                            In the
 United States Court of Appeals
               For the Seventh Circuit
                         ____________

Nos. 03-1897, 03-1913 & 03-2018
MARJORIE L. MUNGO,
                            Debtor-Appellant, Cross-Appellee,
                                v.


MAUREEN SULLIVAN TAYLOR,
                        Defendant-Appellee, Cross-Appellant.
                         ____________
            Appeals from the United States District Court
        for the Northern District of Illinois, Eastern Division.
   Nos. 02-3541, 02-2754 (Consolidated)—Amy J. St. Eve, Judge.
                         ____________
  ARGUED DECEMBER 5, 2003—DECIDED JANUARY 20, 2004
                   ____________

  Before FLAUM, Chief Judge, and MANION and WILLIAMS,
Circuit Judges.
  WILLIAMS, Circuit Judge. Marjorie Mungo filed a vol-
untary petition for relief under Chapter 11 of the bank-
ruptcy code and listed Maureen Sullivan Taylor, her former
divorce attorney, as a disputed creditor. Taylor filed a proof
of claim in the bankruptcy court with respect to the fees
that she claimed Mungo owed as a result of the divorce
representation. Mungo objected to Taylor’s proof of claim,
declaring that Taylor had coerced her into signing the
marital settlement, and then filed an adversary proceeding
against Taylor alleging legal malpractice in the divorce
action.
2                         Nos. 03-1897, 03-1913 & 03-2018

  The bankruptcy court consolidated the adversary pro-
ceeding and the objection to the proof of claim and held
a four and a half day bench trial. Despite finding that
Taylor had committed various breaches of duty to Mungo as
her divorce counsel, the bankruptcy court found for Taylor
in the adversary action because it found that Mungo had
suffered no damages. On reconsideration, however, the
court awarded Mungo $7,340.43 in damages, granted
Taylor’s bill of costs, and denied costs to Mungo. The
bankruptcy court also sustained in part Mungo’s objection
to Taylor’s proof of claim by reducing the amount of the
claim to a figure that Mungo argued was permissible.
Mungo later sought to have the claim judgment reconsid-
ered, arguing that she had not actually agreed to that figure
but rather that it was the only permissible amount that
could be awarded. The court considered that argument
waived.
  Mungo and Taylor both appealed to the district court,
which found that the bankruptcy court had erred in award-
ing damages to Mungo but affirmed the bankruptcy court’s
judgment on all other grounds. Both parties now appeal and
raise essentially the same arguments that they raised in
the district court. Because the district court issued a
thorough and well-reasoned memorandum opinion and
order that does not contain any error, we adopt the district
court’s opinion dated March 7, 2003, as our own and AFFIRM
the judgment of the lower court on all counts. The district
court’s decision is appended below.


        MEMORANDUM OPINION AND ORDER
  Debtor-Plaintiff Marjorie Lynn Mungo appeals from the
October 5, 2001 judgment of the bankruptcy court (as
amended on March 22, 2002), and Creditor-Defendant
Maureen Sullivan Taylor cross appeals. For the reasons
discussed below, the bankruptcy court’s order as amended
is affirmed in part and reversed in part.
Nos. 03-1897, 03-1913 & 03-2018                            3

             BANKRUPTCY PROCEEDINGS
  On July 14, 2000, Mungo filed a voluntary petition for
relief under Chapter 11 of the Bankruptcy Code and listed
Taylor as a disputed creditor. Taylor was a disputed cred-
itor by virtue of her representation of Mungo in state court
divorce proceedings. Mungo objected to Taylor’s proof of
claim, alleging that Taylor had coerced Mungo into signing
a marital settlement, and Mungo filed an adversary pro-
ceeding against Taylor, alleging legal malpractice. The
bankruptcy court consolidated the objection to the claim
and the adversary proceeding and held a four and a half
day bench trial.
  On October 5, 2001, Judge Wedoff held that Mungo had
established a number of breaches of duty by Taylor, in-
cluding her failure to complete discovery, failure to obtain
complete financial information prior to completing the
pretrial statement, failure to seek interim attorney’s fees,
failure to give thorough advice regarding the consequences
of the settlement agreement, and her paralegal’s instruction
to Mungo to offer false testimony. Nonetheless, Judge
Wedoff entered judgment in favor of Taylor in the adversary
proceeding because he found that Mungo had failed to
provide evidence of damages resulting from any of these
breaches. (See R. 1-1, Record, Vol. VIII, October 5, 2001
Ruling.)
  Mungo filed a motion for reconsideration, and on March
22, 2002, Judge Wedoff amended his ruling on the adver-
sary complaint to award Mungo damages in the amount of
$7,340.43. (See R. 1-1, Record, Vol. I, Mar. 22, 2002 Mem.
of Decision.) Mungo and Taylor both filed a bill of costs in
the adversary case, and on April 17, 2002, Judge Wedoff
entered an order granting Taylor’s bill of costs and denying
Mungo’s bill of costs. Taylor filed a timely notice of appeal
from the amended ruling on the adversary action, and
Mungo filed a timely appeal from the order denying her bill
of costs.
4                         Nos. 03-1897, 03-1913 & 03-2018

