Riseman v. United States, 2:14-cv-02656

Background

Plaintiff Bruce Riseman filed Chapter 13 bankruptcy in 2008 and received a discharge in January 2014.
Riseman suffered a heart attack in March 2010 and submitted an administrative tort claim to the VA in November 2011 seeking $1.5 million.
He negotiated with the VA, rejected a final settlement in October 2012, and appealed a denial; during these events he did not list the tort claim on his bankruptcy schedules.
The VA denied his administrative appeal in June 2014, notified him he had six months to sue, and Riseman filed this suit in November 2014.
The United States moved for summary judgment arguing Riseman is judicially estopped from suing because he failed to disclose the claim in bankruptcy; Riseman says nondisclosure was inadvertent and that he told bankruptcy counsel and the VA about the claim.
The court denied summary judgment, crediting Riseman’s affidavit of inadvertence, relying on Ninth Circuit precedent (Ah Quin), and noting reopening the bankruptcy and amended schedules mitigated estoppel concerns and protected creditor interests.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Riseman is judicially estopped from pursuing his VA malpractice claim because he failed to list it in bankruptcy schedules	Riseman says omission was inadvertent: he informed his bankruptcy counsel and the VA, was told no schedule amendment was needed, and later reopened bankruptcy and amended schedules	The United States argues the omission was clearly inconsistent with later suing and therefore estoppel bars the suit	Denied: court found a genuine dispute and credited plaintiff’s affidavit of inadvertence, making estoppel inappropriate on summary judgment
Whether reopening the bankruptcy and amending schedules cures estoppel concerns	Riseman contends reopening and amendment show lack of intent to conceal and protect creditor interests	Government contends reopening without trustee reappointment and delayed reopening suggest concealment	Court held reopening and amendment (as in Ah Quin) were sufficient at summary judgment; trustee reappointment not required to avoid estoppel
Whether failing to disclose prejudices the VA or creditors such that equitable estoppel should apply	Riseman argues creditors could be harmed if claim is foreclosed; disclosure to VA shows no intent to deceive	Government asserts estoppel protects judicial integrity and prevents unfair advantage	Court found no unfair advantage and noted estoppel would harm creditors; equitable factors favored plaintiff
Whether judicial estoppel is appropriate where omission may have been inadvertent	Riseman emphasizes New Hampshire and Ninth Circuit guidance that inadvertence can defeat estoppel	Government relies on cases where omission was intentional (e.g., Hamilton)	Court applied Ninth Circuit standard from Ah Quin, credited plaintiff’s subjective intent of mistake, and declined estoppel

Key Cases Cited

New Hampshire v. Maine, 532 U.S. 742 (2001) (sets multi-factor, discretionary test for judicial estoppel and notes inadvertence may counsel against estoppel)
Ah Quin v. County of Kauai, 733 F.3d 267 (9th Cir. 2013) (holds a debtor’s subjective intent—mistake or inadvertence—governs estoppel analysis and reverses summary judgment where omission may have been inadvertent)
Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778 (9th Cir. 2001) (applies judicial estoppel where bankruptcy omission was clearly intentional)