Lopez v. United Parcel Service, Inc., et al

In June of 2021, he returned to work, but in January of 2022 was diagnosed with stage four kidney failure. This diagnosis resulted in intermittent use of marijuana as a palliative or alternative to pain medication. Later, at a driver’s recertification assessment, he was tested positive for marijuana and his employment was terminated.

On April 28, 2025, Plaintiff filed suit against Defendant for (1) disability discrimination; (2) failure to reasonably accommodate; (3) failure to engage in the interactive process; (4) retaliation in violation of the Fair Employment and Housing Act (FEHA); (5) failure to take all reasonable steps to prevent or remedy discrimination or retaliation; (6) wrongful termination in violation of public policy; (7) unlawful medical inquiry in violation of FEHA; (8) violation of Labor Code § 432.6 and Government Code § 12953; (9) violation of Labor Code §§ 226.7 and 512; (10) violation of Labor Code §§ 202-203; (11) violation of Labor Code § 558.1; and (12) violation of the unfair competition law.

Summary of the Law

A party may bring a motion for judgment on the pleadings after filing an answer and the time to demurrer has expired. (Code Civ. Proc., § 438(b)(1) & (f); Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 548.)

If the moving party is the defendant, then a motion for judgment on the pleading (JOP) is limited to the grounds that the court has no jurisdiction over the subject of the cause of action or the complaint fails to state a cause of action. (Code Civ. Proc., § 438(c)(1)(B).)

The grounds for a JOP shall appear on the face of the pleading or from any matter judicially noticed. (Code Civ. Proc., § 438(d).)

Analysis

Here, Defendant UPS asserts that Judgment on the Pleadings (JOP) Is appropriate since Plaintiff is judicially estopped from asserting the causes of action because he failed to list his claims against Defendant as an asset in his 2022 Chapter 7 bankruptcy.

“In the bankruptcy context, a party is judicially estopped from asserting a cause of action not raised in a reorganization plan or otherwise mentioned in the debtor's schedules or disclosure statements.” (Hamilton v. State Farm Fire & Cas. Co. (9th Cir. 2001) 270 F.3d 778, 783.)

“Judicial estoppel will be imposed when the debtor has knowledge of enough facts to know that a potential cause of action exists during the pendency of the bankruptcy, but fails to amend his schedules or disclosure statements to identify the cause of action as a contingent asset.” (Id. at p. 784.)

Plaintiff concedes the issue of failing to disclose his claims against Defendant in his 2022 bankruptcy action. He asserts this was due to a mistake of counsel or Plaintiff’s legitimate good faith ignorance that it should have been disclosed. He also concedes there is an issue of standing in relation to his Chapter 7 bankruptcy. He argues that, instead of JOP, the proper remedy is to allow him to amend his Complaint and allow the bankruptcy trustee to appear as a real party in interest or to plead facts in support of standing.

This case appears controlled by Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995. In Cloud similar facts are presented: the defendant Northrop terminated the plaintiff’s employment, and the plaintiff filed a Chapter 7 bankruptcy petition. The Cloud plaintiff did not disclose any claim or potential claim against Northrop. (Cloud, supra, 67 Cal.App.4th at p. 998.)

While her bankruptcy action was pending, the plaintiff filed a complaint with Department of Fair Employment and Housing (DFEH). And, after she received her discharge and while her bankruptcy was still pending, the Cloud plaintiff filed a wrongful termination and sexual harassment action against Northrup. The plaintiff’s bankruptcy case was thereafter closed, and Northrup later brought a motion for judgment on the pleadings because the plaintiff had not scheduled her claims against Northrop as assets of her bankruptcy estate. Northrup raised the standing issue, as well as the judicial estoppel argument. (Ibid.)

While the Court of Appeal noted it was not technically proper to consider the plaintiff’s declaration, it nonetheless discussed what the plaintiff stated about following her bankruptcy attorney’s instruction, not knowing she had a valid claim against Northrop, and the circumstances of her filing.

The Court of Appeal reversed the trial court’s ruling that granted the motion without leave to amend based on lack of standing and judicial estoppel. It found that, with respect to standing, the trial court should have granted leave to amend because plaintiff could have substituted in the real party in interest, the bankruptcy trustee, or to obtain the trustee’s abandonment of the claim. (Id. at pp. 1000-1011.)

The Cloud court discussed the specific facts and findings in Ryan Operations G.P. v. Santiam- Midwest Lumber Co. (3rd Cir. 1996) 81 F.3.d 355, a summary judgment case, and that Ryan noted judicial estoppel is an “extraordinary remed[y] to be invoked when a party’s inconsistent behavior will otherwise result in a miscarriage of justice.” (Ryan Operations G.P., supra, 81 F.3d at p. 365.)

“It is not meant to be a technical defense for litigants seeking to derail potentially meritorious claims, especially when the alleged inconsistency is insignificant at best and there is no evidence of intent to manipulate or mislead the courts.” (Ibid.)

“Judicial estoppel is not a sword to be wielded by adversaries unless such tactics are necessary to ‘secure substantial equity.’” (Ibid.)

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