N O T FO R PUB L ICAT IO N UNITED STATES C OUR T OF APPEALS FOR THE NINTH C IR C UIT In re : JAN GLASER ; TATYANA KHOM YAKOVA,

De btors,

______________________________ SHELLEY D. KR OHN, C h a pte r 7 Truste e , Appe lla

nt,
v. JAN GLASER ; TATYANA KHOM YAKOVA,

Appe lle e s. No. 19-60015 B AP No. 18-1175
M EM O R ANDUM *

Appe a l from

the Ninth C irc uit B a nkruptc y

Appe lla te Pa ne l Kurtz , Ta y lor, a nd B ra nd, B a nkruptc y

Judge s, Pre siding Argue d a nd Subm itte d April 29, 2020 Sa n Fra n c isc o , C a lifornia 

# FIL ED
JUN 30 2020 M OLLY C. DW Y E R, CLERK U. S. CO URT O F APPEALS

* This disposition is not a ppropria te for public a t ion a

nd is not pre c e de nt e xc e pt a s provide d

by Ninth C irc uit R

ule 36-3.B e fore : GILM AN, ** GR AB ER , a nd C OLLINS, C irc uit Judge s. She lle y Krohn, C h a

pte r 7 Truste e (" Truste e " ) for the ba n kruptc y e sta te of Ja n Gla se r a n d Ta ty a na

Khom y a kova (" De btors" ), a

ppe a l s from

the B a nkruptc y Appe l la t e Pa ne l’ s (" B AP" ) orde r c onc luding tha t De btors’ ba

nkruptc y e sta t e doe s not inc lude the ir c a

u se of a c tion for le ga l m a lpra c tic e . R e vie wing de novo, In re M ihra nia n, 937 F.3d 1214, 1216 (9th C ir. 2019), we a ffirm
. De btors’ m a lpra c tic e c l a im wa s not prope rty

of the ir ba

nkruptc y e sta

te . A ba nkruptc y e sta te e nc om pa sse s " a ll le ga l or e q

uita ble inte re sts of the de btor in prope rty a s of the c om

m e nc e m e nt" of the ir ba

nkruptc y c a s e , 11 U.S.C . § 541(a )(1), whic h inc lude s c a

u se s of a c tion tha

t ha ve a c c rue d be fore tha

t c om m e nc e m e nt, C usa no v. Kle i n, 264 F.3d 936, 945–47 (9th C ir. 2001). W he t he r a c a use of a c tion ha s a c c rue d

turns on sta

te la w. Id. a t 947. Unde r Ne v a da

la w, a c la im for le ga l
m a lpra c tic e doe s not a c c rue until " da m a ge ha s be e n susta ine d ." He w itt v. Alle n, 43 P.3d 345, 347–48 (Ne v. 2002) (e n ba

nc ). The ba

nkruptc y c o urt a n d the B AP he ld tha t the da m a ge s c a

use d by the m a l pra c tic e a t issue oc c urre d post-pe tition, whe n De btors’ a t torne y

fa ile d to dism i ss the ba

nkruptc y c a se prior to disc ha

rge

* * The Honora

ble R ona ld Le e Gilm a

n , Unite d Sta te s C irc uit Judge for the U .S. C ourt of Appe a ls for the Sixth C irc u it, sitting by de signa tion. 2a nd whe n De btors re c e ive d notic e from the IR S se e king pa

y m e nt of the outsta nding ta x de bt. W e a gre e . Se ga l v. R oc he lle , 382 U.S. 375 (1966), doe s not re q uire a c ontra

ry
c onc lusion. The

truste e in Se ga l a sse rte d

the inte re sts of the de btor tha t e xiste d a t the c om m e nc e m e nt of the c a se . He re , De btors ha d no inte re s t in a c a use of a c tion for le ga l m a lpra c tic e until the y inc urre d da

m a g e s, whic h ha

ppe ne d a fte r the ir ba nkruptc y c a se c om m e n c e d. Ac c ordingly , the re wa s no inte re st in tha t c a use of
a c tion for the Truste e to a sse rt. The Truste e c onte nds tha

t Ne va da la

w spe a ks to a c c rua l only for purpose s of sta tute s of lim ita

tion, but not for purpose s of prope rty owne rship. Although we
re c o gniz e d in C u s a no, 264 F.3d a t 947, tha t a c la im m a y a c c rue diffe re ntly in those
c onte xts, the Truste e

