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Bankruptcy Estate Sues Filing Attorney for Malpractice

Jennings v. Quarles & Brady, 378 B.R. 687 (Bkrtcy. M.D. Fla., Oct. 26, 2007)

Bruce Lee Jennings filed a Chapter 11 bankruptcy petition; the same day, ten entities related to Jennings also filed Chapter 11 petitions. Quarles and Brady, LLP ("attorneys") were the attorneys of record for all of the filers. Brandon Maxfield was the primary creditor of Jennings’ estate.

Maxfield filed a motion to disqualify attorneys, citing undisclosed conflicts of interest in their representations of the multiple debtors. In May 2004, Maxfield filed a motion for leave to pursue claims on behalf of the estate however, this motion was denied. In November 2004, the Court granted the motion to disqualify. As a result, five months later, the Court authorized Maxfield to pursue malpractice claims on behalf of the estate, and in May 2005, Maxfield filed a complaint (individually and on behalf of the estate) against the attorneys for malpractice and breach of fiduciary duty in connection with their conflicts of interest in representing multiple debtors around the time of the Chapter 11 filings.

The attorneys argued that collateral estoppel and res judicata precluded the malpractice claim because the claims for damages had already been raised, litigated, and determined in the disqualification proceeding, in which the Court ordered the attorneys to forgo any compensation for their services plus disgorge any pre-petition retainers for the bankruptcy filings.

The Court held that the malpractice action was not barred. For collateral estoppel to apply, there must be a valid prior judgment that is final, both of the claims must consist of the same parties or privies and finally, there must be the same cause of action. The Court first determined that the malpractice action was materially different from the disqualification proceeding, which only involved ethical considerations and fees. In contrast, the malpractice claim involved negligence and damages for economic loss.

The Court also ruled that both of the causes of actions consisted of different parties. When Maxfield filed the disqualification motion, he was acting only as a creditor of the estate. In the malpractice action he was a representative of the estate. Finally, the Court held that there was no full and fair opportunity to litigate the malpractice claim during the disqualification proceeding.

Based on the foregoing reasons, the Court denied the attorney’s motion for summary judgment.

 

 

Judge(s): Paul M. Glenn
Related Categories: Bankruptcy , Civil Procedure , Civil Remedies
 
Debtor Lawyer(s) Debtor Law Firm(s)
Ronald Bergwerk

 
Creditor Lawyer(s) Creditor Law Firm(s)
Gregory A. Anderson Anderson Glenn, LLC
Elizabeth H. Brabham Anderson Glenn, LLC
Stanley J. Galewski Buchanan Ingersoll & Rooney PC
Lee Christie Cline Farrell Christie Lee & Caress
Mark J. Bernet Kass Shuler Solomon Spector Foyle
Richard Ruggieri Law Office
Douglas H. Morford Morford & Whitefield PA
Betsy C. Cox Rogers Towers PA
Bradley R. Markey Stutsman Thames & Markey PA
Richard R. Thames Stutsman Thames & Markey PA

 
Trustee Lawyer(s) Trustee Law Firm(s)
Kelli E. Lueckert Anderson Glenn, LLC
Elena L. Escamilla U.S. Department of Justice

 

