In re Hall

518 B.R. 202, 2014 Bankr. LEXIS 4130, 2014 WL 4796929
CourtUnited States Bankruptcy Court, N.D. New York
DecidedSeptember 26, 2014
DocketNo. 14-30050
StatusPublished
Cited by6 cases

This text of 518 B.R. 202 (In re Hall) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, N.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Hall, 518 B.R. 202, 2014 Bankr. LEXIS 4130, 2014 WL 4796929 (N.Y. 2014).

Opinion

Memorandum-Decision and Order

MARGARET CANGILOS-RUIZ, Bankruptcy Judge.

This contested matter is before the court following a hearing on damages on Debtor’s motion for sanctions for Syracuse Community Health Center, Inc.’s (“Health Center”) willful violation of the automatic stay pursuant to 11 U.S.C. § 362(k). (Doc. 20) (“Motion”).1 In a prior order the court (i) found that Health Center willfully violated the automatic stay when, on notice of Terry Hall’s (“Debtor”) bankruptcy, it sent two billing statements to the Debtor and (ii) set a discovery schedule and deadlines for the hearing on damages, (order at Doc. 39).2 For the reasons that follow, the court awards actual damages in the amount of $755.

Background Facts

Debtor, through Susan Esce, Esq., of Esce Law, P.C., filed a chapter 7 petition on January 16, 2014. On that same date, Attorney Esce filed the required Rule 2016(b)3 Disclosure of Compensation of Attorney for Debtor form (“2016(b) Statement”). It reflects her agreement to accept $850 in exchange for providing the Debtor with legal services “for all aspects of the bankruptcy case including ... [r]ep-resentation of the debtor in adversary proceedings and other contested bankruptcy matters_” (Doc. 1). Attorney Esce has not filed an amended 2016(b) Statement.

Debtor filed the Motion against the Health Center, a local non-profit health care provider, through James F. Selbach, Esq., of Selbach Law Firm, PLLC. The Motion is based on two monthly billings dated February 11 and March 6, 2014, sent to the Debtor in an attempt to collect a $560.96 medical bill for services provided [205]*205to the Debtor prepetition.4 At the time of the hearing on damages Attorney Selbach had not filed a 2016(b) Statement, an omission which the court inquired about at the hearing. The next day, Attorney Selbach filed a 2016(b) Statement. It discloses an agreement with Attorney Esce to share attorney’s fees recovered on the motion for sanctions. According to Attorney Sel-bach’s 2016(b) Statement, Attorney Esce is not a member of or associated with the Selbach Law Firm. The agreement calls for Attorney Esce to receive 25% of all attorney’s fees recovered. Further, pursuant to the agreement, the formula for payment of attorney’s fees depends upon whether the award results from a settlement or is determined by the court. Should the matter settle, the settlement amount is payable in order as follows: (1) deduction of costs; (2) $300 to the Debtor; (3) $1,000 to the attorneys subdivided at the 25:75 ratio; and (4) balance divided 50:50 between the Debtor and the attorneys, who share between themselves at the 25:75 ratio. Alternatively, if the matter does not settle and the court awards attorney’s fees, the amount awarded would then be shared between the attorneys at the agreed 25:75 ratio.

The court considered two interim motions in advance of the hearing on damages. First, after discovery closed, Debtor filed a motion to compel Health Center to respond to interrogatories and produce documents aimed at identifying Health Center protocols and procedures in the handling of mail and accounts subject to a bankruptcy notice. Health Center objected to the discovery on the grounds that the information sought was (i) relevant only to a claim for punitive damages, which were not claimed by Debtor, and (ii) not relevant and immaterial to the consideration of emotional distress and other actual damages incurred by the Debtor, which was the focus of the damages hearing set by the court. At an expedited hearing on the motion to compel, the court denied the motion as (i) untimely because it was brought after the close of discovery; and (ii) procedurally deficient as lacking the required certification that Mr. Selbach had “in good faith conferred or attempted to confer with the person or party failing to make disclosure or discovery in an effort to obtain it without court action.” Fed. R.Civ.P. 37.5

Second, Health Center moved to dismiss Debtor’s Motion for Debtor’s failure to timely comply with the Order’s directive to file exhibit lists, witness lists and a pretrial statement by the specified deadlines. (Doc. 54). Although the court declined to dismiss the Motion, in recognition of the resulting prejudice to Health Center with respect to litigating the issue of emotional distress damages when required disclosures had not been made, the court limited the hearing to oral argument on the issue of attorney’s fees and directed Debtor’s counsel to file an affirmation and detailed time records in support of his request for attorney’s fees as actual damages, (text order at Doc. 56).

Requested Attorney’s Fees

Mr. Selbach seeks $3,880 in attorney’s fees for services rendered through the scheduled evidentiary hearing. (Docs. 57 and 62). Health Center objects to any [206]*206award of fees in this matter based on its claim that Attorney Selbach engaged in excessive litigation of this matter for his own gain. As support for its position, Health Center cites the fact that it made a $550 offer of settlement six days before the initial return date of the Motion. That offer was rejected even though it would have resolved this matter early on when attorney’s fees on both sides were relatively low. Health Center further objects to Attorney Selbach’s fee application on the grounds that (i) time entries are inadequate, in that the name and credentials of the “Legal Assistant” whose time is billed are not provided nor are the dates when services were rendered; and (ii) time billed is inflated and/or represents time for unnecessary work. (Doc. 58).

In addressing the $3,880 of attorney’s fees requested, the court inquired at the hearing whether Mr. Selbach had read Attorney Esce’s 2016(b) Statement and why he had not separately filed his own 2016(b) Statement as required by the Bankruptcy Code and Rules. The court requested Mr. Selbach to recite the terms of his engagement on the record. The court inquired of Health Center’s counsel, Attorney O’Shea, how many hours he had spent defending the Motion and his hourly billable rate. Attorney O’Shea estimated that he had spent approximately 15 to 20 hours which, at his hourly rate of $185/ hour, brings his client’s attorney’s fees to between $2,775 and $3,700.

Attorney Representation of Debtor

Every attorney who represents a debtor must comply with the requirements of § 329(a) which provides:

Any attorney representing a debtor in a case under this title, or in connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation.

Rule 2016(b), which governs the filing and contents of the statement of compensation required by § 329(a), further provides:

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Cite This Page — Counsel Stack

Bluebook (online)
518 B.R. 202, 2014 Bankr. LEXIS 4130, 2014 WL 4796929, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-hall-nynb-2014.