The chapter 13 debtor was entitled to an award of attorney’s fees for her efforts to get the DOE’s student loan servicer to comply with the terms of her confirmed Plan. In re Berry, No. 16-1460 (Bankr. D. S.C. Feb. 2, 2018). Read More
Tag Archive: Attorney Fees
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No Excuses for Student Loan Servicer’s Failure to Comply with Plan
Posted by NCBRC - February 15th, 2018
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Right to Attorneys’ Fees for Stay Violations Extends to Appeals
Posted by NCBRC - January 29th, 2018
In a case of first impression, the Eleventh Circuit held that the “explicit, specific, and broad language [in section 362(k)] permits the recovery of attorneys’ fees incurred in stopping the stay violation, prosecuting a damages action, and defending those judgments on appeal.” Mantiply v. Horne (In re Horne), No. 16-16789 (11th Cir. Dec. 5, 2017). Read More
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Special Counsel Violates Code and Rules by Failure to Disclose Fee Agreements
Posted by NCBRC - December 11th, 2017
Special counsel representing a bankruptcy debtor in a separate tort action must comply with bankruptcy statutes and rules relating to disclosure of their employment arrangements, including any fee-sharing agreements. Wright v. Csabi (In re Wright), No. 13-10472, Adv. Proc. No. 16-1004 (Bankr. S.D. Tex. Dec. 2017).
During her bankruptcy, chapter 13 debtor, Vicky Wright, presented to the court an agreement she had entered into with James Grissom to represent her in a contingency-fee tort claim. The court approved the agreement. Unbeknownst to the court, Mr. Grissom had separately entered into fee-sharing agreements with Francisco Rodriguez and William Csabi. After the tort case settled for $650,000, the court ordered that Mr. Grissom be paid $90,000 pursuant to the prior-approved agreement, and that the rest of the settlement proceeds go to the chapter 13 estate for distribution to creditors. Notwithstanding this order, Mr. Grissom distributed $73,330 each to Mr. Rodriguez and Mr. Csabi pursuant to the fee-sharing agreements. Ms. Wright’s bankruptcy counsel, Abe Limon, sent demand letters to Messrs. Rodriguez and Csabi notifying them that the transferred funds were property of the bankruptcy estate and demanding turnover. Mr. Csabi turned the funds over several months later and Mr. Rodriquez did not turn over the funds. Ms. Wright filed an adversary complaint seeking disgorgement and turnover. Read More
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Trustee $65,000 Fee Application Denied
Posted by NCBRC - December 6th, 2017
“Trustee’s plan of action from the minute he was assigned these Chapter 7 cases was abundantly clear: he sought to manufacture equity through the Stipulations and Carve-Outs with the IRS in order to sell the Homesteads and generate funds that would primarily benefit Trustee, Counsel, and other bankruptcy professionals, while only minimally benefitting unsecured creditors.” Based on this conclusion, the Bankruptcy Appellate Panel for the Tenth Circuit, in a lengthy opinion, upheld the denial of over $65,000.00 in fees for the chapter 7 trustee and his counsel. Jubber v. Bird (In re Bird), Nos. 16-39, Jubber v. Christensen (In re Christensen), 16-40 (B.A.P. 10th Cir. Nov. 30, 2017). Read More
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Attorney Fees Paid Out of Undistributed Funds
Posted by NCBRC - September 22nd, 2017
Undistributed funds in the hands of the chapter 13 trustee at the time of the debtor’s voluntary dismissal revest in the debtor, and where the debtor’s contract with her bankruptcy counsel provided for payment of attorney’s fees out of undistributed funds there was “cause” for the court to order such payment. In re Beaird, No.16-21725 (Bankr. D. Kans. Sept. 11, 2017).
When Ms. Beaird voluntarily dismissed her chapter 13 plan, the trustee held $13,788.87 in undistributed funds earmarked for distribution to Rushmore Loan Management Corp. The accumulation of funds was a result of Rushmore’s delay in filing its proof of claim until approximately ten months after Ms. Beaird filed her petition. Read More
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Attorney Fee Application Filed Too Late
Posted by NCBRC - April 17th, 2017
Where the debtors’ attorneys filed a fee application as an administrative claim after the debtors completed their chapter 13 plan, the court properly denied the administrative claim and treated the debt as discharged. Cripps v. Foley, No. 16-744 (W.D. Mich. March 31, 2017).
