     Case: 15-50919     Document: 00513739217   Page: 1   Date Filed: 10/28/2016




        IN THE UNITED STATES COURT OF APPEALS
                 FOR THE FIFTH CIRCUIT
                                                                United States Court of Appeals
                                                                         Fifth Circuit
                                 No. 15-50919                          FILED
                                                                October 28, 2016
                                                                  Lyle W. Cayce
In the Matter of: LISA ANN GALAZ,                                      Clerk

             Debtor

ALFRED GALAZ,

             Appellant

v.

LISA A. KATONA, formerly known as Lisa Ann Galaz,

             Appellee




                Appeal from the United States District Court
                     for the Western District of Texas


Before WIENER, CLEMENT, and COSTA, Circuit Judges.
EDITH BROWN CLEMENT, Circuit Judge:
      The bankruptcy court enjoined Alfred Galaz (“Galaz”) from pursuing any
claims related to Worldwide Subsidy Group against his former daughter-in-
law, Lisa Katona (“Katona”). Galaz appealed the bankruptcy court judgment
to the district court. The district court affirmed, finding that the bankruptcy
court had jurisdiction to decide the case and that the bankruptcy court properly
barred Galaz’s claims. Galaz appeals to this court. We AFFIRM.
    Case: 15-50919     Document: 00513739217     Page: 2   Date Filed: 10/28/2016


                                  No. 15-50919

                                        I.
       Raul Galaz (“Raul”) and his legal assistant, Marian Oshita (“Oshita”),
formed two limited liability companies, collectively called Worldwide Subsidy
Group (“WSG”), to collect royalties owed to film and television distributors.
Raul owned a 75 percent interest in WSG, and Oshita owned a 25 percent
interest in WSG. At the time of WSG’s formation, Raul was married to Lisa
Katona (formerly Galaz). When Raul and Katona subsequently divorced,
Katona received half of Raul’s interest in WSG. Raul then sold his remaining
37.5 percent WSG interest to Oshita for $50,000. She paid for his interest from
WSG’s accounts as an offset against unreimbursed expenses purportedly owed
to her. After Raul transferred his remaining interest to Oshita, Katona owned
a 37.5 percent interest in WSG and Oshita owned a 62.5 percent interest in
WSG.
       Shortly thereafter, Katona learned that Oshita’s claim for unreimbursed
expenses was fraudulent, and Katona filed suit against her in California state
court. Following a jury trial, the state court awarded Katona the 37.5 percent
interest that Raul had sold to Oshita, as well as $18,750 in damages—which
Oshita failed to pay. This judgment left Katona with a 75 percent interest and
Oshita with a 25 percent interest in WSG.
       After the judgment, Katona assigned half of her interest to Raul’s sister,
Denise Vernon (“Vernon”). Vernon then filed suit against Katona in Texas
state court to determine ownership and control of WSG. Vernon and Raul, a
third-party defendant in the case, argued that Oshita had withdrawn from the
company and was not entitled to her 25 percent interest.
       Before the case was resolved, Katona filed for Chapter 13 bankruptcy
and the WSG litigation was removed to bankruptcy court as a separate
adversary proceeding. The bankruptcy court approved a settlement between

