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Eunice Esparza v. Costco Wholesale Corporation

December 28, 2011


The opinion of the court was delivered by: Marvin E. Aspen, District Judge:


Plaintiff, Eunice Esparza, is suing Defendant, Costco Wholesale Corporations ("Costco") alleging national origin discrimination in violation of Title VII of the Civil Rights Act of 1964, 42 U.S.C. § 2000e et seq ("Title VII"). Costco has denied and continues to deny that Esparza's claims have any merit; however, presently before us are two motions that arise due to Esparza's 2010 bankruptcy filings. In its first motion, Costco seeks to amend its affirmative defenses to include: "Plaintiff's claim may be barred in whole or in part by the doctrine of judicial estoppel." (Mot. to Amend ¶ 14.) In its second motion, Costco argues summary judgment is proper because, due to Esparza's failure to list this cause of action as an asset during her bankruptcy proceeding, her claims are barred by the doctrine of judicial estoppel, or in the alternative, should be dismissed for lack of standing.


Esparza is a former employee of Costco, a worldwide operator of membership warehouses. (Def. 56.1 Stat. ¶¶ 1, 2.) She was hired by Costco in August 2007, and terminated in November 2007. Costco alleges that she was terminated for serious misconduct, but Esparza disputes this assertion. (Id. at ¶¶ 4, 5.)

On April 1, 2008, Esparza filed charges of discrimination with the Illinois Department of Human Rights, alleging discrimination on the basis of ancestry; the charge was cross filed with the Equal Employment Opportunity Commission ("EEOC"). (Id. ¶ 6.)The EEOC issued a right to sue letter on May 28, 2010. (Id. ¶ 7.)Plaintiff filed this complaint on August 26, 2010 alleging that Costco engaged in a "pattern and practice of national origin-based discrimination" against her during her employment, and that she was discharged "as part of Defendant's surreptitious program of harassment and discrimination toward Plaintiff." (Compl. ¶¶ 5, 10.)

On June17, 2010, Esparza filed a Chapter 13 bankruptcy petition in the United States Bankruptcy Court for the Northern District of Illinois. (Def. 56.1 Stat. Ex. 1.) Esparza electronically signed the petition, declaring "under penalty of perjury" that the answers contained in the petition and its attached documents are true and correct. (Id. at 28.) On Schedule B of the petition, directing Esparza to identify "all contingent and unliquidated claims of every nature . . .," she marked "none." (Id. at 12, ¶ 21.) Also, on the Statement of Financial Affairs, which directed her to "list all suits and administrative proceedings to which the debtor is or was a party within one year immediately preceding the filing," she listed only a mortgage foreclosure claim. (Id. at 26, ¶ 4.) Esparza did not include her charge of discrimination or the existence of the claims she now asserts against Costco on either of these forms.

Esparza voluntarily converted her bankruptcy case to a case under Chapter 7 on November 23, 2010. (Def. 56.1 Stat. Ex. 2.) She did not alter her disclosures at that time. On February 23, 2011, the Bankruptcy Court issued an order discharging Esparza's unsecured debts. (Def. 56.1 Stat. Ex. 3.) The Bankruptcy Court closed the case and discharged the trustee on February 28, 2011. (Def. 56. Stat. Ex. 4.)

At no time prior to the discharge of her debts did Esparza ever disclose to the Bankruptcy Court, the Trustee, or her creditors any of the claims that she now asserts against Costco. However, on June 17, 2011, Esparza filed an Amended Statement of Financial affairs with the Bankruptcy Court. (Dkt. No. 39, Resp. at 2.) The amended statement includes Esparza's employment discrimination claim against Costco, indicating that the claim is currently pending motion for summary judgment. (Id. at 3, ¶ 4.)


"The district court has the discretion to allow an answer to be amended to assert an affirmative defense not raised initially." Jackson v. Rockford Housing Auth.., 213 F.3d 389, 392 (7th Cir. 2000) (citing Fed. R. Civ. P. 15(a)). Rule 15(a) states that "[t]he court should freely give leave when justice so requires." Fed. R. Civ. P. 15(a)(2).

Costco filed its Answer and Affirmative Defenses on January 4, 2011; at that time it was unaware of Esparza's bankruptcy proceedings pending in the bankruptcy court.*fn1 Costco became aware of the bankruptcy on January 27, 2011, when Esparza mentioned it during a status hearing in open court. On April 14, 2011, Costco informed the court that it intended to file a dispositive motion based on Esparza's failure to disclose her claims in this action to the Bankruptcy Court; the motion to amend was filed June 2, 2011. Based on this short time line, we do not believe that Costco unduly delayed its filing. Nor do we find any bad faith or dilatory motive in Costco's actions. As this motion is based on a fact unknown to Costco at the time of its filing and Costco has offered a legitimate reason for its failure to include the affirmative defense in its original answer, we find that justice requires leave to amend and grant Costco's motion.


A. Standard of Review

Summary judgment is proper only when "there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). A genuine issue for trial exists when "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, 106 S. Ct. 2505, 2510 (1986). This standard places the initial burden on the moving party to identify those portions of the record that "it believes demonstrate the absence of a genuine issue of material fact." Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 2553 (1986) (internal quotations omitted). Once the moving party meets this burden of production, the nonmoving party "must go beyond the pleadings" and identify portions of the record demonstrating that a material fact is genuinely disputed. Id.; Fed. R. Civ. P. ...

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