OPINION ON DEBTOR'S MOTION FOR DETERMINATION OF FEES, EXPENSES, OR CHARGES UNDER BANKRUPTCY RULE 3002.1(e)

EDWARD J. COLEMAN, III, Bankruptcy Judge.

Before the Court is the Debtor's "Objection to the Post-Petition Mortgage Fees, Expenses, and Charges" (dckt. 29) asserted by PHH Mortgage Corporation ("PHH Mortgage"). The Court construes the Objection as a motion for determination of fees, expenses, or charges under Federal Rule of Bankruptcy Procedure 3002.1(e). After careful consideration of the arguments of counsel, evidence submitted, and applicable law, the Court issues the following findings of fact and conclusions of law under Federal Rule of Civil Procedure 52(a), made applicable by Federal Rule of Bankruptcy Procedure 9014(c). For the reasons set forth below, it is ORDERED that the Motion is GRANTED.

I. JURISDICTION

This Court has subject-matter jurisdiction pursuant to 28 U.S.C. § 1334(a), 28 U.S.C. § 157(a), and the Standing Order of Reference signed by then Chief Judge Anthony A. Alaimo on July 13, 1984. This is a "core proceeding" within the meaning of 28 U.S.C. § 157(b)(1).

II. FINDINGS OF FACT

The Debtor filed this Chapter 13 case on August 23, 2016. PHH Mortgage timely filed a proof of claim on December 7, 2016, asserting a secured claim in the amount of $56,636.88 based on a first mortgage on the Debtor's principal residence. In his Schedule D, the Debtor valued the claim at $58,000.00 and valued the residence at $55,000.00. (Dckt. 1). On April 17, 2017, PHH Mortgage filed its Notice of Post-Petition Mortgage Fees, Expenses, and Charges ("Notice of Fees"). On May 15, 2017, the Debtor filed his Objection to the Post-Petition Mortgage Fees, Expenses, and Charges ("Motion for Determination") (dckt. 29) asserted by PHH Mortgage, which is actually a motion for determination of fees, expenses, or charges under Rule 3002.1(e). See In re Lighty, 513 B.R. 489, 490 (Bankr. D.S.C. 2014) (treating "objection" to post-petition charge as motion under Rule 3002.1(e)).

The Notice of Fees filed by PHH Mortgage disclosed that $250.00 for "Attorney Fees-Prep/analysis of 410A"1 and $350.00 for "Bankruptcy/Proof of claim fees" had been incurred on the Debtor's mortgage account on "December 7, 2017."2 The Debtor's Motion for Determination raises the following objections: (1) "[PHH Mortgage] has provided no documentation evidencing the fact that the charge is authorized under the Security Deed and Note or allowed under state law"; (2) "PHH Mortgage . . . did not attach any documents proving that the payment of this fee or charge is required by the underlying agreement and applicable non bankruptcy law to cure a default or maintain payments in accordance with § 1322(b)(5) of the [C]ode"; and (3) "[u]pon information and belief, PHH Mortgage . . . did not issue a notice pursuant to O.C.G.A. § 13-1-11 more than ten days prior to the date of filing." (Dckt. 29).

In its response to the motion (dckt. 32), PHH Mortgage argues four points: (1) that the parties' underlying agreement, specifically paragraph 14 of the Security Deed,3 permits PHH Mortgage to collect its post-petition charges from the Debtor; (2) that its attorneys' fees are reasonable and that the Debtor's "objection fails to show otherwise"; (3) that the fees are recoverable pursuant to 11 U.S.C. § 506(b); and (4) that "disallowing or reducing the fees would be tantamount to modifying [PHH Mortgage's] claim which is secured by the Debtor's principal residence." The Court held a hearing on the motion on July 20, 2017. The Debtor appeared through counsel. PHH Mortgage did not appear at the hearing. At the conclusion of the hearing, the Court took the matter under advisement.

