Guay v. Burack

United States Court of Appeals
For the First Circuit

No. 10-2513

LORRAINE GUAY,

Plaintiff,

KEVIN GUAY,

Plaintiff, Appellant,

v.

THOMAS BURAK, Commissioner of the Department of Environmental
Services for the State of New Hampshire; CONCORD POLICE
DEPARTMENT; MICHAEL A. DELANEY, NH Attorney General; SEAN FORD,
Detective, Concord Police Department; CONCORD, NH,

Defendants, Appellees.

APPEAL FROM THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

[Hon. D. Brock Hornby, U.S. District Judge]

Before

Boudin, Selya, and Lipez, Circuit Judges.

Barbara Goodwin, with whom Murray, Plumb & Murray was on
brief, for appellants.
Erik G. Moskowitz, with whom Charles P. Bauer and Gallagher,
Callahan & Gartrell were on brief, for appellees.

April 19, 2012
 LIPEZ, Circuit Judge. This case requires us to apply the

doctrine of judicial estoppel in somewhat unusual circumstances.

While engaged in a Chapter 7 bankruptcy action, the appellant,

Kevin Guay, brought numerous claims against the appellees,

government officials and a police officer, seeking damages for an

allegedly illegal search of his property. Guay, however, failed to

amend his bankruptcy schedules, as required, to disclose the

existence of his claims as newly acquired assets prior to obtaining

a discharge from bankruptcy. As a result, the appellees moved for

summary judgment on the basis of judicial estoppel, even though

appellant's failure to disclose his claims did not give him an

unfair advantage in this proceeding. It was enough, appellees

argued, that appellant successfully adopted a position in the

bankruptcy proceeding inconsistent with the position he takes here.

Agreeing, the district court granted summary judgment for

appellees. We affirm.

I.

We recount the facts in the light most favorable to the

party opposing summary judgment, in this case, the appellant.

Agusty-Reyes v. Dep't of Educ. of P.R., 601 F.3d 45, 48 (1st Cir.

2010). For clarity's sake, our recitation of the facts is divided

into subsections that describe the chronology of events in two

parallel actions.

-2-
A. Bankruptcy Proceedings

On September 28, 2008, Kevin Guay and his wife filed a

Chapter 11 bankruptcy petition in the United States Bankruptcy

Court for the District of New Hampshire. On June 23, 2009, the

case was converted to a Chapter 7 proceeding. The claims advanced

here did not appear as an asset on the Guays' initial bankruptcy

schedules, as the events giving rise to the claims had not yet

occurred.

B. Civil Lawsuit

In early 2009, while still in bankruptcy, the Guays were

subjects of a police investigation into alleged violations of state

environmental protection laws.1 On March 25, 2009, defendant Sean

Ford, a Concord, New Hampshire police detective, secured search

warrants allowing extensive excavation of two properties owned by

the Guays. During execution of the warrants on March 25 and 26,

officers also searched the Guays' home, which was not included in

either warrant. The officers also denied the Guays and their

tenants access to other properties the couple owned for which no

warrant was obtained. The search caused extensive damage to the

1
The investigation concerned the alleged illegal disposal of
asbestos, lead paint, solid and hazardous waste, oil discharge, and
septic waste on property owned by the Guays. Aside from the search
that gave rise to the Guays' claims, the details of the alleged
violations and the resulting investigation are irrelevant to this
appeal.

-3-
Guays' properties and was widely reported in television and print

media.

On June 26, 2009, Kevin Guay, acting pro se, filed suit

in federal court under 42 U.S.C. § 1983 against Ford and various

other defendants claiming a violation of his Fourth, Fifth and

Fourteenth Amendment rights.2 He also raised state law claims of

malicious prosecution, malicious abuse of process, and intentional

and negligent infliction of emotional distress. A month later,

Lorraine Guay, also pro se, filed a substantially similar suit and

the district court ordered the two actions consolidated.

C. The Guays' Failure to Disclose the Existence of Their Claims to
the Bankruptcy Court

Throughout their bankruptcy proceeding, the Guays failed

to file amended asset schedules identifying their lawsuits as

assets, as required by 11 U.S.C. § 521(a)(1) and § 541(a)(1) & (7).