After the debtors, Lon and Deborah Cripps, completed their chapter 13 bankruptcy and the trustee had filed the notice of completion, their bankruptcy attorneys, Dietrich Law Firm, filed a fee application for $642.60 as an administrative claim. (During the course of the bankruptcy, Dietrich Law had filed fee applications amounting to over $13,000 which had been approved and paid through the plan). The trustee objected to the fees as untimely and, while the issue was pending, the Cripps’ were granted discharge. While the court approved the fee application under section 330(a), it found that the fees could not be paid as an administrative claim under section 503. Read More
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Action for Fraudulent Transfer Not “On a Contract”
Posted by NCBRC - September 27th, 2016
An adversary proceeding alleging fraudulent transfer was not an “action on a contract” for purposes of application of the contract’s fee agreement. Jones v. Cheplick (In re Jones), No. 15-2148 (E.D. Cal. Sept. 22, 2016).
David Jones was President and majority shareholder of Telecomm Engineering which was a party to a lease agreement with Wally Cheplick. When Telecomm defaulted on its lease obligations, Mr. Cheplick obtained a judgment against it for $55,656.00. Telecomm failed to pay the judgment and forfeited the property. Mr. Jones filed for chapter 7 bankruptcy, and Mr. Cheplick filed an adversary proceeding, under sections 523 and 747, seeking to recover the Telecomm judgment on the grounds that Mr. Jones had fraudulently transferred Telecomm’s assets to avoid paying creditors. The bankruptcy court held a hearing in which it found insufficient evidence of fraud to support nondischargeability. The court, however, denied Mr. Jones’s motion for attorney’s fees. Read More
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Relief from Stay Motion Not “Action on a Contract” for Fee-Shifting Purposes
Posted by NCBRC - July 5th, 2016
A California statute requiring reciprocal fee-shifting when a contract provides for fee-shifting for the benefit of only one party, does not apply when the action is for relief from stay in bankruptcy. Green Tree Servicing, Co. v. Giusto, No. 15-2105 (N.D. Cal. June 20, 2016).
Jacqueline Giusto inherited real property encumbered by a note and deed of trust. When she filed for bankruptcy she stopped making payments on the note. Green Tree Servicing, as servicer for Bank of America, filed a motion for relief from stay to allow it to initiate foreclosure proceedings. Ms. Giusto filed a brief in opposition arguing that Green Tree did not have standing to bring the motion. The bankruptcy court agreed. Ms. Giusto then sought to recover costs and attorney’s fees incurred by reason of the motion arguing that the note’s provision entitling Bank of America to recoup fees and costs incurred in the effort to collect on a debt was made reciprocal by operation of California Civil Code § 1717. That statute provides: “In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.” Read More
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Fee-Only Plan Has Purpose beyond Payment of Fee
Posted by NCBRC - February 29th, 2016
Although the debtor’s chapter 13 plan effectively paid nothing to the debtor’s single creditor, it was filed in good faith. In re Banks, No. 15-9819 (Bankr. N.D. Ill. Feb. 8, 2016).
Mr. Banks had no assets and only one debt: $5,080 in city parking tickets. His chapter 13 plan contemplated paying his entire $120 disposable income for 36 months for a total of $4,320, $4,000 of which would go to his bankruptcy attorney, and $285.12 to the bankruptcy trustee. The trustee challenged the plan as not having been filed in good faith under section 1325(a)(7). Read More
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Post-Harris Attorney Fee Review
Posted by NCBRC - October 30th, 2015
Since the Supreme Court’s decision in Harris v. Viegelahn, 135 S. Ct. 1829 (2015), the issue of payment of the debtor’s chapter 13 attorney’s fees out of undisbursed funds held by the chapter 13 trustee upon conversion to chapter 7 has split the courts. Read More
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