MICHAEL T DOE V JOHN HENKE MD
Annotate this Case
Download PDF
STATE OF MICHIGAN
COURT OF APPEALS
MICHAEL T. DOE and PATSY R. DOE,
UNPUBLISHED
November 18, 2008
Plaintiffs-Appellees,
No. 278763
Washtenaw Circuit Court
LC No. 02-000141-NH
v
JOHN HENKE, MD, and ANN ARBOR
ORTHOPEDIC SURGERY,
Defendants-Appellants,
and
TRINITY HEALTH, d/b/a ST. JOSEPH MERCY
HEALTH SYSTEM, d/b/a ST. JOSEPH MERCY
HOSPITAL,
Defendant.
Before: Fitzgerald, P.J., and Bandstra and Schuette, JJ.
PER CURIAM.
Defendants appeal the trial court’s order denying defendant John Henke, M.D.’s
(“defendant Henke”) motion for summary disposition by order of our Supreme Court, which
remanded this case as on leave granted for consideration in light of Miller v Chapman
Contracting, 477 Mich 102; 730 NW2d 462 (2007). The trial court held, before the publication
of Miller, that plaintiffs had standing to pursue a claim of medical malpractice against defendant
Henke despite the fact that they had filed for bankruptcy before sending him a notice of intent
regarding the malpractice claim, and had not disclosed the possible malpractice settlement as a
potential asset in the bankruptcy filing. We affirm.
I. FACTS
In June 2000, plaintiffs sought legal counsel to advise them whether they should pursue a
medical malpractice claim against defendant Henke regarding Michael Doe’s hip-replacement
surgery on August 24, 1999. After a nine-month investigation, plaintiffs’ legal counsel
determined that there was no cause of action arising from the surgery.
-1-
On April 26, 2001, plaintiffs filed a petition for Chapter 7 bankruptcy protection in the
Bankruptcy Court for the Eastern District of Michigan. A creditor’s meeting was held on June
19, 2001, at which time, plaintiffs made no disclosure regarding the malpractice investigation.
On June 20, 2001, the bankruptcy trustee issued a “NO ASSET” Report, stating that there was no
property available for distribution to the creditors.
In July 2001, plaintiffs sought new legal counsel regarding the potential medical
malpractice claim. On July 24, 2001, plaintiffs’ new legal counsel filed a notice of intent and
served notice on defendant Henke. Plaintiffs received bankruptcy discharge on August 23, 2001.
The final decree was issued September 26, 2001.
In October 2001, plaintiffs’ legal counsel notified plaintiffs of a conflict of interest and
discontinued representation. Plaintiffs sought new legal representation, retaining current legal
counsel in December 2001. Plaintiffs filed suit on February 8, 2002.
On April 27, 2005, defendant Henke filed a motion to strike/for summary disposition,
alleging that the plaintiffs were not the real parties in interest and that their claim was barred by
judicial estoppel. On May 6, 2005, plaintiffs filed an ex parte motion to reopen their bankruptcy
case to amend schedules to add an undisclosed asset, i.e., the malpractice claim against
defendants. On June 8, 2006, defendant Henke’s motion for summary disposition was denied.
On July 27, 2006, defendants filed an application for leave to appeal to this Court, which
was denied. On May 7, 2007, defendants filed an application for leave to appeal to the Michigan
Supreme Court, and after Miller, supra, filed a motion for peremptory reversal. On May 25,
2007, the bankruptcy court ordered nunc pro tunc that plaintiffs’ bankruptcy trustee was
authorized to abandon property of plaintiffs’ estate. On June 20, 2007, the Michigan Supreme
Court remanded this case to this Court as if on leave granted. Doe v Henke, 478 Mich 909; 732
NW2d 542 (2007).
II. STANDARD OF REVIEW
We review decisions on summary disposition de novo. CAM Constr v Lake Edgewood
Condo Ass’n, 465 Mich 549, 553; 640 NW2d 256 (2002). We must consider the pleadings,
affidavits, depositions, admissions, and any other evidence in favor of the party opposing the
motion, granting the benefit of any reasonable doubt to the opposing party. Radtke v Everett,
442 Mich 368, 374; 501 NW2d 155 (1993). Our review is limited to the evidence that was
presented to the trial court at the time the motion was decided. Peña v Ingham Co Rd Comm,
255 Mich App 299, 310; 660 NW2d 351 (2003).
III. ANALYSIS
A. Standing
On appeal, defendants first argue that under 11 USC § 541(a), a debtor loses all rights to
his property when he declares bankruptcy and that omitting an asset from a bankruptcy schedule
does not exempt the asset from this rule. The trial court rejected this argument because it found
that plaintiffs had not intentionally omitted an asset from their bankruptcy filings; rather,
-2-
plaintiffs were unaware that they had a valid claim until after their bankruptcy case had been
discharged. We agree.
