Carlos S. De Castro

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
MEMORANDUM RE TRUSTEE’S
MOTION TO REVIEW FEES
-1-
UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re
CARLOS S. DE CASTRO,
Debtor.
)
)
)
)
)
)
)
)
)
)
Case No. 10-31138 SFC
Chapter 13
MEMORANDUM RE TRUSTEE’S MOTION TO REVIEW FEES
On July 16, 2010, the court held an evidentiary hearing
regarding (1) the fee application of Debtor’s prior attorney, Lynda
Hung; and (2) the motion of the chapter 13 trustee to require
Ms. Hung to disgorge all fees previously paid to her. 	Lilian Tsang
appeared for the chapter 13 trustee David Burchard. 	Lynda Hung
appeared on her own behalf. 	Richard A. LaCava appeared for Debtor.
Upon due consideration, and for the reasons stated below, the
court determines that Ms. Hung’s application for fees in excess of
those she has already received should be denied, and that Ms. Hung
should be required to return to Debtor $1,852 of the $3,326 fees
she has already received.
(1) Ms. Hung sought and collected fees in a manner and amount
Signed and Filed: August 13, 2010
________________________________________
THOMAS E. CARLSON
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
August 17, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 10-31138 Doc# 85 Filed: 08/13/10 Entered: 08/17/10 14:51:49 Page 1 of 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
1 Debtor contends that he never signed the RAR. 	Ms. Hung is
bound by the terms of the RAR, because she represents that both she
and Debtor signed the RAR.
MEMORANDUM RE TRUSTEE’S
MOTION TO REVIEW FEES
-2-
inconsistent with the terms she agreed to in the Rights and
Responsibilities of Chapter 13 Debtors and their Attorneys
(hereinafter RAR) 1. 	First, she violated the terms of the RAR by
obtaining payment of fees postpetition directly from Debtor, rather
than from the chapter 13 trustee. 	The RAR provides in relevant
part: “Fees shall be paid through the plan unless otherwise
ordered. 	The attorney may not receive fees directly from the
debtor other than the initial retainer.” 	It is undisputed that Ms.
Hung obtained $1,000 from Debtor on April 25, 2010, 25 days after
the petition date. 	Ms. Hung testified that Debtor made this
payment of his own volition; Debtor testified that Ms. Hung
demanded the payment. 	I credit Debtor’s testimony on this point,
and also note that Ms. Hung had a responsibility not to receive
payment in violation of the terms of the RAR. 	Second, Ms. Hung
attempted to collect a fee for filing a motion to avoid lien in
excess of the fee she agreed to in the RAR. 	Ms. Hung acknowledged
that she tried to collect a fee of $1,000 for filing a motion to
avoid lien, after she had agreed in the RAR not to collect a fee of
more than $600 for such services without first filing a full fee
application and obtaining approval of the court.
(2) The services performed by Ms. Hung had limited value to
Debtor. 	The three chapter 13 plans Ms. Hung prepared for Debtor
contained significant flaws, and in response to each such plan the
chapter 13 trustee raised more than one dozen specific objections.
These flaws included failing to provide for secured claims listed
Case: 10-31138 Doc# 85 Filed: 08/13/10 Entered: 08/17/10 14:51:49 Page 2 of 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
2 This is the amount remaining after deducting $1,200 for
services provided plus the $274 filing fee.
MEMORANDUM RE TRUSTEE’S
MOTION TO REVIEW FEES
-3-
in the schedules, promising fixed monthly disbursements to
creditors in excess of the monthly payments to made by Debtor, and
failing to credit Debtor for fees that Debtor had already paid. 	As
a result of the flaws in the plans prepared by Ms. Hung, and Ms.
Hung’s attempt to collect an excessive fee for filing motions to
avoid lien, Debtor reasonably hired new counsel. 	The plans
prepared by Ms. Hung were of little value to the new counsel, who
largely had to start from scratch, and who seeks fees in the full
amount permitted under this court’s fee guidelines. 	The work
performed by Ms. Hung in preparing schedules and the statement of
financial affairs undoubtedly had some value to successor counsel,
which causes this court to permit Ms. Hung to retain some of the
fees she has received.
(3) Debtor contends that Ms. Hung submitted for filing
documents that Debtor had not signed, by falsely representing to
the court that Debtor had signed the documents in question. 	The
court finds the evidence regarding this question inconclusive.
(4) Taking account of all the facts and circumstances noted
above, the court determines that Ms. Hung’s services had a value to
Debtor of no more than $1,200, that Ms. Hung should be required by
September 15, 2010 to return to Debtor in care of Richard A. LaCava
the additional $1,852 she received from Debtor 2 , and that her
application for additional fees should be denied.
**END OF MEMORANDUM**
Case: 10-31138 Doc# 85 Filed: 08/13/10 Entered: 08/17/10 14:51:49 Page 3 of 4

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Court Service List
Lynda Hung, Esq.
Law Office of Lynda Hung
P.O. Box 1713
San Bruno, CA 94066
Carlos S. De Castro
3637 Georgetown Court
South San Francisco, CA 94080
Case: 10-31138 Doc# 85 Filed: 08/13/10 Entered: 08/17/10 14:51:49 Page 4 of 4