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Steeves v. Bernstein, Shur
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Decision:		1998 ME 210
Docket:		Cum-97-500
Argued:		May 4, 1998
Decided :		August 14, 1998




	[¶1]  Joan Steeves appeals from a summary judgment entered in the
Superior Court (Cumberland County, Mills, J.) in favor of Bernstein, Shur,
Sawyer & Nelson, P.C., and two of the firm's attorneys, in Steeves's legal
malpractice action.  Steeves contends that the court erred in entering a
summary judgment based on the court's conclusion that her damages were
conjectural.{2}  Although Steeves has generated material issues of fact
regarding an alleged breach of a professional duty owed to her, we affirm the
summary judgment because Steeves has failed to show more than the mere
possibility that any such breach has caused her any loss.
	[¶2]  Joan Steeves and her then-fiancé, James Swartz, bought land in
Cumberland Foreside in 1986, and built a house partially financed by a loan
made to them by Maine Savings Bank (MSB).  Steeves and Swartz married in
October of 1986, but Swartz left Steeves in 1989, releasing his interest in
the property to her.  At that time, Steeves was left without any ostensible
source of income.{3}  She stopped making mortgage payments in 1989, and
MSB began a foreclosure action in February 1990, alleging $430,918.34 was
owed in unpaid principal and accrued interest.  Steeves listed the home for
sale.  Initially she asked for $1,050,000.  She received one offer to purchase
the property, for $290,000.  In 1991 she reduced the asking price to
$975,000, and in 1992 she reduced the price to $850,000 and then to
$680,000, but received no written offers.  The 1991 divorce judgment
obligated Swartz to make monthly payments of $4,000 to Steeves.  Steeves,
however, did not receive any payment except during a five-month period
beginning in August 1992 when she received partial payments totalling
	[¶3]  Bernstein represented Steeves in defending the foreclosure
action and asserting a counterclaim against MSB alleging that MSB breached
a provision of a 1987 construction loan agreement by failing to withhold
from the contractor 10% of the construction costs{4} (approximately
$33,200) pending the completion of the project, to cover negligent
construction work.{5}  The foreclosure action was removed to federal district
court.  MSB moved for a summary judgment on the claim and counterclaim
in 1991.  While the motion was pending MSB was declared insolvent, the
FDIC was appointed receiver, Fleet Bank acquired MSB's assets, and RECOLL
Management Corp. (a wholly-owned subsidiary of Fleet Financial Group) was
placed in charge of liquidating Steeves's mortgage.
	[¶4] The Bernstein office represented both Fleet Bank and Steeves
and consulted with Fleet to determine if a conflict of interest existed.  Based
on that discussion, Bernstein concluded that RECOLL, not Fleet was the real
party in interest, and that there would be no conflict in representing
Steeves in the foreclosure action.{6}
	[¶5]  In February of 1992 the district court granted a summary
judgment to Fleet and entered a judgment of foreclosure and sale, holding
that the D'Oench, Duhme doctrine{7} applied to assignees of the FDIC,
including private parties such as Fleet.  See Fleet Bank of Maine v. Steeves,
785 F. Supp. 209, 215 (D.Me. 1992).  Because the construction loan
agreement was not incorporated into the mortgage notes, and because there
was no written agreement stating that the mortgage loans could not be
enforced if a breach of the construction agreement occurred, Steeves's
defense and counterclaim based on an alleged breach of the construction
loan agreement were barred.  The amount of the judgment entered in favor
of Fleet against Steeves was $495,854.84.  The amount of interest accruing
on the two notes was $91.47 per day, or $33,386.55 annually.
	[¶6] Bernstein informed Steeves that she had 90 days to redeem the
property, after which the bank would own it.  Neither an appeal nor a
bankruptcy filing were pursued on behalf of Steeves.  RECOLL and Steeves,
and Bernstein on Steeves's behalf, exchanged proposals between April and
September of 1992, in which Steeves sought alternatives to a foreclosure
sale whereby she might live in the house for a longer period and aggressively
market it at a price that would satisfy her mortgage debt and leave her with
some equity.  No definite proposal was agreed to.
