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Does an attorney have a duty to disclose his filing of a personal bankruptcy to a client?
Mark,
Great response and analysis of the issues. Everyone should take note and save, and maybe suggest as a point of discussion during an MCLE.
Lou Esbin
>
>
>
> Daniela:
>
> My two cents: The question is simple to answer in theory, but not
> so simple to answer when it comes to practical application. It is
> none of the client's business if the attorney files a bankruptcy
> unless the client is a creditor or potential creditor of the attorney
> when the bk was filed. Under those circumstances the client must be
> listed and notified because the client is a creditor and because that
> would mean there was at least a potential conflict of interest
> depending on the nature and circumstances of the debt being incurred.
> Assuming the attorney self employed and not an employee of a firm,
> the attorney's contingency fees and reimbursement of any costs due are
> of course assets that would need to be disclosed in Schedule B along
> with other assets of the attorney's practice, but that alone does not
> require notice to the client. If the attorney does not owe the
> client any money and has not committed any malpractice then the client
> is not a creditor and need not be notified. However, if there is any
> potential claim of malpractice, failing to list and notify that client
> leaves the attorney potentially exposed to having that debt excepted
> from discharge under 523(a)3 if it is an asset case, or if there is a
> basis for any 523(a)(2),(4) or (6) claim. Any clients with any
> forseable claim against the attorney must be listed and noticed. For
> everyone else, especially if it is a potential asset case, I would
> analyze the attorney's potential exposure taking into account, the
> extent of the attorney's e&o coverage, the type of cases handled,
> history of malpractice actions, the general quality of the attorney's
> work, and the attorney's office adminstrative procedures to determine
> the likelyhood of any potential claims from past or current clients.
> This has to be weighed against the potential negative impacts on the
> attorney's future practice if the clients would be inclined to
> discontinue using the attorney's services if notified of the
> attorney's bankruptcy. Even though it might not engender confidence
> in the current and former clients, the safest way to avoid 523(a)3
> exposure is to probably to list every former and current client for
> which the malpractice statute of limitations has not expired.
>
> This is also a potential malpractice trap for bankruptcy counsel, so
> I would advise the attoney who is the potential client of all of this
> in writing.
> Mark T. Jessee
> Law Offices of Mark T. Jessee
> "A Debt Relief Agency"
> 50 W. Hillcrest Drive, Suite 200
> Thousand Oaks, CA 91360
> (805) 497-5868
> NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED
> RECIPIENT OF
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> PLEASE NOTIFY
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>
> On Sun 3/01/10 9:27 AM , Daniela Romero dromerolaw@... sent:
> Hi mates:
> Hope everyone is starting the year off healthy, wealthy and a little
> wiser.
> Question for those wiser than I (which doesn't take much, but
> hopefully I'll get there):
> Does an attorney, who is representing a client on a contingency
> basis, have a duty to disclose his filing of personal bankruptcy to
> his client? (filed during representation). Not sure if the
> contingency basis matters, but this is how he posed the question to
> me.
> Based upon Rule of Professional Conduct? case law?
> Thanks,
> Daniela P. Romero
> Law Office of Daniela Romero, APLC
> 1015 N. Lake Ave., Ste. 115
> Pasadena, CA 91104
> Telephone:626-817-2611
> Facsimile: 626-628-1781
> email: dromerolaw@... [1]
> NOTICE: This E-mail (including attachments) is covered by the
> Electronic Communications Privacy Act, 18 U.S.C. 2510-2521. The
> information herein is confidential, privileged & exempt from
> disclosure under applicable law. This E-mail (including attachments)
> are intended solely for the use of the addressee hereof. If you are
> not the intended recipient of this message, you are prohibited from
> reading, disclosing, reproducing, distributing, disseminating, or
> otherwise using this transmission. The originator of this e-mail and
> its affiliates do not represent, warrant or guarantee that the
> integrity of this communication has been maintained or that this
> communication is free of errors, viruses or other defects. Delivery
> of this message or any portions herein to any person other than the
> intended recipient is not intended to waive any right or privilege.
> If you have received this message in error, please promptly notify the
> sender by e-mail and immediately delete this message.
> To comply with IRS regulations, we advise you that any discussion of
> Federal tax issues in this e-mail was not intended or written to be
> used, and cannot be used by you, (i) to avoid any penalties imposed
> under the Internal Revenue Code or (ii) to promote, market or
> recommend to another party any transaction or matter addressed herein.
>
>
> Links:
> ------
> [1] mailto:dromerolaw@...
> [2] mailto:?subjectDoes an attorney have a duty to disclose his
> filing of a personal bankruptcy to a
> client?
> [3] mailto:cdcbaa@yahoogroups.com?subjectDoes an attorney have a
> duty to disclose his filing of a personal
> bankruptcy to a client?
> [4]
> http://groups.yahoo.com/group/cdcbaa/me ... TM3ZzZsZmI
The post was migrated from Yahoo.
