                                                                               FILED
                                                                   United States Court of Appeals
                                      PUBLISH                              Tenth Circuit

                       UNITED STATES COURT OF APPEALS                    August 20, 2013

                                                                       Elisabeth A. Shumaker
                                  TENTH CIRCUIT                            Clerk of Court



 RICHARD QUEEN, SUSAN QUEEN,
 husband and wife,

       Plaintiffs-Appellants-
       Cross/Appellees,
                                                     Nos. 11-8090 and 11-8098
 v.

 TA OPERATING, LLC, a Delaware
 limited liability company,

       Defendant-Appellee-
       Cross/Appellant.



                    Appeal from the United States District Court
                            for the District of Wyoming
                         (D.C. No. 1:10-CV-00170-NDF)


Keith J. Dodson, Williams, Porter, Day, & Neville. P.C. (Stephenson D. Emery, Esq.,
with him on the brief), Casper, Wyoming, for Plaintiffs-Appellants-Cross/Appellees.

Gary R. Scott of Hirst Applegate, LLP (Melissa R. Skorcz, with him on the brief),
Cheyenne, Wyoming, for Defendant-Appellee-Cross/Appellant.


Before TYMKOVICH, EBEL, and O’BRIEN, Circuit Judges.


EBEL, Circuit Judge.
                                     INTRODUCTION

       Plaintiffs Richard and Susan Queen (“Queens”) sued Defendant TA Operating,

LLC (“TA”) in federal district court in Wyoming (“District Court Action”). They

brought various claims against TA based on an injury Mr. Queen sustained when he

slipped and fell in a parking lot operated by TA. During the course of the District Court

Action, the Queens filed for Chapter 7 bankruptcy in California (“Bankruptcy Action”),

but did not disclose the District Court Action in their bankruptcy filings. When TA

discovered this failure, TA brought it to the attention of the trustee for the Bankruptcy

Action (“Trustee”). The Queens subsequently amended their bankruptcy filings to

include the District Court Action, but they provided an estimate of its value that was far

below what they had indicated in the proceedings before the Wyoming district court, and

they claimed that the lawsuit was entirely exempt. Subsequently, the Queens were

granted a no-asset discharge in bankruptcy.

       In the District Court Action, TA filed a motion for summary judgment on the

grounds that the doctrine of judicial estoppel should be applied to dismiss the District

Court Action, because the Queens had not disclosed the lawsuit in their bankruptcy

proceedings. The district court granted summary judgment in favor of TA on this basis,

dismissing the Queens’ claims with prejudice. The Queens appealed the district court’s

ruling, arguing that the district court erred in applying the doctrine of judicial estoppel.

       Having jurisdiction under 28 U.S.C. § 1291, we affirm the district court’s ruling.

Because the Queens adopted an inconsistent position that was accepted by the bankruptcy
                                               2
court, and because the Queens would receive an unfair advantage if not estopped from

pursuing the District Court Action, we hold that it was not an abuse of discretion for the

court to apply the doctrine of judicial estoppel and grant summary judgment in favor of

TA. We also reject the Queens’ arguments of mistake and inadvertence, because the

record shows that the Queens had knowledge of the claim and a motive to conceal it in

their bankruptcy proceedings. Because we decide this appeal on the basis of judicial

estoppel, we dismiss as moot TA’s cross-appeal.1

                                    BACKGROUND

    I.      Factual Background

         On February 27, 2007, Plaintiffs Richard and Susan Queen were working as a

semi-truck driving team. They parked in a parking lot at the Rawlings Travel Center in

Wyoming, which was operated by TA. That night, Mr. Queen slipped and fell while

walking in the parking lot. As a result, he broke his ankle and had to be taken by

ambulance to the hospital.




1
  Before TA filed its motion for summary judgment on the basis of judicial estoppel, it
filed a motion for summary judgment on the basis that the Queens had failed to establish
the elements of negligence. The district court denied this earlier motion. In its cross-
appeal, TA attempts to appeal the denial of this first summary judgment motion, arguing
that if we do not uphold the district court’s grant of summary judgment on the basis of
judicial estoppel, we should uphold the grant of summary judgment on the basis that the
Queens failed to establish an element of negligence. We do not consider this issue.


                                             3
   II.      Procedural Background

         A. The Wyoming Lawsuit

         The Queens filed a lawsuit against TA in federal district court for the District of

Wyoming. In this District Court Action, among other things, the Queens argued that Mr.

Queen had been injured as a result of TA’s negligence in maintaining the parking lot.

