Opinion
13-97-15100 SA.
January 26, 2001
FINDINGS OF FACT AND CONCLUSIONS OF LAW SUPPORTING SUPPLEMENTAL ORDER RESULTING FROM FINAL HEARING ON MOTION FOR RELIEF FROM STAY FILED BY BANK OF AMERICA NT SA IN CONNECTION WITH REQUEST BY BANK OF AMERICA NT SA FOR ATTORNEY FEES AND COSTS
On January 26, 2000, the Court entered its Order Resulting from Final Hearing on Motion for Relief from Stay filed by Bank of America NT SA (Order), concerning the Debtors 1994 Jeep Cherokee, which order reflected the parties negotiated settlement of the second and final stay motion filed by Bank of America NT SA (Bank). The remaining issue left for decision is the Banks request for approval as reasonable its collection costs in the amount of $3,064.00 for fees, costs of $234.45 and gross receipts taxes of $181.20, for a total of $3,479.65. The Bank was represented by Sutin, Thayer Browne, a Professional Corporation (Suann Hendren) and the Debtor by J. D. Behles Associates, A Commercial Law Firm, P. C. (Jennie D. Behles). The settlement was announced to the Court by counsel at the January 12, 2000 final hearing scheduled for the Banks stay motion.
Decretal paragraph 2 of the Order provided as follows:
If the parties are unable to resolve the attorney fee dispute, no later than January 24, 2000, attorney for Creditor will submit an attorney fee affidavit and statements to the Court, and, if either of the parties deems it necessary, that party will submit to the Court a request for hearing.
As is evidenced by the filing by Banks counsel of the affidavit with attached billing sheets on March 15, 2000, the parties have not been able to resolve the dispute about whether and how much the Bank should be able to charge the Debtor for attorney fees and costs incurred in connection with the two stay motions that were filed by the Bank in connection with the vehicle.
Based on the affidavit and the attachments thereto, and a review of the court file, the Court makes the following findings of fact and conclusions of law:
1. The underlying loan documents, specifically paragraph 6 of the Additional Terms section of the Motor Vehicle Sales Contract and Purchase Money Security Agreement, attached to the affidavit as part of Exhibit A, permit the Bank to collect attorney fees and costs in the event of payment delinquencies.
2. As of the petition date (September 4, 1997), the Debtor valued the vehicle at $14,225.00 and showed a claim by the Bank of $14,004.23. The Debtor made a series of payments over time during the chapter 13 case, which resulted in a balance owing, as of January 25, 2000, of principal and interest of $3,206.85.
3. Exhibit B is a copy of the relevant N. A. D. A. Blue Book, showing the value of the vehicle on the date of the scheduled final hearing substantially exceeded the amount owed on the vehicle, and the Court so finds.
4. Paragraph 4 of the Debtors plan (doc. 20) provided that [t] he debtor shall pay directly to the affected creditor [the Bank] the regular payment due postpetition on these claims in accordance with the terms of their respective contracts [sic]. . . . The Debtor repeatedly fell behind on her payments and received a total of five (5) default notices from the Bank.
5. As a consequence of the continuing defaults, during the course of the chapter 13 case, the Bank filed two motions for stay relief. The first (doc. 40), filed May 29, 1998, was scheduled for a final hearing on August 18, 1998 (doc. 71). This stay proceeding was resolved with the withdrawal of the motion (doc. 73) on August 20, 1998, when the Debtor became current on her payments but refused to execute an agreement with a drop dead agreement.
The Court is not criticizing the Debtor for not entering into the drop dead agreement; indeed, her subsequent defaults would almost certainly have resulted in a modification of the stay and a potential repossession. provision in it.
6. The second stay motion was filed on October 4, 1999 (doc. 82), and a final hearing scheduled for January 12, 2000 (doc. 87). At the final hearing, the parties announced that they had reached an agreement resolving the stay dispute (minutes, doc. 88), with the exception of the issue of the Banks collection costs. The Order (doc. 89) reflects that agreement.
7. The remaining balance of $3,206.85 reflected in the Order was paid in full shortly after the entry of the Order.
8. The Debtor had sought to have the Bank send her reminder or payment notices each month; however, according to counsels affidavit, the Banks bankruptcy department is not set up to do that. In addition, from the Courts point of view, one of the purposes of a chapter 13 proceeding is to give the Debtor the opportunity and incentive to become more responsible for the Debtors financial arrangements, including learning to schedule payment deadlines and budget accordingly. In consequence, the Banks refusal to provide such a service, and thereby potentially prevent some of the defaults, is not to be held against the Bank or its counsel.
9. The Court has examined the affidavit and attached materials, including exhibit 3 attached thereto, the billing records, and finds that overall the charges are reasonable. To begin with, the rates are reasonable: $105 per hour for Mr. Hollands time as a five-year attorney, $160 and $165 per hour for Ms. Hendrens time as a ten-year attorney, and paralegal time billed at the rate of $65 to $70 per hour. The Court has reviewed the work done as it appears in this file, and it is workmanlike, typical of the work this Court has seen from Ms. Hendren and Mr. Holland to date. It appears also that the work distribution was such as to maximize the amount of work done by the lowest billing persons competent to do the work, including a considerable amount of work done by the legal assistants.
Worthy of a good workman: well performed. Websters Third New International Dictionary Unabridged (G. C. Merriam Co. 1971) at 2635.
10. The only concern the Court has is with one entry, when Ms. Hendren billed three hours on December 21, 1999 for preparing for and appearing at the preliminary hearing on the second stay motion, scheduled for 10.00 a.m. on a trailing docket. The Court of course has no independent recollection of what the 10.00 a.m. docket was like that day; the calendar shows that there were seven preliminary hearings scheduled and, in the ordinary course, those hearings would have gone fairly quickly. The Court is also aware that the Sutin offices are located uptown, the courthouse downtown, and it should ordinarily require no more travel time than a half-hour each way. And of course counsel has the option of appearing at preliminary hearings by telephone. However, there is no requirement that counsel appear by telephone rather than in person. Further, the remainder of the billings evidence a care to keep the costs to a minimum consistent with doing the job well, and so the Court has no reason to believe that in this one instance the time was not necessarily incurred.
In any event, given the Courts findings about the reasonableness of the fees incurred, including the rates and the distribution of the work, the Court will not require a write off of any portion of the bill.
For the foregoing reasons, the Court will enter an order approving the fees, costs and gross receipts tax.
James S. Starzynski United States Bankruptcy Judge
I hereby certify that on May 21, 2001, a true and correct copy of the foregoing was either electronically transmitted, faxed, delivered, or mailed to the following:
Jennie D. Behles PO Box 849 Albuquerque, NM 87103
Suann Hendren P. O. Box 1945 Albuquerque, NM 87103
Kelley L. Skehen 309 Gold Avenue S.W. Albuquerque, NM 87102-0608
Mary B. Anderson