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"rkb"), the kimberly k. jennings california trust, the pursue the malpractice claim was denied on august 6, represented in a prior action brought by a single creditor, jennings' creditor constituency suffered a loss." (main prior proceeding." christo v. padgett, 223 f.3d at negligence was the proximate cause of loss to the f.3d 693 (6th 24). the basis for an award against the q&b parties did not delay his request for permission to pursue the the legal strategy pursued by counsel." (adv. doc. 47, p. 'two hats.'" (main case doc. 889, p. 10). the court and considered by the courts in the litigation recovery of the money for his individual estate." (adv. vs. in representing both sides was specifically malpractice and breach of fiduciary duty. the in re southmark corporation, 163 f.3d 925 (5th on february 25, 2004, maxfield filed a motion to little incentive to offer proof regarding the actual damages 3 debtors' counsel." (adv. doc. 48, p. 11). quarles & brady llp, defendants breached their reasonable duty of care to claims on behalf of the estate of bruce lee jennings. retail, inc., 456 f.3d at 1287. defendants' conduct. causation issue had been determined in a prior creditor, but initiated the malpractice action as a 11 usc 328. limitation on compensation of judgment, the primary issue before the court is whether claim, maxfield must establish that the estate suffered related cases. the court finds that quarles & designated claims on behalf of the estate on may 19, the doctrine of res judicata to a debtor's malpractice by the court 1339(quoting pleming v. universal-rundle corp., 142 the amount and nature of the sanctions that doc. 47, pp. 1-2). above, therefore, it appears that maxfield was not constituency of jennnings individually is entirely 393, 398 (bankr. d. n.h. 2006)(citing bezanson v. this case came before the court for hearing to jennings, bryco arms, and b.l. jennings in an amount 618 (5th of the defendants' employment and denial of assert, for example, that jennings "testified that counsel judicata, the eleventh circuit court of appeals has held and "participation" are issues of fact that are not suitable unless, in his designation as a party or by other of a judgment in foreclosing relitigation of previously entered in the main bankruptcy case. compensation in these cases and 2) requested permission to pursue certain alter ego, maxfield was authorized to file the malpractice 757 (8th but voluntary relinquished the opportunity as a strategic defendants' violation of the disinterestedness requirement cir. bap 1996)). middle district of florida in other words, the sanctions imposed on an motion solely in his capacity as a creditor of the estate. background disclose the actual and potential conflicts of for the benefit of the estate. damages. action. according to the defendants, all of the claims and on behalf of the estate of southern commodity corp., 709 f.supp. 1117, 1120 maxfield "individually, and on behalf of the estate of disqualifies it from representing bruce l. counsel for a debtor cannot represent interests before the court differs materially from the prior in this case, full relief was not available to maxfield in this case, the court finds that the order on the concluded that the issue had been actually litigated in the jennings' direction throughout the course of their did not have the full and fair opportunity to litigate the 7. disgorgement of all fees paid to for summary judgment, the defendants assert that the cir. established, "a legal malpractice claim is hypothetical and reorganizations, whether or not there is actual damage to disqualification motion does not preclude maxfield from bruce lee jennings, discussion distinguishable from the case before the court, because the estate. denial of compensation is an appropriate brandon j. maxfield, individually "on behalf of the estate of bruce lee jennings, debtor." in fact, the existence of a claim for legal malpractice malpractice claim in connection with the disqualification in, and/or ratified all such actions." (adv. doc. 47, p. plaintiff." olmsted v. emmanuel, 783 so.2d 1122, 1125 bankruptcy court with respect to the causation issue, and against whom collateral estoppel is asserted must have (11th cir. 1990)). third, there must be identity of both parties or many instances of undisclosed conflicts of interest in disqualify quarles & brady, llp as counsel for the individually. malpractice claims until after the disqualification in order for the second action to be barred." in re atlanta estate." in re kings river resorts, inc., 342 b.r. 76, 85 speculative. lenahan v. forkey, 702 so.2d 610, 611 (fla. because the malpractice claim belongs to the estate, prohibits quarles & brady, llp from 1. pursuant to 11 u.s.c. 327(a), the related debtors at the time that the petitions were filed. 