The Queens requested an award for damages that included: (1) Mr. Queen’s past and

future medical expenses; (2) Mr. Queen’s lost past and future wages; (3) Mr. Queen’s

pain and suffering; (4) Mr. Queen’s loss of enjoyment of life, (5) Mrs. Queen’s loss of

consortium, and (6) an award of punitive damages.

         B. The Bankruptcy Action

         While the District Court Action against TA was proceeding in Wyoming, the

Queens filed for Chapter 7 bankruptcy in the United States Bankruptcy Court for the

Eastern District of California. Although the Queens claim that they disclosed the District

Court Action to their bankruptcy attorney, it was not listed in their bankruptcy filings.

Specifically, the Queens did not list the lawsuit in their Schedule B – Personal Property,

even though Item 21 of the schedule specifically asked the Queens to identify “[o]ther

contingent and unliquidated claims of every nature, including tax refunds, counterclaims

of the debtor, and right of setoff claims,” and “[g]ive an estimated value of each.” Aplt.

App. at 1112. The Queens also did not list the District Court Action as an exempt asset

on their Schedule C – Property Claimed as Exempt. Moreover, in response to the item on

the Statement of Financial Affairs requiring the Queens to “[l]ist all suits and
                                               4
administrative proceedings to which the debtor is or was a party within one year

immediately preceding the filing of this bankruptcy case,” the Queens marked, “None.”

Aplt. App. at 1146.

       In signing their bankruptcy filings, the Queens declared under penalty of perjury

that they had read those documents, and that the information in the filings was true to the

best of their knowledge, information, and belief. Further, at a standard creditors’

meeting, Mr. Queen completed a questionnaire (“Debtor Questionnaire”), in which he

again affirmed that he had signed the bankruptcy petition after reviewing it, that the

accompanying Schedules and Statement of Financial Affairs were complete and accurate,

and that he did not need to make any corrections or changes.

       One of the questions on the Debtor Questionnaire asked the Queens, “Are you

suing anyone?” Aplt. App. at 1153. Mr. Queen responded, “Insurance company suing to

get money refunded for my injury.” Id. No questions were asked at this meeting about

the lawsuit that the Queens mentioned on the Debtor Questionnaire, and the Queens

provided no other information. After the meeting, the Trustee determined that there were

no assets available from the estate to distribute to the creditors.

       C. The Queens’ Amended Bankruptcy Filings & Discharge in Bankruptcy

       Subsequently, TA became aware of the Bankruptcy Action. TA emailed the

Trustee for the Bankruptcy Action, informing the Trustee that the Queens had not

disclosed the District Court Action in their bankruptcy filings. After some

communication between TA and the Trustee regarding the District Court Action, the
                                               5
Trustee emailed the Queens and TA, pointing to the question and response in the Debtor

Questionnaire, and stating that he had no other notes on this. The remainder of the

Trustee’s email states: “Given this quasi-disclosure, I am inclined not to take any action

in this matter until debtors have amended their schedules and claimed the lawsuit as

exempt, assuming they wish to. I will then decide if I am going to object to the

exemption.” Aplt. App. at 946.

       After this email, the Queens filed amended Schedules B and C and an amended

Statement of Financial Affairs. In the Amended Schedule B, they listed a “Personal

Injury Claim” and placed a total value on that claim of $400,000. On Amended Schedule

C, the Queens claimed the District Court Action as entirely exempt under three

provisions of the California Code of Civil Procedure. On the Statement of Financial

Affairs, the Queens also listed the District Court Action. Under the heading “Nature of

the Proceeding,” they stated “Law Suit, Personal Injury Claim, Negligence,” and they

indicated that the case was in the discovery stage. Following the amended filings, neither

the Trustee nor any creditors filed an objection to the claimed exemptions. Subsequently,

the Trustee again issued a no-asset determination, and the Queens were granted a

discharge in bankruptcy.

       D. TA’s Motion for Summary Judgment in the District Court Action

       After the Queens amended their filings and obtained a discharge in bankruptcy,

TA filed a motion for summary judgment in the District Court Action, arguing that the

case should be dismissed on the grounds of judicial estoppel because the Queens had not
                                             6
disclosed that lawsuit in their bankruptcy filings. The district court agreed, and it

therefore granted summary judgment in favor of TA, dismissing the Queens’ claims with

prejudice.

