AELE LAW LIBRARY OF CASE SUMMARIES:
Employment & Labor Law for Public Safety Agencies
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Bad Debts and Bankruptcy
A former firefighter
won a judgment against a city in excess of $1 million under the Family
and Medical Leave Act (FMLA). He later filed a Chapter 7 bankruptcy petition,
but did not list the judgment as an asset of the bankruptcy estate. After
his bankruptcy discharge was granted, the judgment was discovered, the
discharge revoked, and the bankruptcy case reopened, with the bankruptcy
trustee seeking to collect the judgment from the city for the benefit of
the firefighter's creditors. A federal appeals court, ruling en banc, rejected
the argument that the firefighter's fraudulent concealment of the judgment
judicially estopped the trustee's claim. Reed v. City of Arlington, #08-11098,
2011 U.S. App. Lexis 16652 (5th Cir.). Editor's note: The fact that the
majority of the funds paid would go to the lawyer who represented the firefighter
in the prior FMLA case did not alter the result, as the attorney had no
knowledge of the filing of the bankruptcy petition.
The failure of a postal worker to list a pending Title VII action alleging race discrimination and retaliation in her bankruptcy petition warrants a dismissal of the bias lawsuit, under the doctrine of judicial estoppel. Higgins v. Potter, #10-3234, 2011 U.S. App. Lexis 5859 (10th Cir.).
Local government cannot terminate chief because he filed bankruptcy, without some additional basis. Detz v. Hoover, 539 F.Supp. 532 (E.D. Pa. 1982).
Mayor who put chief's paychecks in the office of a creditor hit for $54,000 damage verdict. Brown v. Miller, 631 F.2d 408 (5th Cir. 1980).
Bankruptcy discussed. Matter of Loftin, 327 So.2d 543 (La. App. 1976).
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