- Case Type:
- Business
- Case Status:
- Reversed and Remanded
- Citation:
- 21-51234 (5th Circuit, Jan 13,2023) Not Published
- Tag(s):
-
- Ruling:
- Fifth Circuit reinstates a chapter 7 trustee's lawsuit against the Debtor's pre-petition state-court attorney for legal malpractice. The trustee's expert proffered an opinion on duty and breach as required for a malpractice claim, and the record established that a reasonably prudent attorney would not have filed an antitrust claim based on the information available.
- Procedural context:
- Appeal from district court order adopting the proposed findings of fact and conclusions of law recommended by the bankruptcy court after trial of a non-core adversary proceeding. the Fifth Circuit remanded the action to the district court for a calculation of damages.
- Facts:
- The Debtor, Champion Printing & Copying, LLC, was often hired by wedding vendors (e.g., florists) to take photographs of their work at high-end weddings. This occasionally led to conflicts with traditional wedding photographers at a given wedding who had exclusivity clauses for the event in their contract. The Debtor contacted Attorney Gammon about representing him in connection with a possible lawsuit against the traditional photographers. Gammon agreed to take the case and filed a state-court lawsuit alleging conspiracy to restrain trade and tortious interference. The Debtor lost on summary judgment. The traditional photographers sought sanctions against the Debtor and Gammon for filing a frivolous lawsuit; the state court granted sanctions against the Debtor only in the amount of $41,518.75. The state appellate court affirmed and held that the debtor "(1) made groundless assertions of facts and (2) brought the lawsuit for improper purposes."
The Debtor filed for relief under chapter 7. The traditional photographers filed a proof of claim for their sanction award. The chapter 7 trustee filed an adversary proceeding against Gammon for legal malpractice and other claims. After a trial, the bankruptcy court submitted its proposed findings of fact and conclusions of law to the district court, including that the trustee's expert failed to demonstrate the standard of care or produce an opinion based on what could have or should have been known to Gammon when the state court suit was filed, and, thus, the trustee failed to carry his burden to succeed on the legal malpractice claim.
- Judge(s):
- Stewart, Willett, Oldham
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