Filed: May 24, 2012
Latest Update: Mar. 02, 2020
Summary: Case: 11-20332 Document: 00511867008 Page: 1 Date Filed: 05/24/2012 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED May 24, 2012 No. 11-20332 Lyle W. Cayce Clerk In the Matter of: CRAIG WARREN FERNANDEZ, I, Debtor - REESE W. BAKER; BAKER & ASSOCIATES, Appellants v. DAVID G. PEAKE, Chapter 13 Trustee; AMERICA’S SERVICING COMPANY, Appellees Appeal from the United States District Court for the Southern District of Texas USDC No. 4:10-CV
Summary: Case: 11-20332 Document: 00511867008 Page: 1 Date Filed: 05/24/2012 IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT United States Court of Appeals Fifth Circuit FILED May 24, 2012 No. 11-20332 Lyle W. Cayce Clerk In the Matter of: CRAIG WARREN FERNANDEZ, I, Debtor - REESE W. BAKER; BAKER & ASSOCIATES, Appellants v. DAVID G. PEAKE, Chapter 13 Trustee; AMERICA’S SERVICING COMPANY, Appellees Appeal from the United States District Court for the Southern District of Texas USDC No. 4:10-CV-..
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Case: 11-20332 Document: 00511867008 Page: 1 Date Filed: 05/24/2012
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT United States Court of Appeals
Fifth Circuit
FILED
May 24, 2012
No. 11-20332 Lyle W. Cayce
Clerk
In the Matter of: CRAIG WARREN FERNANDEZ, I,
Debtor
------------------------------------------
REESE W. BAKER; BAKER & ASSOCIATES,
Appellants
v.
DAVID G. PEAKE, Chapter 13 Trustee; AMERICA’S SERVICING
COMPANY,
Appellees
Appeal from the United States District Court
for the Southern District of Texas
USDC No. 4:10-CV-4044
Before REAVLEY, HAYNES, and GRAVES, Circuit Judges.
PER CURIAM:*
Appellant Reese W. Baker of Baker & Associates (“Baker”) filed a
bankruptcy petition under Chapter 13 on behalf of Debtor Craig Fernandez
*
Pursuant to 5TH CIR. R. 47.5, the court has determined that this opinion should not
be published and is not precedent except under the limited circumstances set forth in 5TH CIR.
R. 47.5.4.
Case: 11-20332 Document: 00511867008 Page: 2 Date Filed: 05/24/2012
No. 11-20332
(“Fernandez”) in August of 2007. Following the dismissal of the Chapter 13 case
without a confirmed plan, Baker sought recovery of his approved legal fees from
funds obtained by the Chapter 13 Trustee David Peake (the “Trustee”).
However, the Trustee instead paid those funds to Fernandez’s mortgage
company, America’s Servicing Company (“ASC”). The bankruptcy court denied
Baker’s relief, and the district court affirmed. We also AFFIRM.
Pertinent to this appeal, Fernandez filed for Chapter 13 bankruptcy
primarily in order to save his homestead, which he believed had been wrongfully
foreclosed upon the previous year. Although a proposed Chapter 13 plan was
initially confirmed, the confirmation order was entered by mistake over ASC’s
sustained objection and accordingly, was vacated shortly thereafter. Then, in
connection with the allegedly wrongful foreclosure, Fernandez filed an adversary
proceeding against ASC, which was dismissed in December of 2008 upon the
entry of an agreed final judgment (the “Agreed Judgment”). The Agreed
Judgment rescinded the foreclosure, reinstated the note and accompanying deed
of trust, and ordered Fernandez to file an amended plan within forty days.
