### FI LED U.S. COURT O F APP EALS ELEVENTH CIRCUIT J une 25 , 2 004 THO MAS K. KAH N CL ERK [PUBLIS H] IN THE UN ITED STATES COURT OF APPEALS FO R T HE EL EV EN TH CIRC UI T

____ ____ ____ ____ ____ ____ N o. 03- 1618 8

____ ____ ____ ____ ____ ____ D. C. Dock et No. 0 3- 80 71 7- CV-DTKH BKC Y N o. 02-03168 -BK C-SH In re: ALFRED J. WITKO , De btor.

____ ____ ____ ____ ____ ____ ____ ____ __ ALFRED J. WITKO , D ef en da nt- A ppe llant,
ve rs us DE BOR AH C. ME NO TT E, Tr

ustee, Plaintiff-Appellee.

____ ____ ____ ____ ____ ____ Appeal f rom the United State s District Court fo r the S outhe rnD istri ct

of F lor ida

____ ____ ____ ____ ____ ____ _ (J un e 25, 200 4)Honora ble Fe rn M. Smith, Unit ed States District Judge f or the Nor

thern District of * California, sitting by

desig nation. 2 Before BL ACK

and MAR CUS , C ircuit Judg es, and SMIT H , D istrict Judg e. * SMIT H, District Judge: Alfr ed J. W i t k o (W itko) appeals the dis trict court’ s award of his legal
m al pr ac tic e cl ai m

to his ba nkr

upt cy es ta te . O n a

ppe al , W itk o a rg ue s th at

he f ile d hi s ba nkr upt cy pe tit ionbe fo re his le ga l m al pr ac tic e ca use of ac tio n ac cr

ue d an d th at

the legal m alpractice , upon which he bases his claim , did not dam age the bankruptcy
es ta te . W e conc lu de tha t W itk o’ s c au se of a ct ionis not

pr ope rty of his e sta te a nd, accordingly , w e re verse. I. BACKGROUND On S e p t e mb e r8, 1 99 9, Witk o fi le d a pe ti ti on forvo lu nt ary ba nk rupt cy . On Ja nu ary 13 , 20 00 , in a se pa rat e pr oc eed in g reg ard in g Wit ko ’s m ari ta l d is so lu ti on , a state trial court denied his request for alim ony , w hich a state appellate court af firm ed on Dece m

ber 15, 2000. W itko, thereaf ter, sued his d ivorce counsel for m alpractice
. T he tr ust ee of W itk o’ s ba nkr

upt cy es ta te , D eb or ahC. Me not te , int er ve ne d, se ek ing a determ ination that W itko’s m alpractice claim wa s estate property . The bankruptcy court held that W itko’s cause of action was property of the estate bec ause “ the better
ru le is tha t w he re pr e- pe tit iona ct s fo rm part of ac ha in o f ev en ts tha t l ea d to a3

post -p et iti on ‘ re dr es sa

ble ha rm , ’ the c au se of

a ctio n is ‘suf

fi ci en tly r oot ed in the de bto r’ s pr e- pe tit ion pa st. . . . ’ ” T he dis tr ic t co urt af fi rm ed a nd W itk o no w appe al s to this Co urt. II. JUR ISDICTI ON W itko’s appeal is tim ely

and this Cou rt has j urisdictio n. 28 U .S .C. § 158(d). III. STANDARD OF REVIEW T his Co urt r ev ie w s de novo the que sti on o f la w w he the r a de bto r’ s in te re st i s pr op ert y of t he ba nk rupt cy

est at e. B el l- Te l F

ed
. Cr edit U nio n v . Ka lte r (

In re Ka lte r) , 292 F.3d 135 0, 1352 (11th Cir. 2002 ). IV
. AN AL YS IS Pr e- pe tit ionc au se s of

a ct iona re pa rt

of the ba nkr upt cy e sta te a nd p ost -p et iti on ca use s of ac tio n a re not . S pe ci fi ca lly , the de bto r’ s f ili ng o f a pe tit ionw iththe ba nkrupt c y c o u rt c o m

m e n c e s a v o l u n t a ry b a n k r up t c y c a s e . 1 1 U
. S
. C
. § 3 0 1
. T he
co m m en ce m en t of a vol unt ar

y ba nkr upt cy ca se cr ea te s an es ta te ge ne ra lly c onsi sti ng of the “ le ga l or

e qui ta ble int er es ts o f the de bto r in pr ope rty a s of the c om m en ce m en t of th e cas e.” 1 1 U.S.C. § 54 1( a)(1 ). Alt ho ug h t he est at e is co ns tru edbro ad ly, United States v. W

hitin g Pools, Inc. , 462 U
. S. 198 , 205 , 103 S
. Ct
. 230 9, 2313 , 76 L. E d. 2d 515 (198 3), C ongress expresslycautioned that the Bankruptcy Code “ is not in tended to e xpand the de bto r’ s r igh ts a ga ins t othe rs m or e th an the y e xis t a t the4

