       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

McCLINCY BROTHERS FLOOR                      )
COVERING INC. and TIM McCLINCY,              )    No. 78283-5-I
                                             )
                        Appellants,          )    DIVISION ONE
                                             )
              v.                             )
                                             )
ERIC ZUBEL and his marital community;)            UNPUBLISHED OPINION
and ERIC ZUBEL, P.C.,                )
                                             )    FILED: August 5, 2019
                        Respondents.


       SMITH, J.   —   As a general rule, if a bankruptcy debtor fails to report a

cause of action in bankruptcy and then obtains a discharge or confirmation, a trial

court may apply judicial estoppelto bar the action. In 2017, McClincy Brothers

Floor Covering Inc. (company) and its owner, Tim McClincy (together the

McClincy parties) sued their former attorney, Eric Zubel, for malpractice related

to Zubel’s representation of the McClincy parties in a 2013 lawsuit. Because

McClincy did not disclose his malpractice claims during his intervening

bankruptcy and because he has not established that any exception to the general

rule applies here, the trial court did not err when it dismissed McClincy’s claims.

But the company is a separate legal entity from McClincy, and Zubel has not

established that the company’s separate legal entity status should be ignored.

Therefore, the trial court did err by dismissing the company’s claims against

Zubel solely because McClincy is the company’s sole owner. We affirm in part,

reverse in part, and remand for further proceedings.
No. 78283-5-1/2

                                      FACTS

       In 2013, the company sued its former clients, Trish and Collin Carpenter,

and a former project manager, Randall Brooks (underlying lawsuit). The

Carpenters filed a third party complaint against McClincy. Zubel represented

both the company and McClincy in the underlying lawsuit until September 2014,

when the McClincy parties terminated Zubel and hired a new attorney.

       Brooks and the Carpenters prevailed in the underlying lawsuit.

Specifically, the court dismissed the company’s claims in their entirety and

entered judgment against the McClincy parties in February 2015. Some

components of the judgment were entered against the company and McClincy

individually, while others were entered against the company and McClincy jointly

and severally.

       The McClincy parties appealed the judgment to this court. While that

appeal was pending, and after attempts to negotiate a stay of the judgment were

unsuccessful, McClincy (but not the company) filed a voluntary chapter 11

bankruptcy in January 2016. In the section of McClincy’s bankruptcy schedules

asking whether he had any “[c]laims against third parties, whether or not you

have filed a lawsuit or made a demand for payment,” McClincy responded no.

McClincy also responded no to the section of his schedules directing him to list

any “[o]ther contingent and unliquidated cLaims of every nature, including

counterclaims of the debtor and rights to set off claims.” McClincy later amended

his schedules to list the then-pending appeal of the underlying lawsuit as well as

a “Bad Faith/Insurance Coverage Claim.” But his amended schedules still


                                         2
 No. 78283-5-1/3

responded no when asked to list any other “contingent and unliquidated claims of

every nature, including counterclaims     .   .   .   and rights to set off claims.”

           In his schedule of creditors with unsecured claims, McClincy listed Zubel’s

claim for fees arising out of the underlying lawsuit and indicated that the claim

was disputed.1 Zubel timely filed a proof of claim on March 4, 2016, indicating

that the amount of his claim as of that date was $96,954.24. McClincy did not

object to Zubel’s proof of claim.

           On April 28, 2016, McClincy filed a First Amended Disclosure Statement

(disclosure statement) and a proposed First Amended Plan of Reorganization

(plan). The purpose of the disclosure statement was to explain the proposed

plan and provide creditors with material needed to decide whether to vote to

accept the plan. The disclosure statement explained how the proposed plan

classified each creditor’s claim into 1 of 10 classes. Zubel’s claim was classified

as part of class 10, the “Allowed General Unsecured Claims.” The disclosure

statement also summarized how the claims within each class would be treated

under the proposed plan and whether each class would be impaired or

unimpaired by the plan.2 As relevant to Zubel’s claim, class 10 claims were

impaired under the proposed plan. Class 8, which consisted solely of the

Carpenters’ and Brooks’ claims arising from the judgment in the underlying




       1 Under Fed. R. Bankr. P. Rule 3003(c)(2), a creditor whose claim               is
scheduled as disputed must timely file a proof of claim to be treated as a             creditor
with respect to that claim for purposes of voting and distribution.
       2 Generally, a class of claims is “impaired” under a plan if the plan           alters
the legal, equitable, or contractual rights of the holder of any claim within          the
class. 11 U.S.C. § 1124.
                                              3
 No. 78283-5-1/4

 lawsuit, was the only other impaired class.