  On the claim objection, Judge Wedoff sustained Mungo’s
objection in part, reducing Taylor’s proof of claim from
$25,224.28 to $10,641.38. (See R. 1-1, Record, Vol. VIII,
October 5, 2001 Ruling.) Mungo sought to amend or alter
the allowance of Taylor’s claim, but that motion was denied.
Mungo subsequently filed a timely notice of appeal related
to the amount of Taylor’s proof of claim.


                  CURRENT APPEALS
  In accordance with Federal Rule of Bankruptcy Procedure
8006, Mungo filed and served her statement of issues to be
presented on appeal, which may be summarized in these
terms:
    1. Whether Mungo proved damages in excess
       of $7,340.43;
    2. Whether Mungo waived the argument that
       Taylor’s claim for attorney’s fees should be
       disallowed where Mungo failed to make the
       request during closing argument;
    3. Whether the bankruptcy court erred by
       failing to compel testimony concerning a
       gift received by Mungo’s former spouse just
       days after the divorce settlement; and
    4. Whether the bankruptcy court erred by fail-
       ing to award Mungo costs where she was
       the prevailing party at trial.
  In accordance with Rule 8006, Taylor filed and served her
statement of issues to be presented on appeal. These issues
are as follows:
    1. Whether any of Taylor’s negligent acts or
       omissions proximately caused Mungo any
       damages;
Nos. 03-1897, 03-1913 & 03-2018                             5

    2. Whether the bankruptcy court’s finding
       that Taylor failed to give thorough advice
       concerning the divorce settlement was
       clearly erroneous;
    3. Whether the bankruptcy court’s finding
       that Taylor and her former spouse were
       undergoing an irreconcilable breakdown in
       August 1997 was clearly erroneous;
    4. Whether the bankruptcy court’s finding
       that dissipated family assets were not used
       for legitimate family expenses was clearly
       erroneous;
    5. Whether Mungo is entitled to damages
       based on a legal theory not raised until
       closing arguments; and
    6. Whether the bankruptcy court erred by re-
       fusing to permit Mungo to testify contrary
       to her sworn testimony in the underlying
       state court divorce proceedings.


                 STANDARD OF REVIEW
  In the course of a district court’s decision to affirm, mod-
ify or reverse an order of the bankruptcy court, “[f]indings
of fact . . . shall not be set aside unless clearly erroneous,
and due regard shall be given to the opportunity of the
bankruptcy court to judge the credibility of the witnesses.”
Fed. R. Bankr. P. 8013. Thus, a bankruptcy court’s factual
findings cannot be disturbed “simply because [the district
court] is convinced it would have decided the case differ-
ently.” In re Weber, 892 F.2d 534, 538 (7th Cir. 1989)
(quoting Anderson v. City of Bessemer City, 470 U.S. 564,
573 (1985)). Both questions of law and mixed questions of
law and fact, however, are reviewed de novo. See In re
6                          Nos. 03-1897, 03-1913 & 03-2018

Ebbler Furniture and Appliances, Inc., 804 F.2d 87, 89 (7th
Cir. 1986).


I.   MUNGO’S PROOF OF DAMAGES
  In order to recover damages for a legal malpractice action
in Illinois, a plaintiff must establish what the result would
have been in the underlying action where the plaintiff’s
former attorney committed the alleged malpractice. See
Eastman v. Messner, 721 N.E.2d 1154, 1158, 188 Ill. 2d 404,
411 (Ill. 1999). A plaintiff need not prove to a certainty that
she would have prevailed absent legal malpractice, but she
must show that a victory of some sort was more likely than
not in the underlying action. See Praxair, Inc. v. Hinshaw
& Culbertson, 235 F.3d 1028, 1032 (7th Cir. 2000); Jones
Motor Co. v. Holtkamp, Liese, Beckemeier & Childress, P.C.,
197 F.3d 1190, 1193 (7th Cir. 1999). In this case, the
underlying action was a divorce action, and the measure of
damages for Mungo’s legal malpractice claim is the differ-
ence between her recovery under the settlement agreement
and what she would have recovered in the divorce action
but for Taylor’s legal malpractice.
  Mungo attacks Judge Wedoff’s analysis of the value of her
underlying divorce action, arguing that he undervalued the
marital estate. In a divorce action, the issues of damages
and the valuation of the marital estate are factual questions
to be resolved by the trier of fact. In re Marriage of Lee, 615
N.E.2d 1314, 1321, 246 Ill. App. 3d 628, 636 (Ill. App. Ct.
1993). Under the clearly erroneous standard, if the bank-
ruptcy court’s factual findings are plausible in light of the
record viewed in its entirety, a reviewing court may not
reverse even if it would have weighed the evidence differ-
ently. Matter of Love, 957 F.2d 1350, 1354 (7th Cir. 1992).
Nos. 03-1897, 03-1913 & 03-2018                            7