III. CONCLUSIONS OF LAW

A. Post-Petition Fees, Expenses, or Charges Under Rule 3002.1

Bankruptcy Rule 3002.1, Notice Relating to Claims Secured by Security Interest in the Debtor's Personal Residence, applies in Chapter 13 to claims that are (1) secured by a security interest in the debtor's principal residence, and (2) for which the plan provides that either the trustee or debtor will make contractual installment payments. Fed. R. Bankr. P. 3002.1(a). Here, PHH Mortgage is the holder of a claim in the amount of $56,636.88,4 secured by a security interest in real property that is the Debtor's principal residence. (Claims Register 6-1). The Debtor's confirmed Chapter 13 plan (the "Plan") provides for PHH Mortgage's claim to be paid "at the contract rate" with the Debtor making direct payments to PHH Mortgage.5 (Dckt. 7, ¶ 2(d)). Accordingly, Rule 3002.1 applies to PHH Mortgage's claim.

Rule 3002.1 was first added in 2011 and the Advisory Committee Notes describe the purpose of the rule:

Fed. R. Bankr. P. 3002.1 Advisory Committee's Note to 2016 amendment. Under subdivision (b), which is not at issue in this case, the holder of the claim is required to provide notice of any post-petition changes in the mortgage payment amount. This case, however, turns on the provisions of subsections (c) and (e) which provide as follows:

Fed. R. Bankr. P. 3002.1(c), (e) (emphasis added).

Once PHH Mortgage filed its Notice of Fees, the Debtor was entitled to seek a ruling from the Court whether such fees are "required by the underlying agreement and applicable non-bankruptcy law." Id. When a court is called upon to make a determination of fees, expenses, and charges under 3002.1(e), a host of issues come into play: (i) the burden of proof; (ii) the contractual provisions of the "underlying agreement"; (iii) the evidence in support of the claimed fees; and (iv) the enforceability of the asserted fees under "applicable non-bankruptcy law." The Court will address each of these matters. The Court will also address the additional issues raised by the parties, including the relationship between Rule 3002.1(e) and 11 U.S.C. § 506(b).

B. Burden of Proof on Motion for Determination

Procedurally, this matter is before the Court on the Debtor's objection to the Notice of Fees. As mentioned above, the Court is treating the objection7 as a motion for determination of fees, expenses, or charges pursuant to Rule 3002.1(e). And, although the Debtor filed the objection, the Court finds that PHH Mortgage bears the burden of proving its entitlement to the attorneys' fees at issue. As one court addressing the burden of proof observed:

In re Brumley, No. DG 16-00819, 2017 WL 3129735, at *2 (Bankr. W.D. Mich. July 24, 2017). The Court agrees that the burden of proof under Rule 3002.1(e) falls on the creditor asserting the fee, expense, or charge.

C. The Contractual Provisions of the Underlying Agreement Require the Fees.

The first issue for determination under Rule 3002.1(e) is whether payment of the fees is required by the underlying agreement. The Court finds that there is in the record sufficient evidence of the contractual provisions to support the fees at issue in this case. The original Proof of Claim filed by PHH Mortgage included, among other things, the following attachments: (i) Official Form 410A-Mortgage Proof of Claim Attachment, which includes a detailed payment history from April 1, 2013; (ii) Note in the original amount of $66,405.00, dated December 8, 2006; (iii) Security Deed8 dated and recorded on December 8, 2006; and (iv) Corporate Assignment of Security Deed from ERA Mortgage to PHH Mortgage recorded in Evans County, Georgia, on December 2, 2016. The Debtor did not object to any part of the proof of claim, only the attorneys' fees of $600.00 set forth in the Notice of Fees. Specifically, the Debtor has not disputed the validity of the Security Deed attached to the original proof of claim.

In response to the Debtor's objection to its Notice of Fees, PHH Mortgage attached another copy of the Note and Security Deed. PHH Mortgage specifically referenced paragraph 14 of the Security Deed in support of its Notice of Fees. (Dckt. 32-1, p. 10). That paragraph reads as follows:

Id. This provision is not the only provision in the Security Deed authorizing the recovery of attorneys' fees and other expenses. Under paragraph 22, where the debt is accelerated and the Lender invokes the power of sale, the Security Deed provides that the "Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including but not limited to, reasonable attorneys' fees and costs of title evidence." As discussed below, paragraph 22 does not appear to be applicable to the facts of this case since the Debtor was not in default on the petition date and the note had not matured. In addition to the language of paragraph 14, PHH Mortgage's entitlement to recover these post-petition fees is set out with some particularity in paragraph 9 of the Security Deed:

