In Dzakula v. McHugh, ___ F.3d ___ (9th Cir. Dec. 11, 2013), the Ninth Circuit Court of Appeals affirmed the order of the U.S. District Court for the Northern District of California dismissing Plaintiff’s discrimination claim against her employer, the Secretary of the Army, on the grounds that she was judicially estopped from maintaining the action because she failed to list the lawsuit as an asset in her Chapter 7 bankruptcy proceeding .
After filing an employment discrimination action against her employer, she filed for bankruptcy under Chapter 7. Defendant moved to dismiss on the theory of judicial estoppel because Plaintiff did not list the employment discrimination as an asset on her asset schedule but continued pursing it in civil court.
The appellate court found that the District Court did not abuse its discretion when it concluded that Plaintiff’s omission was neither inadvertent nor mistaken, since Plaintiff presented no evidence explaining her failure to list the action on her bankruptcy asset schedule. Therefore, by failing to list the claim while at the same time pursuing it, plaintiff asserted inconsistent positions that misled the bankruptcy court and gave her an unfair advantage in the bankruptcy proceedings.