  Judge Wedoff began his damages analysis by calculating
the value of the marital assets and determining the value
of Mungo’s dissipation claim. Based on the record evidence,
Judge Wedoff determined that the value of the estate was
$301,075.73, including the value of the dissipation claim
and the value of the marital assets. Judge Wedoff deter-
mined that Mungo would have received 60% of the marital
property, or $180,645.43, had the case gone to trial. Judge
Wedoff then determined that the settlement agreement was
worth $173,305.00, and he awarded the difference, or
$7,340.43 as damages.
  Mungo raises a host of challenges to Judge Wedoff’s
valuation of the marital estate. Specifically, she claims
Judge Wedoff erred by: (1) determining that the value of the
marital estate was just $301,075.73 rather than
$2,130,530.30 because he ignored evidence for many of the
assets in the marital estate and improperly valued others;
(2) applying the wrong legal standard to her dissipation
claim and improperly valuing that claim; (3) excluding gifts
to the children from their grandfather when calculating the
value of the marital estate; and (4) holding that Taylor was
barred by the doctrine of equitable estoppel from claiming
a value of the marital estate less than the value Taylor
claimed in the underlying divorce action in state court.
  First, Mungo argues that Judge Wedoff ignored evidence
for many of the assets in the marital estate. Mungo’s
principal evidence for these other assets was based on a
pretrial statement and a settlement proposal from the
underlying divorce proceeding that reflected what Mungo
expected the evidence would show at trial. As Judge Wedoff
correctly noted, however, the pretrial statement was not
evidence but rather simply “a statement of position by a
party as to what the evidence might show.” (See R. 1-1,
Record, Vol. VIII, October 5, 2001 Ruling at p. 8.) Likewise,
the settlement proposal was not evidence of the value of the
8                           Nos. 03-1897, 03-1913 & 03-2018

estate but rather a reflection of one litigant’s views on that
issue.1 Mungo also argues that a summary exhibit, Exhibit
61, (see id., Record, Vol. XIV, Exhibit 61), she prepared for
trial supports her calculation of the value of the marital
estate. As Judge Wedoff noted, however, Mungo failed to
introduce any of the underlying evidence supposedly
supporting this summary exhibit. (See id., Record, Vol. I,
Mar. 22, 2002 Mem. of Decision at p. 7.) Because Judge
Wedoff’s decision to reject the pretrial statement, the
summary exhibit and Mungo’s testimony was not clearly
erroneous, Mungo’s objection to the bankruptcy court’s
calculation of the value of the marital estate fails.
  Mungo also challenges various specific valuations of par-
ticular portions of the marriage estate calculated by Judge
Wedoff, including the value of stock in CLP Group, Inc. and
the value of the marital home. Regarding the value of the
stock, the relevant time for the valuation of stock is as close
as practicable to the date of the trial. See 750 ILCS 5/503(f).
Mungo argues for a stock valuation of $160,000 prepared by
an accounting firm rather than a subsequent valuation
prepared by the same accounting firm of just $40,000.
Given the evidence that the stock declined in value because
of the “generally unprofitable nature of the company
operations,” Judge Wedoff’s decision to base his damages
calculation on the subsequent $40,000 valuation was not
clearly erroneous.2 Likewise, regarding the value of the


