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Pegg v. Steel Dynamics, Inc.

United States District Court, N.D. Mississippi, Aberdeen Division

March 9, 2018




         Craig Pegg was injured in a fall while performing contracted maintenance work on Severstal Columbus, LLC's premises. Seeking damages for his injuries, Pegg sued Steel Dynamics, Inc., Steel Dynamics Columbus, LLC, and Severstal Columbus Holdings, LLC in the Circuit Court of Lowndes County, Mississippi.[1] Steel Dynamics removed the case to this Court, and subsequently filed its Motion for Summary Judgment [22] that is now before the Court. Plaintiff Pegg filed his Response [27], and Defendant Steel Dynamics filed its Reply [29], making this issue ripe for review.

         Factual and Procedural Background

         In July of 2009, Plaintiff Pegg filed for Chapter 13 bankruptcy and his bankruptcy plan was confirmed in March of 2010. The Plaintiff's accident occurred on October 31, 2013. The Plaintiff subsequently completed his bankruptcy plan, and the Bankruptcy Court closed his case in August of 2014.

         The Plaintiff did not disclose the injury claim asserted in the instant case in his bankruptcy proceedings. Because the Plaintiff did not disclose his claim in bankruptcy, Steel Dynamics argues that he is judicially estopped from asserting his claim now. The Plaintiff urges this Court not to apply judicial estoppel in this case, and in an attempt to cure his non-disclosure, re-opened his bankruptcy case to amend his schedules.[2]

         The Court must determine whether the principles of judicial estoppel warrant application here to bar the Plaintiff's injury claim.

         Standard of Review

         Federal Rule of Civil Procedure 56 governs summary judgment. Summary judgment is warranted when the evidence reveals no genuine dispute regarding any material fact, and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The rule “mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial.” Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

         In reviewing the evidence, factual controversies are to be resolved in favor of the non-movant, “but only when . . . both parties have submitted evidence of contradictory facts.” Little v. Liquid Air Corp., 37 F.3d 1069, 1075 (5th Cir. 1994). When such contradictory facts exist, the Court may “not make credibility determinations or weigh the evidence.” Reeves v. Sanderson Plumbing Prods., Inc., 530 U.S. 133, 150, 120 S.Ct. 2097, 147 L.Ed.2d 105 (2000).

         The moving party “bears the initial responsibility of informing the district court of the basis for its motion, and identifying those portions of [the record] which it believes demonstrate the absence of a genuine issue of material fact.” Celotex, 477 U.S. at 323, 106 S.Ct. 2548. The nonmoving party must then “go beyond the pleadings” and “designate ‘specific facts showing that there is a genuine issue for trial.'” Id. at 324, 106 S.Ct. 2548 (citation omitted).

         Judicial Estoppel

         As noted above, the Defendant argues that judicial estoppel bars the Plaintiff's claims. The doctrine of judicial estoppel “prevents a party from asserting a claim in a legal proceeding that is inconsistent with a claim taken by that party in a previous proceeding.” King v. Cole's Poultry, LLC, No. 1:14-CV-88, 2016 WL 7191701, at *2-3 (N.D. Miss. Dec. 12, 2016) (citing Reed v. City of Arlington, 650 F.3d 571, 573-74 (5th Cir. 2011); 18 James Wm. Moore et al., Moore's Federal Practice § 134.30 at 63 (3d ed. 2011)). The doctrine is intended to protect the integrity of the judicial process by “prevent[ing] parties from playing fast and loose with (the courts) to suit the exigencies of self-interest.” Brandon v. Interfirst Corp., 858 F.2d 266, 268 (5th Cir. 1988) (quoting USLIFE Corp. v. U.S. Life Ins. Co., 560 F.Supp. 1302, 1304-05 (N.D. Tex. 1983)) (citation omitted). Judicial estoppel is “an equitable doctrine invoked by a court at its discretion.Reed, 650 F.3d at 574 (quoting New Hampshire v. Maine, 532 U.S. 742, 749-50, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001)) (emphasis added).

         “[A]gainst the backdrop of the bankruptcy system . . . judicial estoppel must be applied in such a way as to deter dishonest debtors, whose failure to fully and honestly disclose all their assets undermines the integrity of the bankruptcy system . . . .” U.S. ex rel. Long v. GSDMIdea City, LLC, 798 F.3d 265, 271 (5th Cir. 2015) (citing Reed, 650 F.3d at 574; see also Jethroe v. Omnova Solutions, Inc., 412 F.3d 598, 600 (5th Cir. 2005) (“Judicial estoppel is particularly appropriate where . . . a party fails to disclose an asset to a bankruptcy court, but then pursues a claim in a separate tribunal based on that undisclosed asset.”). The Fifth Circuit has indicated:

A court should apply judicial estoppel if (1) the position of the party against which estoppel is sought is plainly inconsistent with its prior legal position; (2) the party against which estoppel is sought convinced a court to accept the ...

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