REL: 11/07/2014
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SUPREME COURT OF ALABAMA
OCTOBER TERM, 2014-2015
____________________
1130342
____________________
Ex parte Jackson Hospital & Clinic, Inc., et al.
PETITION FOR WRIT OF MANDAMUS
(In re: Joanne Anderson
v.
Jackson Hospital & Clinic, Inc., et al)
____________________
1130357
____________________
Ex parte Joanne Anderson
PETITION FOR WRIT OF MANDAMUS
(In re: Joanne Anderson
v.
Jackson Hospital & Clinic, Inc., et al)
(Montgomery Circuit Court, CV-12-1044)
STUART, Justice.
Joanne Anderson sued Jackson Hospital and Clinic, Inc.,
Dr. Stephen K. Kwan, and Dr. Kwan's practice group, Capital
Cardio-Thoracic, P.C. (hereinafter referred to collectively as
"the Jackson Hospital defendants"), in the Montgomery Circuit
Court, asserting medical-malpractice claims against them.
Thereafter, the trial court granted a motion to substitute
bankruptcy trustee Daniel G. Hamm for Anderson as the real
party in interest pursuant to Rule 17, Ala. R. Civ. P.,
because Anderson had filed a petition for Chapter 7 bankruptcy
pursuant to 11 U.S.C. § 701 et seq. after her medical-
malpractice claim had accrued. The Jackson Hospital
defendants subsequently petitioned this Court for permission
to file an interlocutory appeal pursuant to Rule 5, Ala. R.
App. P., arguing that Hamm's attempt to be substituted as the
real party in interest was untimely under Rule 17; Anderson
filed a separate Rule 5 petition for permission to appeal,
2
1130342, 1130357
challenging the trial court's decision to remove her as the
plaintiff in this case. We granted both petitions; however,
as explained infra, we now treat the parties' petitions for
permissive appeals as petitions for writs of mandamus, and we
deny those petitions.
I.
On October 5, 2010, Anderson presented herself at the
Jackson Hospital emergency room complaining of chest pain.
Anderson had previously been diagnosed with coronary heart
disease, and it was ultimately determined that she now needed
coronary-artery-bypass surgery; on October 8, 2010, Dr. Kwan
performed the procedure. Anderson thereafter had circulation
issues in her feet; however, she was discharged from the
hospital on October 25, 2010. Dr. Kwan conducted follow-up
examinations with Anderson on November 2, 2010, and November
23, 2010, and on those visits she complained of continuing
pain and circulation issues with her feet. During those
examinations, Dr. Kwan determined that parts of Anderson's
feet, including at least some toes, would likely have to be
amputated; however, a final decision on the matter was delayed
3
1130342, 1130357
because the swelling and blistering on Anderson's feet made it
difficult to fully evaluate them.
On November 24, 2010, Anderson was again admitted to
Jackson Hospital. On November 27, 2010, Dr. Kwan examined her
again. He noted at that time that circulation in her legs was
fine above the ankles, but that she had developed gangrene and
that parts of her feet were dead with no circulation at all.
After waiting for her overall condition to improve –– she was
also experiencing kidney and respiratory failure at this time
–– Dr. Kwan performed surgery on December 8, 2010, to amputate
parts of Anderson's feet. During the course of the surgery,
he ultimately determined that the feet were no longer viable
and he accordingly performed bilateral below-the-knee
amputations.
For all that appears, Anderson thereafter recovered to
some extent and was discharged from Jackson Hospital. On
November 8, 2011, Anderson filed a petition for Chapter 7
bankruptcy in the United States Bankruptcy Court for the
Middle District of Alabama. As part of that petition,
Anderson completed schedules detailing her debts and her
assets. Those schedules indicated that she had approximately
4
1130342, 1130357
$28,000 of unsecured debt, consisting mostly of medical and
consumer debt, and that she had no significant assets.
Notably, she did not include among her assets any potential
cause of action against the Jackson Hospital defendants, even
though she was required by bankruptcy law to do so. See,
e.g., Transouth Fin. Corp. v. Murry, 311 B.R. 99, 102 (M.D.
Ala. 2004) ("One who files bankruptcy must disclose all of his
assets, including causes of action, lawsuits, or potential
lawsuits."). On March 1, 2012, the bankruptcy court granted
Anderson a complete discharge of her debts, presumably putting
an end to those bankruptcy proceedings.
On October 9, 2012, Anderson initiated the instant
medical-malpractice action against the Jackson Hospital
defendants. On approximately May 2, 2013, Anderson filed
responses to interrogatories served upon her by the Jackson
Hospital defendants in which she revealed that she had
recently filed for bankruptcy. The Jackson Hospital
defendants then obtained the records from Anderson's
bankruptcy proceedings and, upon discovering that Anderson had
not disclosed a potential cause of action against them in the
list of assets filed with the bankruptcy court, prepared a
5
1130342, 1130357
motion asking the trial court to enter a summary judgment in
their favor on judicial-estoppel grounds. See, e.g., Luna v.
