 533 (Tex. App.CTexarkana
1998, no pet.) (reversing the trial court=s
dismissal of appellant=s
claims against Dr. Angeles); Horsley-Layman v. Angeles,
90 S.W.3d 926 (Tex. App.CFort
Worth 2002, pet. denied) (same).
Because
of the appellate process, the medical malpractice case was inactive for
several years, but appellant=s
bankruptcy proceedings continued. Appellant
and her husband filed a response to the trustee=s
third motion to dismiss on July 13, 1998, in which they mentioned the malpractice
lawsuit and requested permission to modify the payment plan. The
bankruptcy court allowed the modification. On
October 13, 1998, the trustee filed his final report in appellant=s
bankruptcy proceeding, and appellant was discharged from bankruptcy on
October 14, 1998.
In
her malpractice suit, appellant filed a third amended original petition
on January 10, 2005, and appellee Dr. Angeles filed his first amended original
answer alleging judicial estoppel on August 19, 2005. Appellees
filed motions for summary judgment on the basis of judicial estoppel in
August 2005 asserting that appellant failed to disclose her pending medical
malpractice claim to the bankruptcy court in accordance with her plan. The
trial court granted these motions. This appeal
followed.
III. Appellant=s
First and Third Issues
We
address appellant=s
first and third issues together because they are related. In
her first issue, appellant complains that summary judgment on the affirmative
defense of judicial estoppel was inappropriate because fact issues remain
unresolved. In her third issue, appellant alleges
that appellees waived their right to assert judicial estoppel as a defense.
A.
Standard of Review
A
defendant is entitled to summary judgment on an affirmative defense if
the defendant conclusively proves all the elements of the affirmative defense. Rhone-Poulenc,
Inc. v. Steel, 997 S.W.2d 217, 223 (Tex. 1999); see Tex.
R. Civ. P. 166a(b), (c). To accomplish
this, the defendant-movant must present summary judgment evidence that
establishes each element of the affirmative defense as a matter of law. Ryland
Group, Inc. v. Hood, 924 S.W.2d 120, 121 (Tex. 1996). When
reviewing a summary judgment, we take as true all evidence favorable to
the nonmovant, and we indulge every reasonable inference and resolve any
doubts in the nonmovant=s
favor. IHS Cedars Treatment Ctr. of Desoto,
Tex., Inc. v. Mason, 143 S.W.3d 794, 798 (Tex. 2004).
B. Applicable
Law
1. Bankruptcy
Law
In
a bankruptcy action, the debtor must disclose all assets including contingent
or unliquidated claims. 11 U.S.C.A. ' 521(a)(1)
(West Supp. 2006). The duty to disclose is
a continuing duty that requires the debtor to amend schedules and forms
if circumstances surrounding the bankruptcy change. In
re Coastal Plains, Inc., 179 F.3d 197, 205 (5th Cir. 1999), cert.
denied, 528 U.S. 1117 (2000). If the debtor
knows enough information to suggest that she might have a cause of action,
then she must disclose the potential cause of action. Id. at
208. The debtor must disclose any potential
causes of action even if she does not know the legal basis of the claim. Id.
2. Judicial
Estoppel
The
doctrine of judicial estoppel applies when a party attempts to assert a
claim that is inconsistent with a claim asserted in a prior proceeding. Id.; Stewart,
978 S.W.2d at 208. The doctrine of judicial estoppel
is designed to protect the integrity of the judicial process by preventing
a party from Aplaying
fast and loose@ with
the courts to suit the party=s
own purposes. In re Coastal Plains, 179
F.3d at 205. The primary purpose of the doctrine
is not to protect litigants but rather the integrity of the judiciary. See
id. It is usually applied when a party attempts
to obtain an unfair advantage by intentionally asserting inconsistent claims
in different courts. Id. at 206.
To
establish judicial estoppel involving a bankruptcy case, three elements
must be proven: (1) the party to be estopped has taken a position clearly
inconsistent with its previous position; (2) the previous court must have
accepted the previous position; and (3) the previous inconsistent position
was not inadvertent. See id. A
previous inconsistent position is only inadvertent when the debtor lacks
knowledge of the inconsistent position or has no motive for the inconsistency. Id. at
210.
