Eilber v. Floor Care Specialists, Inc.
Eilber v. Floor Care Specialists, Inc.
Opinion
**440 In this appeal, we consider whether judicial estoppel is an affirmative defense that is waived if not pled.
In December 2012, Russell E. Eilber filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Western District of Virginia. Included with his petition was a proposed Chapter 13 payment plan, which required that he make 36 monthly payments to the bankruptcy trustee for the benefit of his creditors. The bankruptcy court confirmed the proposed Chapter 13 plan after determining that it satisfied the requirements of
Approximately one year later, Eilber began working as the "facilities manager" for New Horizons Healthcare, Inc. ("New Horizons"). In this role, he was responsible for supervising the work of Amanda Guthrie and Brittney Sigmon, who cleaned the New Horizons facility daily. Guthrie and Sigmon were employed by Floor Care Specialists, Inc. ("FCS"), an independent contractor that provided janitorial services for New Horizons.
In September 2014, New Horizons terminated Eilber's employment. Eilber responded by filing a defamation action in the circuit court against FCS, Guthrie, Sigmon, and a FCS manager ("appellees"). His complaint asserted that he was fired as the result of defamatory statements made by Sigmon and Guthrie. He further claimed that these statements were defamatory per se because they prejudiced him in his trade or profession. Appellees demurred, arguing that the complaint failed to state a claim for defamation per se. After briefing and argument by counsel, the circuit court denied the demurrers.
**441 In April 2016, Eilber completed the payments required by the Chapter 13 plan. The bankruptcy court then ordered the discharge of his remaining unsecured debts. Appellees subsequently moved for summary judgment in the circuit court on the ground that Eilber lacked standing to prosecute his defamation action because he failed to disclose the claim to the bankruptcy court. After Eilber filed a brief in opposition to the motion for summary judgment, appellees filed a reply brief in which they argued for the first time that Eilber was judicially estopped from prosecuting his defamation action. They contended that Eilber's failure to timely disclose his claim to the bankruptcy court meant that he took the position that no such claim existed.
After a hearing, the circuit court found that Eilber's defamation action arose after confirmation of the Chapter 13 plan, but prior to the bankruptcy discharge. It also found that he did not disclose his defamation action until after the discharge. Based on these findings, the court concluded that Eilber lacked standing and, alternatively, that the doctrine of judicial estoppel prohibited him from prosecuting his defamation claim *221 after taking the position in the bankruptcy court that it did not exist. Accordingly, the court granted appellees' motion for summary judgment and dismissed Eilber's claim with prejudice.
On appeal, Eilber presents two assignments of error:
1. The trial court erred when [it] held that Eilber as a debtor in a Chapter 13 bankruptcy did not have standing to bring a cause of action that acc [ru]ed subsequent to [the] filing of his Chapter 13 bankruptcy petition, subsequent to the confirmation of [his] Chapter 13 payment plan, but prior to ... receiving a Chapter 13 discharge.
2. The trial court erred when [it] ruled that the doctrine of judicial estoppel bars Eilber from pursuing the cause(s) of action in [his] complaint because the defensive pleadings do not allege judicial estoppel as an affirmative defense....
**442 Additionally, appellees present the following assignment of cross-error:
1. The circuit court erred in finding that [Eilber] stated a cause of action for defamation per se.
We note at the outset that Eilber's second assignment of error does not challenge the circuit court's substantive application of judicial estoppel. Rather, it presents only the narrow question of whether judicial estoppel is an affirmative defense that is waived if not pled. We review this question of law de novo.
See
New Dimensions, Inc. v. Tarquini
,
While "[t]he expression 'judicial estoppel' is relatively new in the lexicon of law[,] ... the concept has ancient roots and 'derives from the prohibition in Scottish law against approbation and reprobation.' "
Wooten v. Bank of Am., N.A.
,
**443
Appellees, however, failed to invoke the doctrine of judicial estoppel until their reply brief on the motion for summary judgment. In
Monahan v. Obici Medical Management Services, Inc.
,
The requirement that most such defenses be specifically pled arises from their collateral nature. Where a defendant seeks to rely upon an affirmative defense not apparent from the allegations pled and unrelated to the elements of a plaintiff's cause of action, that affirmative defense must be pled to avoid unfair surprise or prejudice to the plaintiff.
New Dimensions
,
Eilber contends that because judicial estoppel is collateral in nature and would completely bar an otherwise valid right of recovery, it is an affirmative defense that must be pled to avoid
**444
surprise and prejudice. However, this argument fails to consider the unique characteristics and purpose of judicial estoppel that distinguish it from many of the affirmative defenses listed above. For although judicial estoppel has the effect of protecting litigants from "unfair strategy, the point of the doctrine is not the connection between the parties, but the connection between one party and the court."
Swahn Grp., Inc. v. Segal
,
Consequently, "it is generally recognized that a court, even an appellate court, may raise [judicial] estoppel on its own motion in an appropriate case."
West Va. Dep't of Trans. v. Robertson
,
We therefore reject Eilber's argument that the doctrine of judicial estoppel was waived by appellees. Because the circuit court had the authority to raise and apply the doctrine sua sponte, appellees did not waive it by failing to raise it in their pleadings. As we conclude that Eilber has identified no reversible error in the circuit court's application of judicial estoppel, we need not address the other issues raised in this appeal.
Affirmed .
As the present case illustrates, the judicial estoppel doctrine is frequently at issue in litigation that arises subsequent to representations made, or positions taken, in the context of bankruptcy proceedings. Benjamin J. Vernia, Annotation,
Judicial Estoppel of Subsequent Action Based on Statements, Positions, or Omissions as to Claim or Interest in Bankruptcy Proceeding
,
Exceptions to this general rule have been recognized where (1) the issue addressed by the affirmative defense was not disclosed in the plaintiff's pleading, (2) the affirmative defense is not an absolute bar to recovery, and (3) the affirmative defense is addressed by statute.
New Dimensions
,
In their treatise, Kent Sinclair and Leigh Middleditch, Jr. list 24 defenses that have been recognized in Virginia as affirmative defenses that are waived if not pled, not including judicial estoppel. Kent Sinclair and Leigh B. Middleditch, Jr., Virginia Civil Procedure § 9.2[E], at 726-28 (6th ed. 2014).
The United States Courts of Appeals for the Fourth, Fifth, Seventh, Ninth, and Tenth Circuits, and the United States District Court for the Eastern District of Virginia, have similarly concluded that judicial estoppel may be raised and applied by a court sua sponte.
Cathcart v. Flagstar Corp.
, No. 97-1977,
Reference
- Full Case Name
- Russell Emory EILBER v. FLOOR CARE SPECIALISTS, INC., Et Al.
- Cited By
- 4 cases
- Status
- Published