       The Queens timely appealed the district court’s decision, arguing that the district

court improperly applied the doctrine of judicial estoppel. They contend the bankruptcy

court did not accept an inconsistent position, because they had amended their bankruptcy

filings to disclose the lawsuit prior to their discharge in bankruptcy. They further claim

that they did not gain an unfair advantage by failing to disclose or only partially

disclosing the lawsuit because the entire lawsuit would have been exempt under

California bankruptcy law. They also maintain that any failure to disclose should be

excused because of mistake or inadvertence, because it was not done in bad faith and they

had no motive to conceal the lawsuit. TA counters by arguing that the elements of

judicial estoppel are met, and that the Court should reject the Queens’ arguments of

inadvertence and mistake.

                               STANDARD OF REVIEW

       In reviewing the district court’s decision to grant summary judgment on the basis

of judicial estoppel, “we view the facts and all reasonable inferences to be drawn

therefrom in a light most favorable to the nonmoving party.” Eastman v. Union Pac. R.

Co., 493 F.3d 1151, 1155–56 (10th Cir. 2007). “Assuming the district court has properly

characterized the facts in light of the applicable standard, we then review its decision to

judicially estop [the Queens] from pursuing [their] personal injury claims only for an
                                              7
abuse of discretion.” Id. at 1156. And “[a] court abuses its discretion only when it makes

a clear error of judgment, exceeds the bounds of permissible choice, or when its decision

is arbitrary, capricious or whimsical, or results in a manifestly unreasonable judgment.”

Id. (internal quotations marks omitted). In this case, the parties do not raise a factual

dispute. Thus, we only consider whether the district court’s application of the doctrine of

judicial estoppel to the Queens’ claims was an abuse of discretion.

                                        DISCUSSION

       The purpose of judicial estoppel “is to protect the integrity of the judicial process

by prohibiting parties from deliberately changing positions according to the exigencies of

the moment . . . . [and] to prevent improper use of judicial machinery.” New Hampshire

v. Maine, 532 U.S. 742, 749–50 (2001) (internal quotation marks omitted). Thus,

“judicial estoppel is an equitable doctrine invoked by a court at its discretion.” Id. at 750

(internal quotation marks omitted). Three factors “typically inform the decision whether

to apply the doctrine [of judicial estoppel] in a particular case,” id.; these factors are:

       First, a party’s subsequent position must be clearly inconsistent with its
       former position. Next, a court should inquire whether the suspect party
       succeeded in persuading a court to accept that party’s former position, so
       that judicial acceptance of an inconsistent position in a later proceeding
       would create the perception that either the first or the second court was
       misled[.] Finally, the court should inquire whether the party seeking to
       assert an inconsistent position would gain an unfair advantage in the
       litigation if not estopped.

Eastman, 493 F.3d at 1156 (alteration in original) (citations omitted) (internal quotation

marks omitted). Nonetheless, these three factors are not “an exhaustive formula for

                                               8
determining the applicability of judicial estoppel.” New Hampshire, 532 U.S. at 751.

Indeed, “[a]dditional considerations may inform the doctrine’s application in specific

factual contexts.” Id. Specifically, it “may be appropriate to resist application of judicial

estoppel when a party’s prior position was based on inadvertence or mistake.” Id. at 753.

        We will first discuss whether the three judicial-estoppel factors quoted above

justify applying the doctrine of judicial estoppel against the Queens. We will then

consider the Queens’ arguments of inadvertence or mistake.

   I.      The three judicial-estoppel factors support the district court’s decision to
           apply the doctrine against the Queens.

        A. The Queens adopted clearly inconsistent positions before the district court
           and the bankruptcy court.

        The district court concluded that the Queens had adopted clearly inconsistent

positions regarding the District Court Action before the district court and the bankruptcy

court for two primary reasons. First, the Queens initially failed to disclose the District

Court Action in their bankruptcy filings. Second, when they did amend their filings, they

continued to represent an inconsistent position by listing the lawsuit’s value as far less

than they had estimated it in the district court proceedings. We agree.

        In order for judicial estoppel to be appropriate, “a party’s subsequent position

must be clearly inconsistent with its former position.” Eastman, 493 F.3d at 1156

(internal quotation marks omitted). In Eastman, a case with somewhat similar facts, this

Court upheld a district court’s grant of summary judgment in a plaintiff’s personal injury

lawsuit on the basis of judicial estoppel when “[n]owhere on the petition, schedules, or
                                              9
statements [the plaintiff] filed with the bankruptcy court did he disclose his pending

personal injury action.” Id. at 1158. Indeed, on the plaintiff’s Statement of Financial

Affairs, he listed two collection suits, but did not list his personal injury lawsuit. Id. at

1153. And “when the trustee specifically asked [the plaintiff] whether he had a personal

injury suit pending, he unequivocally responded ‘no.’” Id.

