Walton v. Whitcomb (In re Whitcomb)

479 B.R. 133, 2012 WL 4092519, 2012 Bankr. LEXIS 4307
CourtUnited States Bankruptcy Court, M.D. Florida
DecidedSeptember 18, 2012
DocketNo. 9-12-mp-00003-BSS
StatusPublished
Cited by9 cases

This text of 479 B.R. 133 (Walton v. Whitcomb (In re Whitcomb)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, M.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Walton v. Whitcomb (In re Whitcomb), 479 B.R. 133, 2012 WL 4092519, 2012 Bankr. LEXIS 4307 (Fla. 2012).

Opinion

MEMORANDUM OPINION and ORDER

BARRY S. SCHERMER, Bankruptcy Judge.

This matter comes before this Court in this miscellaneous proceeding on the United States Trustee’s Omnibus Motion For [136]*136Examination Of Services Rendered And Fees Paid To William Whitcomb (the “Omnibus Motion”). William G. Whitcomb appeared for himself (the “Attorney”) and Trial Attorney J. Steven Wilkes appeared on behalf of the United States Trustee for Region 21.

The issues presented in this miscellaneous proceeding concern whether the Attorney violated either the no-look, soup-to-nuts presumptive compensation order, (the “No-Look Order”), currently governing Chapter 13 compensation, or the order establishing duties entered in each Chapter 13 case, (the “First Day Order”), in the Fort Myers division of this Court by seeking and/or collecting: (1) undisclosed compensation; (2) undisclosed costs; (3) post-petition fees and costs not authorized by the court; and (4) fees or expenses in excess of those permitted to be charged to Chapter 13 debtors by the No-Look Order and First Day Order. Therefore, the issues raised in this miscellaneous proceeding arise from the confluence of three matters, this Court’s No-Look Order, this Court’s First Day Order, and the Attorney seeking post-petition compensation of fees and expenses directly from his debtor-clients in Chapter 13 cases.

The portion of this Court’s No-Look Order that applies in this miscellaneous proceeding states that:

After the petition is filed, a debtor’s attorney may not request cash or in any way condition providing any services to the debtor on a cash payment for any post-petition services ...

See No-Look Order, Admin. Order FTM-2010-1, pg. 3, para. 6. This Court’s First Day Order is also applicable to this miscellaneous proceeding, and in relevant part provides that:

Attorney’s Fees. Consistent with Rule 2016(b), the Debtor’s attorney must file supplemental disclosures for all payments received from the Debtor after this case is filed. Failure to file the required disclosures may result in the disgorgement of fees paid. Pursuant to Rule 2016(b), a pre-petition retainer paid to counsel for the Debtor, whether received from the Debtor or other person for the benefit of the Debtor, must be disclosed in writing to the Court and to the Trustee. No post-petition fees or expenses may be taken or requested directly from the Debtor (whether from the Debtor or other person for the benefit of the Debtor), unless said fees are paid through the Plan, except for post-confirmation payments deposited into an attorney’s trust account and held in that trust account pending order of the Court, after written notice to the Trustee and other parties in interest. The Debtor’s counsel must assist the Debtor in all matters related to this case unless the Court allows withdrawal of counsel from the case. The Debtor’s counsel shall not withhold legal advice or assistance of any kind from the Debtor for lack of payment.

See First Day Order, e.g., In re Fraser, 9:10-bk-26493-BSS, Doc. No. 10, pg. 5, para. 12, entered November 9, 2010. This Court enters a First Day Order, in substantially similar format, in every Chapter 13 case.

The Parties have conducted and concluded discovery and have presented stipulated facts as contained in this Memorandum Opinion and Order. This Memorandum Opinion and Order includes this Court’s findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52, made applicable by Federal Rule of Bankruptcy Procedure (Fed.R.Bankr.P.) 7052.

The Attorney has expressly consented to jurisdiction by this Court for the entry of final orders and judgments by this Bank[137]*137ruptcy Court and has waived any appeal from these proceedings.

Stipulated Findings of Fact

The Attorney practices bankruptcy law on behalf of consumers. For approximately twenty six (26) years, the Attorney has actively provided bankruptcy representation services to his clients in cases commenced under Chapters 7 and 13. This miscellaneous proceeding encompasses all Chapter 13 cases commenced by the Attorney on behalf of his debtor-clients during the time period of January 2007 through March 2012 (the “Cases”).1 In the Cases, the Attorney filed his disclosures of attorney compensation statements. Additionally, the debtors filed statements of financial affairs and Chapter 13 plans in the Cases. These filings all constitute judicial admissions. See Fed. R. Bankr.P. 1008, 2016; 11 U.S.C. §§ 329, 521; and 28 U.S.C. § 1746. Together these filings form the evidentiary foundation for this miscellaneous proceeding. It is from these filings, together with the discovery responses from the Attorney through which the Parties presented this Court with the stipulated findings of fact evidenced in this Memorandum Opinion and Order.

The United States Trustee asserts through his Omnibus Motion and the memorandum in support thereof that the Attorney has “failed to fully and completely disclose payments of all fees and expenses.” Specifically, the United States Trustee alleges that the Attorney has “requested additional compensation post-petition from bankruptcy debtors and has accepted additional compensation post-petition from bankruptcy debtors, all without disclosure, notice, application, opportunity for hearing, or order approving additional compensation.” The United States Trustee also asserts that the Attorney has “failed to fully and accurately disclose all pre-petition payments as well as failed to provide supplemental disclosure of all post-petition request[s] for compensation made directly to the debtor and receipt of payment thereof.”

With respect to the Attorney’s seeking and collecting post-petition fees for compensation for services or reimbursement of expenses, discovery established that if amendments to a debtor’s Chapter 13 schedules, statements, or plan were required, the Attorney would notify the client of such needed corrections and offer to make those corrections for a fee. The case which initiated the United States Trustee’s Omnibus Motion in this miscellaneous proceeding evidences this practice.

The Attorney filed a joint Chapter 13 voluntary petition for his clients, Richard and Patricia Fraser, on October 31, 2010. See In re Fraser, 9:10-bk-26493-BSS. The Attorney’s disclosure of attorney compensation in the Fraser case did not disclose the complete fee agreement regarding the Attorney’s intent or ability to seek or obtain additional post-petition fees or expenses directly from the Debtors. The meeting of creditors was conducted and the Chapter 13 Standing Trustee, Jon Waage (the “Chapter 13 Trustee”), required amendments to the schedules, statements, and plan. On January 6, 2011, the Attorney sent correspondence to the Frasers regarding preparation of the necessary amendments.

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Cite This Page — Counsel Stack

Bluebook (online)
479 B.R. 133, 2012 WL 4092519, 2012 Bankr. LEXIS 4307, Counsel Stack Legal Research, https://law.counselstack.com/opinion/walton-v-whitcomb-in-re-whitcomb-flmb-2012.