—

who be a rs the burde n of e sta

blishing tha

t the c a use of
a c tion is prope rty of the e sta te , In re Ja c obson, 676 F.3d 1193, 1200–01 (9th C ir. 2012)— ha s not shown tha

t the a c c rua l of a

le g a l m a lpra c tic e c l a im

diffe rs by
c onte xt unde r Ne va da l a w. The re fore , the B AP did not e rr in c onc luding tha t De btors’ m a lpra c tic e c l a im wa s not the prope rty

of the i r bankruptc y

e sta te
. The disse nt, re l y ing on Gonz a le s v. Ste wa rt Title , 905 P.2d 176 (Ne v . 1995) (e n ba nc ), ove rrule d on othe r grounds by Kopic ko v. Young, 971 P.2d 789, 791 n.3 (Ne v. 1998), a sse rts tha

t De btors’ m a lpra c tic e c la im ha d a c c rue d a s of the
3c om

m e n c e m e nt of the ir ba

nkruptc y c a se be c a

use " a t torne y

inte rve ntion" would ha ve be e n re q uire d to c orre c t the im

prope r filing. B u t the disse nt m isre a ds Gonz a le s. Tha

t c a se doe s not sta

nd for the proposition tha t " a ny ne e d to ha

ve an
a ttorne y ta k e a c tion to a d dre s s a

m ista ke is itse l f a

c om pe n sa ble injury , giving rise to a right to suefor m a lpra c tic e ." Inde e d, tha t c a se did not involve

a n a t torne y ’ s

" a ddre s s[ing] a

m ista ke " a t a ll. R a t

he r, Gonz a le s involve d " a dra fting e rror tha t g[a v e ] rise to a la

w suit." 905 P.2d a

t 179; se e a lso id. a

t 178–79 (" [T] he rule se t forth he re in should not de te r c lie nts from

a llowing the ir a ttorne y

to ‘ c ure ’ a n
e rror." ). A brie f re vie w of Gonz a le s illum inat e s why our c onc l usion is unperturbe d by its holding. Gonz a le s involve d a

m a lpra c tic e c la im

a ga inst a la wy e r who ne glige ntly dra fte d a prom issory note , whic h le d to subse que nt litiga tion be twe e n a

de c e de nt’ s spouse an d c hildre n ove r who owne d the de c e de nt’ s inte re s t in the note . Id. at 176–77. The spouse sue d the c hildre n, a nd the c hildre n won. Id. W he n the
c hildre n the re a fte r sue d

the la wy e r for m a lpra c tic e , the Gonz a l e s c ourt ha d to de te rm i ne whe n

the ir m a lpra c tic e c la im

ha d a c c rue d. C o nc luding tha t the c la im
a c c rue d whe n the spouse file d the c om pla int a ga inst the c hildre n , the c ourt
e m pha siz e d tha

t, whe n the c om

pla int wa s file d, the " e x iste nc e of da m a ge s" be c a m e c e rta in. Id. a

t 178. Som e le ve l of da

m a ge s wa s gua

ra nte e d be c a

use the
4c hildre n ha d to de fe nd the m se lve s. The y ha d to obta in c ounse l a

nd unde rta ke " the
e xpe nse , inc o nve nie nc e a n d risk of . . . litiga tion," a s a re sult of the c om

pla int. Id. The " a ttorne y

inte rve ntion" involve d in Gonz a l e s wa s the re fore the m ounting of a
c ivil de fe nse in a

n a c tion tha

t c a m e a fte r tra

nsa c tiona l m a lpra c tic e . He re , the " a ttorne y

inte rve ntion" re quire d wa s the c orre c tion of a m ista ke
. As a re sult of the im

prope r filing, De btors we re not forc e d to obta in ne w c ounse l or pa rtic i pa te in e ntire ly