       Like the plaintiff in Eastman, in their initial filings, the Queens did not disclose

that they were engaged in the personal injury lawsuit, even though the documents

required disclosure and the Queens affirmed the truthfulness of the filings under penalty

of perjury. In fact, similar to the plaintiff in Eastman, the Queens did not reference the

lawsuit on their Schedule B and Schedule C. Moreover, they affirmatively represented

that they were not engaged in such litigation—the Queens responded, “None,” to the

question on the Statement of Financial Affairs requiring the Queens to “[l]ist all suits and

administrative proceedings to which the debtor is or was a party within one year

immediately preceding filing of this the bankruptcy case.” Aplt. App. at 1146.

       Although the Queens did refer to a lawsuit on the Debtor Questionnaire at the

creditors’ meeting, they did not accurately describe the lawsuit on the Questionnaire.

When asked, “Are you suing anyone?,” Mr. Queen responded by writing, “Insurance

company suing to get money refunded for my injury.” Aplt. App. at 1153. This response

did not disclose that the Queens were the ones that had filed the lawsuit against TA and

were seeking to recover damages on their own behalf. Thus, rather than remedying the

failure to disclose on the bankruptcy filings, the misleading response on the Debtor
                                               10
Questionnaire only further demonstrates the inconsistent position that the Queens took

before the bankruptcy court, as that response suggested the lawsuit would benefit the

insurance company, but not them.

       Indeed, in Eastman, even though the plaintiff later disclosed in a conversation with

the trustee that he had been in an accident, his attorney’s conversation with the trustee

indicated that the plaintiff’s claim was like a worker’s compensation claim for relatively

minor medical damages, rather than a personal injury lawsuit against his employer and

several other defendants. Id. at 1153-54, 1158-59. We concluded in Eastman that “the

trustee’s subsequent conversation with [the plaintiff’s] attorney only served to diffuse the

situation and divert attention from the extent of [the plaintiff’s] pending claims.” Id. at

1158. As with Eastman, rather than rectifying the situation, the Queens’ misleading

statement in the Debtor Questionnaire only further misrepresented the District Court

Action.

       Finally, when the Queens amended their bankruptcy filings, they continued to take

an inconsistent position regarding the personal injury lawsuit. On the Statement of

Financial Affairs, the Queens identified the personal injury lawsuit, indicating that they

were plaintiffs suing TA in the federal court in Wyoming, and that the case was in the

discovery stage. And on Amended Schedule B, the Queens listed a “Personal Injury

Claim,” but placed a total value on that claim of $400,000, which, as discussed below,

was far less than the amount they represented in the district court proceedings.

Moreover, on Amended Schedule C, the Queens claimed the $400,000 lawsuit as entirely
                                             11
exempt—specifically, they claimed the following amounts were exempt pursuant to three

provisions of the California Code of Civil Procedure:2

           $364,875 pursuant to Cal. Civ. Proc. Code § 703.140(b)(11)(E) (2011).
               o This provision provides an exemption for “[a] payment in
                  compensation of loss of future earnings of the debtor . . ., to the
                  extent reasonably necessary for the support of the debtor and any
                  dependent of the debtor.”

           $22,075 pursuant to Cal. Civ. Proc. Code § 703.140(b)(11)(D) (2011).
               o This provision provides an exemption for “[a] payment, not to
                  exceed seventeen thousand four hundred twenty-five dollars
                  ($17,425), on account of personal bodily injury, not including pain
                  and suffering or compensation for actual pecuniary loss, of the
                  debtor.”3

           $13,050 pursuant to Cal. Civ. Proc. Code § 703.140(b)(5) (2011).
               o This provision provides an exemption for “[t]he debtor’s aggregate
                  interest, not to exceed in value nine hundred twenty-five dollars
                  ($925) plus any unused amount of the exemption . . . in any
                  property.”

       The Queens’ representations to the bankruptcy court regarding the value of the

lawsuit and the exemptions are not consistent with what the Queens represented in the

proceedings before the district court. The Queens claimed as exempt $364,875 for

“compensation of loss of future earnings of the debtor . . ., to the extent reasonably

necessary for the support of the debtor,” Cal. Civ. Proc. Code § 703.140(b)(11)(E), but in

2
  Since the Queens submitted their amended bankruptcy filings, these provisions have
been amended by the California legislature. Throughout this opinion, we will refer to the
statutory provisions in effect when the Queens submitted their filings.
3
  It is not clear why the Queens claimed more than this exemption allows. In any case,
that matter does not affect the resolution of the issues presented to the Court on appeal.


