Rachel L. Bell v. Michael Gardner

A debtor in a Chapter 13 bankruptcy case hired an attorney to represent him in his divorce. Several years later, the attorney filed suit against the debtor for unpaid legal fees. The debtor raised the statute of limitations as a defense. The attorney claimed she delayed filing suit after receiving a letter from the debtor’s bankruptcy counsel. The letter asked the attorney to “[p]lease cease collection pursuant to the automatic stay of 11 USC § 362.” Applying the doctrine of equitable estoppel, the trial court “decline[d] to apply the statute of limitations as unjust” and granted judgment to the attorney for the unpaid fees. Because the court erred in concluding that the debtor was equitably estopped from asserting his statute of limitations defense, we reverse.