     Case: 18-60394      Document: 00514826987         Page: 1    Date Filed: 02/07/2019




           IN THE UNITED STATES COURT OF APPEALS
                    FOR THE FIFTH CIRCUIT


                                      No. 18-60394                    United States Court of Appeals
                                                                               Fifth Circuit

                                                                             FILED
                                                                       February 7, 2019
SUZANNE B. COX,
                                                                        Lyle W. Cayce
              Plaintiff - Appellant                                          Clerk


v.

WELLS P. RICHARDS; CANUCANOE RENTAL CABINS, L.L.C.,

              Defendants - Appellees




                   Appeal from the United States District Court
                     for the Southern District of Mississippi
                             USDC No. 3:16-CV-668


Before DAVIS, JONES, and DENNIS, Circuit Judges.
PER CURIAM:*
       Plaintiff Suzanne B. Cox brought the instant action against Defendants
Wells Richards and Canucanoe Rental Cabins, LLC (Canucanoe), seeking to
obtain repayment of a $251,550.14 loan she claims she made to Richards years
earlier. Cox now appeals from the district court’s ruling that she is judicially
estopped from making these claims based on representations she previously
made in unrelated bankruptcy proceedings. We AFFIRM.


       * Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH
CIR. R. 47.5.4.
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                                                I
       In September 2009, Cox received various assets in a divorce settlement,
including a $351,550.14 check.             In October 2010, she filed for Chapter 7
bankruptcy in the Northern District of Florida. See In re Cox, 10-32055 LMK
(Bankr. N.D. Fla. 2011). In her original bankruptcy schedules, Cox listed only
$6,550 in assets, including a bank account, clothing, a rental deposit, and a
car. A few weeks later, she filed amended schedules listing additional assets,
but did not include the loan to Richards on which she now seeks repayment.
Cox declared under penalty of perjury that the information contained in the
petition and schedules was “true and correct to the best of [her] knowledge.”
       In February 2011, the Trustee initiated an adversary proceeding against
Cox to deny a discharge for failure to disclose assets in the bankruptcy
schedules. See Chancellor v. Cox (In re Cox), 11-03007 MAM (Bankr. N.D. Fla.
2011). The Trustee moved for summary judgment, arguing that Cox was not
entitled to a discharge under 11 U.S.C. § 727(a)(2)(A), 1 (a)(4)(A), 2 and (a)(5). 3
The bankruptcy court denied the Trustee’s motion for summary judgment,
finding that there were genuine issues of material fact with respect to whether
Cox’s omissions were knowing and fraudulent. After a trial, the bankruptcy
court sustained the Trustee’s objection to discharge pursuant to § 727(a)(5) for
failure to satisfactorily explain the loss of assets she obtained through her
divorce settlement. The court declined to sustain the Trustee’s objection to




       1   A debtor is entitled to a “discharge, unless . . . the debtor, with intent to hinder,
delay, or defraud a creditor . . . has transferred, removed, destroyed, mutilated, or concealed
. . . property . . . within one year before the date of the filing of the petition.” See 11 U.S.C.
§ 727(a)(2)(A).
         2 A bankruptcy court may deny discharge if “the debtor knowingly and fraudulently,

in or in connection with the case made a false oath or account.” See 11 U.S.C. § 727.
         3 A bankruptcy court may deny discharge if the debtor fails to satisfactorily explain a

loss of assets. See 11 U.S.C. § 727.
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                                      No. 18-60394
discharge based on § 727(a)(2)(A) or (a)(4)(A), determining that the Trustee
failed to establish that Cox failed to disclose assets with fraudulent intent.
        In August 2016, Cox commenced this action against Richards and
Canucanoe in federal district court in Mississippi. 4              She alleged that in
September 2009, she orally agreed to loan Richards $251,550.14 with an
interest rate of fourteen percent per annum for investment purposes, which
Richards was supposed to pay back monthly. Canucanoe, of which Richards is
allegedly a member, filed an answer to Cox’s complaint. 5 Richards did not file
an answer. Both Canucanoe and Richards then filed a motion to dismiss,
asserting the defense of judicial estoppel. The district court granted the motion
and dismissed the case with prejudice, taking judicial notice of Cox’s
representations in the bankruptcy proceedings and concluding that Cox was
judicially estopped from asserting a claim against Defendants. Cox moved to
alter or amend the judgment pursuant to Federal Rule of Civil Procedure 59(e),
which the district court denied. Cox appealed.
                                            II
        On appeal, Cox argues that the district court’s application of the doctrine
of judicial estoppel was an abuse of discretion.              She also brings several
procedural challenges to Defendants’ motion to dismiss. We address each in
turn.
                                             A
        The district court granted the Defendants’ motion to dismiss, concluding
that Cox was judicially estopped from pursuing her claims against Defendants
because she had previously disclaimed the existence of the alleged quarter-



