IN THE SUPREME COURT OF THE STATE OF IDAHO

Docket No. 38196

KATHLEEN A. MC CALLISTER, in her 

capacity as the bankruptcy trustee,

 Plaintiff-Appellant,

v.

GORDON DIXON, M.D., BLACKFOOT 

MEDICAL CLINIC, INC.,

 Defendants-Respondents,

and

BLACKFOOT MEDICAL CENTER, LLC,

 Defendant.

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Boise, September 2012 Term

2013 Opinion No. 16

Filed: February 1, 2013

Stephen W. Kenyon, Clerk

 

 

Appeal from the District Court of the Seventh Judicial District of the State of 

Idaho, Bingham County. Hon. Darren B. Simpson, District Judge.

The decision of the district court is affirmed. Costs on appeal are awarded to 

Respondents.

Cooper & Larsen, Chartered, Pocatello, attorneys for Appellant, Javier Gabiola 

argued.

Moffat, Thomas, Barrett, Rock & Fields, Chtd., Pocatello, attorneys for 

Respondent, Julian Gabiola argued.

____________________________

W. JONES, Justice

I. NATURE OF THE CASE

This is an appeal from a district court order dismissing Plaintiff-Appellant (Jerry 

Doherty) as a party in a medical malpractice action against Respondents (Dr. Gordon E. Dixon 

and Blackfoot Medical Clinic). The judgment was certified under Rule 54(b) of the Idaho Rules 

of Civil Procedure on November 24, 2010. The district court, on September 16, 2010, ruled that 

because Doherty failed to disclose this claim as an asset in his Chapter 13 bankruptcy 

proceeding, he was judicially estopped from pursuing this claim against Respondents. The 
2

district court further ordered that Doherty take nothing from Respondents, and that the 

bankruptcy trustee be substituted as the party-plaintiff. Doherty appeals the district court’s order 

and argues that the district court abused its discretion in granting summary judgment.

II. FACTUAL AND PROCEDURAL BACKGROUND

On September 12, 2004, Doherty sought treatment from Blackfoot Medical Clinic and 

Dr. Dixon—a general practitioner—for an eye injury. Doherty claims that Dr. Dixon failed to 

perform appropriate tests and failed to refer Doherty to an eye specialist, which resulted in the 

loss of his eye. On July 25, 2005, Doherty filed a Chapter 13 bankruptcy petition because he was 

behind on his truck payments. Doherty did not list any potential claims against Respondents on 

his asset schedule. The bankruptcy court confirmed Doherty’s bankruptcy plan on September 6, 

2005, whereby Doherty avoided over $12,000 in unsecured creditor claims. Doherty commenced 

a lawsuit against Respondents on September 6, 2006. Doherty did not amend his bankruptcy 

asset schedule to reflect the claim against Respondents prior to his discharge on January 21, 

2009.

Doherty filed a motion in limine on August 11, 2009, seeking to exclude evidence of his 

bankruptcy. In response to the motion, on August 18, 2009, Respondents raised the issue of 

Doherty’s failure to amend his bankruptcy asset schedule after filing this lawsuit. Respondents’

response was treated by both Doherty and the district court as a motion for summary judgment.

On August 26, 2009, Doherty reopened his bankruptcy case and filed an Amended 

Schedule B (asset schedule), which reflected the current lawsuit as a potential asset. The 

bankruptcy court permitted Doherty to reopen his bankruptcy case on March 4, 2010. Doherty 

moved to join Kathleen McCallister (“McCallister”) as a party-plaintiff to the lawsuit in her 

official capacity as bankruptcy trustee.

