Articles Posted in Judicial Estoppel

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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.

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In divorce cases that settle, the judge will hold a prove-up hearing. During that hearing, the parties are asked questions about the Marital Settlement Agreement. If a litigant testifies that the settlement was fair and appropriate, can he later sue his lawyer for “coercing” him into settling the case? The answer in Michigan is “No.” The legal doctrine is judicial estoppel – which provides that a litigant cannot assert contradictory positions in two cases. In this case, the wife testified at the prove-up that she agreed to the terms of the settlement. Later, she sued her divorce lawyer for legal malpractice and alleged that she was “tricked” into settling. The court dismissed the case and the Appellate Court affirmed in an unpublished opinion. The court essentially reasoned that it was unfair for the plaintiff to obtain the benefits of a settlement (to which she consented) and then turn around and sue her lawyer.

The reasoning:

At the heart of plaintiff’s legal malpractice case is her assertion that she was tricked and/or coerced into agreeing to the settlement at the March 28, 2012 hearing at her divorce proceeding. But the doctrine of judicial estoppel renders her claims meritless. Judicial estoppel, described as the doctrine against the assertion of inconsistent positions, is a tool used by courts to impede those litigants that “play `fast and loose’ with the legal system.” Paschke v Retool Indus, 445 Mich 502, 509; 519 NW2d 441 (1994) (citation omitted). Under this doctrine, a party that has successfully and unequivocally asserted a position in a prior proceeding is estopped from asserting an inconsistent position in a subsequent proceeding. Wells Fargo Bank, NA v Null, 304 Mich App 508, 537; 847 NW2d 657 (2014); Detroit Int’l Bridge Co v Commodities Export Co, 279 Mich App 662, 672; 760 NW2d 565 (2008).

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GROCHOCINSKI v. MAYER BROWN ROWE & MAW, LLP, Court of Appeals, 7th Circuit 2013 – Google Scholar.

The Seventh Circuit has affirmed the dismissal of this legal malpractice case filed by a bankruptcy trustee against Mayer Brown Rowe and Maw.  This case has garnered some attention in the legal ethics press. The only problem with this case is that it is unique and it is unlikely to have any precedential value.

The case began with a contract dispute between Spehar Capital and CMGT, Inc., a start-up company with no assets to speak of. Mayer Brown represented CMGT. Mayer Brown’s only important task was to obtain financing for the CMGT.  The financing never materialized.