[CLBS] PI claim awarded after a Chapter 7 closed

[Aaron Tolson]

I have had a couple similar things and I think you have to reopen and
administer.  I think the current state of the case law is that if you don't
run it through bankruptcy, there is an absolute defense to the malpractice
case (see recent case McAllister v. Dixon, 2013 Opinion 16 Idaho Supreme
Court.)  I do malpractice panel hearings and that is coming up as a defense
more than you might think.  So it might help you with your client to
explain that they may not even get a recovery if they don't reopen.   It is
a pretty easy thing to do that I can send you the forms if you need to I
just did a case that is with Mr. Hopkins.

On Mon, Apr 8, 2013 at 11:54 AM, Rocky Wixom <wixomlawoffice at gmail.com>wrote:

> H
> ere are the facts:
>
> Client sees a national law firm commercial and believes he may have a
> personal injury claim for damages for taking a prescription drug.
>
>  He contacts the firm, they screen it and send him a letter saying his
> statute of limitations is run and there is no claim.
>
> TWO YEARS LATER he files a chapter 7.  Because the law firm said there was
> no claim he did not disclose the issue in any way to the Court or Trustee.
> His no asset case closes in approximately 3 months from the petition.  I
> never withdrew from the case.  I never withdraw from closed cases.
>
> 3 months after the case closed the national law firm re-evaluated cases of
> his type and reached out to him to reopen the PI case  Turns out he is now
> entitled to a very substantial recovery.
>
> Not long ago the law firm called me and informed me of these facts which is
> when I learned of any of this for the first time.
>
> Question:
>
> 1) Because my client was told by a firm two years prior to filing that he
> did not have a claim I do not believe he has any issues with bankruptcy
> fraud, yet.  The firm has admitted that they originally told him he had no
> case.   Am I wrong?
>
>
> 2) Isn't this an undisclosed contingent and unliquidated claim that existed
> at the time of the bankruptcy despite the national law firms advice to the
> contrary?  Thus isn't it property of the estate subject only to a PI
> exemption to the extent reasonably necessary for support?
>
> 3) If so doesn't my client have a duty to re-open and list the asset and
> claim any exemption?  Probably have to negotiate a compromise settlement?
>
> 3) what is the test for reasonably necessary for support of my client and
> his minor children?
>
> 4) what if my client says he does not want to re list and bring to the
> trustee's attention?
> As the attorney of record in a closed case do I have a duty to re-open and
> withdraw from the case without disclosing to the trustee what my client is
> doing?  Or does the fact that it is closed mean I can walk away and let my
> client run the risk of bankruptcy fraud for not allowing me to re-open and
> disclose?
>
> any thoughts would be appreciated.
>
>
>
>
>
>
> --
> Rocky L. Wixom, Attorney at Law
> (208) 542-5298
>
> Wixom Law Office, Inc.
> PO Box 51334
> Idaho Falls, Idaho  83405
>
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-- 
Aaron J. Tolson
2677 E. 17th St. #300
Ammon, ID. 83406
208-228-5221

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