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Case number 14-7190, Sandra Marshall Appellate versus Honeywell Technology Systems, Inc.

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at L. Ms.

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Miles for the appellate, Mr. Otato for the appellate.

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Good morning, Judges Henderson, Griffith, and Randolph.

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My name is Joanne Miles, and I am the attorney for the appellant, Sandra Marshall.

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And in this particular case, I filed on behalf of Miss Marshall a brief concerning the issues that she feels should be reversed by this court as to what occurred in the District Court of the District of Columbia.

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Miss Marshall had a case

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that was a discrimination case.

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And in that particular case, um, she, uh, had her case dismissed based on a motion for summary judgment and based on the doctrine of judicial, uh, estoppel.

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And we believe that the court did not apply the correct standard or legal standard

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in which it dismissed her case.

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And we felt that there was sufficient evidence in the record to show.

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What's the correct legal standard in our circuit for judicial stop?

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Well, I think when I read Moses, and goodness, I read it several times, I think Moses

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doesn't really have a standard per se.

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But if you want to say it had a standard, I don't think it's as strict or as narrow as the district court applied in this particular case.

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Because in this particular case, when I read the judge's opinion and memorandum, it appears that he

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had a very narrow interpretation of how to apply judicial estoppel as to Marshall and as to the facts and the events that occurred in her particular case.

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It appeared as if no matter what evidence Marshall presented to show she had no intent to not file schedules that may have required to be filed in the bankruptcy.

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any evidence she presented to show she was not deliberate or had any intent of not being truthful.

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The district court used the word deliberate to describe the omissions on her filing.

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They said it was deliberate.

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Right.

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And I don't think that it was deliberate.

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I think she didn't know.

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She was a pro se litigant.

[00:03:36] Speaker 02:
Well, but you lost that, right?

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At district court, the district court judge said it was deliberate.

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Yes, I understand that's what the district court said.

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In what way was that error?

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Well, it was an error in this way.

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When you look at the word or interpretation or meaning of deliberate, it would mean, and this is on behalf of Marshall,

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that she would have knowledge of something that she had to do and then purposely didn't do it.

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Well, she did, didn't she?

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No, she did not.

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Did she not read the instructions on the form?

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She read the instructions.

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Let me ask you first.

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Oh, I'm sorry.

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The instructions said, disclose all administrative proceedings.

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Well, it was her understanding.

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Her understanding was that she had done that.

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It was her understanding as a pro se litigant

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who is not a lawyer, who has no legal training or interpretation, that that is what she did.

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Well, she knew that she had an EEOC claim at the time, right?

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She knew that.

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Yes, she did know that she... And she knew that she had been a defendant in three lawsuits in the previous year, right?

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Yes, she did.

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And she put that down, right, that she had been a defendant?

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That's correct.

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And she didn't put down that she had an EEOC claim?

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No, because I think, and I think she explained.

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Even though the form said, the form was not restricted to lawsuits, it said administrative proceedings.

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Right.

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And I don't think that's her interpretation was that particular EEOC proceeding was in that category.

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Because I think when you read her transcript from the hearing that she had initially with the trustee,

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Her thing, and I think you can interpret this, was that because it wasn't a formal filed lawsuit, then that she wasn't supposed to include it.

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But even if, say she should have, well we know she should have included it.

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When you apply the doctrine of judicial estoppel, it's an equitable doctrine which requires equitable considerations.

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And it should be considered in a broad context because judicial estoppel is a doctrine that is discretionary.

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And when you look at the bankruptcy code, the bankruptcy code does allow and gives provisions in which a party can disclose information in a number of ways.

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Isn't your stronger argument that, in fact, she told the trustee?

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Oh, absolutely.

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That there's no fraud upon the court here because she told the trustee.

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Correct.

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And the trustee, that became part of the bankruptcy proceedings, right?

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Right.

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He acted on that.

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No one was cheated out of it here because she told.

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Is that?

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No, absolutely.

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Whatever she understood, apparently she didn't understand something because she didn't do what she was supposed to do.

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And we don't deny that as to the schedules.

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But what happened was when she did her hearing with the trustee, he apparently had interrogatories of questions he gave to everybody.

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Now, she wanted to defraud or lie.

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That was her opportunity.

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she could have just said.

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Well, what about the fact that there's evidence, she said she filled out these forms by herself, but there's evidence that she didn't, right?

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Well, it was evidence that there was a guy, and I wasn't quite clear on that, but it was a guy who supposedly helped her.

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Now, from what she said and what's in the record, she didn't pay the guy, and he probably did help her somewhat, but she said she did most of the work as well.

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So he may have helped her a little, but I think she did most of it herself.

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And she said it took her a while to figure out how to do it.

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So here's the question I have.

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You're asking that we take a broad view of mistake.

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Right.

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I mean, there's a circuit split on this issue of what a mistake is.

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You want us to take the broader view, the one with the Seventh Circuit and others you've taken.

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But here's my concern about taking that.

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If we take that broader view, doesn't that give an incentive to debtors to

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sandbag?

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Like a whole bag?

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Oh, no.

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No, absolutely.

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Because in this particular case, Marshall was totally different than Moses.

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Marshall had no attorney representing her in bankruptcy court.

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I'm not a bankruptcy court.

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And there was no oral disclosure in Moses either, was there?

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Absolutely not.

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And he went to bankruptcy twice.

