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Court Rejects Divorce Malpractice Claim On Judicial Estoppel Grounds

Judicial estoppel is a doctrine that penalizes a litigant who takes one position in one lawsuit and a contrary position in another lawsuit. In other words, the litigant’s position shifts based on the litigant’s interests in a particular case. Kershaw v. Levy, Tennessee Court of Appeals, No. M2017-01129-COA-R3-CV., is a divorce malpractice case where the plaintiff’s claims against her former lawyer ran into the judicial estoppel doctrine. The lawyer entered the divorce case and Kershaw was promptly held in contempt of court and sentenced to 30 days in jail. Later, the lawyer settled the divorce case and obtained an order vacating the contempt finding.  When Ms. Kershaw sued him for legal malpractice the lawyer filed a motion arguing that she was judicially estopped from bringing claims based on the divorce settlement.

The court summarizes the judicial estoppel argument in this fashion:

On March 1, 2017, Mr. Levy filed a motion for summary judgment contending that Ms. Kershaw should be judicially estopped from claiming in the malpractice case that her damages from Mr. Levy’s negligence resulted from an inequitable settlement agreement with Elliot Kershaw when she previously claimed under oath that the settlement had been equitable. Further, Mr. Levy argued that Ms. Kershaw should not be allowed to pursue any malpractice claim against him based on her criminal contempt convictions because they had been vacated and she voluntarily relinquished her right to pursue any post-conviction relief related to them in the MDA. Ms. Kershaw responded in opposition to the motion for summary judgment, asserting the damage resulting from Mr. Levy’s alleged negligence left her with no bargaining power in her settlement negotiations with Mr. Kershaw, and the fact that she entered into an agreement several months after Mr. Levy’s involvement that stated the settlement with Mr. Kershaw was fair and equitable was irrelevant.

The trial court granted the summary judgment motion and the Court of Appeals affirmed. This quote illustrates the court’s reasoning:

“The doctrine of judicial estoppel seeks to ensure that parties do not `play[ ] fast and loose with the courts’ by contradicting a previous sworn statement or testimony.” Schutt v. Miller,W2010-02313-COA-R3-CV, 2012 WL 4497813, at *11 (Tenn. Ct. App. Sept. 27, 2012) (quoting Woods v. Woods, 638 S.W.2d 403, 406 (Tenn. Ct. App. 1982)). Our Tennessee Supreme Court also opined that the doctrine of judicial estoppel is proper when a party is attempting to take a position contrary to a position previously taken under oath:

[W]e take this opportunity to clarify that the doctrine of judicial estoppel is applicable only when a party has attempted to contradict by oath a sworn statement previously made. See Allen v. Neal, 217 Tenn. 181, 396 S.W.2d 344, 346 (1965) (noting that “[j]udicial estoppels arise from sworn statements made in the course of judicial proceedings, generally in a former litigation, and are based on public policy upholding the sanctity of an oath and not on prejudice to adverse party by reason thereof, as in the case of equitable estoppel”).Cracker Barrel Old Country Store, Inc. v. Epperson, 284 S.W.3d 303, 315 (Tenn. 2009).

In the present case, Ms. Kershaw swore under oath that her settlement in the Divorce Case was fair and equitable, that she entered into the MDA voluntarily and with the advice of counsel, and that she was not under any form of fraud, coercion, undue influence, or misrepresentation. She also swore that she was not entering into the MDA as a result of any other reason not stated therein. She now seeks damages against Mr. Levy for allegedly receiving an inequitable settlement with her ex-husband — a position that is diametrically opposed to her representations under oath in the Divorce Case.

Conclusion: this appears to be an appropriate case in which to apply judicial estoppel. First, the lawyer clearly rescued the client from a litigation fiasco (a contempt finding) and the client swore under oath that the settlement of the divorce case was “fair and equitable.”