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       IN THE COURT OF APPEALS OF THE STATE OF WASHINGTON

CHD, INC.,                                                No.  27192-7-III
                                                )
                      Appellant,                )
                                                )
       v.                                       )         Division Three
                                                )
MELVIN C. TAGGART, d/b/a                        )
TAGGART ENGINEERING &                           )
SURVEYING,                                      )
                                                )         PUBLISHED OPINION
                      Respondent.               )
                                                )

       Schultheis, C.J.  --  CHD, Inc. owed Taggart Engineering & Surveying money for 

surveying work, which was evidenced by a promissory note and secured by a deed of 

trust.  CHD acknowledged the debt in Chapter 11 bankruptcy proceedings that were 

dismissed without confirmation or implementation of a reorganization plan.  CHD later 

refinanced the encumbered property, requiring that Taggart be paid.  The closing agent 

asked the noteholder for a payoff statement, which it provided, and CHD paid the amount 

identified in the payoff statement, around $29,000.  CHD received a faxed copy of the 

promissory note marked "paid in full." Taggart disputed the amount paid and returned  

No. 27192-7-III
CHD Inc. v. Taggart

the money.  

       CHD filed suit to quiet title on the property encumbered by the debt to determine 

the rights of the parties under the note.  The trial court decided the matter in favor of 

CHD.  On reconsideration, Taggart successfully argued to the superior court that, because 

CHD had represented in its bankruptcy proceeding that CHD owed Taggart $41,000 

instead of the $29,000 CHD provided in the payoff, CHD was judicially estopped from 

claiming that the debt CHD owed to Taggart was different than the $41,000 stated in the 

bankruptcy paperwork.  On appeal, CHD contends that the trial court improperly applied 

judicial estoppel.  We agree and reverse and remand for further proceedings.

       Taggart Engineering & Surveying performed surveying work for CHD, Inc.  On 

October 1, 1997, CHD executed a $16,000 promissory note payable to Taggart on 

October 1, 1999, or upon sale of the property.  CHD also executed a deed of trust to 

secure the promissory note, naming Taggart as the beneficiary, which stated:  

              This deed is for the purpose of securing performance of each 
       agreement of Grantor herein contained, and payment of the sum of 
       Seventeen Thousand and 00/100ths Dollars ($17,000.00)[1] with interest, in 
       accordance with the terms of a promissory note of even date herewith, 
       payable to Beneficiary or order, and made by Grantor, and all renewals, 
       modifications and extensions thereof, and also such further sums as may be 
       advanced or loaned by Beneficiary to Grantor, or any of their successors or 
       assigns, together with interest thereon at such rate as shall be agreed upon.

       1 The reason for the $1,000 discrepancy between the amount shown on the note 
and deed of trust is unclear.  

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Clerk's Papers (CP) at 6.  

       The terms of the note required that the note and deed of trust "shall be placed in 

escrow at the Law Office of Waldo and Schweda, P.S.," now Waldo, Schweda & 

Montgomery, P.S.  CP at 8.

       In May 2002, CHD filed the first of two Chapter 11 bankruptcy proceedings.  

Taggart acknowledges that CHD disputed the amount secured by the deed of trust.  

Taggart objected to CHD's reorganization plan, claiming the plan did not provide 

information as to when creditors would be paid, the plan was underfunded, and "the plan 

is not proposed in good faith." CP at 207.  In at least two disclosure statements filed in 

the first bankruptcy, CHD acknowledges a deed of trust in Taggart's favor in the amount 

of $17,000.  The bankruptcy was dismissed in April 2003 without a reorganization plan 

being confirmed or implemented.