Importantly, it also required Fernandez to make monthly mortgage payments
of $3,253.43, and authorized the Trustee “to immediately disburse all ongoing
mortgage payments accruing from the petition date pursuant to the plan [to
ASC].”1
In accordance with the Agreed Judgment, Fernandez made monthly
payments to the Trustee. Nevertheless, because Fernandez violated the Agreed
Judgment by failing to file an amended plan, his bankruptcy case was
subsequently dismissed without plan confirmation. At the time of dismissal, the
1
Baker argues that the Agreed Judgment’s use of the language, “pursuant to the plan,”
must refer to the unconfirmed plan that was filed prior to the Agreed Judgment’s entry and
that set a lower monthly payment. We conclude, however, that the fair reading of this
document demonstrates that “pursuant to the plan” refers to the $3,253.43 stated therein that
would have been included in the required amended proposed plan.
2
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No. 11-20332
Trustee paid ASC $19,000 that had been held in reserve from Fernandez’s
monthly payments. However, Baker, who had filed fee applications and received
the bankruptcy court’s approval for approximately $22,000 in fees, filed an
emergency motion seeking the remaining unpaid balance of his
fees—approximately $8,000—from the post-dismissal funds paid to ASC.
The bankruptcy court denied Baker’s request, and the district court
affirmed. The denial of Baker’s request to recover some or all of his remaining
fees from the $19,000 paid to ASC upon dismissal of the case is the only ruling
challenged on this appeal.
Before our court, the parties, citing In re Perez, 339 B.R. 385 (Bankr. S.D.
Tex. 2006), aff’d sub nom., Perez v. Peake,
373 B.R. 468 (S.D. Tex. 2007), make
far-ranging scholarly arguments with potential consequences for many Chapter
13 cases. Although these arguments are worthy of consideration, this case does
not properly present an occasion to do so. Rather, we conclude that this case is
more appropriately decided on the basis of the Agreed Judgment, a binding,
enforceable agreement that Fernandez and Baker both signed and that has
never been appealed. In that regard, we agree with ASC and the Trustee that
Baker, having assented to the Agreed Judgment, cannot now attack it. See New
Hampshire v. Maine,
532 U.S. 742, 749-51 (2001); Browning Mfg. v. Mims (In re
Coastal Plains, Inc.),
179 F.3d 197, 205-07 (5th Cir. 1999); United States v.
McCaskey,
9 F.3d 368, 378-79 (5th Cir. 1993) (per curiam). Thus, pursuant to
the Agreed Judgment’s terms, the Trustee properly paid the remaining funds to
ASC.
Baker suggests that ruling against him in this case would “chill”
representation of Chapter 13 debtors. Such potential “chilling” does not
represent a reason to ignore the Agreed Judgment; further, we note that this
case does not present a “typical” Chapter 13 case, so any resultant “chilling” is
unlikely. Baker was placed in this position not by ASC, the Trustee, or the
3
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No. 11-20332
bankruptcy court, but by his client. By assenting to be bound by the terms of the
Agreed Judgment, Fernandez made a deal. However, by subsequently refusing
to agree to file an amended plan, Fernandez failed to live up to his deal.
Intractable clients like Fernandez can undeniably force attorneys into difficult
situations, but these attorneys are not helpless.2 Moreover, such situations may
present sufficient grounds to seek leave to withdraw. See TEX. DISCIPLINARY
RULES OF PROF’L CONDUCT R. 1.15(b)(4)-(6) (enumerating some of the grounds
under which an attorney may ethically withdraw from representation); cf.
Bankr. S.D. Tex. R. 83.2 (providing procedure for attorney withdrawal in the
Southern District of Texas). But see TEX. DISCIPLINARY RULES OF PROF’L
CONDUCT R. 1.15(c) (requiring an attorney to remain as counsel if the court so
orders).
We are not unmindful of Baker’s predicament. However, he assented to
the Agreed Judgment, and he cannot now attack it merely “to suit the exigencies
of self interest.” In re Coastal Plains, Inc., 179 F.3d at 205 (citation and internal
quotation marks omitted). Baker’s situation does not change the terms of the
Agreed Judgment or impair ASC’s right to be paid thereunder.
AFFIRMED.
2
Indeed, no one disputes that Baker retains the right to seek his approved, but thus
far uncollected, fees directly from Fernandez, who is not a party to this appeal.
4
