Wednesday, March 05, 2014
Take Caution: Attorney's Signature on Proof of Claim Might
It is a circumstance that arises
often but is rarely given much thought: should the creditor or
the creditor's attorney sign a proof of claim? More care
should be devoted to that decision now, as a result of a recent
unpublished decision by a Texas bankruptcy court.
In In re Rodriguez, 2013
WL 2450925, at *6 (Bankr. S.D. Tex. June 5, 2013), the bankruptcy
court required the attorney for several creditors who signed the
creditors' proofs of claim to sit for a deposition on the facts
alleged in the proofs of claim. This decision is striking
because this information ordinarily would be considered privileged
and not discoverable. The court seemed to conclude, however,
that by signing the creditor-clients' proofs of claim, the attorney
was asserting personal knowledge of the facts alleged in the proofs
of claim, and therefore he became a fact witness as to the facts
set forth in the claims. Importantly, both the attorney-client
privilege and the work product privilege can only be waived by the
client. To that point, the court ruled that by consenting to
their attorney filing a proof of claim, the creditors waived both
privileges. The waiver of those privileges thus allowed the
creditors' attorney to be questioned as to all facts contained in
the proofs of claim.
The waiver of privilege in the
context of a proof of claim can be detrimental to a creditor where,
for instance, the creditor and its attorney discussed the strategy
behind the methodology used for calculating the proof of claim,
other alternative methodologies, and why one methodology might be
better than another. A creditor should strive to ensure that
these types of communications with its counsel are appropriately
protected by the attorney-client and work product privileges.
While this decision is unpublished
and its ruling has not been applied universally in bankruptcy
courts across the country, it represents a cautionary tale that
creditors should heed. Attorneys commonly sign proofs of
claim on behalf of their creditor clients. In light of the
Rodriguez ruling, however, it is advisable that the
creditor sign a proof of claim rather than the creditor's attorney
to avoid unnecessarily waiving privilege.
For more information, please
Rein or your primary attorney with the firm.
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