Daniela:
My two cents: The question is simple to answer in theory, but not
so simple to answer when it comes to practical application. It is
none of the client's business if the attorney files a bankruptcy
unless the client is a creditor or potential creditor of the attorney
when the bk was filed. Under those circumstances the client must be
listed and notified because the client is a creditor and because that
would mean there was at least a potential conflict of interest
depending on the nature and circumstances of the debt being incurred.
Assuming the attorney self employed and not an employee of a firm,
the attorney's contingency fees and reimbursement of any costs due are
of course assets that would need to be disclosed in Schedule B along
with other assets of the attorney's practice, but that alone does not
require notice to the client. If the attorney does not owe the
client any money and has not committed any malpractice then the client
is not a creditor and need not be notified. However, if there is any
potential claim of malpractice, failing to list and notify that client
leaves the attorney potentially exposed to having that debt excepted
from discharge under 523(a)3 if it is an asset case, or if there is a
basis for any 523(a)(2),(4) or (6) claim. Any clients with any
forseable claim against the attorney must be listed and noticed. For
everyone else, especially if it is a potential asset case, I would
analyze the attorney's potential exposure taking into account, the
extent of the attorney's e&o coverage, the type of cases handled,
history of malpractice actions, the general quality of the attorney's
work, and the attorney's office adminstrative procedures to determine
the likelyhood of any potential claims from past or current clients.
This has to be weighed against the potential negative impacts on the
attorney's future practice if the clients would be inclined to
discontinue using the attorney's services if notified of the
attorney's bankruptcy. Even though it might not engender confidence
in the current and former clients, the safest way to avoid 523(a)3
exposure is to probably to list every former and current client for
which the malpractice statute of limitations has not expired.
This is also a potential malpractice trap for bankruptcy counsel, so
I would advise the attoney who is the potential client of all of this
in writing.
Mark T. Jessee
Law Offices of Mark T. Jessee
"A Debt Relief Agency"
50 W. Hillcrest Drive, Suite 200
Thousand Oaks, CA 91360
(805) 497-5868
NOTICE TO RECIPIENT: THIS E-MAIL IS MEANT FOR ONLY THE INTENDED
RECIPIENT OF
THE TRANSMISSION, AND THIS COMMUNICATION IS INTENDED TO BE
PRIVILEGED BY
LAW. IF YOU RECEIVED THIS E-MAIL IN ERROR, ANY REVIEW, USE,
DISSEMINATION,
DISTRIBUTION, OR COPYING OF THIS E-MAIL IS STRICTLY PROHIBITED.
PLEASE NOTIFY
US IMMEDIATELY OF THE ERROR BY RETURN E-MAIL AND PLEASE DELETE THIS
MESSAGE FROM YOUR SYSTEM. THANK YOU IN ADVANCE FOR YOUR COOPERATION.
On Sun 3/01/10 9:27 AM , Daniela Romero dromerolaw@gmail.com sent:
Hi mates:
Hope everyone is starting the year off healthy, wealthy and a little
wiser.
Question for those wiser than I (which doesn't take much, but
hopefully I'll get there):
Does an attorney, who is representing a client on a contingency
basis, have a duty to disclose his filing of personal bankruptcy to
his client? (filed during representation). Not sure if the
contingency basis matters, but this is how he posed the question to
me.
Based upon Rule of Professional Conduct? case law?
Thanks,
Daniela P. Romero
Law Office of Daniela Romero, APLC
1015 N. Lake Ave., Ste. 115
Pasadena, CA 91104
Telephone:626-817-2611
Facsimile: 626-628-1781
email: dromerolaw@gmail.com [1]
NOTICE: This E-mail (including attachments) is covered by the
Electronic Communications Privacy Act, 18 U.S.C. 2510-2521. The
information herein is confidential, privileged & exempt from
disclosure under applicable law. This E-mail (including attachments)
are intended solely for the use of the addressee hereof. If you are
not the intended recipient of this message, you are prohibited from
reading, disclosing, reproducing, distributing, disseminating, or
otherwise using this transmission. The originator of this e-mail and
its affiliates do not represent, warrant or guarantee that the
integrity of this communication has been maintained or that this
communication is free of errors, viruses or other defects. Delivery
of this message or any portions herein to any person other than the
intended recipient is not intended to waive any right or privilege.
If you have received this message in error, please promptly notify the
sender by e-mail and immediately delete this message.
To comply with IRS regulations, we advise you that any discussion of
Federal tax issues in this e-mail was not intended or written to be
used, and cannot be used by you, (i) to avoid any penalties imposed
under the Internal Revenue Code or (ii) to promote, market or
recommend to another party any transaction or matter addressed herein.
Links:
[1] mailto:dromerolaw@gmail.com
[2] mailto:?subjectDoes an attorney have a duty to disclose his
filing of a personal bankruptcy to a
client?
[3] mailto:cdcbaa@yahoogroups.com?subjectDoes an attorney have a
duty to disclose his filing of a personal
bankruptcy to a client?
[4]
The post was migrated from Yahoo.