Filed: Feb. 24, 2014
Latest Update: Feb. 24, 2014
Summary: MEMORANDUM OF DECISION HENRY J. BOROFF, Bankruptcy Judge. Before the Court is the "Second Application for Allowance of Compesnation [sic] Pursuant to 11 U.S.C. 330 and 331 and Rule 2016 of the Rules of Bankruptcy Procedure and MLBR 2016-1" (the "Second Fee Application") filed by Carl D. Aframe ("Attorney Aframe"), counsel to Kathleen Ann Gagnon, the debtor (the "Debtor") in this Chapter 13 case. In the Second Fee Application, Attorney Aframe requests an "award" of $4,312.50 in compensation
Summary: MEMORANDUM OF DECISION HENRY J. BOROFF, Bankruptcy Judge. Before the Court is the "Second Application for Allowance of Compesnation [sic] Pursuant to 11 U.S.C. 330 and 331 and Rule 2016 of the Rules of Bankruptcy Procedure and MLBR 2016-1" (the "Second Fee Application") filed by Carl D. Aframe ("Attorney Aframe"), counsel to Kathleen Ann Gagnon, the debtor (the "Debtor") in this Chapter 13 case. In the Second Fee Application, Attorney Aframe requests an "award" of $4,312.50 in compensation ..
More
MEMORANDUM OF DECISION
HENRY J. BOROFF, Bankruptcy Judge.
Before the Court is the "Second Application for Allowance of Compesnation [sic] Pursuant to 11 U.S.C. §§ 330 and 331 and Rule 2016 of the Rules of Bankruptcy Procedure and MLBR 2016-1" (the "Second Fee Application") filed by Carl D. Aframe ("Attorney Aframe"), counsel to Kathleen Ann Gagnon, the debtor (the "Debtor") in this Chapter 13 case. In the Second Fee Application, Attorney Aframe requests an "award" of $4,312.50 in compensation and $54.16 for expenses incurred in this case for the period of August 4, 2011 through November 15, 2013, which he has "voluntarily reduced" to the sum of $3,500.00.1
The Debtor filed this Chapter 13 case on March 31, 2011. On August 3, 2011, Attorney Aframe filed his first fee application (the "First Fee Application"). In the First Fee Application, Attorney Aframe represented that he had received $7,739.44 from the Debtor prepetition and requested approval of $9,762.50 in compensation and $636.13 in expenses — or $2,659.19 in excess of his retainer. He described the Debtor's prepetition circumstances as dire: she was in her early 60's, had the responsibility of caring for an elderly parent, had lost her job, and had subsequently depleted substantial IRA funds to support herself and her mother — which led to a substantial tax claim she was unable to pay. After initial consultation with the Debtor and preparation of the necessary documents for filing a Chapter 13 case, the filing was delayed as the Debtor struggled to regain a stream of income while Attorney Aframe kept creditors at bay in the interim. Accordingly, when the decision to file the case was finally made, Attorney Aframe again drafted the necessary documents in order to reflect the Debtor's current circumstances. Postpetition, Attorney Aframe filed amended schedules, sought and obtained avoidance of a judicial lien (which avoidance was uncontested), and modified the Debtor's Chapter 13 plan prior to its confirmation.
At a hearing on September 6, 2011, the Court granted the First Fee Application in full. However, the Court suggested to Attorney Aframe that this situation might be similar to the one which he (and the Court) faced in In re Boyd, No. 09-41102-HJB, 2009 WL 2971096 (Bankr.D.Mass. Sept. 16, 2009), where the Court reduced fees requested by Attorney Aframe on the grounds that the sought-for allowance substantially exceeded the reasonable value of his services. Attorney Aframe responded that he had taken the Court's views to heart and had recently been able to keep within the terms of his clients' initial retainers. The Court further noted at that hearing that only a few practitioners in the Central and Western Divisions of the Court appeared to regularly seek fees in excess of the sums referenced in Massachusetts Local Bankruptcy Rule 13-7.2
As this Court noted in Boyd:
The standards for allowance of compensation are not new. See In re LaFrance, 311 B.R. 1, 19-22 (Bankr.D.Mass. 2004). Nor is it uncommon in a Chapter 13 case that complexities should arise requiring services that extend beyond the norm. Id. at 21. But where an application for compensation in a Chapter 13 case is substantially higher than the average fee charged in such cases, it is incumbent upon the applicant to demonstrate with specificity why the amount sought is reasonable. See 11 U.S.C. § 329.
2009 WL 2971096 at *1.
In his Second Fee Application, Attorney Aframe has failed to demonstrate the reasonableness of his fee request. In support of Attorney Aframe's request for an "award" of $4,366.66 and "allowance" of $3,500, he described the following events as having occurred and requiring his services since allowance of his First Fee Application:
1. In April 2012, the Debtor informed Attorney Aframe of her mother's death and indicated that she might have some problems making payments under her Chapter 13 plan. But then she overcame that problem and remained current.
2. Attorney Aframe prepared to file an adversary proceeding in order to compel the Internal Revenue Service to accept its claims as discharged. But then the IRS agreed to do so and no adversary proceeding was required.
3. The Debtor lost her job in May 2013. Attorney Aframe informed the Chapter 13 trustee and "contemplated" the possible need to convert the 36-month plan to a 60-month plan. But then the Debtor found a new job in July 2013 and the plan did not require amendment.
4. In July 2013, the Debtor informed Attorney Aframe that she would need a better car for her new job and located a replacement vehicle. Attorney Aframe filed a motion seeking leave for the Debtor to obtain the necessary financing. At a hearing on the motion, the Chapter 13 Trustee objected because the Debtor had not verified her new employment. The Court allowed the motion on condition that the Debtor file amended Schedules I and J and deliver a copy of her current pay stub to the Chapter 13 trustee within 2 days. Apparently, this proved more difficult than at first blush — the pay stub was mailed to the Debtor when she was out of town, and it remained at the post office. This necessitated a visit by Attorney Aframe to the post office to pick up the letter containing the pay stub.
The Court does not make light of Attorney Aframe's provision of these services to the Debtor. After all, as Abraham Lincoln famously said, "A lawyer's time and advice are his stock in trade." But an attorney's charges for services rendered must be qualitatively based on the existing circumstances. The Court sees no need here to quarrel with Attorney Aframe's hourly rate. But for these relatively simple services, consuming (according to his attached time records) a startling and unjustifiable approximate 20 hours,3 Attorney Aframe requests fees in an amount equal to what lawyers typically charge their clients in full for uncomplicated Chapter 13 cases. As such, the Court finds that the request is patently unreasonable. The Court will allow compensation for these services in the sum of $750 — an amount which the Court believes is the reasonable value of the services rendered.4
A separate order in conformity with this Memorandum of Decision shall issue forthwith.