                                        2
    Case: 15-50919    Document: 00513739217     Page: 3   Date Filed: 10/28/2016


                                 No. 15-50919

Raul, Vernon, and Katona regarding that litigation (“2008 Settlement
Agreement”). The 2008 Settlement Agreement provided for: (1) a one-time
distribution from WSG of $50,000 to Katona; (2) monthly payments from WSG
of $4,300 to Katona; (3) a one-time distribution from WSG of $83,000 to
Vernon; (4) monthly payments from WSG of $5,000 to Vernon; and (5) an
annual salary of $67,500 and back-pay of $221,000 from WSG to Raul. As part
of the settlement, Brian Boydston was appointed Business Manager of WSG.
The bankruptcy court confirmed Katona’s Chapter 13 plan.
      Katona and Vernon disagreed over WSG’s operations, and Katona
brought another adversary proceeding against WSG and Vernon. Katona
requested that the bankruptcy court remove Boydston as Business Manager,
appoint a receiver for WSG, and liquidate the company. Katona and Vernon
reached a settlement in that action (“2011 Settlement Agreement”). The 2011
Settlement Agreement provided, in part, that Vernon purchase Katona’s
interest in WSG and “any unliquidated claims against third parties relating to
WSG, including claims against Marian Oshita.” Katona was thus “deemed to
have sold, transferred, and assigned to Denise Vernon any and all of [her]
rights, title, and interest in WSG, including but not limited to . . . any claims
against third parties relating to WSG, including claims against Marian
Oshita.” The 2011 Settlement Agreement also provided that Vernon release all
present and future claims against and rights to sue Katona. After the
bankruptcy court approved the 2011 Settlement Agreement, Vernon assigned
all claims against Oshita that she received under the agreement to her and
Raul’s father, Alfred Galaz. In 2012, Katona received a discharge and her
bankruptcy case was closed.
      Galaz then filed suit in California state court to enforce Katona’s unpaid
money judgment against Oshita, which he believed he had received through

                                       3
     Case: 15-50919      Document: 00513739217        Page: 4     Date Filed: 10/28/2016


                                     No. 15-50919

Vernon’s assignment. 1 The state court found in his favor and foreclosed on
Oshita’s WSG interest to satisfy the judgment. As successor-in-interest to
Oshita, Galaz then sued Katona in Texas state court, alleging that Katona
owed past monetary distributions on Oshita’s interest in WSG (“Oshita
claims”). Katona removed the case to bankruptcy court as an adversary
proceeding in her Chapter 13 bankruptcy suit. Galaz then moved to remand.
The bankruptcy court granted Galaz’s motion, finding that it did not have
jurisdiction because Galaz’s complaint raised only state-law claims. The
bankruptcy court noted, however, that it arguably would have jurisdiction if
Katona had sued for declaratory judgment.
      Katona thus began an adversary proceeding against Galaz in bankruptcy
court, seeking to enjoin him from pursing the Oshita claims. The parties filed
cross-motions for summary judgment. The bankruptcy court granted Katona’s
motion, in part, and enjoined Galaz from pursuing any WSG-related actions
against her. Specifically, the bankruptcy court found that the 2011 Settlement
Agreement, which discharged Vernon and Katona’s rights to sue one another,
barred Galaz’s claims. Galaz appealed to the district court, challenging the
bankruptcy court’s jurisdiction and its determination that his claims were
barred. The district court affirmed. Galaz appeals.
                                            II.
      “Subject-matter jurisdiction is a question of law which we review de
novo.” Beitel v. OCA, Inc. (In re OCA, Inc.), 551 F.3d 359, 366 (5th Cir. 2008).
“When reviewing a district court’s affirmance of a bankruptcy court’s
judgment, this court applies the same standard of review to the bankruptcy
court decision that the district court applied.” Galaz v. Galaz (In re Galaz), 765


      1The parties dispute whether, as part of the settlement, Katona assigned her right to
the money judgment against Oshita.
                                            4
    Case: 15-50919     Document: 00513739217       Page: 5   Date Filed: 10/28/2016