2004. (doc. 670). jefferson national bank, 793 f.2d 1541, 1549 (main case doc. 559). the initial motion for leave to warrants its disqualification in all of these ftc v. wilcox, 926 f.supp. at 1101. adjudicated; they 'promote the conservation of judicial separate order granting motion to disqualify debtors' action. in the disqualification proceeding, maxfield had that the bankruptcy code's rules regarding the apply to a particular case, "there must be identity of both the doctrines of res judicata and collateral estoppel litigated or adjudicated by the court in the motion to disqualify debtors' counsel and for as set forth above, maxfield previously filed a earlier litigation. the alleged damage to the of (a) damage to the bruce jennings estate, maxfield is the holder of a prepetition judgment against first, the prior judgment must be valid in that quarles & brady llp d/b/a california trust, the bradley a. jennings california paul m. glenn was actually litigated in the prior proceeding; been granted at the time that the disqualification motion plaintiff; (2) that the defendant attorney neglected a sanction apparently rests in the policy underlying the action currently before the court, because the facts preclude maxfield from asserting the claims set forth in the plaintiff, brandon j. maxfield, commenced this 2004, while the disqualification motion was pending. malpractice. in count i, maxfield alleges that the alleged in count i. (complaint, adv. doc. 6, p. 7). $337,507.20 security deposit by rkb on both counts also contain separate allegations that was advised of the scope and consequences of all of the f.3d at 1285. and that the trustee therefore was not bound by the compensatory damages, prejudgment interest, the estate, but in the pending action, his appearance was /s/ paul m. glenn compensation is unreasonable or excessive. 11 u.s.c. nevada corporation ("b.l. jennings"), rkb investments, the malpractice claims that are the subject of this disqualification motion and the defendants' first fee "b.l. jennings' schedules indicate that jennings holds a (bankr. d.r.i. 1986); and coleman v. alcock, 272 f.2d equifax check servs., inc., 234 b.r. 8, 11 (d. consequently, maxfield had little incentive in the belong to the bankruptcy estate, and not to maxfield count i of the complaint is an action for legal states that "brandon james maxfield moves the court to property of the bankruptcy estate, the permission had not action; and (4) the party against whom f.3d 1354, 1359 (11th jennings pre-petition assets were essentially wiped out "res judicata" refers to the "preclusive effect beyond the denial of compensation. it is generally litigation must have been "a critical and 3. quarles & brady, llp's to the essential aspects of the disqualification motion. in the disqualification proceeding because maxfield had different than the creditor constituency of b.l. jennings, (3) the determination of the issue in the prior cir. 1990). directed the defendants to use the assets of b.l. jennings retainer. (main case doc. 423). in the motion, on may 19, 2004, maxfield filed a motion for doc. 51, p. 25). did not have a "full and fair opportunity to litigate" the indication or manifestation that maxfield was filing the maxfield filed the malpractice action, however, therefore should not be precluded from prosecuting this b.l. jennings, and bryco arms." (main case doc. 423). creditor of jennings' bankruptcy estate. specifically, in this case, maxfield filed the disqualification employment of professionals had been broken. the relief doc. 890). in the motion, maxfield alleged that the case presented i. preclusion that exceeds $24,000,000. participate in or ratify the defendants' actions with with respect to the doctrine of collateral estoppel, performed estate planning work for jennings for summary judgment motion. order on motion entitled to the entry of a summary judgment in their favor liability claims pending against janice denial of compensation and disgorgement of any rules "by a fiduciary in a bankruptcy case damages the prepetition retainer. not identical to the claim for relief in the disqualification accordingly: estate. (main case doc. 559). in the motion, maxfield it was rendered by a court of competent adjudicated in connection with an order granting maxfield, in his capacity as representative of the estate, disgorgement of retainer. cir. informed of his obligation, as a fiduciary, to seek the at 247). additionally or alternatively, the defendants assert quarles & brady's rule 2014 (main case doc. 889, p. 13). the court also entered a was allowed to represent the estate in the malpractice quarles & brady's initial and addressed in the retention letter. f.supp. at 1100-01. the defendants assert that the matters that were litigated or could have been payments made to the attorney, if the attorney's on november 16, 2004, following two days of proceeding was litigated." specifically, the fifth circuit to support their contention, the defendants rely in application. according to the defendants, jennings the defendants breached their duty to maxfield collateral estoppel, or issue preclusion, may consider the motion for summary judgment filed by the the debtor in intelogic had made a tactical decision not to jennings and rkb, and rkb and bryco. (main case 01 (s.d. fla. 1995)(quoting refined sugars, inc. v. cir. 2000) is also and partnership claims among the debtors which the estate of bruce l. jennings may hold against because the matters presented in the malpractice action 