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Failure to Identify Automobile Collision In Bankruptcy Paperwork May Not Be Fatal

by on June 6, 2011 » Add the first comment.

An issue that injury victims don’t always think about is including their personal injury claims in their bankruptcy paperwork. Unfortunately, failing to list a potential injury claim can later be used as a defense to a personal injury lawsuit.

“Under the doctrine of judicial estoppel, a party is precluded from asserting a position in a judicial proceeding which is inconsistent with a position previously successfully asserted by it in a prior proceeding.  Therefore, the doctrine is commonly applied to preclude a bankruptcy debtor from pursuing a damages claim that the debtor failed to include in his or her assets in the bankruptcy petition because of a failure to include assets.”

This is a quote (citation and punctuation omitted) from Sevostiyanova v. Tempest Recovery Services, __ Ga. App. __ (Case No. A10A2181, decided January 26, 2011).

There is some wiggle room, however.  In CSX Transportation v. Howell, 296 Ga. App. 583, 586 (2009), the Georgia Court of Appeals carved our an exception to the general rule in Sevostiyanova.  From CSX Transportation:

“[A debtor who fails to list a claim as an asset] can avoid the application of judicial estoppel simply by filing a motion to amend . . . or reopen the debtor’s bankruptcy.”

The general rule and the exception were applied in Cox v. Hardwick, __ Ga. App. __ (Case No. A11A0626, decided June 10, 2011), resulting in a favorable outcome for the injured party.  In that case, a trial court granted summary judgment against an injury victim on the grounds that the injury victim had not listed her automobile collision in her bankruptcy.  The Georgia Court of Appeals reversed the trial court, citing the exception set forth in CSX Transportation.

While debtors should always list potential personal injury claims, it seems Georgia courts are not inclined to strictly apply the doctrine of judicial estoppel in these situations.

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