                 In the
            Court of Appeals
    Second Appellate District of Texas
             at Fort Worth
          ___________________________
               No. 02-19-00282-CV
          ___________________________

           HAROLD MILLER, Appellant

                          V.

CONFORMIS, INC. AND JOSEPH BERMAN, Appellees



       On Appeal from the 348th District Court
               Tarrant County, Texas
           Trial Court No. 348-298642-18


    Before Sudderth, C.J.; Birdwell and Womack, JJ.
      Memorandum Opinion by Justice Birdwell
                           MEMORANDUM OPINION

      The trial court granted summary judgment against appellant Harold Miller on the

basis of judicial estoppel. The hitch was Miller’s failure to disclose this lawsuit in an

ongoing bankruptcy, contrary to his duty to disclose all his assets. Appellees Conformis,

Inc. and Joseph Berman argued that in equity, it was only fair to estop Miller from

pursuing this undisclosed lawsuit. Appellees cited a wealth of Fifth Circuit authority to

support their position, and the trial court agreed.

      But the unique circumstances of Miller’s case—namely, the fact that he was a

Chapter 13 debtor who had agreed to repay all of his debts—renders the Fifth Circuit’s

work on this subject distinguishable. In light of these distinctions, we hold that

appellees failed to conclusively prove three of judicial estoppel’s four elements. We

therefore reverse the summary judgment and remand.

                I.     BACKGROUND AND CHAPTER 13 BANKRUPTCY

      In 2013, Miller filed for Chapter 13 bankruptcy. In a questionnaire for his

bankruptcy attorney, he truthfully indicated that he had no claims against third parties.

The attorney filed with the bankruptcy court a schedule indicating that while Miller had

many assets, those assets did not include any claims against third parties.         The

bankruptcy court approved Miller’s Chapter 13 plan.

      Miller’s Chapter 13 plan was atypical. In a typical Chapter 13 bankruptcy, the

debtor keeps his property and pays down his debt with monthly payments based on his



                                            2
disposable income.1 In re Murphy, 474 F.3d 143, 148 (4th Cir. 2007); see Harris v.

Viegelahn, 575 U.S. 510, 135 S. Ct. 1829, 1835 (2015). The debtor pays all of his

disposable income for the benefit of creditors for either a three-year or five-year

“commitment period”; that period is usually three years if the debtor’s income is below

the state median, five years if above. See 11 U.S.C.A. § 1325(b)(4); In re Pautin, 521 B.R.

754, 759 (Bankr. W.D. Tex. 2014). If the debtor makes all of his payments, the debtor

ordinarily receives a “broad[]” discharge of many types of debt. See United Student Aid

Funds, Inc. v. Espinosa, 559 U.S. 260, 268, 130 S. Ct. 1367, 1376 (2010). Thus, the chief

virtues of a Chapter 13 plan are that it allows the debtor to retain his property and to

make structured payments leading to a discharge of many unsecured debts. See Harris,

135 S. Ct. at 1835.

      But in his plan, Miller proposed to pay all of his debts, secured and unsecured,

creating an atypical 2 “100% plan.” At the end of his five-year plan, no debt would be

discharged. Miller was using Chapter 13 simply to retain his property and to make

structured payments on the debt. Thus, Miller’s payment amount was not based on his

disposable income, but on the size of his debts.


      1
       The Bankruptcy Code defines “disposable income” as “current monthly
income” less “amounts reasonably necessary to be expended” for “maintenance or
support,” business expenditures, and certain charitable contributions. Ransom v. FIA
Card Servs., N.A., 562 U.S. 61, 65, 131 S. Ct. 716, 721 (2011) (quoting 11 U.S.C.A.
§ 1325(b)(2)(A)(i)–(ii)).
      2
       See In re Dubois, 834 F.3d 522, 532 (4th Cir. 2016) (“Chapter 13 debtors typically
do not enter into 100 percent repayment plans . . . .”).