	[¶7] By September of 1992, RECOLL had obtained a writ of possession
of the property and published notice of a foreclosure sale of the property to
take place on October 15, 1992.  In the meantime, Steeves had begun
discussions with an acquaintance, Hal O'Brien, counsel for French Broad
Acquisitions (FBA), a North Carolina corporation that expressed interest in
bidding on the property and allowing Steeves to live in the property
temporarily, with proceeds of an eventual sale to be divided between FBA
and Steeves.
	[¶8]  On September 24, 1992, FBA contracted with Steeves to either
bid for the property at auction or purchase it from RECOLL or Fleet at a
price of $425,000, with the understanding that after the expenses and
principal were paid, any future surplus sale proceeds would be split between
Steeves and FBA.   The agreement provided:
French Broad shall bid on said real estate up to a price of
$425,000 plus expenses at the auction scheduled October 15,
1992, or in the event that Fleet . . . or its agent, RECOLL . . .,
acquires title to the real estate . . . the parties shall offer
$425,000 plus expenses for the purchase of the subject
The agreement did not condition FBA's obligations to secure financing and
make its bid on the existence of a specified amount of time before the
	[¶9]  Shortly before the auction, Steeves heard from her daughter-in-
law's sister's husband, who had spoken with a friend who was a vice-
president at Fleet, that the bidding at the auction of the property was going
to start at $600,000.  Based on this, she called O'Brien and told him not to
attend the auction.  O'Brien "offered to come up" anyway despite being told
not to.  She later testified that she told him not to come because he needed
60 days to arrange financing and close, and that the terms of the auction
provided for only 45 days before closing.  The property sold at auction for
$395,000.  The total of the judgment, costs, and attorney fees documented
in Fleet's report of sale totalled $563,721.05, resulting in a deficiency
judgment against Steeves.
	[¶10]  In filing this professional malpractice action against Bernstein,
Steeves alleges Bernstein committed legal malpractice by:  (1) failing to
disclose a conflict of interest, (2) not advising her to appeal the judgment of
foreclosure, (3) not advising her as to the benefits of a Chapter 11
bankruptcy filing, and (4) failing to respond adequately to RECOLL offers
during workout discussions that would have become enforceable
agreements.{8}  Steeves contends that Bernstein's failure to advise her of her
options caused her a loss when she was unable to defer the auction of her
home to a time when she would have realized a greater sale price.  The
Superior Court granted Bernstein's motion for a summary judgment,{9} and
Steeves filed this appeal.
	[¶11] We review the Superior Court's entry of summary judgment "for
errors of law, viewing the evidence in the light most favorable to the party
against whom the judgment was entered."  Denman v. Peoples Heritage
Bank, Inc., 1998 ME 12, ¶ 3, 704 A.2d 411, 413.  A summary judgment will
be upheld "if the evidence demonstrates that there is no genuine issue as to
any material fact and that the moving party is entitled to judgment as a
matter of law." Id.  The "plaintiff must establish a prima facie case for each
element of his cause of action."  Barnes v. Zappia, 658 A.2d 1086, 1089 (Me.
1995).  "The function of a summary judgment is to permit a court, prior to
trial, to determine whether there exists a triable issue of fact or whether the
question before the court is solely one of law." Bouchard v. American
Orthodontists, 661 A.2d 1143, 1144 (Me. 1995). 
	[¶12]  In a professional negligence action, "the plaintiff must establish
that the defendant had a duty to the plaintiff to conform to a certain
standard of conduct and that a breach of that duty proximately caused injury
to the plaintiff."  Fisherman's Wharf Associates II v. Verrill & Dana, 645 A.2d
1133, 1136 (Me. 1994) (attorney malpractice).  In Spickler v. York, 566
A.2d 1385, 1390 (Me. 1989), we noted that "more than a mere possibility
that [the defendant attorney's] negligence, if any, might have caused [the
plaintiff's] loss of the . . . action is necessary to establish that [the] conduct
was the proximate cause of [the plaintiff's] loss."
	[¶13]  In general, "judgment as a matter of law in a defendant's favor
is appropriate when any jury verdict for the plaintiff would be based on
conjecture or speculation." Fleming v. Gardner, 658 A.2d 1074, 1076 (Me.