During an August 12, 2009 meeting of the Guays' creditors, an

attorney for the State of New Hampshire asked the Guays about

various civil lawsuits in which they were plaintiffs, including

those at issue here. The lawsuits were discussed among the Guays,

their counsel, counsel for the State, and the bankruptcy Trustee,

and the Guays' counsel offered to provide the Trustee with copies

of all the relevant filings. It is unclear whether these documents

2
The other defendants are Thomas Burack, Commissioner of the
Department of Environmental Services for the State of New
Hampshire; Kelly Ayotte, former New Hampshire Attorney General; the
City of Concord; and the Concord Police Department.

-4-
were ever provided, but the Guays never formally disclosed the

existence of the claims by amending their asset schedules.

Later in August 2009, the State of New Hampshire filed a

motion seeking an order requiring the Guays to demonstrate why they

should not be held in contempt for failing to file required monthly

operating statements and amended bankruptcy schedules. The motion

noted that these filings were required both by Federal Rule of

Bankruptcy Procedure 1019 and by the bankruptcy court's order

converting the bankruptcy matter from a Chapter 11 to a Chapter 7

proceeding. In response to this motion, the bankruptcy court

ordered the Guays to file the additional information required by

Bankruptcy Rules 1019 and 1007, including information concerning

any property interest acquired subsequent to the filing of the

bankruptcy petition. The order required the Guays to file this

information by October 29, 2009.

Before that deadline arrived, the bankruptcy court

granted the Guays a discharge on October 27 pursuant to 11 U.S.C.

§ 727. This order discharged all debts eligible for discharge in

a Chapter 7 bankruptcy, but did not dismiss the case or end the

Trustee's responsibility for the estate. Accordingly, in response

to the court's earlier order, the Guays filed an affidavit with the

bankruptcy court on October 29 stating that no amendments to their

petition or asset schedules were necessary.

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 Several days later, the State of New Hampshire filed

another motion in the bankruptcy proceeding seeking an order

finding the Guays in contempt for failing to file monthly operating

reports and the disclosures required by Bankruptcy Rule 1019. The

Guays filed an opposition to this motion, stating that "the Debtors

have filed an affidavit stating that the information provided in

their bankruptcy schedules as amended was accurate and there are no

changes," and again affirming the completeness and accuracy of

their bankruptcy schedules and failing to identify their lawsuits

as assets.

Shortly thereafter, in a December 2009 order, the

magistrate judge handling this civil action ordered the parties to

submit additional briefing on the issue of whether the bankruptcy

Trustee, and not the Guays, was the real party in interest in this

lawsuit. In doing so, the court noted that the Trustee had not

abandoned the action. In their supplemental brief, the defendants

raised the issue of judicial estoppel for the first time.

Subsequently, on January 15, 2010, the Guays filed with the

bankruptcy court a Report of Unpaid Chapter 11 Obligations in which

they identified their claims in this lawsuit.3 The Chapter 7

3
This filing is required by Federal Rule of Bankruptcy
Procedure 1019 whenever a Chapter 11 case is converted to a Chapter
7 case. The bankruptcy court ordered the Guays to make the
disclosures required by Rule 1019 by January 15, 2010. The Guays'
filing, although it responded to the court's order, did not meet
their obligation to amend their bankruptcy schedules to identify
assets, and no explanation is provided as to why the Guays chose to

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Trustee then filed a Notice of Abandonment with respect to the

Guays' lawsuits, explaining that she had determined that "the

Lawsuits are burdensome and of inconsequential value to the

estate." This Notice was served on the Guays' creditors, who were

given the opportunity to object to the Trustee's action if they

believed the lawsuits had significant value. None objected.