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And he had a bankruptcy attorney twice.

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Moses, and that's what happened in Moses.

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Marshall was doing this on her own.

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She categorically

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disclosed in her interrogatories that the ECC case... So what's the rule you would have us follow for mistake?

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How are we supposed to figure out whether a mistake is of the nature that it should withstand a claim of judicial estoppel?

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When does a mistake stop a judicial estoppel?

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I think when mistake... I think you look at, first of all, the

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facts or circumstantial or direct evidence as to intent of the party.

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I think you have to look at what did they do or did not do and whether whatever they did or didn't do hurt anybody.

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Because Marshall was not trying to not disclose the information, she disclosed it.

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She may have disclosed it imperfectly or she may have disclosed it incorrectly in the sense that she didn't amend her schedules, but she did disclose it.

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That's going to involve the courts getting into very lengthy sorts of fact-intensive inquiries here, right?

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To get into the subjective intent of each person.

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Why isn't it just simpler?

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You've got the form.

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You're signing under the penalty of perjury.

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The form's clear.

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It says administrative proceedings.

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Is that something that?

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I think it's clear to us as lawyers, but I represent many litigants who do not perceive and interpret

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we perceive as plain language.

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For example, I'll give you an example.

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I do criminal cases.

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I've asked clients, have you ever committed a crime?

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They will only tell me about a theft.

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They don't tell you about traffic offenses they may have committed, because in their minds, a traffic offense is not a criminal offense.

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And there are many traffic cases or types of traffic violations that are criminal cases as well.

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And so when you explain to them that you have to divulge that as well, they'll tell you, oh, I never knew that traffic cases were or could be a criminal case.

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And so the issue is, what was it

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And in her mind, the point is she didn't do anything.

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She had no intent to.

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you know, to see the court.

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She told the court or the trustee what her claims were.

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The trustee spoke to me directly.

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We had a long conversation.

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So he took notes, and he acted on it.

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The only thing that Marshall made a mistake of and didn't know or didn't understand was that she still, even though she verbally disclosed her case, she still had to go back and amend her schedules, which she didn't know that she was supposed to do.

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And so, but no one was harmed by that because the trustee did open up her case again, gave the creditors the opportunity to file any claim against her for any potential assets.

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He did not dismiss her or discharge her case immediately.

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So he did act upon the information.

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The amount of harm that you're talking about would be present in any case, regardless of how

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the information regarding an undisclosed action came about.

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For example, if she had never told anybody and the trustee on his own suddenly discovered she had three discrimination cases pending, you could say the same thing because the trustee discovered it, nobody was harmed.

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So that's going to be true in every case, unless the bankruptcy proceeding is all over, but then you can reopen it.

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So I don't know where that gets you.

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Well, I think what happens in this particular case, like I said, for Marshall, all I'm saying is that her actions did not show that she did anything purposefully or was trying to deceive anybody.

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It's correct that there were three administrative proceedings, right?

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Right.

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There was three, and she talked about one, and I disclosed the other cases to the trustee.

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She only disclosed one of them.

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She disclosed one, I think, yes, at the hearing.

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Honestly, I look for, and I don't find in the joint appendix, the interrogators that

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Oh, I'm glad you mentioned that.

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I thought that was interesting.

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The interrogators that Apa Lee mentioned, those interrogators were interrogators created by the trustee.

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Marshall did not get a copy of those.

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But I will tell you this, that I took upon myself to investigate to try to get a copy.

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And the trustee told me that those, her files had been destroyed because after three years, he's not required to keep it.

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Because I thought the interrogatories would be very instrumental in showing what was the question that was asked that caused Marshall to disclose that she had the EEOC case.

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And I thought that was

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you know, thinking of evidence or evidentiary purposes, that would have said, OK, for some reason, whatever language the trustee used in that interrogatory, it told her in her brain, oh, I do have this administrative charge or EEOC case, and I will disclose it.

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And I'm going to disclose it.

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If the interrogatories no longer exist, is that what you were saying?

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I was told they no longer exist.

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Is there any additional evidence

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And this was decided on summary judgment?

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Yes, it was decided on summary judgment.

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So what, if any, additional evidence would you present?

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If it wasn't on summary judgment, what additional evidence?

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You mean, if you had to go to trial?

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Yeah.

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Or a hearing, an evidentiary hearing on the question of judicial stop.

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I don't know if it'd be trial.

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Well, well.

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short of subpoenaing the trustee.

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I mean, we could always ask the trustee to come forward to testify or obtain a copy of these interrogatories, which I understand are kind of standard, which they use.

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What would the trustee add to the state of the record as it exists now?

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Because there's no dispute, is there, that the trustee was told

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of the three administrative proceedings and that he and that your client disclosed the Honeywell.

[00:14:47] Speaker 05:
Well, I think there is a dispute.

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I don't think the district court judge accepted that as fact.

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In fact, I think the district court judge kind of denigrated the, I think I'm just about out, denigrated the affidavits that were presented and any evidence we presented at the motion for summary judgment level.

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And I thought that a lot of things were in dispute in which a motion for summary judgment could not have been granted.

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But I think we also could probably get copies of interrogatories that the trustees in the District of Columbia.

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Your statement of material facts not in dispute indicated that number one, your client told the trustee about the Honeywell, and that number two, you disclosed the other.

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I disclosed the other three cases.

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And they were facts not in dispute.