1
  Mungo also argues that her testimony supports her claimed
valuation of the marital estate. Judge Wedoff, however, disre-
garded her testimony as not credible and noted that her testimony
simply repeated the values drawn from the settlement proposal.
2
  Mungo suggests that evidence of the $40,000 valuation should
not have been allowed because the trial judge in the underlying
divorce action originally barred that valuation. She argues that
                                                   (continued...)
Nos. 03-1897, 03-1913 & 03-2018                                  9

marital estate, Judge Wedoff’s use of an appraisal offered
into evidence by Taylor to value Mungo’s marital home,
rather than Mungo’s testimony, which he deemed not
credible, was not clearly erroneous.
  Second, Mungo claims that Judge Wedoff improperly
valued her dissipation claim during the period that her
marriage was irretrievably broken. Under Illinois law, dis-
sipation is “the use of marital property for the sole benefit
of one of the spouses for a purpose unrelated to the mar-
riage at the time that the marriage is undergoing an
irreconcilable breakdown.” In re Marriage of Cerven, 742
N.E.2d 343, 348, 317 Ill. App. 3d 895, 900 (Ill. App. Ct.
2000). Mungo claims that Judge Wedoff applied the wrong
standard because he measured the dissipation claim from
late in August 1997 when he determined that the marriage
suffered irreconcilable breakdown. (See R. 1-1, Record, Vol.
VIII, October 5, 2001 Ruling at p. 8.) Mungo suggests that
her marriage (like all others) “undergo[es] irreconcilable
breakdown” before it actually suffers such an irreconcilable
breakdown. Thus, Mungo argues that Judge Wedoff should
have measured her dissipation claim from 1995 when her
marriage started to undergo an irreconcilable breakdown
rather than late August 1997 when the breakdown was
essentially complete.
  Even assuming that Judge Wedoff applied the wrong legal
standard to her dissipation claim, however, Mungo’s
evidence supporting the 1995 date is, as he noted, very
limited. Moreover, Mungo’s assertions of the onset of
irreconcilable breakdown during the period between 1995



2
  (...continued)
the revised valuation later came in during the divorce action only
because of Taylor’s negligence. There is no evidence, however, that
connects Taylor’s negligence to the admissibility of the $40,000
valuation.
10                         Nos. 03-1897, 03-1913 & 03-2018

and 1997 are belied by her admission that when she and
her former husband separated in 1997 it was intended to be
for just “a little while,” suggesting that the couple hoped to
reconcile. Indeed, Mungo testified that she and her former
husband attempted to reconcile as late as March of 1998.
Given these admissions, Judge Wedoff’s decision to mea-
sure the dissipation from 1997 was not clearly errone-
ous—regardless whether he applied the wrong legal stand-
ard. It was, at most, harmless error.
  Even if Judge Wedoff was correct to date the dissipation
claim from 1997, Mungo argues that the bankruptcy court
improperly valued that claim by omitting the swimming
pool from this calculation. As Taylor points out, however,
there is no evidence that the pool was constructed using
marital funds, which is an essential element of a dissipation
claim. Moreover, Judge Wedoff found that the pool was not
“unrelated to the marriage”—another element of a dissipa-
tion claim. (See R. 1-1, Record, Vol. I, Mar. 22, 2002 Mem.
of Decision at p. 10.) Finally, the bankruptcy court noted
that the pool was itself subsumed into the valuation of the
marital estate. (Id.) Thus, Judge Wedoff’s specific calcula-
tion of the value of the dissipation claim was not clearly
erroneous.
  Third, Mungo argues that Judge Wedoff improperly ex-
cluded gifts to her children from their grandfather when
calculating the value of the marital estate. Under Illinois
law, funds in the marital estate are presumed to be marital
property unless that presumption is rebutted by proof of a
gift. In re Lee, 615 N.E.2d 1314, 1323, 246 Ill. App. 3d 628,
639 (Ill. App. Ct. 1993); 750 ILCS 5/503(b)(1). Property
acquired by gift is not considered marital property, and the
court may set it aside in a separate trust or fund for the
benefit of children.
  The parties stipulate that in May and July 1997 Mungo’s
former husband transferred a total of $146,248.80 from the
marital estate to trust accounts for their three children. The
Nos. 03-1897, 03-1913 & 03-2018                         11

parties did not stipulate that these were marital funds but
simply that the funds came from the marital account.
Significantly, however, Taylor testified that the source of
the funds was a gift from Mr. Mungo’s grandfather. Thus,
Judge Wedoff’s conclusion that these funds were not part of
the marital estate was not clearly erroneous. Moreover,
regardless of the source of the funds, the transfer to the
trust accounts occurred in May and July of 1997—before the
beginning of Mungo’s dissipation claim.
  Fourth, Mungo argues that Judge Wedoff erred as matter
of law because he refused to find that Taylor was barred by
the doctrine of collateral estoppel from arguing that the
marital estate was less than the value she claimed in the
pretrial statement she submitted in connection with the
underlying state court divorce action. Mungo argues that
Taylor filed the pretrial statement containing an assertion
concerning the value of the marital estate and that Mungo
relied upon the representation. As Taylor points out,
however, Mungo did not supply any evidence that she relied
to her detriment on Taylor’s representations, which is an
essential element of any collateral estoppel argument. See,
e.g., Quake Const., Inc. v. American Airlines, Inc., 565
N.E.2d 990, 1005, 141 Ill.2d 281, 310 (Ill. 1990). Mungo
might have a collateral estoppel claim if, for example, she
rejected a settlement offer in reliance on Taylor’s state-
ments before recovering an award or agreeing to a settle-
ment that was somehow less. Instead, Mungo apparently
disregarded the valuation of the marital estate from the
pre-trial order and accepted a lower settlement offer.