        Class 10, including Zubel, voted to accept the proposed plan, but class 8

voted to reject it. Objections to confirmation of the plan were later resolved in a

Second Amended Plan of Reorganization, and on June 29, 2016, the bankruptcy

court confirmed that plan. The bankruptcy court later approved certain

postconfirmation modifications to the plan and confirmed a Fourth Amended Plan

of Reorganization (confirmed plan).

       On July21, 2017, the McClincy parties filed this malpractice lawsuit

against Zubel. Zubel moved for summary judgment, arguing that the McClincy

parties’ claims were barred (1) by judicial estoppel because McClincy did not

disclose them as potential assets in his bankruptcy case and (2) by res judicata

because McClincy did not object to Zubel’s proof of claim.

       The McClincy parties opposed the motion, arguing among other things

that (1) Zubel failed to establish that the elements of judicial estoppel had been

satisfied; (2) Zubel’s judicial estoppel theory did not apply to chapter 11, as

opposed to chapter 7, bankruptcy cases; (3) judicial estoppel could not apply to

the company; (4) res judicata was inapplicable because McClincy marked

Zubel’s claim as “disputed” in his bankruptcy schedules; and (5) the trial court

should impose CR 11 sanctions against Zubel’s counsel for filing “a summary

judgment motion with no evidence and no authority.” In reply, Zubel submitted a

declaration from Charles Robinson, a bankruptcy attorney who opined among

other things that McClincy could not have obtained plan confirmation without

Zubel’s vote. Additionally, Zubel argued for the first time in his reply that


                                          4
No. 78283-5-1/5

because McClincy did not “specifically and unequivocally” retain the right under

the confirmed plan to pursue his malpractice claim against Zubel, McCIincy

lacked standing to bring the claim, and the trial court lacked jurisdiction to hear it.

                  The trial court granted Zubel’s motion for summary judgment. The

McClincy parties then moved for reconsideration. They argued that the trial court

erred by considering the Robinson declaration and reinforced their arguments

regarding judicial estoppel and res judicata. The trial court denied

reconsideration but indicated in its order that it did not consider Robinson’s

opinion that McClincy lacked standing. The McClincy parties appeal.

                                             ANALYSIS

                               Judicial Esto~pel of McClincy’s Claims

              The McClincy parties argue that the trial court erred by dismissing

McClincy’s claims on judicial estoppel grounds. We disagree.

              “‘Judicial estoppel is an equitable doctrine that precludes a party from

asserting one position in a court proceeding and later seeking an advantage by

taking a clearly inconsistent position.” Arkison v. Ethan Allen, Inc., 160 Wn.2d

535, 538, 160 P.3d 13 (2007) (quoting Bartley-Williams v. Kendall, 134 Wn. App.

95, 98, 138 P.3d 1103 (2006)). The doctrine is not designed to protect litigants.

Chonah v. Coastal Vills. Pollock, LLC, 5 Wn. App. 2d 139, 147, 425 P.3d 895

(2018), review denied, 192 Wn.2d 1012 (2019). Rather, “[t]he doctrine seeks ‘to

preserve respect for judicial proceedings,’ and ‘to avoid inconsistency, duplicity,

and   .   .   .   waste of time.” Arkison, 160 Wn.2d at 538 (alterations in original)

(internal quotation marks omitted) (quoting Cunningham v. Reliable Concrete


                                                  5
No. 78283-5-1/6

Pumping, Inc., 126 Wn. App. 222, 225, 108 P.3d 147 (2005)).

       In Arkison, our Supreme Court set forth the following three factors to

“guide a trial court’s determination of whether to apply the judicial estoppel

doctrine”:

       (1) whether “a party’s later position” is “clearly inconsistent with its
       earlier position”; (2) whether “judicial acceptance of an inconsistent
       position in a later proceeding would create ‘the perception that
       either the first or the second court was misled”; and (3) “whether
       the party seeking to assert an inconsistent position would derive an
       unfair advantage or impose an unfair detriment on the opposing
       party if not estopped.”

Arkison, 160 Wn.2d at 538-39 (quoting New Hampshire v. Maine, 532 U.S. 742,

750-51, 121 5. Ct. 1808, 149 L. Ed. 2d 968 (2001)).

