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Steeves, part 2
II.
	[¶17]  Steeves also contends that Bernstein's failure to advise her of
the option of a filing under chapter 11 of the Bankruptcy Code, with the
extra time and protection that the automatic stay{11} would have allowed, cost
her the opportunity of retaining her house long enough to find a buyer at a
greater price than that realized at the foreclosure sale.  Steeves also
contends, as she did on the issue of the appeal, that the determination of
the extent that such a bankruptcy petition would have protected her should
have been made by a jury.  We disagree.
A.
	[¶18]  In Harline v. Barker, 912 P.2d 433, 440 (Utah 1996), the Utah
court reviewing alleged attorney negligence in preparing bankruptcy forms
reasoned:
We see no reason why a malpractice plaintiff should be able to
bootstrap his way into having a lay jury decide the merits of the
underlying "suit within a suit" when, by statute or other rule of
law, only an expert judge could have made the underlying
decision.  It is illogical, in effect, to make a change in the law's
allocation of responsibility between judge and jury in the
underlying action . . . . Rather, it makes far more practical sense
to apply the rule that if the underlying case could only have been
tried by a judge, then this aspect of the malpractice claim--the
suit within the suit--must likewise be tried by a judge.
Id.  We similarly conclude that there is no logical role for the jury in these
circumstances.
B.
	[¶19] The bankruptcy Code makes clear that Steeves was not eligible
for an advantageous discharge in bankruptcy.  Moreover, Steeves failed to
produce evidence of any increase in the market value of her property during
the time that Steeves would have been protected by a bankruptcy stay.  The
mere chance that Steeves would have been able to sell her house profitably
during the temporary bankruptcy stay was too speculative to preclude the
entry of a summary judgment against her.
	[¶20]  Steeves points out that a filing before the February 1992
foreclosure judgment would have delayed the running of the 90-day
redemption period until after any relief from stay was granted by the
bankruptcy court.  Such a chapter 11 filing, however, would have been
vulnerable to dismissal for cause pursuant to 11 U.S.C.A.  1112(b).{12}  See In
re Coastal Cable T.V., Inc., 709 F.2d 762, 764 (1st Cir. 1983) ("[A] chapter
11 reorganization plan must be submitted in good faith. . . . That is to say,
there must be some relation--at least an arguable relation--between the
chapter 11 plan and the reorganization-related purposes that the chapter
was designed to serve.").  Petitions filed "for reasons inconsistent with the
intended purpose of the reorganization chapter" include a plan for
"litigation not reorganization," a filing that was in fact a "share holders
squabble," and one that was merely a "two-party lawsuit."  In re Sullivan Cty.
Reg'l Refuse Disposal Dist., 165 B.R. 60, 81 (Bankr. D. N.H. 1994) (citing
cases).
	[¶21]  Although a "single asset debtor is not automatically disqualified
from filing a chapter 11 case to stop a pending foreclosure, . . . single asset
bankruptcy filings are common points for focus of bad faith filing analysis
because they often appear to present merely two-party disputes and
frequently entail little likelihood that a debtor operating a single asset can
effectively reorganize."  Raymond T. Nimmer & Millie Aponte Sall, The Law
of Distressed Real Estate:  Foreclosure, Workouts, Procedures § 24B.03
(1997).  Such filings are vulnerable to dismissal.  See Matter of Little Creek
Dev. Co., 779 F.2d 1068, 1072-73 (5th Cir. 1986).
	[¶22] Dismissal for cause based on lack of good faith commonly results
from a recognition that the debtor is interposing a chapter 11 filing to
frustrate a single, secured creditor, premised upon a slight chance of a
renewed cash flow with the passage of time.  In In re Walter, 108 B.R. 244
(Bankr. C.D. Cal. 1989), for example, the bankruptcy court dismissed on bad
faith grounds a petition filed by a debtor whose single-asset real estate was
subject to the claim of its sole secured creditor who was attempting to
foreclose.  Failing either to negotiate terms with the creditor or to defeat
the foreclosure in state court, the debtors tried to stop the foreclosure in
bankruptcy court by use of the automatic stay.  The court dismissed the
case, concluding that the bankruptcy filing was "at bottom forum shopping."
Id. at 250; see also In re Trina Assocs., 128 B.R. 858, 872 (Bankr. E.D. N.Y.
1991) (dismissing petition for bad faith because "it is recognized that
seeking the protection of the automatic stay to derail a foreclosure is only
appropriate when the Debtor intends to and has the wherewithal to
reorganize").