ne w litiga

tion. If De btors’ ba

n kruptc y c ounse l ha d dism isse d the pe tition, without c ha rging De b tors for the a s soc ia te d c osts, no da m a ge s would ha

ve a rise n. The " e xiste nc e of da m a ge s" wa s c e rta in for the Gonz a le s c hildre n be c a

use the y ha d to de fe nd the m se lve s in a c ivil a c tion. He re , the " e xiste nc e of da

m a ge s" wa s not c e rta in until the IR S a sse rte d its c la im

a ga inst De btors—

whic h oc c urre d post-pe tition— just a s the " e xiste nc e of da m a ge s" for the
c hildre n in Gonz a le s wa s not c e rta in until they we re sue d. Ac c ordingly , De btors’
m a lpra c tic e c la im wa s not prope rty of the ir ba

nkruptc y e sta te
. AFFIRM E D.

5Krohn v. Glaser , No. 19

- 60015 COLLINS, Circuit Judge, dissenting: I respectfully dissent from the majority’s holding that the malpractice cause of action that Debtors Jan Glaser and Tatyana Khomyakova (“Debtors”) have against the ir bankruptcy attorney i s not part of their bankruptcy estate. Had Debtors’ counsel filed their bankruptcy petition six days later than she did, Debtors would have been able to discharge more than a quarter

- million dollars in tax debt to the IRS. Becaus e , however, counsel negligently filed the petition too early, the IRS tax debt was not discharged. In determining whether the resulting malpractice cause of action belonged to Debtors’ bankruptcy estate, we must determine whether that cause of action exis ted “ as of the commencement of the case.” 11 U.S.C. § 541(a)(1). If it did, then it belonged to the estate, but if that cause of action did not come into existence until after the filing of Debtors’ bankruptcy petition, then it remained the property of D ebtors. I n answering this question , we look to state law, but in so doing we must carefully distinguish between state
- law principles for determining when “ accrual has occurred for purposes of ownership ”

— which is what counts for purposes of § 541 (a)(1)

— and

“ principles of discovery and tolling , which may cause the statute of limitations to run after accrual has occurred for purposes of ownership in a bankruptcy proceeding. ” Cusano v. Klein , 264 F.3d 936 , 947 (9th Cir. 2001) (emphasis 

# FILED
JUN 30 2020 MOLLY C. DWYER, CLERK

U.S. COURT OF APPEALS2 added)
. Here , this distinction makes all the difference. U nder Nevada law, “[t] he elements for a claim of legal malpractice are the existence of ‘ an attorney
- client relationship, a duty owed to the client by the attorney, breach of that duty, and the breach as proximate cause of the client ’ s damages. ’ ” Allyn v. McDonald , 910 P.2d 263, 266 (Nev. 1996) (citation omitted). At the moment that Debtors’ bankruptcy petition was filed, there clearly was an attorney
- client relationship, and Debtors’ attorney had breached her duty to her clients by negligently filing the petition too early. The only question is whether that negligence had yet caused any damage to Debtors. The Bankruptcy Appellate Panel (“BAP”) held tha t, because Debtors’ attorney could have cured her malpractice after the filing of the petition by moving to dismiss Debtors’ case and then later refiling it, any damage that Debtors experienc ed necessarily occurred only post
- petition, and the majority affirms that conclusion. This holding cannot be squared with the applicable Nevada law. Even under the BAP’ s and the majority’s view of the case, the Debtors’ too

