Lawyer's knowledge of a BK case is NOT imputed on a former Client - 8-2-13 Ninth Cir. In re Perle

Sometimes, you got to say phew...glad I was not the attorney in this case....

An attorney given notice of the bankruptcy on behalf of a particular client is not

called upon to review all of his or her files to ascertain whether any other client may also have a claim against the bankrupt.

 

In this case, the attorney obtained an arbitration award for a Creditor against a Defendant and his retention was then completed.  A new attorney then took over the case.

 

The Defendant files bankruptcy.  However, that same attorney who represented the original creditor now represents a different creditor against the now Defendant Debtor.  The attorney never advises the original creditor of the bankruptcy and the Defendant Debtor does not adequately notice the original creditor.  

 

Did the Attorney have an obligation to advise the original attorney?  The Ninth Circuit does not answer that question.  Rather, the Ninth Circuit determines that the knowledge of the original attorney is not imputed upon the former Client. 

In re Perle (9th Cir. 2013)