Dominion Bank of Middle Tennessee, Inc., 631 So. 2d 917, 919
(Ala. 1993) ("The doctrine of judicial estoppel applies, where
a debtor in bankruptcy proceedings fails to disclose any claim
that may be presented in a nonbankruptcy contest, to estop the
debtor from presenting the claim.").
On Friday, May 24, 2013, one of the attorneys for the
Jackson Hospital defendants notified one of Anderson's
attorneys of the substance of the summary-judgment motion he
had prepared to file. In an affidavit contained in the
record, the attorney for the Jackson Hospital defendants
states that Anderson's attorney asked him not to file the
motion until after the impending Memorial Day weekend and
that, as a courtesy, he waited until Tuesday, May 28, 2013, to
file the motion. Prior to the filing on the afternoon of May
28 of an amended answer and the summary-judgment motion
asserting judicial estoppel as a ground, however, Anderson
filed a motion in the bankruptcy court seeking to reopen her
bankruptcy case, along with amended schedules listing as an
asset her cause of action against the Jackson Hospital
6
1130342, 1130357
defendants. Two days later, on May 30, 2013, Hamm filed a
similar motion seeking to reopen Anderson's bankruptcy case
and to be reappointed trustee, and he thereafter moved the
bankruptcy court to authorize him to employ one of the
attorneys who had been retained by Anderson in her action
against the Jackson Hospital defendants as his attorney in
that action as well. The bankruptcy court eventually approved
all of those motions, reopening Anderson's bankruptcy case on
June 14, 2013, and, on July 8, 2013, authorizing Hamm to use
Anderson's attorney in the instant action.
After first learning of Anderson's medical-malpractice
claim, Hamm also, on May 31, 2013, filed a motion with the
trial court in this action, notifying it that he had just
learned of Anderson's medical-malpractice claim and that he
was seeking to reopen Anderson's bankruptcy case and to be
reappointed trustee in the case. Hamm further stated in that
motion that he was in current "discussions with an attorney to
represent ... the plaintiff/trustee's interest" and he
requested that the case be stayed until a decision was made as
to representation. It is not clear whether the trial court
7
1130342, 1130357
ever explicitly ruled on Hamm's request for a stay, but the
discovery process appears to have continued during this time.
On November 4, 2013, Hamm filed a motion to formally
intervene in this action, asserting that he was the real party
in interest under Rule 17. The Jackson Hospital defendants
thereafter filed an objection, arguing that Rule 17 allows a
real party in interest to be substituted for the original
party only if the motion seeking to make the substitution is
made within "a reasonable time" after the issue is raised,
and, they argued, Hamm's more than five-month delay was not a
"reasonable time." On November 14, 2013, the trial court
conducted a hearing at which it heard arguments on the issues
raised by the parties in connection with the Jackson Hospital
defendants' summary-judgment motion and Hamm's motion to
intervene. On December 9, 2013, the trial court entered an
order resolving those issues, stating as follows:
"[W]ith regard to defendants' motion for summary
judgment, the court notes that such motion is based
upon the doctrine of judicial estoppel (contending
that the plaintiff failed to disclose her cause of
action to the bankruptcy court during her Chapter 7
proceedings) and on the contention that plaintiff
Joanne Anderson is not the real party in interest.
... [T]he plaintiff has now amended the complaint
and [Hamm,] the trustee in bankruptcy has been
permitted to intervene as the real party in
8
1130342, 1130357
interest. Pursuant to Hamm v. Norfolk Southern
Railway Co., 52 So. 3d 484 (Ala. 2010), the
defendants' motion for summary judgment is denied in
part, such that [Hamm] shall be permitted to pursue
Joanne Anderson's claims against the defendants for
a recovery up to the amount necessary to pay the
claims of Anderson's creditors and expenses
associated with the related bankruptcy proceedings.
The motion for summary judgment is granted in all
other respects, and summary judgment is hereby
entered in favor of the defendants and against
Plaintiff Joanne Anderson as to all claims brought
by her."
However, the trial court recognized that there was substantial
ground for difference of opinion regarding its conclusions of
law, and it accordingly certified its order for an
interlocutory appeal pursuant to Rule 5.
On December 23, 2013, the Jackson Hospital defendants
petitioned this Court for permission to appeal immediately the
trial court's order insofar it held that Hamm's motion to
intervene was timely under Rule 17 (case no. 1130342), and, on
December 24, 2013, Anderson petitioned this Court for
permission to appeal immediately the trial court's order
insofar as it held that she –– as opposed to Hamm acting on
behalf of her creditors –– was judicially estopped from
proceeding with her medical-malpractice claim (case no.
1130357). On May 27, 2014, this Court granted both petitions
9
1130342, 1130357
and ordered briefing. This Court has now elected to treat
both petitions for permission to appeal as petitions for a
writ of mandamus.1 The Jackson Hospital defendants and Hamm
have now filed briefs in case no. 1130342, and the Jackson
Hospital defendants and Anderson have filed briefs in case no.
