Linda Bergal v. Ben Roth, 2 F.4th 1059

Milton Bergal created a trust naming himself trustee; on death Linda and accountant Joseph Sanders would be co-trustees. Milton separately changed a $1.5M Vanguard account (and other accounts) to transfer-on-death (TOD) to Linda as primary beneficiary.
After Milton died in 2016, Linda met with attorney Ben Roth, Sanders, and Milton’s son David; Roth and Sanders urged Linda to disclaim certain assets, asserting she obtained them by wrongdoing.
Roth then transferred the disclaimed Vanguard TOD account to David and emailed colleagues noting the $1.5M transfer.
David sued Linda in Indiana alleging undue influence; a jury found Linda had illegally obtained assets and ordered restoration of the Vanguard account to the trust. The Indiana Court of Appeals affirmed and explained that if David already owned the Vanguard account, Linda need take no further action. The Indiana Supreme Court denied transfer.
Linda filed this federal malpractice, fraud, and conspiracy suit (diversity jurisdiction) against Roth, his firm, and Sanders, alleging (1) malpractice/fraud in advising her to disclaim assets and (2) malpractice in transferring the Vanguard account to David instead of the trust.
The district court granted judgment on the pleadings under Rule 12(c) applying issue preclusion based on the Indiana judgment; the Seventh Circuit affirmed.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether defendants committed malpractice/fraud by advising Linda to disclaim assets	Bergal: she was duped into disclaiming the Vanguard account and other assets; advice was negligent/fraudulent	Roth/Sanders: their advice was proper given the assets were obtained by undue influence; returning the assets was sound counsel	Held: precluded by Indiana jury finding undue influence; advice was not negligent or fraudulent
Whether Roth’s transfer of the Vanguard account to David (instead of the trust) created malpractive injury	Bergal: Roth’s transfer compounded her liability in the Indiana case and caused damages (e.g., exposure to restoration or defense costs)	Roth: Indiana appellate decision made clear that if David already owns the account Linda need take no further action, so she suffered no cognizable malpractice injury	Held: precluded and fatal — no actual damages traceable to transfer because Indiana court stated Linda need do nothing if David already owns the account
Whether issue preclusion applies to foreclose the federal claims	Bergal: seeks to relitigate negligence/intent and damages in federal court	Defs: Indiana judgment necessarily decided undue influence and related ownership, so full faith and credit and Indiana collateral estoppel bars relitigation	Held: Issue preclusion under Indiana law applies; federal court must give preclusive effect to final Indiana judgment

Bergal v. Bergal, 153 N.E.3d 243 (Ind. Ct. App. 2020) (state appellate judgment affirming undue-influence finding and explaining effect of prior disclaimer)
Bergal v. Bergal, 166 N.E.3d 904 (Ind. 2021) (Indiana Supreme Court denied transfer)
In re Catt, 368 F.3d 789 (7th Cir. 2004) (federal courts must give effect to judgments under full faith and credit principles)
Sullivan v. American Cas. Co. of Reading, 605 N.E.2d 134 (Ind. 1992) (elements of issue preclusion under Indiana law)
Northern Illinois Emergency Physicians v. Landau, Omahana & Kopka, Ltd., 216 Ill. 2d 294 (Ill. 2005) (legal malpractice requires proof of actual damages)
Unite Here Local 1 v. Hyatt Corp., 862 F.3d 588 (7th Cir. 2017) (standard of review for Rule 12(c) judgment on the pleadings)
Wonsey v. City of Chicago, 940 F.3d 394 (7th Cir. 2019) (arguments raised first at oral argument are forfeited)