Collin County Wife Recovered $35,167 Stolen By Ex-Husband

Posted by William Hernsberger | Mar 30, 2015 | 0 Comments


The Judge awarded Amy Palmer $35,167 from her husband's 401K at Hewlett Packard. Amy, a now-single mother of three really needed the money, and she needed it quickly.

Amy's Dallas divorce lawyer waited for six months to send the 401K QDRO to HP for approval. (See our discussion of the  QDRO Approval Process ). He should have sent it the same day the QDRO was signed.

Surprise . . .  Surprise . . . Surprise . . .

Imagine everyone's surprise when the Plan Administrator rejected the QDRO because there was no money in the account!

Amy's lawyer sent the QDRO to HP in six months.

Amy's ex-husband emptied the account much more quickly.

The Goals

  • Recover $35,167 in cash (plus interest and attorney's fees) that Amy's ex-husband removed from the 401K after the divorce was final but before her attorney submitted the QDRO to the Plan Administrator

The Approach

  • First, we determined who was legally responsible for Amy's damages. Clearly, her ex-husband was responsible for stealing her money. But her divorce lawyer bore some responsibility also. By law, a 401K must immediately place a hold on all funds in an account when it receives a proposed QDRO. If the lawyer had promptly submitted a QDRO, the funds would have been frozen and Amy's husband could not have stolen her money. The legal principle is known as "but for causation."
  • We decided to pursue Amy's ex-husband and her divorce attorney simultaneously. Our reasoning was this: even though Amy could only recover her damages once, she was more likely to recover all of her damages if she had two sources to collect from. If one Defendant could only pay some, or even none, of her damages, she could look to the other Defendant to be made whole. The legal principle is known as "joint and several liability."
  • We filed a lawsuit against Amy's ex-husband and had him served with citation.
  • We prepared, but did not file, a separate lawsuit against Amy's divorce lawyer. Before filing, I requested a private meeting with the lawyer in her Dallas office. At that meeting, I explained the lawyer's legal vulnerability and showed her the legal malpractice Petition we were prepared to file. After further discussion, the attorney agreed to cooperate and negotiate her financial responsibility with us without the necessity of filing suit. We agreed to look to the ex-husband for satisfaction of Amy's damages first.
  • Amy's husband hired an attorney and responded to the lawsuit.
  • We began three party negotiations between representatives for Amy (HernsbergerLaw Firm), Amy's ex-husband, and Amy's former divorce lawyer.

The Results

  • Amy received all of her $35,167 through settlement negotiations between the three parties.
  • Amy also recovered all of her attorneys fees as a part of the settlement. We were able to make our representation more affordable for Amy by using a hybrid hourly/contingency fee model. Amy paid all costs and reduced attorneys fees in an advance retainer. She continued to deposit funds into her retainer account as the negotiations progressed. Iin the end, Amy recovered all of her attorneys fees and costs in addition to the $35,167. HernsbergerLaw Firm's resolution of her problem did not cost Amy a penny.

Do you have a retirement or QDRO problem? Contact us. Maybe we can help you like we helped Amy.

About the Author

William Hernsberger

Judge Hernsberger has practiced family law in Texas for over 30 years as a Board Certified Specialist in Family Law and Judge of the Family Court in El Paso, Texas. He has tried dozens of jury trials to verdict, thousands of bench trials to verdict, mediated hundreds of family law disputes, and a...


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