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Clark v. AII Acquisition, LLC

United States Court of Appeals, Second Circuit

March 30, 2018

Michele Clark, Individually and as Representative of the Estate of John Clark, [1] Plaintiff-Appellant,
AII Acquisition, LLC, AWC 1997 Corporation, Crane Co., Domco Products Texas, LP, Eaton Aeroquip LLC, General Cable Industries, Inc., General Gasket Corp., Goodrich Corporation, FKA B.F. Goodrich Company, Industrial Holdings Corporation, FKA Carborundum Corporation, Lockheed Martin Corp., McDonnell Douglas Corporation, Navistar, Inc., FKA International Truck and Engine Corporation, Pecora Corporation, Pfizer Inc., Pirelli Inc., Pirelli Tire, LLC, Pneumo Abex Corporation, Saint-Gobain Abrasives, Inc., Defendants-Cross Defendants-Appellees, The Boeing Company, BorgWarner Morse Tec LLC, CBS Corporation, General Electric Company, Goodyear Canada, Inc., Goodyear Tire and Rubber Company, Harco LLC, FKA Harco Laboratories, Inc., Henkel Corporation, Hollingsworth & Vose Company, IMO Industries, Inc., Lennox Industries Inc., Mine Safety Appliance Company, LLC, Parker Hannifin Corporation, United Technologies Corporation, Prysmian Cables and Systems USA, LLC, FKA Pirelli Cable Corporation, Defendants-Cross Defendants-Cross Claimants-Appellees, Advanced Group Composites, Inc., CertainTeed Corporation, Georgia-Pacific LLC, Rockwell Automation, Inc., as successor in interest to Allen-Bradley Company, LLC, Union Carbide Corporation, Welco Manufacturing Company, Wyeth Holdings LLC, Defendants-Cross Defendants-Cross Claimants, Ciba-Geigy Corporation, Curtiss-Wright Corporation, Eaton Corporation, E.V. Roberts Headquarters, FMC Corporation, Greene, Tweed & Co., Hitco Carbon Composites, Inc., Kaiser Gypsum Company Inc., Northrop Grumman Systems Corporation, Schneider Electric, USA, Inc., FKA Square D Company, Trane U.S. Inc., FKA American Standard Inc., BMCE, Inc., Aerco International Inc., Basf Corporation, Defendants-Cross Defendants.

          Argued: December 12, 2017

          Appeal from the United States District Court for the Southern District of New York. No. 16-cv-6422 - George B. Daniels, District Judge.

         Plaintiff-Appellant Michele Clark appeals from an April 28, 2017 judgment of the United States District Court for the Southern District of New York (Daniels, J.) dismissing her personal injury claims against more than fifty corporate defendants. We hold that the district court abused its discretion in invoking the equitable doctrine of judicial estoppel to dismiss her claims. Accordingly, we vacate and remand for further proceedings.

          Alani Golanski (Robert E. Shuttlesworth, Shrader & Associates, LLP, Houston, TX, on the brief) Alani Golanski, Esq., New York, NY, for Plaintiff-Appellant.

          Martin F. Gaynor III (Brian D. Gross, Matthew T. Giardina, Jr., Manion Gaynor & Manning LLP, Providence, RI, Amaryah K. Bocchino, Stephan D. Dargitz, Manion Gaynor & Manning LLP, Wilmington, DE, on the brief), Manion Gaynor & Manning LLP, Boston, MA, for Defendant-Appellee The Boeing Company. [2]

          Bradley M. Wanner (Abbie Eliasberg Fuchs, on the brief), Harris Beach, PLLC, New York, NY, for Defendant-Appellee Prysmian Communications Cables & Systems USA, LLC.

          Before: Jacobs, Calabresi, and Chin, Circuit Judges.


         In 2015, John Edward Clark was diagnosed with mesothelioma, a cancer caused by the inhalation of asbestos fibers. At that time, Mr. Clark was nearing completion of a Chapter 13 bankruptcy plan that he and his wife, Michele, had entered into in 2010. Although the Clarks fulfilled their last remaining obligations under the plan within a matter of weeks, their bankruptcy proceeding remained formally open for another full year before finally coming to a close on August 5, 2016. One week prior to their discharge from that proceeding, the Clarks initiated the present suit: a personal injury action against The Boeing Company and a host of other corporations they believed had exposed Mr. Clark to asbestos.

         Boeing soon thereafter moved to dismiss the Clarks' personal injury suit on grounds of judicial estoppel. According to Boeing, the couple's failure to disclose Mr. Clark's diagnosis during bankruptcy bars them from pursuing personal injury claims related to that diagnosis now. The district court agreed, granting Boeing's motion and dismissing the Clarks' claims with prejudice.

         Mr. Clark died during the pendency of the couple's appeal to this court. But we grant to Mrs. Clark what relief we can: the April 28, 2017 judgment of the district court granting Boeing's motion to dismiss is VACATED, and the case REMANDED for further proceedings.


         By early 2010, the Clarks found themselves more than $100, 000 in debt.[3] Seeking to regain their financial footing, the couple filed for Chapter 13 bankruptcy in the United States Bankruptcy Court for the District of Connecticut. Under the Clarks' proposed bankruptcy plan ("the Plan"), the couple agreed to repay their creditors in full, with interest at the federal judgment rate, over five years through monthly payroll deductions.[4] See 28 U.S.C. § 1961. If all conditions were met, the Clarks would emerge from bankruptcy at the end of that period debt free. Following a confirmation hearing held in July 2010, the bankruptcy court set the Plan in motion.

         For nearly five years, everything went as planned. Each month $2, 152 was deducted from Mr. Clark's paycheck from his then employer, Boeing, and each month the couple inched closer to a discharge from bankruptcy. Then, only a few weeks before the Clarks' sixtieth (and final) monthly deduction was taken in July 2015, [5]tragedy struck: Mr. Clark was diagnosed with mesothelioma.

         Mr. Clark immediately suspected that the culprit was asbestos exposure, which he had suffered during his two decades of service in the United States Air Force and in his subsequent private sector employment. Soon after being diagnosed, Mr. Clark decided to bring suit against the corporations he believed responsible for exposing him to the known carcinogen. Mr. Clark-unsure of whether his bankruptcy asset schedules needed to be updated to reflect his diagnosis and intention to litigate-alerted his bankruptcy counsel to this information and "trusted him to do what was required under the law." Aff. of John Edward Clark ¶ 14 ...

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