FIRST DIVISION
BARNES, P. J.,
GOBEIL and COLVIN, JJ.
NOTICE: Motions for reconsideration must be
physically received in our clerk’s office within ten
days of the date of decision to be deemed timely filed.
https://www.gaappeals.us/rules
DEADLINES ARE NO LONGER TOLLED IN THIS
COURT. ALL FILINGS MUST BE SUBMITTED WITHIN
THE TIMES SET BY OUR COURT RULES.
June 1, 2021
In the Court of Appeals of Georgia
A21A0321. REYNAUD v. FIVE OAKS DEVELOPMENT, INC.
GOBEIL, Judge.
Louis F. Reynaud, IV, appeals from the superior court’s grant of Five Oaks
Development, Inc.’s (“Five Oaks”) motion for summary judgment against Reynaud’s
counterclaims in this underlying dispossessory action. On appeal, in several
interrelated enumerations of error, Reynaud contends that the superior court erred in
applying the doctrine of judicial estoppel to bar his instant claims based on alleged
inconsistent representations he made in a prior bankruptcy proceeding. Reynaud also
asserts that the superior court erred in granting summary judgment to Five Oaks
against his counterclaims as material issues of fact remain as to whether the parties
entered into an enforceable contract to form a joint venture. For the reasons that
follow, we vacate and remand for the superior court to employ the proper two-part
test to determine whether the doctrine of judicial estoppel applies to the instant case.
A trial court properly grants a motion for summary judgment
when there are no genuine issues of material fact and the movant is
entitled to judgment as a matter of law. On appeal of a grant of summary
judgment, we conduct a de novo review, and we view the evidence in
the light most favorable to the nonmoving party.
Holcomb Investments Ltd. v Keith Hardware, Inc., 354 Ga. App. 270, 271 (840 SE2d
646) (2020) (citation and punctuation omitted).
So viewed, the record shows that the instant action originated as a
dispossessory action in the Magistrate Court of Forsyth County. As relevant here,
Five Oaks sought a writ of possession to remove a construction trailer maintained by
Reynaud from land owned by Five Oaks located at the Manor Golf Course & Country
Club (the “Property”).1 Reynaud filed an answer, in which he raised counterclaims
for breach of contract, breach of the duty of good faith and fair dealing, promissory
estoppel, unjust enrichment, fraud, declaratory judgment, and injunctive relief. In
support of his claims, Reynaud stated that in 2011, he entered into a partnership/joint
1
The trailer is located on Lot 76 of the Property, adjacent to a home on Lot 75,
where Reynaud and his wife reside.
2
venture agreement with the King Family2 to develop lots on the Property in order to
construct homes. He asserted that his efforts in the joint venture led to an increase in
the value of the Property of several million dollars. According to Reynaud, the King
Family later denied the existence of an agreement between the parties, and intended
to sell the remaining lots on the Property to a third party, thereby depriving Reynaud
of his interest in the venture. Reynaud sought damages based on his expected profits
per the terms of the parties’ oral agreement. Reynaud filed a motion to transfer the
action to Forsyth County Superior Court, asserting that his counterclaims sought
damages in excess of the jurisdictional limit of magistrate court. The action was then
transferred to superior court.
Following a hearing, a transcript of which does not appear in the record, the
superior court granted a ten-day writ of possession to Five Oaks. The court found,
based on an appraiser’s testimony, that Reynaud was liable to pay rent of $525 per
month to Five Oaks for the trailer during the pendency of the dispossessory action.
2
The term “King Family” refers to Reynaud’s sister, Suzanne R. King, her
husband, Thad D. King, and Thad’s siblings, Christy King Davidson, J. Dudley King,
Jr., Marsh B. King, and Robert C. King; and entities owned by them including King
Family Investments, L.P., KF Investments 1, LLC, and Five Oaks. Thad is the Chief
Executive Officer of Five Oaks.
3
The court, however, reserved the issue of Reynaud’s payment of rent into the court
registry pending the trial on his counterclaims and any other outstanding issues.
Five Oaks filed a motion for summary judgment on Reynaud’s counterclaims.