early filing of the petition immediately placed Debtors in a prejudicial position that counts as damage under Nevada law. As the BAP acknowledged, in the absence of some action to undo the early fili ng of the petition, the IRS debt was not going to be discharged. The parties both agree that the relevant malpractice accrual rule i n this case is the rule concerning transactional malpractice, and the Nevada3 Supreme Court has held that , under that rule, any need to have an attorney take action to address a mistake is itself a compensable injury , giving rise to a right to sue for malpractice. Gonzales v. Stewart Title , 905 P.2d 176, 178 ( Nev. 1995) (en banc) (where plaintiffs “became aware of the dr afting error at the time the complaint was filed, forcing them to obtain legal counsel,” plaintiffs “could have filed their complaint for attorney malpractice at that time”) , overruled on other grounds by Kopicko v. Young , 971 P.2d 789, 791 n.3 (Nev. 1998)
. Here, at the moment that Debtors’ counsel filed the bankruptcy petition, they were placed in a prejudicial position that would require attorney intervention. Under Gonzales , that constitutes injury, thereby completing the cause of action for property p urposes. 1 The cause of action therefore existed “as of the commencement” of the bankruptcy case, 11 U.S.C. § 541(a)(1), and it therefore belonged to the estate. See Johnson v. Alvarez ( In re Alvarez ), 224 F.3d 1273, 1278 (11th Cir. 2000) (citing 11 U.S. C. § 541(a)(1)) (holding that a claim arising at the instant of filing is part of the estate); Winick & Rich, P.C. v. Strada Design Assocs., Inc. ( In re Strada Design Assocs., Inc. ), 326 B.R. 229, 235

– 36 (Bankr. S.D.N.Y. 2005) (same). The majority agrees that , under Gonzales , the need to incur legal expenses arising from transactional malpractice constitutes cognizable damages , b ut the

1 It is irrelevant that Gonzales tolls the time to sue until the plaintiff discovers that injury. See Cusano , 264 F.3d at 947
.4 majority wrongly seeks to confine Gonzales to its specific facts by draw ing an arbitrary distinction between legal expenses that are incurred in defending against litigation (as in Gonzales ) and legal expenses that are required for “the correction of a mistake” (as here). See Mem. Dispo. at 4

– 5. The majority suggests that Gonzales implicitly drew such a distinction b y stating that its damages rule “should not deter clients from allowing their attorney to ‘cure’ an error,” 905 P.2d at 178

– 79
. See Mem. Dispo. at 4. Gonzales itself refutes this contention. The majority overlooks the very next sentence, in which the Go nzales court stated that, in insisting that their attorney “‘cure’ an error,” the “client[s] must observe the limitations period in doing so .” Id . at 179 (emphasis added). This comment would make no sense if, as the majority posits, Gonzales ’ rule only applied when litigation expense is incurred. Gonzales thus explicitly confirm s that, in the transactional context, an attorney error that necessitates attorney effort to fix the

error constitutes cognizable damage that provides a complete caus e of action and starts the running of the statute of limitations. 2

2 Gonzales ’ comments on this score likewise squarely refute the majority’s suggestion that, if an attorney agrees to cure an error for free, there is no cognizable damage and the clock never begins to run. See Mem. Dispo. at 5. More generally, the majority’s suggestion makes no more sense than saying that any tortfeasor’s offer to cover a n injured party’s damages would somehow mean that the victim therefore has no cause of action to sue. An offer to gratuitously redress a tortiously inflicted injury does not disprove the existence of injury; on the contrar y, it confirms it.5 Even if Nevada law delayed the accrual of the cause of action until the later date on which counsel actually takes steps to cure the already

- built

- in mistake (and, as explained above, I see no basis for concluding that Nevada law does so), the Supreme Court’s decision in Segal v. Rochelle , 382 U.S. 375 (1966) , would still consider that property to be part of the estate for federal bankruptcy law purposes . In Segal , the Supreme Court held that tax refund claims that were made after the debtors’ bankruptcy filings were “sufficiently rooted in the pre

bankruptcy past” that they counted as property of the estate as of “the date the bankruptcy petitions were filed.” Id. at 379

– 80. Although t he decision in Segal preceded the enactment of the current Bankruptcy Code, including its definition of “property” in 11 U.S.C. § 541, the quoted language remains good law. See Rau v. Ryerson ( In re Ryerson ), 739 F.2d 1423, 1426 (9th Cir. 1984) (“The Code follows Segal insofar as it includes after

- acquired property ‘sufficiently rooted in the prebankruptcy past.’”). Here, Debtors’ injury

— the need to obtain legal assistance to fix the mistake

— was locked in at the moment of filing. Therefore, even if Nevad a law delayed formal accrual until Debtors actually used the services of a lawyer to fix the mistake, their malpractice claim would be “sufficiently rooted” in the pre

- bankruptcy past that it should be considered property of the bankruptcy estate. I respec tfully dissent.