Progressive Security Insurance Company v. Wilson

               UNITED STATES BANKRUPTCY COURT                            
                 EASTERN DISTRICT OF LOUISIANA                           

                               §                                         
IN RE:                         §          CASE NO: 23-11908              
                               §                                         
KATIE WILSON AND RONALD E.     §          CHAPTER 13                     
WILSON,                        §                                         
                               §          SECTION A                      
DEBTORS.                       §                                         
                               §                                         
                               §                                         
PROGRESSIVE SECURITY           §                                         
INSURANCE COMPANY AND          §                                         
NARINDER GUPTA,                §                                         
                               §                                         
          PLAINTIFFS,          §          ADV. NO. 24-1058               
                               §                                         
V.                             §                                         
                               §                                         
RONALD WILSON AND KATIE        §                                         
WILSON,                        §                                         
                               §                                         
          DEFENDANTS.          §                                         
                               §                                         

                MEMORANDUM OPINION AND ORDER                             
    This Court held an evidentiary hearing on May 19, 2025, to consider the Motion To 
Dismiss,  For  Declaratory  Judgment  and/or  Injunctive  Relief  (the  “Motion  For  Declaratory 
Judgment”), [Adv. No. 24-1058, ECF Doc. 21], filed by Progressive Security Insurance Company 
and Narinder M. Gupta (together, “Progressive”); and the opposition to the Motion, [ECF Doc. 
31], filed by counsel on behalf of Ronald Wilson and Katie Wilson.  The Court heard testimony 
from Katie Wilson and admitted into evidence Progressive Exhibits 1–3, 4-A to 4-D, and 5.  [Adv. 
No. 24-1058, ECF Doc. 38].  At the conclusion of the hearing, the Court took the matter under 
advisement.  [Adv. No. 24-1058, ECF Doc. 40].                             
    Based upon the evidence, the records in the main bankruptcy case and this adversary 
proceeding, and arguments of counsel, the Court GRANTS IN PART and DENIES IN PART the 
Motion For Declaratory Judgment, finding as follows:1                     
                    JURISDICTION AND VENUE                               

    This Court has jurisdiction to grant the relief provided for herein pursuant to 28 U.S.C. 
§ 1334 and the Order of Reference of the District Court dated April 22, 2021.  The matters 
presently before the Court constitute core proceedings that this Court may hear and determine on 
a final basis under 28 U.S.C. § 157(b).  The venues of the Wilsons’ chapter 13 case and this 
adversary proceeding are proper under 28 U.S.C. §§ 1408 and 1409(a).      
                            NOTICE                                       
    Notice of both the Motion for Declaratory Judgment and the Opposition was sufficient and 
constituted the best notice practicable.  All persons affected by this Memorandum Opinion were 
afforded a full and fair opportunity to be heard prior to and during the evidentiary hearing.  Notice 
of the relief granted herein has been given to all persons affected by this decision and complies 

with due process.                                                         
                       FINDINGS OF FACT                                  
                   Witness Credibility Determinations                    
    Counsel for Progressive called Ronald Wilson to testify; however, Mr. Wilson refused to 
swear or affirm to tell the truth on the witness stand, stating that taking an oath was offensive to 
his religious beliefs.  See Hr’g Rec’g 10:18–:21 (May 19, 2025).  The Court acknowledged his 


1    These findings of fact and conclusions of law constitute the Court’s findings of fact and conclusions 
of law pursuant to Federal Rule of Bankruptcy Procedure 7052.  To the extent that any of the following 
findings of fact are determined to be conclusions of law, they are adopted and shall be construed and deemed 
conclusions of law.  To the extent any of the following conclusions of law are determined to be findings of 
fact, they are adopted and shall be construed and deemed as findings of fact. 
inability to swear an oath, and provided the affirmation option as an alternative to swearing an 
oath, but Mr. Wilson stated that he was unable to distinguish between an oath and an affirmation.  
See id.  “The requirement that a witness affirm that he is telling the truth is an established rule of 
procedure design to assure fairness and reliability.”  Kaltenbach v. Breaux, 690 F. Supp. 1551, 

