In re Myers

1

In re: Gregory Brian Myers, Debtor.

No. 2:21-bk-00123-FMD

United States Bankruptcy Court, M.D. Florida, Fort Myers Division

July 20, 2023

ORDER (1) APPROVING UNDINE C. GEORGE, ESQUIRE'S APPLICATION FOR FINAL COMPENSATION & ADMINISTRATIVE CLAIM, AND (2) DENYING DEBTOR'S MOTION FOR DISGORGEMENT OF FEES

Caryl E. Delano, Judge.

On January 28, 2021, Gregory Myers ("Debtor") filed this Chapter 13 case. Two years later, in January 2023, the Court dismissed the case with prejudice on the grounds that Debtor had not filed the petition or his Chapter 13 plan in good faith. After the case was dismissed, Debtor's former attorney, Undine C. George ("George") filed an Application for Final Compensation & Administrative Claim (the Application") seeking payment of her attorney's fees and costs as an administrative claim under 11 U.S.C. § 330(a) and 11 U.S.C. § 503(b)(2).^[1]

Debtor objected to the Application and also filed a motion for disgorgement of the fees paid to George.^[2] For the reasons explained below, the Court overrules Debtor's objections to the Application, allows George's fees and costs in the amount requested in the Application, and denies Debtor's motion for disgorgement.

I. BACKGROUND

Prior to filing his current Chapter 13 case, Debtor had filed three other bankruptcy cases: a Chapter 7 case in Maryland (Case No. 15-26033); a Chapter 13 case in Delaware (Case No 19-10392); and a Chapter 13 case in Maryland (Case No. 19-17428). The Maryland Bankruptcy Court denied Debtor's discharge in his Chapter 7 case, but the case remains an open Chapter 7 case.

On January 28, 2021, Debtor consulted with George about filing a fourth bankruptcy petition, and George agreed to represent him in the current Chapter 13 case. In George's letter of representation, Debtor acknowledged that George had advised him regarding "the impact of filing a second chapter 13 petition after a prior dismissal of a chapter 13 action, and while having a prior chapter 7 action still open in Maryland."^[3] This Chapter 13 case was complicated from its outset, as evidenced in part by (a) Debtor's filing of an unsigned statement that he holds claims against 43 third parties and is a party in 19 lawsuits;^[4] (b) Debtor's filing of unconfirmable Chapter 13 plans, including a First Amended Plan, a Second Amended Chapter 13 Plan, and a Third Amended Plan;^[5] (c) creditors' objections to Debtor's Third Amended Plan alleging bad faith, among other grounds;^[6] (d) at least two motions to dismiss the case on the grounds that Debtor acted in bad faith;^[7] (e) Debtor's objection to every proof of claim filed in the case;^[8] (f) Debtor's unfounded motions to avoid alleged judicial liens under 11 U.S.C. § 522(f);^[9] (g) Debtor's removal of two Maryland state court lawsuits on the eve of the lawsuits' trials;^[10] and (h) Debtor's multiple appeals of this Court's orders.^[11]

On October 12, 2022, George filed a Motion for Leave to Withdraw as Debtor's attorney on the grounds of irreconcilable differences.^[12] On October 27, 2022, the Court granted the motion to withdraw and relieved George of further responsibility in the case.^[13]

On January 19, 2023, the Court held a Seventh Continued Confirmation Hearing on Debtor's Third Amended Plan.^[14] At that hearing, the Court denied confirmation of Debtor's Chapter 13 plan and dismissed the case, and thereafter memorialized its ruling in a written Memorandum Opinion Denying Confirmation and Dismissing Case.^[15] Generally, the Court ruled that Debtor did not file his Chapter 13 case or the Third Amended Plan in good faith, as demonstrated by Debtor's actions to frustrate his many opponents in pending state court litigation and by his failure to propose a plan that satisfies the requirements of § 1325 for confirmation.^[16] In light of Debtor's previous bankruptcy filings, the Court dismissed the case with prejudice, prohibiting Debtor from filing another bankruptcy case for two years.^[17]

Shortly after the case was dismissed, George filed the Application and a supplement to the Application.^[18] Debtor filed an objection to the Application and two supplemental objections (together, the "Objection").^[19] Debtor later filed a motion for disgorgement of the fees paid to George.^[20]