       The Arkison factors are not an “exhaustive formula,” and additional

considerations may guide a court’s decision whether to apply the judicial

estoppel doctrine. Arkison, 160 Wn.2d at 539 (quoting New Hampshire, 532 U.S.

at 751). For example, “[a]pplication of the doctrine may be inappropriate ‘when a

party’s prior position was based on inadvertence or mistake.” Arkison, 160

Wn.2d at 539 (internal quotation marks omitted) (quoting New Hampshire, 532

U.S. at 753). Furthermore, “[a]s a general rule, if a debtor in a bankruptcy

proceeding fails to report a cause of action and obtains a discharge or

confirmation, a trial court may apply judicial estoppel to bar the action.” Arp v.

Riley, 192 Wn. App. 85, 92, 366 P.3d 946 (201 5). “This prevents a debtor from

protecting the asset from creditors by representing to the bankruptcy court that

no claim exists and then asserting in another court that the claim does exist.”

~,   192 Wn. App. at 92.


                                          6
No. 78283-5-117

          In short, judicial estoppel is flexible and fact-based. Chonah, 5 Wn. App.

2d at 148. “[C]ourts must apply [it] at their own discretion; they are not bound to

apply it but rather must determine on a case-by-case basis if applying the

doctrine is appropriate.”   ~,   192 Wn. App. at 92. To that end, we review a trial

court’s decision to apply judicial estoppel for abuse of discretion. Miller v.

Campbell, 164 Wn.2d 529, 536, 192 P.3d 352 (2008). “A decision constitutes an

abuse of discretion when it is manifestly unreasonable or based on untenable

grounds or reasons.” Gosney v. Fireman’s Fund Ins. Co., 3 Wn. App. 2d 828,

880, 419 P.3d 447, review denied, 191 Wn.2d 1017 (2018). We look to federal

cases as persuasive when determining whether judicial estoppel bars a claim

that a debtor failed to disclose in bankruptcy. See, ~      ~,   192 Wn. App. at 92

(citing Ah Quin v. County of Kauai Dep’t of Transp., 733 F.3d 267, 271 (9th Cir.

2013)); Cunninciham, 126 Wn. App. at 227 & n.10 (citing numerous federal

cases).

       Here, the McClincy parties concede for purposes of their appeal that the

first of the three Arkison factors is satisfied. Thus, the only question before us is

whether, based on the remaining two Arkison factors viewed in light of relevant

bankruptcy-related considerations, the trial court abused its discretion by

applying judicial estoppel to bar McClincy’s claims. For the reasons discussed

below, we conclude that it did not.




                                           7
No. 78283-5-1/8

                  The Second Arkison Factor: Judicial Acceptance

       As discussed, the second Arkison factor directs us to consider whether

‘“judicial acceptance of an inconsistent position in a later proceeding would

create the perception that either the first or the second court was misled.”

Arkison, 160 Wn.2d at 539. Under this factor, “[ajcceptance of an initial position

is a precondition to the application of judicial estoppel.” Taylor v. Bell, 185 Wn.

App. 270, 284, 340 P.3d 951 (2014). In the bankruptcy context, “[t]he bankruptcy

court may ‘accept’ the debtor’s assertions by relying on the debtor’s

nondisclosure of potential claims in many.             .   .   ways,” such as by confirming a

plan. Hamilton, 270 F.3d at 784.

       Here, the record reflects that McClincy had knowledge of a potential

malpractice claim against Zubel before McClincy filed bankruptcy. Specifically,

McClincy, through counsel, threatened—once in January 2015, and again in

November 2015—to counterclaim for malpractice if Zubel attempted to collect his

fees. Furthermore, once judgment was entered in the underlying lawsuit,

McClincy was, as a matter of law, charged with “knowledge of all the facts which

may give rise to his   .   .   .   cause of action for negligent representation.” Richardson

v. Denend, 59 Wn. App. 92, 96-97, 795 P.2d 1192 (1990). He also had an

affirmative duty to disclose that cause of action to the bankruptcy court.

Cunnincjham, 126 Wn. App. at 229-30. Indeed, “[t}he debtor’s duty to disclose

potential claims as assets does not end when the debtor files schedules, but

instead continues for the duration of the bankruptcy proceeding.” Hamilton, 270

F.3d at 785; ~ FED. R. BANKR. P. 1009(a) (Schedules may be amended as


                                                   8
 No. 78283-5-1/9

a matter of course before the case is closed.). “The continuing nature of the duty

to assure accurate schedules of assets is fundamental because the viability of

the system of voluntary bankruptcy depends upon full, candid, and complete

disclosure by debtors of their financial affairs.” In re Searles, 317 B.R. 368, 378

(B.A.P. 9th Cir. 2004), affd, 212 F. App’x 589 (9th Cir. 2006).

