ORDER (i) SUSTAINING IN PART AND OVERRULING IN PART TRUSTEE'S OBJECTION TO DEBTOR'S CLAIMED EXEMPTION AND BRIEF IN SUPPORT THEREOF AND NOTICE OF HEARING AND OPPORTUNITY FOR HEARING [DOC. 42], AND (ii) GRANTING TRUSTEE'S MOTION TO TURNOVER PROPERTY OF THE ESTATE AND BRIEF IN SUPPORT THEREOF AND NOTICE OF OPPORTUNITY FOR HEARING [DOC. 30]

SARAH A. HALL, Bankruptcy Judge.

On May 8, 2019, this Court conducted a hearing on the following:

1. Trustee's Motion to Turnover Property of the Estate and Brief in Support Thereof and Notice of Opportunity for Hearing [Doc. 30], filed by trustee John Mashburn ("Trustee") on March 1, 2019 (the "Turnover Motion");

2. Debtor's Response to Trustee's Motion to Turnover Property of the Estate and Brief in Support Thereof and Notice of Opportunity for Hearing [Doc. 39], filed by debtor Raphael Glapion ("Debtor") on March 21, 2019;

3. Trustee's Objection to Debtor's Claimed Exemption and Brief in Support Thereof and Notice of Hearing and Opportunity For Hearing [Doc. 42], filed by Trustee on March 25, 2019 (the "Exemption Objection"); and

4. Debtor's Response to Trustee's Objection to Debtor's Claimed Exemption and Brief in Support Thereof and Notice of Opportunity for Hearing [Doc. 47], filed by Debtor on March 28, 2019.

The hearing centered on $48,362.46 in contingency fee proceeds (the "Contingency Fee") located in the IOLTA account belonging to Debtor's professional legal corporation relating to a case settled in September 2018.1 Having been paid prior to the November 28, 2018, petition date (the "Petition Date"), the Contingency Fee was property of the bankruptcy estate unless, as claimed by Debtor, it was exempt, in whole or in part, pursuant to Okla. Stat. tit. 31, § 1.A.182 as wages or earnings for personal or professional services earned during the last 90 days preceding the Petition Date (the "Exemption Period").3

On May 8, 2019, the Court orally ruled that contingency fees are generally earned over the life of the underling contingency fee contract as the services are rendered rather than when they are received. See, e.g., In re Carlson, 211 B.R. 275, 279 (Bankr. N.D. Ill. 1997) (post-petition payments received by a debtor under a pre-petition contingency fee contract became property of the bankruptcy estate to the extent of the value of the pre-petition services rendered by the debtor).4 The Court then continued the hearing to July 17, 2019, to enab Debtor to present evidence establishing the proportion of the Contingency Fee exempt as having been earned during the Exemption Period, and further directed Debtor to provide any such evidence to Trustee by May 23, 2019.5 See Virtual Minute of May 8, 2019 [Doc. 58].

At the continued hearing, Trustee presented his Trustee Exhibits 1-26, all of which were admitted without objection and which consist, in large part, of the docket and pertinent pleadings from the Civil Action. Debtor presented no exhibits and relied almost entirely on the testimony of Debtor.6 Frankly, the Court found Debtor's testimony to be less than credible. Even after several admonishments by the Court, Debtor refused to specifically answer Trustee's questions without first gratuitously offering "context," yet had no trouble directly and succinctly responding to questions asked by his counsel. Additionally, Debtor's estimations of the time he spent working on various matters directly conflicted with representations he made to the federal district court in documents filed in the Civil Action.7

