Norman B. Newman, solely as Liquidating Trustee of the World Marketing Liquidating Trust v. Crane, Heyman, Simon, Welch & Clar
Filing
55
MEMORANDUM Opinion and Order: For the foregoing reasons, Defendant Crane, Heyman, Simon, Welch & Clars motion to dismiss the complaint, R. 21 , is denied. A status hearing is set for 10/9/2018 at 09:00 AM. Signed by the Honorable Thomas M. Durkin on 9/26/2018:Mailed notice(srn, )
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
NORMAN B. NEWMAN,
solely as Liquidating Trustee
of the World Marketing Liquidating Trust,
)
)
)
)
Plaintiff,
)
)
v.
)
)
CRANE, HEYMAN, SIMON, WELCH & CLAR, )
)
Defendant.
)
No. 17-cv-6978
Judge Thomas M. Durkin
MEMORANDUM OPINION AND ORDER
Norman V. Newman, as the liquidating trustee of the World Marketing
Liquidating Trust (“Trustee”) brought this action against law firm Crane, Heyman,
Simon, Welch & Clar (“Crane Heyman”), alleging Crane Heyman committed
malpractice during the bankruptcy of World Marketing. 1 Before the Court is Crane
Heyman’s motion to dismiss. For the following reasons, Crane Heyman’s motion is
denied.
BACKGROUND
In the summer of 2015, World Marketing ran into financial trouble. It began
working with its lender to implement a turnaround plan to improve its finances. The
plan did not work. On September 15, 2016, World Marketing contacted Crane
Heyman to provide it guidance if a bankruptcy filing became necessary. R. 1 ¶¶ 13-
The debtors in the bankruptcy proceeding were World Marketing, LLC, World
Marketing Atlanta, LLC, and World Marketing Dallas, LLC. The Court will refer to
them collectively as “World Marketing.”
1
14. By September 25, 2015, World Marketing anticipated filing for bankruptcy and
signed
an
engagement
letter
with
Crane
Heyman
for
Crane
Heyman’s
“representation of [World Marketing] in a Chapter 11 bankruptcy proceeding.” Id. ¶
15. World Marketing filed for bankruptcy on September 28, 2015 in the Northern
District of Illinois. Id. ¶ 22.
The Trustee alleges that during Crane Heyman’s representation of World
Marketing, Crane Heyman failed to advise World Marketing that it was subject to
the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 (“WARN
Act”). As a result, World Marketing terminated over 300 employees without giving
them sufficient notice. Id. ¶ 17. On October 21, 2015, World Marketing’s former
employees filed a class action alleging that their terminations violated the WARN
Act. Id. ¶ 24. The class action eventually became a disputed proof of claim in World
Marketing’s bankruptcy case (the “WARN Claim”). Following confirmation of the
bankruptcy plan, the Trustee objected to and litigated the WARN Claim, which
sought roughly $4 million in damages. Id. ¶ 25. In February 2017, the bankruptcy
court overruled the Trustee’s objection, subjecting the trust to $4 million in liability.
Id. ¶ 26. In doing so, the bankruptcy court held that an exception that would not
require notice to the employees—the liquidating fiduciary exception—did not apply.
See In re World Marketing Chicago, LLC, 564 B.R. 587, 600-603 (Bankr. N.D. Ill.
2017) (explaining that the issue was one of first impression in this circuit). The
Trustee alleges that had Crane Heyman satisfied its professional standard of care
2
and advised World Marketing to issue proper notices, the Trustee would have
prevailed. R. 1 ¶ 26.
Crane Heyman moves to dismiss on two bases. First, it argues this Court lacks
subject matter jurisdiction over the Trustee’s claim because of the Barton doctrine.
Second, Crane Heyman argues the Trustee’s case is barred by the principles of res
judicata and collateral estoppel. The Court will address each argument in turn.
DISCUSSION
I.
The Barton Doctrine
The so-called “Barton Doctrine” takes its name from the decision rendered in
Barton v. Barbour, 104 U.S. 126 (1881). There, Barbour had been appointed equity
receiver in Virginia state court to operate a railroad company. Afterwards, a railroad
passenger, Barton, was injured and brought a tort action against the receiver in the
District of Columbia. The Supreme Court held that, as a matter of federal common
law, “before suit is brought against a receiver leave of the court by which he was
appointed must be obtained.” Id. at 128. Without such leave of court, the other forum
“had no jurisdiction to entertain [the] suit.” Id. at 131.