1130357.
1
Although this Court granted both the Jackson Hospital
defendants' petition and Anderson's petition to file
permissive appeals pursuant to Rule 5, upon further
examination it is apparent that a petition for a writ of
mandamus is the appropriate means by which to seek review of
the issues they raise –– whether Hamm timely moved to
substitute himself as the real party in interest and whether
Anderson should be allowed to proceed as the real party in
interest regardless of her bankruptcy filing and initial
failure to disclose her claim in those bankruptcy proceedings.
See Ex parte U.S. Bank Nat'l Ass'n, [Ms. 1120904, Feb. 7,
2014] ___ So. 3d ___, ___ (Ala. 2014) (listing issues this
Court has held to be appropriate for mandamus review); Ex
parte Tyson Foods, Inc., 146 So. 3d 1041 (Ala. 2013)
(reviewing, on petition for writ of mandamus, the trial
court's ruling on a motion seeking to add a real party in
interest); and Ex parte Chemical Lime of Alabama, Inc., 916
So. 2d 594, 596-97 (Ala. 2005) (considering, on petition for
writ of mandamus, whether plaintiffs had timely moved to
substitute defendant for a fictitiously named defendant).
Accordingly, we now exercise our discretion to treat the
parties' permissive appeals as petitions for the writ of
mandamus. See, e.g., Ex parte Watson, 37 So. 3d 752, 757
(Ala. 2009) ("This Court ordered that the defendants' petition
for permission to appeal be treated as a petition for a writ
of mandamus ...."), and Ex parte G & G Steel, Inc., 601 So. 2d
990, 991 (Ala. 1992) ("This Court has elected to treat the
Rule 5 petition for permission to appeal as a petition for a
writ of mandamus.").
10
1130342, 1130357
II.
In Hamm v. Norfolk Southern Ry. Co., 52 So. 3d 484, 493
n. 3 (Ala. 2010), this Court indicated that it reviews a trial
court's decision regarding what constitutes "a reasonable
time" for purposes of Rule 17 to determine whether the court
exceeded its discretion:
"[T]he question whether a 'reasonable time' would
have passed and whether the action should have been
dismissed at that juncture for a failure of
substitution are questions as to which a trial court
is to exercise discretion based on its assessment of
the type of case and its facts and the procedural
history of the case. [6A Charles Alan Wright,
Arthur R. Miller & Mary Kay Kane,] Federal Practice
& Procedure at § 1555 [(2d ed. 1990)] ('What
constitutes a reasonable time is a matter of
judicial discretion and will depend upon the facts
of each case.')."
We further quoted in Hamm the United States Court of Appeals
for the Eleventh Circuit:
"'"[W]e review the district court's application of
judicial estoppel for abuse of discretion." Burnes
[v. Pemco Aeroplex, Inc.], 291 F.3d [1282,] 1284
[(11th Cir. 2002)]. "The abuse of discretion
standard includes review to determine that the
discretion was not guided by erroneous legal
conclusions." Talavera v. School Bd. of Palm Beach
County, 129 F.3d 1214, 1216 (11th Cir. 1997).'"
52 So. 3d at 489 (quoting Parker v. Wendy's Int'l, Inc., 365
F.3d 1268, 1271 (11th Cir. 2004)). See also Hughes v.
11
1130342, 1130357
Mitchell Co., 49 So. 3d 192, 203 (Ala. 2010) (stating that
"there is no general formulation of principle dictating when
the doctrine of judicial estoppel applies [and] such a
decision is left to the court's discretion"). Thus, we review
the trial court's decision on both the Rule 17 and judicial-
estoppel issues to determine whether it exceeded its
discretion.2
2
In Lumpkin v. City of Gulf Shores, 964 So. 2d 1233 (Ala.
Civ. App. 2006), the Court of Civil Appeals affirmed a summary
judgment entered in favor of the appellee, in part because
that court concluded that the appellants had failed to timely
substitute the real party in interest as a plaintiff. It
appears in that case that the trial court had not articulated
its reasons for entering the summary judgment, and it is not
clear that the issue whether the plaintiffs had been given the
Rule 17(a)-mandated "reasonable time" to make substitution of
the proper real party in interest had been considered by the
trial court or even raised by the parties before the summary
judgment was entered. Accordingly, the Court of Civil Appeals
appropriately considered that issue de novo. See Lumpkin, 964
So. 2d at 1236 (stating that the appellants prefaced their
argument that they should still be allowed to substitute the
real party in interest by stating: "'[I]f the trial court's
rationale for dismissing [their] appeal was that [the
Association] instead of the [appellants] was the real party in
interest, then [the Association] should be joined or
substituted to prevent what is at present a gross miscarriage
of justice.'" (quoting the appellants' brief) (emphasis
added)). In the instant case, however, it is apparent from
the trial court's order ruling on the Jackson Hospital
defendants' summary-judgment motion and Hamm's motion to
intervene that the trial court had affirmatively considered
the timeliness issue and found that Hamm had moved within a
reasonable time to be named the real party in interest.