D. The District Court's Application of Judicial Estoppel

The appellees moved to dismiss the Guays' claims on

multiple grounds, including judicial estoppel. They argued that,

because the Guays failed to disclose their claims to the bankruptcy

court, they were barred from bringing the same claims in this

action. Deferring resolution of the judicial estoppel issue until

the factual record was better developed, the district court adopted

in March 2009 the report and recommendation of the magistrate judge

and dismissed most of the Guays' claims for failure to allege facts

supporting the claims. The only surviving claims were Kevin Guay's

malicious abuse of process claim against Ford, the City of Concord,

and the Concord Police Department, and the Fourth Amendment claims

of both Guays against Ford in his personal capacity.

After several months of discovery, the remaining

defendants moved for summary judgment, again raising the judicial

estoppel defense. On November 16, 2010, after de novo review, the

identify the claims at issue in this case among a list of their
obligations to creditors.

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district court adopted the recommended decision of the magistrate

judge and granted the motion on the basis of the Guays' failure to

disclose their claims in their bankruptcy proceeding.

II.

Typically, a district court's grant of summary judgment

is reviewed de novo. Vélez v. Thermo King de P.R., Inc., 585 F.3d

441, 446 (1st Cir. 2009). However, when reviewing application of

the doctrine of judicial estoppel "the applicable rubric is abuse

of discretion." Alternative Sys. Concepts, Inc. v. Synopsys, Inc.,

374 F.3d 23, 30 (1st Cir. 2004). In Alternative System Concepts,

we explained that the abuse of discretion standard is appropriate

even when reviewing a judicial estoppel ruling on a motion for

summary judgment. Id. at 31. We identified several reasons for

applying the standard in this context, including: 1) the

discretionary nature of judicial estoppel, 2) the district court's

closer relationship to the facts of the case and the litigants'

conduct, 3) the flexibility of the abuse of discretion standard,

and 4) the fact that other circuits that have addressed the

question have unanimously settled on abuse of discretion as the

appropriate standard. Id. at 30-31. We concluded that "[t]he fact

that this case arises in the summary judgment context does not

affect our decision to review the trial court's determination for

abuse of discretion." Id. at 31; see also Thore v. Howe, 466 F.3d

173, 185 (1st Cir. 2006) (reviewing application of judicial

-8-
estoppel upon a motion for summary judgment under the abuse of

discretion standard).

Under the abuse of discretion standard, "we will not

lightly substitute our judgment for that of the district court,

[and will reverse] only 'if we are left with a definite and firm

conviction that the court below committed a clear error of

judgment.'" Lamboy-Ortiz v. Ortiz-Vélez, 630 F.3d 228, 236 (1st

Cir. 2010) (quoting Tang v. State of R.I., Dep't of Elderly

Affairs, 163 F.3d 7, 13 (1st Cir. 1998)) (internal quotation marks

omitted). As the Supreme Court has noted, "deference . . . is the

hallmark of abuse-of-discretion review." Gen. Elec. Co. v. Joiner,

522 U.S. 136, 143 (1997).

III.

A. The Doctrine of Judicial Estoppel

The equitable doctrine of judicial estoppel is ordinarily

applied to "prevent[] a litigant from pressing a claim that is

inconsistent with a position taken by that litigant either in a

prior legal proceeding or in an earlier phase of the same legal

proceeding." Alternative Sys. Concepts, 374 F.3d at 32-33 (quoting

InterGen N.V. v. Grina, 344 F.3d 134, 144 (1st Cir. 2003)). Where

one succeeds in asserting a certain position in a legal proceeding,

one may not assume a contrary position in a subsequent proceeding

simply because one's interests have changed. New Hampshire v.

Maine, 532 U.S. 742, 749 (2001). We have explained that, "[t]he

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doctrine's primary utility is to safeguard the integrity of the

courts by preventing parties from improperly manipulating the

machinery of the justice system." Alternative Sys. Concepts, 374

F.3d at 33. Although we have characterized the archetypal judicial

estoppel case as one in which a litigant is "playing fast and loose

with the courts," id. (internal quotation marks omitted), such

tactics are not a prerequisite for application of the doctrine.

"[A] party is not automatically excused from judicial estoppel if

the earlier statement was made in good faith." Thore, 466 F.3d at

184 n.5.

There are two generally agreed-upon conditions for the

application of judicial estoppel. "First, the estopping position

and the estopped position must be directly inconsistent, that is,

mutually exclusive." Alternative Sys. Concepts, 374 F.3d at 33.

