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Dotlich v. Tucker Hester, LLC

Court of Appeals of Indiana

December 31, 2015

Steven E. Dotlich, Appellant-Defendant,
Tucker Hester, LLC, Appellee-Plaintiff

          Appeal from the Hamilton Superior Court. The Honorable Steven R. Nation, Judge. Trial Court Cause No. 29D01-1112-CC-12997.

         ATTORNEY FOR APPELLANT: Matthew A. Griffith, Griffith Law Group, LLC, Indianapolis, Indiana.

         ATTORNEY FOR APPELLEE: Bradley J. Buchheit, Tucker Hester Baker & Krebs, LLC, Indianapolis, Indiana.

         Brown, Judge. Riley, J., and Altice, J., concur.


Page 572

          Brown, Judge.

         [¶1] Steven E. Dotlich appeals the trial court's entry of summary judgment in favor of William Tucker with respect to Dotlich's malpractice claim against Tucker. Dotlich raises five issues which we consolidate and restate as whether the court erred in entering summary judgment in favor of Tucker. We affirm.

         Facts and Procedural History

         [¶2] Dotlich first met with Tucker, an attorney with Tucker Hester, LLC (the " firm" ) on January 24 or 25, 2011. At the meeting, Dotlich explained that most of his debts were secured by crane equipment, vehicles, or other assets, and that he was mostly concerned about saving his family home and his 12.5% limited partnership interest his father had given him in Speedway Industrial Park, L.P. Dotlich met again with Tucker on February 3, 2011, at which time Dotlich signed an engagement letter, and Tucker filed a voluntary petition for bankruptcy under Chapter 7 of the Bankruptcy Code on behalf of Dotlich on the same day. Tucker filed " Schedule B -- Personal Property" with the bankruptcy court on February 17, 2011, which included an interest of 12.5% in " Speedway Industrial Park, Inc." [1] Appellant's Appendix at

Page 573

149. Tucker filed a motion to withdraw his appearance from Dotlich's bankruptcy case on August 24, 2011, and two days later the court granted the motion.

         [¶3] On December 23, 2011, the firm filed a Complaint on Account in the Hamilton Superior Court against Dotlich alleging that he owed the firm $10,658.73. On February 23, 2012, Dotlich by new counsel filed an answer. On April 2, 2012, Dotlich's new counsel also entered an appearance for him in his bankruptcy case. In the Hamilton Superior Court, Dotlich filed a Motion for Leave to Amend Answer to Complaint and a Motion to Join Person as Party on July 27, 2012, and the court granted the motions, including that William Tucker was named as a counter-defendant on August 1, 2012,. Dotlich filed an Amended Answer and Counterclaims on August 28, 2012, alleging:

1. There was an attorney-client relationship between William Tucker and his law firm (" the Firm," ) as attorneys, and Steven E. Dotlich, as client.
2. As a result of the attorney-client relationship, Tucker and the Firm, who held themselves out to the public as possessing greater than ordinary knowledge and skill in the field of bankruptcy law, had a duty to represent Mr. Dotlich with the reasonable care, skill, and diligence ordinarily possessed and exercised by attorneys specializing in the field of bankruptcy law, under similar circumstances.
3. Tucker and the Firm's conduct in filing bankruptcy for Mr. Dotlich, was a breach of their duty to exercise reasonable care, skill, and diligence on Mr. Dotlich's behalf.
4. As a result of said negligence in filing bankruptcy on behalf of Mr. Dotlich, Mr. Dotlich sustained injury and loss.

Id. at 127-128.[2] The bankruptcy court's docket shows that a discharge of debtor was entered on March 4, 2013, and that the bankruptcy case was closed on April 8, 2014.

         [¶4] On June 19, 2014, Tucker filed a motion for summary judgment together with a designation of evidence. He contended that Dotlich was judicially estopped from pursuing his counterclaim, that Dotlich failed to amend his bankruptcy schedules to reflect his malpractice claim and accordingly represented to the bankruptcy court that he had no such claim, and that Dotlich would gain an unfair advantage if not estopped as the bankruptcy trustee relied on his misrepresentations and determined

Page 574

that there were fewer available assets for distribution to his creditors.

         [¶5] Dotlich filed a response together with designated evidence. He contended that Tucker's motion was premised on the false conclusion that the malpractice claim is an asset of the bankruptcy estate, and that Tucker made a number of post-petition errors, including improperly listing assets as exempt and failing to accurately describe assets and their true values. He noted that Chapter 7 differs from bankruptcy under Chapters 11 and 13, and asserted that the filing of a Chapter 7 bankruptcy petition creates a bankruptcy estate encompassing all interests of the debtor in property " as of the commencement of the case" and that his malpractice claim arose after the filing of the petition. Id. at 109.

         [¶6] In his reply, Tucker argued that only the bankruptcy trustee could pursue the claims, and all of the elements of a claim for legal malpractice were present at the time the bankruptcy petition was filed. He also argued that, even if the malpractice claim did not accrue under Indiana law " as of" the filing date, the claim has sufficient roots in Dotlich's pre-bankruptcy activities to warrant inclusion in his bankruptcy estate. Id. at 913.

         [¶7] On December 15, 2014, the court held a hearing, and on February 9, 2015, entered summary judgment in favor of Tucker and against Dotlich on Dotlich's counterclaim. The court found that Dotlich received a discharge in bankruptcy more than seven months after he moved for leave to file his counterclaim in this case, he did not amend his bankruptcy schedules or notify the trustee of the claim, and that the counterclaim was property of the bankruptcy estate and only the bankruptcy trustee could pursue it. The court noted that Section 541(a)(1) of the Bankruptcy Code defines " property of the estate" to include " all legal or equitable interests of the debtor in property as of the commencement of the case," and that property of the estate is broadly construed. Id. at 14 (citing 11 U.S.C. § 541(a)(1)). The court found that causes of action that accrue as a result of the filing of a bankruptcy petition are property of the estate. Id. at 15 (citing In re Strada Design Assocs., Inc., 326 B.R. 229, 235 (Bankr. S.D.N.Y. 2005); In re Alvarez, 224 F.3d 1273, 1278 (11th Cir. 2000), cert. denied, 531 U.S. 1146, 121 S.Ct. 1083, 148 L.Ed.2d 959; In re Dow, 132 B.R. 853, 860 (Bankr. S.D. Ohio 1991)). The court further stated that this conclusion follows from a comparison between 11 U.S.C. § § 541(a)(1) and (a)(7), where Section 541(a)(1) deals with the debtor's ...

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