Accordingly, for the reasons explained in Hamm, 52 So. 3d at
12
1130342, 1130357
III.
We first consider the Jackson Hospital defendants'
arguments in case no. 1130342 concerning the timeliness of
Hamm's intervention. The issue presented in this case was
aptly stated by the trial court as being "whether [Hamm's]
motion for leave to intervene and to file [an] amended
complaint was timely and properly filed pursuant to Rules 17
and/or 24 of the Alabama Rules of Civil Procedure and the
applicable statute of limitations." Rule 17(a) provides, in
pertinent part:
"No action shall be dismissed on the ground that it
is not prosecuted in the name of the real party in
interest until a reasonable time has been allowed
after objection for ratification of commencement of
the action by, or joinder or substitution of, the
real party in interest; and such ratification,
joinder, or substitution shall have the same effect
as if the action had been commenced in the name of
the real party in interest."
In this case, the first "objection" to Anderson's status as
the real party in interest to assert the medical-malpractice
claim against the Jackson Hospital defendants came on May 28,
2013, when the Jackson Hospital defendants filed an amended
answer succinctly asserting that "[Anderson] is not the real
489 n. 3, we review that decision for an excess of discretion.
13
1130342, 1130357
party in interest in this case." It is thereafter undisputed
that Hamm did not formally move to take Anderson's place as
the real party in interest until November 5, 2013 –– over five
months after the initial objection was made. It is apparent
that Hamm became aware of the objection at approximately the
same time the objection was made because, on May 30, 2013, he
moved the bankruptcy court to reopen Anderson's bankruptcy
case; accordingly, the relevant question for the trial court
was whether that five-month delay was reasonable.
The Jackson Hospital defendants essentially argue that a
five-month delay is per se unreasonable and, in support of
that argument, cite Lumpkin v. City of Gulf Shores, 964 So. 2d
1233 (Ala. Civ. App. 2006), and Wilson v. Tucker, No. 10-CV-
0714-CVE-FHM (N.D. Okla. Jan. 5, 2011) (not reported in F.
Supp. 2d).3 In Lumpkin, the Court of Civil Appeals indicated
that a summary judgment was due to be affirmed because, in the
3
The United States District Court in Wilson considered the
meaning of "a reasonable time" in Rule 17(a), Fed. R. Civ. P.,
which is substantially similar to Rule 17(a), Ala. R. Civ. P.
We have stated that "[b]ecause the Alabama Rules of Civil
Procedure are patterned after the Federal Rules of Civil
Procedure, federal cases construing the Federal Rules of Civil
Procedure are persuasive authority in construing the Alabama
Rules of Civil Procedure." Ex parte Alabama State Pers. Bd.,
54 So. 3d 886, 893 (Ala. 2010).
14
1130342, 1130357
two-month period after the appellee had articulated a real-
party-in-interest challenge, the appellants "did nothing" to
remedy the issue by moving either to substitute or to join the
identified real party in interest. 964 So. 2d at 1236.
Similarly, in Wilson, the United States District Court for the
Northern District of Oklahoma granted the defendant's motion
to dismiss after neither the plaintiff nor the trustee
appointed in the plaintiff's separate bankruptcy case "made
any effort to substitute the trustee as the real party in
interest" in the two-month period after the defendant had
asserted a real-party-in-interest challenge. The Jackson
Hospital defendants argue that the principle to be gleaned
from these cases is that, if a two-month delay is
unreasonable, then a five-month delay surely is unreasonable.
We disagree. After reviewing these and other relevant
cases, we think the principle that is most apparent is that
trial courts are best equipped to decide what constitutes "a
reasonable time" under Rule 17(a) in any particular case based
on their familiarity with the facts and specific history of
the case, and, accordingly, an appellate court should
generally defer to the trial court's exercise of that
15
1130342, 1130357
discretion. Given the facts of a particular case, a trial
court may decide that two months is not a reasonable time, or
it may decide that an even shorter period is not reasonable,
or that a longer period is reasonable. For example, in
Killmeyer v. Oglebay Norton Co., 817 F. Supp. 2d 681 (W.D. Pa.
2011), the United States District Court for the Western
District of Pennsylvania considered the same general issue
raised in this case –– what was a reasonable time for a
bankruptcy trustee to move to substitute himself as the real
party in interest in an action brought by a Chapter 7 debtor.
After noting that what constitutes a reasonable time is a
matter of judicial discretion dependant on the facts of the
case, the federal district court concluded that the trustee's
motion to substitute, made approximately four months after the
defendants had asserted a formal real-party-in-interest
challenge and five months after the trustee first learned of
the action, was nevertheless timely. 817 F. Supp. 2d at 690.
The federal district court further noted that, as in the
instant case, part of any delay was attributable to the fact
that the trustee had not known of the action at the time it
was filed and, upon learning of the action, the trustee
16
1130342, 1130357
subsequently had to seek the bankruptcy court's approval to
have counsel appointed to prosecute the claim on the trustee's
behalf.4 Id.
