Conrad

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 136 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 137 OPINION In Oneida Motor Freight, Inc. v. United Jersey Bank (3d Cir. 1988) 848 F.2d 414 , the United States Court of Appeals for the Third Circuit held that a debtor's lender liability claims asserted against a bank in a postbankruptcy complaint were barred because the debtor failed to list those claims in the bankruptcy proceedings. The court concluded that the debtor "violated both its statutory and fiduciary duty to disclose this current claim *Page 138 against the bank during the pendency of the bankruptcy case. By virtue of this failure to disclose, equitable and judicial estoppel operate against further litigation by [the debtor]." ( Id. at p. 415.) The central issue in this case is whether the holding in Oneida Motor Freight, Inc. ( Oneida Motor Freight ), and its progeny bars relief in this case. We conclude it does. In this fraud action the jury found in favor of plaintiffs Robert L. Conrad,…

In Oneida Motor Freight, Inc. v. United Jersey Bank (3d Cir. 1988) 848 F.2d 414 , the United States Court of Appeals for the Third Circuit held that a debtor’s lender liability claims asserted against a bank in a postbankruptcy complaint were barred because the debtor failed to list those claims in the bankruptcy proceedings. The court concluded that the debtor “violated both its statutory and fiduciary duty to disclose this current claim against the bank during the pendency of the bankruptcy case. By virtue of this failure to disclose, equitable and judicial estoppel operate against further litigation by [the debtor].” (Id. at p. 415.) The central issue in this case is whether the holding in Oneida Motor Freight, Inc. (Oneida Motor Freight), and its progeny bars relief in this case. We conclude it does.

In this fraud action the jury found in favor of plaintiffs Robert L. Conrad, Barbara L. Conrad and Industrial Enterprises, Inc. (Industrial Enterprises), and against defendants G. F. Burk and Bank of America, National Trust and Savings Association (Bank). The trial court granted defendants’ motion for judgment notwithstanding the verdict based upon the plaintiffs’…

Plaintiffs petition for rehearing asserting, in part, that a recent decision of the federal court of appeals casts doubt on our application of what we have called the Oneida Motor Freight rule. In Ryan Operations G.P. v. Santiam-Midwest Lumber Co. (3d Cir. 1996) 81 F.3d 355 [Dock. No. 95-3250], the court of appeals for the same circuit that rendered the Oneida Motor Freight decision held that judicial estoppel did not preclude the plaintiff from pursuing warranty actions against suppliers of defective materials that were not parties to a prior chapter 11 bankruptcy proceeding in which the plaintiff did not specifically disclose those causes of action. In reaching its decision the court conceded that it had never applied judicial estoppel in favor of a defendant who was not a party to the prior proceeding, but held that where the circumstances warrant the doctrine may be applied in favor of such a defendant. ( 81 F.3d at pp. 359-361 .) The court also held that although some benefit to the plaintiff from its prior position may make application of the doctrine particularly appropriate, it is not a necessary precondition to the application of the doctrine. ( Id. at p. 361.)…