On September 16, 2010, the district court granted Respondents’ motion for summary 

judgment and substituted McCallister as a party-plaintiff. After disposing of issues not raised on 

this appeal, the district court concluded that a debtor filing for bankruptcy must list all existing 

and potential assets and that this duty continues while the bankruptcy is pending. The district

court found that by October 28, 2004, Doherty believed that Dr. Dixon’s failure to refer him 

earlier to a specialist resulted in his loss of vision. Also, the district court found that when

Doherty filed suit against Respondents on September 6, 2006, Doherty was fully aware that he 

had a claim against them. Yet, Doherty failed to list this asset or to amend his asset schedule with 

the bankruptcy court until Respondents objected.
3

The district court rejected the reasoning used in a string of Georgia cases that permit a 

subsequent reopening of a bankruptcy proceeding and disclosure of a non-disclosed asset to 

avoid application of judicial estoppel. It relied instead on federal precedent holding that the 

reopening cure encourages gamesmanship. The district court reasoned that the Georgia law was 

not persuasive because it failed to recognize the allocation of assets during bankruptcy. During 

bankruptcy, assets and causes of action belong entirely to the bankruptcy trustee. The Georgia 

approach—by permitting a debtor to maintain a lawsuit that does not belong to him or her as a 

debtor in bankruptcy—undermines the bankruptcy code. Also, permitting the debtor to “undo” 

his lack of disclosure encourages non-disclosure. Therefore, the district court found that such a 

cure is not a defense to judicial estoppel.

Doherty filed an affidavit asserting his non-disclosure of this lawsuit in his bankruptcy 

proceeding was a good-faith mistake. The district court found that good faith is insufficient to 

avoid application of judicial estoppel, because judicial estoppel is based upon knowledge of the 

asset and the potential incentive to conceal the asset. The district court found that the alleged 

mistake was the result of either a failure of counsel, which does not amount to inadvertence or 

mistake, or to ignorance of the law, which is not a defense. As to the two issues the district court 

found dispositive—knowledge and incentive—it found that Doherty knew of the claim, benefited 

from the discharge by the bankruptcy proceeding, and had a potential motive to conceal the 

claim from the bankruptcy court. 

Doherty now argues that Respondents in the current matter are not prejudiced by his nondisclosure because it is primarily Doherty’s creditors who were prejudiced. But the prejudice 

caused to Respondents did not weigh heavily on the district court’s decision: it is the integrity of 

the judicial system, not individuals, that is protected by judicial estoppel. 

Finally, the district court rejected Doherty’s claim that permitting judicial estoppel would 

result in inequity because it allegedly impairs the ability of Doherty’s creditors to collect. The 

district court found that even where a party fails to disclose a cause of action, that action belongs 

to the bankruptcy estate and the trustee of that estate maintains exclusive standing to pursue that 

claim. The district court did not find judicial estoppel inequitable to Doherty’s creditors because 

it ordered the bankruptcy trustee be substituted for Doherty. 

III. ISSUES ON APPEAL

1. Whether the district court abused its discretion in imposing judicial estoppel.

2. Whether either Doherty or Respondents are entitled to attorney’s fees and costs on 

appeal.
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IV. STANDARD OF REVIEW

Though the district court called its dismissal of Doherty’s claims “summary judgment,” 

in actuality it merely dismissed Doherty’s action on the basis of judicial estoppel. Therefore, the 

dismissal of Doherty will properly be reviewed under the abuse of discretion standard, not the 

summary judgment standard. The doctrine of judicial estoppel sounds in equity and is invoked at 

the discretion of the court. Sword v. Sweet, 140 Idaho 242, 252, 92 P.3d 492, 502 (2004). A 

reviewing court will examine an alleged abuse of discretion based on “(1) whether the trial court 

correctly perceived the issue as one of discretion; (2) whether the trial court acted within the 

outer boundaries of its discretion and consistently with legal standards applicable to the specific 

choices available to it; and (3) whether the trial court reached its decision by an exercise of 

reason.” Riley v. W.R. Holdings, LLC, 143 Idaho 116, 121, 138 P.3d 316, 321 (2006).

V. DISCUSSION

A. The District Court Did Not Abuse Its Discretion When It Judicially Estopped 

Doherty From Pursuing His Claim.

Doherty argues the imposition of judicial estoppel was improper because Doherty’s claim

against Respondents has nothing to do with his bankruptcy; does not involve the same parties;

and does not arise out of the same transaction. Also, Doherty contends the district court 

improperly weighed inferences from the record that Doherty had no intent to conceal the lawsuit 

as an asset in the bankruptcy proceeding and his reopening and amending of bankruptcy asset 

avoids application of judicial estoppel. Doherty maintains that it is inequitable to both him and 

his bankruptcy creditors to dismiss him as a party, because the failure to report the claim did not 

prejudice Respondents, and prevents Doherty and his creditors from recovering.

