Louis F. Reynaud Ivv.Five Oaks Development, Inc.
Louis Reynaud asserted counterclaims for breach of an oral joint-venture agreement after Five Oaks Development brought a dispossessory action involving a construction trailer on property near a golf course. Reynaud had represented in a prior Chapter 7 bankruptcy petition that he owned no real property and held no partnership or joint-venture interests. The superior court applied judicial estoppel and granted Five Oaks summary judgment on the counterclaims. The Court of Appeals of Georgia held that the superior court used the wrong legal test. Because Five Oaks was not a party to the bankruptcy proceeding, the court was required to apply the two-part test asking whether Reynaud took an inconsistent position under oath and whether the inconsistency was calculated to make a mockery of the judicial system. The trial court addressed the first factor but did not decide the second, including whether Reynaud intended to deceive creditors. The appellate court vacated the summary judgment and remanded for that determination, without reaching the enforceability of the alleged joint venture.
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