Jahrling v. Estate of Cora, No. 15-2252 (7th Cir. 2016)Annotate this Case
Illinois attorney Jahrling was contacted and paid by attorney Rywak to prepare documents for the sale of 90-year-old Cora’s home. Rywak’s clients paid $35,000 for Cora’s property, which was worth at least $106,000 and was later resold by the purchasers for $145,000. Cora later alleged he understood that he would keep a life estate to live in the upstairs apartment of the home rent-free. Jahrling’s sale documents did not include that life estate. Jahrling and Cora could not communicate directly and privately because Cora spoke only Polish and Jahrling spoke no Polish. Jahrling relied on counsel for the adverse parties for all communication with Cora. After the buyers tried to evict Cora, Cora sued Jahrling in state court for legal malpractice. After a partial settlement with a third party and offsets, the court awarded Cora’s estate $26,000, plus costs. Jahrling filed for Chapter 7 bankruptcy protection. Cora’s estate filed an adversary proceeding alleging that the judgment was not dischargeable under 11 U.S.C. 523(a)(4) because the debt was the result of defalcation by the debtor acting as a fiduciary. The bankruptcy court found in favor of the estate. The Seventh Circuit affirmed.Jahrling’s egregious breaches of his fiduciary duty were reckless and the resulting malpractice judgment is not dischargeable.