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Gluhic-Popovic v. American Medical Systems, Inc.

Superior Court of Delaware

October 1, 2019

ANA GLUHIC-POPOVIC and SENAD GLUHIC, Plaintiffs,
v.
AMERICAN MEDICAL SYSTEMS, INC., Defendant.

          Submitted: July 16, 2019

         Upon Defendant's Motion for Summary Judgment DENIED

          Robert J. Leoni, Esq. (Argued), Shelsby & Leoni, Stanton, Delaware 19804; Jeffrey Brinen, Esq. (Argued), Kutner Brinen, P.C., Denver, CO 80264; Shanin Specter, Esq., Lee B. Balefsky, Esq., Kline & Specter, P.C., Philadelphia, PA, Attorneys for Plaintiff

          Brian M. Rostocki, Esq., Stephen J. McConnell Esq., (Argued), Justin M. Forcier, Esq., Reed Smith LLP, Wilmington, Delaware, Attorneys for Defendants

          OPINION

          JOHNSTON, J.

         FACTUAL AND PROCEDURAL CONTEXT

         In this products liability action, Plaintiff, Ms. Gluhic-Popovic, alleges personal injury resulting from surgical implantation of a female pelvic mesh device manufactured and sold by Defendant, American Medical Systems, Inc. The following facts are presumed in favor of Plaintiff for purposes of this motion.

         Plaintiff filed a Chapter 13 bankruptcy petition in Colorado on October 5, 2012, [1] which was confirmed on January 17, 2013.[2] Plaintiffs pelvic mesh implantation surgery occurred on November 14, 2013. On March 5, 2014, Plaintiff underwent her first surgery for the purpose of excising the pelvic mesh. On April 30, 2014, Plaintiff modified her Chapter 13 plan.[3] Plaintiff underwent another mesh excision surgery on June 10, 2014. Plaintiff filed this pelvic mesh suit against Defendant on June 17, 2014. The bankruptcy court again modified Plaintiffs plan on May 12, 2015.[4] Plaintiffs bankruptcy petition was dismissed on July 20, 2016, and reinstated on August 30, 2016.[5] The Chapter 13 trustee issued a final report on April 7, 2018.

         At no time between confirmation and issuance of the final report of her Chapter 13 bankruptcy case did Plaintiff disclose her case in this Court on her bankruptcy asset schedule. On January 22, 2019, Defendant filed this Motion for Summary Judgement seeking dismissal of Plaintiff s vaginal mesh lawsuit. Plaintiff reopened her bankruptcy case in March 2019.[6] In its motion for Summary Judgment, Defendant argued that Plaintiff: (1) lacks standing; and (2) is judicially estopped from bringing this cause of action. This Court heard oral argument on Defendant's motion on May 7, 2019. The Court requested supplemental briefing on the issue of Plaintiffs standing.

         STANDARD OF REVIEW

         Summary judgment is granted only if the moving party establishes that there are no genuine issues of material fact in dispute and judgment may be granted as a matter of law.[7] All facts are viewed in a light most favorable to the non-moving party.[8] Summary judgment may not be granted if the record indicates that a material fact is in dispute, or if there is a need to clarify the application of law to the specific circumstances.[9] When the facts permit a reasonable person to draw only one inference, the question becomes one for decision as a matter of law.[10] If the non-moving party bears the burden of proof at trial, yet "fails to make a showing sufficient to establish the existence of an element essential to that party's case," then summary judgment may be granted against that party.[11]

         ANALYSIS

         Standing - Chapter 13 Debtor

         Whether Plaintiff has standing to bring this action depends on whether a Chapter 13 debtor in bankruptcy has standing independent of the trustee to bring claims on behalf of the estate. Defendant argues that Plaintiff lacks standing because the bankruptcy trustee has exclusive authority to pursue this cause of action on behalf of the bankrupt estate.