       Nevertheless, McClincy did not disclose a potential malpractice claim in

his original bankruptcy schedules filed in January 2016. He also did not disclose

the claim in his amended bankruptcy schedules, nor does the claim appear as an

asset in the disclosure statement. And there is no indication in the record that

McClincy ever amended his schedules to include his claim against Zubel.

Because the bankruptcy court “base[s its] actions on the disclosure statements

and schedules,” the bankruptcy court, by confirming the plan, accepted that

McClincy had no claims against Zubel. See Hamilton, 270 F.3d at 784. And if

the trial court were to permit McClincy’s malpractice claim to move forward, it

would create the perception that either it or the bankruptcy court was misled.

Therefore, the judicial acceptance factor is satisfied.

       The McClincy parties disagree, arguing that Zubel failed to prove that the

bankruptcy court accepted McClincy’s representation that he had no malpractice

claim against Zubel. They rely on Taylor to support their argument, but their

reliance is misplaced. In that case, Reed Taylor sued an Idaho law firm for

malpractice. Taylor, 185 Wn. App. at 276-77. The Idaho court dismissed

Taylor’s claim after it concluded there was no attorney-client relationship

between Taylor and the Idaho firm. Taylor, 185 Wn. App. at 277. Taylor then


                                          9
No. 78283-5-1/10

sued his Washington attorneys, Cairncross & Hempelmann PS (Cairncross), in

King County Superior Court. Taylor, 185 Wn. App. at 278. The court dismissed

Taylor’s claims on judicial estoppel grounds, finding that Taylor took inconsistent

positions by claiming in the Idaho court that the Idaho attorney was the only one

representing him, and then later claiming in King County Superior Court that

Cairncross represented him. Taylor, 185 Wn. App. at 278-79.

       We reversed, observing that Taylor’s earlier position was “undoubtedly

rejected” by the Idaho court when it ruled that there was no attorney-client

relationship between Taylor and the Idaho firm. Taylor, 185 Wn. App. at 283-84.

Put another way, we recognized that where the plaintiff’s initial position is

affirmatively rejected by the first court, there is no risk that another court will be

misled by accepting the plaintiff’s later inconsistent position. But here, there is no

indication that as in Taylor, the bankruptcy court affirmatively rejected McClincy’s

representation that he had no claim against Zubel. Therefore, Taylor is

unpersuasive.

       The McClincy parties alsorely on ~ to argue that Zubel’s failure to prove

acceptance is fatal to his judicial estoppel argument. But the claim at issue in

~ was a personal injury claim that arose from a postbankruptcy motor vehicle

accident that the bankruptcy code did not require the debtor to disclose.      ~,




192 Wn. App. at 88-89, 98. Here, by contrast, McClincy’s malpractice claim

arose before he filed bankruptcy, and he had an affirmative duty to disclose it.

See Cunningham, 126 Wn. App. at 229-30 (debtor has express, affirmative duty

to disclose all assets). The McClincy parties’ reliance on ~ is misplaced.


                                          10
No. 78283-5-Ill I

       The McClincy parties next argue that the judicial acceptance factor is not

satisfied unless Zubel proves “‘that disclosure would have changed the outcome

of the bankruptcy.” They rely on Gosney to support their argument, but

Gosney’s judicial estoppel analysis is distinguishable because in that case, as in

~,   all of the debtor-plaintiff’s damages arose postbankruptcy. Gosney, 3 Wn.

App. 2d at 884. We did observe in Gosney that the defendant’s “failure to

produce any evidence that disclosure would have changed the outcome of the

bankruptcy proceedings precludes application of judicial estoppel.” Gosney, 3

Wn. App. 2d at 884. But properly read in the context of Gosney’s facts, our

statement merely suggests that when a defendant argues that judicial estoppel

bars a debtor-plaintiff’s postbankruptcy claims, which the debtor-plaintiff is not

required to disclose, the defendant must produce some evidence that disclosure

would have changed the outcome of the bankruptcy. That statement does not

apply here because as discussed, McClincy’s claims arose prebankruptcy and he

was required to disclose them.

