UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: EDWARD RICHMAN; In Re:

ILENE RICHMAN,

Debtors.

ILENE RICHMAN,

Plaintiff-Appellant, No. 96-2156

v.

JOHN R. GARZA; LAWRENCE F.

REGAN, JR.; GARZA, REGAN & ROSE,

P.C.,

Defendants-Appellees.

Appeal from the United States District Court

for the District of Maryland, at Greenbelt.

Alexander Williams, Jr., District Judge.

(CA-96-1509-AW,

BK-92-13241-DK,

AP-95-1389)

Argued: May 8, 1997

Decided: July 1, 1997

Before NIEMEYER and MOTZ, Circuit Judges, and FABER,

United States District Judge for the Southern District of West

Virginia, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

_________________________________________________________________
COUNSEL

ARGUED: David Hart Nelson, Charlottesville, Virginia, for Appellant. Lawrence Francis Regan, Jr., GARZA, PAPERMASTER,

REGAN & ROSE, P.C., Rockville, Maryland, for Appellees. ON

BRIEF: John R. Garza, GARZA, PAPERMASTER, REGAN &

ROSE, P.C., Rockville, Maryland, for Appellees.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Ilene Richman appeals from the district court's order affirming the

bankruptcy court's findings that Mrs. Richman could not personally

maintain a legal malpractice claim against her attorneys arising

from

their advice and handling of Mrs. Richman's bankruptcy action. Mrs.

Richman and her husband, Edward, filed a bankruptcy petition under

Chapter 11 of the Bankruptcy Code on May 29, 1992. The appellees

initially served as counsel to the Richmans as

debtors-in-possession.

The Richmans eventually sought new counsel, and the appellees were

replaced effective April, 1994. The case was converted to Chapter

7

effective August, 1994.

On May 26, 1995, the Richmans filed a complaint against the

appellees in the Circuit Court for Montgomery County, Maryland.

Their complaint alleged that the appellees negligently represented

them both before and after they filed their bankruptcy petition.

The

appellees removed the case to the bankruptcy court and moved to

dismiss. By order entered April 2, 1996, the bankruptcy court

dismissed

the Richmans' complaint, determining that they had no standing to

pursue the cause of action, which is the property of the Richmans'

Chapter 7 bankruptcy estate. Ilene Richman appealed the decision of

the bankruptcy court, but her husband did not. By order entered on

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July 18, 1996, the district court affirmed the findings of the

bankruptcy court.

The act of filing a petition for relief under an applicable chapter

of

the Bankruptcy Code commences a bankruptcy case and creates an

estate consisting of "all legal or equitable interests of the

debtor in

property as of the commencement of the case." Upon the filing of a

petition, the debtor's interests in property vest in the bankruptcy

estate, and the debtor surrenders the right to dispose of or

otherwise

control the estate property. In re Osborn, 176 B.R. 217, 219

(Bankr.

E.D. Okla. 1994). The bankruptcy trustee, as representative of the

bankruptcy estate, has exclusive authority to use, sell or lease

property of the estate. 11 U.S.C. §§ 323(a), 363(b)(1).

11 U.S.C. § 541 provides in part that the bankruptcy estate is comprised, with exceptions not applicable here, of "all...

property, wherever located and by whomever held . . ., [including] all legal or

equitable interests of the debtor in property as of the

commencement

of the case." The estate also includes "proceeds, products,

offspring,

rent or profits of or from property of the estate, except such as

are

earnings from services performed by an individual debtor after the

commencement of the case." The statute further provides that the

estate includes "any interest in property that the estate acquires

after

the commencement of the case." A legal cause of action is an

interest

of the debtor in property within the meaning of section 541. Sierra

Switchboard Co. v. Westinghouse Elec. Corp., 789 F.2d 705, 707 (9th

Cir. 1986); Tignor v. Parkinson, 729 F.2d 977, 980-81 (4th Cir.

1984).

Any legal malpractice claim arising from the appellees' advisement

and handling of the Richmans' bankruptcy proceeding is properly

characterized as property of the estate. The nature and existence

of the

Richmans' interest in property as of the commencement of their

Chapter 11 case is governed by applicable non-bankruptcy law; in

this

case, Maryland law. Under Maryland law, a plaintiff must establish

three elements to sustain a cause of action for legal malpractice:

(1)

the employment of the attorney by the plaintiff; (2) that the

attorney
breached a reasonable duty of care owed to the plaintiff; and (3)

that

the attorney's breach of that duty was the proximate cause of

injuries

sustained by the plaintiff. Kendall v. Rogers, 31 A.2d 312, 315

(Md.

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1943). As properly determined by the courts below, such a cause of

action accrues when all of the elements of the action are present.

The Richmans' complaint alleges causes of action based on the

appellees' representation of them both before and after the

petition

date. With respect to Mrs. Richman's claim of pre-petition malpractice, we agree with the bankruptcy court that the Richmans suffered

an injury, if any, at the moment the petition was filed, and it was

at

that point that all the elements of a cause of action for

malpractice,

under Maryland law, came into existence. The bankruptcy court was

also correct in finding that, to the extent the cause of action

arose

post-petition, the professional negligence lawsuit is property of

the

estate.

Mrs. Richman's major contention is that, at least with regard to

the

appellees' initial advice to file for Chapter 11 relief, she did

not suffer

an injury until after the Chapter 11 petition was filed. She

contends

that she suffered no recognizable injury until the bankruptcy

proceeding exceeded the appellees' prediction of a quick and simple

experience. Thus, Mrs. Richman argues that at least a portion of her

malpractice claim did not accrue at a time which would place it

within

the bankruptcy estate. Mrs. Richman relies primarily upon In re

Swift,

198 B.R. 927 (W.D. Tex. 1996).

Swift, however, appears to go against the weight of authority on

this issue, and this court is not persuaded by its rationale. As

the

bankruptcy court found, with regard to the initial advice to file

the

petition, Mrs. Richman suffered an injury "at the moment the

petition

was filed." Conceding the possibility that the bankruptcy

proceeding

could have proceeded smoothly, which Mrs. Richman does by contending that any injury arose post-petition, it is difficult to

find that

a malpractice claim could be sustained under this scenario.

Nevertheless, assuming that Mrs. Richman's allegations give rise to a

possible

malpractice claim, and further assuming the injury did occur post-
petition, such a cause of action is still characterized as property

of the

estate under section 541(a)(7) (estate includes "any interest in

property that the estate acquires after the commencement of the case").

As

previously discussed, the applicable non-bankruptcy law, Maryland

law, provides that a legal malpractice claim does not accrue until

all

the elements are present. Under Mrs. Richman's scenario, all the

ele4
ments did not coexist until post-petition and, thus, would be

property

of the estate under section 541(a)(7).

Finally, although we affirm the lower courts' dismissal of the

Richmans' cause of action, this decision in no way precludes the

Trustee

of the estate from filing a new action on behalf of the bankruptcy

estate. We have only determined that Mrs. Richman's claims are

properly characterized as property of the estate. There has been no

finding regarding the merits of the malpractice claims raised by

the

Richmans.

Accordingly, the district court's decision is

AFFIRMED.

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