In re Ivey

568 B.R. 85, 2017 Bankr. LEXIS 1416
CourtUnited States Bankruptcy Court, E.D. Arkansas
DecidedMarch 21, 2017
DocketCase No. 4:15-bk-10300
StatusPublished
Cited by1 cases

This text of 568 B.R. 85 (In re Ivey) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Arkansas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Ivey, 568 B.R. 85, 2017 Bankr. LEXIS 1416 (Ark. 2017).

Opinion

[87]*87ORDER ON MOTION REQUESTING ALLOWANCE OF ADMINISTRATIVE CLAIM

Phyllis M. Jones, United States Bankruptcy Judge

Before the Court is a Motion Requesting Allowance of Administrative Claim and Notice of Opportunity to Object (“Motion”) filed on November 25, 2015, by Lyndsey Dilks, the former attorney of Ashley Ivey, the Debtor in this bankruptcy case (“Debtor”). Jack Gooding, the Chapter 13 Standing Trustee (“Trustee”), subsequently filed the Trustee’s Response to Motion Requesting Allowance of Administrative Claim (“Response”) on December 17, 2015, and Brief in Support of Trustee’s Response (“Brief in Support of Response”) on February 1,2016.

Dilks filed the Motion two days after the Debtor, through other counsel, filed a notice of conversion from Chapter 13 to Chapter 7. No plan of reorganization was confirmed while the case was pending under Chapter 13. In the Motion, Dilks requests that the Trustee pay her previously approved compensation of $3000.00 in attorney fees and $86.00 in additional expenses pursuant to 11 U.S.C, §§ 330 and 503(b) for services performed in regard to the Chapter 13 case. Further, Dilks asks that her fees and expenses be remitted to her from the Debtor’s postpetition payments to the Trustee and that the payment be distributed to her prior to any refund to the Debtor. The Trustee raised a number of objections to allowance of the fees and payment from the Debtor’s refund, each of which will be addressed below.

A hearing was held on the Motion and Response. At the conclusion of the hearing, the Court took the matter under advisement. For the reasons stated in this Order, the Motion is denied.

JURISDICTION

The Court has jurisdiction pursuant to 28 U.S.C. § 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (B). The following shall constitute the Court’s findings of fact and conclusions of law in accordance with Federal Rules of Bankruptcy Procedure 9014 and 7052.

FINDINGS OF FACT

The parties presented the facts underlying the dispute through a series of exhibits, stipulations, and the testimony of Dilks.1 On December 8, 2014, prior to the Debtor’s bankruptcy filing, the Debtor and Dilks signed a document titled Chapter 13 Bankruptcy Fee Agreement and Client’s Rights & Responsibilities (“Fee Agreement”). On January 20, 2015, the Debtor, represented by Dilks, filed for relief under the provisions of Chapter 13 of the Bankruptcy Code. Gooding was appointed the Chapter 13 Trustee.

On May 1, 2015, pursuant to the Guidelines for Compensation for Services Rendered and Reimbursement of Expenses in Chapter 13 Cases and the Revised Guidelines (collectively, the “Guidelines”), Dilks filed an Application for Attorney Fee (“Short Form Fee Application”). The Short Form Fee Application was signed by both Dilks and the Debtor. It reflected that Dilks applied for a summary fee of $3000.00 for services rendered or to be rendered to complete the plan. Pursuant to the Guidelines, this Short Form Fee Ap[88]*88plication was not noticed to all creditors but only to the Debtor and the Trustee. The summary fee awarded pursuant to the Guidelines was first payable in part upon confirmation of the plan, with the remainder to be paid from the amount disbursed to creditors each month.

On May 11, 2015, the Trustee filed an objection to the Short Form Fee Application (“Objection”), along with a notice of opportunity to respond within thirty days. With no response from any party, an agreed order (“Agreed Order”) was entered sustaining the Trustee's Objection on July 31, 2015. Both Dilks and the Trustee signed the Agreed Order in which the Court approved the requested fees of $3000.00.

After the Agreed Order was entered, Dilks filed an additional application on August 7, 2015, for reimbursement of expenses, which included $56.00 for service to creditors and $30.00 for costs incurred to add a creditor to the case. The Court approved the additional expenses by an order dated August 31, 2015.

On November 23, 2015, after Dilks’s fee and expense applications were approved but prior to confirmation of the Debtor’s Chapter 13 plan, James O, Wyre filed a motion to be substituted as the attorney for the Debtor in the case (“Motion to Substitute”). The Motion to Substitute included a certificate of service stating that it had been served on the same day by electronic case filing on the Trustee and the Dilks Law Firm.

Wyre also filed a Notice to Convert Chapter 13 to Chapter 7 C‘Notice of Conversion”) on November 23, 2015. Notice of the Notice of Conversion and the order granting were transmitted electronically to Dilks, the Trustee, and others on November 24,2015.

On November' 25, 2015, an order granting the Motion to Substitute was entered on the docket. On the same day, Dilks filed the instant Motion with notice of a potential hearing, and it was electronically transmitted to the‘Trustee and the United States Trustee, and sent by United States Mail to the Debtor.

As of November 25, 2015, the date of the filing of the Motion, the Trustee held post-petition wages of the Debtor. On December 1, 2015, the Trustee issued a check made payable to the Debtor in the sum of $6,089.08. This check was remitted directly to the Debtor. After issuing the December 1, 2015 check to the Debtor, the Trustee received additional postpetition wages, and those additional postpetition wages were also remitted to the Debtor by the Trustee.

Dilks testified that she performed a substantial amount of legal work for the Debt- or. The Trustee did not dispute that she performed the services for which she requested compensation.

The Debtor has not objected to the allowance of fees that are requested in the Motion. There is no dispute that the conversion was voluntary and no allegation that the Debtor sought conversion of the case in bad faith. After conversion, on February 1, 2016, the Chapter 7 Trustee docketed his Report of No Distribution with a text entry on the docket reflecting that there is no property available for distribution.

ARGUMENTS

Dilks’s Arguments. At the hearing, Dilks orally moved that the Trustee’s Response be stricken as untimely because it was filed more than twenty-one days from the date of the Motion. Second, she contended that she was due her approved attorney fees and expenses pursuant to the provisions in her Fee Agreement with the Debt- [89]*89or. Finally, she urged the Court to find the Supreme Court’s opinion in Harris v. Viegelahn, — U.S.—, 135 S.Ct. 1829, 191 L.Ed.2d 783 (2015) inapplicable to the case at hand, as did the court in In re Brandon, 537 B.R. 231 (Bankr. D. Md.

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Cite This Page — Counsel Stack

Bluebook (online)
568 B.R. 85, 2017 Bankr. LEXIS 1416, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-ivey-areb-2017.