In re: Francisco D. Medina-Espinosa and Elidelia Andujar-Ocasio

United States Bankruptcy Court, D. Puerto Rico·Decided May 18, 2015·No. 13-04255·Unknown

Opinion

IN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF PUERTO RICO IN RE: CASE NO. 13-04255 (ESL) FRANCISCO D. MEDINA-ESPINOSA CHAPTER 13

Debtors OPINION AND ORDER This case is before the court upon the Application for Compensation of Attorney for Debtor[s] (the “Application for Compensation”, Docket No. 56) filed by Almeida & Dávila, P.S.C.1 (the “Applicant”) for the unpaid balance of $1,1749.00 over the $3,150.00 already paid by the Chapter 13 Trustee, which includes the $3,000 “no-look” fee afforded in P.R. LBR 2016- 1(f)(1). Also before the court is the Opposition filed by the Chapter 13 Trustee (Docket No. 57) sustaining that: (a) some of the charges are clerical, secretarial and/or paralegal in nature; (b) the Application for Compensation is untimely considering that the Applicant is requesting fees for pre-filing and pre and post-confirmation services rendered; (c) “the evaluation of [the] Application for Compensation of post-confirmation services cannot be postponed until nine (9) months after the confirmation is entered in a Chapter 13 case” because “doing so will have the unintended effect of altering the terms of the plan bypassing the statutory mechanism of 11 U.S.C. § 1329”; and (d) the binding effect of the confirmation order is “res judicata with respect to all issues that were or could have been litigated at or before the confirmation hearing on confirmation”. For the reasons stated below, the Application for Compensation is hereby denied. Factual and Procedural Background The Debtors filed their Chapter 13 bankruptcy petition on May 25, 2013 (Docket No. 1) along with the Chapter 13 Plan (Docket No. 2). In the Disclosure for Compensation of 1 Also see In re Lugo-Parrilla, 2015 Bankr. LEXIS 540, 2015 WL 779621 (Bankr. D.P.R. 2015) (regarding another Attorney, the Applicant disclosed under 11 U.S.C. § 329(a) and Fed. R. Bankr. P. 2016(b) as follows:

[We] certify that [we are] the attorney[s] for the above-named debtor and that compensation paid to [us] within one year before the filing of the petition in bankruptcy, or agreed to be paid to me, for services rendered or to be rendered on behalf of the debtor(s) in contemplation of or in connection with the bankruptcy case is as follows: For legal services, I have agreed to accept $3,000.00 Prior to the filing of this statement I have received $200.00 Balance Due $2,800.00

Docket No. 1, p. 39, ¶ 1. They also disclosed the following:

6. In return for the above-disclosed fee, I have agreed to render legal service for all aspects of the bankruptcy case, including:

a. Analysis of the debtor’s financial situation, and rendering advice to the debtor in determining whether to file a petition in bankruptcy; b. Preparation and filing of any petition, schedules, statement of affairs and plan which may be required;

c. Representation of the debtor at the meeting of creditors and confirmation hearing, and any adjourned hearings thereof;

d. [Other provisions as needed] The fee agreement between Almeida & Davila, PSC and the debtor(s) provides that a flat fee of $3,000.00 will be accepted for services rendered up to confirmation of the plan or until the $3,000.00 is accumulated in services provided at the regular hourly rates of $200.00 for services performed by Enrique M. Almeida and Zelma Dávila Carrasquillo. Matters attended by paralegal staff will be charged at the rate of $85 per hour, and services of in-house accountants will be charged at the rate of $100 per hour. Services of associate attorneys will be charged at the rate of $175 per hour. Expenses will be charged at their price/cost. Any work in excess of the flat fee agreed to will be billed through an application for compensation to be filed with the Court for its approval. This disclosure should be construed in harmony with 11 USC sec. 330(a)(4)(B), rules, and all applicable orders. 7. By agreement with the debtor(s), the above-disclosed fee does not include the following service:

The agreement is limited to Bankruptcy work up to the confirmation of the plan, work performed at the agreed rates, whichever comes first. Additional work will be billed as disclosed in this form. This agreement does not contemplate any work in local state courts, administrative courts, or any other forum other than the Bankruptcy Court. Adversary proceedings and appeals are also outside the scope of this agreement with the debtor(s).

Docket No. 1, p. 39, ¶¶ 6-7. The meeting of creditors was held and closed on June 28, 2013 (Docket Nos. 8 and 14). On that same date, the Chapter 13 Trustee filed an unfavorable recommendation (Docket No. 14). After filing Amended Schedules B and C and their Statement of Financial Affairs (Docket Nos. 15, 16 and 17), on July 5, 2013, the Debtors filed an Amended Chapter 13 Plan (Docket No. 18). Section II of the Amended Chapter 13 Plan provides for a total compensation for Attorney’s Fees in the amount of $3,000.00 to be treated as priority under 11 U.S.C. § 507 as follows: a. Rule 20106(b) Statement $3,000.00 b. Fees paid (pre-petition) $200.00 c. R 2016 Outstanding Balance $2,800.00 d. Post-Petition Additional Fees $0.00 e. Total Compensation $3,000

Docket No. 18, Section II, p. 1 (emphasis added). On July 9, 2013, the Chapter 13 Trustee filed a favorable recommendation for confirmation (Docket No. 21). On August 12, 2013, the court entered an Order Confirming Plan which provides as follows in regards to the allowance of debtors’ attorney’s fees:

The application for the allowance of reasonable compensation as authorized by 11 U.S.C. 330, having been considered, the court finds that a reasonable fee for the services performed and undertaken by such attorney is $3,000.00. Such fee, less any retainer, shall be paid by the trustee from the monies received under the debtor’s plan, provided, however that such payments be deferred in time to payments which may be required to provide adequate protection of the interest of the holders of secured claims.

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In re: Francisco D. Medina-Espinosa and Elidelia Andujar-Ocasio, (prb 2015).

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