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Janidet Lujano v. Town of Cicero

September 28, 2012

JANIDET LUJANO, PLAINTIFF,
v.
TOWN OF CICERO, ET AL. DEFENDANTS.



The opinion of the court was delivered by: Magistrate Judge Finnegan

MEMORANDUM OPINION AND ORDER

Plaintiff Janidet Lujano ("Lujano") has sued the Town of Cicero ("the Town") and several of its officials -- the Town's President, Larry Dominick ("Dominick"), the Town's Superintendent of Police, Anthony Iniquez ("Iniquez"), the Superintendent of the Town's Auxiliary Police Force, Moises Zayas ("Zayas"), and the Deputy Superintendent of the Town's Auxiliary Police Force, Serge Rocher ("Rocher") -- for violating her constitutional rights under 42 U.S.C. § 1983.*fn1 Lujano also asserts claims under Illinois law for intentional infliction of emotional distress and assault and battery. In brief, she claims that over a number of years she was sexually harassed by Dominick and Zayas, and that she was demoted in retaliation for refusing their advances. In addition, she alleges that she was demoted on account of her gender and because of her refusal to engage in political activities for Dominick, and was subjected to even further retaliation after she came forward with these allegations.

On March 5, 2010, District Judge Elaine Bucklo denied a motion filed by the Town, Iniquez, and Rocher seeking summary judgment on certain counts. (Doc. 276). On June 23, 2011, the parties consented to have Magistrate Judge Martin Ashman conduct all further proceedings in the case. (Doc. 352). All Defendants (except Zayas) subsequently moved for summary judgment, asserting Lujano lacks standing and is judicially estopped from suing because she filed for bankruptcy in 2007 and never disclosed this lawsuit in the bankruptcy filing. Alternatively, Defendants seek dismissal of the case as a sanction because Lujano did not disclose the bankruptcy in discovery responses. (Doc. 491). On June 12, 2012, the case -- and responsibility for deciding the pending motion -- was reassigned to this Court. (Doc. 439). For the reasons discussed below, the motion is denied.

BACKGROUND

A. Filing of Lawsuit and EEOC Complaint

After she was initially terminated in January 2004, Lujano was re-hired as an officer for the Town's auxiliary police force in June 2005 and became an auxiliary sergeant in July 2006. (Doc. 1 ¶¶ 16, 18; Defs.' SOF ¶ 1). On August 27, 2007, Lujano filed her original complaint against the Town, Iniquez, Dominick, and Zayas, alleging misconduct after her re-hire, namely, sexual harassment, retaliation and demotion in violation of her Equal Protection and First Amendment rights under Section 1983. (Doc. 1). She also made claims of assault, battery and intentional infliction of emotional distress against the Town, Dominick and Zayas. (Id.). While still employed with the Town, Lujano amended her complaint on November 6, 2007 to include Rocher as a defendant in her intentional infliction claim, as well as her equal protection and first amendment claims.

Lujano also expanded her allegations of retaliatory conduct and emotional and physical damages, describing new alleged misconduct occurring between September and October 2007. (Doc. 45). She amended her complaint once again on December 15, 2009 to include allegations of continued harassment and retaliation in 2008 and 2009, including her termination on August 17, 2009 and the failure to hire her for other positions after this. (Doc. 236 ¶¶ 98-100, 102-110). Prior to bringing the lawsuit, Lujano filed a complaint against the Town with the EEOC, alleging sex discrimination, pregnancy discrimination, sexual harassment and retaliation from January 1, 2006 "and continuing." (Pl.'s SOF, Ex. E).*fn2 According to Lujano's attorney, the EEOC's investigation of the Town is ongoing. (Id., Ex. D ¶ 2).

B. Filing of Chapter 7 Bankruptcy Petition

On November 27, 2007, Lujano filed a voluntary petition for bankruptcy under Chapter 7 of the Bankruptcy Code in the United States Bankruptcy Court for the Northern District of Illinois. (Id., Ex. A). She was represented by counsel who was not associated with the pending civil rights lawsuit. In Schedule B of the bankruptcy petition Lujano was required to list all personal property that she possessed at the time of filing, including "contingent and unliquidated claims of every nature," and to indicate their estimated value. In response, Lujano stated "Debtor has filed a complaint with EEOC for sexual harassment." (Id., Ex. A, at 10). She indicated that the current value of this interest was "Unknown." (Id.). On Schedule C, Lujano listed property that she was claiming as "exempt" and included the EEOC complaint for sexual harassment as an exempt contingent claim. (Id., Ex. A, at 12). In her "Statement of Financial Affairs," Lujano was required to "list all suits and administrative proceedings to which the debtor is or was a party within one year immediately preceding the filing of this bankruptcy case." (Id., Ex. A, at 30) (emphasis omitted). Lujano indicated "None." (Id.). Lujano declared under penalty of perjury that the information set forth in this Statement and her schedules was true and correct. (Id., Ex. A, at 28; Defs.' SOF ¶¶ 10-12).

On January 7, 2008, the bankruptcy court closed Lujano's Chapter 7 case with a "no asset" finding. (Defs.' SOF ¶ 14). She was discharged from bankruptcy proceedings on February 19, 2008. (Pl.'s SOF, Ex. K). At the time, she owed $24,844 to creditors holding unsecured non-priority claims, and $7,000 to creditors holding unsecured priority claims. (Id., Ex. A, at 6).

