Verdicts

The U.S. Bankruptcy Court for the Eastern District of Tennessee has determined that a debtor is entitled to seek exemption of a portion of potential medical malpractice proceeds from the bankruptcy estate because his tardiness in formally disclosing the claim to his creditors and the bankruptcy trustee was excusable. In re Stiltner, 2012 Bankr. LEXIS 2204 (5/17/12).

Bankruptcy debtor Daniel Kieth Stiltner suffered complications from kidney surgery and is now dependent on dialysis and unable to work. He hired a personal injury attorney to help him seek medical malpractice damages, though it took some time to file the claim. In the meantime, Stiltner filed for bankruptcy protection on Jan. 21, 2011, largely due to the almost $400,000 in uninsured medical expenses incurred following the surgery. Prior to filing his bankruptcy petition, Stiltner discussed his potential medical malpractice claim with his bankruptcy attorney, Thomas Banks. The attorney opined (incorrectly) that the statute of limitations on medical malpractice claims was one year, which would have rendered Stiltner's med-mal suit untimely. Thus, when filing his bankruptcy petition, Stiltner omitted the medical malpractice claim on his “Schedule B ' Personal Property” in response to question 21: “Other contingent and unliquidated claims of every nature ' .”