Facts of the Case
While his Chapter 13 bankruptcy was pending, Thomas Keathley was injured in a collision with a truck driver employed by Buddy Ayers Construction and sued the company for negligence, but he did not list the lawsuit as an asset in his bankruptcy filings until after the company moved to dismiss. The district court granted summary judgment to the company on judicial estoppel grounds, reasoning that Keathley knew of the claim and had a motive to conceal it. The Fifth Circuit affirmed under its two-factor test, which presumes intentional concealment from knowledge and motive alone.
Questions
May the doctrine of judicial estoppel be invoked to bar a plaintiff who fails to disclose a civil claim in bankruptcy filings from pursuing that claim simply because there is a potential motive for nondisclosure, regardless of whether there is evidence that the plaintiff in fact acted in bad faith?
Conclusions
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On June 11, 2026, the U.S. Supreme Court unanimously held in Keathley v. Buddy Ayers Construction, Inc. that courts deciding whether a bankruptcy debtor's failure to disclose a claim was inadvertent or mistaken for purposes of judicial estoppel must examine the totality of the circumstances, not merely whether the debtor knew of the claim and had a potential motive to conceal it.