II. MUNGO’S ATTEMPT TO COMPEL DISCOVERY
    RELATING TO A GIFT OR EXPECTANCY PRIOR TO
    THE DIVORCE
  Mungo claims that within ten days of entry of the divorce
decree, her former husband was gifted 4,000 shares of stock
12                          Nos. 03-1897, 03-1913 & 03-2018

in his family’s business, which was valued in the millions of
dollars. Under Illinois law, such a stock gift could conceiv-
ably be considered part of the marital estate. See 750 ILCS
5/503(d) (one of the factors when assessing the value of the
marital property includes “the reasonable opportunity of
each spouse for future acquisition of capital assets and
income”); see also In re Marriage of Henke, 728 N.E.2d 1137,
1150, 313 Ill. App. 3d 159, 176 (Ill. App. Ct. 2000).
  In order to assess whether the stock gift might be con-
sidered part of the marital estate, Mungo sought to depose
her former husband’s siblings in order to determine when
the gift was made and when her former husband learned
that he was to receive it. The siblings objected to their de-
positions and suggested that Mungo might obtain such
information by serving subpoenas for stock records or by
deposing Mungo or their father. Judge Wedoff apparently
agreed, because he denied the motion to compel. Mungo
contends that his denial was erroneous.
  Significantly, although Judge Wedoff rebuffed Mungo’s
attempt to depose her former husband’s siblings, Mungo
had the opportunity to explore the issue of the stock gift at
trial. Indeed, Mungo called her former husband at trial but
apparently failed to ask him any questions concerning the
timing of the stock gift or when he learned about it. Thus,
regardless whether Judge Wedoff’s refusal to order the
depositions of the siblings was erroneous, that error was
harmless because Mungo was not foreclosed from obtaining
access to equivalent information through other discovery
means. She simply chose not do so.3




3
  Moreover, Mungo’s claim relating to the stock gift fails because
she does not suggest that even if she had obtained the requested
discovery the evidence would have supported the assertion that
the stock gift was properly part of the marital estate.
Nos. 03-1897, 03-1913 & 03-2018                             13

III. THE PARTIAL ALLOWANCE OF TAYLOR’S PROOF
     OF CLAIM
  At the conclusion of the trial, Judge Wedoff invited
argument with respect to Taylor’s proof of claim. Mungo’s
counsel argued that the claim should not include fees
incurred after Mungo filed for bankruptcy and the claim
was therefore limited to approximately $10,600. Taylor’s
counsel agreed. Judge Wedoff then ordered:
    All right. Fine. The proof of claim would be reduced,
    the allowed claim would be reduced to the $10,000
    [sic], the precise amount that you stated, Ms.
    Boynton, as of the July date, and in other respects
    disallowed.
(See R. 1-1, Record, Vol. VIII, October 5, 2001 Ruling
at pp. 9-10.) Mungo moved for reconsideration, arguing that
Taylor’s proof of claim should not be allowed in any amount
and that her counsel’s admission during oral argument was
simply an argument in the alternative. In rejecting this
argument, however, Judge Wedoff found that “no argument
was made at trial that Taylor’s claim should be disallowed
in its entirety and the court finds such an argument was
waived.” (See id., Record, Vol. I, Mar. 22, 2002 Mem. of
Decision Order at p. 12.)
  Mungo suggests that her counsel’s statements were
not “crystal clear,” but she acknowledges that her counsel
did in fact state that Taylor’s claim should be limited to
amounts incurred prior to Mungo’s bankruptcy filing.
Nonetheless, Mungo argues that she did not waive the
argument that Taylor’s claim should be disallowed in its
entirety because she raised the argument in a motion for
reconsideration. Arguments raised for the first time in
connection with a motion for reconsideration, however, are
generally deemed to be waived. See Havoco of Am., Ltd. v.
Sumitomo Corp. of Am., 971 F.2d 1332, 1336 (7th Cir. 1992)
(considering appeal in underlying litigation and stating that
14                         Nos. 03-1897, 03-1913 & 03-2018

arguments may not be raised for the first time in Rule 59(e)
motion). Accordingly, Judge Wedoff did not abuse his
discretion by refusing to entertain this argument in the
context of Mungo’s motion for reconsideration.


