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Hernandez v. Forest Preserve District of Cook County

March 29, 2010


The opinion of the court was delivered by: Judge Robert M. Dow, Jr.


Plaintiff Gronimo Hernandez filed this civil rights action against the Forest Preserve District of Cook County ("District") on October 7, 2008, alleging national origin discrimination and retaliation in violation of Title VII of the Civil Rights Act of 1964. Before the Court is the District' s motion for summary judgment [29]. For the reasons stated below, the District' s motion for summary judgment [29] is denied.

I. Background

The Court takes the relevant facts primarily from the parties'Local Rule ("L.R.") 56.1 statements*fn1 Defendant' s Statement of Facts ("Def. SOF") [32], Plaintiff's Response to Defendant' s Statement of Facts ("Pl. Resp.") [46], and Plaintiff's Statement of Additional Facts ("Pl. SOF") [43].

In September 2006, the District hired Hernandez, who is Puerto Rican, as a maintenance mechanic. Def. SOF ¶¶ 2, 3. On February 1, 2007, Hernandez filed a charge of discrimination with the Equal Employment Opportunity Commission ("EEOC") alleging that the District discriminated and retaliated against him in violation of Title VII of the Civil Rights Act of 1964. Def. SOF ¶ 4. Eight days later, on February 9, 2007, Hernandez filed a Chapter 13 bankruptcy petition in the Bankruptcy Court for the Northern District of Illinois. Def. SOF ¶ 5. Hernandez failed to list his claims against the District on his bankruptcy petition. Def. SOF ¶ 6. On October 7, 2008, after obtaining a Notice of Right to Sue from the EEOC, Hernandez filed this action. Def. SOF ¶ 7.

According to Hernandez, he did not know that he was required to list the EEOC charge on his bankruptcy schedule, nor did his bankruptcy attorney -- who was aware of the EEOC charge -- advise him to do so. Pl. SOF ¶¶ 2, 8, 9. Hernandez states in his affidavit that when he filed the EEOC charge, he did not intend to seek monetary compensation for his discrimination and retaliation claims. Pl. SOF ¶ 4. Rather, he merely intended to bring the discrimination to the District' s attention. Pl. SOF ¶ 5. Hernandez further testifies that he has instructed his attorneys in this matter to engage his former bankruptcy attorney to reopen the bankruptcy estate and amend the schedules to include Hernandez's claims against the District, as well as to alert his creditors to these claims.*fn2 Pl. SOF ¶ 11. The Court' s review of the docket in Plaintiff's bankruptcy case (bankruptcy petition no. 07-02286) indicates that on February 19, 2010, Plaintiff filed a motion to modify his Chapter 13 plan to provide that any recovery from this suit be paid into the plan for the benefit of Plaintiff's creditors. On March 11, 2010, the bankruptcy court modified Plaintiff's Chapter 13 plan as follows: "the debtor' s proceeds of his lawsuit against the Forest Preserve District of Cook County, Illinois, case number 08 CV 5731, if any remains after payment of expenses and attorney' s fees of said suit, shall be paid into the Chapter 13 plan, but I no event more than the amount necessary to provide 100% distribution to unsecured."

II. Legal Standard on Summary Judgment

Summary judgment is proper where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. P. 56(c). In determining whether there is a genuine issue of fact, the Court "must construe the facts and draw all reasonable inferences in the light most favorable to the nonmoving party." Foley v. City of Lafayette, 359 F.3d 925, 928 (7th Cir. 2004).

To avoid summary judgment, the opposing party must go beyond the pleadings and "set forth specific facts showing that there is a genuine issue for trial." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1986). A genuine issue of material fact exists if "the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Id. at 248. The party seeking summary judgment has the burden of establishing the lack of any genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). Summary judgment is proper against "a party who fails to make a showing sufficient to establish the existence of an element essential to that party's case, and on which that party will bear the burden of proof at trial." Id. at 322. The non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). In other words, the "mere existence of a scintilla of evidence in support of the [non-movant' s] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-movant]." Anderson, 477 U.S. at 252.

III. Analysis

The District argues that it is entitled to summary judgment because the discrimination and retaliation claims at issue existed at the time that Plaintiff filed for bankruptcy and consequently are property of the estate; therefore, the District contends, Plaintiff is not the real party in interest, and lacks standing to sue. Alternatively, the District maintains that even if Plaintiff were entitled to bring the claims himself, this Court should apply judicial estoppel to bar Plaintiff from recovering on the previously undisclosed claims. The Court addresses each argument in turn.

A. Real Party in Interest

Under § 541 of the Bankruptcy Code, all of a debtor' s property, including existing legal claims, become part of the bankruptcy estate at the time that the petition is filed. See 11 U.S.C. § 541(a)(1) ("estate is comprised of * * * all legal or equitable interests of the debtor in property as of the commencement of the case); Biesek v. Soo Line Railroad Co., 440 F. 3d 410, 413 (7th Cir. 2006). Here, Plaintiff plainly was aware of the alleged discrimination and retaliation underlying his Title VII claims before he filed for bankruptcy. Therefore, Plaintiff's claims accrued prior to the commencement of his bankruptcy proceeding, and are part of the bankruptcy estate. See Adams v. CBS Broadcasting, Inc., 61 Fed. Appx. 285, 287 (7th Cir. 2003) (under federal discovery rule, Title VII cause of action accrues on the date plaintiff should reasonably have discovered the injury); Nationwide Acceptance Corp. v. Markoff, Krasny, Goldman and Grant, 2000 WL 1230434, at *2 (N.D. Ill. Aug. 23, 2000) (causes of action that accrue prior to commencement of bankruptcy proceeding must be included in bankruptcy estate).*fn3

In the context of Chapter 7, the Seventh Circuit has held that debtors lack standing to assert pre-bankruptcy claims. See Matthews v. Potter, 316 Fed. Appx. 518, 521 (7th Cir. 2009) (unpublished) ("only the trustee, as the real party in interest, has standing to sue"); see also Biesek, 440 F.3d at 413 (debtor is not real party in interest because pre-bankruptcy claims belong to the trustee, for the benefit of the debtor' s creditors).*fn4 The District argues that it is entitled to summary judgment because, under this line of cases, Plaintiff is not the real party in interest in this cause of action. However, the District overlooks the significant differences between Chapter 7 and Chapter 13.*fn5 Under Chapter 13, the debtor remains in possession of all property of the estate, including pre-existing legal claims. See 11 U.S.C.A. § 1306(b); Cable v. Ivy Tech State College, 200 F.3d 467, 472 (7th Cir. 1999). Therefore, unlike a Chapter 7 debtor, a Chapter 13 debtor has standing to bring claims in his own name for the benefit of his creditors. See Cable, 200 F.3d at 474 (holding that "[t]he proper practice for creditors and trustees is to allow the debtor-in-possession to exercise the powers assigned by ยงยง 1306(b) and 541, and sue in his own name for the estate"); Calvin v. Potter, ...

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