Facts

Plaintiff Connie Washington insured her 2000 Honda Passport with defendant Allstate. On Dec. 20, 2001, the plaintiff was involved in a serious accident. Her car was towed to co-defendant MB Automotive ("MB"). Defendant Allstate paid defendant MB $8,598 to repair the collision damage. After MB completed its work, the plaintiff had problems with her car. It was taken periodically to Airport Marina Honda ("AMH"), but the source of the problem could not be found. On July 17, 2002, the plaintiff's car stalled. AMH determined that the engine needed to be replaced. A mechanic there observed that the oil filter base had been cracked and welded back together. The weld impeded the flow of oil into the engine, which eventually ruined it. On July 22, 2002, defendant Allstate denied the plaintiff's supplemental claim for engine damage on the ground that the engine damage was not caused by the accident.

The plaintiff sued defendant Allstate for breach of contract, bad faith, and violation of Business & Professions Code section 17200, et seq. The plaintiff alleged that defendant Allstate caused her to have her car repossessed and to file for bankruptcy. The plaintiff sued defendant MB and its owner for breach of contract, negligence, and fraud.

Before trial, Judge Judith C. Chirlin granted defendant Allstate's motion for summary adjudication, eliminating the claims for bad faith and punitive damages. Defendant Allstate asserted the defense of judicial estoppel based on the plaintiff having filed for Chapter 7 bankruptcy without disclosing either her Allstate claim or this lawsuit. The trial was bifurcated, with the first phase, concerning judicial estoppel, tried without a jury. According to the plaintiff's counsel, trial time was less than one hour on the bifurcated issue of judicial estoppel. The plaintiff then made a motion for nonsuit that the court denied. The plaintiff's counsel then took the stand to testify that the doctrine of judicial estoppel did not apply.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended that Allstate was liable for the engine damage because either the accident caused the engine damage or Allstate was vicariously liable for MB's negligence in repairing the plaintiff's car. As to judicial estoppel, the plaintiff contended and contends that it was improperly raised and applied because the plaintiff's bankruptcy petition was in legalese that she did not understand and because as soon as she was told what it meant she obtained three separate orders from the bankruptcy court: 1. an order to reopen, 2. an order to amend the petition, and 3. an order that the asset (this case) be abandoned by the creditors and bankruptcy trustee and be granted to the plaintiff. Hence, the bankruptcy court expressly and impliedly found that the plaintiff had not acted with bad faith. The defendant called only the plaintiff who testified to the foregoing. The defense counsel asked the court to ignore the plaintiff's testimony and argued that it had "proven" bad faith.

DEFENDANTS' CONTENTIONS:
Allstate contended that the accident did not cause the engine damage. The plaintiff drove her car nearly 7,000 miles after MB repaired it. The plaintiff's engine damage was caused by whoever welded the oil filter base. Allstate was not responsible for MB's negligence because Allstate did not choose MB and elected to pay for the car repairs, not to repair the car. Judicial estoppel applied because the plaintiff obtained the benefit of a discharge in a bankruptcy without having informed her creditors of her insurance claim or this lawsuit, which she intentionally concealed from them. MB did not present a defense.

Settlement Discussions

The plaintiff demanded $100,000. Allstate offered $1,000 under CCP Section 998 early in the case and refused to offer any money after that.

Result

Defense. The court ruled that the defendant met its burden of establishing that the matter was barred by judicial estoppel, which the plaintiff disputes and is appealing. The remainder of the case has been stayed pending the outcome of the appeal on the issue of judicial estoppel.

Other Information

Allstate has stated that it will pursue collection of nearly $4,000 in sanctions against the plaintiff's attorney and will file a cost bill, including expert costs. The plaintiff is appealing the trial court's ruling on the judicial estoppel issue.