                                            3
       In March 2016, Miller had a Conformis knee replacement. The implant was

allegedly ill-fitting and required a second replacement to correct the problem. In

November 2016, Miller’s attorney sent a letter of intent to sue appellees Conformis and

his surgeon, Berman. However, he did not update his bankruptcy schedules to list the

lawsuit as an asset.

       Miller was unable to keep up with his bankruptcy payments, and in June 2017,

his bankruptcy was dismissed without prejudice. He refiled his bankruptcy case in

December 2017, but in his updates and revisions, he failed to mention his potential

lawsuit against Conformis and Berman. Again it was a five-year, 100% plan, and as

before, the bankruptcy court approved the plan.

       In March 2018, Miller sued Conformis and Berman. In March 2019, the

defendants deposed Miller and discovered the bankruptcy. Miller’s affidavit explained

that at the deposition, he learned for the first time that he needed to include the lawsuit

in his list of scheduled assets. In April 2019, Miller amended his bankruptcy filings to

include the lawsuit, which Miller valued at $250,000.

       Also in April 2019, the defendants moved for summary judgment on grounds of

judicial estoppel. They argued that Miller had a duty to disclose this lawsuit to the

bankruptcy court, and because Miller failed to disclose this suit, he should be estopped

from proceeding. The trial court agreed and granted summary judgment against Miller.




                                            4
                              II.    JUDICIAL ESTOPPEL

      In his first and second issues on appeal, Miller challenges appellees’ proof to

support the elements of judicial estoppel. Appellees assert that they have offered

conclusive proof to support the defense, including evidence

          • that Miller took inconsistent positions in that he failed to disclose the suit

             in the bankruptcy proceedings, but he then brought this suit;

          • that the bankruptcy court officially adopted his inconsistent position by

             confirming his bankruptcy plan;

          • that Miller had a financial motive to conceal the suit, such that it was safe

             to presume his nondisclosure was not inadvertent; and

          • that Miller derived an unfair benefit from the nondisclosure.

      We hold that appellees have conclusively proved the first element of judicial

estoppel. However, as we explain, there remain questions of fact on the other elements,

which preclude summary judgment.

A.    Standard of Review and Applicable Law

      Judicial estoppel is an affirmative defense upon which appellees had the burden

of proof. See Ventling v. Johnson, 466 S.W.3d 143, 146 (Tex. 2015). A defendant who

conclusively proves all elements of an affirmative defense is entitled to summary

judgment. Frost Nat’l Bank v. Fernandez, 315 S.W.3d 494, 508 (Tex. 2010). An issue is

conclusively established if reasonable minds could not differ about the conclusion to



                                            5
be drawn from the facts in the record. Cmty. Health Sys. Prof’l Servs. Corp. v. Hansen, 525

S.W.3d 671, 681 (Tex. 2017). In reviewing summary judgment, we view the evidence

in the light most favorable to the nonmovant, crediting evidence if a reasonable jury

could do so and disregarding contrary evidence and inferences unless a reasonable jury

could not. Painter v. Amerimex Drilling I, Ltd., 561 S.W.3d 125, 130 (Tex. 2018).

       “Judicial estoppel precludes a party who successfully maintains a position in one

proceeding from afterwards adopting a clearly inconsistent position in another

proceeding to obtain an unfair advantage.” Ferguson v. Bldg. Materials Corp. of Am., 295

S.W.3d 642, 643 (Tex. 2009) (per curiam). A party cannot be judicially estopped if it

did not prevail in the prior action. Id. The doctrine is not intended to punish

inadvertent omissions or inconsistencies but rather to prevent parties from playing fast

and loose with the judicial system for their own benefit. Id.

       The integrity of the bankruptcy system depends on full and honest disclosure by

debtors of all of their assets. In re Coastal Plains, Inc., 179 F.3d 197, 208 (5th Cir. 1999).