23). chief bankruptcy judge count ii of the complaint is an action for breach of chapter 11 proceeding are property of the bankruptcy christo v. padgett, 223 f.3d 1324, 1339 (11th chapter 7 on december 29, 2004, maxfield filed a renewed maxfield made the following allegations: filings and b) the possible conflict of interest cir. 1998)). trust, and the bradley a. jennings nevada trust, and a california general partnership ("rkb investments" or on march 24, 2005, the court entered an order judicata or collateral estoppel from pursuing the estate of bruce jennings already having been not yet been authorized to pursue the malpractice action 4. the fraudulent transfer, alter ego in an action for legal malpractice under florida law, cir. 1999); in re giorgio, 62 b.r. 853 requested permission to pursue a malpractice action between bryco and rkb relating to the intelogic trace, inc., 200 f.3d 382 (5th receive a full and fair opportunity to litigate the still prevent the relitigation of particular issues the court may cancel the agreement between the debtor multiple debtors. according to maxfield, disqualification quarles & brady streich lang llp, judgments provides: motion in any representative capacity, or in any capacity must involve the same cause of action as claims that jennings' estate held against b.l. jennings' the disqualification motion does not contain any appeared in a prior case in a different capacity than he claims as a "negotiating chip" to obtain a reduction in the in its introductory paragraph, for example, the motion brady's initial and continuing violation of the defendants' services. b. the claim or issue adv. no. 06-84 is required. (p. 30). in that earlier litigation, it cannot be a basis for adverse to the estate. (p. 12). remedies" to address the defendants' violations of because of the "identity of parties" requirement, the as an additional or alternative basis for their motion "for the purpose of advancing his own interests rather disqualification proceeding, but is appearing as a deterrent to such conduct." in re rivers, 167 b.r. at 302. e. summary petition under chapter 11 of the bankruptcy code on quarles & brady, llp in contemplation or in the defendants assert that they acted pursuant to that the malpractice action is barred because their client for an action to be barred under the doctrine of res pursue any and all claims against quarles & brady on do not preclude maxfield from pursuing the action, based on the evidence and findings described maxfield filed his initial motion for leave to pursue 4 jennings' estate in three respects: first, maxfield alleges 1 the doctrines of res judicata and collateral estoppel connection with these chapter 11 proceedings inc. and bruce l. jennings, a secured creditor, manifestation, it is made evident that he as set forth above, for the doctrine of res judicata to that the estate suffered actual damages as a result of the law from prosecuting the malpractice action on the theory action, but had appeared only in his capacity as trustee in malpractice action that is currently before the court, alleged in the malpractice action are the same as the facts determination in the prior action. see in re fordu, 201 serve the purpose of preventing the relitigation of matters professional person employed under section and disgorgement of fees were the "only appropriate individually, by filing an action for declaratory judgment which were actually litigated and decided in a jennings." maxfield asserts that jennings could not have debtors' counsel and for disgorgement of retainer filed case no. 03-4926-3f7 motion for leave to pursue designated claims on behalf in accordance with these provisions, the f.3d at 1359). pursuant to the defendants' motion for summary "to prevent litigation of matters of law and fact previously (c) except as provided in section 327(c), issues are not identical in both proceedings, because the and issues asserted in the complaint were previously the related debtors, whether he conveyed specific, failed to make the following disclosures: employment contract with the debtors, and the denial of the bankruptcy court. see, for example, in re deny allowance of compensation for services was filed more than one year prior to the entry of the malpractice claim in the disqualification proceeding, and judgment must be final and on the merits. estoppel preclude maxfield from bringing the malpractice nashban. 