Id. at pp. 7-8. It is precisely these types of fees and charges described in paragraph 9 that PHH Mortgage has disclosed in the Notice of Fees. Under this provision of the Security Deed, the Lender bargained for the right to protect its interests in the event the Debtor filed bankruptcy, including asserting "its secured position in a bankruptcy proceeding." Id. By filing a detailed proof of claim, and by attaching proof of its security interest as required by Rule 3001(d), together with the rather complex Mortgage Proof of Claim Attachment, PHH Mortgage has taken steps to assert "its secured position" in this bankruptcy proceeding. Accordingly, the Court finds that "payment of [the] claimed fee . . . is required by the underlying agreement" within the meaning of Bankruptcy Rule 3002.1(e). But that does not end the inquiry. The Court must determine whether this payment is required by applicable non-bankruptcy law (i.e. whether the provision is enforceable) and whether PHH Mortgage has proved the amount of fees to which it is entitled, including whether the fees are reasonable.

D. Are the Fees Enforceable under Georgia Law?

As to the enforceability of the attorneys' fees provisions of the Security Deed, the Court will first address the argument Debtor's counsel asserted at the hearing, as well as in her objection to the Notice of Fees, that under Georgia law a lender can never collect attorneys' fees if it has not provided the so-called 10-day letter required by O.C.G.A. § 13-1-11. The relevant portion of that statute reads as follows:

O.C.G.A. § 13-1-11 (emphasis added). The Debtor contends that under Georgia law, a creditor's right to payment of attorneys' fees remains unperfected until the expiration of ten days following service of the notice required by O.C.G.A. § 13-1-11 (commonly referred to as the "10-day letter"). In re Snow, No. 04-30995, slip op. at 5-6 (Bankr. S.D. Ga. Aug. 26, 2005) (Dalis, J.). If the creditor fails to send the 10-day letter, then its right to collect attorneys' fees does not vest at state law, and the creditor is barred from collecting those fees. Id. The party seeking to collect attorneys' fees bears the burden of proving compliance with the 10-day notice requirement of O.C.G.A. § 13-1-11. Chrysler Credit Corp. v. Smith, 143 B.R. 284, 292-93 (Bankr. M.D. Ga. 1992).

The Debtor's reliance on O.C.G.A. § 13-1-11 is misplaced because the mortgage debt at issue is not in default and has not matured. As the Georgia Court of Appeals noted in the case of Boddy Enterprises, Inc. v. City of Atlanta, 171 Ga.App. 551, 553, 320 S.E.2d 374, 375 (1984):

Id. at 552-53 (emphasis added). In Boddy Enterprises, supra, the security deed at issue allowed the creditor to claim as additional security any condemnation award under eminent domain to which the borrower became entitled and to claim "the reasonable attorney's fees, costs and disbursements incurred by [creditor] in connection with the collection of such award or payment." The Boddy Enterprises court held that the entitlement to attorneys' fees to enforce this part of the security deed did not require notice under O.C.G.A. § 13-1-11.

Similarly, in the case of Colonial Bank v. Boulder Bankcard Processing, Inc., 254 Ga.App. 686, 689-90, 563 S.E.2d 492, 496-97 (2002), the court was called upon to address an attorneys' fees provision in an indemnity agreement:

In support of her argument that the 10-day notice provision of O.C.G.A. § 13-1-11 bars collection of the $600.00 in attorneys' fees disclosed in the Notice of Fees, Debtor's counsel cited the Court to two cases, namely In re Snow, No. 04-30995, slip op. at 5-6 (Bankr. S.D. Ga. Aug. 26, 2005) (Dalis, J.), and In re Clark, 299 B.R. 694 (Bankr. S.D. Ga. 2003) (Dalis, J.). Both cases, however, are distinguishable. Both predate Rule 3002.1, which was adopted in 2011. Therefore, neither case addresses the issue currently before the Court. It is true that in both cases this Court held that failure to comply with O.C.G.A. § 13-1-11 requires a creditor's claim for attorneys' fees to be disallowed under § 502 as unenforceable under applicable non-bankruptcy law. See Snow, No. 04-30995, slip op. at 6-7; Clark 299 B.R. at 699-700. But in Clark, the debtor had defaulted on the terms of a promissory note and security deed, and the debt came due. No such default is alleged to have occurred in this case. In Snow, Judge Dalis correctly described the notice requirements of O.C.G.A. § 13-1-11 in a default context but not one where the loan had not matured. The Court does not find the holding in Snow persuasive in light of Boddy Enterprises and Colonial Bank. The Court therefore concludes that PHH Mortgage's failure to comply with O.C.G.A. § 13-1-11 does not preclude it from recovering the attorneys' fees it disclosed pursuant to Rule 3002.1(c). The Debtor raised no other defenses under Georgia law. Accordingly, the Court finds that such attorneys' fees are enforceable under Georgia law.

