In Re Sturgeon

242 B.R. 724, 1999 WL 1288672
CourtUnited States Bankruptcy Court, E.D. Oklahoma
DecidedDecember 29, 1999
Docket19-80199
StatusPublished
Cited by2 cases

This text of 242 B.R. 724 (In Re Sturgeon) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Sturgeon, 242 B.R. 724, 1999 WL 1288672 (Okla. 1999).

Opinion

OPINION

TOM R. CORNISH, Bankruptcy Judge.

At issue before this Court is what constitutes a reasonable attorney’s fee in a routine Chapter 7 case in this District.

On the 7th day of December, 1999, the above-referenced cases came on for evi-dentiary hearing on the Trustee’s Motion to Partially Disgorge Attorney’s Fees and Objections by the Debtors. After hearing evidence presented, this Court does hereby enter the following findings and conclusions in conformity with Rule 7052, Fed. R.Bankr.P., in this core proceeding.

All of these are simple, no asset Chapter 7 cases. In Bilyeu, there was real estate with a value of $18,000.00 which is encumbered. Additionally, there is personal property valued at $700.00, no priority claims and thirteen (18) creditors holding unsecured nonpriority claims in the amount of $41,788.94. The disclosure of compensation provides that “[a]ny extended disputes or unanticipated court proceeding, discovery of assets, liability, appeal, etc., are not covered within this agreement.” Thus, these items are not covered by the $1,000.00 fee.

In Hudson, there was no real property involved and the personal property was valued at $7,700.00. There were four secured claims on a four-wheeler, a 1994 Ford Thunderbird, a mobile home and a lawn mower totaling $38,072.96. There were no priority claims and there were three unsecured nonpriority claims totaling $4,187.46. The disclosure of compensation was the same as it was in Bilyeu.

In Sturgeon, the schedules reflect real estate valued at $107,000.00 and personal property valued at $12,540.00. The schedules reflect secured claims of $122,580.00, priority tax claims of $8,800.00 and unsecured nonpriority claims of $21,985.00. The disclosure of compensation reflects that it “includes all conferences with the Debtor, preparation of petition and schedules, attendance at 341 meeting and attendance at reaffirmation and/or confirmation hearings and preparation of routine motions.”

The Trustee testified that he has been practicing bankruptcy for twenty (20) years. For a simple Chapter 7 consumer case, he charges $500.00, which includes the initial consultation, preparation of petition and schedules, attendance at the 341 meeting, reaffirmation agreements and filing appropriate § 506 or § 522 motions. Tax issues would also be included in this $500.00 fee. The Trustee believes that a fee of up to $750.00 in a routine Chapter 7 case would be reasonable.

The Trustee specifically noted in the Bilyeu case that entries on January 8,1999 reflected as “numerous calls re bankruptcy” totaling one hour and on January 11, 1999 eight calls to creditors for 1.6 hours were not itemized and it could not be determined who was called and the nature of the call. The Trustee further noted that the time of 1.8 hours for review of the Motion to Disgorge filed by the Trustee, compilation of records and response to the Motion should not be compensable. Additionally, the Court notes that there were three office consultations with the Debtor. Mr. Starr testified that the Debtor in Bilyeu was very concerned about filing bankruptcy and consequently, made numerous calls to him.

In Hudson, Mr. Starr’s time records reflect “numerous calls re bankruptcy” totaling one hour and also do not state who was called and the reason for the call. Again, there was a charge for a review of the Motion to Disgorge filed by the Trustee, compilation of records and response to the Motion. In this case, there were three *726 office consultations with the Debtors totaling three hours. Mr. Starr testified that all of his time records were not kept contemporaneously and thus, some of the time entries were estimates, and were made sometime later.

Mr. Nunley testified that he charges $1,000.00 for bankruptcy cases filed in the Eastern District of Oklahoma. His practice consists of approximately ninety percent (90%) bankruptcy. He does not keep contemporaneous time records and did not submit detailed time records. Mr. Nunley testified that a normal Chapter 7 consists of an initial consultation of about forty-five (45) minutes. At that point, if the clients decide to retain him, he goes over an attorney-client contract and advises them of the fee. At the second visit, he or his Legal Assistant reviews the information which the debtors have prepared. He believes this takes approximately one hour. At the third appointment, the debtors review and sign the petition and schedules. Mr. Nunley testified he reviews the schedules and all forms before they are filed.

Mr. Nunley testified that Mrs. Sturgeon had been a client who required a lot of hand-holding. Further, his fee includes everything except adversary proceedings and objections to discharge. In this case, he testified he filed four Motions to Avoid Lien and had five reaffirmation agreements to review with the clients. He believed he had three or four personal consultations with the Debtors and spent a lot of time dealing with the Debtors’ credit union. The Court notes with interest that only one reaffirmation agreement was filed and that involved an unsecured debt.

An attorney representing a debtor 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. 11 U.S.C. § 329(a). However, such compensation is limited by § 329(b), as follows:

(b) If such compensation exceeds the reasonable value of any such services, the court may cancel any such agreement, or order the return of any such payment, to the extent excessive, to—
(1) the estate if the property transferred—
(A) would have been property of the estate; or
(B) was to be paid by or on behalf of the debtor under a plan under chapter 11, 12, or 13 of this title; or
(2) the entity that made such payment.

“Courts have long recognized that the debtor is in a vulnerable position and is highly dependent on its attorney and therefore would be reluctant to object to the fees of the attorney.” In re Smitty’s Truck Stop, Inc., 210 B.R. 844, 848 (10th Cir. BAP 1997). One purpose of § 329 is to protect debtors from overreaching by attorneys. Id.

Courts, determining whether fees were excessive, have looked at a variety of factors. One court looked at the results obtained; time and labor expended; novelty and difficulty of questions raised; experience, reputation and ability of counsel; the nature and length of the professional relationship between counsel and. debtor; undesirability of the case; and fees charged in similar cases. In re Costello, 150 B.R. 675, 679-80 (Bankr.E.D.Ky.1992). The District Court for the District of Colorado noted that the reasonableness of the fee for debtor’s counsel requires the application of the same principles as other fee awards. In re Jones, 236 B.R. 38, 41 (D.Colo.1999). The Court, in Jones, stated that the factors to be used were set forth in Johnson v. Georgia Highway Exp., Inc.,

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Cite This Page — Counsel Stack

Bluebook (online)
242 B.R. 724, 1999 WL 1288672, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-sturgeon-okeb-1999.