11 USC § 541 provides, in pertinent part:
(a) The commencement of a case under section 301, 302, or 303 of this
title creates an estate. Such estate is comprised of all the following property,
wherever located and by whomever held:
(1) Except as provided in subsections (b) and (c)(2) of this section, all
legal or equitable interests of the debtor in property as of the commencement of
the case.
(2) All interests of the debtor and the debtor’s spouse in community
property as of the commencement of the case that is –
(A) under the sole, equal, or joint management and control of the debtor;
or
(B) liable for an allowable claim against the debtor, or for both an
allowable claim against the debtor and an allowable claim against the debtor’s
spouse, to the extent that such interest is so liable.
***
(7) Any interest in property that the estate acquires after the
commencement of the case.
Defendants note that potential causes of action have been determined to be an interest of the
estate by the Sixth Circuit. However, defendants do not cite any published cases in Michigan
that address this issue.
Defendants cite Kuriakuz v Community Nat’l Bank of Pontiac, 107 Mich App 72; 308
NW2d 658 (1981), in support of their position that plaintiffs lack standing to pursue their
malpractice claim against them. In Kuriakuz, the plaintiff filed for bankruptcy in November
1978. Id. at 74. Before filing for bankruptcy, a right of action accrued against the defendant,
which the plaintiff did not disclose on the asset schedules he had filed with the bankruptcy court.
Id. This Court held that when the plaintiff had filed his petition for bankruptcy, all of his assets
became vested in the trustee in bankruptcy, including the right of action against the defendant.
Id. Further, the Court held that “the only way that a bankrupt may bring suit on that right of
action, at least during the pendency of the bankruptcy proceedings, is by showing abandonment
or by receiving permission from the bankruptcy court.” Id. at 75. The Court ultimately found
that because the plaintiff had deliberately omitted to disclose his claim on his bankruptcy filings,
he “‘could not, by withholding knowledge of its existence, obtain a release from his debts, and
still assert title to the property.’” Id. at 75-76, quoting First Nat’l Bank v Lasater, 196 US 115,
119; 25 S Ct 206; 49 L Ed 408 (1905).
-3-
In the instant case, although defendants argued before the trial court that plaintiffs knew
that they had a possible claim for malpractice at the time of their bankruptcy filing, the court’s
finding to the contrary was not error. As the court noted, plaintiffs sought the advice of an
attorney who conducted a nine-month long investigation and advised plaintiffs that their claim
would not be successful based on the information the attorney had received from an orthopedic
surgeon. The court’s finding that plaintiffs legitimately believed at the time of their bankruptcy
filing that they did not have a valid claim to disclose was based on plaintiffs’ reliance on the
advice of the attorneys who initially investigated the matter. Although Michigan courts have not
apparently addressed this issue in the context of bankruptcy, the courts have held that when an
individual relies on his attorney’s counsel in order to interpret a court order, she cannot be held
liable for contempt of court if the attorney’s advice is at odds with the court’s order. In re
Contempt of Rapanos, 143 Mich App 483, 495; 372 NW2d 598 (1985). Similarly, plaintiffs in
the instant case should not be held liable for failing to disclose a claim when, based on the advice
of counsel, plaintiffs did not understand that they had a valid claim to be disclosed in bankruptcy.
B. Miller v Chapman Contracting
Next, defendants argue that the trial court should have granted defendant Henke’s motion
for summary disposition based on our Supreme Court’s holding in Miller. Again, we disagree.
In Miller, the plaintiff was injured in an automobile accident on December 28, 2000, and
filed for bankruptcy on March 6, 2002. Miller, supra at 104. The defendants filed a motion for
summary disposition, contending that the plaintiff lacked standing to sue because he was not the
real party in interest due to his status as a bankrupt. Id. The plaintiff filed a motion to amend his
complaint in order to correct what he termed a misidentification of the plaintiff; however, the
trial court denied the motion, stating that it was futile, and granted the defendants’ motion for
summary disposition. Id. at 105. In denying the plaintiff’s appeal, this Court stated that a
motion to add a party was not the same as a motion to correct a misnomer and that MCR
2.118(D) did not extend the relation-back doctrine to new parties. Id.