       The McClincy parties next rely on Haslett v. Planck, 140 Wn. App. 660,

166 P.3d 866 (2007), to argue that a bankruptcy court does not necessarily

accept the debtor’s prior position by confirming a bankruptcy plan. But in Haslett,

the debtors amended their bankruptcy schedules to include the claim at issue,

and their chapter 13 plan was also modified so that any recovery would benefit

creditors. Haslett, 140 Wn. App. at 666-67. Indeed, this fact was “[cjentral” to

the debtors’ argument that the bankruptcy court did not “accept” their prior

position. Haslett, 140 Wn. App. at 666-67. Here, by contrast, there is no


                                         11
 No. 78283-5-1112

 indication that McClincy amended his schedules to include a malpractice claim

against Zubel or that the confirmed plan has been modified to ensure that any

proceeds of the claim will benefit creditors. Haslett is unpersuasive.

       As a final matter, the McClincy parties assert that “[a] bankruptcy court’s

acceptance has been implied on/y when the court granted a no asset

discharge.”3 They cite to two cases, Harris v. Fortin, 183 Wn. App. 522, 333 P.3d

556 (2014), and Cunninçjham, in which we have applied judicial estoppel to bar

undisclosed claims following a no-asset discharge. But that a no-asset discharge

may be sufficient to satisfy the judicial acceptance factor does not mean that a

no-asset discharge is necessary to satisfy it. Indeed, the McClincy parties cite no

authority to support the proposition that a no-asset discharge is a prerequisite to

judicial estoppel. Therefore, their argument fails.

             The Third Arkison Factor: Unfair Advantage or Detriment

       The third and final Arkison factor directs us to consider “whether the party

seeking to assert an inconsistent position would derive an unfair advantage or

impose an unfair detriment on the opposing party if not estopped.” Arkison, 160

Wn.2d at 539 (quoting New Hampshire, 532 U.S. at 750-51).

       Here, McClincy would obtain an unfair advantage if not estopped.

Specifically, despite the fact that McClincy did not comply with his duty to fully

disclose his assets to the bankruptcy court and to his creditors, he obtained

confirmation of a plan that gave him more time to repay his class 8 and class 10

creditors. Therefore, the third Arkison factor is satisfied. Ct Ah Quin, 733 F.3d


      ~ (Emphasis added.)

                                         12
No. 78283-5-1/13

at 271 (explaining that plaintiff-debtors who later pursue undisclosed claims

obtain an unfair advantage by obtaining discharge or plan confirmation without

allowing creditors to learn of pending or soon-to-be-filed lawsuits).

       The McClincy parties argue that “[w]hen the moving party fails to prove

that the debtor plaintiff obtained a benefit from the failure to disclose a claim,

judicial estoppel is improper.” But none of the five cases that the McClincy

parties cite to support this argument are persuasive. Two of them do not address

judicial estoppel in the postbankruptcy context. See Nw. Cascade, Inc. v. Unique

Constr., Inc., 187 Wn. App. 685, 701 n.9, 351 P.3d 172 (2015) (inconsistent

positions presented to two divisions of the Court of Appeals); Mercer Island Sch.

Dist. v. Office of Superintendent of Pub. Instruction, 186 Wn. App. 939, 972 &

n.25, 347 P.3d 924 (2015) (inconsistent positions presented to administrative law

judge, superior court, and this court). And of the remaining three, two are

distinguishable because the claims at issue arose postbankruptcy and the debtor

had no duty to disclose them. ~ Johnson v. Si-Cor Inc., 107 Wn. App. 902,

911-12, 28 P.3d 832 (2001);   ~,    192 Wn. App. at 89, 98. In the final case, Miller

v. Campbell, the bankruptcy court reopened the debtor-plaintiff’s bankruptcy case

and appointed a trustee to administer a previously undisclosed childhood sexual

abuse claim for the benefit of the estate. Miller, 164 Wn.2d at 534-35. Our

Supreme Court held that judicial estoppel would not apply under those

circumstances, i.e., when the bankruptcy trustee has been substituted as the real

party in interest to pursue the claim for the benefit of the bankruptcy estate.

Miller, 164 Wn.2d at 543. But here, there is no indication that McClincy is


                                          13
No. 78283-5-1/14

pursuing his claim other than on his own behalf. Therefore, the McClincy parties’

argument is unpersuasive.

        In short, the trial court did not abuse its discretion by applying judicial

estoppel to bar claims that McClincy did not disclose to the bankruptcy court.