“Judicial estoppel, however, should be applied with caution to avoid impinging on the

truth-seeking function of the court, because the doctrine precludes a contradictory

position without examining the truth of either statement.” Eubanks v. CBSK Fin. Grp.,

Inc., 385 F.3d 894, 897 (6th Cir. 2004) (internal quotations omitted). It is not to be

mechanically applied and demands a flexible approach. Slater v. U.S. Steel Corp., 871

F.3d 1174, 1187 (11th Cir. 2017) (op. on reh’g en banc); accord Matter of Parker, 789 Fed.

App’x 462, 464 (5th Cir. 2020) (per curiam).

                                              6
       This court applies federal law when deciding whether judicial estoppel applies

based on a position that a party took in prior bankruptcy proceedings. Flores v. Deutsche

Bank Nat’l Tr. Co., No. 02-12-00033-CV, 2014 WL 4109645, at *5 (Tex. App.—Fort

Worth Aug. 21, 2014, no pet.) (mem. op.) (citing Stewart v. Hardie, 978 S.W.2d 203, 208

n.1 (Tex. App.—Fort Worth 1998, pet. denied) (op. on reh’g)). To prevail, appellees

must conclusively establish the elements of judicial estoppel under the federal test:

(1) that Miller’s current position is clearly inconsistent with his former position, (2) that

the trial court accepted his first position (i.e. that Miller “successfully maintain[ed]” the

earlier position), (3) that Miller’s actions were not inadvertent, and (4) that Miller would

gain an unfair advantage or impose an unfair detriment on the opposing party if not

estopped. Id.; see Horsley-Layman v. Adventist Health Sys./Sunbelt, Inc., 221 S.W.3d 802,

807 (Tex. App.—Fort Worth 2007, pet. denied).

B.     Inconsistent Positions

       Under our precedent, it is beyond dispute that Miller took inconsistent positions.

In a bankruptcy action, the debtor must disclose all assets including contingent or

unliquidated claims. Horsley-Layman, 221 S.W.3d at 806. A debtor’s nondisclosure of

his claim to the bankruptcy court is “tantamount to a representation that no such claim[]

existed.” Haren v. Wells Fargo Bank, N.A., No. 02-14-00148-CV, 2015 WL 2341924, at

*5 (Tex. App.—Fort Worth May 14, 2015, pet. denied) (mem. op.); see Horsley-Layman,

221 S.W.3d at 807–08. Thus, Miller has taken inconsistent positions by effectively



                                             7
asserting that his claim did not exist, but later filing this claim, effectively asserting that

it does exist.

C.     Judicial Acceptance and Successfully Maintaining the Position

       We have never addressed whether the trial court’s action—simply confirming

Miller’s bankruptcy plan—qualifies as successfully maintaining the earlier position or

the trial court formally accepting it. To date, we have only applied judicial estoppel at

final discharge: only when the bankruptcy is finally closed and the debt is discharged

have we held that the debtor succeeded in concealing a lawsuit. See Haren, 2015 WL

2341924, at *5; Flores, 2014 WL 4109645, at *6; Horsley-Layman, 221 S.W.3d at 808;

Stewart, 978 S.W.2d at 208.

       There is mixed authority on whether confirming a bankruptcy plan satisfies the

second element of judicial estoppel. The Fifth Circuit has held that confirmation of a

Chapter 13 plan means that the debtor has succeeded in concealing the lawsuit. See

Allen v. C & H Distribs., L.L.C., 813 F.3d 566, 573 (5th Cir. 2015); Flugence v. Axis Surplus

Ins. Co. (In re Flugence), 738 F.3d 126, 130 (5th Cir. 2013) (per curiam) (op. on reh’g);

Jethroe v. Omnova Sols., Inc., 412 F.3d 598, 600 (5th Cir. 2005). Conversely, other federal

circuits have suggested that the line should be drawn at discharge. See Sadlowski v.