1556 (W.D. La. 1988).  A litigant’s due process rights may not be exercised in total disregard for 
established rules of procedure.  See id. (citing Chambers v. Mississippi, 410 U.S. 284 (1972)).  
Accordingly, the Court denied Mr. Wilson the opportunity to testify.  See id. (“[The litigant] was 
given an alternative to the oath which he declined.  [The litigant’s] failure to testify under these 
circumstances was no denial of [the litigant’s] right to a fair trial.”). 
    Counsel for Progressive then called Katie Wilson to testify, who willingly provided 
testimony under oath; however, during the course of her testimony, the Court observed Ronald 
Wilson attempting to coach his wife as she testified by nodding or shaking his head after each 
question posed to her.  The Court cautioned Mr. Wilson against such interference.  See Hr’g Rec’g 
11:05 (May 19, 2025).  Although Mrs. Wilson presented as a deliberate and thoughtful witness, 

her testimony revealed that she had deferred to her husband for actions taken in state court 
litigation as well as the bankruptcy case and thus her testimony was unhelpful to the Court.  
Further, the Court finds her testimony to be compromised insofar as her husband had attempted to 
influence her answers from counsel’s table.  Thus, the Court gives little weight to her testimony.  
    After Katie Wilson testified, Ronald Wilson then changed his mind and stated that he was 
willing to testify under oath.  See Hr’g Rec’g 12:01–:02 (May 19, 2025).  The Court viewed Mr. 
Wilson’s change in position as a disingenuous litigation tactic which would prejudice the opposing 
party as well as the litigation process and denied Mr. Wilson the opportunity to testify.  See id.  
           The Wilsons’ Bankruptcy Case and State Court Litigation       
    Represented by bankruptcy counsel, the Wilsons filed a petition for bankruptcy relief under 
chapter 13 of the Bankruptcy Code on November 1, 2023; both Ronald and Katie Wilson e-signed 
the petition and affirmed that each had “examined this petition, and . . . declare under penalty of 

perjury  that  the  information  provided  is  true  and  correct.”    [No.  23-11908,  ECF  Doc.  1]; 
Progressive  Ex.  4-A.    In  e-signing  the  petition,  both  affirmed  the  following  statement:  “I 
understand that making a false statement, concealing property, or obtaining money or property by 
fraud in connection with a bankruptcy case can result in fines up to $250,000, or imprisonment for 
up to 20 years, or both.”  [No. 23-11908, ECF Doc. 1]; Progressive Ex. 4-A.   
    Contemporaneously  with  the  filing  of  the  bankruptcy  petition,  the  Wilsons  filed  a 
document entitled Schedule A/B: Property (“Initial Schedule A/B”), which identifies all assets of 
the bankruptcy estate.  [No. 23-11908, ECF Doc. 9]; Progressive Ex. 4-A.  Both Ronald and Katie 
Wilson e-signed a Declaration About an Individual Debtor’s Schedules under penalty of perjury, 
acknowledging that “[i]f two married people are filing together, both are equally responsible for 

supplying correct information” and that they “have read the summary and schedules filed with this 
declaration and that they are true and correct.”  [No. 23-11908, ECF Doc. 1, at 10]; see also Hr’g 
Rec’g 11:48 (May 19, 2025).  Question 33 of Initial Schedule A/B asks whether the Wilsons hold 
“[c]laims against third parties, whether or not [they] have filed a lawsuit or made a demand for 
payment.”  The Wilsons disclosed one lawsuit, a “PI Claim vs. Felipe's - Attorney Joseph Barbie,” 
referencing a personal-injury lawsuit against Felipe’s Ventures LLC (the “Felipe’s Lawsuit”).  
[No. 23-11908, ECF Doc. 9]; Progressive Ex. 4-A.                          
    Also contemporaneously with the filing of their bankruptcy petition, the Wilsons filed a 
document entitled Statement of Financial Affairs for Individuals Filing for Bankruptcy (the “Initial 
SOFA”) [No. 23-11908, ECF Doc 1, at 11]; Progressive Ex. 4-A.  Both Ronald and Katie Wilson 
e-signed the Initial SOFA, affirming that they both “read the answers on this Statement of Financial 
Affairs and any attachments” and “declar[ing] under penalty of perjury that the answers are true 
and correct.”  [No. 23-11908, ECF Doc 1, at 16]; Progressive Ex. 4-A.  Question 9 of the Initial 