327(e), or 1107(b) of this title, the court may may 14, 2003. on the same day, ten entities that were component of the plaintiff's case. it is well-established request for relief in the malpractice action, were not operates as a bar to the claims asserted in the malpractice c. the parties are: "(1) that the defendant attorney was employed by the disclosure rules are not determined by computing the had a full and fair opportunity to litigate the issue in the section 328(c) of the bankruptcy code provides: resources by preventing needless litigation.'" federal (fla. 1st case was pending as a chapter 11. on the other hand, proof of actual harm is a critical conclusion cases holding that a trustee represented the interest of all 2 with jennings' knowledge and approval. (transcript, pp. professional person is not a disinterested of this interrelated debt forces quarles & brady to wear claiming over $875,000 in back wages from 1999). in southmark, the fifth circuit declined to apply were imposed on the q&b parties in that that the defendants were not disinterested as required by involved in the prior proceeding; (2) the issue ii. ratification the entry of a summary judgment in their favor on the [as the debtor-in-possession] had knowledge and was that there is no evidence that jennings "was ever q&b parties, already have been presented to inability to independently evaluate the various inconsistent with those he might assert in litigation on his that "it is appropriate that mr. maxfield be permitted to that have already been adjudicated. ftc v. wilcox, 926 case. assets of b.l. jennings, and by failing to file a timely in southeast banking corp., 315 b.r. at 247-48, the available was the termination of the defendants' reviewed the extensive factual findings and record in the that he was 'quite satisfied' with the performance of based on the above, the court finds that maxfield 2. the existence of alter ego claims, 327 of the bankruptcy code, and that they had violated maxfield's motion to disqualify debtors' counsel and for the defendants on behalf of the bankruptcy estate. (see bruce lee jennings." (adv. doc. 6). inappropriate in this case, (1) because the ultimate claim or the disclosure rules. in order to obtain relief under the court also found that conflicts existed because was the primary reason for the chapter 11 parties or their privies." in re atlanta retail, inc., 456 connection with the defendants' representation of conflicts of interest existed between the various estates; 327 or 1103 of this title if, at any time during from the record, for example, whether jennings had full the defendants subsequently filed the motion for it is clear that maxfield filed the disqualification employment, and that they implemented the directions lang llp, and ned nashban, is denied. were already considered and decided by the court in the consent to, and participation in, the defendants' decisions taken "at the direction and/or with the consent of the 327.'" in re rivers, 167 b.r. 288, 300-01 (bankr. n.d. proceeding. malpractice claims in the disqualification proceeding. that were raised, litigated, and fully determined in the capacity, individual or representative, is not former trustee had served in a representative capacity for based on the statutes and authorities discussed maxfield as an individual creditor could not assert the additionally, maxfield is not barred as a matter of the disclosure requirements set forth in rule 2014 of the defendants, quarles & brady llp, quarles & brady in this case, the court finds that jennings' "consent" quarles & brady arising out of their representation of mr. estates of the other debtors simultaneously, even though motion was decided, and because the remedy provided in jennings' bankruptcy estate. (p. 22). the disqualification proceeding consisted of termination is appearing as a representative of the estate, maxfield as and services as attorneys for the debtors. barred where the client consented to and participated in than the interests of the estate." id. at 247. person, or represents or holds an interest thereby bound by or entitled to the benefits of request for disgorgement was made pursuant to 328(c) further, it is noteworthy that the absence of a "full reasonable duty owed to the plaintiff; and (3) that such award against the q&b parties for the exact kimberly k. jennings nevada trust, the rhonda d. the defendants are not entitled to the entry of a (1) the issue at stake is identical to the one brought an avoidance action was not in privity with an 4. that quarles & brady had dca 2001)(emphasis supplied). the loss august 6, 2004. (main case doc. 670). jurisdiction and in accordance with the jennings, rkb and the trust debtors even dated this 26th and ned nashban, above, maxfield is required to prove that the estate motion"). the court entered an order on the coupled with its non-disinterestedness defendants breached their fiduciary duty of care to claims, transfers, and interests in these related with respect to the nondisclosures alleged by (complaint, adv. doc, 6, p. 4). action. although he had requested permission to southmark, 163 f.3d at 935. nevertheless, the fifth suffered by the estate, because the sanctions authorized of the bankruptcy code. order authorizing maxfield to assert any claims against b.l. jennings. a. the doctrines debtor in southmark not only had the opportunity to similarly, the fifth circuit's decision in in re and fair opportunity to litigate" distinguishes this case the purpose of the doctrines of res judicata (claim pursuant to the order authorizing him to pursue the claim bringing this malpractice action, because the claims or circumstances surrounding the payment of a the estate. "a court may sanction a professional for jennings' estate by essentially the same conduct that was doctrines preclude maxfield from prosecuting the (adv. doc. 47, p. 10). the "motion for sanctions" of damages." until redressable harm has been and the attorney, and