                                  No. 15-50919

F.3d 426, 429 (5th Cir. 2014) (internal quotation marks omitted). We review
findings of fact for clear error and legal conclusions de novo. Id.
                                       III.
                                        A.
       Galaz first argues that the bankruptcy court lacked jurisdiction to
enjoin his state-law claims. His arguments rest primarily on the fact that the
bankruptcy court closed Katona’s Chapter 13 bankruptcy in 2012. Katona
contends that the bankruptcy court had jurisdiction because Galaz violated her
discharge rights under title 11. A bankruptcy court’s jurisdiction extends to
“all civil proceedings arising under title 11, or arising in or related to cases
under title 11.” See 28 U.S.C. § 1334(b). Before confirmation of the bankruptcy
plan, a proceeding is related to the bankruptcy case if the “outcome could
conceivably have any effect on the estate being administered in bankruptcy.”
Fire Eagle, L.L.C. v. Bischoff (In re Spillman Dev. Grp., Ltd.), 710 F.3d 299,
304 (5th Cir. 2013) (internal quotation marks omitted). After confirmation,
“the debtor’s estate, and thus bankruptcy jurisdiction, ceases to exist, other
than for matters pertaining to the implementation or execution of the plan.”
Newby v. Enron Corp. (In re Enron Corp. Sec.), 535 F.3d 325, 335 (5th Cir.
2008) (quoting Craig’s Stores of Tex., Inc. v. Bank of La. (In re Craig’s Stores of
Tex., Inc.), 266 F.3d 388, 390 (5th Cir. 2001)).
       A bankruptcy court maintains “jurisdiction to interpret and enforce its
own prior orders.” Travelers Indem. Co. v. Bailey, 557 U.S. 137, 151 (2009).
Subject matter jurisdiction remains in the bankruptcy court, even after a
bankruptcy case is closed, “to assure that the rights afforded to a debtor by the
Bankruptcy Code are fully vindicated.” Padilla v. Wells Fargo Home Mortg.,
Inc. (In re Padilla), 379 B.R. 643, 652 n.4 (Bankr. S.D. Tex. 2007) (relying on
Bradley v. Barnes (In re Bradley), 989 F.2d 802, 804 (5th Cir. 1993)).

                                        5
     Case: 15-50919       Document: 00513739217         Page: 6     Date Filed: 10/28/2016


                                       No. 15-50919

           Here, Galaz’s underlying state court action alleges that Katona
controlled WSG’s finances and failed to pay out proceeds from WSG in
accordance with Oshita’s membership interest. Even viewed through the
narrower lens of post-confirmation bankruptcy jurisdiction, Galaz’s Oshita
claims relate principally to pre-confirmation activity between the parties.
There was discord between Oshita and Katona during the reorganization as to
the respective ownership interests in WSG. Indeed, that dispute formed the
basis of the 2008 Settlement Agreement, which provided funds for Katona to
pay off her debts under the plan. Galaz’s cause of action for nonpayment is a
preconfirmation claim that—according to Katona—was subject to the
bankruptcy court’s discharge order. 2
           Galaz’s suit in state court is arguably a violation of Katona’s discharge
rights, directly implicating the bankruptcy court’s “arising under” jurisdiction.
See Ins. Co. of N. Am. v. NGC Settlement Trust & Asbestos Claim Mgmt. Co.
(In re Nat’l Gypsum Co.), 118 F.3d 1056, 1064 (5th Cir. 1997). The state law
causes of action asserted by Galaz bear on the interpretation and execution of
Katona’s plan. Even though Katona’s bankruptcy case was closed, the
bankruptcy court retains jurisdiction to consider violations of the discharge
order; the order of discharge necessarily implicates the implementation or



       2 The bankruptcy court explicitly declined to make any findings on whether the Oshita
claims were discharged, and dismissed Katona’s claims for discharge violations without
prejudice. But jurisdiction to hear and decide a proceeding attaches before—and regardless
of how—a court rules on the merits of the claim. See Bradley, 989 F.2d at 804–05 (finding
that the bankruptcy court had subject matter jurisdiction even though the bankruptcy court
did not rule on the merits of the disputed debt). When a federal claim appears on the face of
the complaint, dismissal for want of jurisdiction is proper only when the claim is “patently
without merit.” Young v. Hosemann, 598 F.3d 184, 188 (5th Cir. 2010). Katona alleges that
the Oshita claims were discharged in her bankruptcy proceedings, in part, because Oshita
had constructive or actual notice of her bankruptcy and failed to assert a claim. We hold that
Katona’s allegations meet the low pleading burden sufficient to establish jurisdiction.
                                              6
    Case: 15-50919    Document: 00513739217     Page: 7   Date Filed: 10/28/2016