IV. MUNGO’S BILL OF COSTS
  Finally, Mungo argues that Judge Wedoff erred by failing
to award her costs as the prevailing party. Although
Bankruptcy Rule 7054 provides that the court may award
the prevailing costs, the courts have held that there is a
rebuttable presumption that the prevailing party is entitled
to costs. Congregation of the Passion, Holy Cross Providence
v. Touche, Ross & Co., 854 F.2d 219, 221-22 (7th Cir. 1988).
Thus, “[g]enerally only misconduct by the prevailing party
worthy of a penalty . . . or the losing party’s inability to pay
will suffice to justify denying costs.” Contreras v. City of
Chicago, 119 F.3d 1286, 1295 (7th Cir. 1997). The courts
review a lower court’s decision to impose costs for an abuse
of discretion. See Spegon v. Catholic Bishop of Chicago, 175
F.3d 544, 550 (7th Cir. 1999). This “discretion is narrowly
confined because of the strong presumption created by [this
rule] that the prevailing party will recover costs.”
Contreras, 119 F.3d at 1295.
  Taylor points out that under Bankruptcy Rule 7068 a
prevailing party forfeits the right to costs where that party
rejects a Rule 7068 offer of judgment. On its face though,
Rule 7068 applies only to costs incurred after the prevailing
party rejects an offer of judgment. Taylor cites no authority
for the proposition that a Rule 7068 offer of judgment
forecloses costs incurred prior to the rejection of the offer.
Further, Taylor cites no authority for the proposition that
the rejection of a Rule 7068 offer of judgment rises to the
level of misconduct that would justify the denial of costs.
Nos. 03-1897, 03-1913 & 03-2018                            15

  Taylor concedes that Mungo incurred at least $3,095.33
in costs prior to rejecting Taylor’s offer of judgment.
Nonetheless, Judge Wedoff denied Mungo’s bill of costs in
its entirety without explanation. Ordinarily the denial of
costs to a prevailing party must be accompanied by an ex-
planation of the lower court’s “good reasons” for this denial.
See Weeks v. Samsung Heavy Indus. Co., Ltd., 126 F.3d 926,
945 (7th Cir. 1997); Congregation of the Passion, 854 F.2d
at 222. Here, Judge Wedoff failed to give any explanation
for his denial of Mungo’s bill of cost, and if this Court
affirmed the bankruptcy court’s decision in all other
respects, Judge Wedoff’s failure to explain the “good rea-
sons” if any for the denial of costs would be grounds for
reversal on that issue. As discussed in Section VI, supra,
however, this Court reverses Judge Wedoff’s decision in
part with the effect that Mungo is no longer a prevailing
party on her adversary claim and is, therefore, no longer
entitled to the presumption that costs should be awarded to
her.


V. IRRECONCILABLE BREAKDOWN OF MUNGO’S
   MARRIAGE
  Taylor argues that Judge Wedoff’s ruling that Mungo’s
marriage was undergoing irreconcilable breakdown in
August 1997 was clearly erroneous. Taylor argues that
Judge Wedoff dismissed Mungo’s testimony as not credible
and argues that Mungo failed to provide any evidence that
her marriage was undergoing irreconcilable breakdown
prior to March of 1998.
  There is evidence, however, that supports the bankruptcy
court’s conclusion that Mungo’s marriage was undergoing
irreconcilable breakdown in August 1997. Indeed, Mungo
left her former husband and moved in with a friend around
that time. The move itself, quite apart from Mungo’s
testimony concerning her subjective opinions of the state of
16                        Nos. 03-1897, 03-1913 & 03-2018

her marriage, was sufficient for the bankruptcy court to
conclude that the marriage was irreconcilably broken by
this point. Thus, Judge Wedoff’s conclusion was not clearly
erroneous.


