Court Opinion

ID: 9787378
Source: CourtListenerOpinion
Date Created: 2023-08-31 00:15:21.644679+00
Date Added: 2024-06-11T07:36:55.383577
License: Public Domain

BURKE, District Judge,
dissenting, with whom HILL, Chief Justice, joins.
[¶28] I respectfully dissent. I find that genuine issues of material fact exist which preclude summary judgment.
[¶29] For purposes of summary judgment we must provide all favorable inferences to be gleaned from the evidence to the party opposing the motion. In that vein, we must take as true the unrefuted opinion testimony of the Kolschefskys' expert. According to that expert, Mr. Harris breached his duties to the Kolschefskys by failing to properly and timely investigate the claim, failing to advise the Kolschefskys as to the applicable statute of limitations, failing to advise the Kolschefskys of the impact of bankruptcy upon the client's chiropractic malpractice claim, and failing to take action during the bankruptey to preserve the chiropractic malpractice claim after receiving notice that the bankruptcy had been filed. There is factual support for those opinions in the record.
[¶30] The record demonstrates that Harris was aware that the Kolschefskys were having financial difficulties. As a result of Mrs. Kolschefsky's chiropractic malpractice injury, the Kolschefskys accumulated medical bills amounting to $30,000. In a discussion with Harris, Mr. Kolschefsky brought up the *1150subject of bankruptcy and Harris told him that it might not be a bad idea. During the course of their relationship, Harris sent numerous letters to creditors on behalf of the Kolschefskys to stave off collection efforts while he investigated the chiropractic malpractice claim. Harris never advised the Kolschefskys that filing bankruptcy could negatively impact their chiropractic malpractice claim.
[¶31] Facts supporting an ongoing attorney-client relationship post-bankruptcy also appear in the record. The Kolschefskys believed that Harris continued to represent them and was pursuing a claim against the chiropractor, even after the bankruptcy. Despite the bankruptcy filing in November, 1999, Harris sent a letter on April 25, 2000, to a treating neurologist. In the letter, Harris requested information about Mrs. Kol-schefsky, referring to her as his client. In a follow-up telephone conversation on May 1, 2000, Harris informed the neurologist that he was not qualified to give an expert opinion in Mrs. Kolschefsky's case but asked if he could identify any chiropractors who could give an opinion. Harris never communicated any termination of his representation to the Kol-schefskys in writing.
[¶ 32] I do not take issue with the majority's analysis that by operation of bankruptcy law the executory fee agreement was breached by the Kolschefskys. However, I disagree that the effect of that breach resulted, as a matter of law, in the termination of the attorney-client relationship. The majority equates the duty to perform as specified in the contract with the professional duty arising from the attorney-client relationship. I discern a difference. The latter imposes an obligation to meet a standard of care. The standard of care is not set forth in the fee agreement and must be established by expert testimony.
[¶33] The majority summarily concludes that the breach ended the attorney-client relationship because it constituted an anticipatory repudiation of the attorney-client contract and relieved Harris from further responsibilities on behalf of the Kolschefskys. I interpret the facts differently, and based upon his conduct, so did Harris. He continued to hold himself out as the Kolschefskys' attorney months after the bankruptcy. Harris never provided written notice of termination and did not return the Kolschefskys' file to them until the Kolschefskys' sought new counsel. Additionally, Harris failed to raise bankruptcy as an affirmative defense in the legal malpractice case for many months and then only after the deadline for disposi-tive motions had passed.1
[¶ 34] We have recognized that the existence of an attorney-client relationship will often present an issue for the trier of fact. Meyer v. Mulligan, 889 P.2d 509, 513-514 (Wyo.1995). In this case material issues of fact concerning the duration of the attorney-client relationship render summary judgment inappropriate. The doctrine of anticipatory repudiation should not be applied when the facts are equivocal as to whether the party on the receiving end of a breach considered it a repudiation of the contract. Rather, the Kolschefskys' bankruptcy is more properly viewed as an element of damage incurred by them, rather than as an event which eliminates any possible claims the Kolchevskys may have against Harris, eg., Laiben v. Roberts, 936 S.W.2d 220 (Mo.Ct.App.1996).
[¶35] I also cannot agree that the Kol-schefskys lacked standing to pursue their claim against Harris.