SOFA asked the question: “Within 1 year before you filed for bankruptcy, were you a party in any 
lawsuit, court action, or administrative proceeding?”  The Wilsons answered “No.”  [No. 23-
11908, ECF Doc 1, at 12]; Progressive Ex. 4-A.                            
    On April 4, 2023, approximately six months before filing for bankruptcy relief, however, 
the Wilsons filed a lawsuit against Progressive and other defendants in the Civil District Court for 
the Parish of Orleans, State of Louisiana, alleging mental and physical pain and suffering, physical 
disability, medical expenses, loss of enjoyment of life, and other damages sustained by the Wilsons 
as a result of a car accident (the “State Court Litigation”).  See Hr’g Rec’g 10:25–:26 (May 19, 
2025); Progressive Ex. 1.  The Wilsons failed to list the State Court Litigation on Initial Schedule 
A/B and the Initial SOFA.  [No. 23-11908, ECF Docs. 1 & 9]; Progressive Ex. 4-A.  While the 

Wilsons’ bankruptcy case proceeded, Ronald Wilson continued to participate in discovery in the 
State  Court  Litigation.    On  May  1,  2024,  Ronald  Wilson  gave  deposition  testimony  (the 
“Deposition”) in the State Court Litigation.  See Progressive Ex. 3.   Mr. Wilson testified that, 
although he was taking medications prescribed by a doctor, his ability to recall or understand the 
questions posed to him at the Deposition was not impaired.  See id.  When asked whether he had 
ever filed for bankruptcy relief, Mr. Wilson answered “no.”  See id. (Tr. 16:21–23).     
    Meanwhile, the Wilsons continued to participate in their bankruptcy case.  On February 5, 
2024, and again on August 1, 2024, the Wilsons amended their proposed bankruptcy plan, yet still 
failed to disclose the State Court Litigation.  [No. 23-11908, ECF Docs. 38 & 67].  On August 19, 
2024, the Court confirmed that the Wilsons’ second amended plan.  [No. 23-11908, ECF Doc. 71].  
The Confirmation Order provides that “proceeds from lawsuits or settlements . . . payable to [the 
Wilsons] shall be turned over to the trustee for administration,” and that the Wilsons “shall provide 
the trustee, at least once every six months until the case is closed, a report of the status of any 

pending or potential lawsuit in which the debtors are or may be a plaintiff.”  See id.  Under the 
confirmed plan, the Wilsons will distribute to general unsecured creditors only 13.47% of an 
approximate $43,700 in unsecured claims.  See id.                         
    On October 25, 2024, Progressive initiated the instant adversary proceeding, informing the 
Court of the Wilsons’ undisclosed State Court Litigation and seeking a declaratory judgment that 
the Wilsons are judicially estopped from prosecuting the State Court Litigation.  [Adv. No. 24-
1058, ECF Doc. 1].  Less than three weeks later, on November 11, 2024, the Wilsons amended the 
Initial SOFA and Initial Schedule A/B to disclose the State Court Litigation for the first time in 
their bankruptcy case.  [No. 23-11908, ECF Docs. 75 & 76]; Progressive Ex. 4-D.    
                      CONCLUSIONS OF LAW                                 

    A.  Legal Standards for Disclosures in Bankruptcy and Judicial Estoppel 
    The Bankruptcy Code places “an express, affirmative duty” on debtors in bankruptcy 
proceedings “to disclose all assets, including contingent and unliquidated claims.”  Browning Mfg. 
v. Mims (In re Coastal Plains, Inc.), 179 F.3d 197, 207–08 (5th Cir. 1999) (citing 11 U.S.C. 
§ 521(a)(1)).  That duty to disclose is continuous.  See id. at 208.  “The debtor need not know all 
the  facts  or  even  the  legal  basis  for  the  cause  of  action;  rather,  if  the  debtor  has  enough 
information . . . prior to confirmation to suggest that it may have a possible cause of action, then 
that is a ‘known’ cause of action such that it must be disclosed.”  Id. (internal quotation and 
citations omitted).  Indeed, debtors must disclose all assets, even those they believe are worthless 
or not property of the estate.  See Flugence v. Axis Surplus Ins. Co. (In re Flugence), 738 F. 3d 
126, 130 & n.4 (5th Cir. 2013) (citing United States v. Beard, 913 F.2d 193, 197 (5th Cir. 1990)) 
(explaining that debtors have a “duty to disclose to the court the existence of assets whose 
immediate status in the bankruptcy is uncertain, even if that assets is ultimately determined to be 