"Second, the responsible party must have succeeded in persuading a

court to accept its prior position." Id. There is also a third

oft-considered factor that asks "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."

New Hampshire, 532 U.S. at 751. We generally have not required a

showing of unfair advantage. See Thore, 466 F.3d at 182 (noting

that this circuit has "rejected [benefit] as a prerequisite to

application of the doctrine"); Alternative Sys. Concepts, 374 F.3d

at 33 (noting that unfair advantage is "not a formal element of a

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claim of judicial estoppel"). Where unfair advantage exists,

however, it is a powerful factor in favor of applying the doctrine.

See Perry v. Blum, 629 F.3d 1, 8-9 (1st Cir. 2010); Alternative

Sys. Concepts, 374 F.3d at 33.

Finally, it is well-established that a failure to

identify a claim as an asset in a bankruptcy proceeding is a prior

inconsistent position that may serve as the basis for application

of judicial estoppel, barring the debtor from pursuing the claim in

a later proceeding. See Moses v. Howard Univ. Hosp., 606 F.3d 789,

798 (D.C. Cir. 2010) ("[E]very circuit that has addressed the issue

has found that judicial estoppel is justified to bar a debtor from

pursuing a cause of action in district court where that debtor

deliberately fails to disclose the pending suit in a bankruptcy

case."); Payless Wholesale Distribs., Inc. v. Alberto Culver (P.R.)

Inc., 989 F.2d 570, 571 (1st Cir. 1993) ("[H]aving obtained

judicial [bankruptcy] relief on the representation that no claims

existed, [plaintiff] can not now resurrect them and obtain relief

on the opposite basis.").

B. The District Court's Application of Judicial Estoppel to the
Guays' Claims

In adopting the magistrate judge's recommended decision

that judicial estoppel barred the Guays' claims, the district court

emphasized the Guays' failure to disclose their claims in the

bankruptcy proceeding and the discharge obtained in that

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proceeding. Kevin Guay,4 however, raises three arguments on

appeal: 1) he did not take contradictory positions in his

bankruptcy and civil cases, 2) the bankruptcy court did not adopt

the schedules in that proceeding, and 3) even if his position here

is inconsistent with that taken in the bankruptcy proceeding, and

even if the bankruptcy court adopted his position in that

proceeding, it is not equitable to apply judicial estoppel in this

case.

1. The Guays' Inconsistent Positions Before the
Bankruptcy Court and the District Court

Under the rules governing the bankruptcy proceeding,

appellant had an obligation to disclose all assets to the

bankruptcy court, 11 U.S.C. §§ 521(a)(1) and 541(a)(1), including

legal claims and potential claims, see Moses, 606 F.3d at 793 ("A

debtor is required to disclose all potential claims in a bankruptcy

petition."); Howe v. Richardson, 193 F.3d 60, 61 (1st Cir. 1999)

("Like all of [debtor's] property . . ., his legal claims became

part of the bankruptcy 'estate' under the Bankruptcy Code."). This

disclosure must take the form of a schedule identifying all assets,

11 U.S.C. § 521(a)(1), and the debtor must amend his asset

schedules and petition if circumstances change during the

bankruptcy proceeding, see 11 U.S.C. § 541(a)(7) (stating that

4
Both Kevin Guay and his wife, Lorraine Guay, were plaintiffs
in the action below. However, only Kevin Guay has appealed from
the district court's judgment and thus he is the sole appellant in
this case.

-12-
estate property includes "[a]ny interest in property that the

estate acquires after the commencement of the case"); Moses, 606

F.3d at 793 ("[A] debtor is under a duty both to disclose the

existence of pending lawsuits when he files a petition in

bankruptcy and to amend his petition if circumstances change during

the course of the bankruptcy.").

The Guays failed to meet this baseline obligation to

amend their bankruptcy schedules, even when ordered by the court to

do so. In September 2009, the bankruptcy court ordered the Guays

to file certain information required by the Federal Rules of

Bankruptcy Procedure, including amended asset schedules. In

response, the Guays filed an affidavit stating:

1. We have reviewed our Bankruptcy
Petition and Amendments as filed and find that
there is no additional information to include
on our Petition or Amendments.