may order the return of any their privies. fourth, the later proceeding cases warrants: 1) a complete denial of 5 disqualification motion on november 16, 2004. in the above, therefore, the court concluded that: 327(a) of the bankruptcy code and rule 2014 of the janice kay jennings. in re: pp.4-5, 7). cmt. a(quoted in in re southeast banking corp., 314 b.r. basis that the doctrines of res judicata and collateral cir. bap 2000), found that a trustee who had action involving a former trustee, since the former trustee order, the court terminated the defendants' further, the defendants also contend that they are disgorgement proceeding. id. at 933. in other words, the third element of a legal malpractice claim the element _______________________________________/ seek adequate protection from b.l. jennings for the 5. quarles & brady, llp's rendition 11 u.s.c. 328(c)(emphasis supplied). additionally, to satisfy the debt owed to him. maxfield also contends evidentiary proceedings, the court entered its findings of 3. a) that possible claims existed on behalf of the estate at the time that the disqualification them not disinterested." specifically, the court noted that theory is set forth on page 10 of the motion: litigated in an earlier suit. i.a. durbin, inc. v. individual creditor who had previously asserted the same action, and also on the basis that jennings consented to or quarles & brady, llp and ned nashban, esquire corporation ("bryco arms"), b.l. jennings, inc., a bruce lee jennings, and (b) the appropriate sanctions against the had performed valuable services for the debtor estates and disclosure rules, its non-disinterestedness, and disclosure is woefully insufficient because it "authorized, but not required, to pursue any and all claims 474, 480 (9th disgorgement proceeding. malpractice action from relitigating a prior determination related to jennings also filed chapter 11 petitions. knowledge of the complex rights and obligations among requirements of due process. second, the creditors of the estate, that the creditor body had not been maxfield, the court found: section 327 or 1103 of this title, such assert certain malpractice claims against an accountant in cause of action without first obtaining permission from the course of the proceeding, the evidence was incidental malpractice action. d. full and fair opportunity to litigate accountant's fees. in re intelogic, 200 f.3d at 389. the "bankruptcy code empowers the court to deny testified on their behalf at that hearing. the defendants (adv. doc. 47). in the motion, the defendants contend disqualification proceeding. by maxfield in the main case. (adv. doc. 47, p. 3). february 25, 2004, more than one year before maxfield disgorgement of retainer (the "disqualification jennings had ratified their conduct. understand his duties or the obligations among the in re atlanta retail, inc., 456 f.3d 1277, 1285 disclosure violations regardless of actual harm to the fact and conclusions of law on maxfield's motion to summary judgment in their favor on the theory that debtors in these chapter 11 proceedings." on page 4 of court declined to apply the doctrine of res judicata in an fiduciary duty. in count ii, maxfield alleges that the respect to the matter on which such adequate protection of jennings' estate's interest in the the disqualification motion, however, was filed on it is ordered that the motion for summary because the claim for damages in the malpractice action is disqualification proceeding. in the current case, as shown (n.d.n.y. 1997) aff'd 142 f.3d 571 (2d cir. 1998). disqualify debtors' counsel and for disgorgement of "redressable harm." "redressable harm relates to the federal rules of bankruptcy procedure. pursue the malpractice claim on behalf of the estate on tampa division a $24,774,146.53 california judgment against jennings, disgorgement of any pre-petition retainer. 48, 77). suffered by the estate. opportunity to litigate the malpractice claims in the prior thomas, 402 f.3d 257, 265 (1st on may 13, 2005, maxfield filed a complaint appears in some other capacity. is impermissible. (p. 14). (1) a party appears in his individual capacity proceeding had been concluded. on the contrary, respect to the assets of b.l. jennings or rkb. on the professional persons southeast banking corp., 315 b.r. 244, 247 (bankr. s.d. circuit evaluated the "way in which the disgorgement maxfield contends that the entry of the prior order simultaneous representation of b.l. jennings, representation of jennings and the related debtors, and brandon j. maxfield (the plaintiff) is the primary issues of fact exist in this case regarding jennings' in this respect, the malpractice action presently contrary, according to maxfield, jennings had actually defendants contend that the plaintiff, brandon j. in response, maxfield asserts that jennings did not legal malpractice and breach of fiduciary duty. the prior proceeding. instead, the debtor chose to use the disqualification proceeding. evidence of the damage may have been introduced during other than his individual capacity. in fact, the motion though: a) the consolidation of that litigation disqualification proceeding only in his capacity as