At the heart of this dispute is the authority of UDC to negotiate check # 322550 on behalf of Cadillac. The complaint alleges that Wachovia is liable to Alexander for honoring the check because it contained an unauthorized indorsement. Wachovia moves for summary judgment on the ground that UDC possessed sufficient authority to negotiate the check.
A district court may enter summary judgment only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(c). A genuine issue of material fact exists, and summary judgment is therefore inappropriate, "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248, 91 L. Ed. 2d 202, 106 S. Ct. 2505 (1986).
In support of its motion for summary judgment, Wachovia contends that in the litigation pending before Judge Conlon (88 C 215), Tifco admitted that UDC was authorized to indorse check # 322550. According to Wachovia, Tifco's admissions are found in several sources: 1) Tifco's amended complaint; 2) "Tifco's Response to Monaco's Statement of Facts and Tifco's Additional Statements of Fact"; and 3) the deposition testimony of Tifco's Midwest regional manager, Ronald Berich. Since Tifco previously admitted that UDC had authority to indorse the check, Wachovia argues, the doctrine of judicial estoppel bars Alexander from now asserting a contrary position. Judicial estoppel "precludes a party from advocating a position inconsistent with one previously taken with respect to the same facts in an earlier litigation." Himel v. Continental Ill. Nat'l Bank and Trust Co., 596 F.2d 205, 210 (7th Cir. 1979) (quoting In re Yarn Processing Patent Validity Litig., 498 F.2d 271, 279 (5th Cir.), cert. denied, 419 U.S. 1057, 42 L. Ed. 2d 654, 95 S. Ct. 640 (1974)). The underlying purpose of the doctrine is to safeguard the integrity of the judicial process. Edwards v. Aetna Life Ins. Co., 690 F.2d 595, 598 (6th Cir. 1982). If a party persuades one court to accept his position, and later convinces another court to adopt the opposite position, the logical assumption is that at least one of the courts has been misled. Id. at 599; Konstantinidis v. Chen, 200 U.S. App. D.C. 69, 626 F.2d 933, 938-39 (D.C. Cir. 1980). Judicial estoppel works to prevent a litigant "from 'playing fast and loose' with the courts" by intentionally asserting inconsistent positions. Allen v. Zurich Ins. Co., 667 F.2d 1162, 1166 (4th Cir. 1982).
In Wachovia's view, Tifco's admissions are inconsistent with the position taken by Alexander (as assignee) in this case.
Wachovia, however, has failed to satisfy an essential element of judicial estoppel -- i.e., that the party to be estopped actually prevailed on the disputed issue in the prior litigation. Astor Chauffeured Limousine Co. v. Runnfeldt Inv. Corp., 910 F.2d 1540, 1548 (7th Cir. 1990); Eagle Foundation, Inc. v. Dole, 813 F.2d 798, 810 (7th Cir. 1987). Wachovia does not state that a trier of fact accepted Tifco's position by specifically finding that UDC had authority to indorse check # 322550. There is no allegation, moreover, that Judge Conlon made some sort of judicial finding in favor of Tifco. Rather, Wachovia points to the settlement Tifco obtained from Cadillac and Monaco. Unfortunately for Wachovia, a settlement is not the sort of prior success which implicates judicial estoppel. Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 666, 7 U.S.P.Q.2D (BNA) 1097 (Fed. Cir.), cert. denied, 488 U.S. 968, 102 L. Ed. 2d 534, 109 S. Ct. 498 (1988); Edwards, 690 F.2d at 599-600; Konstantinidis, 626 F.2d at 939. A settlement does not imply a judicial endorsement or acceptance of a litigant's assertions. Water Technologies Corp., 850 F.2d at 666; Konstantinidis, 626 F.2d at 939. Consequently, there is no perception that a court has been led astray, and the integrity of the judicial process is left intact. Water Technologies Corp., 850 F.2d at 666; Edwards, 690 F.2d at 599. Wachovia simply cannot rely on a settlement as the basis for its judicial estoppel theory.
Nonetheless, Wachovia contends that Alexander is bound by Tifco's admissions even if judicial estoppel does not apply. Assuming that Tifco's admissions are binding on Alexander, the court cannot agree that any such admissions entitle Wachovia to judgment in its favor. Wachovia's liability is tied to the authority of UDC and FAC to indorse and deposit check # 322550. Although Tifco has admitted that UDC and FAC are agents of Cadillac for some purposes, Tifco never openly admitted that either party had authority to negotiate the check in the manner in which it was negotiated in this case. None of the statements relied upon by Wachovia conclusively establish that UDC and FAC were fully authorized to indorse and deposit a check earmarked for payment of a Cadillac Errors and Omissions policy.
At this stage of the litigation, there remains a factual dispute as to the authority question. The authority of UDC (and Monaco) to indorse checks on behalf of Cadillac was circumscribed by the administrative agreement between UDC and Cadillac. UDC was only given administrative authority with respect to certain types of Cadillac insurance policies specified in the administrative agreement. See note 2, supra. The Errors and Omissions policy obtained by FAC was not within the purview of this authority. Cadillac does not even write Errors and Omissions policies in Illinois. Furthermore, there is no solid evidence that either UDC or FAC was authorized to deposit the funds into FAC's bank account; FAC was only authorized to act on behalf of Cadillac for certain Truck Owner's policies. See Managing General Agent Agreement, art. I, para. 1.01; art. IV, para. 4.03.
Wachovia has not presented sufficient evidence upon which to conclude that UDC and FAC actually had the authority to indorse and deposit check #322550. A question of fact regarding this authority renders summary judgment inappropriate.
For the foregoing reasons, the motion for summary judgment filed by defendant Wachovia and third-party defendants Pathway, the Federal Reserve Bank of Richmond, and the Federal Reserve Bank of Chicago is denied.
IT IS SO ORDERED.