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August 18, 2024
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Client’s failure to disclose tort claim as a bankruptcy asset doesn’t bar malpractice claim against lawyers who missed statute of limitations |
Date: August 18, 2024 |
Legal Update |
William L. Boesch |
Related Services: Professional Liability, Appellate Practice |
The Massachusetts Appeals Court has reinstated a legal malpractice case brought by a former personal-injury client who, after hiring the defendant lawyers, obtained a bankruptcy discharge of her debts without disclosing the existence of the personal-injury claim to her creditors. The Appeals Court in Holland v. Kantrovitz & Kantrovitz LLP sought to remedy the client’s non-disclosure by ordering her to notify the bankruptcy trustee (from a case closed more than six years earlier) that he and the creditors may have rights in what is now a malpractice dispute. But the Appeals Court was unwilling to bar the client from bringing her malpractice suit as a matter of law. The tort case and the bankruptcy. The missed statute of limitations. Lawyers: tort claim waived, so no harm. Thus, the lawyers’ subsequent malpractice in failing (after the bankruptcy discharge) to timely file suit could not have caused any harm to Holland. Alternatively, the lawyers argued, having obtained her discharge on the basis that she had no such asset, Holland could not now sue for malpractice based on the position that the personal-injury claim was valuable—a reversal of the sort prohibited by the doctrine of judicial estoppel. Appeals Court: client was harmed. More evaluation of estoppel defense needed. The Holland case deals with what is often a difficult obstacle for a plaintiff in a legal malpractice case: proving that with reasonable lawyering, she “probably would have achieved a better result” in the underlying matter. A malpractice claim will fail where the defendant lawyers can show that some legal “defect” in the client’s position in that case—independent of any malpractice—would have prevented her from succeeding in any event. In Holland, the Appeals Court effectively agreed that there was such a flaw in the underlying claim—failure to disclose a bankruptcy asset when required—but directed the lower court to explore further whether the flaw was curable or fatal. |
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![]() William L. BoeschPartner617.227.3030[email protected] |