1995).  It is appropriate for a trial court to keep highly speculative causation
issues from the jury in a legal malpractice case. See id. at 1077 (reversing
denial of attorney's motion for summary judgment in malpractice action on
the basis that record was "bare of evidence" that injury to client was caused
by improper representation).  Because "a mere possibility" of success,
Spickler v. York, 566 A.2d at 1390, is insufficient to establish legal
malpractice, a summary judgment in favor of the defendant is appropriate
when the link between the attorney's act or omission and the alleged
damage is overly speculative.
	[¶14]  Steeves contends that Bernstein's failure to advise her to appeal
the foreclosure judgment constitutes malpractice.  Although Steeves has
generated a factual issue as to whether Bernstein should have advised her of
her rights of appeal, she has not shown any resulting damage.  The trial
court correctly concluded that she would not have prevailed on appeal.
	[¶15] Steeves contends that the issue of her theoretical appeal should
have been determined by a jury.  In an action following an attorney error
during trial, the court addressing the causation issue in the subsequent
malpractice action "merely retries, or tries for the first time, the client's
cause of action which the client asserts was lost or compromised by the
attorney's negligence." Daugert v. Pappas, 704 P.2d 600, 603 (Wash. 1985). 
By contrast, in an attorney's alleged failure to perfect an appeal, the client
must show that an appellate court would have granted review and rendered
a judgment more favorable to the client.  Numerous courts{10} have
recognized that the determination of whether an appeal not taken would
have succeeded is "within the exclusive province of the court, not the jury . .
. ." See id. ("determination of what decision would have followed if the
attorney had timely filed the petition for review is a question of law for the
judge, irrespective of whether the facts are undisputed."); see also Charles
Reinhart Co. v. Winiemko, 513 N.W.2d 773, 779 (Mich. 1994) (issue of
whether an appeal would have been successful involves issues of law within
the exclusive province of the courts); Chocktoot v. Smith, 571 P.2d 1255,
1258 (Or. 1997) ("[N]o jury can reach its own judgment on the proper
outcome of an earlier case that hinged on an issue of law.  Unlike its
decision of a disputed issue of the professional standard of care, the jury
cannot decide a disputed issue of law on the testimony of lawyers.").  
Contrary to Steeves's contention, the issue concerning the failure to appeal
the foreclosure to the First Circuit is a question of law that was properly
addressed by the court at the time of summary judgment.
	[¶16]  The appeal of a similar foreclosure judgment of the federal
district court in 1992 demonstrates the correctness of the Superior Court's
conclusion that an appeal of the foreclosure judgment by Steeves would have
been unsuccessful.  See Fleet Bank of Maine v. Prawer, 991 F.2d 786 (1st
Cir. 1993) (unpublished opinion).  The Prawers, like Steeves, were asserting
the same type of affirmative defense and counterclaim, arguing that the
bank's failure to abide by the terms of two letters offering financing that
predated two promissory notes excused some of the Prawers' liability on the
mortgages that secured the debt on the notes.  The appeal of the Prawers,
very similar to the appeal Steeves contends should have been taken on her
behalf, was rejected by the First Circuit on state law grounds.  The court
concluded that the unambiguous terms of the promissory notes offered "no
hint" that repayment on the notes would be affected by any other
agreement.  An appeal by Steeves would have fallen squarely under the First
Circuit's holding in Prawer that pursuant to Maine law, unambiguous
repayment terms within the four corners of the notes prevent the
counterclaimant from relying on other agreements and from introducing
extrinsic evidence.  Steeves points to nothing in the record that shows that
the notes in the foreclosure judgment against her were conditioned by the
construction loan agreement.  Indeed, in her statement of material facts in
dispute, Steeves merely offers her subjective and undocumented
"understanding" that the Bank would not waive the retainage provision
without obtaining her consent.  Even if an appeal in federal court were not
barred pursuant to federal law and the D'Oench, Duhme doctrine, because
the claim would fail on state law grounds, Steeves's assertion that she was
damaged by the failure of Bernstein to appeal the foreclosure is without

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