C. Analysis
Appellant
filed for Chapter 13 bankruptcy on November 30, 1992. The
complications that form the basis of this suit occurred on December 6 and
7, 1993. Subsequently, appellant amended her
bankruptcy filings several times without formally including this claim
as an asset.
Although
appellant never officially amended the bankruptcy schedules, she and her
husband filed a response to a motion to dismiss in the bankruptcy court
in July 1998 that explained the malpractice claim. Appellant
and her husband also filed a modification plan in the bankruptcy court
in August 1998 that mentioned the medical malpractice claim, but they did
not state the amount of recovery sought. Appellant
and her husband were discharged from bankruptcy on October 14, 1998 without
the court taking the malpractice claim into account.
Appellant
concedes that she did not amend her bankruptcy schedules. According
to appellant, regardless of this concession, the appellees still lose because
they failed to establish as a matter of law the three elements of judicial
estoppel. We disagree.
1.
Clearly Inconsistent Position
Appellant
argues that by mentioning her malpractice claim in motions with
the bankruptcy court, she did not take the position that no claim existed.
However, debtors have a continuing duty to formally amend
their bankruptcy schedules if their circumstances change during bankruptcy. See
In re Superior Crewboats, Inc., 374 F.3d 330, 335 (5th Cir. 2004) (finding
inconsistent positions where a debtor failed to amend schedules but informed
the trustee of the claim and later filed a lawsuit for $2.5 million); In
re Coastal Plains, 179 F.3d at 210 (requiring the debtor to disclose
that it believed the claim was worth millions so that it would not confuse
the creditors). Confusion as to what must be
disclosed to the bankruptcy court does not create a fact issue. See
In re Superior Crewboats, 374 F.3d at 335-36 (stating that plaintiff=s
negligent nondisclosure did not prevent judicial estoppel or create a fact
issue).
Here,
appellant attempts to pursue this malpractice claim even though she did
not previously alert her bankruptcy creditors as to how much the claim
was worth or that the claim even existed. Even
though appellant noted the malpractice claim on at least two other filings
with the bankruptcy court, she had a duty to amend the schedules. See
id. By omitting this claim from her schedules,
appellant represented to her creditors that no such claim existed. See
In re Coastal Plains, 179 F.3d at 210.
2. Position
Accepted by Court
To
prove the acceptance prong, a party must show that the previous court adopted
the position urged by the party. Id. at
206. A court adopts the position if it relies
on the assertion in making a decision or ruling. Id.
Here,
the bankruptcy court discharged appellant based on her list of assets in
the schedules, and the schedule did not include the malpractice claim.
3. Not
Inadvertent
A
debtor can establish inadvertence by showing that she did not know of the
claim or had no motive to conceal the claim. Id. at
210. Appellant certainly knew about the claim
because she pursued it while she was still under a duty to disclose all
of her assets and claims. Id. at 208.
After
reviewing the record and procedural history of appellant's bankruptcy and
malpractice cases, we conclude and hold that appellant asserted inconsistent
positions, the bankruptcy court accepted the position that appellant had
no malpractice claim, and appellant knew of the malpractice claim while
she was under a duty to disclose her assets. Therefore,
appellant=s
discharge from bankruptcy after nondisclosure of her malpractice claim
precludes her from pursuing that claim. See
id. at 213.
4. Waiver
Appellant
argues that appellees waived the defense of judicial estoppel because they
did not assert it at an earlier time. Waiver
is defined as an intentional relinquishment of a known right or conduct
inconsistent with claiming that right. Int=l
Ins. Co. v. RSR Corp.,
426 F.3d 281, 300 (5th Cir. 2005); Jernigan v. Langley, 111 S.W.3d
153, 156 (Tex. 2003). Waiver
must be shown through intentional conduct that is inconsistent with claiming
the right to dismiss for judicial estoppel. See
Jernigan, 111 S.W.3d at 156. Mere silence
cannot establish waiver unless the inaction shows an intent to relinquish
the right. Id. at 157.