As relevant here, Five Oaks highlighted that on May 9, 2014, Reynaud and his wife
had filed a Chapter 7 petition for bankruptcy3 under oath in the United States
Bankruptcy Court for the Northern District of Georgia. On Schedule A of the petition,
which required Reynaud to list any real property assets in which he “has any legal,
equitable, or future interest,” Reynaud represented “None.” Similarly, under
“Schedule B - Personal Property” of the petition, Reynaud checked “None” for Item
14, which concerned “Interests in partnerships or joint ventures.” Five Oaks
contended that Reynaud had admitted under oath in the prior bankruptcy proceeding
that he owned no property and held no interest in any partnerships or joint ventures,
which was in direct conflict with his position in the instant dispossessory action,
3
“Chapter 7 allows a debtor to make a clean break from his financial past, but
at a steep price: prompt liquidation of the debtor’s assets.” Harris v. Viegelahn, 575
U. S. 510, 513 (I) (A) (135 SCt 1829, 191 LE2d 783) (2015). When a debtor files a
Chapter 7 petition, his assets, subject to certain exemptions, are immediately
transferred to a bankruptcy estate. 11 USC § 541 (a) (1). Although a Chapter 7 debtor
“must forfeit virtually all his prepetition property,” the bankruptcy laws give the
debtor an immediate “fresh start” from his financial past “by shielding from creditors
his postpetition earnings and acquisitions.” Harris, 575 U. S. at 514 (I) (A).
4
wherein his counterclaims were predicated on the existence of a joint
venture/partnership with Five Oaks. In response, Reynaud explained:
he did not intend by making such representations in the context of his
bankruptcy proceeding to preclude his opportunity to recover on an oral
agreement with Five Oaks, nor did he intend to unfairly represent
anything to the bankruptcy court, his having sought advice of counsel
with respect to the bankruptcy filing.
Following a hearing, a transcript of which does not appear in the record, the
superior court denied Five Oaks’s motion for summary judgment, concluding that
material issues of fact remained as to whether: (1) part performance by Reynaud
removed the parties’ oral agreement from the statute of frauds; and (2) the parties
entered into an enforceable joint venture.
Prior to receiving the superior court’s order, Five Oaks submitted a
supplemental brief in support of its motion for summary judgment, urging the court
to apply the doctrine of judicial estoppel. Specifically, Five Oaks highlighted that
based on Reynaud’s sworn statements in his bankruptcy petition that he owned no
real property or interests in partnerships or joint ventures, the bankruptcy court had
granted him relief based on those representations. By contrast, in the present action,
the crux of Reynaud’s counterclaim centered on the breach of a joint venture with
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Five Oaks that Reynaud previously swore did not exist. Five Oaks also filed a motion
for reconsideration from the superior court’s denial of its motion for summary
judgment, reiterating its judicial estoppel argument.
The superior court entered a final order on July 8, 2020, granting Five Oaks’s
motion for reconsideration and its motion for summary judgment against Reynaud’s
counterclaims. The court first acknowledged that it had failed to address the judicial
estoppel issue in its previous order denying Five Oaks’s motion for summary
judgment. The court continued:
In considering whether judicial estoppel applies, the [c]ourt finds that
the positions asserted [by Reynaud] in the bankruptcy court and in this
action are clearly inconsistent. In the bankruptcy proceeding[,] Mr.
Reynaud asserted that he owned no real property and that he held no
interests in partnerships or joint ventures. In the present action, the
entire crux of [Reynaud’s] counterclaim is that he entered into a joint
venture to develop property and that he is entitled to recovery for the
breach of the parties’ joint venture agreement.
Additionally, the court found that the discharge granted by the bankruptcy
court showed that Reynaud persuaded the bankruptcy court to accept his earlier
representation that he did not have any interests in property or joint ventures. As a
result, if the court accepted Reynaud’s inconsistent position in the instant action that
6
he entered into a joint venture with Five Oaks, this would create “the perception that
either the first or the second court was misled.” Finally, the court reasoned that the
failure to apply the doctrine of judicial estoppel would give Reynaud an unfair
advantage based on his inconsistent positions in the two proceedings. The instant
appeal followed.
1. In several interrelated enumerations of error, Reynaud contends that the
superior court abused its discretion in applying the doctrine of judicial estoppel.