The majority opinion in Barton explained that the doctrine was necessary to
avoid plaintiffs obtaining an “advantage over the other claimants” as to the
distribution of “the assets in the receiver’s hands.” Id. at 128. The Court also
explained that the requirement served to prevent the “usurpation of the powers and
duties which belonged exclusively to another court” and protect “the duty of that court
3
to distribute the trust assets to creditors equitably and according to their respective
priorities.” Id. at 136.
In a comparatively more recent case, the Seventh Circuit further explained the
policy reasons for not allowing appointed receivers such as trustees to be sued without
approval of the appointing courts:
This concern is most acute when suit is brought against the trustee
while the bankruptcy proceeding is still going on. The threat of his being
distracted or intimidated is then very great . . . [w]ithout the
requirement, trusteeship will become a more irksome duty, and so it will
be harder for courts to find competent people to appoint as trustees.
Trustees will have to pay higher malpractice premiums, and this will
make the administration of the bankruptcy laws more expensive (and
the expense of bankruptcy is already a source of considerable concern).
Furthermore, requiring that leave to sue be sought enables bankruptcy
judges to monitor the work of the trustees more effectively. It does this
by compelling suits growing out of that work to be as it were prefiled
before the bankruptcy judge that made the appointment; this helps the
judge decide whether to approve this trustee in a subsequent case.
...
At stake . . . is a concern . . . with the integrity of the bankruptcy
jurisdiction. If debtors, creditors, defendants in adversary proceedings,
and other parties to a bankruptcy proceeding could sue the trustee in
state court for damages arising out of the conduct of the proceeding, that
court would have the practical power to turn bankruptcy losers into
bankruptcy winners, and vice versa. A creditor who had gotten nothing
in the bankruptcy proceeding might sue the trustee for negligence in
failing to maximize the assets available to creditors, or to the particular
creditor. A debtor who had failed to obtain a discharge might through a
suit against the trustee obtain the funds necessary to pay the debt that
had not been discharged.
In re Linton, 136 F.3d 544, 545 (7th Cir. 1998).
Courts have included attorneys hired by a trustee and other representatives of
the trustee as among those actors who cannot be sued without the plaintiff first
4
obtaining leave of the bankruptcy court. See Lawrence v. Goldberg, 573 F.3d 1265,
1269-70 (11th Cir. 2009); Allard v. Weitzman (In re DeLorean Motor Co.), 991 F.2d
1236, 1241 (6th Cir. 1993).
The circumstances here are not the usual circumstances observed in most cases
applying the Barton doctrine. Both sides here are or were court appointed parties
rather than third parties suing court appointed trustees for conduct not directly
related to the bankruptcy case. And the plaintiff, the Trustee, is the current trustee
of the liquidating trust. For this reason, the Trustee argues the Barton doctrine does
not apply to such situations because the same policy considerations are not
implicated.
The Court agrees with the Trustee that the concerns discussed by the Barton
court and the Seventh Circuit in Linton are not implicated here. First, there is no
concern that the Trustee is attempting to circumvent the appointing court’s
supervision to obtain some advantage over other claimants. The Trustee is not a
creditor seeking faster payment. Rather, he is the estate representative
administering the estate by attempting to liquidate one of its claims, and presumably
bring more value to the estate. Second, there is no threat that either he or Crane
Heyman will be distracted by an ancillary proceeding—litigating claims is precisely
the Trustee’s role, and Crane Heyman is already out of the case. Indeed, requiring
trustees to seek additional leave beyond what the bankruptcy court already approved
through the bankruptcy plan only causes additional delay and distraction to the
Trustee in administering and liquidating the estate.