                                 No. 15-50919

execution of the plan. See Bradley, 989 F.2d at 804. The alleged violation of
Katona’s discharge rights brings this case within the bankruptcy court’s post-
confirmation jurisdiction. See Local Loan Co. v. Hunt, 292 U.S. 234, 241 (1934)
(“[It is] the authority of the bankruptcy court to entertain the present
proceeding, determine the effect of the adjudication and [discharge] order, and
enjoin petitioner from its threatened interference therewith.”).
                                       B.
      Galaz next contends that the bankruptcy court lacked statutory
authority to enter final judgment because these proceedings do not constitute
a “core” claim. Katona counters that her action for declaratory relief and an
injunction is a core proceeding that provides the bankruptcy court statutory
authority. “A bankruptcy court’s statutory authority derives from 28 U.S.C.
§ 157(b)(1), which designates certain matters as ‘core proceedings’ and
authorizes a bankruptcy court to determine the matters and enter final
judgments.” Galaz, 765 F.3d at 431. “If the proceeding involves a right created
by the federal bankruptcy law, it is a core proceeding.” Spillman Dev. Grp., 710
F.3d at 305. For non-core proceedings, a bankruptcy judge shall “submit
proposed findings of fact and conclusions of law to the district court, and any
final order or judgment shall be entered by the district judge . . . .” 28 U.S.C.
§ 157(c)(1).
      Galaz argues that the claims asserted here are state-law defenses that
cannot constitute core proceedings. “[B]ut even such claims may be considered
core if they are dependent upon the rights created in bankruptcy.” Spillman
Dev. Grp., 710 F.3d at 305 (internal quotation marks omitted) (quoting Wood
v. Wood (In re Wood), 825 F.2d 90, 97 (5th Cir. 1987)). Katona alleges in her
claim for declaratory relief that her discharge rights—statutory rights
provided for under the Bankruptcy Code—are being violated. The bankruptcy

                                       7
     Case: 15-50919       Document: 00513739217         Page: 8    Date Filed: 10/28/2016


                                      No. 15-50919

court decided that the 2011 Settlement Agreement, which the bankruptcy
court approved and is the source of Galaz’s ownership to the Oshita claims,
bars his suit. This action presents a core proceeding over which a bankruptcy
court may enter final judgment. See Nat’l Gypsum, 118 F.3d at 1063–64
(“Although a discharge in bankruptcy can constitute an affirmative defense to
a state law contract claim, [a debtor’s] action to enforce the discharge
injunction . . . assert[s] a statutory right under the Bankruptcy Code . . . .”);
Harris v. Wittman (In re Harris), 590 F.3d 730, 741 (9th Cir. 2009) (reasoning
that a dispute over a post-petition settlement agreement “is much more like a
public rights case than a private rights case” and is a “core” proceeding). The
bankruptcy court’s interpretation of the 2011 Settlement Agreement is
determinative of Katona’s claim, and the bankruptcy court’s order was within
its statutory authority.
                                             C.
           Galaz next argues that the bankruptcy court was required by the
mandatory abstention provision to abstain from adjudicating this case. 3 This
court reviews the decision not to abstain for abuse of discretion. See Edge
Petroleum Operating Co. v. GPR Holdings, L.L.C. (In re TXNB Internal Case),
483 F.3d 292, 299 (5th Cir. 2007). This court has interpreted 28 U.S.C.
§ 1334(c)(2) to mandate federal court abstention where, among other things,
“the claim is a non-core proceeding.” Id. at 300. Here, the bankruptcy court did
not abuse its discretion in refusing to abstain because, as previously discussed,


