Dzakula v. McHugh

Judicial estoppel bars an action that was neither inadvertently nor mistakenly omitted from Chapter 7 bankruptcy schedules.

When Maida Dzakula filed for Chapter 7 bankruptcy, she omitted her cause of action for employment discrimination on her bankruptcy schedules; she did not add this potential asset until her employer moved to dismiss based on judicial estoppel. The district court held that there was no evidence to suggest that Dzakula’s original omission in not listing her employment discrimination suit on her bankruptcy schedules was inadvertent or mistaken. Thus, judicial estoppel barred her claim. Dzakula appealed, and the Ninth Circuit affirmed. The panel looked at its recent decision in Ah Quin v. County of Kauai Department of Transportation and held that the district court “correctly assessed whether [Dzakula’s] omission was inadvertent or mistaken under the ordinary understanding of those terms.” Dzakula did not present evidence or explain why she did not include this action, seek reconsideration, supplement the record, or challenge the district court’s assessment of her act. The panel determined that “no reasonable fact-finder could conclude that the omission was inadvertent or mistaken,” and thus Dzakula did not need an evidentiary hearing like the Ah Quin plaintiff received. The panel also disagreed with Dzakula’s argument that the district court abused its discretion when it assessed the factors in New Hampshire v. Maine and explained that even though it would have been within its discretion to reach opposite conclusions, there was no abuse in the analysis. AFFIRMED.