5
Even if the Barton doctrine did apply, it is clear that the bankruptcy court
granted Trustee permission to sue Crane Heyman for legal malpractice for violations
of the WARN Act. A plan approved by the bankruptcy court is sufficient to confer
such authority to a trustee. See Grede v. Bank of N.Y. Mellon, 598 F.3d 899, 902 (7th
Cir. 2010) (explaining that “the terms of the plan of reorganization (and of the trust
instrument) govern the permissible duties of a trustee after bankruptcy”); In re BC
Funding, LLC, 519 B.R. 394, 410 (Bankr. E.D.N.Y. 2014) (“[T]he Court finds that the
powers and duties bestowed upon the [estate representative] by the confirmed Plan,
the Confirmation Order and the LLC Agreement—which was specifically approved
by the Confirmation Order—provide the sole guidance for the Plaintiff’s authority to
prosecute the subject causes of action.”). On the other hand, courts have stressed that
parties cannot contract to suit—the appointing court must approve suits to avoid the
Barton doctrine. See In re Sedgwick, 560 B.R. 786, 796 (N.D. Cal. 2016) (“Whether or
not to grant leave under Barton to bring suit in another forum is at the discretion of
the court. Appellant has provided no authority to support his contention that parties
can enter into an agreement to waive the requirement of Barton approval, and
effectively circumvent this power from the court.”). Here, the bankruptcy court
approved the bankruptcy plan, 2 and through it explicitly gave the Trustee the
authority to sue Crane Heyman for malpractice related to the WARN Act.
Specifically, Section 7.2 of the plan gives the Trustee the exclusive right to
enforce any “claims, rights or Causes of Action” including “malpractice, . . . for any
2
See In re World Mktg. Chi., LLC, et al., No. 15-32968 (Bankr. N.D. Ill.), at Dkt. 638.
6
liability associated with the Debtors’ failure to give notice under the WARN Act prior
to the Petition Date to the extent that such notice was required as a matter of law.”
R. 29-1 at APP022-APP025. The plan gives the Trustee this right “without any
further order of the Bankruptcy Court.” Id. at APP023. Further, Section 7.10 of the
plan grants the Trustee, in all matters “arising in, arising under or related to” the
bankruptcy cases, “the right to appear and be heard on matters brought before the
Bankruptcy Court or other courts of competent jurisdiction.” Id. at APP030.
Crane Heyman focuses on the language “other courts of competent jurisdiction”
in Section 7.10 to argue that because the Trustee does not have authorization to sue,
this Court is not of “competent jurisdiction.” Crane Heyman argues the plan does not
authorize the Trustee to bring a lawsuit in a non-bankruptcy court, only in “courts of
competent jurisdiction” with the bankruptcy court’s approval. Crane Heyman’s
argument is entirely circular. The plain language of the bankruptcy plan indicates
the bankruptcy court authorized the Trustee to bring a suit for malpractice for the
WARN Act notice failure. It granted the Trustee this right either in the “bankruptcy
court or other courts of competent jurisdiction.” R. 29-1 at APP030. This is sufficient
to meet the approval of the bankruptcy court required by the Barton doctrine.
II.
Preclusion
Next, Crane Heyman argues the bankruptcy court has already adjudicated the
issue of malpractice during the determination of Crane Heyman’s final fee
application.
7
At this point, a bit of background into the relevant bankruptcy proceedings is
necessary. On July 11, 2016, Crane Heyman filed its final fee application. On August
8, 2016, the Trustee objected to the application, arguing that Crane Heyman had
engaged in legal malpractice related to its alleged failure to give World Marketing
proper legal advice regarding the WARN Act. R. 21-3. The Trustee alleged “potential
legal claims against Crane Heyman for their role as Debtors’ counsel in these cases,
including but not limited to malpractice liability arising under the WARN ACT.” Id.
at ¶ 3.
On November 16, 2016, the bankruptcy court denied the Trustee’s objection
and granted the final fee application. See R. 21-8. In doing so, the bankruptcy court
recognized the contingent nature of Trustee’s claim—because the WARN claim had
not yet been adjudicated, the Trustee could not bring a malpractice claim,
notwithstanding the deadline to object to the fee petition:
It is not a valid objection to say I might have an objection. That’s what
you’re really saying. You said it with respect to the three-tenths of an
hour, you’re saying it with respect to the malpractice: We may have a
problem with their being compensated; please reserve and don’t rule on
this now. That’s not the way—the order of the court. You have a deadline
to bring an objection. And you brought an objection, but your objection
doesn’t articulate malpractice, it articulates your reservations with
respect to possible malpractice claims.
R. 21-8 at 3-4
The court further explained that it would not delay ruling on the final fee
application “because of another process that may or may not occur.” Id. at 4. It noted
that the Trustee was “required to articulate an objection with respect to this final fee
application,” but had failed do so. Id. Instead, the Trustee only “articulated the
8
possibility of an objection,” id., which the court found insufficient to sustain an
objection to the final fee application. The bankruptcy court explicitly declined to
determine whether its ruling precluded a later malpractice claim against any party.
Id. at 5.