	[¶23]  Steeves argues that a chapter 11 filing was critical to provide
her with a bargaining position to prevail in the failing negotiations with
RECOLL in 1992.  Such a motivation has been grounds for a bad faith
dismissal when various defenses in over a year of litigation in state court had
been unfruitful.  See In re Campus Housing Developers, Inc., 124 B.R. 867,
870  (Bankr. N.D. Fla. 1991) ("When [the debtor] lost in the state court, it
filed for the protection of the Bankruptcy Code in an attempt to force RTC
to refinance the loan on terms which it could not negotiate . . . .  The
bankruptcy court was not intended to provide debtors with an alternate
forum for private disputes.").
	[¶24]  Steeves does not address what her "reorganization" would
consist of, aside from her purported ability to salvage her lost equity with
the passage of time and her hope that the real estate market would improve.  
This, too, is grounds for a dismissal based on bad faith.  See Nimmer & Sall,
supra, at § 24B.03 ("Bad faith exists if a debtor files its petition without an
ability or reasonable expectation of reorganization."); see also In re
Nesenkeag, Inc., 131 B.R. 246, 249 (Bankr. D. N.H. 1991) ("This is simply a
'two-party lawsuit' which has been transferred from the state courts to this
court under the guise of a 'reorganization' that amounts to nothing more
than further delay during which the equity-holders hope to salvage their
investment.  No other parties are involved and no need for 'reorganization'
in any meaningful sense pertinent to the Bankruptcy Code is shown."); In re
Miracle Church of God in Christ, 119 B.R. 308, 310 (Bankr. M.D. Fla. 1990)
("Lack of good faith is clearly shown by evidence of a debtor seeking to use
the provisions of the Bankruptcy Code in order to hold a single asset
'hostage' in order to speculate that such asset may increase in value in order
to recover its original value at the creditors's risk."); In re Krilich, 87 B.R.
178, 183 (Bankr. M.D. Fla. 1988) ("Thus if a Debtor's problem is nothing but
a mortgage which is in default which has been foreclosed, and the Chapter
11 is filed for the sole purpose of stalling and preventing the sale of the
property at foreclosure in the hope and expectation that the property might
increase in value and hopefully might create an equity for the owners, it is a
petition which was not filed in good faith.").  See also In re Sirius Systems,
Inc., 112 B.R. 50, 55 (Bankr. D. N.H. 1990).
C.
	[¶25] Moreover, had Steeves's filing not been dismissed for cause,
Fleet would have been entitled to a relief from stay.  See Bankruptcy Code
Section 362(d){13} (stating when lender is entitled to relief from the
automatic stay).  To resist a relief from stay, the debtor who does not have
equity in property must not only show that it is essential or indispensable to
the reorganization,{14} Turner v. Turner, 161 B.R. 1, 4 (Bankr. D. Me. 1993);
she must further prove that the planned reorganization is "feasible."  Id. 
"[T]here must be a reasonable possibility of a successful reorganization
within a reasonable time."  United Savings v. Timbers of Inwood Forest, 484
U.S. 365, 375-76 (1988).
	[¶26]  At the time Steeves argues that she could and should have been
filing for chapter 11, e.g., in the early part of 1992 before the judgment of
foreclosure, her equity was essentially non-existent and her prospects for a
successful reorganization were very bleak.  Lack of equity "exists if the value
of the collateral is less than the first lien or less than the sum of all liens
against the property."  Nimmer & Sall, supra, at § 24B.03.  The two
concrete valuations in the record were for $465,000 and $507,000.  The
total amount due on the debt to Fleet as of the summary judgment in 1992
was $495,854.84, and interest was accruing at an annual rate of $33,386.55.
	[¶27]  Moreover, at that point, although her divorce judgment
provided that her ex-husband pay her $4,000 per month in alimony, and
made him responsible for marital debt, she had collected little.  The
speculative nature of this alleged future income stream would give Steeves
little help in meeting her burden pursuant to 11 U.S.C. § 362(d)(2)(B) to
show that the reorganization was feasible.  See In re Petit, 176 B.R. 296,
297 n.3 (Bankr. D. Me. 1995) (no effective reorganization was in prospect
where a critical payment was to be funded by expected litigation proceeds,
"if and when they are received").  Accordingly, Steeves had little or no
equity in the property and an effective reorganization was not in prospect. 
Bernstein's failure to advise Steeves of the option of filing for bankruptcy
protection did not result in any discernible damages so as to preclude the
entry of a summary judgment.
III.
	[¶28] Steeves's contention that additional time would have allowed
FBA the opportunity to secure financing for her real estate is without merit. 
