United States District Court, E.D. Pennsylvania
MEMORANDUM AND ORDER
action, Plaintiffs Valerie O'Connell and Albert
Kleschick, Sr., wife and husband (“Plaintiffs”),
seek damages from Marshall's, Inc., and the TJX
Companies, Inc. (“Defendants”),  for damages
allegedly sustained when Ms. O'Connell slipped and fell
in a Marshall's store. Presently before the court are
Defendants' motions for leave to amend their Answer to
add the affirmative defenses of standing and judicial
estoppel, and for summary judgment based on the same
affirmative defenses. Docs. 17 & 18. For the reasons that
follow, the motion for leave to amend the Answer will be
granted, and the motion for summary judgment will be denied.
FACTUAL AND PROCEDURAL BACKGROUND
the affirmative defenses that are the subject of
Defendants' motions rely on Plaintiffs' Chapter 13
bankruptcy petition. Therefore, I begin by exploring the
procedural history of both this lawsuit and the bankruptcy
petition. Except where stated, the following facts are not in
dispute for purposes of these motions.
16, 2016, Plaintiff O'Connell was injured in a
slip-and-fall accident giving rise to the present litigation.
Plaintiffs commenced this action in the Philadelphia Court of
Common Pleas on May 12, 2017, and Defendants timely removed
it to this court on May 30, 2017. Doc. 1. Plaintiff
O'Connell states a claim for negligence and Plaintiff
Kleschnik states a claim for loss of consortium. Id.
at 23 (Complaint). On June 16, 2017, Defendants filed their
Answer. Doc. 4.
point after this suit was filed, Defendants learned that on
November 12, 2015 -- that is, approximately six months prior
to the incident giving rise to the present civil action --
Plaintiffs filed for Chapter 13 bankruptcy protection in the
Eastern District of Pennsylvania. See Bankr. Pet.
15-18147, Doc. 17-4 (Exh. C); Voluntary Pet. & Summary of
Schedules, Doc. 17-7 (Exh. D). At the time of the filing,
Plaintiff Kleschnik had a pending claim in a slip and fall
case, and disclosed that claim on the Chapter 13 Schedule
B-Personal Property (“Schedule B”) form, in the
category of “Other contingent and unliquidated claims
of every nature . . . .” Schedule B, Doc. 17-7 at 9,
item 21 (ECF pagination).
20, 2017, Plaintiffs filed an Amended Schedule B form with
the bankruptcy court, providing updated information on
Plaintiff Kleschick's previously-disclosed personal
injury claim, and adding (without any date information)
Plaintiff O'Connell's “Age Discrimination
action.” Doc. 17-6 (Exh. E) (“Amended Schedule
B”). However, in the Amended Schedule B, Plaintiffs did
not disclose the existence of their negligence action against
Defendants in the instant matter.
August 18, 2017, Defendants filed the present related motions
-- first, a motion for leave to amend the Answer to assert
the affirmative defenses of standing and judicial estoppel,
and second, a motion for summary judgment based on the same
affirmative defenses. Docs. 17 & 18. In the motions,
Defendants argue that Plaintiffs did not have standing to
bring this action because they did not disclose it to the
bankruptcy court or bring it on behalf of the bankruptcy
estate, and that the action is barred by the doctrine of
judicial estoppel because Plaintiffs' position before the
bankruptcy court is inconsistent with their position in this
lawsuit, and because Plaintiffs' failure to disclose the
present negligence action to the bankruptcy court evidenced
an intent to conceal it from potential creditors.
August 25, 2017, Plaintiffs filed a second Amended Schedule B
with the bankruptcy court, for the first time disclosing the
present lawsuit. See second Amended Schedule B, Doc.
19 Exh. 2 (“Second Amended Schedule B”).
September 1, 2017, Plaintiff filed a response in opposition
to Defendants' motion for leave to amend, arguing that
the motion should be denied on the grounds of delay and
futility. Doc. 19. On September 13, 2017, Plaintiff filed a
response in opposition to Defendants' motion for summary
judgment, arguing that they were not required to disclose the
present lawsuit to the bankruptcy court because it arose
several months after they filed for Chapter 13 bankruptcy
protection, and that to the extent they were required to do
so, they filed the second Amended Schedule B immediately
after Defendants' motions alerted them to the issue. Doc.
21. Defendants thereafter filed reply briefs in support of
both motions. Docs. 24 & 25.
DEFENDANTS' MOTION FOR LEAVE TO AMEND
aver that during discovery in this case, they learned that
Plaintiffs had previously filed for Chapter 13 bankruptcy, in
a proceeding which entered an automatic stay and remains
pending in the bankruptcy court, and without disclosing their
claims against Defendants to that court. As a result,
Defendants seek to amend their Answer to include the
following affirmative defenses:
TWENTIETH AFFIRMATIVE DEFENSE
Plaintiffs' claims are barred by the doctrine of judicial
estoppel, which prevents a party from taking inconsistent
positions by prosecuting claims not disclosed in a bankruptcy
proceeding. Plaintiffs had an affirmative duty to disclose
assets including causes of action to the bankruptcy court,
failed to do and thereby represented that they had no such
claims. Plaintiffs cannot now take the inconsistent and
opposite position that they do have a claim by pursuing this
TWENTY-FIRST AFFIRMATIVE DEFENSE
Plaintiffs' claims are barred because they lack
standing to pursue the claims. Having filed for bankruptcy
protection, all of the Plaintiffs' assets, including
these claims, are property of the bankruptcy estate, and
having failed to disclose the claims, Plaintiffs lack
standing to pursue them.
Doc. 17 ¶ 17.
are unable to amend their Answer without leave or court or
consent of Plaintiffs as too much time has passed after
service of their Answer. See Fed.R.Civ.P. 15(a)(1)
(allowing 21 days to amend pleading not requiring a
response). Therefore, their ability to amend their Answer is
governed by Rule 15(a)(2), which provides that “a party
may amend its pleadings only with the opposing party's
consent or the court's leave. The court should freely
give leave when justice so requires.” Id. R.
15(a)(2). Leave to amend a pleading is generally granted
unless equitable considerations “render it otherwise
unjust.” Arthur v. Maersk, Inc., 434 F.3d 196,
204 (3d Cir. 2006) (citing Foman v. Davis, 371 U.S.
178, 182 (1962)). “Among the factors that may justify
denial of leave to amend are undue delay, bad faith, and
futility, ” although courts have consistently
recognized that “prejudice to the non-moving ...