Kentucky Court of Appeals Affirms Dismissal of Complaint Based Upon Equitable Doctrine of Judicial Estoppel

April 2023

Gordon Rees Scully Mansukhani Senior Counsel Megan P. Keane successfully obtained an affirmance by the Kentucky Court of Appeals in an action asserting fraud, breach of contract, wrongful eviction, conversion, and injunctive relief against the firm’s client, a real estate investor. 

The plaintiff had originally filed a Chapter 13 bankruptcy case in which she failed to disclose numerous assets and creditors. The underlying civil action was filed several months later asserting causes of action stemming from the undisclosed assets. The state court held a hearing on the plaintiff’s requests for injunctive relief which was ultimately denied. 

Ms. Keane filed a motion for summary judgment on behalf of the client based upon the equitable doctrine of judicial estoppel. The state court agreed that judicial estoppel was applicable and dismissed all counts of the plaintiff’s complaint finding that (1) the plaintiff had knowledge of assets that she failed to disclose in her bankruptcy case; (2) seeking relief in the state court based upon undisclosed assets was a contrary position to the one taken in her bankruptcy case; (3) the bankruptcy court adopted the plaintiff’s position when it confirmed her Chapter 13 plan; and (4) the plaintiff testified during the temporary injunction hearing of her intent to omit the assets from the bankruptcy case.

The Kentucky Court of Appeals found no reversible error and affirmed the state circuit court’s entry of judgment dismissing the complaint against the real estate investor.