Michaels Stores, Inc., 672 Fed. App’x 729, 730 (9th Cir. 2016) (concluding that the debtor’s

position was not accepted because the debtor “did not receive a discharge, a favorable

ruling, or any other benefit”); Strauss v. Rent-A-Ctr., Inc., 192 Fed. App’x 821, 823 (11th

Cir. 2006) (per curiam) (concluding that judicial estoppel should not apply, in part

                                              8
because “[t]he bankruptcy court never entered any order discharging any of Strauss’s

debts”); Stallings v. Hussmann Corp., 447 F.3d 1041, 1049 (8th Cir. 2006) (holding that

there was no judicial acceptance because “the bankruptcy court never discharged

Stallings’s debts based on the information that Stallings provided in his schedules”).

The Dallas Court of Appeals has endorsed the latter view. Norris v. Brookshire Grocery

Co., 362 S.W.3d 226, 231 (Tex. App.—Dallas 2012, pet. denied) (citing Stallings with

approval).

      We need not decide which view is correct. It is enough to note that the Fifth

Circuit’s primary justification for its holding is inapplicable to the unique facts of this

case—in particular, the fact that Miller is a Chapter 13 debtor on a 100% plan. The

Fifth Circuit has reasoned that when a bankruptcy court confirms a plan, judicial

acceptance can be inferred because awareness of the undisclosed claim might affect the

bankruptcy court’s decision making: “[h]ad the court been aware of the claim, it may

well have altered the plan.” Allen, 813 F.3d at 573 (quoting Flugence, 738 F.3d at 130).

For a typical Chapter 13 debtor whose plan payments are based on his disposable

income, this is a fair stance. The bankruptcy court has arguably accepted the debtor’s

representation of his income by approving payments based on that income, and if

additional sources of income were disclosed, this might lead the bankruptcy court to

increase the debtor’s payments to creditors. And when a lawsuit is settled or won, the

proceeds could be considered income. See, e.g., Ortiz-Peredo v. Viegelahn, 587 B.R. 321,



                                            9
326–27 (W.D. Tex. 2018) (deeming settlement proceeds to be income that was subject

to distribution); In re Stretcher, 466 B.R. 891, 896 (Bankr. W.D. Tex. 2011) (same).3

       But here, Miller’s payments were not based on his income, and thus extra sources

of income were of no consequence to how much he would pay under his plan. See

Martinez v. Viegelahn, 581 B.R. 486, 498–99 (W.D. Tex. 2017) (quoting In re Richall, 470

B.R. 245, 249 (Bankr. D.N.H. 2012)); see also 11 U.S.C.A. § 1325(b)(1). Under these

distinctive facts, it is difficult to say that the confirmation of Miller’s Chapter 13 plan

operates as an “acceptance” of Miller’s nondisclosure of potential sources of income,

because that confirmed plan had nothing to do with Miller’s income and likely would

not have changed no matter how much income Miller disclosed.

       We are also swayed by reasons of policy. It is said that the judicial acceptance

element “ensures that judicial estoppel is only applied in situations where the integrity

of the judiciary is jeopardized.” Allen, 813 F.3d at 572–73. But if the integrity of the

bankruptcy court is truly jeopardized, the bankruptcy court has plenty of tools to

protect itself. Martineau v. Wier, 934 F.3d 385, 395 (4th Cir. 2019); see Law v. Siegel, 571

U.S. 415, 427, 134 S. Ct. 1188, 1198 (2014). A bankruptcy court can impose a variety

of sanctions, including denial of a discharge. Law, 571 U.S. at 427, 134 S. Ct. at 1198.

The court may also “deny an exemption for the proceeds from the debtor’s lawsuit; it



       But see In re Connor, 463 B.R. 14, 18–19 (E.D. Mich. 2012) (collecting cases
       3

holding that a lawsuit was not present income when the lawsuit remained pending at
confirmation), aff’d sub nom. Connor v. Carroll, 511 Fed. App’x 537, 538 (6th Cir. 2013).