outside of the bankruptcy estate”); In re Robinson, 292 B.R. 599, 607 (Bankr. S.D. Ohio 2003) 
(“[D]ebtors have the absolute duty to report whatever interests they hold in property, even if they 
believe their assets are worthless or unavailable to the bankruptcy estate.  This is because the 
bankruptcy court, not the debtor, decides what property is exempt from the bankruptcy estate.” 
(internal quotations and citations omitted)).                             
    “Judicial  estoppel  is  a  common  law  doctrine  that  prevents  a  party  from  assuming 
inconsistent positions in litigation.”  Superior Crewboats, Inc. v. Primary P & I Underwriters (In 
re Superior Crewboats, Inc.), 374 F.3d 330, 334 (5th Cir. 2004).  “[A]gainst the backdrop of the 
bankruptcy system . . . judicial estoppel must be applied in such a way as to deter dishonest debtors, 
whose failure to fully and honestly disclose all their assets undermines the integrity of the 

bankruptcy system . . . .”  United States v. GSDMIDEA City, L.L.C., 798 F.3d 265, 271 (5th Cir. 
2015) (quoting Reed v. City of Arlington, 650 F.3d 571, 574 (5th Cir. 2011)).  In fact, “the integrity 
of the bankruptcy system depends on full and honest disclosure by debtors of all of their assets.”  
In re Coastal Plains, Inc., 179 F.3d at 205 (quoting Rosenshein v. Kelban, 918 F. Supp. 98, 104 
(S.D.N.Y. 1996)).  “Thus, judicial estoppel can bar a plaintiff from proceeding with a claim when 
he or she failed to disclose that claim in a bankruptcy petition.”  In re Vioxx Prods. Liab. Litig., 
889 F. Supp. 2d 857, 860 (E.D. La. 2012).  Indeed, “[j]udicial estoppel is particularly appropriate 
where . . . a party fails to disclose an asset to a bankruptcy court, but then pursues a claim in a 
separate tribunal based on that undisclosed asset.”  Love v. Tyson Foods, Inc., 677 F.3d 258, 261–
62 (5th Cir. 2012) (quoting Jethroe v. Omnova Solutions, Inc., 412 F.3d 598, 600 (5th Cir. 2005)). 
    “A court should apply judicial estoppel if (1) the position of the party against which 
estoppel is sought is plainly inconsistent with its prior legal position; (2) the party against which 

estoppel is sought convinced a court to accept the prior position; and (3) the party did not act 
inadvertently.”  Jethroe, 412 F.3d at 600 (citing In re Coastal Plains, Inc., 179 F.3d at 206–07). 
    B.  The Wilsons’ Conduct Satisfies All of the Elements of Judicial Estoppel 
    The Wilsons’ conduct satisfies the first element of judicial estoppel.  The Wilsons filed the 
State Court Litigation approximately six months before filing their chapter 13 bankruptcy petition.  
The Wilsons did not disclose the State Court Litigation in the bankruptcy proceedings for one year 
after filing their petition for bankruptcy relief—and only disclosed the State Court Litigation after 
being confronted by Progressive.  The Wilsons understood that they had to disclose legal claims, 
as evidenced by the fact that they disclosed the Felipe’s Lawsuit on Initial Schedule A/B and the 
Initial SOFA.  The Wilsons have been and continue to be represented by bankruptcy counsel, and 