1. Judicial Estoppel Applies to Bankruptcy Proceedings.

Idaho adopted the doctrine of judicial estoppel in Loomis v. Church, 76 Idaho 87, 277 

P.2d 561 (1954). Judicial estoppel precludes a party from advantageously taking one position,

then subsequently seeking a second position that is incompatible with the first. Wood, 141 Idaho 

at 684, 116 P.3d at 14. The policy behind judicial estoppel is to protect “the integrity of the 

judicial system, by protecting the orderly administration of justice and having regard for the 

dignity of the judicial proceeding.” Id. at 685, 116 P.3d at 15 (quoting Robertson Supply Inc. v. 

Nicholls, 131 Idaho 99, 101, 952 P.2d 914, 916 (Ct. App. 1998)). Broadly accepted, it is intended

to prevent parties from playing fast and loose with the legal system. Id.; see also 31 C.J.S. 

Estoppel and Waiver §186 (2012). Judicial estoppel protects the integrity of the judicial system, 

not the litigants; therefore, it is not necessary to demonstrate individual prejudice. Wood, 141 
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Idaho at 686, 116 P.3d at 16 (citing Hamilton v. State Farm Fire & Cas. Co., 270 F.3d 778 (9th 

Cir. 2001)). Judicial estoppel applies to inconsistent positions taken in bankruptcy proceedings. 

Id. (relying on decisions from numerous courts holding “privity . . . [though] often present in 

judicial estoppel cases, [is] not required.” Burnes v. Pemco Aeroplex, Inc., 291 F.3d 1282, 1286 

(11th Cir. 2002)). 

In Wood, A & J Construction filed for bankruptcy and failed to list the Sugar Beet 

Property as an asset in its bankruptcy proceeding, nor did it list a joint venture agreement that it

entered into with Wood. Id. at 684, 116 P.3d at 14. Wood was not listed as either a creditor or 

debtor in the bankruptcy proceeding. Id. Thereafter, A & J Construction brought an unjust 

enrichment suit against Wood on its interest in the joint venture, which was ultimately dismissed 

on grounds of judicial estoppel even though A & J Construction claimed to have honestly 

believed its interest in the joint venture was not an asset. Id. This Court affirmed the district

court’s grant of summary judgment on the grounds of judicial estoppel. Id. at 688, 116 P.3d at 

18. In so doing, we relied heavily on federal precedent providing that anything less than full 

disclosure undermines the bankruptcy system. Id.

This Court was not alone when in 2005 we extended judicial estoppel to bankruptcy 

proceedings. Compare Wood, 141 Idaho at 688, 116 P.3d at 18, with Benjamin J. Vernia, 

Annotation, Judicial Estoppel of Subsequent Action Based on Statements, Positions, or 

Omissions as to Claim or Interest in Bankruptcy Proceeding, 85 A.L.R. 5th 353 (2001). Full 

disclosure is crucial to the effective functioning of the bankruptcy system: “[T]he importance of 

full and honest disclosure cannot be overstated.” Wood, 141 Idaho at 685, 116 P.3d at 15 (citing 

11 U.S.C. §§ 521(1), 541(a)(7)). The application of judicial estoppel is necessary in such cases to 

discourage debtors from concealing potential assets. Hamilton, 270 F.3d at 285; Burnes, 291 

F.3d at 1286; Oneida Motor Freight, Inc. v. United Jersey Bank, 848 F.2d 414, 419 (3d Cir. 

1988).

