Queen v. TA Operating, LLC
734 F.3d 1081
| 10th Cir. | 2013Background
- Richard and Susan Queen sued TA Operating, LLC in federal court (Wyoming) for injuries Richard sustained in a parking-lot slip and fall, seeking past/future medical expenses, lost wages, pain and suffering, loss of enjoyment, loss of consortium, and punitive damages.
- While the Wyoming case was pending, the Queens filed Chapter 7 bankruptcy in California but did not list the Wyoming lawsuit on initial Schedules B/C or the Statement of Financial Affairs; at a creditors’ meeting they gave a misleading description implying the insurer, not they, was suing.
- TA discovered the nondisclosure and alerted the bankruptcy trustee; the Queens then amended their bankruptcy schedules to list a “Personal Injury Claim” valued at $400,000 and claimed the entire amount exempt under California exemptions; no trustee/creditor objections followed and the Queens received a no-asset discharge.
- TA moved for summary judgment in the Wyoming action on the basis of judicial estoppel; the district court granted summary judgment, dismissing the Queens’ claims with prejudice.
- On appeal to the Tenth Circuit, the court reviewed whether judicial estoppel should bar the Queens’ suit — focusing on (1) inconsistent positions, (2) whether the bankruptcy court accepted the inconsistent position, and (3) whether the Queens would gain an unfair advantage if not estopped — and whether inadvertence/mistake excused nondisclosure.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether judicial estoppel bars the Queens from pursuing the Wyoming lawsuit | Queens: not estopped because they amended schedules before discharge and any recovery would be exempt under California law; any omission was inadvertent | TA: Queens failed to disclose asset, then misvalued and exempted it to obtain a no-asset discharge, creating inconsistent positions and unfair advantage | Held: Judicial estoppel applied; summary judgment for TA affirmed |
| Whether the Queens’ amended filings were inconsistent with earlier litigation positions | Queens: $400,000 estimate was a realistic recovery estimate; may recover less than claimed in district court | TA: Bankruptcy valuation/exemption contradicted district-court damage estimates (medical bills and lost wages much higher) | Held: Amended valuation and exemption were clearly inconsistent with district-court positions |
| Whether the bankruptcy court accepted the Queens’ inconsistent position | Queens: amended disclosures were accepted only after amendment and as a matter of course | TA: Trustee relied on the representations and the court granted a no-asset discharge, so the bankruptcy court was misled | Held: Bankruptcy court accepted inconsistent position (no-asset discharge), creating risk to judicial integrity |
| Whether inadvertence or attorney error excuses nondisclosure | Queens: omission was a mistake; they told counsel and had no motive to conceal | TA: Queens knew of the claim and had motive to conceal to obtain discharge; cannot blame counsel | Held: Inadvertence/mistake rejected; knowledge and motive to conceal support estoppel |
Key Cases Cited
- New Hampshire v. Maine, 532 U.S. 742 (2001) (articulates doctrine and discretionary factors for judicial estoppel)
- Eastman v. Union Pac. R. Co., 493 F.3d 1151 (10th Cir. 2007) (applies judicial estoppel to debtor’s nondisclosure of personal-injury claim)
- Paup v. Gear Prods., Inc., 327 F. App’x 100 (10th Cir. 2009) (unpublished) (similar facts; nondisclosure leading to no-asset discharge creates perception bankruptcy court was misled)
- In re Gose, 308 B.R. 41 (B.A.P. 9th Cir. 2004) (interprets California exemption scheme for personal-injury claims; exemption limited to amounts necessary for support)
- Link v. Wabash R.R. Co., 370 U.S. 626 (1962) (party is bound by acts/omissions of chosen attorney)