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Now, did the defendants in this case put a statement in indicating that they were a dispute?

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They never, I can't remember, but I know it was not disputed.

[00:16:01] Speaker 03:
Well, that was my approach.

[00:16:02] Speaker 05:
Yeah, it was not disputed.

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Much of the evidence we put in was never disputed.

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And the district court found that.

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I'm looking at his opinion.

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During the hearing, Marshall noted that she had a pending EEOC claim against Honeywell only.

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But he did not put in his opinion anything concerning the affidavit that I gave or any of the evidence that I presented.

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In fact, it was ignored completely.

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That memorandum is void of any mentioning concerning the affidavit or evidence that I presented.

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And I thought that was key, because it put it in a totally different light.

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All right.

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OK, thank you.

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Mr. Machado.

[00:16:51] Speaker 01:
Good morning, and may it please the court.

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My name's Les Enshado.

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I stand up here on behalf of all Quiopolis, joined by counsel at council table.

[00:16:59] Speaker 01:
Judge Gruff, to your question, there is a commonly followed test, followed by Moses, identified by the Supreme Court in New Hampshire, and followed by virtually all the circuits, and that's the test that the district court here properly followed.

[00:17:10] Speaker 01:
It looks at whether there were inconsistent positions taken.

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It looks at whether

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It led to at least one court being misled that looks at whether it would have allowed Ms.

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Marshall to obtain an unfair advantage or impose an unfair burden under that commonly applied test applied by this court in Moses under virtually identical facts.

[00:17:29] Speaker 03:
Well, yeah, virtually identical.

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There's a huge difference between this and Moses, right?

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There's no oral disclosure in Moses.

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That's the whole case right here.

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The significance of this oral disclosure and whether the district court

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properly weighted, so Moses doesn't get you too far.

[00:17:44] Speaker 03:
Well, certainly there was no oral disclosures in Moses.

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Right.

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And isn't that the key issue here?

[00:17:50] Speaker 03:
At least it is for me, the key issue here.

[00:17:51] Speaker 03:
What effect does that oral disclosure have?

[00:17:53] Speaker 03:
Absolutely.

[00:17:54] Speaker 03:
Does it show that this was in fact a mistake, which if it's a mistake, may have legal consequences for the judicial estoppel theory?

[00:18:02] Speaker 01:
Absolutely, your honor.

[00:18:04] Speaker 01:
I think what the district court looked at was, and to the last colloquy, the district court did not disagree or dispute that these oral disclosures occurred.

[00:18:12] Speaker 01:
As you properly pointed out, the opinion reflects that these oral disclosures occurred.

[00:18:16] Speaker 01:
What the district court found is, as most circuit courts have found, oral disclosures or oral conversations of the type that happened here are not enough to overcome the bankruptcy court rules which require

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accurate, truthful, and complete.

[00:18:32] Speaker 03:
We've got three circuits that feel differently than that, right?

[00:18:35] Speaker 03:
You've got three circuits, what?

[00:18:37] Speaker 03:
Three, seven, and nine, who disagree with that.

[00:18:41] Speaker 03:
Well, we haven't weighed in on it yet.

[00:18:44] Speaker 01:
So the Ninth Circuit in the Aquinn case said that in that case, I'm not sure Aquinn involved oral disclosures, honestly.

[00:18:52] Speaker 01:
I think Aquinn involved someone who went back.

[00:18:54] Speaker 03:
I talked about the general issue of mistake, the significance of mistake.

[00:18:57] Speaker 01:
Absolutely.

[00:18:58] Speaker 01:
There's a difference among the circuits on how to interpret what mistake or inadvertence mean.

[00:19:02] Speaker 01:
And the majority of the circuits have a very narrow view of that.

[00:19:06] Speaker 01:
Is it majority?

[00:19:07] Speaker 03:
I could only count three.

[00:19:09] Speaker 01:
I think it's in favor of a narrow view of it.

[00:19:16] Speaker 01:
The Ninth Circuit took a broader view, acknowledged that it was disagreeing with most of the other circuits, but took a broader view because in that case, the plaintiff, the debtor,

[00:19:25] Speaker 01:
upon the omission being discovered, went back to the bankruptcy court, reopened the bankruptcy court proceeding, and filed corrected schedules.

[00:19:35] Speaker 01:
And the Ninth Circuit said, well, given this do-over, we think that we need to take a broader view of whether this is true.

[00:19:40] Speaker 01:
That's exactly right, Judge Randolph.

[00:19:43] Speaker 01:
In Moses, this circuit has already found the do-over doesn't count.

[00:19:47] Speaker 01:
In Moses, the debtor went back to the bankruptcy court also, refiled corrected schedules, and this circuit joined a number of other circuits and said, we're not going to count in such efforts because that allows people to avoid doing it properly the first time until they're caught and then are being forced to accept it.

[00:20:03] Speaker 04:
That's exactly right.

[00:20:08] Speaker 01:
So the Ninth Circuit's broader view of mistake or inadvertence was based upon the do-over and in fact in the Ninth Circuit decision they say had the person here not done that

[00:20:19] Speaker 01:
we would join all the other circuits in adopting a narrow view of mistake or inadvertence.

[00:20:23] Speaker 01:
But here, we take into account this conduct in returning and correcting, and based upon that, we think that the district court erred in adopting this narrow view.

[00:20:31] Speaker 01:
We're going to remand it back in order to consider the entire record.

