Legal Malpractice

At the Intersection of Bankruptcy and Legal Malpractice

By (Andrew Lavoott Bluestone)

in Lyons v Cronin & Byczek, LLP 01/06/2010 2010 NYSlipOp 30006(U Plaintiff started an employment discrimination case against the LIRR and while it was pending, filed a petition in Bankruptcy.  How this fact was not known to his attorneys, or the LIRR is not explained, but he settled the case and accepted the proceeds.  Later, after being discharged in Bankruptcy.

He was dissatisfied with the settlement, and retained the target attorneys to sue his former attorneys.  In this round it was established that he had filed bankruptcy during the pendency of the underlying case, and the rule is that he lost rights to that case at the moment that the petition was filed.  It belonged to the debtor's estate, to be administered by the Chapter 7 trustee.

So, case dismissed.  Now he sues his own attorneys, saying that they should have known.  If they knew, they also should have known that he could move to reopen the bankruptcy, amend the petition and schedules, have the trustee cede the cause of action back to him, and refile under CPLR 205. They didn't, and this forms the basis of his second legal malpractice action.

Currently, motion for summary judgment by the target attorney was dismissed.

Full post as published by New York Attorney Malpractice Blog on January 15, 2010 (boomark / email).