        4Cox brought this action in federal court, asserting diversity of citizenship and an
amount in controversy over $75,000. See 28 U.S.C. § 1332.
       5 Cox contended that Richards was one of two members of Canucanoe and had been

paying interest on the loan through Canucanoe until 2016. Canucanoe denies this allegation.
                                             3
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million-dollar loan in her bankruptcy proceedings. We review a district court’s
decision to invoke the equitable doctrine of judicial estoppel for abuse of
discretion. See United States ex rel. Long v. GSDMIdea City, L.L.C., 798 F.3d
265, 271 (5th Cir. 2015). “The purpose of the doctrine is to protect the integrity
of the judicial process by preventing parties from playing fast and loose with
the courts to suit the exigencies of self interest.” See In re Superior Crewboats,
Inc., 374 F.3d 330, 334 (5th Cir. 2004) (quoting In re Coastal Plains, Inc., 179
F.3d 197, 205 (5th Cir. 1999)). Judicial estoppel is properly invoked where “(1)
the party against whom judicial estoppel is sought has asserted a legal position
which is plainly inconsistent with a prior position; (2) a court accepted the prior
position; and (3) the party did not act inadvertently.” Reed v. City of Arlington,
650 F.3d 571, 574 (5th Cir. 2011) (en banc).
      Cox argues that the evidence does not support the application of judicial
estoppel under any of the three elements. We disagree. As to the first element,
the district court correctly concluded that Cox’s position in the instant
litigation is inconsistent with her sworn representations in her bankruptcy
proceedings. The court reasoned that Cox testified in her bankruptcy case that
she had used the $351,550.14 settlement check from her divorce to pay living
expenses and bills and to repay debts to friends, including a payment of
$163,200 to Richards for living expenses he advanced to her before she received
the divorce settlement. The district court further noted that Cox failed to list
the loan in her initial and amended bankruptcy schedules or to otherwise
mention it.    Next, the district court determined that Cox convinced the
bankruptcy court, through her omission, that her assets did not include a loan
in the amount of $251,550.14, satisfying the second element. The district court
additionally found the third element satisfied, concluding that “Cox had every
opportunity to reveal that $251,550.14 asset” and that “[h]er motivation for her


                                        4
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                                   No. 18-60394
conduct is evident: she hoped to hide the asset from the Bankruptcy Court and
benefit from its receipt later.”
      Cox contends that the bankruptcy court’s closure of her case “return[ed]
[her] to the position she was in before the bankruptcy filing,” thereby
“negat[ing]” the first and second elements. Her argument is unavailing. The
bankruptcy court, in denying the Trustee’s motion for summary judgment in
the adversary proceeding, accepted both Cox’s omission of any reference to the
$251,550.14 loan and her representation that she repaid Richards for the funds
he had advanced to her for living expenses. See Superior Crewboats, 374 F.3d
at 335 (the second element is met when a court adopts a party’s prior position,
“either as a preliminary matter or as part of a final disposition”). “An adversary
proceeding and the companion bankruptcy case constitute two distinct
proceedings.” In re Porges, 44 F.3d 159, 163 n.2 (2d Cir. 1995). Accordingly,
the bankruptcy court’s closure of Cox’s bankruptcy case did not revoke her
prior inconsistent position, or the court’s acceptance of that position, in the
separate adversary proceeding.
      As to the third element, Cox argues that there is no evidence her actions
were not inadvertent. She cites to the bankruptcy court’s findings in the
adversary proceeding that the Trustee had not met its burden to demonstrate
Cox’s “intent to hinder, delay, or defraud” by concealing assets and that the
evidence instead indicated a “lack of knowledge” on her part. This argument
is misleading. The bankruptcy court’s determinations about her intent clearly
did not pertain to the $251,550.14 loan because Cox failed to disclose that loan
in the proceedings.    Moreover, Cox amended her bankruptcy schedules to
reflect additional assets once the bankruptcy court discovered them, swearing
under oath that “[a]ny omissions in the original schedules have been
amended.” “[T]he motivation sub-element is almost always met if a debtor fails
to disclose a claim or possible claim to the bankruptcy court. Motivation in this
                                        5
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                                        No. 18-60394
context is self-evident because of potential financial benefit resulting from the
nondisclosure.” Love v. Tyson Foods, Inc., 677 F.3d 258, 262 (5th Cir. 2012).
Thus, the district court did not abuse its discretion in applying judicial
estoppel. 6
                                               B
       Cox also brings several procedural challenges to Defendants’ motion to
dismiss. First, she argues that, because Canucanoe answered the complaint
before filing a motion to dismiss, the motion to dismiss was untimely.
Normally, a motion asserting a Rule 12(b) defense “must be made before
pleading if a responsive pleading is allowed.”                See FED. R. CIV. P. 12(b).
However, where, as here, a defendant files a motion to dismiss after filing a
responsive pleading, the motion may be treated as one for judgment on the
pleadings under Federal Rule of Civil Procedure 12(c). See Yassan v. J.P.
Morgan Chase & Co., 708 F.3d 963, 975–76 (7th Cir. 2013) (noting that
“[d]ismissing a case on the basis of an affirmative defense is properly done
under Rule 12(c), not Rule 12(b)(6),” but affirming the district court’s dismissal
“under the wrong rule”).          Because a Rule 12(b)(6) and Rule 12(c) motion
warrant the same standard of review, any error by the district court in
granting Defendants’ motion to dismiss with respect to Canucanoe was




