Filed: Jul. 18, 2016
Latest Update: Jul. 18, 2016
Summary: MEMORANDUM GRANTING DEFENDANTS' MOTION FOR ATTORNEY FEES HERB ROSS , Bankruptcy Judge . Defendants' motion for attorney fees 1 will be granted. Defendant student lenders seek $11,130 for attorney fees for successfully defending against plaintiff debtor's adversary proceeding challenging that the defendants were appropriate educational lenders, and that the loans were appropriate claims, entitled to protection from nondischargeability under 11 USC 523(a)(8). The court granted defendants s
Summary: MEMORANDUM GRANTING DEFENDANTS' MOTION FOR ATTORNEY FEES HERB ROSS , Bankruptcy Judge . Defendants' motion for attorney fees 1 will be granted. Defendant student lenders seek $11,130 for attorney fees for successfully defending against plaintiff debtor's adversary proceeding challenging that the defendants were appropriate educational lenders, and that the loans were appropriate claims, entitled to protection from nondischargeability under 11 USC 523(a)(8). The court granted defendants su..
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MEMORANDUM GRANTING DEFENDANTS' MOTION FOR ATTORNEY FEES
HERB ROSS, Bankruptcy Judge.
Defendants' motion for attorney fees1 will be granted.
Defendant student lenders seek $11,130 for attorney fees for successfully defending against plaintiff debtor's adversary proceeding challenging that the defendants were appropriate educational lenders, and that the loans were appropriate claims, entitled to protection from nondischargeability under 11 USC §523(a)(8). The court granted defendants summary judgment on the merits.2
The fees requested are exceedingly modest for the quality of the briefing and result obtained. Most of the hours were billed at the low rate of $125 per hour by a law clerk working for Richard Crabtree. Plaintiff does not challenge the amount sought.
Neither party has adequately briefed whether attorney fees are awardable in a situation like the one presented. This is a litigation about educational loan dischargeability under the terms of 11 USC §523(a)(8) that would not exist outside of bankruptcy. The defendants motion states:
The promissory notes state that Plaintiff agreed to pay to Defendants' "reasonable collection costs permitted by law, including reasonable attorney's fees (to the extent permitted by law) and court costs, which [Brazos] incur[s] in enforcing the terms of this Note if [Rizor is] in default." Section "I," appearing on pages 2, 9, 19, 22, 29, 42, 45, 53, 57, 59, and 67 of the Affidavit, ECF No. 20-2.
Plaintiff does not contest this representation.
I will adopt the holding of the Seventh Circuit case In re Busson-Sokolik.3 Some of the arguments by the plaintiff debtor in that case, which also involved an educational loan, were similar to plaintiff Rizor's in this case. They challenged the use of the loan and whether the loans qualified for nondischargeability under §523(a)(8).4 The promissory notes also had provisions for the lender recovering collection costs which were similar to notes in this case.5
The basis for Seventh Circuit court's finding that the contractual provisions were sufficient to warrant the grant of attorney fees is:
Under the "American Rule," a litigant who prevails in a lawsuit is not ordinarily allowed to collect attorney's fees from the losing side. See Alyeska Pipeline Service Co. v. Wilderness Society, 421 U.S. 240, 247, 95 S.Ct. 1612, 44 L.Ed.2d 141 (1975). However, this rule can be overcome by statute or by an enforceable contract with a provision regarding the allocation of attorney's fees. See Travelers Cas. and Sur. Co. of America v. Pacific Gas and Elec. Co., 549 U.S. 443, 448, 127 S.Ct. 1199, 167 L.Ed.2d 178 (2007).
I will follow this precedent and grant the motion to award the attorney fees requested.