                                            10
may even fine or imprison a debtor for contempt or refer the matter for the United

States Attorney’s Office to consider prosecuting the debtor for perjury.” Slater, 871

F.3d at 1187 (citation omitted).

       Indeed, these solutions may be preferable to judicial estoppel, because they target

an immoral debtor but leave his innocent creditors unharmed:

       Judges understandably favor rules that encourage full disclosure in
       bankruptcy. Yet pursuing that end by applying judicial estoppel to
       debtors’ self-contradiction would have adverse effects on third parties:
       the creditors. Biesek’s nondisclosure in bankruptcy harmed his creditors
       by hiding assets from them. Using this same nondisclosure to wipe out
       his FELA claim would complete the job by denying creditors even the
       right to seek some share of the recovery. Yet the creditors have not
       contradicted themselves in court. They were not aware of what Biesek
       has been doing behind their backs. Creditors gypped by Biesek’s
       maneuver are hurt a second time by the district judge’s decision. Judicial
       estoppel is an equitable doctrine, and using it to land another blow on the
       victims of bankruptcy fraud is not an equitable application. Instead of
       vaporizing assets that could be used for the creditors’ benefit, district
       judges should discourage bankruptcy fraud by revoking the debtors’
       discharges and referring them to the United States Attorney for potential
       criminal prosecution.
Biesek v. Soo Line R.R. Co., 440 F.3d 410, 413 (7th Cir. 2006); accord Ah Quin v. Cty. of

Kauai Dep’t of Transp., 733 F.3d 267, 276 (9th Cir. 2013); Kane v. Nat’l Union Fire Ins. Co.,

535 F.3d 380, 387–88 (5th Cir. 2008) (per curiam). “Judicial estoppel is an equitable

doctrine, and it is not equitable to employ it to injure creditors who are themselves

victims of the debtor’s deceit.” Cannon-Stokes v. Potter, 453 F.3d 446, 448 (7th Cir. 2006)

(Easterbrook, J.).




                                             11
       And at the same time that it disadvantages innocent creditors, judicial estoppel

hands a “windfall” to the alleged wrongdoer whom the plaintiff has sued. Martineau,

934 F.3d at 396 (quoting Slater, 871 F.3d at 1187); see Ah Quin, 733 F.3d at 275

(“Perversely, the only ‘winner’ in this scenario is the alleged bad actor in the estopped

lawsuit.”).4

       Because the Fifth Circuit’s primary justification is inapplicable to these facts,

because persuasive policy reasons weigh against finding an acceptance, and because we

operate under a standard of review that requires us to view the matter in the light most

favorable to Miller, we cannot conclusively say that Miller’s position was judicially adopted

or successfully maintained simply because the bankruptcy court confirmed his

Chapter 13 plan. See Frost Nat’l Bank, 315 S.W.3d at 508. Rather, for purposes of

summary judgment, we hold that reasonable minds could differ on whether Miller

prevailed in the bankruptcy court. See Cmty. Health, 525 S.W.3d at 681; Ferguson, 295




       4
        Moreover, even after approving the Chapter 13 bankruptcy plan, the debtor’s
and the court’s positions remain somewhat fluid, and inadvertent nondisclosures are
readily subject to correction after approval, which may imply that merely confirming
the plan does not qualify as a firm judicial acceptance. After approval, the bankruptcy
code and rules “liberally permit debtors to amend their disclosures when an omission
is discovered.” Slater, 871 F.3d at 1186. “Bankruptcy Rule 1009, which was proposed
by the Supreme Court and adopted by Congress, permits a debtor to amend a schedule
or statement ‘as a matter of course at any time before the case is closed.’” Id. (quoting
Fed. R. Bankr. P. 1009(a)). Creditors, debtors, and trustees retain the option of pursuing
a modification “[a]t any time . . . before the completion of payments under such plan.”
11 U.S.C.A. § 1329(a). And if the debtor does not comply with his obligations, the
whole of the plan may be undone and set back to square one. See 11 U.S.C.A. § 1307(c).