Crane Heyman argues that the bankruptcy court’s determination of the final
fee application precludes the Trustee’s malpractice claim against it. Crane Heyman
makes its preclusion argument with respect to both res judicata (claim preclusion)
and collateral estoppel (issue preclusion). The Court will address each briefly, though
it finds the same reasoning applies to both preclusion doctrines.
For res judicata to apply, there must be: (1) a final judgment on the merits; (2)
an identity of parties; and (3) an identity of the cause of action. See Alvear-Velez v.
Mukasey, 540 F.3d 672, 677 (7th Cir. 2008). If these elements are present, res judicata
will bar re-litigation not only of issues that were actually decided in a prior
proceeding, but also all issues that could have been raised in that proceeding. See
D&K Props. Crystal Lake v. Mutual Life Ins. Co., 112 F.3d 257, 259 (7th Cir. 1997).
But courts will refuse to apply “res judicata to preclude a second suit that is based on
a claim that could not have been asserted in the first suit.” Alvear-Velez, 540 F.3d at
678. This includes claims that did not accrue during the first suit. See Waivio v. Bd.
of Trs., 290 F. App’x 935, 938 (7th Cir. 2008); see also ASARCO, LLC v. Mont. Res.,
Inc., 858 F.3d 949, 958 (5th Cir. 2017) (recognizing that res judicata does not bar
claims contingent on future events); Rawe v. Liberty Mut. Fire Ins. Co., 462 F.3d 521,
9
530 (6th Cir. 2006) (“[R]es judicata does not apply to claims that were not ripe at the
time of the first suit.”).
Here, the parties dispute when the malpractice claim accrued. The Trustee
argues that under Illinois law, the malpractice claim did not accrue until the WARN
Claim was adjudicated against World Marketing on February 24, 2017. Crane
Heyman on the other hand, argues that the relevant inquiry is based on federal
principles of res judicata, and that under those principles, the malpractice claim
accrued before the bankruptcy court’s adjudication of the WARN Claim—when the
Trustee became aware of the claim. R. 21 at 18; R. 34 at 6-7.
The Court agrees with Crane Heyman that since the earlier action was brought
in federal court, federal, not state, res judicata principles govern the preclusive effect
of a prior judgment. See In re Energy Coop., Inc., 814 F.2d 1226, 1230 (7th Cir. 1987);
EEOC v. Harris Chernin, Inc., 10 F.3d 1286, 1289 n. 4 (7th Cir. 1993) (“[w]here the
earlier action is brought in federal court, the federal rules of res judicata apply.”). But
this does not mean that federal law governs accrual of the claim. Rather, the Trustee’s
malpractice claim is a state law claim. State law thus governs when the Trustee could
bring its malpractice claim, even though federal law will govern the res judicata
analysis. See In re Micro-Time Mgmt. Sys., Inc., 983 F.2d 1067 (Table) at *5 (6th Cir.
1993) (applying Michigan law to determine when a malpractice claim accrued for
purposes of res judicata following a bankruptcy decision).
Under Illinois law, “in order to prevail on a claim of attorney malpractice, a
plaintiff must succeed in proving four elements: (1) an attorney-client relationship
10
giving rise to a duty on the attorney’s part; (2) a negligent act or omission by the
attorney amounting to a breach of that duty; (3) proximate cause establishing that
but for the attorney’s negligence, the plaintiff would have prevailed in the underlying
action; and (4) actual damages.” Mihailovich v. Laatsch, 359 F.3d 892, 904-05 (7th
Cir. 2004); see also N. Illinois Emergency Physicians v. Landau, Omahana & Kopka,
Ltd., 837 N.E.2d 99, 106 (Ill. 2005). “For purposes of a legal malpractice action, a
client is not considered to be injured unless and until he has suffered a loss for which
he may seek monetary damages.” Landau, 837 N.E.2d at 107. World Marketing could
not meet the fourth element required to bring a claim for malpractice until February
2017, when the bankruptcy court allowed the employees’ WARN Claim. Before then,
the malpractice claim was merely speculative because the bankruptcy court could
have found that the liquidating fiduciary exception applied, meaning WARN Act
notice was not required. Thus, at the time the bankruptcy court determined the final
fee application (in November 2016), the Trustee could not have brought the
malpractice claim, because it did not yet exist. “Where the mere possibility of harm
exists or damages are otherwise speculative, actual damages are absent and no cause
of action for malpractice yet exists.” Id.