                                             12
the district court, the Queens estimated in a response to an interrogatory that their lost

income was around $1,500,000 in gross earnings. Moreover, in the district court, the

Queens sought lost past and future wages—Mr. Queen indicated that his lost gross wages

from 2008 were $150,000—but by its terms, § 703.140(b)(11)(E) only provides an

exemption for “future earnings.” Likewise, § 703.140(b)(11)(E) only provides an

exemption for earnings “to the extent reasonably necessary for the support of the debtor,”

but the Queens’ claim for lost wages in the district court is not limited to that necessary

for their future support.

       The Queens also claimed as exempt $22,075 for “[a] payment . . . on account of

personal bodily injury, not including pain and suffering or compensation for actual

pecuniary loss, of the debtor,” Cal. Civ. Proc. Code § 703.140(b)(11)(D), but in the

district court proceeding, the Queens’ initial disclosures reported that Mr. Queen’s past

medical bills totaled $167,842.29. In addition, the Queens also sought damages relating

to Mr. Queen’s future medical expenses. Further, they claimed damages relating to Mr.

Queens’ pain and suffering, which are specifically excluded from this exemption.

       The Queens’ one remaining exemption was for the amount of $13,050, claimed

pursuant to Cal. Civ. Proc. Code § 703.140(b)(5). But the Queens’ representations in the

district court proceedings demonstrate that they expected the lawsuit to exceed this

amount. Indeed, the balance of Mr. Queens’ medical bills beyond that claimed as exempt

under Cal. Civ. Proc. Code § 703.140(b)(11)(D) still exceeded the exemption claimed

under Cal. Civ. Proc. Code § 703.140(b)(5) by well over $100,000. Similarly, Mr. Queen
                                              13
claimed damages for lost past wages, and his representations before the district court

indicate that this claim has a $150,000 value. Thus, the Queens remaining claims already

exceeded the claimed exemption of $13,050 by well over $250,000. But beyond this, the

Queens brought claims for additional damages in the district court—Mr. Queen’s claim

for pain and suffering, his claim for loss of enjoyment of life, Mrs. Queen’s claim for loss

of consortium, and their claim for punitive damages.

       The Queens contend that the $400,000 value “is simply an estimated value of the

Queens’ claims against [TA],” and they argue that even if they sought a greater amount in

the district court, the amount they may actually recover could be much lower than what

they were seeking. Aplt. Br. at 37. Thus, they assert that they “should not be punished

because they placed a realistic recovery value on their lawsuit instead of claiming

multiple millions of dollars.” Id.

       But the Queens miss the point—in determining whether to apply the doctrine of

judicial estoppel, the court must consider whether “a party’s subsequent position . . . [is]

clearly inconsistent with its former position.” Eastman, 493 F.3d at 1156 (internal

quotation marks omitted). By providing a significantly lower estimated value to the

bankruptcy court that they asserted was entirely exempt, while their position in the

district court placed a much higher value on the lawsuit and indicated that it would not be




                                             14
entirely exempt, the Queens took a clearly inconsistent position in the bankruptcy court.4

Thus, the first factor to consider in determining whether to apply judicial estoppel is met.

       B. The Queens succeeded in persuading the bankruptcy court to adopt their
          clearly inconsistent position.

       As to this factor, the district court determined that the Queens “clearly persuaded

the bankruptcy court to accept their misrepresentation that they were not involved in any

lawsuits because the Court later issued a finding of no assets available for distribution”

and “[t]he [bankruptcy] Court accepted this finding and [the Queens] received a no asset

discharge.” Aplt. App. at 1285. The Queens argue that they did not persuade the

bankruptcy court to adopt a clearly inconsistent position, because they amended their

filings before receiving a discharge. They also point out that they were allowed to amend

their filings as a matter of course.5 After they amended their filings, the Trustee and

creditors did not object to the claimed exemption, the Trustee again issued a “no asset”

determination, and the bankruptcy court accepted this determination and granted a

4
 If the Queens had made consistent representations in the bankruptcy court regarding the
value of the District Court Action, there may have been objections to their claimed
exemptions, or the bankruptcy court may have stayed proceedings until the District Court
Action was resolved.
5
 Indeed, the Federal Rules of Bankruptcy Procedure provide “[a] voluntary petition, list,
schedule, or statement may be amended by the debtor as a matter of course at any time
before the case is closed.” Fed. R. Bankr. P. 1009(a); accord In re Arnold, 252 B.R. 778,
784 (B.A.P. 9th Cir. 2000) (“Amendments are and should be liberally allowed at any time
absent a showing of bad faith or prejudice to third parties.” (emphasis omitted) (internal
quotation marks omitted) (superseded by statute on other grounds as stated in In re
Salgado-Nava, 473 B.R. 911, 916 (B.A.P. 9th Cir. 2012))).