The instant case is distinguishable from Miller. First, the plaintiff in Miller was
apparently aware that he had a cause of action arising from the accident after he filed for
bankruptcy. The plaintiff filed for bankruptcy in March 2002 and filed the negligence action in
October 2003, while the bankruptcy was ongoing. Miller, supra at 109 (Kelly, J., dissenting).
The plaintiff’s trustee hired an attorney to pursue the negligence action, but apparently the
attorney did not name the proper party as the plaintiff. Id. at 109-110. By contrast, plaintiffs in
the instant case did not file their complaint in this action until the bankruptcy had been
discharged. Further, plaintiffs did not file a motion to amend their complaint in this case, so the
language in Miller regarding the relation-back doctrine is not relevant to this case.
C. Bankruptcy Court’s Order
Defendants also ask this Court to review an order of the bankruptcy court in plaintiffs’
bankruptcy case, granting plaintiffs’ motion asking that the trustee be permitted to abandon this
lawsuit as an asset, and ordering that the order be given retroactive, or nunc pro tunc, effect.
-4-
Although the trial court could not have considered this argument because the bankruptcy
court’s order was not issued until after the trial court’s decision, the trial court lacked any
jurisdiction to review the order of the bankruptcy court. Similarly, this Court does not have
jurisdiction to review an order of the federal bankruptcy court. Under the Supremacy Clause, US
Const, art VI, cl 2, “federal laws take precedence over state laws by express preemption, conflict
preemption, or field preemption.” X v Peterson, 240 Mich App 287, 289; 611 NW2d 566
(2000). 11 USC § 105(a) gives the bankruptcy court the power to “issue any order, process, or
judgment that is necessary or appropriate to carry out the provisions of this title.” Thus, the
bankruptcy court has authority under the statute to administer the Bankruptcy Act; and under the
Supremacy Clause, field preemption prohibits the state courts from administering the Act. Thus,
we are without jurisdiction to review defendants’ claim with respect to this issue.
D. Judicial Estoppel
Finally, defendants argue that judicial estoppel bars plaintiffs from asserting their
malpractice claim. Again, we disagree.
Before the lower court, defendants argued that the doctrine was applicable because
plaintiffs in this matter made a representation and in fact the schedules
specifically state, under knowledge of perjury. They made a decision not to
disclose this. . . . No matter what presumption they may have been under when
the case was filed, they go ahead and get another lawyer for a second opinion and
file an NOI before their discharge is ever issued. Under the doctrine of judicial
estoppel they have made a statement under oath to the court that’s a finding on the
merits and should be estopped from asserting otherwise in a subsequent suit.
The trial court did not address this issue; plaintiffs contend on appeal that the doctrine is not
applicable to this case.
In Paschke v Retool Industries, 445 Mich 502, 509; 519 NW2d 441 (1994), our Supreme
Court held that under the doctrine of judicial estoppel, “a party who has successfully and
unequivocally asserted a position in a prior proceeding is estopped from asserting an inconsistent
position in a subsequent proceeding” (emphasis in original; internal quotation marks and
citations omitted). The Court stated further that “the mere assertion of inconsistent positions is
not sufficient to invoke estoppel; rather, there must be some indication that the court in the
earlier proceeding accepted that party’s position as true. Further, . . . the claims must be wholly
inconsistent.” Id. at 509-510.
Defendants have not presented any evidence that the claims presented by plaintiffs in this
litigation are contrary or inconsistent to the claims raised during their bankruptcy proceedings.
Plaintiffs did not claim to be unaware of their malpractice claim; rather, they pursued it but were
told by the attorneys investigating the claim that it was not viable based on the advice of an
orthopedic surgery expert. Plaintiffs sought a second opinion from a different attorney before
the discharge of their bankruptcy case who did not review the claim, but did file a notice of
intent in order to preserve the running of the statute of limitations. It was only after their
bankruptcy was discharged that plaintiffs received a positive review on their malpractice claim.
-5-
Thus, to argue that plaintiffs deliberately asserted a contrary position before the bankruptcy court
to the one they raised before the trial court is not accurate. The court’s finding that plaintiffs did
not deliberately omit information concerning the malpractice claim from their bankruptcy
schedules was reasonable, and thus, defendants’ claim that judicial estoppel is applicable lacks
merit.
Affirmed.
/s/ E. Thomas Fitzgerald
/s/ Bill Schuette
-6-
Some case metadata and case summaries were written with the help of AI, which can produce inaccuracies. You should read the full case before relying on it for legal research purposes.
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.