Indeed, McClincy’s arguments largely ignore that judicial estoppel in this context

is the “general rule.”   ~,   192 Wn. App. at 92; see also McFarling v. Evaneski,

141 Wn. App: 400, 403, 171 P.3d 497 (2007) (observing that judicial estoppel “is

particularly well suited to protect the integrity of the bankruptcy process”); ~

Quin, 733 F.3d 271 (characterizing judicial estoppel of previously undisclosed

claims as the “basic default rule” in the bankruptcy context). McClincy’s

arguments also fail to acknowledge that this general rule can be invoked in the

bankruptcy context, “[i]ndependent of unfair advantage from inconsistent

positions,” “out of ‘general consideration of the orderly administration of justice

and regard for the dignity of judicial proceedings;’ or to ‘protect against a litigant

playing fast and loose with the courts.” In re Associated Vintage Grg., Inc., 283

B.R. 549, 566 (B.A.P. 9th Cir. 2002) (quoting Hamilton, 270 F.3d at 782, 785;

Russell v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990)).

       Of course, there are exceptions to the general rule. For example, as

already discussed, Washington courts have declined to apply judicial estoppel to

claims that arise postbankruptcy—as in ~ and Gosney—and when the claim at

issue is being pursued for the benefit of creditors—as in Haslett and Miller.

Washington courts have also declined to apply judicial estoppel when a debtor’s

failure to disclose his claim is the result of mistake or inadvertence. See, ~


                                          14
 No. 78283-5-1115

 Chonah (holding that judicial estoppel would not bar debtor’s claim where

 debtor’s attorney misunderstood the nature of the claim and mischaracterized it

 in the debtor’s schedules, and debtor took immediate action to correct the error

 once known). But none of these exceptions are present in this case. Therefore,

 considering the Arkison factors in light of the need to protect the integrity of the

bankruptcy process, the trial court did not abuse its discretion by applying the

general rule here.

       As a final matter, the McClincy parties contend that Zubel belatedly

argued for the first time in his reply below that (1) he believed, and relied on his

belief, that McClincy would not be pursuing a malpractice claim when he decided

to vote in favor of the proposed plan; (2) McClincy lacked standing to pursue a

malpractice claim; and (3) the trial court lacked jurisdiction to hear McClincy’s

malpractice claim. The McClincy parties are correct that the trial court erred to

the extent it considered these belated arguments, and Zubel does not argue

otherwise. But this court may affirm summary judgment on any basis supported

by the record. Bavand v. OneWest Bank, 196 Wn. App. 813, 825, 385 P.3d 233

(2016). Here, the record—even without considering Zubel’s belated

arguments—supports the trial court’s decision to dismiss McClincy’s claim on

judicial estoppel grounds. Therefore, reversal is not required.

                     Judicial Estoppel of the Company’s Claims

       The McClincy parties argue that even if the trial court correctly applied

judicial estoppel to bar McClincy’s claims against Zubel, it abused its discretion

by applying judicial estoppel to the company’s claims. We agree.


                                          15
No. 78283-5-1/16

       Gosney is instructive. In Gosney, the trial court concluded that a

bankruptcy debtor’s undisclosed claims were judicially estopped, and then

extended judicial estoppel to the claims of Pizza Time (PT), a company in which

the debtor was the sole shareholder. Gosney, 3 Wn. App. 2d at 882-83. We

reversed, characterizing the trial court’s application of judicial estoppel to PT as

“entirely unwarranted.” Gosney, 3 Wn. App. 2d at 885. Specifically, we

observed that PT was “a separate legal entity that never filed a bankruptcy

petition” and that “[t]he trial court made no findings of alter ego, commingling of

assets, or a failure to adhere to corporate formalities, or any other finding that

could support a ruling extending judicial estoppel to PT.” Gosney, 3 Wn. App. 2d

at 882, 885. Rather, the trial court simply noted that the debtor was PT’s sole

shareholder. Gosney, 3 Wn. App. 2d at 883.

       Here, as in Gosney, the company is a separate legal entity, and there is

no indication in the record that it ever filed bankruptcy. And, as in Gosney, the

trial court made no findings of alter ego, commingling of assets, failure to follow

corporate formalities, or any other facts to support a ruling extending judicial

estoppel to the company. Furthermore, Zubel’s argument below was premised

entirely on the fact that McClincy is the company’s sole owner and that therefore

McClincy and the company are “privies.” In other words, as in Gosney, the trial

court erred by extending judicial estoppel to the company based solely on the

fact that McClincy is the company’s sole owner.

      Zubel argues that Gosney is distinguishable because it was decided after

a jury trial, whereas this case was decided on summary judgment. But he does


                                         16
 No. 78283-5-1/17

 not explain why this distinction is relevant—much less why it weighs in his favor.