[00:20:35] Speaker 03:
The district court at JA 509 says, as noted in Moses,

[00:20:42] Speaker 03:
inadvertence or mistake is not enough to ward off the application of judicial estoppel.

[00:20:49] Speaker 03:
Is that right?

[00:20:51] Speaker 01:
I think what the district court certainly incurs or mistake is an available remedy.

[00:20:55] Speaker 01:
Right back to New Hampshire, it's clear.

[00:20:57] Speaker 01:
Absolutely.

[00:20:57] Speaker 01:
The New Hampshire court makes it at least alludes to the fact.

[00:20:59] Speaker 03:
So what do you make of the district court statement there?

[00:21:02] Speaker 01:
I think what the district court was saying was what this circuit did in Moses was look at identical facts on this point, which was the plaintiff in Moses was arguing, well, it was a mistake or inadvertent.

[00:21:11] Speaker 01:
And the district court in Moses said,

[00:21:13] Speaker 01:
No, we're not going to accept mistake or inadvertence when the record shows what you alluded to earlier.

[00:21:18] Speaker 01:
When the record shows that the documents are clear on their faces to what's required.

[00:21:22] Speaker 03:
So where has the district court, in its opinion, weighed

[00:21:27] Speaker 03:
the evidence.

[00:21:28] Speaker 03:
It seems to me you've got the evidence that you just cited.

[00:21:31] Speaker 03:
You've got the fact that she filled out this form and it was incomplete.

[00:21:35] Speaker 03:
But then on the other hand, you have this testimony that she told the trustee about it.

[00:21:41] Speaker 03:
Where does the district court

[00:21:43] Speaker 03:
way that, because that's what's going on.

[00:21:45] Speaker 03:
Moses is making a decision that, making a finding fact that it was deliberate, right?

[00:21:52] Speaker 01:
Where do we have that here?

[00:21:53] Speaker 01:
Two answers, Your Honor.

[00:21:54] Speaker 01:
One is what the district court is saying is that the facts here are identical to Moses on the completion of the forms.

[00:22:00] Speaker 01:
Right.

[00:22:00] Speaker 01:
In Moses, as here, the plaintiff is arguing, I made a mistake or is that... That means something.

[00:22:05] Speaker 01:
The forms reflect otherwise.

[00:22:07] Speaker 01:
The forms reflect that you included actions in which you were a defendant

[00:22:11] Speaker 01:
which benefited you.

[00:22:12] Speaker 01:
It made you look like you had greater exposure, greater debts, but you omitted ones in which you were pursuing affirmative claims.

[00:22:18] Speaker 01:
This one.

[00:22:19] Speaker 01:
Yeah, that looks bad.

[00:22:19] Speaker 01:
And so on that fact, it's saying this is identical to Moses.

[00:22:23] Speaker 01:
On the oral disclosures, the court's not disagreeing that she made it.

[00:22:26] Speaker 01:
It's finding, as have numerous other courts, oral communications aren't enough.

[00:22:31] Speaker 03:
Where does she say that?

[00:22:36] Speaker 03:
That's what I'm looking for in the district court opinion, is where there's evidence that

[00:22:40] Speaker 01:
It's at JA508, Your Honor.

[00:22:43] Speaker 01:
In the middle of the page here, she says, the district court says the disclosure of the EEOC claim was not sufficient to correct misrepresentations in the petition, and then they cite cases.

[00:22:52] Speaker 01:
We have added numerous other cases in our brief, and what those courts find is that creditors and the bankruptcy court rely upon documents.

[00:23:00] Speaker 01:
They don't rely upon a conversation that happened between a discrimination attorney and a bankruptcy trustee secretary.

[00:23:09] Speaker 01:
Anybody trying to find out if Ms.

[00:23:11] Speaker 01:
Marshall had an asset here would have looked at the bankruptcy court pleadings that she filed.

[00:23:16] Speaker 01:
If you're a creditor and it's being identified that this is a no asset case, you go look at those pleadings.

[00:23:22] Speaker 01:
And she didn't put anything in the pleadings.

[00:23:24] Speaker 01:
And then she didn't correct the pleadings.

[00:23:26] Speaker 01:
And it was three charges, as you identified, Judge Randolph.

[00:23:28] Speaker 01:
And then it was when the lawsuit was filed, she didn't correct them again.

[00:23:32] Speaker 01:
And so the bank, none of those creditors looking at those pleadings would have had any knowledge about this lawsuit that she valued at $2 million.

[00:23:40] Speaker 04:
When Judge Lamberth said, what he actually said is,

[00:23:44] Speaker 04:
Claims of inadvertence or mistake do not excuse filing.

[00:23:49] Speaker 04:
And that's absolutely accurate under the state of law of any circuit.

[00:23:55] Speaker 04:
The claim itself doesn't excuse it.

[00:23:58] Speaker 04:
It's what the underlying analysis of that claim is, whether it gets excused or not.

[00:24:04] Speaker 01:
That's exactly right, Judge Randolph.

[00:24:05] Speaker 01:
And he looked at the same exact record as this court looked at in Moses and found that you're standing up now and you're saying it was a mistake, but the record reflects a complete comprehension of what you needed to do because you included three lawsuits that were helpful to you.

[00:24:19] Speaker 04:
And as Judge Griffith alluded to earlier... What is the difference between... I can't make out.

