The Risk Manager, Spring 2015

Neither Lawyer Apparently Had Emergency Plans in the Event of Death or Disability

Recent cases in New York and Ohio once again show how important it is for lawyers to have emergency plans in the event of death or disability. This is especially critical for sole practitioners. In Cabrera v. Collazo, (115 A.D.3d 147 (2014)) Tanzman was retained to represent the administrator of an estate in a wrongful death action based on medical malpractice. Tanzman died of cancer on October 24, 2010 before filing the action. The statute of limitations ran on November 4, 2010. The administrator then sued, among others, Tanzman’s estate for malpractice. A motion for dismissal was filed on the theory “that since the attorney-client relationship was terminated by Tanzman’s death on October 24, 2010, Tanzman and his law firm cannot be held liable for any damages sustained by plaintiff as a result of the subsequent running of the statutory limitations period on November 4, 2010.” This motion was denied and appealed. In upholding the denial the appellate court held:

According to the Tanzman defendants, neglect of a client matter by an attorney is not actionable if, as here, the attorney dies before the applicable limitations period runs against the client. Granted, it has been held that, for the purpose of determining the timeliness of a professional malpractice action, the action accrues “when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court.” That a cause of action might accrue when the plaintiff actually sustains a loss, however, does not require the conclusion that an attorney is absolved of responsibility for any and all consequences of his neglect of the matter simply because it occurred prior to accrual of an actionable claim.

[I]t appears that the inaction of counsel rendered the lapse of plaintiff ’s cause of action not merely possible—or even probable—but inevitable. On a motion directed at the sufficiency of the pleadings, the issue is whether the facts alleged fit within any cognizable theory of recovery, not whether the complaint is artfully pleaded, and the circumstances of this matter do not warrant dismissal of the action, at this juncture, as against the Tanzman defendants. (citations omitted)

In Specht v. U.S. (2015 WL 74539 (S. D. Ohio 2015) (1/6/2015)) the executor of an estate appealed an IRS $1.2 million penalty because the estate’s lawyer Backsman, suffering from brain cancer, failed to timely file the estate tax return. Based on this malpractice the lawyer subsequently voluntarily relinquished her law license and was declared incompetent. The Federal District Court reluctantly upheld the penalty in a lengthy opinion concluding with this observation: While this Court finds it difficult to hold that Plaintiffs are ultimately responsible for Ms. Backsman’s malpractice, that is what binding precedent requires. Notably, in light of Ms. Backsman’s malpractice, the State of Ohio refunded the late filing and payment penalties for Ohio estate taxes without the Estate filing a refund suit. It is truly unfortunate that the United States did not follow the State of Ohio’s lead.

We may never know how the financial consequences of these tragic circumstances impacted Tanzman’s family or Ms. Backsman ability to obtain the care she needed. What we do know is if death and disability emergency plans had been in place, these adverse consequences could have been avoided. If your firm does not already have an emergency plan for the death or disability of its lawyers, we urge you to implement one immediately. A Practical Guide To Achieving Excellence in the Practice of Law offers this checklist for preparing one:

  1. Have I left written instructions for steps to be taken if I die or become permanently or temporarily incapacitated?
  2. Does my secretary or someone else know where to find these instructions?
  3. Have I indicated in my office manual where these instructions are to be found and to whom they should be given?
  4. Have I arranged with another lawyer to take necessary protective measures upon my death or incapacitation, including when appropriate:
    1. notifying my clients?
    2. reviewing client files to determine if any immediate action is necessary?
    3. arranging with clients to deliver fiduciary assets to a qualified successor?
    4. returning client property?
    5. providing for any necessary retention of client files and other office records?
  5. If such other lawyer is unavailable, does my secretary have a list of other lawyers to call upon?
  6. If I am not in a firm, do I obtain my clients’ consent to have an outside lawyer review their files in such an emergency?
  7. In asking an outside lawyer to assist in an emergency, do I make sure the lawyer understands that any further action on behalf of my clients requires their consent?
  8. Does my will instruct any non-lawyer executor that only a lawyer can review my client files?
  9. Does my will further provide for application to a court or disciplinary agency for appointment of a lawyer when necessary to review my files?

For a more detailed consideration of emergency planning and closing a practice read:

  • Closing a Kentucky Law Office: A Guide for After the Death of a Kentucky Sole Practitioner, Glenn David Denton, Denton & Keuler, LLP, KBA Bench & Bar – September 2013
  • What Happens To Your Clients If Something Happens to You?: Checklists for Closing a Practice, Del O’Roark, Loss Prevention Consultant, Lawyers Mutual Insurance Company of Kentucky, KBA Bench & Bar – September 2004

These articles are available on Lawyers Mutual’s website at www. Click on Resources, Risk Management Articles Subject Index, go to Disaster Planning, and click on the articles.