       3 Galaz also argues that the bankruptcy court should have abstained from hearing
this case under the permissive abstention statute. See 28 U.S.C. § 1334(c)(1). This court,
however, lacks jurisdiction to review that decision. Id. § 1334(d); see Baker v. Simpson, 613
F.3d 346, 352 (2d Cir. 2010) (“[D]ecisions on permissive abstention, which lie within the
discretion of the bankruptcy court, are not subject to review by the court of appeals. We
therefore lack jurisdiction to decide whether the district court’s decision on permissive
abstention was correct.”).
                                             8
    Case: 15-50919        Document: 00513739217      Page: 9    Date Filed: 10/28/2016


                                    No. 15-50919

the proceeding at issue is “core” under § 157(b). See Gober v. Terra + Co. (In re
Gober), 100 F.3d 1195, 1206 (5th Cir. 1996) (“Mandatory abstention applies
only to non-core proceedings . . . .”).
                                           D.
            Galaz argues that the bankruptcy court erred in finding his Oshita
claims barred by res judicata, compromise and settlement, and accord and
satisfaction because (1) Katona did not raise these defenses in her pleadings
and (2) these defenses are meritless. We address each of Galaz’s arguments in
turn.
                                           1.
            “Bankruptcy Rule 8006 provides that in an appeal to a district court,
the appellant must file a statement of the issues to be presented.” 4 McClendon
v. Springfield (In re McClendon), 765 F.3d 501, 506 (5th Cir. 2014). “It is clear
under the law of this circuit that an issue that is not designated in the
statement of issues in the district court is waived on appeal . . . .” Id. (internal
quotation marks omitted). Bankruptcy Rule 8006 serves a specific purpose: it
enables a redesignation of the appellate record assembled in the bankruptcy
court. See M.A. Baheth & Co. v. Schott (In re M.A. Baheth Const. Co.), 118 F.3d
1082, 1085 n.2 (5th Cir. 1997). “After an immediate appeal, a party may well
narrow the focus of its efforts on the second appeal and a redesignation of the
record may eliminate unnecessary material.” Id.
            When Galaz appealed to the district court, he filed a Bankruptcy Rule
8006 statement of the issues that raised, in relevant part, this question:
        Whether the Bankruptcy Court erred by rendering judgment in
        favor of Plaintiff and against Defendant Alfred Galaz where


        As part of the December 2014 amendments to the Federal Rules of Bankruptcy, Rule
        4

8006 became Rule 8009. Galaz filed his statement of issues before the amendments and thus
the parties and courts below refer to Rule 8006.
                                           9
   Case: 15-50919     Document: 00513739217     Page: 10   Date Filed: 10/28/2016


                                 No. 15-50919

      Plaintiff failed to meet her summary judgment burden of
      establishing the grounds presented in her Motion for Summary
      Judgment and where Defendants raised a genuine, material issue
      of fact as to Plaintiff’s claims against them.
Galaz argues that this issue naturally encompasses the argument that he later
briefed before the district court: Whether “the bankruptcy court erred in
granting summary judgment based upon res judicata, compromise and
settlement, and accord and satisfaction because these defenses were never
raised in Katona’s pleadings.” But this assertion construes his statement of the
issues too broadly. The purpose of Bankruptcy Rule 8006 is to narrow the
record on appeal. Drafting a sweeping statement of issues flouts that purpose.
The statement of the issues need not “be precise to the point of pedantry” to
avoid waiver. In re Am. Cartage, Inc., 656 F.3d 82, 91 (1st Cir. 2011). There is
no indication in Galaz’s statement of the issues, however, that he intended to
challenge the bankruptcy court’s grant of summary judgment on grounds not
urged by Katona. His statement of the issues concerns only whether Katona
met her summary judgment burden. His statement of the issues does not fairly
encompass his later argument that the bankruptcy court should not have
granted summary judgment on arguments that Katona did not raise. See
McClendon, 765 F.3d at 506. Galaz failed to identify the particular issue that
he sought to appeal: whether the bankruptcy court erred in granting summary
judgment on defenses not presented in Katona’s motion for summary
judgment. We hold that Galaz waived that issue.
                                       2.
       “Once a final judgment on the merits of a prior action is entered, the
parties and those in privity with them may not relitigate issues that either
were or at least could have been brought in the action.” Cooper v. Int’l Offshore
Servs., L.L.C., 390 F. App’x 347, 351 (5th Cir. 2010) (relying on Oreck Direct,