       6   Cox additionally argues that applying judicial estoppel would result in an
inequitable result, claiming that Richards and Canucanoe acknowledged the loan by making
monthly interest payments to her for more than four years after the close of her bankruptcy
proceedings. We take Cox’s allegations to be true at the motion to dismiss stage, see Ashcroft
v. Iqbal, 556 U.S. 662, 678 (2009), but Cox does not explain how the district court’s application
of judicial estoppel was an abuse of discretion in light of these facts. See Coastal Plains, 179
F.3d at 205 (noting that judicial estoppel “is intended to protect the judicial system, rather
than the litigants”); see also Reed, 650 F.3d at 574 (“[J]udicial estoppel is particularly
appropriate where . . . a party fails to disclose an asset to a bankruptcy court, but then
pursues a claim in a separate tribunal based on that undisclosed asset.” (internal citations
and quotation marks omitted)).
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                                      No. 18-60394
harmless. 7 See FED. R. CIV. P. 61; see also Patrick v. Rivera-Lopez, 708 F.3d
15, 18 (1st Cir. 2013) (noting that the district court’s reliance on the wrong rule
of civil procedure was “inconsequential” because the standard of review for
both motions is the same).
       Next, Cox argues that the district court erred by impermissibly engaging
in fact-finding and not taking the allegations in her complaint as true. We
disagree. A district court may take judicial notice of public records without
converting a Rule 12(b)(6) motion into a motion for summary judgment. See
Hall v. Hodgkins, 305 F. App’x 224, 227 (5th Cir. 2008) (citing Cinel v. Connick,
15 F.3d 1338, 1343 n. 6 (5th Cir. 1994). The district court’s consideration of
publicly available records in Cox’s prior bankruptcy proceedings was not error.
       Finally, Cox asserts that Defendants’ failure to cite a rule of civil
procedure in support of their motion to dismiss fails under the pleading
standard set forth in Ashcroft v. Iqbal, 556 U.S. 662 (2009), and Bell Atlantic
Corp. v. Twombly, 550 U.S. 544 (2007). However, where a defendant raises an
affirmative defense “in a manner that does not result in unfair surprise” to the
plaintiff, any “technical failure to comply precisely with [Federal Rule of Civil
Procedure] 8(c) is not fatal.” See Motion Med. Techs., L.L.C. v. Thermotek, Inc.,
875 F.3d 765, 771 (5th Cir. 2017). Such is the case here, as Defendants’ motion
gave Cox the required notice of their intent to raise the defense of judicial
estoppel.
                                            ***
       For these reasons, we AFFIRM.




       7As previously noted, Richards did not answer the complaint prior to filing the joint
motion to dismiss with Canucanoe. In any event, Cox does not appear to challenge the
timeliness of the motion to dismiss with respect to Richards.
                                             7
