United States District Court, E.D. Michigan, Southern Division
In re Adrienne Bush, Debtor.
Kenneth Nathan, Appellee. Adrienne Bush, Appellant
OPINION AND ORDER
F. COX UNITED STATES DISTRICT JUDGE.
Adrienne Bush's bankruptcy trustee discovered her
separate, then-pending employment discrimination lawsuit, he
agreed to settle it for $20, 000. Unhappy with this
settlement, Bush claimed an exemption in the lawsuit and
moved to convert her Chapter 7 proceeding to a Chapter 13
proceeding. The bankruptcy court (1) sustained the
trustee's objection to the claimed exemption; (2) denied
Bush's motion to convert; and (3) granted the
trustee's motion to compromise Bush's employment
discrimination claim. Bush now appeals these decisions.
Finding no error, the Court will affirm the bankruptcy
appeal touches on two distinct legal proceedings: Bush's
employment discrimination lawsuit and Bush's bankruptcy
the employment discrimination lawsuit. On May 18, 2016,
Adrienne Bush filed a pro se action against her
former employer, Lumileds LLC. Bush v. Lumileds, LLC, et.
al., No. 16- 11761 (E.D. Mich. filed on May 18, 2016).
This case was assigned to United States District Court Judge
Laurie J. Michelson, who referred all pre-trial motions to
Magistrate Judge Elizabeth A. Stafford.
amended complaint, Bush alleged that Lumileds had
discriminated against her because she is African Amerian and
had retaliated against her for reporting the discrimination,
in violation of Title VII of the Civil Rights Act of 1964 and
Michigan's Elliott-Larsen Civil Rights Act. (ECF No. 11,
PageID 1176-1207; No. 16-11761, ECF No. 30). During the
discovery and summary judgment phases, Bush actively
litigated her case by stipulating to a protective order (No.
16-11761, ECF No. 38), filing two motions to extend deadlines
(No. 16-1176, ECF Nos. 39 and 75), filing three witness lists
(No. 16-11761, ECF Nos. 42, 74, and 84), opposing a motion to
stay (No. 16-11761, ECF No. 44), filing two motions to compel
(No. 16-11761, ECF No. 46 and 58), attending two status
conferences, a settlement conference, and a hearing,
objecting to four orders issued by Magistrate Judge Stafford
(No. 16-11761, ECF Nos. 53, 62, 86, and 88), filing a motion
for sanctions (No. 16-11761, ECF No. 63), amending her motion
for sanctions (No. 16-11761, ECF No. 70), filing a motion to
strike (No. 16-11761, ECF No. 78), filing a motion to amend
her complaint (No. 16-11761, ECF No. 85), and responding to
the Lumileds's motion for summary judgment. (No.
16-11761, ECF No. 79).
10, 2018, Magistrate Judge Stafford issued a Report and
Recommendation, wherein she recommended that summary judgment
be granted in favor of Lumileds. (No. 16-11761, ECF No. 89).
On July 25, 2019, Bush objected to this recommended
disposition. (No. 16-11761, ECF No. 94).
the bankruptcy proceeding comes into play. On August 9, 2018,
Bush filed a petition for bankruptcy relief under Chapter 7
of the Bankruptcy Code. (ECF No. 11, PageID 954-971).
Bush's bankruptcy case was assigned to United States
Bankruptcy Court Judge Maria L. Oxholm, and Appellee Kenneth
Nathan was appointed as trustee of Bush's bankruptcy
estate. On August 22, 2018, Bush filed her Schedules and
Statement of Financial Affairs. (ECF No. 11, PageID
977-1025). In Part 3 of Schedule A/B, Bush was asked,
“Do you own or have any legal or equitable interest in
any of the following items?” Item 33 of this part
described “Claims against third parties, whether or not
you have filed a lawsuit or made a demand for payment.”
(ECF No. 11, PageID 989). Item 33 offered several examples,
including “accidents, employment disputes,
insurance claims or rights to sue.” Id.
(emphasis added). Despite actively litigating her pending
employment discrimination claims for the previous two years,
Bush checked the “No” box in response to Item 33.
in her Statement of Financial Affairs, Bush failed to list
her employment discrimination lawsuit in response to the
question, “Within 1 year before you filed for
bankruptcy, were you a party in any lawsuit, court action, or
administrative proceeding.” (ECF No. 11, PageID 1017).
And, at a September 12, 2018 creditors' meeting, Bush
responded “No” to the question “Have you
sued anybody in the last five years?” (ECF No. 11,
the employment action. On September 26, 2018, Judge Michelson
adopted Judge Stafford's recommendation “save for
her recommendation to grant Lumileds summary judgment on
Bush's discriminatory discharge claims under Title VII
and ELCRA.” (No. 16-11761, ECF No. 105, PageID 3519).
In other words, only Bush's discriminatory discharge
claims survived summary judgment.
employment action and the bankruptcy proceeding meet. On
October 3, 2018, Lumiled's counsel contacted Trustee
Nathan and informed him of Bush's employment lawsuit.
Nathan evaluated Bush's remaining claims and agreed to
settle the case for $20, 000.
proposed settlement did not sit well with Bush. On January 3,
2019, Bush filed a motion to convert her Chapter 7 proceeding
to a Chapter 13 proceeding (ECF No. 11, PageID 1042) and
amended her schedules. (ECF No. 11, PageID 1051). In her
amended Schedule A/B, she identified the employment
discrimination case and, in her amended Schedule C, she
claimed it as exempt under 11 U.S.C. § 522(d)(11)(E).
(ECF No. 11, PageID 1064). Nathan opposed the motion to
convert and filed an objection to the amended exemption. The
United States Trustee also opposed both of Bush's
March 11, 2019, Nathan filed a motion to approve the
compromise of Bush's remaining employment discrimination
claims against Lumileds. (ECF No. 11, PageID 1170-1175). In
his motion, Nathan described, in detail, why he concluded
that it was in the estate's best interest to settle the
case for $20, 000. First, he noted that Bush had
“expressly disclaimed the intent to seek any damages
for the time period following the termination of her
employment or emotional distress damages . . . and as a
pro se plaintiff, [Bush] is not entitled to
attorneys' fees.” (ECF No. 11, PageID 244). Then,
he noted that Bush had found new, more lucrative employment
only six months after she had been discharged and that
“had [Bush] remained employed with Lumileds during that
six-month period, she would have received approximately $20,
000 in base salary-the amount of the proposed settlement at
issue.” (ECF No. 11, PageID 1174). Nathan concluded
that “[t]he proposed settlement, therefore, is more
than reasonable as it represents the amount of damages the
estate could be awarded if it were to prevail on the sole
remaining civil claim at trial, which is far from certain and
would be costly for the estate to pursue.” Id.
filed a response to the motion to approve compromise of
claim, arguing that “[t]he settlement is not reasonable
and furthermore should be denied because the debtor is no
longer within the Chapter 7, the stated exemption is valid,
this will not satisfy the debtors [sic] creditors and ...