                                             12
S.W.3d at 643. Appellees have not carried their burden to conclusively establish the

second element of judicial estoppel.

      Because appellees have not conclusively established the second element, Miller

is entitled to reversal of the summary judgment. Nonetheless, in an abundance of

caution, we proceed to address the remaining elements of judicial estoppel.

D.    Inadvertence

      For the third element, we ask whether the party to be estopped has “acted

intentionally, not inadvertently.” Coastal Plains, 179 F.3d at 206. We have held that a

previous inconsistent position is inadvertent only when the debtor lacks knowledge of

the inconsistent position or has no motive for the inconsistency. Horsley-Layman, 221

S.W.3d at 807.

      A financial motive is “almost always” present “if a debtor fails to disclose a claim

or possible claim to the bankruptcy court”; “[m]otivation in this context is self-evident

because of potential financial benefit resulting from the nondisclosure.” Flores, 2014

WL 4109645, at *6 (quoting Love v. Tyson Foods, Inc., 677 F.3d 258, 262 (5th Cir. 2012)).

The nearest parallel we have found to Miller’s case is U.S. ex rel. Long v. GSDMIdea City,

L.L.C., in which the Fifth Circuit held that there was a financial motive to conceal a

lawsuit for a debtor who had what the court referred to as a “100% repayment plan.”

798 F.3d 265, 273 (5th Cir. 2015). But unlike Miller’s 100% plan, the debtor in Long

had some unsecured creditors who did not file claims, and $4,504.91 of those unsecured

debts were discharged at the end of the commitment period. See id. Also unlike Miller’s

                                           13
plan, the debtor was not paying interest on his debts, possibly to accommodate the

limits of his disposable income. See id. On those facts, the Long court held that the

debtor had three financial motives to conceal potential sources of income: “(1) he was

not required to pay any interest on his debts; (2) he was given five years (rather than a

shorter period) to repay the principal on his debts; and (3) $4,504.91 in unsecured claims

were discharged.” Id. The court reasoned that had the debtor disclosed his claims, “his

creditors may have sought modification and the bankruptcy court might have modified

his plan to require paying some of the interest, paying over a shorter period, or paying

some of the discharged debts.” Id.

      However, “‘[a]lthough it may generally be reasonable to assume that a debtor

who fails to disclose a substantial asset in bankruptcy proceedings gains an advantage,’

the specific facts of a case may weigh against such an inference.” Stallings, 447 F.3d at

1049 (quoting Ryan Operations G.P. v. Santiam–Midwest Lumber Co., 81 F.3d 355, 363 (3d

Cir. 1996)). The specific facts of this case—primarily Miller’s true 100% plan—show

that none of the motives advanced in Long apply here.

      Unlike Long, Miller was already paying interest on his unsecured debts “at the

legal rate from the petition date” pursuant to the bankruptcy court’s order. Moreover,

under Miller’s true 100% plan, his payments were not based on or limited by his income,

and there is no reason to believe that if he obtained more income in the future, it would

call for higher interest payments. Cf. 11 U.S.C.A. § 1322(b)(10).



                                           14
      Also, it does not appear that Miller had a motive to manipulate his plan duration.

To review, debtors usually receive a three-year plan if they are under their state’s median

income, but a five-year plan if they are above the median. See 11 U.S.C.A. § 1325(b)(4);

see also 11 U.S.C.A. § 1322(d). But in both the 2013 and 2017 bankruptcies, Miller was

already on a five-year plan, so even if he disclosed additional sources of income that

took him further above the state median, his situation would likely remain unchanged.