they e-signed declarations that they had read the bankruptcy documents, that their statements made 
on those documents were true and correct, and that they understood that concealing property or 
making false statements was punishable.  Given those facts, the Court finds that the Wilsons 
certainly had “enough information” regarding a “possible cause of action” such that it must have 
been disclosed in their bankruptcy proceeding.  In re Coastal Plains, 179 F.3d at 206–07.   
    In light of the Wilsons’ express, affirmative, and continuous duty to disclose all assets in 
their  bankruptcy  case,  their  “omission  of  the  personal  injury  claim  from  their  mandatory 
bankruptcy filings is tantamount to a representation that no such claim existed.”  In re Superior 
Crewboats, Inc., 374 F.3d at 335.  Prior to Progressive’s interjection, the Wilsons failed to fulfill 
that duty, representing to the Court through omission that no such State Court Litigation against 
Progressive existed.  Meanwhile, the Wilsons continued to pursue recovery in the State Court 
Litigation, and, as evident from Ronald Wilson’s deposition in that case, took steps to conceal the 
bankruptcy filing from Progressive.  As stated in In re Superior Crewboats, “[s]uch blatant 

inconsistency readily satisfies the first prong of the judicial estoppel inquiry.”  Id. 
    The second element of judicial estoppel is also met because this Court accepted the 
Wilsons’ omission of the State Court Litigation when it confirmed their chapter 13 plan.  As the 
Fifth Circuit has instructed:                                             
    [T]he “judicial acceptance” requirement “does not mean that the party against 
    whom the judicial estoppel doctrine is to be invoked must have prevailed on the 
    merits.  Rather, judicial acceptance means only that the first court has adopted the 
    position urged by the party, either as a preliminary matter or as part of a final 
    disposition.”                                                        
In re Coastal Plains, Inc., 179 F.3d at 206 (quoting Reynolds v. Comm’r of Internal Revenue, 861 
F.2d 469, 473 (6th Cir. 1988)); see also In re Superior Crewboats, Inc., 374 F.3d at 335.  “In 
chapter 13 cases, debtors file schedules on which the chapter 13 trustee and the court rely to 
confirm chapter 13 plans.”  In re Miller, 347 B.R. 48, 55 (Bankr. S.D. Tex. 2006).  “In th[at] 
chapter, the discharge occurs only if the plan is confirmed; therefore, false statements in the 
schedules . . . are effectively ‘accepted’ by the Court.”  Id.  The Wilsons took the position in their 
bankruptcy case that the only lawsuit to which they were a party within the year prior to filing their 
bankruptcy petition was the Felipe’s Lawsuit.  [No. 23-11908, ECF Doc. 9]; Progressive Ex. 4-A.  
The Court accepted that position when it confirmed the Wilsons’ chapter 13 plan.  [No. 23-11908, 
ECF Doc. 71].                                                             
    As to the third and final element of judicial estoppel, the Wilsons’ nondisclosure of the 
State Court Litigation to this Court would be considered inadvertent only if they “either lack[] 
knowledge of the undisclosed claims or ha[ve] no motive for their concealment.”  In re Coastal 
Plains, 179 F.3d at 210 (emphasis omitted).  As discussed, the record establishes that the Wilsons 
did not lack knowledge of the State Court Litigation.  The Fifth Circuit has consistently held that 
debtors have a motivation to conceal where, as here, they stand to “reap a windfall had they been 
able to recover on the undisclosed claim without having disclosed it to the creditors.”  In re 

Superior Crewboats, Inc., 374 F.3d at 336.  “Such a result would permit debtors to conceal their 
claims, get rid of their creditors on the cheap, and start over with a bundle of rights.”  Id. (internal 
citation and punctuation omitted).  For that reason, “the motivation sub-element [of judicial 
estoppel] is almost always met if a debtor fails to disclose a claim or possible claim to the 
bankruptcy court.  Motivation in this context is self-evident because of potential financial benefit 
resulting from the nondisclosure.”  Love v. Tyson Foods, Inc., 677 F.3d 258, 262 (5th Cir. 2012) 
(internal quotations and citation omitted).                               
    Like the debtor in In re Superior Crewboats, Inc., the Wilsons had the requisite motivation 
to conceal the State Court Litigation, as they would have certainly reaped a windfall if they 
obtained a recovery on their undisclosed claims to the exclusion of their creditors.  Indeed, the 