Thus, the Killmeyer court concluded that a trustee's
motion to substitute himself as plaintiff for a Chapter 7
debtor was timely even though that motion was filed
approximately five months after the trustee first learned that
the Chapter 7 debtor had initiated the action. The trial
court in this action made essentially the same conclusion, and
we cannot say that it exceeded its discretion by doing so.
Accordingly, the action should proceed as if it had been
commenced in the name of Hamm, the real party in interest.
Rule 17(a). See also Board of Water & Sewer Comm'rs of City
of Mobile v. McDonald, 56 Ala. App. 426, 430-31, 322 So. 2d
717, 721 (Ala. Civ. App. 1975) (stating that, when Rule 17(a)
is applied, it is unnecessary to resort to Rule 15(c), Ala. R.
4
We further note that Hamm notified the trial court on May
31, 2013 –– just days after learning that Anderson had
initiated an action against the Jackson Hospital defendants ––
that he was seeking counsel to represent "the
plaintiff/trustee's interest" in that case moving forward.
Thus, Hamm essentially notified the trial court at that time
that he ratified Anderson's commencement of the action and
would be taking it over.
17
1130342, 1130357
Civ. P., to determine whether an amended pleading relates back
to the date of an original pleading).
IV.
We next consider Anderson's argument in case no. 1130357
that she should be allowed to prosecute this action in her
individual capacity. The trial court stated the issue in that
regard as follows:
"Whether [Anderson] is barred from prosecuting this
action in her individual capacity: (a) based on the
doctrine of judicial estoppel, by virtue of her not
disclosing the presently advanced cause of action
during her Chapter 7 proceedings, and/or (b) based
on her not being the real party in interest."
Anderson essentially argues to this Court that the Jackson
Hospital defendants failed to establish that the doctrine of
judicial estoppel should apply and that the trial court's
ruling unfairly prevents her from petitioning the bankruptcy
court for permission to prosecute the medical-malpractice
action herself as the real party in interest. Neither of
those arguments has merit.
First, our decision in Hamm illustrates that the trial
court's application of the doctrine of judicial estoppel was
proper. In Hamm, the plaintiff filed a bankruptcy petition in
October 2004; that petition did not disclose any potential
18
1130342, 1130357
causes of action in the list of assets submitted to the
bankruptcy court. 52 So. 3d at 487. Nevertheless, in January
2005, the plaintiff initiated an action against his former
employer, and, in March 2005, he received a complete discharge
of debts and his bankruptcy case was closed. Id. In January
2006, the plaintiff's former employer learned of the
bankruptcy case during a deposition, and it thereafter amended
its answer to assert the affirmative defense of judicial
estoppel and filed a motion for a summary judgment on that
same ground. Id. Thereafter, the plaintiff moved the
bankruptcy court to reopen his bankruptcy estate, and he also
filed amended schedules listing the cause of action against
his former employer as an asset of the bankruptcy estate. 52
So. 3d at 488. Nevertheless, the trial court granted the
employer's summary-judgment motion, and, after the trial court
also denied a postjudgment motion seeking to substitute the
bankruptcy trustee as the real party in interest, the
plaintiff and the trustee filed a joint appeal to this Court.
Id.
After holding that the bankruptcy trustee was in fact the
real party in interest, 52 So. 3d at 491-92, this Court
19
1130342, 1130357
considered what effect the doctrine of judicial estoppel
should have in the case:
"'In Ex parte First Alabama Bank, [883 So. 2d
1236 (Ala. 2003),] this Court "embrace[d] the
factors set forth in New Hampshire v. Maine[, 532
U.S. 742, 121 S.Ct. 1808, 149 L.Ed.2d 968 (2001),]
and join[ed] the mainstream of jurisprudence in
dealing with the doctrine of judicial estoppel."'
Middleton v. Caterpillar Indus., Inc., 979 So. 2d
53, 60 (Ala. 2007) (quoting Ex parte First Alabama
Bank, 883 So. 2d at 1246). For judicial estoppel to
apply (1) 'a party's later position must be "clearly
inconsistent" with its earlier position'; (2) the
party must have been successful in the prior
proceeding 'so that judicial acceptance of an
inconsistent position in a later proceeding would
create "the perception that either the first or
second court was misled"'; and (3) 'the party
seeking to assert an inconsistent position would
derive an unfair advantage or impose an unfair
detriment on the opposing party if not estopped.'
New Hampshire, 532 U.S. at 750–51 (citations
omitted); see Middleton, 979 So. 2d at 60–61; Ex
parte First Alabama Bank, 883 So. 2d at 1244–45.
This Court has stated that '[t]he purpose of
judicial estoppel is "'to protect the integrity of
the judicial process' by 'prohibiting parties from
deliberately changing positions according to the
exigencies of the moment.'"' Middleton, 979 So. 2d
at 59 (quoting New Hampshire, 532 U.S. at 749–50;
other citation omitted).