And conversely, because his payments were not based on his income, obtaining

additional income would not necessarily shorten the duration of his plan. See Martinez,

581 B.R. at 499 (observing that debtors who have agreed to pay the full amount of their

debt are not required to make higher payments based on their income even if by doing

so they “could pay off their unsecured creditors in a shorter period of time” (quoting

Richall, 470 B.R. at 249)). Thus, disclosure of additional income would likely not alter

his plan duration.

       Finally, the Long court proposed that the debtor had a motive to conceal income

in order to avoid being required to pay the “$4,504.91 in unsecured claims” that were

discharged at the end of the plan. See Long, 798 F.3d at 273. But Miller’s payments

were based on the amount of his debt apportioned out over the life of his plan, not his

income.    Thus, any future income from this lawsuit would not have justified a

modification to increase his payments. See Martinez, 581 B.R. at 498 (holding that the

debtor’s disposable income is effectively immaterial to the amount of payments “when

the confirmed plan already pays unsecured creditors in full”). Moreover, unlike Long,

                                            15
no debt was going to be discharged under his 100% plan, and thus concealing sources

of future income would not bring him any closer to a discharge of debts. In that regard

especially, Long is distinguishable.

       In judicial estoppel cases stemming from bankruptcy proceedings, a dispute

about the existence of a motive may be “a question of fact which is not subject to

resolution on summary judgment.” Thompson v. Cont’l Airlines, 18 S.W.3d 701, 704 (Tex.

App.—San Antonio 2000, no pet.) (summarizing In re Okan’s Foods, Inc., 217 B.R. 739,

755 (Bankr. E.D. Penn. 1998)); see State v. Clear Channel Outdoor, Inc., 463 S.W.3d 488,

493 (Tex. 2015) (“As a general rule, intent is a question of fact to be decided by the

jury.”). None of the motives identified in Long apply to the unique facts of this case,

and appellees have not offered any evidence tending to show that Miller had some other

motive to conceal his lawsuit. We therefore hold that a fact question remains as to the

third element of judicial estoppel.

E.     Unfair Advantage or Detriment

       Consistent with our conclusion that there is no evidence of a motive to gain

benefits or impose detriments, we also conclude that there is no evidence that such

benefits or detriments actually materialized, as would satisfy the fourth element of

judicial estoppel. See New Hampshire v. Maine, 532 U.S. 742, 751, 121 S. Ct. 1808, 1815

(2001); Ferguson, 295 S.W.3d at 644; Flores, 2014 WL 4109645, at *5. 5 Miller’s actions in


       Berman insists that unfair benefit or detriment is not an element of judicial
       5

estoppel under the federal test. To the contrary, the United States Supreme Court

                                           16
the bankruptcy proceeding did not prejudice appellees because they were not involved

with the bankruptcy in any way. See Ashmore v. CGI Grp., Inc., 923 F.3d 260, 279 (2d

Cir. 2019). And appellees have not identified any unfair benefits or detriments that

were actually reaped by Miller or visited on his creditors. Indeed, the Second Circuit

has held that where, as here, “the [p]lan already required the [debtors] to repay their

creditors in full,” the nondisclosure gave rise to only a de minimis benefit to the debtors

that was insufficient to justify the application of judicial estoppel. See Clark v. AII

Acquisition, LLC, 886 F.3d 261, 267 (2d Cir. 2018).

      Even supposing there were unfair benefits or detriments, Miller amended his

bankruptcy schedules before the trial court took definitive action. To a limited degree,

this would have mitigated any benefit or detriment. See Spaine v. Cmty. Contacts, Inc., 756

F.3d 542, 547 (7th Cir. 2014) (“Spaine’s creditors were not and could not have been

injured by incomplete Chapter 7 schedules that were orally corrected before Spaine

received a discharge.”); see also Ashmore, 923 F.3d at 278 (concluding that any harm from

a nondisclosure was mitigated by the debtor’s corrective action once he realized his

error); Ah Quin, 733 F.3d at 273–74 (similar); cf. Martineau, 934 F.3d at 397 (suggesting

similar reasoning based on Ah Quin).




recognized the importance of this consideration in New Hampshire v. Maine, 532 U.S. at
751, 121 S. Ct. at 1815, and both the Texas Supreme Court and this court have treated
it as an element, see Ferguson, 295 S.W.3d at 644; Flores, 2014 WL 4109645, at *5. Berman
offers us no reason to depart from binding precedent.