The essential function and justification of judicial estoppel is to
prevent the use of intentional self-contradiction as a means of obtaining
unfair advantage in a forum provided for suitors seeking justice. The
primary purpose of the doctrine is not to protect the litigants, but to
protect the integrity of the judiciary. The doctrine is directed against
those who would attempt to manipulate the court system through the
calculated assertion of divergent sworn positions in judicial proceedings
and is designed to prevent parties from making a mockery of justice
through inconsistent pleadings.
Kamara v. Henson, 340 Ga. App. 111, 112 (1) (796 SE2d 496) (2017), disapproved
on other grounds by Fulton County v. Ward-Poag, 310 Ga. 289, 297 (2) (c) (849
SE2d 465) (2020) (citation and punctuation omitted). “Judicial estoppel is an
equitable doctrine that can be invoked by a court at its discretion, and we review a
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trial court’s application of that doctrine for an abuse of discretion.” Ward-Poag, 310
Ga. at 291 (2) (a). “If a trial court significantly misapplies the law or clearly errs in
a material factual finding, we may affirm the trial court’s exercise of discretion only
when we can conclude that, had the trial court used the correct facts and legal
analysis, it would have had no discretion to reach a different judgment.” Id. at 292 (2)
(a).
The United States Supreme Court has identified a general test to guide the
application of judicial estoppel:
First, a party’s later position must be clearly inconsistent with its earlier
position. Second, courts regularly inquire whether the party has
succeeded in persuading a court to accept that party’s earlier position,
so that judicial acceptance of an inconsistent position in a later
proceeding would create the perception that either the first or the second
court was misled. . . . A third consideration is whether 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 v. Maine, 532 U.S. 742, 750-751 (II) (121 SCt 1808, 149 LE2d 968)
(2001) (citations and punctuation omitted).
In establishing those three factors, the United States Supreme Court did
not intend to establish inflexible prerequisites or an exhaustive formula
for determining the applicability of judicial estoppel because the
8
circumstances under which judicial estoppel may appropriately be
invoked are probably not reducible to any general formulation of
principle. Instead, the Court emphasized that additional considerations
may inform the doctrine’s application in specific factual contexts,
remembering that the purpose of judicial estoppel is to protect the
integrity of the judicial process.
Ward-Poag, 310 Ga. at 294 (2) (b) (citation and punctuation omitted).
The Eleventh Circuit has declined to adopt the New Hampshire factors where,
as here, there is no mutuality of parties. See Slater v. U. S. Steel Corp., 871 F3d 1174,
1182 (III) (A) (11th Cir. 2017) (en banc). Instead, it employs a test for judicial
estoppel that has two factors, namely: “whether (1) the party took an inconsistent
position under oath in a separate proceeding, and (2) these inconsistent positions were
calculated to make a mockery of the judicial system.” Id. at 1181 (III) (A) (citation
and punctuation omitted). Our Supreme Court recently reiterated that, in cases such
as this one, where the party seeking to apply judicial estoppel was not a party to the
prior proceeding in which the adverse party has allegedly has taken an inconsistent
9
position, courts should apply the two-part Slater test outlined by the Eleventh Circuit.
Ward-Poag, 310 Ga. at 295 (2) (b).4
There is no dispute that Five Oaks was not a party to the prior bankruptcy
proceeding. As a result, the superior court should have employed the two-factor
Slater test. The court, however, made no mention of the Slater test in its order
granting Five Oaks’s motion for reconsideration. Rather, the court applied the three-
factor New Hampshire test to the facts of the instant case. As an initial matter, we
note that under both the New Hampshire and Slater tests, the first factor requires the
trial court to determine whether the party took an inconsistent position in an earlier
proceeding. See New Hampshire, 532 U. S. at 750 (II); Slater, 871 F3d at 1181 (III)
(A).