[00:24:24] Speaker 04:
It's the same act of alleged acts of discrimination, right?

[00:24:30] Speaker 04:
The only question is who gets charged with it.

[00:24:33] Speaker 01:
I believe there was a changeover in terms of who the contractor was.

[00:24:38] Speaker 01:
This was a government contract and there was a change in who there was one company that took over for another company and they were perhaps operating under a subcontract for a third company and that's why there's three separate charges because there's three separate employers or potential employers.

[00:24:51] Speaker 04:
But the acts

[00:24:52] Speaker 04:
underlying the alleged acts underlying the proceedings are the same?

[00:24:58] Speaker 04:
It's just who's responsible?

[00:25:00] Speaker 01:
That's right, Your Honor.

[00:25:01] Speaker 04:
I think it's... Do you know whether these three proceedings were consolidated at any point?

[00:25:06] Speaker 01:
I think at a certain point Ms.

[00:25:08] Speaker 01:
Marshall received charge, she received right to sue letters and was able to then prosecute this lawsuit.

[00:25:13] Speaker 04:
This lawsuit, the one before us now, is a consolidation of all three of the administrative claims?

[00:25:23] Speaker 01:
In the lawsuit, Ms.

[00:25:24] Speaker 01:
Marshall has brought a lawsuit against those three people that originally she filed the three charges against, those three entities.

[00:25:29] Speaker 04:
So what is the significance, if any, of Ms.

[00:25:34] Speaker 04:
Marshall telling the

[00:25:36] Speaker 04:
a trustee only about the Honeywell suit.

[00:25:40] Speaker 04:
I mean, that's one way of, a shorthand way of describing it and then giving her attorney's telephone number to the bankruptcy trustee.

[00:25:51] Speaker 01:
There is the conversation she had with the trustee, as you alluded to earlier, but there's no evidence of the interrogatories that have been referenced at some length.

[00:25:58] Speaker 01:
The district court's opinion references that the interrogatories were never provided to the district court.

[00:26:02] Speaker 01:
The oral communication that occurred between Ms.

[00:26:05] Speaker 01:
Marshall and the trustee and the subsequent conversation that occurred between her employment attorney and the trustee's secretary, again, what numerous courts have found is even if those communications occur, they're not enough to overcome the obligation to complete the forms and then correct the forms.

[00:26:23] Speaker 01:
Here's a hypothetical.

[00:26:24] Speaker 01:
Even if Miss Marshall had omitted the information from the forms initially, and as you alluded to earlier, according to the bankruptcy court pleading, she was assisted by an individual who was experienced in completing bankruptcy court forms.

[00:26:37] Speaker 01:
This was her second bankruptcy.

[00:26:39] Speaker 01:
And according to her own testimony, it took her several months to complete the form.

[00:26:43] Speaker 01:
So this wasn't something done overnight, over the course of a weekend, in haste, and in a minute.

[00:26:48] Speaker 01:
And she made sure, again, to include the three lawsuits in which she was a defendant.

[00:26:52] Speaker 04:
What's the $175, by the way?

[00:26:57] Speaker 01:
I'm not a bankruptcy court practitioner.

[00:27:00] Speaker 01:
You know what I'm referring to?

[00:27:01] Speaker 01:
I do.

[00:27:01] Speaker 01:
I believe that what that form indicated was that the individual who assisted her in completing it was going to make a claim somehow that he was entitled to remuneration in that amount for his efforts.

[00:27:13] Speaker 04:
It seems inconsistent with what the plaintiffs

[00:27:18] Speaker 04:
Council said is that she never, she didn't, she wasn't charged or she didn't pay.

[00:27:25] Speaker 01:
Again, I'm not, I heard Council also say that it may be that the discrepancy is that she never paid anything but that he agreed that he would be paid later.

[00:27:35] Speaker 00:
Yes.

[00:27:36] Speaker 01:
What the record reflects though is she was assisted by somebody whose job it is to help complete forms in a timely way.

[00:27:44] Speaker 01:
Going back to the conversation.

[00:27:45] Speaker 04:
What's the filing fee for bankruptcy?

[00:27:48] Speaker 01:
I don't know, Your Honor, and I'm not sure again if there's an IFP sort of availability.

[00:27:52] Speaker 01:
I'm not.

[00:27:53] Speaker 01:
Bankruptcy court is one of them.

[00:27:54] Speaker 04:
Years ago there was a Supreme Court case where the claim was that the individual was too poor to pay the filing fee for bankruptcy.

[00:28:03] Speaker 04:
And the Supreme Court rejected that.

[00:28:06] Speaker 04:
I followed up on the case, by the way, about what happened next, and what happened next was the individual paid the bankruptcy.

[00:28:13] Speaker 01:
Yeah.

[00:28:14] Speaker 01:
I think what most of the circuits have found is that oral communications of the sort that occurred here are not enough, again, to overcome the right to complete and update those forms, because the forms

[00:28:26] Speaker 01:
are what, ultimately, when you fast forward this two, three, four, five, six months, and it's being represented that there are no assets here, it is the forms that the creditors look at.

[00:28:37] Speaker 01:
It is the forms that the bankruptcy court looks at.

[00:28:39] Speaker 01:
They don't look at slips of alleged telephone conversations between secretaries and other attorneys.

[00:28:45] Speaker 01:
that have been somewhere in the ether.