[¶36] In concluding that Harris did not owe any duties to the Kolschefskys, the majority limits its inquiry to the point in time that the statute of limitations lapsed, after the bankruptey was concluded. The majority concludes that any pre-petition misconduct by Harris is not actionable because it became, and remains, property of the bankruptcy estate. I disagree. The cause of action resulting from those acts did not be*1151come part of the bankruptey estate because it was not a legally cognizable interest when the Kolschefskys filed bankruptey.
[¶37] A bankruptcy estate includes "all legal or equitable interests of the debtor in property as of the commencement of the case...." 11 U.S.C. § 541(a). The majority states that this includes "all causes of action existing on the petition date, whether or not a lawsuit has been commenced, and no matter how inchoate or unliquidated the underlying claim." I agree that causes of action become part of the bankruptcy estate, but I do not believe that the authority cited supports the conclusion that the Kolschefskys had a cause of action against Harris when they filed for bankruptey.
[¶38] The majority cites DKBP v. Dorr, Bentley & Pecha, 841 P.2d 811, 815 (Wyo.1992) to demonstrate that the Kolschefskys had an interest in property, that being an unliquidated or inchoate claim against Harris. However, what we stated in that case was:
The filing of the petition in the bank-ruptey court on February 1, 1990, created an estate. That estate consisted of "all legal or equitable interests of the debtor [D & A] in property" wherever located and by whomever held. 11 U.8.0. § 541 (1988) (emphasis added). This includes any and all causes of action existing on the petition date. Delgado Oil, Inc. v. Torres, 785 F.2d 857 (10th Cir.1986).
Property of the estate includes all of the debtor's inchoate and unliquidated interests. United States v. Whiting Pools, Inc., 462 U.S. 198, 204-05 n. 8, 103 S.Ct. 2309, 76 L.Ed.2d 515 (1983) (Estate succeeds to no more or greater causes of action against third parties than those held by the debtor.) Property of the estate includes "any interest in property that the estate acquires after the commencement of the case." 11 U.S.C. § 541 (a)(7). Property of the estate in a Chapter 7 case of a non-individual includes all property, income, receivables, causes of action, etc., generated or acquired during a preceding Chapter 11 case. Id.
As a partner in DKBP, D & A had an interest in managing that partnership. See, e.g., Wyo. Stat. § 17-18-501(ii)(1989). That management interest passed to the estate when D & A filed for bankruptcy. In re Cardinal Industries, Inc., 105 B.R. 834, supplemented 109 B.R. 748 (Bankr. S$.D.Ohio 1989).
When a cause of action accrues before the bankruptcy petition, that claim is property of the estate, regardless of whether or not a lawsuit based upon that cause of action had been commenced. In re James, 120 BR. 802 (E.D0.P4.1990); In re E.F. Hutton Southwest Properties, II, Ltd., 108 BR. 808 (N.D.Tex.1989) - In re Johns-Manville Corporation, 57 BR. 680 (S.D.N.Y.1986).
Id. (Bold emphasis added.)
[¶39] We acknowledged that a cause of action is a form of property encompassed by the bankruptey code and that a trustee succeeds to a cause of action held by a debtor at the time the bankruptey petition is filed. Id. at 816. (citing Cain v. Hyatt, 101 BR. 440 (E.D.Pa.1989)).
[¶40] In DKBP, we cited a footnote from United States v. Whiting Pools, Inc., 462 U.S. 198, 204-05, 103 S.Ct. 2809, 76 L.Ed.2d 515 (1983) for the proposition that a debtor's bankruptcy estate includes inchoate and unliquidated interests. 841 P.2d at 815. However, we clarified that statement with a parenthetical explaining that the "[elstate succeeds to no more or greater causes of action against third parties than those held by the debtor." Id. Moreover, while the seope of 11 U.S.C. § 541(a) is broad, it is not intended to expand the debtor's rights against others more than they exist at the commencement of the case. Whiting Pools, Inc., 462 U.S. at 204-5, n. 8, 103 S.Ct. 2809; see also S.Rep. No. 95-989, 95" Cong. 2" Sess. at 1, 82, U.S8.Code Cong. & Admin.News 1978 at 5787, 5868.