VI. THE USE OF DISSIPATED ASSETS
  Taylor also challenges Judge Wedoff’s findings that the
marital estate included certain dissipated assets, arguing
that there was evidence that Mungo’s former husband used
the dissipated assets for legitimate family expenses.
Specifically, Taylor points to evidence that, after the cou-
ple’s separation, Mungo’s husband gave her $160,000 in
cash support payments, $25,000 for a car, and $15,000 for
furniture, and paid $157,500 in taxes and $4,000 in car
payments. Some or all of these amounts, Taylor argues,
should have reduced the dissipated assets component in
Judge Wedoff’s calculation of the value of the marital
estate.
  Under Illinois law, once the court determines that a
spouse has liquidated marital assets, the spouse charged
with dissipation must establish by clear and convincing
evidence that the liquidated assets were used for legitimate
family expenses. See In re Marriage of Cerven, 742 N.E.2d
343, 348, 317 Ill. App. 3d 895, 900 (Ill. App. Ct. 2000); see
also In re Marriage of Toth, 586 N.E.2d 436, 439, 224 Ill.
App. 3d 43, 48 (Ill. App. Ct. 1991) (“General and vague
statements that they were spent on marital expenses or
bills are inadequate to avoid a finding of dissipation.”).
  Here, the parties stipulated that Mungo’s husband with-
drew $213,840.73 from the couple’s Quick & Reilly marital
account from after late August 1997 to April 2000. Thus,
the question is whether Taylor provided clear and convinc-
ing evidence that Mungo’s husband spent any of this
Nos. 03-1897, 03-1913 & 03-2018                             17

$213,840.73 on legitimate family expenses. Judge Wedoff
found that there was an “absence of direct evidence” that
these funds were expended on legitimate family living
expenses. (See R. 1-1, Record, Vol. I, March 22, 2002
Opinion at p. 9.) With due respect to Judge Wedoff, this
conclusion was clearly erroneous. In fact, there was direct
evidence that certain funds taken from the Quick & Reilly
marital account after late August 1997 were spent on leg-
itimate family expenses.
  Specifically, Mungo testified that for a period of 13 or 14
months beginning in late August 1997 her former husband
gave her monthly checks for $7,650 for support. (See R. 1-1,
Record, Vol. VI, M. Mungo Direct Test. at pp. 11-12.) An
accountant retained by Taylor to examine the Quick
& Reilly account confirmed that during this same period
Mungo’s former husband wrote Mungo six separate checks
for $7,650. (See id., Record, Vol. IX, Exhibit 17, at pp. 5-10.)
This total of $45,900 from the Quick & Reilly account was
clearly spent on legitimate family expenses. See In re
Marriage of Calisoff, 531 N.E.2d 810, 815, 176 Ill. App. 3d
721, 727-28 (Ill. App. Ct. 1988) (amounts paid directly to
former wife for support considered legitimate family
expenses). Therefore, these six checks totaling $45,900
should have reduced the value of the marital estate to
$255,175.73 and reduced Mungo’s damages to zero.
  Taylor points to other evidence purporting to show that
money taken from the Quick & Reilly account after late
August 1997 was used for legitimate family purposes, but
this other evidence is not clear and convincing. For ex-
ample, Taylor cites testimony by Mungo that she received
from her former husband $15,000 for the children and an
unspecified sum of money for a car, (see R. 1-1, Record, Vol.
VI, M. Mungo Direct Test. at pp. 12, 22), but fails to connect
that testimony to specific disbursements from the Quick &
Reilly account during the relevant time period. On the other
hand, Taylor points to various specific disbursements from
18                          Nos. 03-1897, 03-1913 & 03-2018

the Quick & Reilly account, including purported tax
payments, (see, e.g., id., Record, Vol. IX, Exhibit 17 at p.
17), but fails to point to any testimony or other direct
evidence showing that those disbursements were made for
a legitimate family purpose. Taylor argues that Mungo and
her former husband filed joint tax returns during this
period, but it does not necessarily follow, for example, that
a January 1, 1998 disbursement from the Quick & Reilly
account in the amount of $44,050 was in fact made to
discharge the couple’s joint tax liability. (See id., Record,
Vol. IX, Exhibit 17 at p. 17.)4


VII. MUNGO’S DAMAGES THEORY
  Taylor argues that Mungo prevailed on a damages theory
that she did not raise until closing argument—namely, that
Taylor failed to advise Mungo about the pros and cons of
the April settlement agreement—and that this is somehow
improper. In support of this argument, Taylor cites just one
case—Burdett v. Miller, 957 F.2d 1375, 1381 (7th Cir. 1992).
In Burdett, the Seventh Circuit overturned a RICO convic-
tion based on an enterprise theory raised not by the parties
but by the district court when it entered its findings of fact
and conclusions of law. The Seventh Circuit held that the
district court’s attempt to inject its own theory of the case
after the close of the evidence was improper because it ran