"It is evident that the trial court properly
applied the doctrine of judicial estoppel to [the
plaintiff] when it entered the summary judgment
against him. After he filed the ... action [against
his former employer], [the plaintiff] failed to
amend his bankruptcy schedules to reflect his ...
claim as a potential asset, and thereafter he
received a 'no-assets' discharge in the bankruptcy
20
1130342, 1130357
proceeding. Despite this outcome, [the plaintiff]
continued to prosecute the ... action. Thus, [the
plaintiff] had taken clearly inconsistent positions;
he was successful in his bankruptcy proceeding; and
he potentially could have received the unfair
advantage of a possible $750,000 'windfall' if he
succeeded in his claim against [his former
employer].
"The fact that the trial court properly applied
the doctrine of judicial estoppel to [the
plaintiff], however, does not mean that that
doctrine necessarily is applicable to [the]
bankruptcy trustee. ... The trustee has never
taken inconsistent positions with regard to the ...
claim because he did not know about the claim until
the bankruptcy schedules were amended to reflect the
existence of the claim as a potential asset to the
estate. Therefore, [the trustee] cannot be
judicially estopped from pursuing the claim."
52 So. 3d at 494. Thus, Hamm clearly indicates that the
doctrine of judicial estoppel can operate to bar a party from
pursuing an action if that party previously failed to disclose
the cause of action as an asset during bankruptcy proceedings
that take place after the cause of action arises.
Anderson nevertheless argues that the doctrine of
judicial estoppel should not apply to her for three reasons.
First, she argues that, unlike the plaintiff in Hamm, she did
not know of the existence of her cause of action until after
her bankruptcy case was closed. Thus, she argues, she has
21
1130342, 1130357
never knowingly asserted inconsistent positions so as to
implicate the doctrine of judicial estoppel.
However, this Court has indicated that the crucial
inquiry is not whether a plaintiff actually knew of a
potential claim, but whether a reasonable person should have
known about the potential claim. See Hamm, 52 So. 3d at 498
(citing Jinright v. Paulk, 758 So. 2d 553, 559 (Ala. 2000),
for the proposition that "among the questions of fact
essential to a determination of the applicability of the
doctrine of judicial estoppel is 'whether a debtor who is
engaged in bankruptcy proceedings knew or should have known
about claims or causes of action that should be disclosed as
assets'"), and Luna, 631 So. 2d at 919 ("[The plaintiff]
further contends that the doctrine of judicial estoppel should
not be applied to him because, he says, he was unaware of his
claims against [the defendant] until after his bankruptcy
discharge. This argument is also without merit. Certainly,
if the facts ... were as he says they were, then [the
plaintiff], acting as a reasonable person, would have known,
when he filed his bankruptcy proceeding, that he had a claim
against [the defendant]."). In this case, Anderson alleges
22
1130342, 1130357
that the Jackson Hospital defendants' negligence following the
October 2010 heart surgery resulted in the amputation of her
feet in December 2010. Thus, the result of the alleged
negligence was admittedly apparent by December 2010, and, if
the facts are as Anderson has asserted them to be, a
reasonable person should accordingly have been aware by that
time that a possible cause of action against the Jackson
Hospital defendants existed. Moreover, Anderson essentially
agreed with this conclusion in a January 2013 amendment to her
complaint in which she stated that "[p]laintiff's injury and
defendants' substandard care [were] not discovered and could
not have reasonably been discovered prior to December of
2010." "'"Normally, factual assertions in pleadings and
pretrial orders are considered to be judicial admissions
conclusively binding on the party who made them."'" Noland
Health Servs., Inc. v. Wright, 971 So. 2d 681, 685-86 (Ala.
2007) (quoting Jones v. Kassouf & Co., 949 So. 2d 136, 142
(Ala. 2006) (Lyons, J., dissenting), quoting in turn White v.
ARCO/Polymers, Inc., 720 F.2d 1391, 1396 (5th Cir. 1983)).
Accordingly, we find no merit in Anderson's argument that the
trial court should not have applied the doctrine of judicial
23
1130342, 1130357
estoppel against her because she alleges she was not aware
that she had a possible claim against the Jackson Hospital
defendants at any time during the pendency of her bankruptcy
case.5
5
We further note that we are not impressed by Anderson's
contention that, "[a]fter the cause of action against
appellees became known to [her], she took the extraordinary
measure of reopening her bankruptcy case and amending her
bankruptcy schedules to list the cause of action against
appellees." Anderson's brief in case no. 1130357, p. 21-22.
