Opinion
Case No. 8:19-bk-11220-RCT
08-28-2020
Chapter 13 O RDER OVERRULING DEBTOR'S OBJECTION TO CLAIM , AND SUSTAINING, IN PART, OBJECTIONS TO NOTICES OF POSTPETITION MORTGAGE FEES, EXPENSES AND CHARGES
(Docs. 16, 29, & 42)
Before the Court are Debtor's Objection to Amended Claim No. 7 of Republic Bank & Trust Company (Doc. 16) and his Objections to Notices of Postpetition Mortgage Fees, Expenses and Charges (Docs. 29 and 42) (collectively, the "Contested Matters"). The Court has considered the pleadings along with the Declaration of Fees filed by counsel to Creditor Republic Bank & Trust Co. (Doc. 59) (the "Declaration") and Debtor's response to the Declaration (Doc. 60) (the "Response"), both filed as directed by the court's Order Canceling Trial and Establishing Deadlines (Doc. 58) (the "Order").
This includes Creditor Republic Bank & Trust Co.'s response to Debtor's objection to claim (Doc. 28).
At the teleconference which prompted entry of the Order, the parties narrowed the issues in the Contested Matters to (a) the reasonableness of the attorney's fees claimed by the Creditor and (b) the calculation of the post-judgment interest that accrued prior to the filing of this chapter 13 case. Debtor has withdrawn his objection to Creditor's calculation of the post-judgment interest, leaving only the issue of the reasonableness of the attorney's fees.
Doc. 61 ¶ 17.
Reviewing the Declaration, together with the record, the Court finds that as to the attorney's fees incurred prepetition and reflected in Creditor's proof of claim, the fees are not unreasonable. Debtor's arguments to the contrary are without merit.
But Debtor's contention that the attorney's fees incurred by Creditor post-petition are unreasonable based upon the nature of Debtor's case and Creditor's treatment in the plan is better taken. A brief review of the history of the case is warranted.
Debtor commenced this chapter 13 case on November 25, 2019, and along with the petition, filed a chapter 13 plan. In his original plan, as to Creditor, Debtor proposed to cure and maintain the mortgage pursuant to 11 U.S.C. § 1322(b)(5).
Docs. 1 & 2.
Creditor filed its proof of claim on December 11, 2019, and less than two weeks later, moved for relief from the automatic stay to enforce its final judgment of foreclosure. Creditor advanced two arguments. First, remarking that the underlying note had matured prepetition, Creditor asserted that its claim must be paid in full and that full payment was not possible based upon the payments proposed in the plan. Second, Creditor asserted a lack of adequate protection due to Debtor's failure to maintain appropriate insurance.
Claim No. 7-1. Creditor amended the claim on December 20, 2019 and again on April 8, 2020. The initial amendment appears to correct a typographic error in question 6 of the claim form in which the last four digits of the account number are identified (Claim No. 7-2). The second amendment appears to correct a second typographic error in the amount of the claim as provided in response to question 7 (Claim 7-3).
Doc. 13.
Though argued as "cause" to lift the automatic stay, Creditor's argument is more appropriately an objection to confirmation of plan.
In response, Debtor clarified that he did intend to pay the secured claim in full over the life of the plan. As to insurance, Debtor explained that an inspection had been required by the insurer to renew his homeowner's policy. Debtor indicated he would provide proof of appropriate coverage as soon as it was available. Shortly after filing his response, on January 28, 2020, and prior to the initial confirmation hearing, Debtor amended his plan to clarify his intended treatment of Creditor under the plan.
Based upon the values proffered of Debtor's homestead, Creditor is over-secured and may be substantially so.
Doc. 15.
Doc. 25.
The Court held a preliminary hearing on Creditor's motion for relief from the stay on February 26, 2020. The Court denied the motion, but directed that Debtor provide Creditor proof of insurance within 14 days.
Doc. 37.
The initial confirmation hearing was conducted on February 12, 2020, and continued, per the Court's procedures, to an open date. Creditor has filed no objection to Debtor's plan, nor has any party other than the chapter 13 trustee. Review of the record suggests that the pendency of the Contested Matters is more likely than not the sole impediment to confirmation.
Returning to the matter at hand, Debtor challenges the attorney's fees sought in the Amended Notice of Postpetition Mortgage Fees, Expenses and Charges dated February 11, 2020 (the "February Notice") and the Notice of Postpetition Mortgage Fees, Expenses and Charges dated March 18, 2020 (the "March Notice"). In the February Notice, Creditor claims attorney fees of $1,465.20 for the period starting the day of the bankruptcy filing and ending December 20, 2019. In the March Notice, Creditor claims additional attorney fees of $509.60. Taken together, Creditor claims total post-petition attorney's fees of $1,974.80.
Creditor has filed a total of five notices of post-petition mortgage fees, expenses, and charges. A notice dated December 16, 2019 was withdrawn, and a notice dated January 15, 2020 was amended by the February Notice. Creditor also filed a notice dated February 19, 2020, but no objection to that notice has been filed.
In addition to attorney's fees, Creditor seek allowance of post-petition filing fees, costs, and other charges in the aggregate amount of $381.00. In gross total, Creditor seeks $2,355.80.
Noting his is not a "Cadillac Case," Debtor argues that the amount of attorney's fees claimed by the Creditor is unreasonable and excessive. Having carefully reviewed the time records provided by the Creditor, the Court agrees. The Court found several entries to be unnecessary or duplicative. Accordingly, an appropriate downward adjustment is required.
Debtor originally objected to the March Notice as being devoid of any supporting documentation. While true, Creditor provided appropriate support as part of the Declaration. In the Response, Debtor shifts his argument to the reasonableness of the fees claimed.
For example, $170.40 was billed for preparing, filing, and serving the notice of appearance. Counsel billed to review nearly every document filed and every proof of claim in the case, albeit only 0.1 hours per entry. But he also billed for review of certain proofs of claim twice, and as to review of one unsecured claim, he billed three times. And for charges related to the preparation and filing of the proof of claim, Creditor billed $646.80.
It is therefore ORDERED:
1. Debtor's Objection to Amended Claim No. 7 of Republic Bank & Trust Company (Doc. 16) is OVERRULED. Creditor's claim is allowed as filed.
2. Debtor's Objections to the Notices of Postpetition Mortgage Fees, Expenses and Charges (Docs. 29 and 42) are SUSTAINED, in part. The post-petition attorney's fees sought by Creditor shall be reduced by $450.00, for a total allowed amount of $1,524.80.
This total allowed amount of attorney's fees does not include filing fees, costs, or other post-petition charges for which Debtor has not objected. Accounting for the reduction in attorney's fees, the gross total of post-petition mortgage fees, expenses, and charges to be allowed to Creditor is $1,905.80. --------
ORDERED. Dated: August 28, 2020
/s/_________
Roberta A. Colton
United States Bankruptcy Judge Service of this Order other than by CM/ECF is not required. Local Rule 9013-3(b).