In re Knight

625 B.R. 894

IN RE: Jessie M. KNIGHT, Debtor.

Case No. 16 B 32994

United States Bankruptcy Court, N.D. Illinois, Eastern Division.

Signed March 29, 2021

Attorney Steve Miljus, The Semrad Law Firm LLC

Chapter 13 Trustee, M.O. Marshall

Order Requiring Full Accounting (Amended)

Jacqueline P. Cox, United States Bankruptcy Judge

This chapter 13 case was filed on October 17, 2016. The Debtor's plan was confirmed on January 9, 2017. The plan included payments to Toyota Credit Corporation for a secured claim with respect to a 2011 Toyota Camry. Toyota was to receive $3,918.00 over the term of the plan with a fixed payment of $19.00 a month. Toyota filed Proof of Claim 8-1 in the amount of $4,398.92 on December 24, 2016. A chapter 13 Discharge Order was entered on July 17, 2020. That Order states that creditors could not collect discharged debts. Generally, other than mortgage debt, debts provided for in a confirmed Chapter 13 plan are discharged "after completion by the debtor of all payments under the plan ..." 11 U.S.C. § 1328(a).

The Debtor's motion states that following entry of the Discharge Order the Debtor contacted Toyota numerous times to arrange the release of the title of the vehicle. Toyota apparently refused to release its lien, insisting that it was still owed funds on the debt.

Debtor's counsel contacted Toyota on August 4, 2020; the matter was not resolved, although he warned that sanctions would be sought for Toyota's violation of the Discharge Order. On September 23, 2020, the Debtor's attorney, Steve Miljus, filed a Motion for Sanctions against Toyota for violation of the discharge injunction for seeking to collect on a discharged debt. Docket 30.

An order sanctioning Toyota was entered on October 5, 2020. Docket 33. Eventually the court was told that the parties had settled the matter. When Attorney Steve Miljus asked to withdraw the motion on March 1, 2021 the court asked for a copy of the settlement document(s). The matter was continued to March 8, 2021 for presentation of the document(s); nothing was produced. The matter was continued to March 22, 2021. The Settlement Agreement was docketed on March 18, 2021. Settlement Agreement, Docket 47.

The Settlement Agreement and General Release states that the matter was settled for $8,300. Settlement Agreement, Docket 47, ¶ 3.

Court Approved Retention Agreement

When this case was filed in 2016 an attorney from the Semrad Law Firm LLC sought compensation pursuant to the Court-Approved Retention Agreement ("CARA"). In exchange for a flat fee of $ 4,000.00 the attorney agreed to represent the Debtor in this case. The attorney agreed, amongst other things, to "[p]repare, file and serve all appropriate motions to avoid liens[.]" and to "[p]rovide any other legal services necessary for the administration of the case." CARA, Docket 14, p. 12, Section B, ¶¶ 15 & 17.

In addition, the CARA states at ¶¶ F(1) and (4):

Any attorney retained to represent a debtor in a Chapter 13 case is responsible for representing the debtor on all matters arising in the case unless otherwise ordered by the court. For all of the services outlined above, the attorney will be paid a flat fee of $4,000.00. For all of the services outlined above, the attorney will be paid a flat fee of $4,000.00 (sic). Id. , CARA, Section F(1), p. 13.

In extraordinary circumstances, such as extended evidentiary hearings or appeals, the attorney may apply to the court for additional compensation for these services. Any such application must be accompanied by an itemization of the services rendered showing the date, the time expended, and the identity of the attorney performing the services. The debtor must be served with a copy of the application and notified of the right to appear in court to object. Id. , CARA, Section F(4), p. 14.

The October 5, 2020 Order states that Toyota is to...