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Alward v. Johnston

Supreme Court of New Hampshire

December 21, 2018


          Argued: January 25, 2018

          Hillsborough-southern judicial district.

          Swartz & Swartz, P.C., of Boston, Massachusetts (David P. Angueira on the brief and orally), for the plaintiff.

          Wadleigh Starr & Peters P.L.L.C., of Manchester (Todd J. Hathaway on the joint brief and orally), for defendants Emery Johnston, M.D., and Elliot Hospital.

          Sulloway & Hollis, P.L.L.C., of Concord (Peter A. Meyer and Jay Surdukowski on the joint brief), for defendant Gary D. Fleischer, M.D.

          Foster & Eldridge LLP, of Cambridge, Massachusetts (Stephen M. Fiore and Martin C. Foster on the joint brief), for defendants Tung Thuy Nguyen, M.D., and Southern New Hampshire Medical Center.

          HANTZ MARCONI, J.

         This appeal arises from the dismissal of a medical malpractice action filed by the plaintiff, Nicole Alward, against defendants Emery Johnston, M.D., Gary Fleischer, M.D., Tung Thuy Nguyen, M.D., Elliot Hospital, and Southern New Hampshire Medical Center.[1] The plaintiff argues that the Superior Court (Temple, J.) erred in granting the defendants' motion to dismiss based on the doctrine of judicial estoppel. We reverse and remand.


         The following relevant facts are found either in the plaintiff's allegations, which we accept as true, or in the trial court's orders, recited in the light most favorable to the plaintiff. In July 2013, the plaintiff experienced persistent and severe lower back pain as well as numbness and weakness in her right leg. In July and August of 2013, she visited the emergency departments of the two defendant hospitals, was evaluated by the defendant doctors, and underwent two back surgeries. Throughout these attempts to treat her symptoms, the plaintiff's pain remained consistent and at times worsened. Thereafter, she suffered from "severe pain, bilateral weakness, and numbness, and both bowel and urinary incontinence," and was unable to work.

         Following her second back surgery, the plaintiff consulted with two different attorneys about a potential medical malpractice claim. Ultimately, both attorneys advised the plaintiff that they were unwilling to represent her in a medical malpractice action against the treating physicians and hospitals. As a result, the plaintiff believed that her potential claim had no value.

         The plaintiff consulted with a bankruptcy attorney, Mark Cornell, in April 2015. She informed Attorney Cornell about her potential medical malpractice claim and that other attorneys had declined to pursue it. When Cornell drafted the plaintiff's petition for chapter 7 bankruptcy, he did not list the potential medical malpractice claim on the plaintiff's schedule of assets. Cornell also failed to advise the plaintiff that she needed to disclose this potential claim to the bankruptcy trustee.

         Using the documents prepared by Cornell, the plaintiff filed for chapter 7 bankruptcy on July 23, 2015. The United States Trustee appointed Steven Notinger as the chapter 7 trustee. On December 22, 2015, the bankruptcy court granted the plaintiff a discharge under 11 U.S.C. § 727 (2012).

         At her ex-husband's suggestion, in February 2016, the plaintiff consulted with a third law firm, Swartz & Swartz, P.C., which agreed to represent her and pursue the medical malpractice claim. The plaintiff filed the medical malpractice action against the defendants in superior court on June 27, 2016. The plaintiff "did not understand or know that she needed to advise" the bankruptcy court or the trustee "of the change of status of the [p]otential [c]laim." On June 13, Notinger had filed a "Report of No Distribution" with the bankruptcy court, in which he certified that "there is no property available for distribution from the estate over and above that exempted by law," and requesting to be discharged from further duties as trustee. On July 14, the bankruptcy court issued an order closing the case and discharging the trustee.

         On October 28, the defendants moved to dismiss, arguing that the plaintiff should be judicially estopped from pursuing her medical malpractice claim because she failed to disclose it on her schedule of assets. The plaintiff immediately consulted with new bankruptcy counsel, who filed a motion to reopen her bankruptcy case "to administer a potential asset" and requested the appointment of a trustee "to protect the interests of creditors and the [plaintiff]." The bankruptcy court granted the motion on November 14 and the United States Trustee appointed Notinger as the trustee.

         The plaintiff then filed an objection to the defendants' motion to dismiss, asserting that her failure to list the malpractice claim on her bankruptcy schedule was the product of inadvertence or mistake, and citing federal cases recognizing that judicial estoppel should not apply under those circumstances. See, e.g., New Hampshire v. Maine, 532 U.S. 742, 753 (2001). The plaintiff also asserted that the defendants' judicial estoppel argument was "moot" in light of the fact that the bankruptcy court had granted her motion to reopen and a trustee had been appointed to administer the potential asset. She included, as exhibits to her objection, a copy of her motion to reopen, the bankruptcy court's order granting the motion, and the notice from the United States Trustee of Notinger's appointment as trustee. The plaintiff also attached a letter from Notinger to Swartz & Swartz, P.C., dated November 15, 2016, which stated: "This letter confirms that I intend to engage your firm (subject to bankruptcy court approval) to represent me in the Alward medical malpractice litigation."

         The trial court granted the defendants' motion to dismiss, concluding that the plaintiff was judicially estopped from pursuing her medical malpractice claim. The court ruled that the plaintiff's failure to disclose her malpractice claim to the bankruptcy court was not due to inadvertence or mistake. The court also disagreed that "the issue of judicial estoppel was rendered moot" by the reopening of the bankruptcy case, relying on Moses v. Howard University Hospital, 606 F.3d 789 (D.C. Cir. 2010), and other federal cases cited therein. See Moses, 606 F.3d at 800 (applying judicial estoppel to the plaintiff-debtor and rejecting his argument that "he cured his failure to disclose" his claims by reopening the bankruptcy and amending his bankruptcy schedule). In ruling that the plaintiff was judicially estopped from pursuing her medical malpractice claim, the trial court noted that, "[l]ike the plaintiff in Moses, the plaintiff here only moved to reopen her bankruptcy proceedings to amend her schedule of assets after the defendants filed their motion to dismiss based on judicial estoppel." The court stated that the timing of these events "strongly suggests that the plaintiff's motion . . . was prompted entirely by the defendants' motion to dismiss," which "is exactly the type of behavior that the court in Moses condemned."

         The plaintiff moved for reconsideration. She argued, inter alia, that applying judicial estoppel to bar the malpractice claim would be inequitable, in part because it would allow the defendants to escape responsibility for their negligence at the expense of the plaintiff's creditors, whose interests the court must consider, given that the bankruptcy trustee had "taken control of the instant lawsuit for the benefit of the estate." Relying on Wood v. Household Finance Corp., 341 B.R. 770, 774 (W.D. Wash. 2006), the plaintiff asserted that judicial estoppel did not apply to the trustee.

         In its order denying reconsideration, the court stated:

[T]he plaintiff claims that the Chapter 7 Trustee "has now taken control of the instant lawsuit for the benefit of the estate, not for the benefit of Plaintiff/debtor," and thus the issue of judicial estoppel is moot because the Trustee cannot be held accountable for the plaintiff's prior assertions. In support of her position, the plaintiff cites [Wood], in which the court held that "there is a difference between a debtor attempting to pursue an action for his own benefit, and a trustee pursuing an action for the benefit of creditors." Wood, 341 B.R. at 774. However, in Wood, the trustee had been "substituted as the real party of interest in the instant action," entirely replacing the original plaintiff. Id. at 771. There has been no such replacement in the instant case. The Trustee has not filed an appearance, a motion to be substituted as the real party in ...

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