       CHD filed a second Chapter 11 bankruptcy in September 2003.  Taggart filed a 

claim in January 2004 for $40,987.76.  CHD filed a disclosure statement indentifying the 

real property at issue, which it stated was subject to a deed of trust "in favor of Taggart 

Engineering and Surveying in the amount of $41,000.00."  CP at 170.  The reorganization 

plan notes that the claim is partially disputed.  Taggart filed an objection, asserting that it 

requested information from CHD regarding the nature of the disputed amount and CHD 

did not respond.  CHD filed a first amended disclosure statement, making the same 

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CHD Inc. v. Taggart

relevant representations as in the first as well as making a general statement that "[t]he 

debtor has resolved all litigation issues at this time." CP at 192.  A second amended 

reorganization plan was then filed that acknowledges Taggart's claim for $41,000 and 

that Taggart is a secured creditor.  The second bankruptcy petition was dismissed in 

November 2004.  No reorganization plan was confirmed or implemented. 

       In July 2006, CHD refinanced the property subject to the deed of trust.  As part of 

the transaction, the closing agent ordered title insurance, which indicated that the

property was subject to a deed of trust in favor of Taggart in the amount of $17,000.  On 

July 26, the closing agent contacted the law firm of Waldo, Schweda & Montgomery, 

P.S., to obtain an exact payoff figure, including interest.  The law firm sent a statement to 

which the closing agent responded on August 9 with a trust account check for 

$28,847.79, the amount identified in the payoff statement.  The check was cashed.  The 

law firm provided the closing agent with a copy of the note marked "paid in full." CP 

at 53.

       On September 12, the law firm informed the closing agent that it was

"'invalidating the payoff statement dated July 26, 2006.'" CP at 56.  The law firm 

provided a check from its trust account for $28,847.79, payable to the closing agent's 

trust account.  Mr. Taggart had evidently refused payment because he believed he was 

owed additional monies that were secured by the deed of trust. 

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No. 27192-7-III
CHD Inc. v. Taggart

       CHD initiated this quiet title action to determine the rights of the parties under the 

note.  CHD also asserted two legal theories:  that the statute of limitations had run on the 

collection of the debt and/or the acceptance of the payoff by the law firm constituted 

accord and satisfaction.  Cross-motions for summary judgment were filed.  Besides the 

two legal theories, CHD also claimed that the obligations were personally incurred by 

members of the corporation and the work was performed on property not owned by the 

corporation.  Finally, CHD asserted that it did not agree that any other obligations would 

be secured by the deed of trust and that the statute of frauds precluded the security of 

unwritten agreements.  Taggart sought to eliminate consideration of the two legal theories 

at trial.  The trial court orally granted a motion for summary judgment in favor of CHD.  

       Before the entry of the order of judgment, Taggart moved for reconsideration, 

asserting that the law firm was not its agent, the note did not create an escrow, and CHD 

should be judicially estopped from disputing any disclosures or representations it made in 

the bankruptcy.  The trial court granted the motion for reconsideration, ruling that CHD 

was "judicially estopped from claiming any amount different than it claimed in its 

Bankruptcy statement absent of [sic] proof of payments." CP at 241.  The court then 

entered an order dismissing CHD's claim for relief and for judgment in favor of Taggart 

in the amount of $41,000 plus interest and attorney fees.  This appeal follows.

       "While orders [on] reconsideration are reviewed for abuse of discretion, summary 

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judgment orders are reviewed de novo."  Bunnell v. Blair, 132 Wn. App. 149, 152, 130 

P.3d 423 (2006) (citing Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300, 45 P.3d 1068 

(2002)).  We review an order granting summary judgment de novo, engaging in the same 

inquiry as the trial court and considering all facts and reasonable inferences in the light 

most favorable to the nonmoving party. Korslund v. DynCorp Tri-Cities Servs., Inc., 156 

Wn.2d 168, 177, 125 P.3d 119 (2005).  Summary judgment is proper if the record before 

the court shows that there are no genuine issues of material fact and the moving party is 

entitled to judgment as a matter of law. CR 56(c); Hisle v. Todd Pac. Shipyards Corp.,

151 Wn.2d 853, 861, 93 P.3d 108 (2004).

       "'[J]udicial estoppel is an equitable doctrine that precludes a party from asserting 

one position in a court proceeding and later seeking an advantage by taking a clearly 

inconsistent position.'"  Miller v. Campbell, 164 Wn.2d 529, 539, 192 P.3d 352 (2008)

(internal quotation marks omitted) (quoting Arkison v. Ethan Allen, Inc., 160 Wn.2d 535, 

538, 160 P.3d 13 (2007)).  A trial court's application of judicial estoppel is discretionary.  

