Schaefer v. Putnam, No. 15-2333 (8th Cir. 2016)
Annotate this CaseLarry and Elaine, husband and wife, filed suit in Iowa state court in 2008 against multiple parties, including defendant, whom they claimed was negligent in his pre-bankruptcy and bankruptcy-planning advice. The jury found in favor of defendant and warded him a $12,200 judgment. In 2013, the Iowa Court of Appeals affirmed the award of unpaid legal fees. Larry and Elaine then filed this action in 2014, alleging that defendant was negligent in advising them regarding their bankruptcy, and that their sons acted in concert with Putnam to close the bankruptcy through the Settlement Agreement with the bankruptcy trustee. The district court determined that the jury verdict in the prior case disposed of all issues in the instant case but one: the alleged failure of Putnam to protect Larry and Elaine’s interests when the bankruptcy was closed. The court held that Larry and Elaine's claim is barred by res judicata. Larry and Elaine’s claim in the instant action relates to the same cause of action that was adjudicated to a final judgment on the merits in the first malpractice case, and Larry and Elaine have failed to show that their claim could not have been fully and fairly adjudicated in the first action. Accordingly, the court affirmed the judgment.
Court Description: Shepherd, Author, with Beam and Kelly, Circuit Judges] Civil case - Legal malpractice. The claims in this case were barred by res judicata as they could have been raised in a first malpractice case the plaintiffs filed against defendant in state court and which was reduced to a final judgment in the defendant's favor.
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