Therefore, his argument fails.

       Zubel next asserts that we should follow decisions from other jurisdictions

that have applied judicial estoppel both to parties who made inconsistent claims

in prior litigation and to their “privies.” But the cases he cites are not binding in

Washington, and we decline to consider them.

       Zubel also argues that the company should be estopped because by filing

bankruptcy, “McClincy stayed collection efforts against both himself and [the

company].” This argument is raised for the first time on appeal and is

unsupported by citation to any authority. Therefore, we reject it. See Silverhawk,

LLC v. KevBank Nat’l Ass’n, 165 Wn. App. 258, 265, 268 P.3d 958 (2011) (“An

argument neither pleaded nor argued to the trial court cannot be raised for the

first time on appeal.”); Cowiche Canyon Conservancy v. Bosley, 118 Wn.2d 801,

809, 828 P.2d 549 (1992) (Arguments must be supported by authority.).

       Finally, Zubel attempts to “flesh out” his privity argument by pointing out

that (1) McClincy and the company are joint judgment debtors in the underlying

lawsuit, (2) McClincy is employed by the company, and (3) McClincy and the

company are coplaintiffs in this suit. But none of these facts are sufficient to

extend judicial estoppel to the company. First, the record does not reflect the

reasons that McClincy and the company are joint judgment debtors—much less

whether those reasons support disregarding the company’s separate legal entity

status. Second, Zubel cites no authority supporting his argument that judicial

estoppel should extend to an employer based on the bankruptcy-related


                                          17
No. 78283-5-1/18

omissions of its employee. He cites Ensley v. Pitcher, but that case is

distinguishable because it turned on the fact that an employer may be vicariously

liable for an employee’s torts. 152 Wn. App. 891, 903, 222 P.3d 99 (2009). And

finally, the fact that McClincy and the company are coplaintiffs in this suit is

unpersuasive because the company was a distinct client of Zubel’s and will need

to prove its own malpractice claims against Zubel regardless of its relationship to

McClincy.   ~ RPC 1.13(a) (lawyer retained by an organization represents the
organization); RPC 1.13(g) (lawyer representing an organization may also

represent an individual constituent subject to RPC 1 .7 regarding conflicts of

interest). Therefore, Zubel’s additional privity-based arguments fail.

                                     Res Judicata

       The McClincy parties argue that the trial court erred to the extent that it

applied res judicata to dismiss their claims. Because we conclude that

McClincy’s claims were properly dismissed on judicial estoppel grounds, we do

not decide whether his claims were also properly dismissed on res judicata

grounds. See Wash. State Farm Bureau Fed’n v. Greqoire, 162 Wn.2d 284, 307,

174 P.3d 1142 (2007) (“‘Principles of judicial restraint dictate that if resolution of

an issue effectively disposes of a case, we should resolve the case on that basis

without reaching any other issues that might be presented.” (internal quotation

marks omitted) (quoting Hayden v. Mut. of Enumclaw Ins. Co., 141 Wn.2d 55, 68,

I P.3d 1167 (2000))). But assuming without deciding that McClincy’s claims are

barred by res judicata, application of res judicata to the company’s claims would




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be error for the same reasons that application of judicial estoppel to the company

was error.

                         Admission of Robinson Declaration

       The McClincy parties argue that the trial court committed reversible error

by considering the Robinson declaration. We disagree.

       In his declaration, Robinson explains how the bankruptcy code applies to

McClincy’s bankruptcy case and opines that (1) McClincy lacks standing to bring

claims against Zubel and (2) McClincy could not have obtained plan confirmation

without Zubel’s vote. In short, the Robinson declaration contains a number of

legal conclusions regarding the application of bankruptcy law to McClincy’s

bankruptcy case. Ordinarily, we would presume that the trial court ignored these

improper conclusions on summary judgment. See Orion Corp. v. State, 103

Wn.2d 441, 462, 693 P.2d 1369 (1985) (on summary judgment, court is

presumed to ignore improper legal conclusions contained in expert affidavit); ~

also Cano-Garcia v. Kinci County, 168 Wn. App. 223, 249, 277 P.3d 34 (2012)

(“[Tjhat inadmissible evidence was presented to the trial court, without more,

does not require reversal.”).