                                             15
discharge to the Queens. Because the bankruptcy court accepted the claimed exemption

and granted the Queens a discharge in bankruptcy after they had amended their filings to

disclose the lawsuit, the Queens contend that the district court did not accept a clearly

inconsistent position.

       In considering this second factor, “a court should inquire whether the suspect party

succeeded in persuading a court to accept that party’s former position, so that judicial

acceptance of an inconsistent position in a later proceeding would create the perception

that either the first or the second court was misled.” Eastman, 493 F.3d at 1156

(alteration omitted). In making this determination,

       [o]ur concern is not so much with whether [the Queens] acted with some
       nefarious motive as it is with whether [their] actions led the bankruptcy
       court to accept [their] position, so that judicial acceptance of an inconsistent
       position in a later proceeding would introduce the risk of inconsistent court
       determinations and thus pose a threat to judicial integrity.

Paup v. Gear Prods., Inc., 327 F. App’x 100, 107 (10th Cir. 2009) (unpublished) (ellipsis

and brackets omitted) (internal quotation marks omitted).

       We agree with the Queens that the proper inquiry under this factor involves the

position they took in their amended filings, which is the position the bankruptcy court

ultimately accepted. In other words, because they received a discharge in bankruptcy

based on their amended filings, the relevant question is whether the Queens persuaded the

bankruptcy court to adopt an inconsistent position based on their representations in the

amended filings. Thus, the district court was incorrect in focusing on whether the district

court accepted an inconsistent position based on the original filings. Nonetheless, in
                                             16
examining the Queens’ amended filings, it is still apparent that the bankruptcy court

accepted a position that was inconsistent with the position adopted by the Queens in the

District Court Action. This creates a perception that the bankruptcy court was misled.

See Eastman, 493 F.3d at 1156.

       In an unpublished decision with similar facts, we reached the same conclusion. In

Paup, we considered whether a plaintiff should be judicially estopped from pursuing a

claim for age discrimination in violation of the Age Discrimination in Employment Act

(“ADEA”). 327 F. App’x at 102. The plaintiff did not disclose the lawsuit as an asset in

her bankruptcy proceedings, but after the defendant in the ADEA lawsuit moved for

summary judgment on the basis of judicial estoppel, she “reopened her bankruptcy

proceedings, disclosed her ADEA lawsuit, and successfully moved to have a bankruptcy

trustee substituted for her in th[e] suit.” Id. at 105.6

       We explained that “[b]ased on [the plaintiff’s] incomplete bankruptcy disclosures,

the trustee appointed to administer [the plaintiff’s] estate concluded that she did not have

any assets, a position the bankruptcy court subsequently adopted when it granted [the


6
 Similarly, in Eastman, after the plaintiff’s personal injury attorney informed the
bankruptcy trustee of the lawsuit, the trustee moved to reopen the bankruptcy
proceedings and include the pending lawsuit as an asset of the estate. 493 F.3d at 1154.
But we held “that [the plaintiff’s] bankruptcy was reopened and his creditors were made
whole once his omission became known is inconsequential,” and we explained that
“[a]llowing [the plaintiff] to back up and benefit from the reopening of his bankruptcy
only after his omission had been exposed would suggest[] that a debtor should consider
disclosing potential assets only if he is caught concealing them.” Id. at 1160.


                                               17
Plaintiff] a ‘no asset’ discharge.” Paup, 327 F. App’x at 107. The “discharge relieved

[the plaintiff] of her debts without her having to reimburse her creditors,” but the plaintiff

then “claimed an asset for herself that predated her bankruptcy—she, rather than her

creditors, sought the full benefit of this pre-petition asset.” Id. Accordingly, we held that

“such a result gives rise to ‘the obvious perception’ that the bankruptcy court was

misled.” Id. (quoting Eastman, 493 F.3d at 1159). Finally, we explained that “[t]his

perception is made even more apparent because [the plaintiff] disclosed her ADEA claim

to her creditors and the bankruptcy court only when her failure to do so was revealed by

[the defendant’s] summary judgment motion.” Id.

       Unlike the plaintiffs in Paup and Eastman, the Queens did not receive a discharge

before amending their filings. But like the plaintiffs in Paup and Eastman, the Queens

did not disclose the lawsuit to the bankruptcy court until after TA had discovered their

failure to disclose the District Court Action and reported it to the Trustee. And as

discussed previously, their amended filings did not fully disclose the District Court

Action—indeed, the Queens took a materially inconsistent position before the bankruptcy

court regarding the District Court Action even in their amended filings. In granting the

Queens a discharge in bankruptcy under these circumstances, the bankruptcy court

accepted the Queens inconsistent position, which creates a perception that the bankruptcy

court was misled. See Eastman, 493 F.3d at 1156.