co m m en ce m en t of

the c as e. . . . [ T he tr

ust ee ] c oul d take no g re at er r igh ts tha n th e de bto r him se lf

ha d. ” S
. Re p. N o. 95- 989, a t 82 ( 197 8) , rep ri nte d in197 8 U
. S. C. C. A
. N
. 578 7, 586 8; H
. R. Re p. N o. 95- 595, at 367- 68 (19 77) , r ep ri nte d in197 8 U
. S. C. C. A
. N
. 596 3, 632 3. In Se gal v . R oc he lle , 382 U
. S. 375 , 86 S
. Ct
. 511, 15 L
. E d. 2d 4 28 ( 1966 ), f or ex am ple , the S upr em e Co urt c onc lud ed that the de bto r’ s lo ss- carr y ba ck ta x r ef und cl ai m s w e r e p r o p e rt y o f t h e e s t a t e b e c au s e t h e y w e r e “ s u f f i c i e n t l y r o o t e din the pre-bankruptcy

past.” Id . a t 380, 86 S. Ct. at 515. Although th e Se gal de bto r co uld not claim the ref unds until the tax y ear closed, which w as post-petitio n, the predica tes fo r re ce iv i n g t h e r e f

u n d s ( p a ym e n to f

t a x e s i n p r i o r

y e a r s a n dan e to p e r a t i n g los s)
o c c u r r e d p re-p et it io n. Id
. The debtor had m ore than a m ere hope that hi s losses
m igh t ge ne ra te r ev enue in the fu tur e; he “ poss es se d an exi sti ng inte re st at the ti m e of fil in g,” ev en th ou gh hi s en joy m en t of

th at in te res t was po st po ne d. Drew es v. Vote ( In re V ote) , 276 F
. 3d 1 024, 102 6 ( 8th Ci r. 200 2) ; se e Sli ne y v. B att le

y (I n re Sc hm itz

) , 270 F.3d 12 5 4 , 1 2 5 8 (9th Cir. 2001). The Suprem e Court did not allo w the Se gal tr ust ee to as se rt

m or e ri ght s th anthe de bto r ha d a t the c om m en ce m en t of

the c as e; it
m er el y a llo w ed the tr ust ee to se ek

the int er es ts e xis tin g, tho ugh sti ll unde te rm ine d in quanti ty , a t the ti m e the de bto r fi le d hi s pe tit ion
.5

T he iss ue he re is whe the r W itk o’ s le ga l m al pr ac tic e cl ai m is pr ope rty

of his ba nkr upt cy e sta te . T his Co urt m

ust de te rm ine w he the r the c ourts be low co rr ec tly cl as sif ie d W itk o’ s c au se of

a ct io n as a pr e- pe tit ionint er es t. A s r ef le ct ed by the pa rt ie s’ br ie fi ng and o ra l arg um en ts, r ec en t c as es a rg uably ha ve c lou de d pr ev iou s ch oi ce o f la w aut ho rit y . Se e Jo hnso n v. A lv are z (I n re A lv are

z) , 224 F
. 3d 1 273, 127 6 (1 1th Ci r. 200 0) ( “ W e not e th at th e pa rt ie s di sa gr ee about w he the r thi s qu es tio n is gove rn ed by sta te law or

f ed er al ba nkr

upt cy law . W e de cl ine to dec ide the que sti on of which lawgoverns thi s dete rmin at ion, because in either e vent, w e conclude that this legal m alpractice claim is pr operty of Alvare z’ s bankrupt cy estate. ”) ( footnot es om itt ed ). W e nowr ei te ra te tha t fe de ra l la w de te rm ine s w he the r an int er es t i s pr ope rty of th e b an krup tc y

est at e, Se

gal , 382 U
. S. a t 37 9, 86 S
. Ct
. a t 51 5, an d “ [p ] ro pe rty interests are c reate d and defined by state l aw . Unless som e fe deral interest r equires
a dif fe re nt re sul t, the re is no re as on wh y suc h in te re sts sho uld be a na ly ze d di ff

er en tly sim ply because an interested party is involved in a bankrupt cy proceeding.” Butner
v. United States , 440 U
. S. 48, 55, 99 S
. Ct
. 914 , 918 , 59 L
. E d. 2d 1 36 ( 1979 ); see als o B arnh ill

v . J ohns on , 503 U
. S. 393 , 398, 112 S. Ct
. 1386 , 1389 , 118 L
. E d. 2d 3 9 (1 992) ( “ Inthe abse nc e of a ny c ontro lli ng f

ed er al law , ‘ pr ope rty ’ an d ‘ int er es ts i n pr ope rty ’ a re c re at ur es of st at e la w . ”) ; Ch arl es R
. H all M oto rs, I nc . v . L ew is (

In re L ew is) , 137 F
. 3d 1 280, 128 3 ( 11th C ir
. 199 8) ( quot ing Sout htrus t Bank of A la. v.6

