In re White

100 B.R. 619, 1989 Bankr. LEXIS 731, 1989 WL 53445
CourtDistrict Court, D. Georgia
DecidedMay 15, 1989
DocketBankruptcy No. 88-30506
StatusPublished
Cited by2 cases

This text of 100 B.R. 619 (In re White) is published on Counsel Stack Legal Research, covering District Court, D. Georgia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re White, 100 B.R. 619, 1989 Bankr. LEXIS 731, 1989 WL 53445 (gad 1989).

Opinion

MEMORANDUM OPINION ON MOTION TO EXAMINE PAYMENT MADE TO ATTORNEYS FOR DEBTORS

ROBERT F. HERSHNER, Jr., Chief Judge.

STATEMENT OF THE CASE

Roger Hugh White and Cheryl Ann White, Debtors, filed a petition seeking relief under Chapter 7 of the Bankruptcy Code on October 24, 1988. On January 6, 1989, William M. Flatau, Trustee, filed a “Motion to Examine Payment Made to Attorneys for Debtors.”1 In his motion, Trustee seeks to have Debtors’ attorneys refund all fees received in this bankruptcy [620]*620case. Trustee also seeks sanctions in the form of attorney fees and expenses pursuant to Rule 11 of the Federal Rules of Civil Procedure.2 Trustee contends that the services rendered by Bill Parker & Associates, attorneys for Debtors, are of substandard quality and that their fees should be reduced accordingly.

A hearing on the motion was held on February 1, 1989. At the close of the hearing, the Court instructed Trustee, Bill Parker & Associates, and the United States Trustee to submit letter briefs to the Court. Bill Parker & Associates failed to submit a brief.

The Court, having considered the evidence presented and the briefs of counsel, now publishes its findings of fact and conclusions of law.

FINDINGS OF FACT

The procedures followed by Bill Parker & Associates in this Chapter 7 bankruptcy case generally parallel those procedures outlined by the Court in its opinion in In re Rainwater.3 In the interests of economy, those procedures will not be set forth in great detail in this opinion.

The initial contact between Debtors and Bill Parker & Associates was made by telephone. Mrs. White telephoned the law firm based upon an advertisement in the telephone directory. Following this conversation, Debtors received a set of evaluation forms in the mail from the law firm. Debtors completed the forms and returned them to Bill Parker & Associates. Debtors then received a second set of evaluation forms, which they also completed and mailed back to the law firm. These evaluation forms were then given to a secretary at the law .firm who transferred the information in the evaluation forms to a Chapter 7 petition.4 The secretary was not assisted by an attorney. Mr. Robert Dunn, attorney, testified that he reviewed the Chapter 7 petition after the secretary completed it, however he admitted that he did not review the documents carefully and in fact merely scanned them.

The original copy of the Chapter 7 petition was then mailed to Debtors with instructions to note necessary changes and to sign and return the document with a money order for $300. Of this amount, $90 was intended to cover the filing fee and $210 was intended as attorney fees. Debtors followed these instructions. The law firm then mailed the petition to Ms. Anne Martin, who signed and filed it as attorney for Debtors. Ms. Martin is represented to be an associate of Bill Parker and Associates. Debtors met Ms. Martin for the first time at the section 341 meeting of creditors.

Debtors had only minimal contact with Bill Parker & Associates. Except for the section 341 meeting, all of their contact occurred through telephone conversations. Mrs. White spoke with someone at the law firm on three occasions for a total time of less than twenty-five minutes. Mr. White contacted the law firm one time; the conversation lasted five to ten minutes. The law firm conducted virtually no investigation into Debtors’ financial affairs. The law firm never requested that Debtors provide them with tax returns, bills or other evidence of indebtedness, or any other related financial information or documentation before the Chapter 7 petition was filed. Mr. White did send the law firm a copy of a lawsuit in which he was involved and attached to this lawsuit was a copy of a mortgage note. Mr. White could not recall whether the law firm had requested a copy of the lawsuit or whether he had sent them a copy on his own initiative. It was not until after the petition had been filed and creditors continued to harass Debtors that Debtors were instructed to send copies of their bills to Ms. Martin.

Trustee has noted the following problems with Debtors’ Chapter 7 petition: (1) the documents are incomplete, (2) Exhibit “B” is not attached, (3) the Chapter 7 peti[621]*621tion is not dated, (4) certain questions are answered incorrectly, (5) the Statement of Affairs is not dated, (6) the schedules fail to list the market value for certain property, (7) the schedules are inconsistent regarding the ownership of certain property, and (8) the notice to individual consumers and the acknowledgement are not dated.

CONCLUSIONS OF LAW

Bankruptcy Rule 2017 provides:

(a) Payment or transfer to attorney before commencement of case
On motion by any party in interest or on the court’s own initiative, the court after notice and a hearing may determine whether any payment of money or any transfer of property by the debtor, made directly or indirectly and in contemplation of the filing of a petition under the Code by or against the debtor, to an attorney for services rendered or to be rendered is excessive.
(b) Payment or transfer to attorney after commencement of case
On motion by the debtor or on the court’s own initiative, the court after notice and a hearing may determine whether any payment of money or any transfer of property, or any agreement therefor, by the debtor to an attorney after the commencement of a case under the Code is excessive, whether the payment or transfer is made or is to be made directly or indirectly, if the payment, transfer, or agreement therefor ■is for services in any way related to the case.

R.Bankr.P. 2017.

An examination of a payment to an attorney requires the Court to determine the reasonable value of the services rendered and to discern whether any excess payment was made by comparing the reasonable value of the services rendered to the value given or promised to the attorney. The examination must be made on a case-by-case basis. Although an attorney may engage in a pattern of conduct in a series of cases, the Court must examine the services rendered in each case to determine their value. 8 Collier on Bankruptcy ¶! 2017.06[2] (15th ed. 1989).

Section 329 of the Bankruptcy Code provides that the Court may order the return of any payment made by a debtor to his attorney in connection with the bankruptcy case to the extent that the payment exceeds the reasonable value of the services rendered.5 Thus, the Court must determine the value of the services rendered. From the testimony presented, the Court finds that only a minimum of contact occurred between Debtors and Bill Parker & Associates. Debtors made the initial contact with Bill Parker & Associates by a telephone call. Virtually all contact between Debtors and Bill Parker & Associates occurred through telephone conversations. Debtors did not meet their attorney until they attended the section 341 meeting of creditors. The Court notes that Debtors’ Chapter 7 petition contains omissions, mistakes, and incorrect answers.

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Related

Matter of Rainwater
100 B.R. 615 (M.D. Georgia, 1989)

Cite This Page — Counsel Stack

Bluebook (online)
100 B.R. 619, 1989 Bankr. LEXIS 731, 1989 WL 53445, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-white-gad-1989.