a in which he appears in another capacity. compensation to a professional who is not disinterested or accepted, for example, that the sanction provided by those referred to in this paragraph is the motion to disqualify maxfield is not precluded by the doctrines of res involved in the earlier proceeding. in the motion before the court, the defendants seek jennings nevada trust, the rhonda d. jennings was decided. maxfield, in his representative capacity, has defendants' first fee application. (main case doc. 7 (the defendants) were the attorneys of record for all of 6. quarles & brady, llp failed to damages are speculative." hold v. manzini, 736 so.2d that the three elements of a claim for legal malpractice summary judgment that is currently under consideration. action only in a representative capacity, and not in his governs attorneys who represent debtors, provides that informed instructions to the defendants, or whether he motion on february 25, 2004, while jennings' bankruptcy failed to timely file a proof of claim against rkb. that the defendants represented jennings' estate and the adverse to the interest of the estate with (main case doc. 1145). in that order, the court found creditor of b.l. jennings or that jennings was . . . for summary judgment. the court cannot determine jennings in the amount of $1,404,000.00. the existence the related entities are bryco arms, a nevada part on jennings' testimony at the hearing on the restatement (second) of judgments, 36(quoted in in re here, just as in southmark, the issues estate." in re robotic vision systems, inc., 343 b.r. representative of the estate, and because maxfield did not compensation, rather than the monetary damages actually such professional person's employment under capacities secured claim against b.l. jennings for a loan to b.l. (main case doc. 559, p. 3). the motion was denied on who holds an interest adverse to the estate 'at any time preclude the plaintiff from bringing the malpractice 2. quarles & brady, llp's claim against them, because their client "bruce jennings 138, 142 (fla. 3d dca 1999)(citations omitted). (2) a party appearing in an action in one ratified the defendants' conduct because he did not is predicated on the plaintiff's ability to establish the doctrines of res judicata and collateral estoppel continuing violation of the disclosure rules action against a chapter 11 examiner's accountant. in re during 2002. debtor-in-possession at the time, bruce jennings." (adv. of asset protection advice to bruce l. jennings plaintiff, representative of the estate in the malpractice action, and debtor in intelogic possessed the "opportunity to litigate," party relying on the doctrine must show that: quarles & brady llp d/b/a quarles & brady streich not yet received a forum to prove the entire amount of the attorney for violating the disinterestedness requirement or the court finds that application of the doctrines is 4th because all of the acts described in the complaint were against the defendants. the complaint was filed by (main case doc. 1145). in the order, the court granted required in the disqualification proceeding to establish ratified all of the actions alleged in the complaint. aware of all such actions, and participated in, acquiesced 1. that jennings was a secured the debtor, bruce lee jennings ("jennings") filed a counsel and for disgorgement of retainer. (main case maxfield's motion "for leave to pursue claims on behalf of the estate. (main case doc. 946). the injury to debtors resulting from its debtor. doctrine is not generally applied against a party who the rules of res judicata in a subsequent action 9 cause of action. in so finding, the court cited a series of main case doc. 1145). litigate the causation issue in the prior proceeding, but did (3) because maxfield did not receive a full and fair the prior action. in other words, in the prior action, the 889). trade commission v. wilcox, 926 f.supp. 1091, 1100- as shown above, maxfield was authorized to cir. 2006)(quoting in re justice oaks ii, action are property of the bankruptcy estate. "claims of constructive trust, and fraudulent transfer claims on of the cause of action. these damages, as the ultimate the court found that "quarles & brady's simultaneous with respect to the conflicts alleged by maxfield, over the motion for sanctions in determining the economic damage suffered by the estate. although conn.1997)). leave to pursue designated claims on behalf of the 898 f.2d 1544, 1550 (11th the defendants' theory of ratification is premised judgment filed by the defendants, quarles & brady llp, greenburg, 266 b.r. 45, 51 (bankr. e.d.n.y. 2001) and was appearing in his individual capacity in the current ________________________________________/ of the estate," and determined that maxfield was in the disqualification motion, maxfield alleged the eleventh circuit court of appeals has held that the neither 328(c) nor 329(b) expressly authorizes circuit found that the debtor was precluded in the prosecute the claim, as required because the claim is (main case doc. 889, p. 8). professional person is employed. they provided. device. maxfield, is precluded from bringing the action by virtue in re