Last week the Illinois Supreme Court held in Seymour v. Collins, that the trial court and the Illinois Court of Appeals erred when they dismissed a personal injury suit on the grounds that the plaintiff failed to disclose the cause of action in its chapter 13 case. The Court rejected the contention that estoppel applied merely because the plaintiff had a legal duty to disclose the cause of action, and failed to do so. Instead, the Court reasoned that even if all the elements of estoppel existed (i.e., the "party to be estopped must have (1) taken two positions, (2) that are factually inconsistent, (3) in separate judicial or quasi-judicial administrative proceedings, (4) intending for the trier of fact to accept the truth of the facts alleged, and (5) have succeeded in the first proceeding and received some benefit from it"), the court still should consider whether there was an intent to deceive and the significance or impact of the party’s action in the first proceeding. Based on that standard, the Illinois Supreme Court reversed the lower courts, concluding they erred when they found the plaintiff intended to deceive the court by not disclosing the asset and further concluding the cause of action had no value to creditors.
