
The Senior U.S. District Judge Jan E. DuBois found that by hiding her lawsuit during her Chapter 13 bankruptcy, the debtor had potentially defrauded the creditors out of more than $140,000 which was discharged in bankruptcy.
“Here, the potential miscarriage of justice was inflicted upon Hardee-Guerra’s unsecured creditors, who did not receive the money they might have been entitled to had Hardee-Guerra informed them of her pending discrimination suit,” DuBois wrote.
As a result, DuBois found that the plaintiff must be barred from pursuing compensatory damages in order to protect “the integrity of both the bankruptcy and judicial processes.”
For her part, the debtor claimed that she did disclose the pregnancy discrimination case to the bankruptcy court because she believed that they were two separate things. However, the judge found that since the debtor had knowledge of the lawsuit, the incentive to hide it and in fact failed to disclose it over the course of her Chapter 13 bankruptcy that was enough to constitute bad faith. And while judicial estoppel has been used to completely dismiss cases in the past, the judge said that a complete dismissal of the discrimination lawsuit would be too extreme.