[00:28:47] Speaker 01:
They look at the forms.

[00:28:48] Speaker 01:
If Ms.

[00:28:49] Speaker 03:
Marshall had omitted information... The district court comments or remarks that he's taking the narrow approach to inadvertence or mistake, right?

[00:29:00] Speaker 01:
He says that after he finds that the facts here are indistinguishable from Moses on inadvertence or mistake.

[00:29:05] Speaker 01:
So I'm not sure that's the crux of his opinion.

[00:29:07] Speaker 03:
What do you understand to be the narrow approach to inadvertence or mistake?

[00:29:11] Speaker 03:
What are the elements of that?

[00:29:12] Speaker 01:
Sure.

[00:29:14] Speaker 01:
the narrow version of inadvertence of mistake is the one that the majority of courts look at.

[00:29:20] Speaker 01:
And what that... And there are two elements to that, right?

[00:29:24] Speaker 03:
One, there's no motive to conceal, or... Knowledge of the information and motive to conceal.

[00:29:30] Speaker 03:
Yeah, yeah.

[00:29:31] Speaker 03:
And what does that first one mean, knowledge of the information?

[00:29:33] Speaker 04:
What... Well, so... Is that the entire end of the laundry list?

[00:29:40] Speaker 04:
I don't...

[00:29:41] Speaker 04:
I'm really not certain about this narrow, broad dichotomy.

[00:29:47] Speaker 04:
For example,

[00:29:48] Speaker 04:
It would seem to me relevant, the length of time that transpired between the filing of the bankruptcy petition and the, if there's a revision or an amendment, the amendment, what intervened was the person filing the bankruptcy petition, alerted to the fact that they were about to be discovered, all those factors.

[00:30:14] Speaker 04:
And it's true that the two factors you mentioned are the predominant ones, but I don't necessarily see in these cases a decision saying, and we're not going to consider anything else.

[00:30:27] Speaker 01:
As I read the decisions, the majority of courts, and I'm looking at our brief now on pages 43 and 44, and we cite the courts that apply this, what we're calling the narrow test of mistake or inadvertence.

[00:30:42] Speaker 01:
And again, it is what the court says.

[00:30:44] Speaker 01:
We look, you know, courts addressing a debtor's failure to satisfy the legal duty of full disclosure have deemed such failure inadvertent or mistaken only when the debtor

[00:30:53] Speaker 01:
Lacks knowledge of the undisclosed claims or has no motive for their concealment.

[00:30:57] Speaker 03:
My question was, what does that first one mean?

[00:31:00] Speaker 01:
So I think what I believe from the cases is if the record reflects that there was no knowledge.

[00:31:05] Speaker 01:
There truly was a mistake here, and I think the best case for that is actually a case that was cited by the appellate, which is the Ryan case of the Third Circuit.

[00:31:13] Speaker 01:
In the Ryan case, the court finds

[00:31:15] Speaker 01:
It was inadvertent.

[00:31:17] Speaker 01:
It was a mistake.

[00:31:18] Speaker 01:
But they find that because what they find the debtor did there was the debtor didn't include information about his federal court lawsuit, or it was a company, the federal court lawsuit it was prosecuting, but it also didn't include information about lawsuits in which it was a defendant.

[00:31:32] Speaker 01:
It omitted information that was both hurtful and helpful to the defendant.

[00:31:37] Speaker 03:
What's an example of where the debtor doesn't know the claim?

[00:31:43] Speaker 01:
I think hypothetically, and I've not seen this in the cases, Your Honor, I think hypothetically, if at the time you file for bankruptcy, you know maybe you've been terminated, but you haven't yet, you know, talked to an attorney to find out whether in fact this is a, this is a, this is conduct that would violate the DC Human Rights Act or Title VII or some sort of federal statute.

[00:32:01] Speaker 01:
And then, so at that point you don't yet know.

[00:32:03] Speaker 03:
And certainly, okay, that's helpful.

[00:32:05] Speaker 01:
And certainly Ms.

[00:32:06] Speaker 03:
Marshall doesn't

[00:32:07] Speaker 03:
I don't think she's in that scenario.

[00:32:09] Speaker 01:
She clearly knew.

[00:32:10] Speaker 03:
Let's take the broader view, which is, as I understand, this sort of subjective intent, this inquiry into what was in the mind of the debtor.

[00:32:21] Speaker 03:
And your opponent's argument here is that she just may have been mistaken about

[00:32:28] Speaker 03:
what an administrative proceeding makes.

[00:32:30] Speaker 03:
And she showed she had no ill will because she told the trustee.

[00:32:33] Speaker 03:
And we are in equity here, right?

[00:32:35] Speaker 03:
We're looking at equity here.

[00:32:36] Speaker 03:
We are.

[00:32:37] Speaker 03:
How do you respond to this?

[00:32:37] Speaker 01:
So I think there's two answers to that.

[00:32:38] Speaker 01:
Again, on the first prong, which is she was just mistaken if you look at the documents, I think that that's foreclosed by Moses.

[00:32:45] Speaker 01:
If you take out the oral disclosure, we're squarely in Moses' land.

[00:32:49] Speaker 01:
And what she's saying there is my conduct in not reading the forms, not understanding what the forms require,

[00:32:55] Speaker 01:
understanding the forms required me to include lawsuits in which that were helpful to me, but didn't seem to require me to include three administrative charges in that in which I was... As a matter of fact, you don't think it's possible that someone could be mistaken about that?

