Kennedy v. Jim’s Formal Wear Co.,  No. 1:05-CV-1280-JEC, 2006 U.S. Dist. LEXIS 68902 (N.D. Ga. September 14, 2006) (Carnes)

Debtor filed an EEOC charge against her former employer for racial discrimination in March, 2003.  She filed a Chapter 7 petition in February, 2005 but failed to schedule her claim as an asset.  On March 15, 2005, the EEOC issued Debtor a notice of right to sue but plaintiff did not amend her bankruptcy schedules to disclose the claim.  In June 2006 she was issued a discharge. The defendant then sought dismissal of the lawsuit based upon judicial estoppel.

The Court first determined that judicial estoppel did not apply to the Chapter 7 Trustee.  However, the Trustee failed to comply with the Magistrate’s Order to intervene, and took no other action indicating an intent to pursue the claim. Therefore, the Court found that the Trustee had abandoned the claim.  The Court then determined that while the asset is normally abandoned back to the debtor, it was well settled that judicial estoppel bars the debtor from litigating the claim herself.  Therefore, the claim was dismissed.