In this matter, Doherty asserts malpractice against Respondents and seeks damages. The 

alleged malpractice occurred before his bankruptcy action, but it was not disclosed on his asset 

schedule. The question of whether it was Doherty’s intent to conceal his claim until bankruptcy 

proceedings closed—so he can keep any potential recovery instead of satisfying his creditors—is 

not material; there is certainly a motive and an incentive to try concealing the asset for personal 

gain. Such concealment undermines the effectiveness of the bankruptcy system. Therefore, the 

district court did not abuse its discretion when it properly recognized judicial estoppel as 

applicable to situations of non-disclosure of an asset in an earlier bankruptcy proceeding.
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2. Doherty is Charged With Knowledge of His Claim Against Respondents.

Judicial estoppel “takes into account . . . what the [estopped] party knew, or should have 

known, at the time the original position was adopted. Thus, the knowledge that the party 

possesses, or should have possessed, at the time the statement is made is determinative as to 

whether that person is ‘playing fast and loose’ with the court.” Heinze v. Bauer, 145 Idaho 232,

236, 178 P.3d 597, 601 (2008). Judicial estoppel, however, should “only be applied when the 

party maintaining the inconsistent position either did have, or was chargeable with, full 

knowledge of the attendant facts prior to adopting the initial position.” McKay v. Owens, 130 

Idaho 148, 155, 937 P.2d 1222, 1229 (1997). Bankruptcy rules require disclosing all existing and 

potential assets. 11 U.S.C. §§ 521(1), 541(a)(7). This duty continues during the pendency of the 

bankruptcy. Burnes, 291 F.3d at 1286. “Judicial estoppel will be imposed when the debtor has 

knowledge of enough facts to know that a potential cause of action exists during the pendency of 

the bankruptcy, but fails to amend his schedules or disclosure statements to identify the cause of 

action as a contingent asset.” Wood, 141 Idaho at 686, 116 P.3d at 16 (quoting Hamilton, 291 

F.3d at 1286). It is the knowledge that a party has or is chargeable as having that is considered, 

not the intent of the party. McKay, 130 Idaho at 155, 937 P.2d at 1229.

In Wood, A & J Construction (the debtor) was involved in a joint venture with Wood and 

subsequently filed for bankruptcy. 141 Idaho at 683–84, 116 P.3d at 13–14. A & J Construction 

maintained that it honestly did not believe its interest in the joint venture was an asset. Id. This

Court found that the corporation was aware of the joint venture and should have disclosed the 

asset. Id. at 686, 116 P.3d at 16. We rejected A & J Construction’s argument that it was unaware 

the joint venture constituted an asset and held that a debtor’s subjective determination of an 

asset’s value is irrelevant. Id. The determinative question was whether there was knowledge of 

the asset—we did not inquire into the intent to conceal the asset.

The case of McKay v. Owens involves a suit by a parent against the attorney she hired to 

represent her child in a medical malpractice suit. 130 Idaho at 150, 937 P.2d at 1224. After 

agreeing to a settlement on the medical malpractice claim, the parent sued her attorney asserting 

that the agreement was signed without her consent and that the damages were insufficient. Id. at 

151, 937 P.2d at 1225. The parent in McKay had knowledge of the agreement because in court 

and on the record she “agreed to the settlement,” and “clearly registered [her] agreement to the 

settlement.” Id. But in opposition to judicial estoppel, the parent asserted that she never “meant” 

to approve the settlement but “intended” to file the legal malpractice claim. Id. at 154, 937 P.2d 
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at 1228 (emphasis added). We upheld imposition of judicial estoppel, because the knowledge of 

a party is relevant, not the party’s intent. See id. at 154–56, 937 P.2d at 1228–30.

In Heinze v. Bauer, a client sued his divorce attorney for negligently recommending that 

he accept the property division settlement in his divorce proceeding. Again, the question was

whether the party was “chargeable with full knowledge” 145 Idaho at 239, 178 P.3d at 604 

(emphasis in original). The client accepted the property division agreement in court, but he 

subsequently argued that he failed to understand the settlement agreement, and that the 

agreement lacked clarity because of notations and strikeouts. Id. Nonetheless, the client was 

“chargeable with full knowledge of the attendant facts prior to the in court stipulation. [He] was 

intimately familiar with the assets and liabilities of the community estate prior to the settlement.” 