E. Are the Fees Allowable Under § 506(b), and Does that Matter?

In its response to the Debtor's Motion for Determination, PHH Mortgage specifically asserts that "pursuant to 11 U.S.C. § 506(b), the fees are recoverable." (Dckt. 32, p. 2). While the reported cases addressing issues under Rule 3002.1(e) are few in number, some courts seem to assume that a notice of fees filed pursuant to Rule 3002.1(c) necessarily implicates 11 U.S.C. § 506(b). See In re Tatum, No.: 15-31925 VFP; 2017 WL 3311219, at *1-3 (Bankr. D.N.J. May 15, 2017); In re Herman, No. 15-80027-G3-13, 2016 WL 520306, *2-3 (Bankr. S.D. Tex. Feb. 9, 2016) (creditor "failed to sustain its burden of proof to show that the fees are reasonable under section 506(b) of the Bankruptcy Code"); In re Susanek, No. 12-23545-GLT, 2014 WL 4960885, at *3 (Bankr. W.D. Pa. Sept. 30, 2014); In re Fuentes, 509 B.R. 832, 835-36 (Bankr. S.D. Tex. March 13, 2014). Section 506 provides in relevant part as follows:

11 U.S.C. § 506(b). Section 506(b) applies only to post-petition attorneys' fees. In re Garner, 663 F.3d 1218, 1220 (11th Cir. 2011). Since Rule 3002.1(c) also relates to post-petition attorneys' fees (as well as other charges and expenses), it is perhaps natural to draw a connection between Rules 3002.1(c) and (e), and 11 U.S.C. § 506(b). Under § 506(b), a lender with an allowed secured claim may recover attorneys' fees and costs provided "(1) the creditor is over-secured; (2) the fees are reasonable; and (3) the fees are provided for in the agreement or state statute under which the claim arose." In re Amron Techs., Inc., 376 B.R. 49, 54 (Bankr. M.D. Ga. 2007) (Walker, J.). Thus, if § 506(b) is necessarily implicated, then only an over-secured creditor may recover attorneys' fees disclosed under Rule 3002.1(c). See Herman, No. 15-80027-G3-13, 2016 WL 520306, at *2 (holding creditor was over-secured as required by § 506(b) but failed to establish that claimed amount was incurred); Susanek, No. 12-23545-GLT, 2014 WL 4960885, at *3 (holding creditor "demonstrated an entitlement to postpetition fees as an over-secured creditor" pursuant to Rule 3002.1).

The Court is not convinced that attorneys' fees allowable under Rule 3002.1(e) are limited to over-secured creditors under the language of 11 U.S.C. § 506(b). Neither the text of Rule 3002.1, nor the Advisory Committee Notes, nor the Official Form make any reference to § 506(b). If the fees disclosed pursuant to Rule 3002.1(c) were intended to be subject to § 506(b), then requiring a mere notice, as opposed to a motion, and hiding that notice in the claims register,10 as opposed to requiring that it be filed on the docket, is a peculiar way to express that intent. Further, Rule 3002.1(e) expressly provides that the court's determination of the enforceability of the fees is focused on non-bankruptcy law. The Court has already found that the fees are required under the loan agreement and are enforceable under Georgia law. To disallow them because § 506(b) only allows post-petition fees to over-secured creditors is to decide the matter under bankruptcy law. More troubling is the fact that § 506(b) allows a creditor to collect fees that are unenforceable11 under Georgia law as long as they are "reasonable" and "provided for under the agreement or State statute under which such claim arose." 11 U.S.C. § 506(b). On the other hand, Rule 3002.1(e) provides just the opposite: the claimed fees must be enforceable under non-bankruptcy law.