                                       10
    Case: 15-50919     Document: 00513739217      Page: 11   Date Filed: 10/28/2016


                                   No. 15-50919

LLC v. Dyson, Inc., 560 F.3d 398, 401 (5th Cir. 2009)). “[A] bankruptcy order
is entitled to the effect of res judicata . . . .” Republic Supply Co. v. Shoaf, 815
F.2d 1046, 1051 (5th Cir. 1987). The bankruptcy court here found that the 2011
Settlement Agreement provided a broad release of liability to Katona and thus
res judicata, compromise and settlement, and accord and satisfaction
functioned to bar Galaz from bringing the Oshita claims. Galaz argues that
these defenses are inapplicable because he brings his claims as a successor-in-
interest to Oshita, not a successor-in-interest to Vernon, and thus the 2011
Settlement Agreement does not bar his claims. Because Galaz’s claims arose
through rights assigned from Vernon, however, this court finds that his claims
are barred by res judicata.
         Galaz was awarded Oshita’s ownership interest in WSG by a foreclosure
judgment in California state court on Katona’s unpaid money judgment. He
inherited the right to foreclose against Oshita through Vernon’s assignment.
Vernon inherited those rights from Katona by virtue of the 2011 Settlement
Agreement, which also provided that Vernon release all present and future
claims against and rights to sue Katona. This broad and exhaustive release
included any claims related to or arising out of any event, act, omission, or
condition involving WSG. As the district court correctly identified, this
assignment history presents two issues: (1) whether Vernon’s release carries
over to Galaz; and (2) if so, whether the ownership interest in WSG that Galaz
obtained is a substitute for the unpaid money judgment or a legally distinct
right.
         Under Texas law, an assignment is a “transfer of some right or interest.”
Shipley v. Unifund CCR Partners, 331 S.W.3d 27, 28 (Tex. App. 2010). It
“operates to transfer to the assignee no greater right or interest than was
possessed by the assignor . . . .” Fla. Bahamas Lines, Ltd. v. The Steel Barge

                                        11
   Case: 15-50919    Document: 00513739217      Page: 12   Date Filed: 10/28/2016


                                 No. 15-50919

“Star 800” of Nassau, 433 F.2d 1243, 1246 (5th Cir. 1970). But “[a]n assignee’s
rights are also subject to defenses existing at the time of the assignment that
would have been available against the assignor had there been no assignment.”
Forex Capital Mkts., LLC v. Crawford, No. 05-14-00341-CV, 2014 WL 7498051,
at *2 (Tex. App. Dec. 31, 2014). Galaz received his right to the unpaid money
judgment upon assignment from Vernon subject to the release of liability
against Katona.
      Galaz maintains that, even if he took subject to release, the claims he is
now asserting never belonged to Vernon. Acknowledging that Vernon “might
have been precluded from bringing certain claims against Katona due to the
release,” he argues that he is instead “stepping into Oshita’s shoes” and
asserting her rights. But Galaz cites no authority for the proposition that this
foreclosure judgment allows him to kick off Vernon’s shoes and the
accompanying liability release. Nor does he point to any precedent that this
judgment grants him a distinct legal right. An assignee of a claim may not
receive more than the assignor would have been entitled to. See Fla. Bahamas
Lines, Ltd., 433 F.2d at 1246. Galaz took Vernon’s interest subject to the legal
and equitable defenses that existed at the time of the assignment; the transfer
does not function to deprive Katona of defenses that she has against Vernon,
the original assignor. Galaz’s claims are barred by res judicata, compromise
and settlement, and accord and satisfaction.
                                      E.
      Galaz argues that the bankruptcy court erred in finding his Oshita
claims barred by judicial estoppel because (1) Katona did not raise this defense
in her pleadings, (2) neither Galaz nor Oshita took inconsistent positions as to
Oshita’s ownership interest, and (3) Katona took inconsistent positions as to
Oshita’s ownership interest and her “unclean hands” prohibit judicial estoppel.