Id. at 239, 178 P.3d at 604. Furthermore, he met with his attorney about the settlement, he 

reviewed his wife’s credit card purchases, he notated the settlement with his concerns, and he 

had opportunity to ask the magistrate questions. Id. Consequently, judicial estoppel was 

appropriate despite the client’s subjective state of mind.

In the current matter, the district court found that, eight months before Doherty filed for 

bankruptcy, he believed that but for Dr. Dixon’s alleged malpractice he would have retained full

eyesight in his injured eye. When Doherty filed bankruptcy, before filing this suit against 

Respondents, Doherty failed to list his potential claim as an asset. At no time while the 

bankruptcy was pending did Doherty seek to amend his asset schedule—even after the lawsuit 

was filed. Doherty signed an affidavit asserting that his non-disclosure was made in good faith 

and without the intent to deceive. Doherty contends that the district court did not read the 

assertions in his affidavit in the light most favorable to him as the non-moving party and 

therefore abused its discretion by finding that he possessed the requisite knowledge for judicial 

estoppel. Even assuming that Doherty is correct that the district court failed to properly weigh 

the inferences in his affidavit (or even if the district court discounted Doherty’s assertions 

altogether), the inferences drawn from Doherty’s affidavit do not implicate the knowledge that 

Doherty is charged with having, because it speaks to his intent to conceal. Doherty’s own brief 

articulates the inference drawn from his affidavit as follows: “[H]e had no intention to conceal 

his lawsuit against Dr. Dixon and [Blackfoot Medical Clinic] as an asset in the bankruptcy 

proceeding.” Yet, nowhere does Doherty claim that he was unaware of his claim against 

Respondents. Based on this inference, Doherty created an issue of fact with his affidavit, but 

hardly a material fact: Doherty’s subjective intent is irrelevant. 
8

There is a distinction between a party’s intent to play fast and loose with the judicial 

system and the knowledge that they are charged with possessing. We have consistently rejected 

opportunities to inquire into a party’s subjective state of mind, and instead question whether the 

party seeking to avoid judicial estoppel was sufficiently aware of the facts giving rise to 

application of judicial estoppel. The fact that the bankruptcy proceeding was filed before the 

malpractice action is not material, because Doherty was aware of Dr. Dixon’s potential 

malpractice before bankruptcy proceedings; did not claim the potential asset; and did not amend 

his asset schedule after implementing this suit against the Respondents while his bankruptcy was 

still pending. Therefore, Doherty possessed the requisite knowledge for the application of 

judicial estoppel.

3. Doherty’s Subsequent Reopening and Amending of His Bankruptcy Assets Does 

Not Avoid Application of Judicial Estoppel. 

Whether a party’s reopening of his or her bankruptcy proceeding and amending his or her 

asset schedule to reveal an undisclosed cause of action avoids application of judicial estoppel in 

the non-disclosed proceeding is an issue of first impression in Idaho. But numerous other 

jurisdictions—including many federal circuits—have examined this issue and held that 

reopening bankruptcy proceedings will not cure non-disclosure to a bankruptcy court so as to 

avoid application of judicial estoppel.1

 1 The Sixth Circuit held that permitting such a cure “would encourage gamesmanship since [the debtor] only 

fixed her filing after the opposing party pointed out that those filings were inaccurate.” White v. Wyndham Vacation 

Ownership, Inc., 617 F.3d 472, 481 (6th Cir. 2010). The Eleventh Circuit in Burnes found that permitting a party to 

“re-open the bankruptcy case, and amend his 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.” 291 F.3d at 

1288. There, the Eleventh Circuit reaffirmed this earlier rejection of the reopening cure: 

Allowing [a debtor] to back-up, re-open the bankruptcy estate, and amend his bankruptcy filing, 

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 to provide the bankruptcy court with a truthful 

disclosure of the debtors assets.