         Plaintiff-asserts that she is "bringing the case for the benefit of their bankruptcy estate." Thus, "Plaintiffs are once again debtors, and as debtors, they are now bringing the case on behalf of their estate[.]"[12] It is not disputed that Plaintiffs cause of action is property of the bankrupt estate.[13]

         Under 11 U.S.C. § 323(b), the trustee is authorized to pursue the estate's causes of action.[14] Defendant argues that the trustee has exclusive authority to pursue the estate's claims. Defendant supports this assertion with substantial case law establishing that Chapter 7 bankruptcy trustees have such exclusive authority.[15]

         Plaintiff .counters that, unlike Chapter 7 debtors, Chapter 13 debtors have statutorily-preserved standing under 11 U.S.C. §§ 1306(b) and 1303. Section 1306(b) provides that the debtor under Chapter 13 "shall remain in possession of all property of the estate."[16] Section 1303 also grants the debtor certain rights and powers to administer the estate in the same way as the trustee.[17] Plaintiff filed for bankruptcy in Colorado. Therefore, the Court looks to that jurisdiction's law for the most relevant authority. To clarify how these provisions operate, Plaintiff references two cases from the The United States Court of Appeals for the Tenth Circuit: Autos, Inc. v. Gowin, 18 and Smith v. Rockett.[19]

         In Autos, a Chapter 13 debtor brought a cause of action which she failed to disclose on her bankruptcy schedules. The defendant argued that the plaintiff lacked standing because only the trustee was authorized to pursue causes of action on behalf of the estate.[20] The Tenth Circuit disagreed. Citing both 11 U.S.C. § 1306(b) and Bankruptcy Rule 6009, [21] the Tenth Circuit held that the Autos plaintiff, a Chapter 13 debtor, had standing to pursue her cause of action.[22]

         In Smith, a Chapter 13 debtor alleged violations of both federal and state laws. The United States District Court for the Western District of Oklahoma dismissed the action for lack of standing. On appeal, the Tenth Circuit reversed the district court's dismissal. The Tenth Circuit again distinguished debtors under Chapter 7 from those under Chapter 13.[23] The Tenth Circuit noted that legislative history of bankruptcy provisions also supports the position that Chapter 13 debtors have "the power to sue and be sued."[24]

         Defendant relies on Richardson v. United Parcel Service.[25] In Richardson, a Chapter 13 debtor raised employment discrimination claims.[26] The defendant moved to dismiss for lack of standing.[27] The debtor-plaintiff in Richardson conceded that he lacked standing.[28] The Richardson court omitted any explanation as to how it concluded that Chapter 13 debtors lack standing. Instead, the court in Richardson referenced several cases involving Chapter 7 debtors.[29] The Richardson court neither addressed, nor mentioned, 11 U.S.C. §§ 1306(b) and 1303.

         Defendant also cites In re Bryer.[30] In Bryer, a Chapter 13 debtor sought recovery from her ex-husband of monies she alleged were improperly credited against his support obligations. The court in Bryer entered an order requiring joinder of the trustee without discussing standing. The Bryer court simply cited Richardson, and again, Chapter 7 cases.

         While Richardson and Bryer cite only Chapter 7 cases, Autos and Smith specifically contemplate the impact of 11 U.S.C. §§ 1306(b) and 1303 on the Chapter 13 debtor's standing. The weight of the United States Courts of Appeals authority overwhelmingly favors standing for Chapter 13 debtors.[31] The Tenth Circuit is no exception.

         The Court finds the Tenth Circuit authority most closely on point supports the position that Plaintiff has standing. Sections 1306(b) and 1303 preserve the right of the Chapter 13 debtor in bankruptcy to pursue claims, in the debtor's own name, on behalf of the bankrupt estate. Therefore, Plaintiff, a debtor in bankruptcy under Chapter 13, has standing to pursue the present action.

         Judicial Estoppel

         Defendant argues that Plaintiff is judicially estopped from bringing this cause of action. "Judicial estoppel bars a party from adopting inconsistent positions in the same or related litigation."[32] It is a discretionary remedy to "prevent improper use of judicial machinery."[33] While the doctrine is "probably not reducible to any general formulation of principle, "[34] the Tenth Circuit has identified three primary factors that inform the analysis:

(1) The party against whom judicial estoppel is to be invoked seeks to rely on a position that is clearly inconsistent with its earlier position;
(2) The party has succeeded in persuading a court to accept its earlier position, such that judicial acceptance of an inconsistent position would create the impression that either the first or the second court was misled; and
(3) The party seeking to assert the inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.[35]

         Defendant argues that "a debtor's assertion of legal claims not disclosed in earlier bankruptcy proceedings constitutes an assumption of inconsistent positions."[36] Plaintiff contends that she had no duty to disclose this action in her previous bankruptcy proceedings. Additionally, Plaintiff argues that, even ...


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