Per Debtor's testimony, he spent 2½ days (which the Court estimates to be 20 hours) drafting the Written Discovery Requests during the Exemption Period. Relative to Debtor's time estimation for performance of other tasks — especially those done prior to the Exemption Period — 2½ days for drafting the Written Discovery Requests is not only dubious at best, but also excessive. First, the substance of the Written Discovery Requests — which was only 4½ double-spaced pages — was not overly complex or technical given the fact that Debtor had been plaintiffs' only counsel in the Civil Action for more than 2½ years. During that time, Debtor drafted a complaint, responded to two successive motions to dismiss, prepared an amended complaint, responded to written discovery issued to his clients, and defended their depositions. Second, Debtor testified, rather incredibly, that drafting and filing the complaint and amended complaint, the first he had ever prepared in an airline injury case, took a mere 45 minutes in total for both. Similarly, according to Debtor, he required only three hours in the aggregate to draft and file responses to the motion to dismiss and the amended motion to dismiss, notwithstanding the necessity of becoming familiar with the Montreal Convention and the United States Supreme Court's interpretation thereof.8 For these reasons, and given the relative simplicity of the Written Discovery Requests, the Court rejects Debtor's testimony that it took 2½ days to prepare the same as unbelievable, and reduces the unreasonable time spent to 10 hours (an amount which still seems generous given their simplicity).

As Debtor estimated time spent working on the Civil Action during direct examination, he conveniently omitted several large chunks of time expended on critical tasks performed during the 16 months prior to the Exemption Period that should have been easily recalled and included. This put Trustee in the position of having to tediously "complete the picture" during cross examination. Below is a comparison of Debtor's original estimation of time spent prior to the Exemption Period versus a calculation of time spent during those 16 months after additions were elucidated during cross examination.9

Given the gross discrepancies between the total time figures above — both of which are derived from Debtor's own testimony — the Court rejects the calculation based solely on Debtor's direct examination and accepts the total time calculated after Trustee's cross-examination of Debtor.

With respect to the time incurred by Debtor during the Exemption Period, Debtor testified that his time was comprised of two basic activities: researching and preparing the Written Discovery Requests to defendants; and preparation and participation in mediation of the Civil Action. As previously discussed above, the Court rejects Debtor's somewhat incredible testimony that 2½ days were necessary to prepare the Written Discovery Requests. Instead, the Court reduces that amount to 10 hours, an amount which still seems excessive given that (i) the discovery requests were neither complicated nor sophisticated (Trustee Ex. 26); and (ii) Debtor testified he only spent three hours in total preparing the responses to two motions to dismiss. Ten hours is certainly more reasonable and realistic in light of the circumstances and the apparent speed with which Debtor drafted legal documents prior to the Exemption Period.

Although Debtor never testified as to the date of the mediation, he testified that the Written Discovery Requests were served immediately prior to the mediation. They were hand-delivered to opposing counsel on September 26, 2018. (Trustee Ex. 26) The docket sheet in the Civil Action indicates that a notice of settlement was filed on September 27, 2018. (Trustee Ex. 6) As a result, it appears that the mediation would have had to of taken place on either September 26 or 27, 2018, a date within the Exemption Period.

Thus, under either Debtor's calculations or Trustee's calculation, the resulting total hours spent during the Exemption Period are the same:

The parties agreed that the total amount of the Contingency Fee at issue under the Exemption Objection and Turnover Motion is $48,362.46. Using the Trustee time calculations above, in the aggregate Debtor spent 47½ hours on the Civil Action. Of that total, 26½ hours occurred prior to the Exemption Period (May 2016 — August 29, 2018), and 21 hours occurred during the Exemption Period (August 30, 2018 — November 28, 2018). Accordingly, the appropriate calculations are:

However, only 75% of the Contingency Fee earned during the Exemption Period is exempt, or $16,035.98, leaving an additional $5,345.32 not exempt.

Accordingly, for the reasons set forth above and on the record on May 8, 2019, and July 17, 2019, the Exemption Objection is SUSTAINED IN PART AND DENIED IN PART as follows:

The Turnover Motion is GRANTED, and Debtor is directed to turnover to Trustee within five (5) days of entry of this Order $32,326.48, the non-exempt portion of the Contingency Fee.

IT IS SO ORDERED.