Sunday, November 20, 2005

Case Law Development: Attorney Malpractice for Failure to Secure Obligations in Divorce Settlement

The U.S. Third Circuit Court of Appeals provides a cautionary tale regarding the costs of failing to follow-through after the divorce decree.  Attorney represented Wife in a divorce, in which Husband eventually agreed to pay Wife a total of $143,000 in four installments. As part of the divorce settlement approved by the court, Husband agreed to provide his 401(k) Plan as security and take out an insurance policy naming Wife as beneficiary in an amount sufficient to cover his obligations.  To secure the debt through Husband's 401(k) Plan, Wife needed to obtain either a Qualified Domestic Relations Order ("QDRO") or a survivors annuity. Attorney advised Wife to enter into the divorce settlement, although it contained neither of these and despite his knowledge that Wife might not ever legally qualify for a QDRO.  He then took no steps to insure either of these security devices were put into place.  When Husband died before the obligations were paid and Wife was unsuccessful in recovering either the 401(k) or insurance funds, Wife sued Attorney for malpractice and was awarded nearly $300,000 in damages.  The Third Circuit Court of Appeals upheld the award.

Winters v. Patel, 2005 U.S. App. LEXIS 24552 (3rd Cir. November 14, 2005)
Opinion on the web at http://www.ca3.uscourts.gov/opinarch/041753np.pdf (last visited November 17, 2005 bgf)

http://lawprofessors.typepad.com/family_law/2005/11/case_law_develo_20.html

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