vogel van & storage, inc., 210 b.r. 27, 33-34 328(c) and 329(b), maxfield was required to show only 329(b). fla. 2004))(emphasis supplied). the motion, maxfield describes himself as "the holder of alleged by the plaintiff must be actual and not merely that the accountant's conduct had not caused certain on behalf of the related debtors, by failing to seek parties are not identical in both proceedings, and because postjudgment interest, and costs of the proceeding. bryco's behalf. bankruptcy estate has no right to pursue the malpractice 2000)(quoting pleming v. universal-rundle corp., 142 assets; and third, maxfield alleges that the defendants 6 disclosure rules themselves. violation of the disclosure 10 the court to impose monetary sanctions on an attorney counsel and for disgorgement of retainer that was necessary part" of the judgment in the first currently appears. the restatement (second) of damage to the estate caused by the violation. the reason sections is not measured by the actual harm or injury to same actions. this second action, which seeks a further by 328(c) and 329(b) are not measured by such multiple debtors. (transcript, pp. 62-63). malpractice and fraud that arise during the performance constructive trust claims, and joint enterprise second, maxfield alleges that the defendants failed to disqualify and for disgorgement, and also on the (p. 25). damages that might be recoverable from the defendants that full relief must have been available in the first action finally, the eleventh circuit has held that "the party on the principle that "malpractice actions such as this are not "disinterested." (p. 16). for the statutory choice of denial of compensation as the representing all of the debtor entities. (p. 20). in both counts, maxfield seeks an award of actual, non-speculative damages as a result of the that jennings ratified the defendants' conduct, because (bankr. e.d. cal. 2006)(citing in re mehdipour, 202 b.r. in fact litigate the issue in the prior proceeding. collateral estoppel is asserted must have had a llp d/b/a quarles & brady streich lang llp, and ned this is an action against the defendants for legal (complaint, adv. doc. 6, pp. 5, 7). damage to the estate. according to the fifth circuit, the dca 1997). "the most basic principles of res judicata require proof of claim against rkb. (complaint, adv. doc. 6, further found that "jennings' security interests in b.l. cir. 1959). rendered asset protection advice to jennings. ga. 1994). 36. party appearing in different prior disqualification proceeding. suffered specific, non-speculative damages as an element proceeding, because maxfield initiated the (11th of quarles & brady's simultaneous representation of the malpractice action. the essence of the defendants' financial corp., 904 f.2d 1498, 1501 (11th 8 representation of b.l. jennings and jennings renders that the doctrines of collateral estoppel and res judicata cir. 2005) and correll v. such representative "should be free to take positions through quarles & brady's inaction. because the creditor own behalf." restatement (second) of judgments, 36 because maxfield appeared only as a creditor in the (s.d. fla. 1988)). during such professional person's employment under and reimbursement of expenses of a against the defendants for the benefit of jennings' estate. behalf of jennings' bankruptcy estate. maxfield also march 24, 2005. in order to recover on the malpractice cir. 1986). "when [res judicata or] public's confidence in judicially supervised day of october, 2006. bryco-rkb lease and/or the bryco-knowlton which were assigned to rkb, and b) the similarly, the court in in re marlar, 252 b.r. 743, had consented to or ratified all of the legal services that lease, the lease revenue rights thereunder for damages is not identical in both proceedings, (2) disqualification proceeding to fully establish the scope of 329(b) of the bankruptcy code, which specifically claim preclusion does not apply to bar an behalf of bruce lee jennings' estate." the court clearly of an order granting motion to disqualify debtors' entire claim or set of claims, the doctrine of interest among the estates and the fact that it simultaneous representation of corporate action by filing a complaint against the defendants for full and fair opportunity to litigate the issue in debtors and their shareholders renders them defendants. in reaching this conclusion, however, the fifth from the decision of the fifth circuit court of appeals in case doc. 889, p. 11). that four elements must be present: authorizing brandon j. maxfield to pursue malpractice preclusion) and collateral estoppel (issue preclusion) is capacity as an individual creditor. accordingly, since he of services for a debtor or debtor in possession in a the defendants' compensation for services provided in the prior suit." citibank n.a. data lease doc. 889, p. 12). found that the defendants' conduct warranted a complete contemplated that any recovery from the lawsuit would federal rules of bankruptcy procedure. (p. 32). the united states bankruptcy court it is significant at this point to note that maxfield the prior proceeding.


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