[00:33:10] Speaker 01:
I think the circuit held in Moses as our matter of law, that's not a mistake or an emergency.

[00:33:15] Speaker 03:
As a matter of fact, you don't think that someone could be mistaken about that?

[00:33:19] Speaker 03:
Of course they could.

[00:33:20] Speaker 03:
Of course someone could.

[00:33:20] Speaker 01:
I think you're opening the Pandora's box that you alluded to earlier, which is full-blown trials on what someone's subjective intent was.

[00:33:26] Speaker 01:
No, no, no.

[00:33:27] Speaker 03:
That was an inquiry into subjective intent, right?

[00:33:30] Speaker 01:
And that's what the broader, that's what the Seventh Circuit and others would have us do.

[00:33:33] Speaker 01:
Is it possible that someone could have mistaken, not understood the forms?

[00:33:37] Speaker 01:
Is it possible?

[00:33:38] Speaker 01:
Sure.

[00:33:39] Speaker 01:
I think what Moses said is not on these facts.

[00:33:42] Speaker 01:
Yeah, because there was no oral disclosure.

[00:33:45] Speaker 01:
So we have oral disclosure.

[00:33:46] Speaker 01:
So that's the one differentiated between this case and Moses.

[00:33:48] Speaker 01:
But what the most in the circuits have said is oral communications don't count.

[00:33:53] Speaker 01:
They don't count.

[00:33:55] Speaker 01:
At the end of the day, the forms are what count.

[00:33:57] Speaker 01:
We require people to fill out the forms completely and accurately.

[00:34:01] Speaker 01:
And if they discover something,

[00:34:03] Speaker 01:
If after Ms.

[00:34:04] Speaker 01:
Marshall had this conversation with Ms.

[00:34:06] Speaker 01:
Rusty and learned that this was information that had been omitted, if she'd amended the forms, we might be in a lot of bigger, different world.

[00:34:14] Speaker 01:
But she didn't do that.

[00:34:15] Speaker 01:
She sat quietly and let the court and the creditors close the case as a no-asset case while she's pursuing a $2 million lawsuit.

[00:34:24] Speaker 04:
Your time's expired, but before you sit down,

[00:34:29] Speaker 04:
Tell me exactly what your view is of what happened with respect to the age discrimination charges.

[00:34:38] Speaker 04:
When exactly were they filed?

[00:34:41] Speaker 04:
And to what extent were they disclosed?

[00:34:45] Speaker 01:
I don't believe any of the charges were disclosed, Judge Randolph.

[00:34:48] Speaker 01:
Without regard for what the claims were in the charges, I don't believe any... Wasn't there an age discrimination charge?

[00:34:54] Speaker 01:
There were a variety of charges that were brought and there were a variety of claims that were initially brought to the federal court and then there was an amended complaint filed that brought additional claims into the court and some of those claims were then dismissed by the district court below.

[00:35:08] Speaker 01:
Honestly, I don't have standing right here now.

[00:35:11] Speaker 01:
awareness of what specifically happened to the age charges and when they went away.

[00:35:16] Speaker 04:
I'm not really concerned about that.

[00:35:19] Speaker 04:
What I'm concerned about is that by the time, as I understand it on the timeline, by the time the age discrimination charges are filed,

[00:35:28] Speaker 04:
She's already answered the interrogatory.

[00:35:34] Speaker 04:
Her attorney has had correspondence with her or talked to the bankruptcy trustee.

[00:35:39] Speaker 04:
She hasn't amended anything.

[00:35:41] Speaker 04:
And what I'm asking is, did she alert, or either her or through her attorney, did she alert the bankruptcy trustee that I filed additional charges?

[00:35:52] Speaker 01:
There's no evidence in the entire bankruptcy court docket that anybody at the bankruptcy court

[00:35:58] Speaker 01:
or any of the creditors were aware of anything that was going on with respect to Ms.

[00:36:02] Speaker 01:
Marshall's claims of discrimination, whether it was the multiple charges, the original claims in the charges, amended charges, or this lawsuit.

[00:36:09] Speaker 01:
And I think that's one point of clarification.

[00:36:10] Speaker 01:
Before I sit down, I want to make sure it's clear.

[00:36:15] Speaker 01:
Ms.

[00:36:15] Speaker 01:
Marshall had a conversation with the trustee about the one charge.

[00:36:20] Speaker 01:
Her attorney says she had a conversation with the secretary about other charges and brought them up to speed.

[00:36:24] Speaker 01:
There is no evidence that the bankruptcy court was aware of these charges or this lawsuit at the time it closed this case as a no-asset case.

[00:36:35] Speaker 01:
There was a suggestion earlier that the trustee acted upon this information and alerted creditors to this case and creditors were aware of it and therefore no harm, no foul.

[00:36:46] Speaker 01:
There is no evidence of that in the record.

[00:36:49] Speaker 01:
The evidence of when the creditors learned about this case was four years later after the district court here forced Ms.

[00:36:56] Speaker 01:
Marshall to go back to the bankruptcy court

[00:36:58] Speaker 01:
And the trustee was then substituted in, and then the trustee properly, and this is if you want to see this, it's in the record at page 329, 330.

[00:37:08] Speaker 01:
This is the trustee actually now for the first time telling predators, there is an asset out there.

