Tammy J. Belcher and John J. Belcher

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: 	:
:
TAMMY J. BELCHER 	: 	Case No. 04-13326PM
JOHN M. BELCHER 	: 	Chapter 13
: 	CONSOLIDATED
Debtors 	: 	(03-18286)
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MEMORANDUM OF DECISION
Before the court is the First and Final Application for Allowance of Attorneys’ Fees to
Counsel for the Chapter 7 Trustee in the Case of John M. Belcher, Bankruptcy Case No. 03-
18286 (“the Application”). Jeffrey M. Orenstein and Goren, Wolff & Orenstein, LLC (“the
Applicants”) filed the Application on March 11, 2008, seeking compensation of $11,696.00.
The Application presents an unusual situation in that the Chapter 7 Trustee (“the Trustee”)
liquidated no assets and made no distribution in this consolidated case.
Bankruptcy Case No. 03-18286 was filed by John M. Belcher on August 22, 2003, as a
case under Chapter 13. It was converted to a case under Chapter 7 on John M. Belcher’s motion
by Order entered December 4, 2003, and Michael G. Wolff was appointed as trustee.
Because of the substantial equity in the jointly-owned residence located at 15 Hibiscus
Court, Gaithersburg, Maryland, that would be available to pay joint debts of John M. Belcher
and his spouse, Tammy J. Belcher, the Trustee and his counsel moved aggressively to liquidate
the equity, filing a motion to employ a real estate agent on January 16, 2004. The Trustee filed
an adversary proceeding on February 12, 2004, to obtain approval under 11 U.S.C. § 363(h) to
Date signed June 02, 2008
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sell the estate’s interest and the interest of Tammy J. Belcher, who filed her own bankruptcy case
under Chapter 13 on February 13, 2004. This was followed by John M. Belcher’s motion on
February 17, 2004, to reconvert his case to one under Chapter 13. The Trustee opposed the
motion to reconvert, reporting an offer to purchase the property for $190,000.00. The motion to
reconvert was denied. There was neither any change in circumstances or other factor shown to
justify the extraordinary relief sought. A review of the schedules in both of the bankruptcy cases
demonstrated that there was not enough income to fund a confirmable plan. If their schedules
were accurate, they needed either a miracle or the ability to create money out of thin air to
accomplish their aims.
In April 2004, the Trustee filed a Motion for Relief from Stay in Tammy J. Belcher’s
case so as to enable him to proceed in the 11 U.S.C. § 363(h) action. This matter was continued
from time to time. Ultimately, the Trustee withdrew the Motion, and Tammy J. Belcher filed a
plan providing for payments of over $68,000.00 that was confirmed. The Trustee’s counsel
remained active after confirmation of Tammy J. Belcher’s plan and opposed the efforts of
Wachovia Bank to obtain relief from the automatic stay. Ultimately, an agreement was reached
whereby the case of John M. Belcher was reconverted to a case under Chapter 13 and
consolidated with the case of Tammy J. Belcher. The consent order memorializing the
agreement reflected that the parties were unable to agree as to the amount of compensation to be
allowed the Trustee’s counsel.
The Application is opposed by the Belchers as excessive, in that it is entirely out of
proportion to the results obtained. The court will review the Application under the Lodestar
approach as required by the Fourth Circuit in the case of Harmon v. Levin, 772 F.2d 1150, 1152
(CA4 1985). See also, Barber v. Kimbrell’s, Inc., 577 F.2d 216 , 226 n.28 (CA4 1978); In re
Garrison Liquors, Inc., 108 B.R. 561, 565 (BC Md. 1989). The 12 factors for the court to
consider are:
(1) The time and labor expended. The court finds that the Applicants spent the time
shown on their records in the Application.
(2) The novelty and difficulty of the questions raised. The issues involved, for the most
part, are not novel. The difficulty is that the Trustee was frustrated by the filing Tammy J.
Belcher’s bankruptcy case as the Trustee was negotiating a contract for the sale of the jointly-
held property. The Chapter 13 Plan proposed appeared impossible of fulfillment. This activity
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was at a time when the local real estate market was very favorably inclined towards sellers and
most likely could have resulted in a substantial distribution to unsecured creditors.
(3) The skill required to properly perform the legal services rendered. This work
required the efforts of experienced counsel. The Applicants possess this experience.
(4) The attorneys’ opportunity costs of pressing the instant litigation. This is not a factor
other than the fact that the time that the Applicants spent on this case could not be spent on other
cases.
(5) The customary fee for like work. The hourly charges by the Applicants appear to be
their usual and customary rate and well within the range of fees charged by counsel representing
trustees in this court.
(6) The attorneys’ expectations at the outset. The Applicants observed that if the
intended results were produced there was every likelihood that they would be paid their usual
and customary rate.
(7) The time limitations imposed by the circumstances. The case did not present
significant time limitations.
(8) The amount in controversy and the results obtained. But for the interdiction of
Tammy J. Belcher’s case under Chapter 13, the Trustee would have liquidated the Belchers’
residence and made a distribution in 2004 or early 2005. That distribution would have been less
than what would be distributed to creditors should the Belchers make all payments required
under the Plan. The Applicants suggest that because of the aggressive tack taken on behalf of
the Trustee that creditors will receive payment of all or most of their claims. The court cannot
wholly agree with this proposition. As counsel for the Belchers pointed out at argument, this
Chapter 13 case succeeded because Tammy J. Belcher is earning far more than the sum that was
originally scheduled.
(9) The experience, reputation and ability of the attorney. The Applicants are competent
and well regarded within the legal community.
(10) The undesirability of the case within the legal community. This is not a factor.
(11) The nature and length of the professional relationship between attorney and client.
The Trustee is a member of the law firm for which compensation is sought.
(12) Attorney’s fees awards in similar cases. The fees sought are comparable to those
sought in hundreds of similar cases. Compensation was delayed for more than three years on
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this account by the failure of John M. Belcher to implement the agreement to request
reconversion of his case and consolidation with the estate of Tammy J. Belcher.
After consideration of all of the foregoing, the court finds the critical factor to be the
results obtained. The court does not agree with the Applicants’ view of the reason for the
success of this consolidated bankruptcy case. Had the Trustee proceeded and sold the property
as planned, the distribution to creditors would not have been more than under a successful
Chapter 13 Plan, but most likely somewhat less. The court will not allow all the compensation
sought. At some point the Trustee should have taken a passive role with the Applicants’
activities limited to that of a watching brief.
Considering the disability of John M. Belcher, the court understands the Belchers’
interest in retaining their residence. At the same time, the Trustee did what Chapter 7 trustees
are supposed to do under 11 U.S.C. § 704(1) – that is, to collect and reduce to money the
property of the estate as expeditiously as possible, compatible with the interests of the parties in
interest. One is reminded of the phrase, “to a hammer, everything looks like a nail.”
An appropriate order will be entered.
cc: 	Jeffrey M. Orenstein, Esq., 15245 Shady Grove Road, Suite 465, Rockville, MD 20850
Robert J. Haeger, Esq., 9535 Fern Hollow Way, Gaithersburg, MD 20886
John M. Belcher and Tammy J. Belcher, 15 Hibiscus Court, Gaithersburg, MD 20878
Timothy P. Branigan, Esquire, P.O. Box 1902, Laurel MD 20725-1902
United States Trustee, 6305 Ivy Lane, #600, Greenbelt MD 20770
End of Memorandum
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