Barger v. City of Cartersville, Ga., 348 F.3d 1289, 1297 (11th Cir. 2003) (citing Burnes, 291 F.3d at 1284) (internal 

citations and quotations omitted). The Tenth Circuit spoke disfavorably about the reopening cure because permitting 

a party to reopen “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.” Eastman v. Union Pac. R.R. Co., 493 F.3d 

1151, 1160 (10th Cir. 2007). The Bankruptcy Court for the Eastern District of California rejected the reopening cure 

by holding that such reopening does not cure or excuse the failure to declare all interests. Rose v. Beverly Health & 

Rehab Serv., Inc., 356 B.R. 18, 27 (Bankr. E.D. Calif. 2006). The Third Circuit uses similar reasoning in strictly 

enforcing judicial estoppel as opposed to lesser sanctions. Krystal Cadillac-Oldsmobile GMC Truck, Inc. v. General 

Motors Corp., 337 F.3d 324, 325 (3d Cir. 2003) (“allowing . . . the lesser sanction . . . would send a message that a 

debtor should consider disclosing potential assets only if he is caught concealing them). The Sixth Circuit permits 

the reopening cure when the assets were not disclosed due to inadvertence or mistake. See Finney v. The Free Enter. 

Sys., Inc., 2011 WL 1157696 at *2 (holding that the debtor’s misunderstanding that a claim was required to be 
9

Doherty urges us to adopt the Georgia approach. But the Georgia approach is 

incompatible with the current state of Idaho law. First, the Georgia approach considers which 

court is manipulated by non-disclosure and leaves it to that court to impose sanctions. However, 

judicial estoppel protects the judicial system—not merely the enforcing court. See Wood, 141 

Idaho at 686, 116 P.3d at 16. Permitting the reopening cure as a defense to judicial estoppel

provides an incentive for debtors to conceal potential causes of action until the opposing party 

identifies the concealment and objects, but no incentive to disclose all assets: If the cause of 

action is disclosed and goes unnoticed, then the debtor can recover free from the claims of his 

discharged creditors. But if the non-disclosure is noticed, the debtor simply needs to reopen and 

amend his schedule. Indeed, Doherty’s concealment of this cause of action from the bankruptcy 

court nearly went unnoticed. Respondents only discovered Doherty’s bankruptcy filing less than 

two months before the jury trial was set to begin. 

Second, Doherty and Georgia make an unpersuasive argument that it is inequitable to 

deny the reopening cure. Georgia permits the reopening cure so bankruptcy creditors will not

lose their potential recovery. Jowers v. Arthur, 537 S.E.2d 200, 201 (2000). The Bankruptcy 

Code provides that title to the debtor’s assets, including causes of action that belong to the debtor 

when bankruptcy is filed, vest in the bankruptcy estate. Kane v. Nat’l Union Fire Ins. Co., 535 

F.3d 380, 385 (5th Cir. 2008). Property that is not disclosed on the asset schedule, or otherwise 

administered by the time the bankruptcy case closes, remains property of the bankruptcy estate 

forever. An-Tze Chang v. K & S Diversified Investments, Inc., 308 B.R. 448, 461 (9th Cir. 2004); 

U.S. ex rel. Gebert v. Trans. Admin. Serv., 260 F.3d 909, 913 (8th Cir. 2001). As to causes of 

action, the trustee of the bankruptcy estate is the only party with standing to prosecute causes of 

action belonging to the estate. Kane, 535 F.3d at 385. 

As the district court properly noted, once Doherty filed for bankruptcy, the potential tort 

claim he had against Respondents was no longer Doherty’s to assert. It became an asset of the 

bankruptcy estate for the bankruptcy trustee to assert. The district court recognized that this

cause of action belongs to the trustee of the bankruptcy estate and substituted the trustee as a 

plaintiff to this claim. Such a result is equitable because Doherty’s bankruptcy creditors can 

potentially recover; it moots the concerns expressed by Georgia that alleged tortfeasors would 

not be held responsible for their torts, Jowers, 537 S.E.2d, 200, 203; and it maintains the 

integrity of the judicial system by eliminating the incentive to conceal an asset in bankruptcy 

 included in the asset schedule and lack of bad faith was a sufficient to avoid judicial estoppel under the mistake 

exception). 
10

until discovered. Therefore, Doherty’s reopening and amending of his bankruptcy assets does not 

avoid application of judicial estoppel.