4
  Taylor also challenges Judge Wedoff ’s findings that Taylor
failed to advise Mungo about the pros and cons of the settlement
agreement, that Taylor breached her duty to Mungo in various
other respects, and that Taylor’s malpractice proximately caused
the damages assessed by the bankruptcy court. This Court need
not address these arguments, however, because it concludes that,
in light of the clear and convincing evidence that some of the
allegedly dissipated assets from the marital estate were used for
legitimate family purposes, Mungo’s damages are zero.
Nos. 03-1897, 03-1913 & 03-2018                             19

counter to the spirit of the adversary system and, more
importantly, deprived the defendant of the opportunity to
rebut the new enterprise theory. See id. at 1380 (“The judge
. . . changed the plaintiff’s theory of the case after the time
had passed for the defendant to present contrary evi-
dence.”).
  Of course, the present case is not remotely similar to
Burdett. The theory Taylor complains of was not raised by
the bankruptcy court but by Mungo’s counsel—albeit
somewhat late in the game. Moreover, Taylor cannot argue
that she was deprived of the opportunity to respond to this
theory. Indeed, one of the central claims raised by Mungo
from the very onset of the litigation was the claim that
Mungo signed the settlement agreement without receiving
proper legal advice from her attorney because Taylor “pres-
sured” her into accepting the settlement agreement with
the specter of $25,000 in attorney’s fees. Responding to this
theory would have required Taylor to demonstrate that she
in fact gave Mungo appropriate legal advice before she
signed the settlement agreement. Thus, there can be no
argument that Taylor was somehow prejudiced by Mungo’s
last minute decision to emphasize a different theory of
recovery.


VIII. MUNGO’S TESTIMONY
  Finally, Taylor asserts that Judge Wedoff erred when he
allowed Mungo to testify that she was coerced by Taylor
into signing the settlement agreement and that she did not
receive the benefit of proper legal advice from Taylor before
signing that agreement. Taylor argues that the doctrine of
judicial estoppel bars such testimony because Mungo
testified in the underlying state court divorce proceeding
that she entered the settlement agreement freely and
voluntarily, that no one forced her to enter the agreement,
and that she was pleased with Taylor’s representation.
20                         Nos. 03-1897, 03-1913 & 03-2018

  Judicial estoppel is inapplicable here because, contrary to
Taylor’s suggestion, the position espoused by Mungo in this
case is not “clearly inconsistent” with the testimony she
gave in the underlying state court divorce proceeding. See
Levinson v. United States, 969 F.2d 260, 264 (7th Cir. 1992)
(judicial estoppel requires, among other things, that “the
later position must be clearly inconsistent with the earlier
position”). Mungo’s position at trial in this case may be
summed up as follows: she admits that she agreed to sign
the settlement agreement but she contends that her
willingness to do so was the product of Taylor’s undue
pressure and inadequate legal advice. Mungo’s earlier
testimony that she entered the settlement agreement freely
and voluntarily is not clearly inconsistent with her current
conviction that Taylor gave her bad legal advice and
pressured her into accepting the agreement.
   Moreover, this is not a case where the doctrine of judicial
estoppel must be invoked in order to prevent a litigant from
prevailing twice on separate, mutually exclusive theories.
See Ogden Martin Systems of Indianapolis, Inc. v. Whiting
Corp., 179 F.3d 523, 527 (7th Cir. 1999) (“Judicial estoppel
serves “ ‘to protect the courts from being manipulated by
chameleonic litigants who seek to prevail, twice, on opposite
theories.’ ”) (citation omitted); Ladd v. ITT Corp., 148 F.3d
753, 756 (7th Cir. 1998) (“[T]he purpose of the doctrine . . .
is to reduce fraud in the legal process by forcing a modicum
of consistency on a repeating litigant.”). To the contrary,
Mungo claims that she essentially lost by signing the
settlement agreement and seeks to redress that loss with
the malpractice action against Taylor.
  Finally, as Judge Wedoff recognized, it would make no
sense to permit Taylor to invoke the doctrine of judicial es-
toppel to bar Mungo’s testimony because, assuming
Mungo’s allegations are correct, Taylor’s bad legal advice
and pressure convinced Mungo to give the testimony in
Nos. 03-1897, 03-1913 & 03-2018                           21

the state court divorce proceeding in the first place. As
the bankruptcy court noted, “it would hardly be appropriate
for the attorney who gave that bad advice to say that
because her client testified in accordance with that bad
advice that her client is estopped from asserting that the
advice [is] bad.” (See R. 1-1, Record, Vol. II, September 28,
2001 Order at p. 14.)


                      CONCLUSION
 Judge Wedoff’s order as amended is AFFIRMED in part and
REVERSED in part.

A true Copy:
      Teste:

                        ________________________________
                        Clerk of the United States Court of
                          Appeals for the Seventh Circuit




                   USCA-02-C-0072—1-20-04