The record reflects that Steeves, not the law firm, was responsible for
relieving FBA from its obligation to secure financing and bid at the
foreclosure sale.  Steeves explicitly told O'Brien not to attend that sale. 
Steeves contends that FBA was not contractually obligated to appear at the
auction. The Steeves-FBA contract, however, clearly reflects the contrary. 
Notwithstanding Steeves's professed belief that FBA would not have had
sufficient time to arrange financing, FBA was legally bound to secure
financing and make a bid on the property, and Steeves relieved it of any
obligation that it had. 
	[¶29]  The lack of proof of any damage beyond speculation is fatal to
Steeves's other contentions as well.  Steeves had generated an issue of
material fact as to whether Bernstein should have disclosed to her the
possible conflict of interest Bernstein had in defending her in the
foreclosure action brought by Fleet.  She fails, however, to generate anything
beyond speculation as to how she was damaged.  She had no legitimate
defense to the foreclosure, and she has failed to show how an appeal or
bankruptcy filing or any other delay would have appreciably improved her
position.  She presented no evidence as to any change in the value of her
real estate during the relevant period when she asserts that more time
would have allowed her to realize a higher price.  The court correctly
concluded that "plaintiff's belief that she could have found the right buyer
and sold the house pending any possible stay of foreclosure that she could
have obtained is pure speculation."  See Girardi v. Gabriel, 649 N.E.2d 805,
809 (Mass. App. 1995) (no "basis for attributing the adverse consequences
of the fall in real estate prices to the [attorneys'] negligence" when
plaintiff's expert initially stated that the delay in administering the estate
contributed to the risk of loss in a falling real estate market [but then]
conceded that he could not say that the delay caused any damages.").
	[¶30]  Finally, the court did not err in rejecting Steeves's contention
that Bernstein dawdled in the spring and summer of 1992, and did not act
promptly to secure an agreement with RECOLL to allow her to remain in the
possession of her property and to market the property.  She contends that
Bernstein's failure to respond promptly to RECOLL proposals allowed Fleet
to avoid what would have been enforceable agreements.  That the outcome
would have been any more beneficial for Steeves if Bernstein had sought to
buy her additional time through an appeal, or a chapter 11 filing, or if the
firm had responded differently to RECOLL's proposals, is merely conjecture,
and insufficient to resist the summary judgment entered.
	[¶31]  Other issues raised by Steeves are without merit.{15}   
	The entry is:
			Judgment affirmed.
               
Attorney for plaintiff: John S. Campbell, Esq., (orally) Campbell & McArdle, P.A. P O Box 369 Portland, ME 04112-0369 Attorneys for defendants: Christopher C. Taintor, Esq, (orally) Robert F. Hanson, Esq. Norman, Hanson & DeTroy P O Box 4600 Portland, ME 04112-4600
FOOTNOTES******************************** {1} The other defendant-appellees are Peter Rubin and Anthony Perkins, attorneys and stockholders of the law firm, generally referred to in the opinion as "Bernstein." {2} Steeves also contends that the court erred and abused its discretion by imposing a sanction against her. See infra note 9. {3} Swartz moved to Florida and filed for bankruptcy protection. As of 1996 Steeves was unsuccessfully attempting to enforce a substantial divorce judgment requiring him to pay alimony and his obligation on the mortgage debt. {4} The retainage provision in the Construction loan agreement executed by Steeves, MSB, and IBIS Construction Company provided: The remaining 10% of the loan shall be withheld pending final completion . . . . The Mortgagee, at its discretion, may waive said 10% retainage upon any periodic inspection. The document further provided: It is also agreed that Borrower shall have no right to rely on any procedures required by Mortgagee herein, such procedures being for the protection of the Mortgagee as lender and no one else. (Emphases added). {5} Steeves's had a claim for defective workmanship against the insolvent contractor in excess of the 10% retainage amount. {6} Steeves was not told of the possible conflict until after the foreclosure sale of her home. Bernstein told her they could not represent her if she wanted to sue Fleet or RECOLL. {7} See D'Oench, Duhme & Co. v. Federal Deposit Ins. Corp., 315 U.S. 447 (U.S. 1942). Pursuant to the D'Oench, Duhme doctrine, defendants are precluded from using secret or unrecorded side agreements to defend against efforts by the FDIC to collect on notes acquired from a failed bank. Accordingly, Steeve's defense and counterclaim based on MSB's alleged breach of the construction loan agreement by not withholding money from the contractor, failed. The district court also noted that the D'Oench, Duhme doctrine