2. We make the foregoing declaration under
penalty of perjury.

The Guays again denied the existence of the claims they seek to

bring here in their opposition to New Hampshire's motion for

contempt. They stated that, "[i]n accordance with the Court's

request, the Debtors have filed an affidavit stating that the

information provided in their bankruptcy schedules as amended was

accurate and there are no changes." Accordingly, in addition to

neglect of their general duty to disclose newly acquired assets,

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the Guays twice represented to the bankruptcy court that no such

assets existed.

These averments, and their general failure to update

their bankruptcy schedules, are plainly inconsistent with the

Guays' conduct in bringing their claims now. As the Eleventh

Circuit has explained, "[b]y failing to update her bankruptcy

schedule to reflect her [newly filed] claim, [debtor] represented

that she had no legal claims to the bankruptcy court while

simultaneously pursuing her legal claim . . . in the district

court. These actions, both taken under oath, are clearly

inconsistent." Robinson v. Tyson Foods, Inc., 595 F.3d 1269, 1275

(11th Cir. 2010).

2. The Bankruptcy Court's Acceptance of the Position
Advanced in the Guays' Asset Schedule

A bankruptcy court "accepts" a position taken in the form

of omissions from bankruptcy schedules when it grants the debtor

relief, such as discharge, on the basis of those filings. Compare

Cannon-Stokes v. Potter, 453 F.3d 446, 447 (7th Cir. 2006)

("[Debtor] had represented that she had no claim against

[defendant] . . .; that representation had prevailed; she had

obtained a valuable benefit in the discharge of her debt."), and

Payless Wholesale Distribs., 989 F.2d at 571 ("[Debtor] having

obtained judicial relief on the representation that no claims

existed, can not now resurrect them and obtain relief on the

opposite basis."), with DiVittorio v. HSBC Bank, USA, N.A. (In re

-14-
DiVittorio), 430 B.R. 26, 48 (Bankr. D. Mass. 2010) (stating that

a position advanced in bankruptcy schedules had not been accepted

when the bankruptcy court "ha[s] not granted the Debtor any relief,

such as a discharge, based upon representations made in them.").

Here, the Guays were discharged from bankruptcy on

October 27, 2009. Although discharge preceded the Guays'

representations to the court that no changes to the schedules were

necessary, it occurred months after the Guays became aware of their

claims and the obligation to amend the schedules had arisen.

Accordingly, the bankruptcy court accepted the position the Guays

adopted with respect to their assets when it discharged them from

bankruptcy on October 27, 2009.

3. Unfair Advantage and Equitable Considerations

Having determined that the two requisite elements for

application of judicial estoppel (inconsistent positions in two

judicial proceedings, and success in relying on the position in the

first proceeding) are present, we now turn to the equities of the

district court's decision to apply judicial estoppel. Appellant

notes that he stands to gain no unfair advantage in this proceeding

on account of his failure to disclose the claims to the bankruptcy

court. Furthermore, he argues that, because the Trustee was made

aware of the claims at the August 2009 creditors' meeting, prior to

his obtaining a discharge on October 27, 2009, and because he

listed the claims on his Report of Unpaid Chapter 11 obligations in

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January 2010, he did not intend to conceal his claims from the

bankruptcy court. Hence applying judicial estoppel in this case

would be inequitable.

As noted above, unfair advantage "is not a formal element

of a claim of judicial estoppel," Alternative Sys. Concepts, 374

F.3d at 33, but it is frequently considered as an important factor

in whether to apply the doctrine, see New Hampshire, 532 U.S. at

751. In this case, appellees admit that appellant stands to gain

no unfair advantage in this proceeding because of his

representations to the bankruptcy court. However, the doctrine is

also intended to protect the integrity of other judicial

proceedings.

We addressed the application of judicial estoppel on the

basis of bankruptcy schedules in Payless Wholesale Distributors.