Th oma s (I

n re T hom as) , 883 F
. 2d 9 91, 995 ( 11th C ir
. 198 9) ) (“ [T ] he na tur e an d existence of the debtor’ s right to property is dete rm ined by look ing at st at e l aw .” ) (b ra ck et s om itt ed ). S ta te law thu s c ontro ls W itk o’ s le ga l m al pr ac tic e ca use of a ct ion and determ ines whether that cla im existed at the tim e W itko filed his bankruptcy pe tit ion
. A ppl y ing the appr opr ia te sta te law , W itk o’ s lega l m al pr ac tic e cause of a ct ion did no t exist unt il his alim ony action co n cl u d ed with an adverse outcom e that w as pr oxi m at el y

c au se d by

his a tt or ne y ’ s ne gli ge nc e. “ U nde r Fl or ida law , ac au se of
ac tio n f or le ga l m al pr ac tic e ha s th re e el em en ts: ( 1) the a tto rn ey ’ s em plo ym en t; (2 ) the at torn ey ’s n eg le ct

of ar ea sona

ble duty ; and ( 3) the a tto rn ey ’ s ne gli ge nc e w as the proxim ate cause of loss to the client.” In re A lvarez , 224 F. 3d at 127 6 ( ci tin g Ste el e
v. Ke hoe , 747 So
. 2d 9 31, 933 ( Fl a. 199 9) ). D isc uss ing the thi rd e le m en t, the F lor ida Su pr em e Co urt un am

big uous ly he ld t h at un til the und er ly ing a ct ionis co nc lud ed w ith
anout co m e adve rs e to the c lie nt ( i.e. , ha rm), “ a m al pr ac tic e cl ai m is hy pothe tic al a nd dam ages are speculative.” Silvestr one v . E de ll , 721 So. 2d 1173, 1175 (Fla. 1998 );
se e B lum be rg v . U

SA A Ca s. I

ns. Co
. , 790 S o. 2d 1 061, 106 5 ( Fl a. 20 01 ) (“ [I ] n th e circum stances presented here, a negligence/m alpractice cause of action accrues w hen the client incurs dam ages at the conclusion o f the re la t ed o r un derly ing judicial pr oc ee din gs. . . . ”) ; se e als o Fla. Stat. § 95.031(1) (“ A cause of action accr ues when7

the last elem ent constitu ting the cause o f action occurs.” ). The m achinations of legal
m al pr ac tic e, es pe ci al ly the el em en t re qui ri ng the co nc lus ion of j udi ci al pr oc ee din gs, dis tin gui sh l eg al m al pr ac tic e ac tio ns f ro m vir tua lly a ll oth er tor t c la im s. A lth ough proxim ate harm

usuallyoccurs in close tem poral proxim ity to tortiou s conduct, legal
m al pr ac tic e ha rm

of te n a ri se s w el l a ft er the at tor ne y ’ s fa ilu re s. O the rw ise sta te d, it is u nli ke ly tha t a car

a cc ide nt v ic tim

c oul d f ile he r ba nkr

upt cy pe tit ionbe tw ee n th e c au s a l a c ta n dh e r

r e s u l t i n g h a rm. W itk o di d no t su ff

er a ny ha rm f ro m th e al le ge d le ga l m al pr ac tic e pr ior to or contem poraneous with filing his bankrup tcy petition
. W itko fi l ed h is bankrup tcy petition on Septem

ber 8, 1999
. The j udicial proceedings u nderly ing hi s m alpractice cl ai m did not c onc lud e unt il m onths l at er on J anua ry

13, 200 0 - - at the earl ie st ( the sta te appe lla te c ourt di d no t a ff irm the tr ia l c ourt’ s de ci sio n un til D ec em be r 15, 2 0 0 0 )
. T h e s e f

a c t s d i s t i n g u i s h t h e i n s t a n tma t t e r f r o m I n re Alv arez , w here a

legal
m alpractice cause of a ction was found to be sufficiently rooted in the pre-bankruptcy pa st . In re A lvarez , 2 2 4 F
. 3 da t1 2 7 9
. T h e r e , t h e h a rm o c c u r r e d a t t h e s a me t i me Alv arez ’s att or ne y s fi le d h is ba nk rupt cy pe ti ti on . I

d. (“ Si m ult an eo us w ith the f

ili ng, Alv arez su ffer ed si gn ifi can t ha rm fro m th e fi rm ’s all eg edne gl ig en ce, i.e. the los s of control of assets.”). When W itko filed his bankruptcy petition he had not y et suffer ed any ha rm . W itk o’ s m al pr ac tic e ca use of a ct ionw as unknow n, not e ve n r isi ng t o a8

hope ; the m ost pe ssi m ist ic c urm udge on c oul d no t anti ci pa te tha t, m onths l at er , W itk o would lose his alim ony

claim due to his atto rney ’ s m alpractice
. W itko’s legal
m al pr ac tic e ca

use of a ct iondid

not e xis t a t the ti m e he f

ile d hi s bankr

upt cy pe tit ion and, consequently , is not property of his bankrup tcy

estate. V. CONCLUSION Fo r the r ea sons se t fo rth abov e, w e hol d th at W itk o’ s m al pr ac tic e ca

use of action is not property

of his bankrup tcy

estate. A ccordingly , w e re verse. REVERSED.