       Here, however, the trial court stated that in its ruling on reconsideration, it

disregarded only Robinson’s opinion that McClincy lacked standing to bring

claims against Zubel. This statement suggests that the trial court did not ignore

the remainder of the improper legal conclusions in the Robinson declaration. In

other words, we cannot presume the trial court ignored the legal conclusions in

the Robinson declaration.


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        Nevertheless, reversal is not required. As discussed, this court can affirm

summary judgment on any basis supported by the record. Bavand, 196 Wn.

App. at 825. Here, even without considering any of the legal conclusions in the

Robinson declaration, the record supports the trial court’s application of judicial

estoppel to McClincy’s claims. Therefore, even assuming the trial court erred by

considering the Robinson declaration, that error does not require reversal.

       The McClincy parties chiefly rely on State v. Clausinci, 147 Wn.2d 620, 56

P.3d 550 (2002), to argue that the trial court’s admission of the Robinson

declaration requires reversal. But in Clausing, the legal opinion at issue was

admitted during a jury trial. Clausing, 147 Wn.2d at 628. Here, the Robinson

declaration was admitted on summary judgment where, as discussed, this court

may affirm on any basis supported by the record. Therefore, Claus inç~ is

distinguishable and does not control.

                                      Sanctions

       The McClincy parties argue that the trial court erred by declining to impose

CR 11 sanctions on Zubel’s counsel. We disagree.

       CR 11(a) provides that by signing a motion, an attorney certifies that to the

best of the attorney’s knowledge, information, and belief after reasonable inquiry,

the motion (1) “is well grounded in fact,” (2) “is warranted by existing law or a

good faith argument for the extension, modification, or reversal of existing law or

the establishment of new law,” (3) “is not interposed for any improper purpose,”

and (4) contains only denials of factual contentions that “are warranted on the

evidence.” If a motion is signed in violation of CR 11(a), the court may impose


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No. 78283-5-1/21

sanctions on the person who signed it. CR 11(a). This court reviews a trial

court’s decision to deny sanctions for an abuse of discretion. Wash. State

Physicians Ins. Exch. & Ass’n v. Fisons Cow., 122 Wn.2d 299, 338, 858 P.2d

1054 (1993).

       Here, the McClincy parties argued below that sanctions were warranted

because Zubel’s motion for summary judgment was a “motion with no evidence

or authority.” On appeal, the McClincy parties argue, more specifically, “that

Zubel’s motion was frivolous because he presented no evidence that the

bankruptcy court accepted McClincy’s statement or that McClincy obtained an

unfair advantage.” But this argument is unpersuasive because Zubel presented

authority and argument below that judicial estoppel of undisclosed claims is the

default rule in the bankruptcy context and that the default rule applies here.

Therefore, the trial court did not abuse its discretion by denying the McClincy

parties’ request for sanctions.

       The McClincy parties next assert that sanctions are warranted because in

Gosney, this court “called the argument to extend judicial estoppel to a plaintiff’s

wholly owned corporation ‘entirely unwarranted.” But because Gosney was not

decided until after the McClincy parties’ claims were dismissed, this argument is

unpersuasive.

       Finally, the McClincy parties assert that at oral argument below, they cited

as additional bases for sanctions (1) Zubel’s submission of the Robinson

declaration and (2) Zubel’s new arguments on reply. But because the McClincy

parties did not provide a verbatim report of proceedings, this assertion is


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No. 78283-5-1/22

unsupported by any citation to the record. Therefore, we decline to consider it.

See Christensen v. Munsen, 123 Wn.2d 234, 247, 867 P.2d 626 (1994)

(declining to consider factual assertion not supported by citations to the record).

                            Motion for Reconsideration

       As a final matter, the McClincy parties argue that the trial court erred by

denying their motion for reconsideration. “Motions for reconsideration are

addressed to the sound discretion of the trial court and a reviewing court will not

reverse a trial court’s ruling absent a showing of manifest abuse of discretion.”

Wilcox v. Lexington Eye Inst., 130 Wn. App. 234, 241, 122 P.3d 729 (2005).

Here, for reasons already discussed, the trial court did not abuse its discretion by

declining to reconsider its dismissal of McClincy’s claims. And because we

reverse the trial court’s dismissal of the company’s claims, we need not consider

whether the trial court erred by not reconsidering that dismissal. ~ Wash.

State Farm Bureau Fed’n, 162 Wn.2d at 307 (declining to address additional

issues on appeal when resolution of one issue effectively disposed of case).

      We affirm the dismissal of McClincy’s claims, reverse the dismissal of the

company’s claims, and remand for further proceedings.




WE CONCUR:




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