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28 Journal of American Law // Spring 2015 Is the policyholder being deceitful, or is the claim legitimate? Tis is the question at the heart of investigating insurance fraud. Oral testimony and written statements in a court proceeding, even if false, can be deemed to be true in a later insurance claim under the doc- trine of judicial estoppel. Finding those prior representations to the court and determining whether judicial estoppel applies can be an important part of an insurance fraud investi- gation and analysis. Purpose of Judicial estoppel Te judicial estoppel doctrine prevents a par- ty who assumed a position in court from later taking an inconsistent position. Te doctrine arose in the context of taking inconsistent le- gal positions in lawsuits: "Where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that posi- tion, he may not thereafer, simply because his interests have changed, assume a contrary position, espe- cially if it be to the prejudice of the party who has acquiesced in the position formerly taken by him." Davis v. Wakelee, 156 U.S. 680, 689, 39 L. Ed. 578, 15 S. Ct. 555 (1895). Tis rule, known as judicial estop- pel, "generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase." 1 Te doctrine's purpose is "to protect the integrity of the judicial process…by prohib- iting parties from deliberately changing posi- tions according to the exigencies of the mo- ment…." 2 1 State of New Hampshire v. State of Maine, 532 U.S. 742, 749, 121 S. Ct. 1808, 149 L. Ed. 2d 968 (2001). 2 Id., at 749-750, quoting Edwards v. Aetna Life Ins. Co., 690 F.2d 594, 598 (6 th Cir. 1982) and United States v. McCaskey, 9 F.3d 368, 378 (5 th Cir. 1993). Gene A. Weisberg is a name partner with Glad- stone Michel Weisberg Willner & Sloane ALC, in Los Angeles, Calif. He has more than 35 years of experi- ence analyzing insurance coverage issues, investi- gating insurance fraud, and litigating insurance cover- age, bad faith, and subro- gation lawsuits in California and throughout the United States. He is "AV" rated by Martindale Hubbell, a mem- ber of the American Board of Trial Advocates, and a Southern California Super Lawyer since 2007. He is admitted to practice in the state and all federal district courts in California, the 9th and 10th Circuit Courts of Appeals and the United States Supreme Court. SUMMARY When a policyholder claims loss or damage to property that he previously swore to a court he did not own or possess, the law provides that he may not be permitted to recover on his insurance claim for that property. Te judicial estoppel doctrine prevents a party who assumed a position in court from later taking an inconsistent position. Tis ofen arises when an insurance claim is made for personal property that was not disclosed in bankruptcy or divorce property schedules that are fled with a court. For judicial estoppel to apply, there must be a clear, intentional statement to the court and the court must take action based on that statement. Te doctrine is designed to protect the judicial system. Tus, there is no requirement that any party detrimentally rely on the statement. Under the bankruptcy code and rules, a bankruptcy debtor has an express, afrmative duty to dis- close all assets. Te duty is continuing until the bankruptcy case ends. Creditors rely on the property schedules in deciding how to respond to the bankruptcy. Te court also relies on those schedules in deciding whether to grant a discharge, divide property in a divorce, or take other action. When the court is misled because not all property is disclosed, judicial estoppel may be applied to bar an insur- ance claim or limit the amount that can be recovered. If a policyholder swore an item did not exist or was worth a small amount, he is bound by that position and cannot collect on an insurance claim based on diferent claimed facts. Judicial Estoppel in Insurance Claims Binding an Insurance Claimant to Inconsistent Statements Made in Court By Gene A. Weisberg inSuRAnCe/Re-inSuRAnCe