                                            17
      We therefore hold that appellees have failed to conclusively prove the fourth

element of judicial estoppel. We sustain Miller’s first and second issues.6

                                   III.   STANDING

      Lastly, Conformis contends that Miller lacked standing to pursue his claim in the

first place. Conformis argues that the lawsuit became part of Miller’s bankruptcy estate

and that all his rights to this asset were extinguished. According to Conformis, the

bankruptcy trustee was the only one with standing to bring the claim.

      Standing is a prerequisite to subject-matter jurisdiction, and subject-matter

jurisdiction is essential to a court’s power to decide a case. Teal Trading & Dev., LP v.

Champee Springs Ranches Prop. Owners Ass’n, 593 S.W.3d 324, 331 (Tex. 2020). We review

questions of standing de novo. Farmers Tex. Cty. Mut. Ins. Co. v. Beasley, 598 S.W.3d 237,

240 (Tex. 2020).

      When a person files a bankruptcy petition, he loses all right, title, and interest in

all of his property, and his property is then vested in his bankruptcy estate. Martin v.

Clinical Pathology Labs., Inc., 343 S.W.3d 885, 888 (Tex. App.—Dallas 2011, pet. denied)

(citing, inter alia, 11 U.S.C.A. § 541(a)(1)). Thus, in general, bankruptcy under chapters

other than Chapter 13 may affect a debtor’s standing to sue. See id.




      6
        This renders it unnecessary to consider Miller’s third issue, in which he offers a
fallback position: that even if appellees conclusively established the defense of judicial
estoppel, the bankruptcy trustee should nonetheless be allowed to bring the suit for the
benefit of his creditors.

                                           18
      However, Chapter 13 has “distinctive features” that preserve the debtor’s

standing. Id. Although a Chapter 13 debtor loses all right, title, and interest in his

property under § 541(a)(1), he remains in possession of all property of the estate under

§ 1306(b). Id. “Thus, every federal circuit court that has addressed the issue has

concluded that Chapter 13 debtors retain standing to sue on claims that are owned by

the bankruptcy estate.” Id. (collecting cases). Moreover, § 1327(b) provides that when

a Chapter 13 plan is confirmed, all property of the bankruptcy estate revests in the

debtor, except as otherwise specified in the bankruptcy plan or order confirming the

plan—and here, the plan and the order did not specify otherwise. See id. at 890; Dowler

v. Delta Inv. Hous., Inc., 834 S.W.2d 127, 129 (Tex. App.—Eastland 1992, no writ)

(quoting 11 U.S.C.A. § 1327(b)). Miller’s Chapter 13 bankruptcy therefore posed no

obstacle to his standing to sue.

                                   IV.   CONCLUSION

      Appellees conclusively proved the first element of judicial estoppel, inconsistent

positions. However, for purposes of the second element, a mere confirmation of

Miller’s plan does not conclusively show a judicial acceptance under these distinctive

facts. For purposes of the third element, none of the financial motives posited in Long

apply to the facts of this case, and appellees have not conclusively proved any other

sort of motive.    Finally, for purposes of the fourth element, appellees did not

conclusively prove that Miller gained an unfair benefit or imposed an unfair detriment.



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Because appellees failed to conclusively establish their affirmative defense, summary

judgment was inappropriate. We therefore reverse and remand for further proceedings.

                                                    /s/ Wade Birdwell

                                                    Wade Birdwell
                                                    Justice

Delivered: July 30, 2020




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