United States District Court, N.D. Alabama, Southern Division
MEMORANDUM OPINION AND ORDER
OWEN BOWDR, ECHIEF UNITED STATES DISTRICT JUDGE.
Cory Hutcherson filed for Chapter 7 bankruptcy while engaged
in arbitration of an employment discrimination claim against
plaintiff Wholesalecars.com. Ms. Hutcherson did not disclose
her bankruptcy petition to the arbitrator, and she did not
disclose the pending arbitration to the Bankruptcy Court. Ms.
Hutcherson received a $116, 677.22 arbitration award and did
not disclose the award to the Bankruptcy Court.
matter comes before the court on Wholesalecars.com's
“Motion to Vacate Arbitration Award and/or Preclude
Enforcement Thereof” (doc. 1) and Ms. Hutcherson's
response styled as a “motion to dismiss” (doc.
18). Upon filing for Chapter 7 bankruptcy protection, the
petitioner's assets, including legal claims, become the
property of the bankruptcy estate; thus Wholesalecars.com
argues Ms. Hutcherson fraudulently procured the arbitration
award by pursuing arbitration in her own name when the
standing to do so belonged to the bankruptcy trustee.
Accordingly, Wholesalecars.com asks the court to vacate the
award under Title 9 U.S.C. § 10(a). Alternatively,
Wholesalecars.com asks the court to judicially estop Ms.
Hutcherson from enforcing the arbitration award because she
intentionally hid the award from her creditors, the
bankruptcy trustee, and the Bankruptcy Court.
discussed below, because Ms. Hutcherson's lack of
standing did not affect the arbitrator's final decision,
Ms. Hutcherson did not procure her award by fraud for
purposes of Title 9 U.S.C. § 10(a). Accordingly, the
court denies Wholesalecars.com's motion to the extent
that it requests vacatur under Title 9 U.S.C. § 10(a).
But because Ms. Hutcherson omitted her cause of action and
arbitration award from her original and amended bankruptcy
schedules and denied under oath that she was suing anyone,
the court grants Wholesalecars.com's motion to the extent
that it requests the court to judicially estop Ms. Hutcherson
from enforcing the award in her name. The court does not
preclude the bankruptcy trustee from enforcing the final
award in the interest of the bankruptcy estate. To the extent
that Ms. Hutcherson's response styled as a “motion
to dismiss” is a motion to dismiss, the court denies
18, 2014, Ms. Hutcherson sued Wholesalecars.com, her prior
employer, in the Northern District of Alabama, alleging that
the company illegally terminated her because she was
pregnant. See Hutcherson v. Wholesalecars.com,
2:14-cv-01382-WMA. At Wholesalecars.com's request, the
court compelled the case to arbitration. (Doc. 1 at 2). The
timing of subsequent events plays a key role in resolution of
September 8 and 9, 2015, Ms. Hutcherson and Wholesalecars.com
participated in an arbitration hearing of her employment
claim. (Doc. 1-7 at 4).
September 25, 2015, Ms. Hutcherson filed a Chapter 7
bankruptcy petition in the United States Bankruptcy Court for
the Northern District of Alabama. (Doc. 1-1). She did not
disclose her suit against Wholesalecars.com in the schedules
attached to her petition. (See Doc. 1-1; Doc. 1-2;
Doc. 1-3; Doc. 1-5; Doc. 1-6). The petition required Ms.
Hutcherson to report the suit on Schedule B, Schedule C, or
the Statement of Financial Affairs. (See Doc. 1-2;
Doc. 1-3; Doc. 1-5). Ms. Hutcherson reported $75, 675.00 as
the total value of her assets. (Doc. 1-1 at 33). She signed
her petition under penalty of perjury. (Doc. 1-1 at 4).
October 1 and 22, 2015, Ms. Hutcherson's attorney filed
post-hearing briefs in arbitration. (Doc. 1-7 at 4). Ms.
Hutcherson's attorney did not disclose the bankruptcy to
the arbitrator in either brief. (See Doc. 1-8; Doc.
November 6, 2015, Ms. Hutcherson attended the creditors
meeting in her bankruptcy case. (Doc. 1-10). At the meeting,
the bankruptcy trustee specifically asked Ms. Hutcherson,
“[a]re you suing anyone for any reason?”
(Id.). Under oath, Ms. Hutcherson responded,
“[n]o sir.” (Id.).
November 24, 2015, the arbitrator awarded $116, 677.22 to Ms.
Hutcherson. (Doc. 1-7 at 21).
January 4, 2016, Ms. Hutcherson filed amended bankruptcy
schedules to disclose previously unscheduled debts. (Doc.
1-11). She did not disclose the award or adjust the value of
her assets. (See Doc. 1-1; Doc. 1-11).
January 7, 2016, the Bankruptcy Court discharged Ms.
Hutcherson's debts. (Doc. 1-12).
January 28, 2016, Wholesalecars.com filed its “Motion
to Vacate Arbitration Award and/or Preclude Enforcement
Thereof.” (Doc. 1). Wholesalecars.com argues that the
court should vacate the arbitration award pursuant to Title 9
U.S.C. § 10(a) because Ms. Hutcherson procured the award
by fraud. (Id. at 5-6). It alleges Ms. Hutcherson
committed fraud by not disclosing her bankruptcy in
arbitration and vice-versa, thus hiding an asset from her
bankruptcy estate and falsely representing to the arbitrator
that she had standing to pursue a claim that belonged to the
bankruptcy estate. (Id. at 20-21). Additionally,
Wholesalecars.com argues that judicial estoppel bars Ms.
Hutcherson from enforcing the arbitration award.
(Id. at 6).
March 3, 2017, this court permitted Rocco J. Leo, the trustee
of Ms. Hutcherson's bankruptcy estate, to ...