The fundamental principle behind all types of legal estoppel is that there are some positions that a party should be prevented from taking based on some past action, assertion or matter that has already been fixed. Collateral estoppel, for example, prevents a party from relitigating an issue decided in a prior action. See Continental Cas. Co. v. Rapid American, 80 N.Y.2d 640, 649 (1993). Promissory estoppel prevents parties from avoiding commitments made when those promises would otherwise not be considered to be binding contracts. See Matter of Hennel, 29 N.Y.3d 487 (2017). Judicial estoppel prevents a party from asserting a position in a legal proceeding that is contrary to a position previously successfully taken by the same party in a prior legal proceeding. See Herman v. 36 Gramercy Park Realty Assoc., 165 A.D.3d 405 (1st Dept. 2018).

Closely related to judicial estoppel is the doctrine of tax estoppel, which prevents a party from taking factual positions in legal proceedings in contradiction of disclosures in tax returns. As discussed below, recent Commercial Division decisions have routinely applied tax estoppel where appropriate, but also have highlighted limitations to the application of the doctrine.

General Standard