Juan Antunez summarizes a case where a client won a defalcation case in bankruptcy court against its former probate lawyer, which in turn immunized that probate lawyer’s insurance carrier from liability, which probably was not the client’s intended result. Mr. Antunez’s summary concludes as follows:
In estate litigation it’s the “unknown unknowns” that can convert today’s big win into tomorrow’s bitter set back. The bankruptcy judge’s defalcation ruling against West was clearly a “win” for Aleta, but it also immunized West’s insurance carrier from liability. This may have all been part of a grand strategy, or it could have been an unintended consequence. Either way, we now have one more contingency we can transfer from the “unknown unknown” column to the much easier to handle “things we know we don’t know” column. Will a defalcation ruling always immunize a lawyer’s insurance carrier from liability? We don’t know. But that’s OK, we now know this is a possible risk (it’s a known unknown), and can plan accordingly. And for those of us making a living in the crazy world of civil litigation, that counts as a win.
See full article at: Bkrtcy. M.D.Fla.: Can winning a “defalcation” ruling in a bankruptcy proceeding against your former probate lawyer end up immunizing his insurance carrier from liability? | Florida Probate & Trust Litigation Blog
Posted by Lewis J. Saret, Co-General Editor, Wealth Strategies Journal.