The court considers if judicial estoppel prevents a party from benefiting by making representations in state court that are inconsistent with those previously made to obtain a modification of an automatic stay imposed by a federal court in a bankruptcy case.
While this automobile-accident case was pending in the Law Division, defendant filed a petition for bankruptcy in the federal bankruptcy court. Plaintiff moved for a modification of an automatic stay issued by the bankruptcy court. He represented to the court he was pursuing a judgment only in the amount of defendant's insurance coverage. Plaintiff made the same representation in the Law Division in opposition to defendant's motion for a stay. Based on plaintiff's representations, the Law Division judge denied defendant's stay motion and the bankruptcy court granted plaintiff's motion and modified its automatic stay, expressly to permit plaintiff to pursue a judgment limited to the amount of insurance coverage. The Law Division case proceeded to trial; the jury awarded plaintiff a verdict far in excess of the amount of the insurance coverage. Plaintiff requested and obtained a judgment in the amount of the verdict plus relief granted pursuant to Rule 4:58-2(a). The Law Division judge denied defendant's multiple motions to mold the verdict to the insurance-coverage amount, or in the alternative for a new trial or remittitur.
Based on the equitable doctrine of judicial estoppel and applicable bankruptcy law, the court reversed and remanded for entry of an order molding the verdict to the amount of the insurance coverage.