Another reason to question the applicability of § 506(b) to fees disclosed pursuant to Rule 3002.1(c) is to consider what happens if the fees are approved by the court after a determination under Rule 3002.1(e). In the Sheppard case, the court addressed what action is to be taken with respect to a notice of fees:

In re Sheppard, No. 10-33959-KRH, 2012 WL 1344112, at *4 (Bankr. E.D. Va. Apr. 18, 2012) (emphasis added). The Sheppard court suggests that nothing "happens" in the pending bankruptcy case with the post-petition fees unless the creditor files a motion for allowance of a post-petition claim pursuant to 11 U.S.C. § 1305. But that is not what PHH Mortgage seeks to do. It has not sought allowance of a post-petition claim under § 1305. It is providing notice of the fees that will be added to the debt.12 Nothing in Rule 3002.1(c) suggests that the notice of fees is an alternative mechanism for amending the secured creditor's claim. Thus, while § 506(b) allows an over-secured creditor to augment its claim, that is not the function of Rule 3002.1(c). As the Sheppard court explained, "[t]he notice required by Bankruptcy Rule 3002.1 is not intended to be either a pleading or a claim. It is simply a statement that a creditor files to inform the debtor that postpetition expenses have been incurred. It is akin to providing an annual escrow statement." Id.

Providing notice of fees to debtors so they will not be surprised to learn at the conclusion of their Chapter 13 cases that they owed fees, expenses, or charges was the purpose of Rule 3002.1. As the Advisory Committee Notes to the Rule observed: "Timely notice of these changes [and fees] will permit the debtor or trustee to challenge the validity of any such charges, if necessary, and to adjust post-petition mortgage payments to cover any properly claimed adjustment." Fed. R. Bankr. P. 3002.1 Advisory Committee's Note to 2016 Amendment. Notably absent from this commentary is any limitation of Rule 3002.1 to over-secured creditors, as would be the case if the Rule necessarily invokes § 506(b).

While PHH Mortgage takes the position that its fees are recoverable "pursuant to § 506(b)," it offers no analysis of how that Code section relates to Rule 3002.1. (Dckt. 32, p. 2). The Court has expressed its skepticism about that issue. But, since PHH Mortgage is not an over-secured creditor, § 506(b) will not support the requested attorneys' fees. The Court need not decide whether § 506(b) precludes the collection of the subject attorneys' fees in any event for the reasons discussed below.

F. Disallowance of Fees Would Not Impermissibly Modify Rights in Violation of § 1322(b)(2).

PHH Mortgage has argued that disallowance of its fees would "be tantamount to modifying [its] claim which is secured by the Debtor's principal residence." Although PHH Mortgage did not cite a Code section for this proposition, presumably it meant that disallowance of its fees would be tantamount to modifying its claim in violation of 11 U.S.C. § 1322(b)(2) (Dckt. 32, p. 2). Aside from this assertion in its response to the Motion for Determination, PHH Mortgage offers no further argument in support of this proposition. Section 1322(b)(2) prohibits modification of the "rights" of a claim "secured only by a security interest in real property that is the debtor's principal residence." 11 U.S.C. § 1322(b)(2); Nobelman v. American Sav. Bank, 508 U.S. 324, 322 (1993) ("[T]o give effect to § 506(a)'s valuation and bifurcation of secured claims through a Chapter 13 plan . . . would require a modification of the rights of the holder of the security interest. Section 1322(b)(2) prohibits such a modification where . . . the lender's claim is secured only by a lien on the debtor's principal residence."). One of the "rights" of PHH Mortgage is its contractual right to attorneys' fees under paragraph 9 of the Security Deed; indeed, those fees become additional debt and bear interest. Thus, one court has observed that where the contractual provision clearly allows attorneys' fees to a secured creditor seeking to protect its claim in a bankruptcy case, denying such fees may impermissibly "modify the rights of holders of secured claims" in violation of 11 U.S.C. § 1322(b)(2). See In re Susanek, No. 12-23545-GLT, 2014 WL 4960885, at *3 n.6 (Bankr. W.D. Pa. Sept. 30, 2014) (Taddonio, J.) ("Given the explicit language in the mortgage, the Court questions whether the Trustee's position — seeking an outright ban on the collection of attorneys' fees for the preparation of Rule 3002.1 notices — would constitute an impermissible modification of the Bank's rights as the holder of claim secured primarily by the Debtor's principal residence. See 11 U.S.C. § 1322(b)(2)."). However, PHH Mortgage is only entitled to attorneys' fees if those fees actually were incurred and are enforceable under Georgia law. The whole purpose of Rule 3002.1 is not to modify those rights but to confirm their existence and scope. In the absence of any further support for this argument, the Court is unable to conclude that a proper application of Rule 3002.1(e), even where the fees are disallowed, would impermissibly modify the contract in violation of § 1322(b)(2).