Wilsons not only failed to disclose the State Court Litigation in the bankruptcy proceeding, but 
they continued to pursue the State Court Litigation.  The Wilsons ultimately only disclosed the 
State Court Litigation when confronted by Progressive.                    
    Regarding whether they acted inadvertently, Katie Wilson testified at the evidentiary 
hearing that she did not review the bankruptcy petition and amended filings “line by line [to make] 
sure all the information was correct,” but asserted that she did not intentionally leave out the State 
Court Litigation against Progressive when the petition was filed.  See Hr’g Rec’g 11:57–:59 (May 
19, 2025).  But as in Love,                                               
    whether [Progressive or the Wilsons] would accrue an unfair detriment or benefit 
    if the lawsuit were allowed to go forward after [Progressive] forced [the Wilsons] 
    to disclose [their] claims is an entirely different issue than whether [the Wilsons] 
    had a financial motive to conceal [their] claims against [Progressive] at the time 
    [the Wilsons] failed to meet [their] disclosure obligations, which is the relevant 
    time frame for the judicial estoppel analysis.                       

677 F.3d at 263 (citing Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1276 (11th Cir. 2010) 
(“When reviewing potential motive, the relevant inquiry is intent at the time of non-disclosure.” 
(citation omitted)).  “Because the doctrine [of judicial estoppel] is intended to protect the judicial 
system, rather than the litigants, detrimental reliance by the opponent of the party against whom 
the doctrine is applied is not necessary.”  Id. at 261 (quoting In re Coastal Plains, Inc., 179 F.3d 
at 205).  The Court therefore concludes that the Wilsons’ failure to disclose the State Court 
Litigation was not inadvertent.                                           
    Based on the record and evidence, the Court finds that Progressive has demonstrated that 
the Wilsons are barred from pursuing their prepetition claim against Progressive under the doctrine 
of judicial estoppel.  Therefore, the Court grants Progressive’s Motion For Declaratory Judgment 
and finds that the Wilsons are judicially estopped as a matter of law from pursuing the State Court 
Litigation against Progressive.  For the reason stated in In re Lymon, No. 18-13128, 2020 WL 
7388073, at *7–9 (Bankr. E.D. La. Jan. 15, 2020), the chapter 13 trustee does not have authority 
here to administer the State Court Litigation as an asset of the estate.   Even if the chapter 13 trustee 
were able to liquidate the State Court Litigation, the Court estimates the State Court Litigation to 
have negligible value to the Wilson’s creditors.  The Wilsons’ participation in the prosecution of 
the State Court Litigation is essential to obtaining a judgment against Progressive, if one is to be 
had and one can reasonably conclude that their participation in the State Court Litigation will 
sharply decline, if not cease altogether, now that they are judicially estopped from sharing in any 
recovery.  But the State Court Litigation will nevertheless remain property of the estate that may 
be administered in the event that the case is ever converted to one under chapter 7, as a chapter 7 
trustee has statutory authority to “collect and reduce to money property of the estate.”  11 U.S.C. 
§  704(a)(1).  To be  clear:  whether the Wilsons’  chapter  13  case is  completed successfully, 
dismissed, or converted to one under chapter 7, this Court orders pursuant to 11 U.S.C. §  105(a) 
that the State Court Litigation remain an asset of the estate, never vesting in the Wilsons.  See id. 
(citing Jn re Derosa-Grund, 544 B.R. 339, 383-84 (Bankr. S.D. Tex. 2016)). 
                               CONCLUSION 
     Based on the foregoing findings of fact and conclusions of law, 
     IT IS ORDERED that Progressive’s Motion For Declaratory Judgment is GRANTED IN 
PART to the extent it seeks a finding of this Court that the Wilsons are judicially estopped from 
pursuing the State Court Litigation. 
     IT IS FURTHER ORDERED that Progressive’s Motion For Declaratory Judgment is 
DENIED IN PART to the extent it seeks dismissal of the State Court Litigation with prejudice. 
     A separate judgment on the Complaint consistent with this Memorandum Opinion and 
Order will be entered contemporaneously and in accordance with Bankruptcy Rules 7054 and 
9021. 
          New Orleans, Louisiana, June 10, 2025. 

                                    MEREDITHS.GRABILL 
                                     UNITED STATES BANKRUPTCY JUDGE 

                                     12