is no longer strictly common law, having been incorporated into the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 ("FIRREA"). {8} Steeves alleges breaches of fiduciary duty, negligence, and breach of contract. See Kilpatrick v. Wiley, Rein & Fielding, 909 P.2d 1283, 1291 n.2 (Utah App. 1996) (generally the same rules of causation apply whether the cause of action sounds in contract, negligence, or breach of fiduciary duty) (citing 1 R. Mallen & J. Smith, Legal Malpractice 8.3, at 413 (3d ed. 1989)). {9} In its reply brief supporting its motion for summary judgment, Bernstein cited violations of M.R. Civ. P. 7(d)(2) and M.R. Civ. P. 56(e) in Steeves's statement of material facts, and "respectfully submit[ted] that the Court should strike the Plaintiff's rule 7(d)(2) Statement in its entirety. The court concluded in its summary judgment order that Steeves's statement of material facts was "replete with inaccurate or missing record references, legal argument, and lack of care for the process," and, noting violations of M.R. Civ. P. 7(d), 11, and 56(c) and (e), ordered Bernstein to submit an affidavit of costs and attorneys fees associated with preparation of its reply memorandum supporting its motion for summary judgment. The court later entered an order for Steeves to reimburse Bernstein for its documented $2,365.50 in costs and attorney fees. Steeves argues that the sanction order was "erroneous," because her attorney's acts were not in bad faith or egregious, the court did not "set forth specifically" the rationale for its sanction, and the court "should have notified counsel and allowed him to explain the factual basis for the particular paragraph." A trial court's imposition of sanctions is reviewed for an abuse of discretion, and in this case the court acted within its discretion. See Fraser Employees Fed. Credit Union v. Labbe, 1998 ME 71, ¶8, 708 A.2d 1027, 1030-31 (1998) ("court acted well within the bounds of its broad discretion" by imposing a $1,200 Rule 11 sanction where many of party's affirmative defenses and counterclaims lacked supporting evidence). {10} See, e.g., Chocktoot v. Smith, 571 P.2d 1255 (Or. 1977); Hurd v. DiMento & Sullivan, 440 F.2d 1322 (1st Cir. 1971); Croce v. Sanchez, 64 Cal.Rptr. 448 (Cal. App. 2d 1967); Chicago Red Top Cab Ass'n, Inc. v. Gaines, 364 N.E.2d 328 (Ill. App. 1977); Cabot, Cabot & Forbes Co. v. Brian, Simon, Peragine, Smith & Redfearn, 568 F. Supp. 371 (E.D. La. 1983); Katsaris v. Scelsi, 453 N.Y.S.2d 994 (N.Y. Sup. Ct. 1982). {11} See 11 U.S.C.A. 362 Revision Notes and Legislative Reports, 1978 Acts ("The automatic stay is one of the fundamental debtor protections provided by the bankruptcy laws. It gives the debtor a breathing spell from his creditors. It stops all collection efforts, all harassment, and all foreclosure actions. It permits the debtor to attempt a repayment or reorganization plan, or simply to be relieved of the financial pressures that drove him into bankruptcy."). {12} Title 11 U.S.C.A. 1112(b) provides in pertinent part: [O]n request of a party in interest or the United States trustee or bankruptcy administrator, and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 7 of this title or may dismiss a case under this chapter, whichever is in the best interest of creditors and the estate, for cause, including-- (1) continuing loss to or diminution of the estate and absence of a reasonable likelihood of rehabilitation; (2) inability to effectuate a plan; (3) unreasonable delay by the debtor that is prejudicial to creditors; (4) failure to propose a plan under section 1121 of this title within any time fixed by the court . . . . Id. (emphasis added). {13} Title 11 U.S.C.A. 362(d) provides in pertinent part: On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay-- (1) for cause, including the lack of adequate protection of an interest in property of such party in interest; (2) with respect to a stay of an act against property under subsection (a) of this section, if-- (A) the debtor does not have an equity in such property; and (B) such property is not necessary to an effective reorganization {14} Steeves's "need to use the asset" was dubious and thus grounds for relief from stay for cause pursuant to 11 U.S.C. § 362(d)(1). See Nimmer & Sall, supra, at § 24B.03 ("The debtor must prove that the property is necessary for an effective reorganization if it has no equity in the property, but proof of a need to continue to use the asset is also important even if equity exists since it relates to the general "cause" standard for relief from the stay.") (emphasis added). {15} Steeves also alleges that she suffered emotional distress caused by Bernstein. Although Steeves may have generated a genuine issue of material fact regarding the existence of emotional distress following the loss of her home, her claim fails because of the conjectural nature of the causation between any acts of Bernstein and the loss of her home.
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