G. Evidence in Support of the Claimed Fees

Regardless of whether § 506(b) applies, PHH Mortgage has not proven the fees requested. As required by Bankruptcy Rule 3002.1(d), PHH Mortgage correctly filed the Notice of Fees (using Official Form 410S2) as a supplement to its proof of claim. Official Form 410S2 does not require the holder of the claim to attach supporting documents, nor are there any Form Instructions which reference any such documentation requirements. Accordingly, as an initial matter, the lack of documentation in the Notice of Fees is not fatal to the evidentiary burden imposed on PHH Mortgage.

But Form 410S2 does put the creditor on notice that: "The debtor or trustee may challenge whether the fees, expenses, and charges you listed are required to be paid. See 11 U.S.C. § 1322(b)(5) and Bankruptcy Rule 3002.1." And, of course, that is what happened here. The Court has found generally that the fees are required under the Security Deed and are enforceable under non-bankruptcy law. What is lacking is proof that the attorneys' fees were incurred and that they were reasonable. The party seeking attorneys' fees under Rule 3002.1 "must properly support the billed fees or charges asserted in bankruptcy proceedings." In re Hale, No. 14-04337-HB, 2015 WL 1263255, at *3 (Bankr. D.S.C. March 16, 2015). "Unlike a standard proof of claim, a notice filed under Rule 3002.1 does not constitute prima facie evidence as to the validity or amount of the claimed charges." In re Susanek, No. 12-23545-GLT, 2014 WL 4960885, at *2 (Bankr. W.D. Pa. Sept. 30, 2014) (emphasis in original). Thus, "simply including `Attorney fees' or "Bankruptcy/proof of claim fees' on the 3002.1 Notice . . . does not necessarily support the charge made." In re Pittman, No. 14-03404-HB, 2015 WL 1262837, at *2 (Bankr. D.S.C. March 16, 2015). As the Pittman court explained,

Id. at *3. See also Hale, No. 14-04337-HB, 2015 WL 1263255, at *3 (noting that simply listing the fees on the 3002.1 notice does not explain "why the services of an attorney were needed, whether the charges are reasonable on the particular facts of the case, who performed the work, the time spent on task, [and] the rate charged"). Those details are likewise lacking in this case. For example, the Court has assumed that both the $250.00 attorneys' fees and the $350.00 "Bankruptcy/proof of claim fees" represent attorneys' fees, but the latter claim is not so described. Further, the identity of the attorney is not revealed. In fairness, the Official Form includes ten (10) preprinted categories of expense, including the two used by PHH Mortgage. The Official Form itself does not invite further elaboration (with the exception of line 10 and the "Other" categories) and only requires by way of itemization that the fee amount be "listed" and the "dates incurred" be provided.13 But once the notice of fees is challenged, more evidence is required.14 It would not have required much proof to convince the Court that attorneys' fees of $600.00 for the documents (42 pages) comprising its proof of claim were reasonable.15 Cf. In re Polly, 2016 WL 3004439, No. 15-31834(1)(13), *1-2 (Bankr. W.D. Ky. May 17, 2016) (noting creditor may establish it is entitled to attorneys' fees by filing an affidavit detailing the legal work performed in connection with debtor's mortgage). Here, however, PHH Mortgage failed to appear at the July 20, 2017 hearing and presented no evidence by way of affidavit or otherwise in support of its requested attorneys' fees. Accordingly, the Court finds PHH Mortgage is not entitled to the $600 in attorneys' fees sought in its Notice of Fees. A separate Order will be entered contemporaneously with this Opinion.