       C. The Queens would gain an unfair advantage if not estopped from
          pursuing the District Court Action.

                                             18
       The district court concluded that the Queens “derived a substantial unfair

advantage because the bankruptcy trustee relied on [their] misrepresentations and

determined that there were no assets available for distribution to the creditors.” Aplt.

App. at 1288. We agree.

       “[A] court should inquire whether the party seeking to assert an inconsistent

position would gain an unfair advantage in the litigation if not estopped.” Eastman, 493

F.3d at 1156. In Eastman, we pointed out that “[a] debtor, once he files for bankruptcy,

disrupts the flow of commerce and promptly benefits from an automatic stay,” and “then

receives the ultimate benefit of bankruptcy when he receives a discharge.” Id. at 1159.

Morever, “[a] chapter 7 discharge . . . relieves the debtor of any obligation to pay

outstanding debts.” Id. Accordingly, in Eastman, we held that the plaintiff “received the

benefit of a discharge without ever having disclosed his pending personal injury action

against Defendants, thus providing him an unfair advantage over his creditors.” Id. at

1159-60.

       In this case, the Queens were granted a no-asset discharge on the basis of their

amended filings, which provided a greatly decreased estimate of the value of the lawsuit

and claimed the entire lawsuit as exempt under provisions that do not extend to the full

value the Queens’ claims. Thus, if not estopped, the Queens would gain an unfair

advantage by being allowed to proceed with the District Court Action, because they could

pursue the litigation without the risk that any of the award would go to their creditors.


                                             19
       Nonetheless, the Queens argue that they would not gain any unfair advantage,

because they claim that the entire lawsuit against TA would have been exempt under

California Code of Civil Procedure § 704.140(a). This provision states that “[e]xcept as

provided in Article 5 . . . of Chapter 6, a cause of action for personal injury is exempt

without making a claim.” But this provision is followed by California Code of Civil

Procedure § 704.140(b), which states that, with certain exceptions, “an award of damages

or a settlement arising out of personal injury is exempt to the extent necessary for the

support of the judgment debtor and the spouse and dependents of the judgment debtor.”

Cal. Civ. Proc. Code § 704.140(b) (emphasis added).

       In In re Gose, the U.S. Bankruptcy Appellate Panel of the Ninth Circuit noted that

§ 704.140(a) “negates (with certain exceptions) the need to make a formal claim to

exempt a cause of action for personal injury,” but “does not state. . . that such a cause of

action is exempt in its entirety.” 308 B.R. 41, 46 (B.A.P. 9th Cir. 2004) (emphasis

added). After considering the legislative history of Cal. Civ. Proc. Code § 704.140(a)

and other caselaw interpreting the provision, the court concluded, “[W]e believe that the

California Legislature did not intend CCP § 704.140(a) to exempt personal injury claims

in their entirety, without reference to necessity for support.” Id. at 48. Instead,

“subsection (b) defines the scope of exemption identified in subsection (a). . . . both

provisions govern the exemption in the personal injury claim.” Id. (emphasis omitted).

       As explained in In re Gose, California Code of Civil Procedure § 704.140(a) does

not establish that the District Court Action would have been exempt in its entirety.
                                             20
Instead, an award would only have been exempt to the extent necessary for the Queens’

support. And the Queens’ claims for damages go far behind what is necessary for their

support. Thus, if the Queens had provided the bankruptcy court with an accurate

disclosure of their claims against TA and the estimated value of those claims, they may

not have received a no-asset discharge. As is, the Queens received a discharge and their

creditors received nothing, but the Queens now stand to gain an award in the District

Court Action that would not have been exempt from their creditors had proper

disclosures been made to the bankruptcy court. Thus, the Queens would gain an unfair

advantage if they were not estopped from pursuing the District Court Action.

         Under our deferential standard of review, we conclude that it was not arbitrary,

capricious, or manifestly unreasonable, see Eastman, 493 F.3d at 1156, for the district

court to hold that the Queens adopted an inconsistent position, which was accepted by the

bankruptcy court, and which would provide the Queens with an unfair advantage if not

estopped from pursuing the District Court Action.

   II.      Other considerations, including the Queens’ claims of inadvertence or
            mistake, do not weigh against applying the doctrine of judicial estoppel
            against the Queens.