Anderson does not dispute that she moved to reopen her
bankruptcy case in May 2013 only after being notified that the
Jackson Hospital defendants were preparing to move for a
summary judgment on a judicial-estoppel ground; she
undisputedly took no action to do so on her own initiative in
the seven months following the initiation of her lawsuit. In
Hamm, we warned against the incentives that would be created
if the initial failure to disclose assets in bankruptcy
proceedings was excused by giving effect to subsequent
amendments without consequence:
"'"Allowing [a debtor] to back-up, re-open the
bankruptcy case, and amend his bankruptcy filings,
only after his omission has been challenged by an
adversary, suggests that a debtor should consider
disclosing potential assets only if he is caught
concealing them. This so-called remedy would only
diminish the necessary incentive to provide the
bankruptcy court with a truthful disclosure of the
debtor's assets." Burnes[ v. Pemco Aeroplex, Inc.,
291 F.3d 1282,] 1288 [(11th Cir. 2002)] (citation
omitted). As such, [the debtor's] disclosure upon
re-opening the bankruptcy estate deserves no
favor.'"
52 So. 3d at 495 (quoting Barger v. City of Cartersville, Ga.,
348 F.3d 1289, 1297 (11th Cir. 2003)).
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1130342, 1130357
Anderson next argues that the doctrine of judicial
estoppel should not have been applied against her because, she
argues, she will gain no unfair advantage if she is allowed to
pursue her action against the Jackson Hospital defendants in
that the first $28,000 of any judgment awarded would go to
those entities holding her discharged debt. However, she
fails to recognize that she has already had $28,000 of debt
discharged and that the bankruptcy court, though it granted
her motion to reopen her bankruptcy case, denied her motion to
set aside the judgment discharging her debts. In Hamm, we
noted that the unfair-advantage prong of the Ex parte First
Alabama Bank, 883 So. 2d 1236 (Ala. 2003), judicial-estoppel
test was satisfied because the plaintiff "potentially could
have received the unfair advantage of a possible $750,000
'windfall'" if he was successful in prosecuting the claim
omitted from his bankruptcy petition. 52 So. 3d at 494. That
same potential for a windfall was present in this case as
well, and, as we explained in Hamm, it is sufficient to
establish the unfair-advantage prong of the judicial-estoppel
test; accordingly, Anderson's argument on this point is
without merit.
25
1130342, 1130357
Anderson's final argument regarding the doctrine of
judicial estoppel is that the Jackson Hospital defendants
suffer from unclean hands in this matter, which, she says,
should estop them from asserting judicial estoppel.
Essentially, Anderson argues that the Jackson Hospital
defendants fraudulently concealed mistakes that, she generally
alleges, were made during her coronary surgery and/or her
follow-up care until after her bankruptcy case was completed
and that they accordingly should not be allowed to profit from
their wrongful conduct by invoking the doctrine of judicial
estoppel against her. However, as discussed above, we have
already concluded, based partly upon Anderson's own statements
in her amended pleadings, that the Jackson Hospital
defendants' alleged negligence could reasonably have been
discovered by December 2010. Thus, Anderson cannot attribute
to the Jackson Hospital defendants her failure, in November
2011, to disclose to the bankruptcy court a claim based upon
that alleged negligence.
Moreover, this Court has stated that "'the doctrine of
unclean hands cannot be applied in the context of nebulous
speculation or vague generalities; but rather it finds
26
1130342, 1130357
expression in specific acts of willful misconduct which is
morally reprehensible as to known facts.'" Retail Developers
of Alabama, LLC v. East Gadsden Golf Club, Inc., 985 So. 2d
924, 932 (Ala. 2007) (quoting Sterling Oil of Oklahoma, Inc.
v. Pack, 291 Ala. 727, 746, 287 So. 2d 847, 864 (1973)).
Although Anderson has generally accused the Jackson Hospital
defendants of fraudulently hiding their alleged negligence,
she does not, in her initial brief to this Court, cite any
"specific acts of willful misconduct." After the Jackson
Hospital defendants identified this deficiency, Anderson
attempted to correct it in her reply brief; however, that
attempt comes too late. As the Court of Criminal Appeals
explained in L.J.K. v. State, 942 So. 2d 854, 868-69 (Ala.
Crim. App. 2005):
"'Recitation of allegations without citation to any
legal authority and without adequate recitation of
the facts relied upon has been deemed a waiver of
the arguments listed.' Hamm v. State, 913 So. 2d
460, 486 (Ala. Crim. App. 2002). [The appellant]
cites no legal authority in support of his argument.
He also fails to provide an adequate recitation of
the facts relied upon in support of his argument;
merely referring to the record without setting forth
the facts in support of an argument is not
sufficient to comply with Rule 28(a)(10), Ala. R.
App. P. Moreover, although [the appellant] cites
Strickland v. Washington, 466 U.S. 668, 104 S.Ct.
2052, 80 L.Ed.2d 674 (1984), in his reply brief, and
27
1130342, 1130357
lists four specific allegations of ineffective
assistance of counsel, because his initial brief
fails to comply with Rule 28(a)(10), and he did not
include those specific allegations in his initial
brief, we consider them to have been raised for the
first time in his reply brief. ... As noted above,
'an appellant may not raise a new issue for the
first time in a reply brief.' Woods v. State, 845
So. 2d [843] at 846 [(Ala. Crim. App. 2002)]. See
also James v. State, 788 So. 2d 185, 192 n. 2 (Ala.