In that case, as here, the plaintiff sought to bring claims that it

previously failed to disclose in its bankruptcy schedules. We

observed that "[a] long-standing tenet of bankruptcy law requires

one seeking benefits under its terms to satisfy a companion duty to

schedule, for the benefit of creditors, all his interests and

property rights." 989 F.2d at 571 (quoting Oneida Motor Freight,

Inc. v. United Jersey Bank, 848 F.2d 414, 416 (3d Cir. 1988)). The

accuracy and completeness of bankruptcy schedules is important

"[i]n order to preserve the requisite reliability of disclosure

statements and to provide assurances to creditors regarding the

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finality of plans which they have voted to approve." Id. at 571-72

(quoting Oneida Motor Freight, 848 F.2d at 418); see also Burnes v.

Pemco Aeroplex, Inc., 291 F.3d 1282, 1286 (11th Cir. 2002) ("Full

and honest disclosure in a bankruptcy case is crucial to the

effective functioning of the federal bankruptcy system." (internal

quotation marks omitted)).

We determined in Payless that the integrity of the

bankruptcy process is sufficiently important that we should not

hesitate to apply judicial estoppel even where it creates a

windfall for an undeserving defendant.5 We concluded that "[t]his

may not be strictly equitable estoppel . . . . [i]ndeed, defendants

may have a windfall. However, [the plaintiff's conduct] is an

unacceptable abuse of judicial proceedings." 989 F.2d at 571; see

also Cannon-Stokes, 453 F.3d at 448 ("A doctrine that induces

debtors to be truthful in their bankruptcy filings will assist

creditors in the long run (though it will do them no good in the

particular case) -- and it will assist most debtors too, for the

few debtors who scam their creditors drive up interest rates and

injure the more numerous honest borrowers.").

5
Such a windfall would exist if a meritorious claim is deemed
to be forfeit by failure to identify it as an asset in a bankruptcy
proceeding. In such a case, a defendant that would otherwise be
liable is spared because of the plaintiff's conduct in an unrelated
proceeding. We express no opinion on the merit of the Guays'
underlying claims in this case, and thus do not suggest that such
a windfall exists here. We merely point out that the integrity of
the judicial process is paramount.

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 Guay argues that the fact that the claims were discussed

during the August 2009 meeting with the bankruptcy Trustee and

creditors is proof that he did not attempt to conceal the claims.

However, even if we were to accept that he attempted to disclose

the existence of the claims at this meeting (and, for reasons

discussed below, we do not), oral disclosure does not meet the

requirements of the bankruptcy code. In Jeffrey v. Desmond, 70

F.3d 183 (1st Cir. 1995), we explained the importance of formally

scheduling claims and the insufficiency of oral notification.6 We

noted that "[t]he law is abundantly clear that the burden is on the

debtors to list the asset and/or amend their schedules," id. at

186, and explained that the fact that the debtors brought their

claims to the Trustee's attention by means of oral notification

still left open the possibility of judicial estoppel, id. at 186-

87. While we were not called upon to decide whether judicial

6
The procedural posture in Jeffrey differed from that here.
There, the appellants were former debtors who attempted to litigate
claims that they failed to schedule in a contemporaneous bankruptcy
proceeding. When the Trustee of their estate learned of the
claims, he re-opened the bankruptcy case and settled the claims
with the defendant in that case. The bankruptcy court approved the
compromise and the district court affirmed. The debtor appealed,
raising two primary arguments: first, that the Trustee
constructively abandoned the claims because he failed to follow up
after the debtor orally notified him of their existence, and,
second, that when considering whether the compromise was fair in
light of the competing interests at stake the district court
inappropriately considered the likelihood that the claims would be
dismissed pursuant to our holding in Payless. We affirmed the
district court's decision to approve the compromise. Id. at 186-
87.

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estoppel was appropriate in that case, we observed that

"appellants' argument that they brought the state court action to

the Trustee's attention completely overlooks both the importance of

the Bankruptcy Code's disclosure requirements and the fact that

appellants signed the schedules under penalties of perjury." Id.

at 187.