         We next consider whether other considerations weigh against applying the

doctrine of judicial estoppel against the Queens. The Queens claim that their

nondisclosure of the personal injury lawsuit was only the result of inadvertence or

mistake. Specifically, they assert that they disclosed the lawsuit to their attorney and


                                              21
intended for it to be included in their filings. The district court rejected the Queens’

argument, and we conclude that the district court did not abuse its discretion.

        We have explained that “courts addressing a debtor’s failure to satisfy the legal

duty of full disclosure to the bankruptcy court have deemed such failure inadvertent or

mistaken only when, in general, the debtor either lacks knowledge of the undisclosed

claims or has no motive for their concealment.” Eastman, 493 F.3d at 1157 (internal

quotations omitted). Thus, “[w]here a debtor has both knowledge of the claims and a

motive to conceal them, courts routinely, albeit at times sub silentio, infer deliberate

manipulation.” Id.

        In Eastman, we rejected a plaintiff’s attempt to claim inadvertence or mistake and

place the blame on his bankruptcy attorney. 493 F.3d at 1157. There, the plaintiff argued

that “his failure to disclose in no uncertain terms his pending personal injury action to the

bankruptcy court resulted from ‘[m]istake, inadvertence, confusion, lack of

understanding, lack of legal sophistication, and the like,” and that his bankruptcy attorney

was to blame for the error, because “he informed [the bankruptcy attorney] of the

pending lawsuit early in the bankruptcy proceedings.” Id. In rejecting the plaintiff’s

arguments, we held that “he well knew of his pending lawsuit and simply did not disclose

it to the bankruptcy court,” and that he “had a motive to sweep his personal injury action

‘under the rug’ so he could obtain a discharge free and clear of his creditors.” Id. at

1159.


                                             22
       The Queens had both knowledge and a motive to conceal. First, the Queens

obviously had knowledge of the District Court Action when they submitted their initial

filings. And even more importantly, the nondisclosure was specifically brought to the

Queens’ attention before they amended their filings, but they still did not fully and

accurately disclose the lawsuit. At that point, the Queens were certainly aware of both

the need to disclose the District Court Action in the bankruptcy proceedings and of what

they had represented before the district court.

       Second, like the plaintiff in Eastman, the Queens had a motive to conceal and

misrepresent the District Court Action in their proceedings before the bankruptcy court.

Specifically, it was to their benefit to conceal the claim so that they could receive a full

discharge in bankruptcy before proceeding with the lawsuit, because this would allow

them to pursue an award for damages without the risk that any of the award would go to

their creditors. See id.

       Moreover, the Queens cannot escape their responsibility by blaming their

bankruptcy attorney. In Eastman, we cited with approval the Seventh Circuit’s holding

that “a client is bound by the acts of her attorney and the remedy for bad legal advice

rests in malpractice litigation.” 493 F.3d at 1157 (citing Cannon-Stokes v. Potter, 453

F.3d 446, 449 (7th Cir. 2006)); cf. Link v. Wabash R.R. Co., 370 U.S. 626, 633-34

(1962) (“Petitioner voluntarily chose this attorney as his representative in the action, and

he cannot now avoid the consequences of the acts or omissions of this freely selected

agent. Any other notion would be wholly inconsistent with our system of representative
                                              23
litigation . . . .”). Accordingly, we held that the plaintiff’s assertion in Eastman “that he

simply did not know better and his attorney ‘blew it’ [wa]s insufficient to withstand

application of the doctrine [of judicial estoppel].” 493 F.3d at 1159. The Queens are

bound by the acts of their bankruptcy attorney, and moreover, they affirmed under

penalty of perjury that the filings were accurate to the best of their knowledge.

       For the foregoing reasons, we conclude that it was not arbitrary, capricious, or

manifestly unreasonable for the district court to reject the Queens’ arguments of mistake

and inadvertence. See id. at 1156. Accordingly, we hold that the district court did not err

in imposing the doctrine of judicial estoppel against the Queens.

                                      CONCLUSION

       The Queens adopted an inconsistent position, which was accepted by the

bankruptcy court, and which would provide the Queens with an unfair advantage if not

estopped from pursuing their lawsuit against TA. Moreover, we reject the Queens’

arguments of inadvertence and mistake, because the record shows that the Queens had a

knowledge of the claim and a motive to conceal. Under our deferential standard of

review, we therefore hold that it was not an abuse of discretion for the court to apply the

doctrine of judicial estoppel. Accordingly, we AFFIRM the district court’s grant of

summary judgment in favor of TA, and we DISMISS as moot TA’s cross-appeal.




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