Id. at 536; New Hampshire v. Maine, 532 U.S. 742, 750, 121 S. Ct. 1808, 149 L. Ed. 2d 

968 (2001) (exercising original jurisdiction).  "Where the decision or order of the trial 

court is a matter of discretion, it will not be disturbed on review except on a clear 

showing of abuse of discretion, that is, discretion manifestly unreasonable, or exercised 

on untenable grounds, or for untenable reasons." State ex rel. Carroll v. Junker, 79 

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Wn.2d 12, 26, 482 P.2d 775 (1971).

       The court focuses on three core factors when deciding whether to apply judicial 

estoppel: 

       "(1) whether a party's later position is clearly inconsistent with its earlier 
       position; (2) whether judicial acceptance of an inconsistent position in a 
       later proceeding would create the perception that either the first or the 
       second court was misled; and (3) whether the party seeking to assert an 
       inconsistent position would derive an unfair advantage or impose an unfair 
       detriment on the opposing party if not estopped."

Miller, 164 Wn.2d at 539 (internal quotation marks omitted) (quoting Arkison, 160 

Wn.2d at 538-39).

       The purpose of the doctrine is to preserve respect for judicial proceedings and to 

avoid inconsistency, duplicity, and waste of time.  Id. at 540.

       As to the first core factor, CHD argues that it did not take a position in the superior 

court that is clearly inconsistent with its position in bankruptcy court. CHD is correct.  

       In the bankruptcy court, CHD acknowledged a debt and inconsistently stated the 

amount, whether the amount was in dispute, and what amount was secured by the deed of 

trust.  In the last reorganization plan filed by CHD, which is a part of the record on 

appeal by Taggart's motion to supplement the record, CHD only generally acknowledges 

that Taggart had a claim for $41,000 and that Taggart is a secured creditor. 

       Two years after that acknowledgement, new facts came into play that were the 

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No. 27192-7-III
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foundations for CHD's legal defense that CHD pursued in the superior court.  One new 

fact was the passage of time itself, which was the basis of the statute of limitations 

defense.  Other facts involved the payoff, which was the basis of the accord and 

satisfaction defense.  

       Judicial estoppel "'prevents a party from taking a factual position that is 

inconsistent with his or her factual position in previous litigation.'" Miles v. Child 

Protective Servs. Dep't, 102 Wn. App. 142, 153 n.21, 6 P.3d 112 (2000) (emphasis 

added) (quoting Holst v. Fireside Realty, Inc., 89 Wn. App. 245, 259, 948 P.2d 858 

(1997)). The doctrine concerns itself with inconsistent assertions of fact, not with 

inconsistent positions taken on points of law.  See Ashmore v. Estate of Duff, 165 Wn.2d 

948, 951-52, 205 P.3d 111 (2009).  

       The facts in this case are similar to those in Ashmore, 165 Wn.2d at 950-51.  

There, the personal representative of a woman's estate sought to enjoin the conveyance of 

the house in which the woman and her deceased husband lived for 30 years.  The 

personal representative of the husband's estate had entered into a purchase and sale 

agreement with a buyer.  But the wife's personal representative asserted that the wife had 

a community interest in the property.  The court enjoined the sale until the interest of 

each respective estate could be determined at trial.  The personal representative of the 

husband's estate filed a declaratory action.  The parties resolved the issue, and the 

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No. 27192-7-III
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husband's estate conveyed the property to the wife's estate.  The purchaser sought 

specific performance of the purchase and sale agreement.  The wife's personal 

representative argued that the agreement had expired by its terms.  The trial court ruled 

that the wife's estate was judicially estopped from making that argument and ordered 

specific performance.  The Washington Supreme Court held that the wife's estate did not 

take inconsistent positions because at the time that the injunction was sought, the 

agreement had not yet expired.  Ashmore, 165 Wn.2d at 952.  The same is true here as 

concerns CHD's statute of limitations and accord and satisfaction claims.  