[00:37:15] Speaker 01:
It is this discrimination lawsuit.

[00:37:17] Speaker 01:
I'm about to give it up.

[00:37:18] Speaker 01:
Let me know if you think you object to that.

[00:37:21] Speaker 01:
But back at the time Ms.

[00:37:23] Speaker 01:
Marshall originally filed for bankruptcy and prior to the time the bankruptcy court discharged her case as a no asset case, even after these conversations, nobody at the bankruptcy court and none of the creditors, there's not one document, and this gets back finally to why oral communications aren't enough.

[00:37:39] Speaker 01:
You can have these oral communications, but if the creditors who are not standing there when the communications occur,

[00:37:46] Speaker 01:
They rely upon the pleadings.

[00:37:48] Speaker 01:
They rely upon documents.

[00:37:49] Speaker 01:
They rely upon timely disclosure.

[00:37:51] Speaker 01:
And they rely upon them being amended.

[00:37:52] Speaker 01:
And if that doesn't happen, you can't now stand up here nine years later and say, well, I had a conversation with the trustee secretary.

[00:38:01] Speaker 01:
Therefore, it shows I had no intent to omit this.

[00:38:05] Speaker 01:
All right.

[00:38:07] Speaker 01:
Thank you very much for your indulgence on the time.

[00:38:09] Speaker 01:
I appreciate it.

[00:38:11] Speaker 00:
All right.

[00:38:12] Speaker 00:
Does counsel have questions?

[00:38:14] Speaker 00:
All right.

[00:38:14] Speaker 00:
Why don't you take a minute?

[00:38:24] Speaker 00:
Why don't you take one minute come up to the podium just if you have anything reply if you don't If you have anything in reply you have one minute

[00:38:42] Speaker 05:
Do I go forward now?

[00:38:44] Speaker 05:
OK, I'm sorry.

[00:38:45] Speaker 05:
First of all, I definitely disagree with the appellee's argument before this court that supposedly there was no evidence in this record that showed that Marshall or myself on behalf of Marshall did not inform the trustee as to the filing of the age discrimination case.

[00:39:05] Speaker 05:
Clearly, there was.

[00:39:07] Speaker 05:
My affidavit that was submitted in this case and is part of the record shows that I informed the trustee through his... No, that's not what your affidavit says.

[00:39:18] Speaker 05:
Through his... Wait a minute.

[00:39:20] Speaker 05:
I think the... Not him personally, but his secretary.

[00:39:24] Speaker 05:
His receptionist.

[00:39:25] Speaker 05:
Yeah, his secretary.

[00:39:27] Speaker 05:
who called me several times to check to see when the case was going to be filed.

[00:39:33] Speaker 04:
But there was no amended filing in the bankruptcy court.

[00:39:39] Speaker 05:
No.

[00:39:39] Speaker 05:
I'm not a bankruptcy lawyer.

[00:39:41] Speaker 05:
I had no idea.

[00:39:42] Speaker 04:
But you're a creditor, aren't you?

[00:39:44] Speaker 04:
You filed.

[00:39:45] Speaker 05:
I mean, notice of lien.

[00:39:47] Speaker 05:
We do that in Maryland all the time.

[00:39:48] Speaker 05:
That's not unusual.

[00:39:50] Speaker 05:
Attorney lien.

[00:39:52] Speaker 05:
That's just not unusual.

[00:39:53] Speaker 05:
That's not unusual.

[00:39:55] Speaker 05:
Not unusual.

[00:39:57] Speaker 05:
But anyway, what I wanted to say was the secretary called me a couple of times.

[00:40:02] Speaker 05:
The trustee even said to me, let me know when you file the age, any case.

[00:40:08] Speaker 05:
We only filed the age case because there was a statute of limitations issue.

[00:40:12] Speaker 05:
Didn't do anything on that case for about four months.

[00:40:15] Speaker 05:
Didn't touch it, told them, didn't do anything.

[00:40:18] Speaker 04:
Ms.

[00:40:18] Speaker 04:
Marshall never, there's no evidence that Ms.

[00:40:22] Speaker 04:
Marshall ever informed

[00:40:24] Speaker 04:
the trustee or even the trustee's secretary.

[00:40:27] Speaker 05:
I think in her affid, one of her affidavits, she did say she had a conversation with him because she talked to him more than I, I only talked to him that one time.

[00:40:37] Speaker 05:
But, and I think you have to check the affidavits without me going through them.

[00:40:40] Speaker 05:
But anyway, I'm just saying his office had knowledge.

[00:40:43] Speaker 05:
He filed an application as a trustee to employ himself as an attorney in the case.

[00:40:49] Speaker 05:
He didn't discharge the case.

[00:40:53] Speaker 05:
He opened the case up because he said there was assets.

[00:40:57] Speaker 05:
He did all these things that we talked about.

[00:41:00] Speaker 05:
And it had to have been based on the information he got from me and Ms.

[00:41:04] Speaker 05:
Marshall because they knew about the case.

[00:41:07] Speaker 05:
The secretary knew about the case.

[00:41:09] Speaker 05:
Now, she's the agent for the trustee.

[00:41:11] Speaker 05:
I am sure she told the trustee.

[00:41:14] Speaker 05:
OK, you can't testify.

[00:41:16] Speaker 05:
OK, I mean, that's my interpretation.

[00:41:19] Speaker 05:
But thank you, Your Honors.