4. The Inadvertence-or-Mistake Exception to Judicial Estoppel is Satisfied Only if 

the Debtor Lacks Knowledge of the Undisclosed Claim or has No Motive to 

Conceal the Claim.

The final question regarding the application of judicial estoppel is whether the 

inadvertence-or-mistake exception to judicial estoppel is applicable. Doherty maintains that his 

nondisclosure is the result of mistake or inadvertence because his non-disclosure was made in 

“good faith,” and without the intent to conceal. Doherty equates inadvertence or mistake with the 

absence of intent.

Judicial estoppel is intended to prevent abuse of the judicial process. McKay, 145 Idaho 

at 235, 178 P.3d at 600. Judicial estoppel will not be applied if the inconsistent positions are 

based only on inadvertence or mistake. Id. It is widely recognized that judicial estoppel does not 

apply to good faith mistakes. 31 C.J.S. Estoppel and Waiver §186 (2012). Following the advice 

of counsel is not the equivalent of inadvertence or mistake. Wood, 141 Idaho at 688, 116 P.3d at 

16; see also Cannon-Stokes v. Potter, 453 F.3d 446, 448–49 (7th Cir. 2006); In re Coastal

Plains, Inc., 179 F.3d 197, 213 (5th Cir. 1999); Tokheim v. Ga.-Pac. Gypsum LLC, 147 Idaho 

737, 748, 215 P.3d 457, 468 (2009). Thus, the inadvertence-or-mistake exception is only 

applicable where it negates the knowledge that the estopped party actually had, or that he or she 

is reasonably charged with having at the time the estopped party adopted his or her original 

position. See Heinze, 145 Idaho at 239, 178 P.3d at 604 (examining whether the estopped party 

“should have recognized any mistakes” in his original position). 

Doherty asserts that because his omission was made in good faith, it satisfies the 

inadvertence-or-mistake exception to judicial estoppel. It is true that some courts have 

interpreted the inadvertence-or mistake-exception as denoting bad faith. See Thompson v. Cont,

Airlines, 18 S.W.3d 701 (Tex. App. San Antonio 2000). But the majority of jurisdictions apply 

the inadvertence-or-mistake exception only if the debtor lacks knowledge of the undisclosed 

claim or has no motive for its concealment. Eastman, 493 F.3d 1151 (finding the “overwhelming 

weight of authority” as supporting this position); Jethroe v. Omnova Solutions, Inc., 412 F.3d 

598 (5th Cir. 2005) (holding that debtor must demonstrate that she was unaware of the of facts 

giving rise to her claim during bankruptcy, not merely disclosure requirements); Burnes v. 

Pemco Aeroplex, Inc., 291 F.3d 1282 (11th Cir. 2002); In re Coastal Plains, 179 F.3d 197 (5th 

Cir. 1999). Courts examining this exception apply an objective standard. See Benton v. Ryan’s 
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Family Steakhouse, 222 F.R.D. 112 (S.D. Miss. 2004) (“[debtor] plainly had motive to conceal 

her claim, of which she had knowledge, and her current professed lack of bad faith and 

unintentional non-disclosure do not amount to ‘inadvertence’”). This approach is consistent with 

Idaho law: the inadvertence-or-mistake exception applies where the facts alleged negate the 

knowledge chargeable to the estopped party at the time he asserted his original position.

In Heinze, the estopped party sought to sue his attorney for negligently recommending he 

accept a property division settlement in his divorce. Heinze, 145 Idaho at 234, 178 P.3d at 599. 

The estopped party in Heinze claimed that he failed to recognize mistakes in the agreement and 

that he did not understand the agreement he was entering. Id. at 239–40, 178 P.3d at 604–05. 

Whether these circumstances negated the knowledge he was charged with having, this Court

found that he had the opportunity to ask the magistrate questions, he examined the settlement and 

made notations, and he tracked his wife’s purchases. Id. The knowledge that the estopped party 

is charged with having is determinative. Id. at 235, 178 P.3d at 600 (citing McKay, 130 Idaho at 

155, 937 P.2d at 1229). Therefore, judicial estoppel was appropriate.