Here, the superior court concluded that Reynaud asserted inconsistent positions
in the bankruptcy court and the superior court as to his interest in the Property based
4
The facts in Ward-Poag involved the application of the doctrine of judicial
estoppel when an adverse party fails to disclose a civil asset in a Chapter 13
bankruptcy filing. 310 Ga. at 294-295 (2) (b). See Period Homes, Ltd. v. Wallick, 275
Ga. 486, 487-488 (1) (569 SE2d 502) (2002) (“Unlike a bankruptcy proceeding under
Chapter 13, there are only limited circumstances in which a Chapter 7 or 11 debtor
must amend his schedule of assets to reflect property acquired after commencement
of the case.”). Nevertheless, the Eleventh Circuit formulated the two-part judicial
estoppel test in an appeal where the prior proceeding involved a Chapter 7 bankruptcy
petition, as is the case here. See Slater, 871 F3d at 1177 (I), 1180-1181 (III) (A).
10
on the partnership/joint venture agreement with Five Oaks. Reynaud’s bankruptcy
petition required the disclosure of all legal, equitable, or future interests in all
property, as well as interests in partnerships or joint ventures. Reynaud failed to
disclose any agreement or interest he had with regard to the Property in his 2014
bankruptcy petition, even though, by his own admission, the agreement that Reynaud
is now seeking to enforce had its origins in 2011 or 2012. Similarly, although
Reynaud asserted that his efforts in developing the lots resulted in a substantial
increase in the value of the Property, Reynaud failed to disclose his accrued equity
and ownership interest in the Property during his bankruptcy proceeding. Based on
the foregoing, we conclude that the superior court properly found that there were no
genuine issues of material fact as to whether Reynaud made inconsistent statements.
Accordingly, Reynaud’s actions satisfy the first factor under the two-part Slater test
of asserting an inconsistent legal position in separate legal proceedings with regard
to the same issue, namely, his ownership interest in the Property.
With respect to the second part of the test: [t]o determine whether
a plaintiff’s inconsistent statements were calculated to make a mockery
of the judicial system, a court should look to all the facts and
circumstances of the particular case. When the plaintiff’s inconsistent
statement comes in the form of an omission in bankruptcy disclosures,
the court may consider such factors as the plaintiff’s level of
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sophistication, whether and under what circumstances the plaintiff
corrected the disclosures, whether the plaintiff told his bankruptcy
attorney about the civil claims before filing the bankruptcy disclosures,
whether the trustee or creditors were aware of the civil lawsuit or claims
before the plaintiff amended the disclosures, whether the plaintiff
identified other lawsuits to which he was party, and any findings or
actions by the bankruptcy court after the omission was discovered.
Ward-Poag, 310 Ga. at 295 (2) (b) (citation and punctuation omitted).
In this case, the superior court failed to consider the second factor in
considering whether to grant Five Oaks’s motion for summary judgment on judicial
estoppel grounds. We therefore remand to the superior court to consider in the first
instance whether Reynaud intended to deceive his creditors and make a mockery of
the judicial system by any inconsistent positions he may have taken.5 See 9766, LLC
v. Dwarf House, Inc., 331 Ga. App. 287, 291 (4) (b) (771 SE2d 1) (2015) (“This
5
Five Oaks points out that the superior court stated in its reconsideration order
“that it is important to prevent improper use of the judiciary which would occur if
[Reynaud’s] inconsistent positions were permitted.” Based on this language, Five
Oaks urges us to conclude that the court found that Reynaud intended “to manipulate
or deceive the court system,” which satisfies the second prong of the Slater test,
namely, that Reynaud’s inconsistent representations make a “mockery of the judicial
system.” Ward-Poag, 310 Ga. at 295 (2) (b) (citation and punctuation omitted).
However, we decline to hold that this statement alone demonstrates that the trial court
considered the second factor of the Slater test.
12
[C]ourt is for the correction of errors, and where the trial court has not ruled on an
issue, we will not address it.”) (citation and punctuation omitted).
2. Reynaud also asserts that the superior court erred in granting Five Oaks’s
motion for summary judgment against his counterclaims because genuine issues of
material fact remain as to whether the parties entered into an enforceable agreement
to develop the Property. We need not reach this issue because resolution of this claim
of error hinges on whether the doctrine of judicial estoppel applies to bar Reynaud’s
representations in the instant case that he is entitled to a share of the profits from the
development of the Property based on the existence of an agreement between the
parties.
Judgment vacated and case remanded with direction. Barnes, P. J., and Colvin,
J., concur.
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