       Further, CHD filed this quiet title action in order to determine the amount secured 

by the deed of trust.  Taggart's argument focuses on the amount owed, not necessarily the 

amount secured by the deed of trust. The trial court may have been similarly 

preoccupied, ruling that CHD was "judicially estopped from claiming any amount 

different than it claimed in its Bankruptcy statement absent of [sic] proof of payments."  

CP at 241 (emphasis added).  These aspects, however, are significantly distinguishable in 

the context of this action.  Because of the inconsistent statements CHD made in the 

bankruptcy action, it cannot be said that CHD took a position in the superior court that is 

clearly inconsistent with its position in bankruptcy court.  

       Thus, the first factor in the judicial estoppel analysis does not favor estoppel.

       The second core factor asks whether judicial acceptance of an inconsistent position 

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in a later proceeding would create the perception that either the first or the second court 

was misled.  Miller, 164 Wn.2d at 539.  

       As part of this factor, the party must convince the court to accept the previous 

position taken by the party.  New Hampshire, 532 U.S. at 755; Miller v. Campbell, 137 

Wn. App. 762, 769, 155 P.3d 154 (2007) (quoting In re Coastal Plains, Inc., 179 F.3d 

197, 206 (5th Cir. 1999)), aff'd, 164 Wn.2d 529; Skinner v. Holgate, 141 Wn. App. 840, 

848, 173 P.3d 300 (2007); but see 14A Karl B. Tegland, Washington Practice: Civil 

Procedure § 35.57 (1st ed. 2003). Because the doctrine of judicial estoppel seeks to 

preserve judicial integrity, "[a]bsent success in a prior proceeding, a party's later 

inconsistent position introduces 'no risk of inconsistent court determinations' and thus 

poses little threat to judicial integrity."  New Hampshire, 532 U.S. at 750-51 (quoting 

United States v. C.I.T. Constr., Inc. of Tex., 944 F.2d 253, 259 (5th Cir. 1991)). As 

reasoned by the Sixth Circuit, although the requirement that the party's prior argument be 

accepted by the court "allows parties to contradict themselves in court, it threatens only 

the integrity of the parties, not of the court."  Teledyne Indus., Inc. v. Nat'l Labor 

Relations Bd., 911 F.2d 1214, 1218 (6th Cir. 1990).  

       Here, the bankruptcy case was dismissed without the implementation of a 

reorganization plan.  The bankruptcy was not successful and CHD did not convince the 

bankruptcy court to accept its position.  Because the bankruptcy was dismissed without 

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No. 27192-7-III
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discharge or confirmation of a plan, there was no judicial acceptance.  Stallings v. 

Hussmann Corp., 447 F.3d 1041, 1049 (8th Cir. 2006); 3D Constr. and Dev., L.L.C. v. 

Old Standard Life Ins. Co., 2005 UT App. 307, 117 P.3d 1082, 1086; cf. Jackson v. 

Hancock & Canada, L.L.P., 245 S.W.3d 51, 54-57 (Tex. App. 2007).  

       Taggart argues that judicial acceptance of CHD's later position would create the 

perception that either the bankruptcy court or the superior court was misled.  It explains 

that acceptance of the later position would imply to the bankruptcy court that CHD 

received a windfall gain to the detriment of other creditors, while acceptance of the 

earlier position would indicate to the superior court that CHD was attempting to scam its 

creditors. 

       Again, Ashmore is instructive.  In Ashmore, the Washington Supreme Court held 

that the court correctly granted an injunction in light of the interest asserted by the wife's 

estate.  The court's acceptance of the later assertion by the wife's estate that the 

agreement had expired would not create a perception that the court was misled in its 

earlier injunction decision.  Instead, it would be perceived that the agreement expired 

after the injunction was granted.  Ashmore, 165 Wn.2d at 952.