                                      12
   Case: 15-50919     Document: 00513739217       Page: 13   Date Filed: 10/28/2016


                                  No. 15-50919

For the reasons discussed, we hold that Galaz’s Bankruptcy Rule 8006
statement of the issues does not encompass Galaz’s argument that the
bankruptcy court erred in considering judicial estoppel when Katona did not
raise it. We hold that Galaz waived this issue.
       This court reviews a determination of judicial estoppel for abuse of
discretion. Love v. Tyson Foods, Inc., 677 F.3d 258, 262 (5th Cir. 2012). “The
doctrine of judicial estoppel is equitable in nature and can be invoked by a court
to prevent a party from asserting a position in a legal proceeding that is
inconsistent with a position taken in a previous proceeding.” Id. at 261. This
court looks to the following elements in deciding whether to apply judicial
estoppel: “(1) the party against whom judicial estoppel is sought has asserted
a legal position which is plainly inconsistent with a prior position; (2) a court
accepted the prior position; and (3) the party did not act inadvertently.” Reed
v. City of Arlington, 650 F.3d 571, 574 (5th Cir. 2011) (en banc). These
elements, however, are neither inflexible nor exhaustive and “numerous
considerations may inform the doctrine’s application in specific factual
contexts.” Love, 677 F.3d at 261 (internal quotation marks omitted).
       Here, the bankruptcy court took judicial notice of all the filings in the
bankruptcy case, the adversary proceedings, the filings and decisions in the
appeals of the bankruptcy case, and the decisions in the California state court
litigation. Upon review, the bankruptcy court noted several instances where
Vernon asserted that Oshita did not have an ownership interest in WSG.
Because Galaz is Vernon’s successor-in-interest, he inherits the positions that
she has taken throughout the litigation. See Adelphia Recovery Tr. v. Goldman,
Sachs & Co., 748 F.3d 110, 120 (2d Cir. 2014) (finding appellants judicially
estopped by actions of predecessors in interest). He cannot now contend that
Oshita has an ownership interest in WSG, because that position is plainly

                                       13
    Case: 15-50919    Document: 00513739217      Page: 14   Date Filed: 10/28/2016


                                  No. 15-50919

inconsistent with Vernon’s prior position. The bankruptcy court did not abuse
its discretion in finding Galaz judicially estopped.
       A party cannot rely on judicial estoppel if it comes to the court with
unclean hands. Reg’l Props., Inc. v. Fin. & Real Estate Consulting Co., 752 F.2d
178, 183 (5th Cir. 1985). Galaz contends that Katona similarly took
inconsistent positions regarding Oshita’s ownership interest and thus judicial
estoppel cannot apply. The bankruptcy court reviewed these allegedly
inconsistent statements made by Katona, but found that Katona had
maintained that Oshita’s interest was disputed, whereas Vernon had
definitively asserted that Oshita had no interest. Because Galaz provides no
basis for concluding that the bankruptcy court erred in its factual findings, this
court holds that the bankruptcy court did not abuse its discretion in applying
judicial estoppel.
                                       F.
       As a final argument, Galaz contends that the bankruptcy court erred in
denying his motion for summary judgment and requests that this court reverse
and render judgment in his favor. Galaz reiterates, as the basis for rendering
judgment in his favor, the many arguments that he levied against the
bankruptcy court’s order granting Katona’s motion for summary judgment. For
the reasons set forth above, Galaz’s arguments fail.
                                       IV.
       We AFFIRM the judgment of the district court.




                                       14