Crim. App. 2000) (noting that an appellant may not
raise for the first time in his reply brief specific
allegations of ineffective assistance of counsel
that were not raised in his initial appellate
brief)."
We agree with the Court of Criminal Appeals' recitation of the
applicability of Rule 28(a)(10), Ala. R. App. P. Anderson has
not established that the trial court exceeded its discretion
in the manner in which it applied the doctrine of judicial
estoppel against her.
Anderson's final argument is that the summary judgment
should be reversed because, she argues, she should be given
the opportunity to ask the bankruptcy court if she, instead of
Hamm, the trustee, can pursue her claim against the Jackson
Hospital defendants. Anderson acknowledges that Hamm is
properly viewed as the real party in interest; however, she
argues that debtors are nevertheless sometimes allowed to
prosecute claims themselves if the trustee abandons the claim
28
1130342, 1130357
or the bankruptcy court authorizes the debtor to prosecute the
claim instead of the trustee. See Hamm, 52 So. 3d at 491. It
is evident by Hamm's actions in this case that he has no
intention of abandoning the action and leaving its prosecution
to Anderson, but Anderson argues that the bankruptcy court
might nevertheless authorize her to pursue the action instead
of Hamm and urges us to reverse the order entered by the trial
court so she can pursue this possibility with the bankruptcy
court.
Although we have no desire to remove this issue from the
bankruptcy court's purview, Anderson's argument simply comes
too late. Anderson could have made her request to the
bankruptcy court at any time before the entry of the judgment
that is the subject of these petitions but failed to do so.
Moreover, Anderson completely failed to raise this issue with
the trial court, and we cannot hold the trial court in error
for failing to give Anderson time to pursue this avenue with
the bankruptcy court when she never asked the trial court for
that additional time. See Andrews v. Merritt Oil Co., 612 So.
2d 409, 410 (Ala. 1992) ("This Court cannot consider arguments
raised for the first time on appeal; rather, our review is
29
1130342, 1130357
restricted to the evidence and arguments considered by the
trial court."). Anderson's argument is without merit.
V.
Anderson sued the Jackson Hospital defendants in October
2012 alleging that both of her feet were amputated as a result
of Dr. Kwan's negligence. However, because Anderson failed to
disclose this potential cause of action when she filed for
bankruptcy in November 2011, the Jackson Hospital defendants
moved the trial court to enter a summary judgment in their
favor on the ground of judicial estoppel. Thereafter, Hamm,
the bankruptcy trustee, moved to be substituted as the real
party in interest in the action initiated by Anderson based on
well established law holding that causes of action held by a
debtor in bankruptcy become the responsibility of the trustee.
The trial court subsequently entered an order substituting
Hamm as the plaintiff, and both the Jackson Hospital
defendants and Anderson sought review of that decision in this
Court: The Jackson Hospital defendants argue that Hamm waived
his right to be substituted as the real party in interest and
Anderson argues that she should be allowed to pursue her claim
instead of Hamm. However, as explained above, the parties
30
1130342, 1130357
have failed to establish that the trial court exceeded its
discretion with regard to either decision, and we accordingly
deny the parties' petitions for the writ of mandamus.
1130342 –– PETITION DENIED.
1130357 –– PETITION DENIED.
Bolin, Shaw, Main, Wise, and Bryan, JJ., concur.
Murdock, J., concurs specially.
Moore, C.J., concurs in the result.
Parker, J., recuses himself.
31
1130342, 1130357
MURDOCK, Justice (concurring specially).
I concur in the main opinion, but I write separately to
address note 2 of that opinion. In note 2, the main opinion
summarizes the actions of the Court of Civil Appeals in
Lumpkin v. City of Gulf Shores, 964 So. 2d 1233 (Ala. Civ.
App. 2006), as follows:
"[T]he Court of Civil Appeals affirmed a summary
judgment entered in favor of the appellee, in part
because that court concluded that the appellants had
failed to timely substitute the real party in
interest as a plaintiff. It appears in that case
that the trial court had not articulated its reasons
for entering the summary judgment, and it is not
clear that the issue whether the plaintiffs had been
given the Rule 17(a)-mandated 'reasonable time' to
make substitution of the proper real party in
interest had been considered by the trial court or
even raised by the parties before the summary
judgment was entered. Accordingly, the Court of
Civil Appeals appropriately considered that issue
de novo."
___ So. 3d at ___ n. 2. The notion that "the Court of Civil
Appeals appropriately considered [the stated] issue de novo"
would be correct only if it could be ascertained from the
record, including filings made in the trial court and the
trial court's order, that the trial court's summary-judgment
order was not based on that issue and, further, only if the
issue was one that could be invoked sua sponte by the
32
1130342, 1130357
appellate court because it presented an alternative valid
"legal ground" for affirming the trial court's order and, in
addition, could be so invoked without implicating the due-
process rights of the parties adversely affected by that
invocation. I do not read note 2 as saying anything other
than this.
33
Anderson v. Jackson Hospital & Clinic, Inc.
Combined Opinion