C. Reopening Bankruptcy Case and Conversion to Chapter 13

Defendants state that they first learned of Lujano's November 2007 bankruptcy filing in January 2012. (Doc. 401, at 1). Shortly after, Defendants sought leave to file a motion for summary judgment based on the omission of the federal lawsuit from the bankruptcy filing. Leave was given, and Defendants filed a motion for summary judgment on February 1, 2012. (Docs. 400, 401).

On February 28, 2012, Lujano (represented by a new bankruptcy attorney) filed a "Motion to Reopen Case" and a "Motion to Convert to Chapter 13" with the bankruptcy court. (Pl.'s SOF, Ex. C; Docs. 18, 19). Notice of these motions was sent to Lujano's creditors and the U.S. Trustee. (Id.). In her motion to reopen the bankruptcy case Lujano disclosed:

! She previously had filed for relief under Chapter 7 on November 27, 2007 and had listed "an EEOC claim she had against her former employer" on Schedule B.

! "At the time of filing her bankruptcy petition, the Debtor had filed a suit" in federal court "naming the Town of Cicero and others as defendants (case number 07 C 4822)."

! The bankruptcy court had entered an order discharging the Debtor on

February 19, 2008. (Bankr. Doc. 18). Lujano's motion said that "[u]pon entry of an Order reopening this case, the Debtor will file Amended Schedules B, I and J[,]" and that she "desires to convert this case to Chapter 13. She intends to pay unsecured creditors 100 percent under her proposed plan." (Id.). Approximately one week later, the bankruptcy court entered an order granting the motion to reopen the bankruptcy case. (Pl.'s SOF, Ex. F).

In her separate motion to convert to Chapter 13, Lujano said she had filed for relief under Chapter 7, the case had not previously been converted, and Lujano was eligible to be a debtor under Chapter 13. (Bankr. Doc. 19). On March 7, 2012, the bankruptcy court entered an order granting the motion to convert to Chapter 13. (Pl.'s SOF, Ex. G). Coincidentally, this was the same day that Lujano was due to file a response to the pending motion for summary judgment in the district court. (Doc. 400). Rather than file, Lujano sought an extension of time, noting (among other reasons) that her attorney had requested and just received the bankruptcy file from Lujano's prior bankruptcy counsel and was "still investigating this matter." (Doc. 403). Plaintiff ultimately filed her response to the motion for summary judgment on May 18, 2012. (Doc. 432).

On March 21, 2012, Lujano filed her proposed Chapter 13 Plan with the bankruptcy court. The Plan indicated that she would not receive a discharge from her debts (as she had with the Chapter 7 bankruptcy) and instead would be required to make certain monthly payments to the trustee and then to general unsecured creditors. The Plan indicated that the unsecured creditors would receive 100% of their allowed amount. (Bankr. Doc. 26, at 2-5). In a modified Chapter 13 Plan dated May 1, 2012, Lujano added as a "special term" a provision that "[a]ny proceeds received by the Debtor pursuant to her EEOC claim or lawsuit against the Town of Cicero shall be forwarded to the Trustee for distribution to creditors." (Bankr. Doc. 41, at 5).

Lujano also filed an Amended Statement of Financial Affairs and Personal Property and amended schedules. Instead of answering "None" to the question about suits and administrative proceedings in which she was a party (as she had before), Lujano identified her pending civil rights lawsuit against Defendants, as well as the EEOC charge. (Bankr. Doc. 35; Pl.'s SOF, Ex. H., at 2-3). On Schedule B (Personal Property), under "[o]ther contingent and unliquidated claims," Lujano indicated: "Civil Rights, State Law and EEOC Claims. Case number 07 C 4822" and listed the parties in this lawsuit. (Id., Ex. I, at 2). On Schedule C (Property Claimed as Exempt), Lujano also indicated "Civil Rights, State Law and EEOC Claims" (not simply the EEOC complaint as before) but this time estimated the value of the claimed exemption as $0. (Id., Ex. I, at 4).

On June 19, 2012, Lujano filed a motion to vacate her prior discharge for debtor in the Chapter 7 case, stating that she desired to convert the case to Chapter 13 and intended to pay unsecured creditors 100% under her proposed plan. (Bankr. Doc. 56). On July 12, 2012, the bankruptcy court granted this motion, and a notice was issued to creditors and parties in interest that the discharge had been vacated. (Bankr. Docs. 60, 61). That same day, the bankruptcy court entered an order confirming the modified Chapter 13 Plan. The court's order stated that all property of the estate "will continue to be property of the estate following confirmation" unless the plan provided for surrender of the property or the property was sold pursuant to the plan or court order. (Bankr. Doc. 59).

D. Affidavits from Lujano and Attorney Kurtz

In opposition to the pending motion, Lujano has submitted an affidavit stating that she informed her prior bankruptcy attorney about both the lawsuit and the charge filed with the EEOC and relied on him to "properly file the bankruptcy petition on my behalf knowing this information." (Pl.'s SOF, Ex. B ¶ 2). Lujano further states that she did not inform Ms. Kurtz, her counsel in this lawsuit, about the bankruptcy filing because she did not think it was relevant to the lawsuit. (Id., Ex. B ¶ 5). Lujano then states that she never intended to evade her debts or defraud her creditors. (Id., Ex. B ¶ 9).

Attorney Kurtz submitted her own affidavit, attesting that Lujano never informed her of the bankruptcy filing. (Id., Ex. D ΒΆ 5). Ms. Kurtz also states that neither Lujano's prior bankruptcy attorney nor the bankruptcy trustee contacted her "to inquire into the merits of Ms. Lujano's claims ...


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