Ins and Outs of Judicial Estoppel
February 10, 2020 § 1 Comment
Terry Carpenter Owned several parcels of property that had been conveyed to her by family members. She was diagnosed with terminal cancer, and her relationship with her husband, Guy, began to deteriorate and she conveyed two parcels — referred to as Parcels 1 and 2 — to her parents.
After Terry’s death in 2011, Guy was appointed administrator of her estate. Parcels 1 and 2 were not identified as estate property, and a judgment was entered closing the estate.
In 2016, Guy filed suit against Kenneth Conway, brother of Terry, who by then had become owner of the property, to set aside the conveyances of Parcels 1 and 2. The complaint was filed as next friend of Guy’s son alleging that Terry could not legally convey it without Guy’s signature because the property was part of the homestead, and Terry lacked mental capacity at the time of the conveyance.
Kenneth filed a motion to dismiss, and the chancellor did dismiss, finding that Guy’s claims were barred by judicial estoppel. Guy appealed.
In Carpenter v. Conway, a November 19, 2019, decision, the COA affirmed. Judge Tindell wrote the majority opinion:
¶7. In appealing the dismissal of his complaint, Guy asserts the chancellor erroneously found that judicial estoppel barred his claims. Although we review de novo a trial court’s grant or denial of a motion to dismiss, Trigg v. Farese, 266 So. 3d 611, 617 (¶9) (Miss. 2018), we review the application of judicial estoppel for abuse of discretion. Adams v. Graceland Care Ctr. of Oxford LLC, 208 So. 3d 575, 580 (¶13) (Miss. 2017). Thus, we must first determine whether the chancellor abused her discretion by finding that judicial estoppel barred Guy’s claims, and then we must review de novo whether the chancellor properly dismissed Guy’s complaint under Rule 12(b)(6). See id. at 579-80 (¶12); Rogers v. Gulfside
Casino P’ship, 206 So. 3d 1274, 1279 (¶9) (Miss. Ct. App. 2016).
¶8. As the Mississippi Supreme Court has explained:
Judicial estoppel precludes a party from asserting a position, benefitting from that position, and then, when it becomes more convenient or profitable, retreating from that position later in the litigation. Judicial estoppel has three elements: A party will be judicially estopped from taking a subsequent position if (1) the position is inconsistent with one previously taken during litigation, (2) a court accepted the previous position, and (3) the party did not inadvertently take the inconsistent positions.
Hinton v. Pekin Ins. Co., 268 So. 3d 543, 558-59 (¶62) (Miss. 2019) (citation and internal quotation marks omitted).
¶9. Regarding the first prong of judicial estoppel, Guy asserts that he has never been involved in a prior adverse proceeding with Kenneth. In Clark v. Neese, 131 So. 3d 556, 561-62 (¶21) (Miss. 2013), the supreme court “took the opportunity to clarify” its elimination of “the adverse-party requirement and overruled [its] prior judicial-estoppel opinions insofar as they included such a requirement.” As the Clark court explained:
The purpose of judicial estoppel is to prevent parties from knowingly taking a position in one court that is contrary to a position that party has asserted in, and that has been accepted by, another court. This purpose is served regardless of whether the inconsistent positions were taken in opposition to the same party.
Id. at 562 (¶21).
¶10. Even before the supreme court’s holding in Clark regarding the elimination of the adverse-party requirement, this Court determined in Johnson v. Herron, 33 So. 3d 1160 (Miss. Ct. App. 2009), that an estate proceeding could meet all the requirements necessary for judicial estoppel. In Johnson the decedent’s son by his first marriage and his niece by his second marriage acted as co-administrators of his estate. Id. at 1162 (¶7). The coadministrators and the decedent’s nephew by his second marriage entered into a settlement agreement to close the decedent’s estate and distribute his assets. Id. Almost three years after closing the estate, the son sought to contest the asset distribution. Id. at 1164 (¶10). As part of his requested relief, the son asked that the chancellor void deeds to certain pieces of real property and make him the sole owner of the properties. Id.
¶11. The chancellor in Johnson granted the niece and nephew’s summary-judgment motion after finding that judicial estoppel precluded the son from serving as co-administrator of his father’s estate, joining the petition to close the estate, and then filing a subsequent lawsuit to contest the asset distribution to which he had previously agreed at the estate’s closure. Id. at 1164-65 (¶13). On appeal, the son argued that judicial estoppel failed to apply because it required the parties to be involved in a prior adverse proceeding, and he contended that he had never been involved in such a proceeding with the niece and nephew. Id. at 1167 (¶21). In affirming the chancellor’s ruling, however, this Court agreed with the chancellor’s conclusion that, although the son and niece were both co-administrators of the decedent’s estate, the parties were still clearly in an adverse position as to the estate’s assets and their respective interests in those assets. Id.
¶12. Based on the holdings in both Clark and Johnson, we find that all the requirements for judicial estoppel have been met in the present case. We first note that, like the son in Johnson, Guy asserts on appeal that neither he nor his son has ever been involved in a prior adverse proceeding with Kenneth. As discussed, however, this is no longer a requirement for finding judicial estoppel. Clark, 131 So. 3d at 561-62 (¶21).