II. THE APPLICATION FOR FINAL COMPENSATION

In the Application, George seeks attorney's fees of $51,872.92 and expenses of $671.68 for the 21-month period from January 28, 2021, to October 27, 2022. She contends that she spent 159.61 hours performing services in the case and that her written agreement with Debtor provided for her to be paid at the rate of $325.00 per hour. George attached her billing statements to the Application, which include a breakdown of her services by date, description, and time spent.^[21]

In his objection, Debtor primarily asserts that George is not entitled to an award of any fees because, he alleges, (a) she was negligent in her representation of him; (b) she was not disinterested; (c) she violated Administrative Order FLMB-2020-7 by demanding payment of $30,000.00 as a condition of providing future services; and (d) she violated the automatic stay by representing that her firm would seek a charging lien if Debtor did not pay its invoices. In addition, Debtor asserts that George may not receive payment of her fees from the undisbursed funds held by the Chapter 13 Trustee because those funds must be refunded to him under § 349.

A. George's fees are allowable under § 330.

Under § 330(a)(4)(B), the Court may award reasonable compensation to a Chapter 13 debtor's attorney "based on a consideration of the benefit and necessity of such services to the debtor and the other factors set forth in this section." The attorney in a Chapter 13 case represents the interests of the debtor, rather than the interests of the bankruptcy estate, and a Chapter 13 debtor's attorney may be entitled to compensation even if the case is dismissed before the debtor's plan is confirmed.^[22]In determining reasonable compensation under § 330, courts generally consider "the nature, the extent, and the value of such services," based on relevant factors such as the time and rate charged, and whether the services were beneficial at the time that they were rendered toward completion of the case.

It is clear to the Court that George performed the services described in the Application. The Court reviewed the motions and papers filed by George on Debtor's behalf and observed George's appearances at the hearings in this case. While Debtor's positions often were only marginally supported in the law, the Court finds that George competently presented Debtor's arguments and asserted Debtor's interests.

The Court gives little weight to Debtor's claim that George did not work diligently to achieve confirmation of his Chapter 13 plan or file all appropriate motions to obtain a positive result in the case. Rather, it is the Court's perception that George undertook a difficult case-Debtor's fourth bankruptcy case - and attempted to follow Debtor's direction in the bankruptcy context.

For example, in late 2021, U.S. Bank NA, as successor trustee (the "Bank") filed a motion for relief from the automatic stay, and George, on Debtor's behalf, filed a written opposition to the motion.^[23] On March 8, 2022, the Court entered an order granting in rem relief from the stay in favor of the Bank.^[24] Under Administrative Order FLMB-2020-7, the Bank's entitlement to in rem relief was unquestionable because Debtor's Chapter 13 plan did not provide for its secured claim.^[25] But George, on Debtor's behalf, filed a motion for reconsideration of the order and appeared at a hearing on June 9, 2022, to present Debtor's position for reconsideration of the Court's ruling.^[26] After the Court denied the motion for reconsideration,^[27] Debtor himself-not George-filed a Notice of Appeal of the order.^[28]

Similarly, George filed a motion on Debtor's behalf to avoid what he contended was an avoidable lien that impaired an exemption on funds on deposit in the registry of the Maryland bankruptcy court.^[29] Debtor had deposited the funds in the Maryland bankruptcy court's registry pursuant to that court's order approving Debtor's agreement with U.S. Bank National Association, as Trustee, for adequate protection pending the outcome of Debtor's appeal of the bank's foreclosure judgment in Florida's Second District Court of Appeals. After the bank prevailed in the appeal, Debtor contended that the funds were exempt tenants by the entireties property and the Maryland bankruptcy court order was an avoidable judicial lien under § 522(f). George appeared at hearings on the motion and effectively presented Debtor's position. However, this Court denied the motion, finding that the Maryland court's order is not a judicial lien,^[30] and Debtor himself-not George -filed a motion for reconsideration of the Court's ruling.^[31] When the Court denied Debtor's motion for reconsideration,^[32] Debtor himself-not George - appealed the Court's ruling.^[33]That appeal, District Court Case No. 2:22-cv-498-JES, remains pending.^[34]

Debtor's actions demonstrate that legal services performed by George in his Chapter 13 case were performed at his direction.

George has been a practicing attorney for more than 17 years and has represented clients in bankruptcy cases for more than 12 years.^[35] The Court finds that George's hourly rate of $325.00 is reasonable, and the 159.61 hours she spent performing services were reasonable given the number of issues she addressed at Debtor's behest. The Court finds that the total amount of fees sought, $51,872.92, is reasonable, as is the requested reimbursement of expenses of $671.68 for the 21-month period from January 28, 2021, to October 27, 2022. Ther...