The case involves statements made by plaintiff Vehicle Market Research, Inc. (VMR) in a breach of contract case that were allegedly inconsistent with earlier statements by its sole owner, John Tagliapietra. VMR developed and owned certain intellectual property, including a software system to calculate the value of a total loss of an automobile for the purposes of the automobile insurance industry and certain “pre-existing software tools, utilities, concepts, techniques, text, research or development” used in the development of the software. When Mr. Tagliapietra filed for personal bankruptcy, he asserted that his shares in VMR were worth nothing. A few years later, as the bankruptcy was winding down, VMR sued Mitchell International, Inc., a company which held an exclusive license to VMR’s technology. That case sought $4.5 million in damages for the alleged misappropriation of that technology. The question this case presented to the Tenth Circuit was whether the statements by VMR and Mr. Tagliapietra in the litigation against Mitchell were so clearly contrary to the statements made by Mr. Tagliapietra in his bankruptcy proceeding that VMR should have been judicially estopped from proceeding with its suit against Mitchell. After review, the Court concluded that neither VMR’s litigation claim for payments nor Mr. Tagliapietra’s deposition testimony in that lawsuit was clearly inconsistent with his valuation of 0.00 for his VMR stock at the time of his bankruptcy petition in 2005, the date when the initial bankruptcy representations were made. “If there were grounds for judicial estoppel, it would have to be based on a duty by Mr. Tagliapietra to amend his bankruptcy pleadings to report a possible increased value for his VMR stock at least as of the time that VMR filed its suit against Mitchell in 2009. However, our precedent is not clear on whether a debtor has a continuing duty to amend his bankruptcy schedules when the estate’s assets change in value. Given our reluctance to invoke judicial estoppel, and keeping in mind that judicial estoppel is an affirmative defense that its proponent must prove, we conclude that in this case Mitchell has not met its burden of showing any clearly inconsistent statements that would warrant that relief.”
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View "Vehicle Market Research v. Mitchell International" on Justia Law