¶13. As administrator of Terry’s estate, Guy had an affirmative duty to “take all proper steps to acquire possession of any part of . . . [the estate] that may be withheld from him . . . .” Miss. Code Ann. § 91-7-47(1) (Rev. 2018). [Fn 2] Further, he had a duty to “ascertain whether the decedent was the sole owner, joint owner[,] or tenant in common” of the real estate. Robert E. Williford & Samuel H. Williford, Mississippi Probate and Administration of Estates § 8:3 (3d ed. 2019). Such a determination “is essential if the existence and nature of the ownership is to be correctly reported on the estate tax return.” Id.; see also Miss. Code Ann. § 91-7-157 (Rev. 2018) (“An executor or administrator shall pay all taxes that may be due on real and personal property belonging to the estate.”). In fulfilling his role as administrator, Guy never raised the claims he now seeks to assert—that Parcels 1 and 2 belonged to Terry’s estate and that he and his son possess an ownership interest in those parcels as tenants in common. Instead, Guy maintained during the probate proceedings that Parcel 3 alone comprised his and Terry’s homestead. By maintaining this position, Guy had no adverse claims to contend with during the probate of Terry’s estate. Thus, the estate was closed in a more timely fashion, and Guy’s ownership right to Parcel 3 was completely and definitively established. After benefitting from the position he maintained during the probate proceedings, Guy now adopts a contrary argument in the current litigation and asserts for the first time that Terry actually owned all three parcels of land when she died and that he and his son are tenants in common. Because the record clearly reflects that Guy has taken a
position in the current litigation that is contrary to the one he took in the prior probate proceedings, we find the first requirement of judicial estoppel has been met.
¶14. The second prong of judicial estoppel requires the court to have accepted the party’s prior position. Hinton, 268 So. 3d at 558-59 (¶62). By entering the order to close Terry’s estate, the chancellor effectively accepted Guy’s representation that Terry owned only Parcel 3 at the time she died. We therefore find this prong has also been met.
[Fn 2] As the dissent correctly points out, by operation of law, Parcel 3 descended to Guy and the couple’s minor son upon Terry’s death. See Miss. Code Ann. § 91-1-7 (Rev. 2018). Thus, Guy was not required to open an estate except to ensure that Terry’s other assets would in fact transfer to her next of kin, which were Guy and the couple’s minor son. See Miss. Code Ann. § 91-1-11 (Rev. 2018). And since Terry had already conveyed Parcels 1 and 2 to her parents prior to her death, Guy had a duty on behalf of Terry’s heirs to raise any claims to those parcels during the probate proceedings. See Miss. Code Ann. §§ 91-7-47(1) & -93 (Rev. 2018).
¶15. Relevant to the third requirement for judicial estoppel, Guy contends that his current and previous positions were not intentionally inconsistent but that his previous position was, at most, simply “incomplete.” When discussed within the context of a bankruptcy proceeding, this Court has explained:
A debtor’s non-disclosure is inadvertent only when, in general, the debtor either lacks knowledge of the undisclosed claims or has no motive for their concealment. Moreover, it is the debtor’s burden to prove that her non-disclosure was inadvertent. The question is not whether the debtor subjectively knew at the time of her bankruptcy that she had a legal duty to disclose the claim in her bankruptcy proceeding. Rather, a debtor is deemed to have had knowledge of her claim so long as she was aware of the facts giving rise to it.
Rogers, 206 So. 3d at 1280 (¶11) (citations and internal quotation marks omitted).
¶16. Here, Guy makes no assertion that he was somehow unaware of Parcels 1 and 2 at the time he probated Terry’s estate. In fact, Guy admits his prior knowledge of Parcels 1 and 2 and states that he withheld his current claims regarding these parcels during the probate proceedings based on his attorney’s advice. As administrator of Terry’s estate, however, Guy possessed a duty to discover and inventory all her assets before he sought or agreed to the estate’s closing. Miss. Code Ann. § 91-7-93 (Rev. 2018). He also had a duty to determine the nature of Terry’s ownership interest in her real property. See Williford & Williford, Mississippi Probate and Administration of Estates § 8:3. Guy represented to the chancellor that Parcel 3 was the only real property Terry owned at the time of her death, the chancellor relied on his representation, and Guy benefitted when the chancellor closed the estate and he and his son received ownership of the parcel. We therefore find no merit to Guy’s claim now that his inconsistent positions were unintentional.
¶17. Based on the record and applicable caselaw, we find no abuse of discretion in the chancellor’s determination that all three requirements for judicial estoppel were met. We therefore find no error in the chancellor’s dismissal of Guy’s complaint under Rule 12(b)(6). Because we affirm the chancellor’s judgment on this ground, we decline to address Guy’s remaining assignment of error on appeal.
Chief Judge Barnes wrote an interesting dissent that we will look at tomorrow.
Thank you, judge. This blog happens to be timely for a case in which I am currently interested and also answers a question which has long bothered me, namely: Is it necessary for the application of judicial estoppel that the estopped party actually have profited from taking a prior inconsistent position? I had earlier concluded that having profited from the earlier position was considered by many courts to be a necessity, which seemed offensive to justice. So I agree with the COA for once.