Some circuits have held that parties who fail to identify

a legal claim in bankruptcy schedules may escape the application of

judicial estoppel if they can show that they "either lack[ed]

knowledge of the undisclosed claims or ha[d] no motive for their

concealment." Eastman v. Union Pac. R.R. Co., 493 F.3d 1151, 1157

(10th Cir. 2007); see also Robinson v. Tyson Foods, Inc., 595 F.3d

1269, 1275 (11th Cir. 2010) (same); Eubanks v. CBSK Fin. Group,

Inc., 385 F.3d 894, 898 (6th Cir. 2004) (same); Browning Mfg. v.

Mims (In re Coastal Plains, Inc.), 179 F.3d 197, 210 (5th Cir.

1999) (same). This case does not present facts that require

consideration of that exception, and we leave that question open.7

The appellant makes much of the fact that his claims were

discussed at the August 2009 creditors' meeting. However,

7
We have never recognized such an exception and have noted
that deliberate dishonesty is not a prerequisite to application of
judicial estoppel. See Schomaker v. United States, 334 F. App'x
336, 340 (1st Cir. 2009) (finding that judicial estoppel was
appropriate "whether [plaintiff] has taken an intentionally
inconsistent position . . . or failed to disclose [asset] in the
bankruptcy proceeding because he mistakenly believed it was subject
to forfeiture").

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appellant's briefing scrupulously avoids stating that it was an

attorney for the State of New Hampshire who brought the claims to

the Trustee's attention. Hence, appellant's argument that he

cannot be deemed to have intended to conceal his claims where the

Trustee had knowledge of the claims appears disingenuous, and his

repeated denial of the existence of the claims takes on added

significance. In sum, because the oral notice provided to the

Trustee came from another party, and not from the Guays, and the

Guays repeatedly averred to the bankruptcy court that no such

claims existed, the district court had an ample basis for

concluding that there was a motive to conceal in the bankruptcy

proceeding.8

Finally, the fact that the claims were listed on the

Guays' January 15, 2010 Report of Unpaid Chapter 11 Obligations

does not prevent the application of judicial estoppel. This filing

came more than two months after the bankruptcy court, in

discharging the Guays from bankruptcy, had accepted the Guays'

bankruptcy schedules as complete and accurate. Furthermore, it

also came after the defendants raised the issue of judicial

8
There was no explicit finding by the district court that
there was a motive to conceal in this case. Instead, that finding
may be fairly inferred from the court's reasoning. The court
quoted our decision in Payless describing the debtor's conduct in
that case as a plan to "[c]onceal [its] claims; get rid of [its]
creditors on the cheap, and start over with a bundle of rights."
989 F.2d at 571. It then analogized the Guays' conduct to that of
the debtors in Payless and concluded that such conduct was "an
unacceptable abuse of judicial process."

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estoppel. Therefore, the Guays only made this disclosure (which

did not satisfy their obligation to amend their bankruptcy

schedules) after: 1) repeatedly denying the existence of the

claims, 2) obtaining a discharge from the bankruptcy court, and 3)

their adversary raised the issue of judicial estoppel. To allow

the Guays to rely on their belated report of unpaid obligations

under these circumstances would neither serve the equities of this

case nor create the proper incentive for future debtors to disclose

assets in a bankruptcy proceeding completely and accurately. As

the D.C. Circuit has explained,

allowing . . . a debtor to "back-up, re-open
the bankruptcy case, and amend his bankruptcy
filings, only after his omission has been
challenged by an adversary, suggests that a
debtor should consider disclosing potential
assets only if he is caught concealing them.
This so-called remedy would only diminish the
necessary incentive" for the debtor "to
provide the bankruptcy court with a truthful
disclosure of his assets."

Moses, 606 F.3d at 800 (quoting Burnes v. Pemco Aeroplex, Inc., 291

F.3d 1282, 1288 (11th Cir. 2002)). Furthermore, allowing such

conduct "would similarly diminish the doctrine's ability to deter

the debtor from pursuing claims in the District Court to which he

is not entitled." Id.

IV.

For the foregoing reasons, the district court did not

abuse its discretion in applying the doctrine of judicial estoppel

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to foreclose appellant's claims. The judgment of the district

court is affirmed.

So ordered.

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