In Wood, a joint venture was not disclosed to the bankruptcy court. The estopped party 

argued that the non-disclosure “was not because of deliberate intention . . . to mislead the 

bankruptcy court.” Wood, 141 Idaho at 686, 116 P.3d at 16. Rather, the joint venture was not 

disclosed because of the efforts and advice of the attorneys. Id. The estopped party sought the 

relief of the inadvertence or mistake exception. See id. We held “that following the advice of 

counsel is not equivalent to inadvertence or mistake . . . .” Id. at 687, 116 P.3d at 17. In that case, 

regardless of the estopped party’s intentions, the estopped party was ultimately aware of the 

potential asset and did not disclose it. Id.

Here, even though Doherty claims inadvertence or mistake, Doherty had knowledge of 

the facts giving rise to his claim against Respondents at the time he filed for bankruptcy, and 

during his bankruptcy proceeding. Therefore, he did not lack knowledge. Also, whether or not he 

intended to conceal this potential asset is irrelevant: objectively, there was a motive for Doherty 

to conceal this claim. Doherty’s affidavit does not raise any facts that negate the knowledge he 

was charged with having and therefore his lack of bad faith alone is not sufficient to avoid 

judicial estoppel. The only two inferences the district court could draw from Doherty’s affidavit 

were (1) that he was unaware he was required to disclose this cause of action on his asset 

schedule (i.e., he was ignorant of the law), or (2) that his legal counsel failed him. The district

court reasonably disposed of these two inferences, which was unnecessary because neither of 
12

these inferences negates the knowledge with which Doherty is charged nor his potential motive 

to conceal.

Therefore, the inadvertence-or-mistake exception does not apply to Doherty’s nondisclosure.

B. Neither Party is Entitled to Attorney Fees, But Costs are Awarded to 

Respondents.

Doherty claims he is entitled to attorney fees pursuant to I.C. § 12-121 and Idaho 

Appellate Rule 41 and costs pursuant to Idaho Appellate Rule 40. The Respondents request

attorney fees under I.C. §12-121 and Idaho Appellate Rule 41 and costs pursuant to Idaho 

Appellate Rule 40.

Idaho Appellate Rule 41 provides “any party seeking attorney fees on appeal must assert 

such a claim as an issue presented on the first appellate brief filed by such party . . . .” Doherty 

and the Respondents each properly raised and requested attorney fees in their first briefs.

The Court is permitted to award fees to a prevailing party in certain limited circumstances 

as authorized by I.C. § 12-121. Owner-Operator Indep. Drivers Ass’n v. Idaho Pub. Utils. 

Comm’n, 125 Idaho 401, 408, 871 P.2d 818, 825 (1994). But attorney fees are not awardable as a 

matter of right. Id. They should only be awarded when the court believes “that the action was 

pursued, defended, or brought frivolously, unreasonably, or without foundation.” Id. Attorney 

fees will not be awarded for arguments that are based on a good faith legal argument. E.g., 

Backman v. Lawrence, 147 Idaho 390, 401, 210 P.3d 75, 86 (2009).

In the present case, Doherty argued the elements of judicial estoppel were not met in the 

current matter despite very clear and very heavy authority holding that judicial estoppel will 

apply to interests not disclosed in a prior bankruptcy proceeding. But Doherty made a good faith 

argument that his omission was not intentional and therefore fell within the ambit of the 

inadvertence-or-mistake exception. Since this issue is unsettled in Idaho and other courts have 

addressed this exception in terms of intentionality, attorney fees will not be awarded. 

Respondents in this case defended what they saw as a proper order from the district court. Thus, 

neither party is entitled to attorney fees.

Idaho Appellate Rule 40 awards costs “as a matter of course to the prevailing party unless 

otherwise provided by the law or order of the Court.” Since the Respondents are the prevailing 

party on appeal, they are awarded costs.

VI. CONCLUSION
13

We affirm the district court’s dismissal of Doherty’s claims under the doctrine of judicial 

estoppel. Costs on appeal are awarded to Respondents as the prevailing party.

Chief Justice BURDICK, Justices EISMANN, J. JONES and HORTON, CONCUR.