[¶41] The analysis in DKBP which speaks of a cause of action is largely ignored by the majority. Not surprisingly then, the majority does not examine whether the Kol-schefskys had a cause of action against Harris when they filed for bankruptcy.
[¶42] It is state law, and not federal bankruptcy law, which determines whether a *1152debtor has an interest in a particular item of property and the extent of that interest at the commencement of the bankruptcy case. Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 LEd.2d 186 (1979); Ellwanger v. Budsberg (In re Ellwanger), 140 Bankr. 891, 900 (Bankr.W.D. Washington 1992).
[¶48] In Wyoming, a cause of action accrues only when forces wrongfully put in motion produce injury. Duke v. Housen, 589 P.2d 334, 343 (Wyo.1979) cert. denied 444 U.S. 863, 100 S.Ct. 132, 62 L.Ed.2d 86; Cross v. Berg Lumber Company, 7 P.3d 922, 980 (Wyo.2000). We have recognized that a cause of action exists when the plaintiff could have first filed and prosecuted the action to successful completion. Gillis v. F & A Enterprises, 934 P.2d 1253, 1255 (Wyo.1997).
[¶44] The Kolschefskys' claim against Harris is one for damages based upon legal malpractice. A cause of action for legal malpractice based upon a breach of a professional duty is a tort. Rino v. Mead, 2002 WY 144, ¶16 n. 1, 55 P.3d 18 ¶16 n. 1 (Wyo.2002). A tort is not complete and actionable until all of the elements of the tort: duty, breach, proximate cause and damages are present. Nowotny v. L & B Contract Industries, Inc., 933 P.2d 452 (Wyo.1997). The Kolschefskys could not have brought a malpractice claim against Harris as of the date they filed for bankruptcy because all of the elements of the tort were not yet present. The Kolschefskys claim damages resulting from their discharge in bankruptey and from the loss of their chiropractic malpractice claim. These damages did not arise until after the bankruptcy was filed.
[¶45] The Kolschefskys claim that Harris' failure to properly advise them and diligently pursue their chiropractic malpractice claim forced them to file bankruptcy. Questions of fact appear in the record concerning whether actions of Harris caused or contributed to the bankruptey filing. A question also exists concerning the appropriate standard of care involved in representing a client with a personal injury claim who is in financial distress. The Kolschefskys' expert opines that under these cireumstances, the standard of care requires counseling that bankruptcy could impact the personal injury claim. If attributable to Harris, any damages resulting from the discharge in bank-ruptey could not have occurred until the bankruptey was concluded. Laiben, 986 S.W.2d 220.
[¶46] As to the chiropractic malpractice claim, I agree with the majority that it remains property of the bankruptcy estate. The damage suffered by the Kolschefskys is the loss of that claim. Arguably, the Kol-schefskys first suffered damage immediately after the filing of the bankruptey when the ownership of their chiropractic malpractice claim was transferred to their bankruptcy estate.2 Alternatively, damages may have arisen when the statute of limitations elapsed. Regardless of when the damages arose after the bankruptcy filing, damages did not exist prior to the filing.
[¶47] A cause of action against Harris did not exist as of commencement of the bankruptcy because the Kolschefskys did not incur any damages until after the bankruptey was filed. Accordingly, the cause of action against Harris never became property of the bankruptcy estate. The Kolschefskys were the rightful owners of the legal malpractice claim when they filed their complaint against Harris.
[¶ 48] The district court erred in granting the Defendants' motion for summary judgment. I would reverse and remand for further proceedings.

. The majority does not address the Kolschef-skys' assertion that the district court abused its discretion by considering the late-filed motion. I agree that we are unable to review this issue because the Kolschefskys' brief cites to documents that do not appear in the record on appeal. However, I find that Harris' failure to raise the bankruptcy issue until very late in the proceedings indicates that Harris did not ascribe to the bankruptcy the significance that the majority does in its opinion.

. However, the claim may not have been truly lost at that point. There is a possibility that the loss of ownership of the claim may have been remedied before the statute of limitations passed. In the opinion of Kolschefskys' expert, an attorney in Harris' position could pursue several options to recover a claim from the bankruptcy estate. Harris could have sought to recover the claim from the bankruptcy estate by either offering to purchase the claim or requesting that the trustee abandon the claim back to the Kolschef-skys. I consider the availability and likely success of any of these options suitable issues for trial.