I have been watching with interest a lawsuit in the Texas valley against the law firm where my husband and I met, Baker Botts.  I had been reading articles from the McAllen newspaper and the San Antonio newspaper, which described the lawsuit as being brought by relatives of Floyd and Kathleen Cailloux against the firm on the grounds that two  BB estate planning partners allegedly gave faulty advice to Mrs. Cailloux to disclaim a $65 million bequest to her from her husband and to transfer it to their family foundation.  I found this incredibly hard to believe, knowing what I know about the two expert attorneys who were named in the lawsuit.  Therefore I was very surprised to read in the San Antonio newspaper on Saturday that a jury had found Baker Botts and several other defendants liable for a combined verdict of $64 million.  The widow was found 25% negligent.  The San Antonio paper only reported that BB was not found to have committed malpractice, but was found to have violated its fiduciary duty to Mrs. Cailloux.

Today, in the Houston Chronicle, the story becomes clearer.  The party who may have benefitted from the transfer of funds into the foundation was the trustee, Wells Fargo.  Apparently, BB also represents Wells Fargo.  The article seems to imply that BB represented Wells Fargo in this transaction, not merely in a completely unrelated transaction within a different department.  I do not know if it is routine for estate planning attorneys to represent both estate planning clients and trustees.  However, the case may serve as an example of how undisclosed conflicts can be costly.  The firm plans to appeal.

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