As a result, res judicata cannot apply. See Davenport v. Djourabchi, 316 F.
Supp. 3d 58, 64 (D.D.C. 2018) (res judicata did not bar subsequent action because the
plaintiffs were prohibited from bringing their state and common law claims for
damages in the prior bankruptcy proceedings).
11
For similar reasons, the Trustee’s malpractice claim is also not barred by
collateral estoppel. Collateral estoppel applies if “(1) [t]he party against whom the
doctrine is asserted was a party to the earlier proceeding; (2) the issue was actually
litigated and decided on the merits; (3) the resolution of the particular issue was
necessary to the result; and (4) the issues are identical.” King v. Burlington N. &
Santa Fe Ry. Co., 445 F. Supp. 2d 964, 971 (N.D. Ill. 2006), aff’d, 538 F.3d 814 (7th
Cir. 2008).
Here, the Trustee’s malpractice claim was never actually litigated and decided
on the merits by the bankruptcy court, precluding a finding of collateral estoppel. The
Trustee filed an objection to Crane Heyman’s fee petition. R. 29-1 at 87. In the
objection, the Trustee criticized Crane Heyman’s billing practices and identified a
“potential legal malpractice claim for liability arising as a result of claims made under
the WARN Act.” Id. at 90. The Trustee indicated that he must “object to Crane
Heyman’s Final Fee Application to ensure that potential causes of action against
Crane Heyman are not later found to be barred or waived.” Id. The Trustee asked the
bankruptcy court to defer the final allowance of Crane Heyman’s fees or expressly
hold that final allowance and approval of Crane Heyman’s fees would not bar the
Trustee from asserting any claims against Crane Heyman based on preclusion
doctrines. Id. at 91. As described above, the bankruptcy court’s adjudication of the
malpractice issue was limited—it held that the Trustee’s objection was speculative.
The bankruptcy court recognized the case law “that says if you don’t raise an issue
with respect to malpractice at the time of a fee application, you may be precluded
12
from bringing it later. There’s a District of Columbia bankruptcy court case I think
that says that pretty clearly.” R. 29-1 at 131. But the court refused to allow the
Trustee to “keep [his] foot in on the issue of malpractice” and defer dealing with the
fee application. Id. Accordingly, the court denied the Trustee’s objection. The court
made no reference or determination as to Crane Heyman’s negligence and did not
otherwise address the issue of malpractice. Further, the order allowing Crane
Heyman’s final compensation and reimbursement of expenses did not make any
findings of fact or discuss the issue of malpractice or the quality of Crane Heyman’s
legal
services.
Id.
at
137.
Accordingly,
the
malpractice
claim
was
not
“actually litigated and decided on the merits” to impose collateral estoppel now.
Crane Heyman frames the Trustee’s attempt as an already litigated issue
simply because the Trustee had knowledge of the claim at the final fee application
hearing. 3 But knowledge is not the right inquiry here. There is no question that the
The cases Crane Heyman cites in support of its position are inapposite. In those
cases, there was no question that the malpractice had already taken place and the
plaintiff had suffered harm (either through damages or an unfavorable ruling) when
the bankruptcy court decided the final fee petition. And in those cases, the plaintiffs
did not object to the fee petition. See Weinberg v. Kaplan, LLC, 699 Fed. App’x. 118
(3d Cir. 2017) (plaintiff did not contest fee application even though the bankruptcy
court had already lifted the automatic stay against plaintiffs as a result of the
defendant’s conduct); Capitol Hill Grp. v. Pillsbury, Winthrop, Shaw, Pittman, LLC,
569 F.3d 485, 488 (D.C. Cir. 2009) (plaintiff represented it had “no outstanding claims
against [the attorney] arising out of the bankruptcy proceedings” despite an
unfavorable ruling issued more than a year prior to the fee application); In re Intelogic
Trace, Inc., 200 F.3d 382, 387 (5th Cir. 2000) (debtor discovered errors in accounting
firm’s services before the firm’s fee application was approved, but the debtor declined
to proceed on a malpractice claim, preferring instead to negotiate a reduction in fees
from the firm); In re Iannochino, 242 F.3d 36, 49 (1st Cir. 2001) (plaintiffs alleged the
representation produced “almost immediate negative results,” but they failed to
attend the hearing on the fees, causing the bankruptcy court to allow the fees in part);
3
13
Trustee knew of the potential for malpractice. In fact, he raised the issue with the
bankruptcy court. The reason the Trustee’s claim is not barred is because the
bankruptcy court did not consider it and declined to allow the Trustee to defer the fee
petition until the malpractice claim was ripe.
