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MA: Botched Bankruptcy Brings Lawyer Liability

Don v. Soo Hoo, 75 Mass. App. Ct. 80 (2009)

MA: Underlying Botched Bankruptcy Proceedings

Student Contributor: Jason W. Hake

Facts: A client retained the defendant law firm to file a bankruptcy petition on her behalf while he earned $8,000.00 per year. The attorneys forgot to file his petition and discovered their error three (3) years later when the client was earning $30,000.00 per year. The attorneys filed the petition and the bankruptcy trustee concluded that she could pay her debts and dismissed the petition. The client sued his attorneys for negligence, breach of contract, breach of the covenant of good faith and fair dealing, and for violation of Mass. Gen. Laws Ann. Ch. 93A. The jury awarded the client $16, 913.00 in damages. The attorneys appealed for judgment notwithstanding the verdict.

Issue: Did the jury properly find in favor of the client?

Ruling: Yes. The evidence properly supported the jury’ finding that but for the attorney’s negligence, the client would have received a discharge of her debts at an earlier date when she was making only $8,000.00 per year. The jury’s finding was also supported by the evidence which demonstrated that the client’s creditor’s were still interested in commencing lawsuits against her, as she was receiving demand letters and was no longer ‘judgment proof”. The amount of damages awarded by the jury were also supported by the evidence documenting the debt owed by the client.

Lesson: Beware of skeletons in the closet. It is extremely important to manage your case-load and document important dates and client goals and anticipate changes in circumstances which could adversely affect your clients.  

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Posted in: Massachusetts