Appellant
filed suit against appellees on February 16, 1996 and was discharged from
bankruptcy on October 14, 1998. From 1998 to
2002, the case against Dr. Angeles was appealed twice regarding dismissal
for appellant=s failure
to provide proper expert reports. See Horsley-Layman,
968 S.W.2d at 533; Horsley-Layman, 90 S.W.3d at 926. Appellant
filed her third amended petition in January of 2005, nine years after she
filed suit, and appellees included judicial estoppel in their motion for
summary judgment filed on August 19, 2005.
Appellees
waited until after the appeal regarding failure to provide a proper expert
report to assert the judicial estoppel defense. However,
appellees= filing
of a motion to dismiss on other grounds was not inconsistent with their
intent to assert judicial estoppel. See
Jernigan, 111 S.W.3d at 157. By pursuing
their right to dismissal under another theory, appellees did not show an
intent to relinquish the right to judicial estoppel. See
id.
We
disagree with appellant's assertion that Spinks v. Brown is compelling
authority. 211 S.W.3d 374, 378 (Tex. App.CSan
Antonio 2006, no pet.) (holding that defense was waived after the defendant
went through a jury trial before asserting his right). Unlike
the defendant in Spinks, here, appellees asserted their right to
judicial estoppel while still in the summary judgment context. See
id. Such pretrial actions are proper. See
Jernigan, 111 S.W.3d at 158. Therefore,
appellees did not waive their judicial estoppel claim. See
id. Accordingly, we overrule appellant=s
first and third issues.
Because
our conclusions on issues one and three dispose of appellant=s
claims against all parties, we do not reach the issue of ostensible agency. See Tex.
R. App. P. 47.1.
IV. Conclusion
Having
overruled appellant=s
first and third issues, we affirm the trial court=s
order granting summary judgment in favor of appellees.
TERRIE
LIVINGSTON
JUSTICE
PANEL
A: CAYCE, C.J.; LIVINGSTON and DAUPHINOT,
JJ.
DAUPHINOT,
J. filed a dissenting opinion.
DELIVERED:
March 29, 2007
COURT
OF APPEALS
SECOND
DISTRICT OF TEXAS
FORT
WORTH
NO.
2-06-066-CV
HEIDI
C. HORSLEY-LAYMAN APPELLANT
V.
ADVENTIST
HEALTH SYSTEM/SUNBELT, INC. APPELLEES
D/B/A
HUGULEY MEMORIAL MEDICAL CENTER,
KALMAN
S. NARAYAN, M.D., AND FERNANDO
S.M.
ANGELES, M.D.
------------
FROM
THE 352ND DISTRICT COURT OF TARRANT COUNTY
------------
DISSENTING
OPINION
------------
I
must respectfully dissent from the majority opinion because I cannot agree
that Appellant=s
failure to amend the schedule amounted to a representation that the otherwise
disclosed claim did not exist.
LEE
ANN DAUPHINOT
JUSTICE
DELIVERED:
March 29, 2007
During
the seven-month abatement period, appellant was excused from making her
regularly scheduled Chapter 13 plan payments.
Although
appellant=s
case against Dr. Angeles was initially dismissed by the trial court on
November 8, 1996, her claims against the other appellees were still pending. See
Horsley-Layman, 968 S.W.2d at 535. Additionally
her claim against Dr. Angeles was pending from February 16, 1996 until
November 8, 1996, which was during the bankruptcy period. See
id.
To Apromote
the goal of uniformity and predictability in bankruptcy proceedings@ and
to Agive
the proper effect to the judgment of the bankruptcy court,@ we
will apply federal bankruptcy law to this issue. In
re Coastal Plains, 179 F.3d at 205; Stewart v. Hardie, 978 S.W.2d
203, 208 (Tex. App.CFort
Worth 1998, pet. denied) (op. on reh=g).
[JH1]
Majority
by Justice Livingston; Dissent by Justice Dauphinot