Further, it is not clear that the Trustee could have litigated the malpractice
claim in the same proceeding as the fee petition at all. In a similar case to this one,
the D.C. Circuit in Davenport v. Djourabchi, 316 F. Supp. 3d 58 (D.D.C. 2018)
described that a 2007 change in the bankruptcy rules prevents parties from asserting
damages in contested matters and affects the rulings of many of the cases discussed
above. In Davenport, plaintiff Davenport filed for bankruptcy. The defendants filed a
proof of claim with the bankruptcy court, alleging Davenport was in default on a note
owed them. Id. at 61. Davenport initiated a contested matter in the bankruptcy court
by filing an objection to the defendants’ proof of claim. The bankruptcy court
eventually ruled that Davenport was not in default on the note, but found that
Davenport owed defendants a sum of money. Id. After that proceeding, Davenport
filed a civil lawsuit against the defendants, alleging they harassed him. Id. The
defendants moved to dismiss the civil lawsuit, arguing it was barred by res judicata
because Davenport should have adjudicated his allegations in the bankruptcy court.
Grausz v. Englander, 321 F.3d 467, 470 (4th Cir. 2003) (debtor failed to object to fee
petitions by attorney); Trigee Found., Inc. v. Lerch, Early, & Brewer, Chtd. (In re
Trigee Found., Inc.), 2016 WL 5360572, at *3, *7 (Bankr. D.D.C. Sept. 23, 2016)
(Trigee did not object to the fee applications, despite actual notice of the malpractice
before the fee applications were filed); In re Sedgwick, 560 B.R. 786, 794 (C.D. Cal.
2016) (appellant failed to raise claim for affirmative relief in bankruptcy
proceedings).
14
The D.C. Circuit held Davenport’s action was not barred by res judicata
because Davenport could not have brought his damages claim in the contested action
due to a change in the bankruptcy rules. Specifically, an amendment to Fed. R.
Bankr. P. 3007 prevented Davenport from seeking monetary damages in the
contested action regarding the note. Id. at 65. Instead, Davenport would have had to
commence an adversary proceeding, which would have constituted a separate action.
Id. at 66. The court acknowledged that Davenport could have initiated an adversary
proceeding, but it explained that that was not the question on res judicata. Instead,
res judicata looks at whether a claim could have been brought in the first proceeding,
not whether it could have been brought in the previous court. Id. at 68. The court held
because Davenport could not have brought his damages claim in the contested matter
regarding fees, res judicata did not bar his action. Id.
The same is true here. The Trustee could not have sought affirmative monetary
damages for malpractice in response to the final fee petition because the bankruptcy
rules barred him from doing so. And he could not bring a malpractice claim in an
adversary proceeding because the malpractice claim did not accrue until February
2017, when the bankruptcy court ruled that World Marketing did not meet the
exception to giving WARN Act notice. The Court recognizes that some courts have
held that a fee petition necessarily resolves any malpractice claim. See In re Frazin,
732 F.3d 313, 322 (5th Cir. 2013); supra n.3. But in those cases, the plaintiff failed to
object to the fees at the time the court decided the issue. That is simply not the case
here—the Trustee made an explicit objection to the fees based on the very malpractice
15
claim asserted now. But the Trustee was not given a full and fair opportunity to
litigate the malpractice claims in the bankruptcy proceedings. For this reason, the
Trustee may bring the malpractice claim now. Not allowing the Trustee to bring the
malpractice claim in yet another proceeding would run contrary to the principles of
preclusion—“[p]reclusion is designed to limit a plaintiff to one bite at the apple, not
to prevent even that single bite.” Hurd v. D.C., Gov’t, 864 F.3d 671, 679 (D.C. Cir.
2017); Poyner v. Murray, 508 U.S. 931, 933 (1993) (A “full and fair opportunity to
litigate the case below is a prerequisite to the principles of res judicata.”).
CONCLUSION
For the foregoing reasons, Defendant Crane, Heyman, Simon, Welch & Clar’s
motion to dismiss the complaint, R. 21, is denied.
ENTERED:
Dated: September 26, 2018
--------------------------------------------Honorable Thomas M. Durkin
United States District Judge
16
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