       Here, CHD offered a reorganization plan based on CHD's representations that 

Taggart claimed $41,000 and was a secured creditor.  By the trial court's acceptance of 

Taggart's later assertions -- that the statute of limitations had expired on the contract 

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No. 27192-7-III
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underlying the debt and/or that Taggart's acceptance of the payoff constituted accord and 

satisfaction of the debt claim -- would not create the perception that the bankruptcy court 

or its creditors were misled as to the status of CHD's estate.  Instead, it would be 

perceived that the passage of time and the events involving the payoff occurred 

subsequent to the failed bankruptcy plan.

       As to the amount secured by the deed of trust, the superior court's acceptance of 

CHD's position in the quiet title action, which seeks to determine the amount secured by 

the deed of trust, would not imply that either the bankruptcy court or the superior court 

was misled.  In fact, CHD's inconsistent representations in the bankruptcy as to the 

amount secured by the deed of trust highlights the need for judicial resolution of the 
issue.2  

       On balance, the second factor does not favor estoppel.

       For the third core factor the court considers whether the party seeking to assert an 

       2 We note one troubling aspect.  CHD's final organization plan, which represents 
that Taggart was a secured creditor and that the amount of the claim was $41,000, placed 
Taggart's claim in a position of priority over unsecured creditors.  In the quiet title action, 
CHD asserted that some work Taggart claimed to be a part of the $41,000 CHD owed 
was not owed by the corporation, but personally owed by CHD's family members.  
Obviously, CHD should not have included in the bankruptcy debts not owed by the 
corporation.  Ultimately, because the plan was not implemented and the interests of the 
secured creditors are not entirely clear from the record, that aspect is moot.  Moreover, 
while the party's integrity may be threatened, the court's integrity is not.  Teledyne 
Indus., Inc., 911 F.2d at 1218.  

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No. 27192-7-III
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inconsistent position would derive an unfair advantage or impose an unfair detriment on 

the opposing party if not estopped.  Miller, 164 Wn.2d at 540.  Taggart argues that 

CHD's inconsistent position would permit CHD to derive a windfall of almost $28,000 of 

the $41,000 amount owed.  That is not the case.  

       Even if the superior court were to find that only the expressly identified $17,000 is 

secured by the deed of trust, the other amounts claimed by Taggart still exist -- they 

simply are not covered by the deed of trust.  Judicial resolution of the amount covered by 

the deed of trust, even if it were a lesser amount than that claimed by the creditor, would 

not unjustly enrich the debtor.  Instead, it would resolve the issue on the merits, which is 

the preference in Washington law.  Griffith v. City of Bellevue, 130 Wn.2d 189, 192, 922 

P.2d 83 (1996). 

       Further, resolution of the quiet title action on the basis of CHD's statute of 

limitations claim and/or accord and satisfaction claim would not result in a windfall to 

CHD at Taggart's expense.  The events underlying these claims were wholly within 

Taggart's control.  The statute of limitations claim is grounded in Taggart's failure to 

reduce its claim to judgment and then execute on it.  If the statute of limitations has 

expired, the debt is not extinguished; Taggart is simply left with no remedy to collect on 

the obligation.  Jordan v. Bergsma, 63 Wn. App. 825, 827-28, 822 P.2d 319 (1992).  The 

accord and satisfaction claim is also attributable to Taggart's conduct through its alleged 

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escrow agent.  Taggart cannot claim that its own failure to act or careless actions would 

derive an unfair advantage to CHD or impose an unfair detriment on Taggart.  

       We conclude that judicial estoppel does not apply.  We therefore reverse the order 

on summary judgment and remand to vacate the judgment and for further proceedings.  

We deny Taggart's request for attorney fees.

                                                ____________________________________
                                                Schultheis, C.J.

WE CONCUR:

__________________________________              ____________________________________
Sweeney, J.                                     Kulik, J.

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