Alexander Alberto Castillo

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UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF CALIFORNIA
In re
ALEXANDER ALBERTO CASTILLO,
aka DAXENO CASTILLO,
aka ALEXANDER DAXENO CASTILLO,
aka DAXENO ALEXANDER CASTILLO,
Debtor.
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Case No. 10-33208 TEC
Chapter 7
MEMORANDUM RE ORDER TO SHOW CAUSE RE ATTORNEY FEES
On February 11, 2011, the court held a hearing on the court’s
January 21, 2011 Order to Show Cause Regarding Attorney Fees (the
Order). 	Michael Shemtoub (Shemtoub) appeared in response to the
Order. 	Alexander Castillo (Debtor) appeared in pro per.
Upon due consideration, the court determines that the attorney
fees collected by Shemtoub from Debtor exceed the value of the
services provided to Debtor, and that Shemtoub must repay Debtor
all fees collected, except the $299 chapter 7 filing fee. 	This
memorandum shall constitute the court’s findings of fact and
conclusions of law.
FACTS
On December 29, 2009, Debtor retained Shemtoub to file a
chapter 7 bankruptcy case and agreed to pay Shemtoub a flat fee of
MEMORANDUM RE ATTORNEY FEES 	-1-
Signed and Filed: April 29, 2011
________________________________________
THOMAS E. CARLSON
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
April 29, 2011
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 10-33208 Doc# 17 Filed: 04/29/11 Entered: 04/29/11 15:18:02 Page 1 of 5

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$1,500 for Shemtoub’s legal services in connection with Debtor’s
bankruptcy case.
On January 6, 2010, Debtor paid Shemtoub $100. 	On August 18,
2010, Debtor paid Shemtoub an additional $800.
On August 20, 2010, Shemtoub filed Debtor’s chapter 7
bankruptcy petition, paid Debtor’s $299 chapter 7 filing fee, and
filed a Rule 2016(b) statement. 	The Rule 2016(b) statement
provides that Debtor paid counsel $500 prepetition, 1 that the unpaid
balance is $1,000, and that 	Debtor’s wages are the source of
payments for the unpaid balance.
On August 27, 2010, Shemtoub spent three hours attempting to
stop the garnishment of Debtor’s wages.
On September 14, 2010, Shemtoub spent thirty minutes gathering
documents required to be filed in the bankruptcy case pursuant to
11 U.S.C. § 521.
On September 15, 2010, Shemtoub spent thirty minutes
attempting to obtain tax information for Debtor from the Internal
Revenue Services.
On September 21, 2010, the initial section 341 meeting of
creditors was held. 	The 341 meeting was continued to November 2,
2010.
On September 23, 2010, Shemtoub e-mailed Debtor the following:
“Alex–you are past due on the $1,000 due on your case. 	Please send
the balance to us as soon as possible to ensure that your case is
not dismissed.”
On October 29, 2010, Debtor paid Shemtoub $200.
1 Shemtoub’s declaration in response to the order to show
cause provides that Shemtoub collected $900 from Debtor
prepetition.
MEMORANDUM RE ATTORNEY FEES 	-2-
Case: 10-33208 Doc# 17 Filed: 04/29/11 Entered: 04/29/11 15:18:02 Page 2 of 5

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On November 1, 2010, Shemtoub e-mailed Debtor asking for
immediate payment of $450 for Shemtoub’s appearance at the
continued meeting of creditors and for making a court appearance on
Debtor’s behalf.
On November 2, 2010, the continued section 341 meeting of
creditors was held.
On November 5, 2010, the chapter 7 trustee filed a no-asset
report.
On November 18, 2010, Debtor sent a letter to the above-signed
judge regarding Shemtoub’s September 23rd e-mail.
November 22, 2010 was the deadline for a creditor to file a
complaint objecting to Debtor’s discharge or to determine the
dischargeability of a debt. 	No such complaint was filed. 	On
November 23, 2010, the court entered Debtor’s discharge.
On January 21, 2011, the court issued the Order, setting a
hearing to show cause why, pursuant to 11 U.S.C. §§ 329(b) and
362(k), Shemtoub should not be required to disgorge the fees paid
by Debtor or to pay damages to Debtor if the court found that
Shemtoub intentionally violated the automatic stay. 	The Order set
February 4, 2011 as the deadline to file a response.
On February 7, 2011, Shemtoub filed a response to the Order.
The response does not contain any documentary evidence that
Shemtoub billed Debtor separately for the work performed for Debtor
postpetition, or that the parties had agreed to modify the
prepetition retainer agreement. 	The declaration confirmed the
prepetition agreement that Shemtoub would represent Debtor in the
bankruptcy case for a flat fee of $1,500.
MEMORANDUM RE ATTORNEY FEES 	-3-
Case: 10-33208 Doc# 17 Filed: 04/29/11 Entered: 04/29/11 15:18:02 Page 3 of 5

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LAW
If compensation to a debtor’s counsel exceeds the reasonable
value of services provided, the court may order the fees returned
to the debtor. 	11 U.S.C. § 329(b)(2); In re Jastrem, 253 F.3d 438,
443 (9th Cir. 2001). 	The court has authority to order repayment of
all fees when an attorney receives compensation in a manner that
violates the Bankruptcy Code. 	E.g., In re Waldo, 417 B.R. 854,
892-96 (Bankr. E.D. Tenn. 2009)
The court determines that Shemtoub received compensation in a
manner that violated the automatic stay 2 and the discharge
injunction, 3 because Shemtoub e-mailed Debtor postpetition to demand
payment of fees owing under the prepetition retainer agreement,
because Shemtoub collected $200 postpetition on account of fees
owing under the prepetition retainer agreement, and because
Debtor’s obligation to pay the prepetition fees was discharged.
Jastrem, 253 F.3d at 442. 	The appropriate remedy for Shemtoub’s
violation of the Bankruptcy Code is disgorgement of all fees paid
by Debtor to Shemtoub (pre- and postpetition), less the $299
chapter 7 filing fee. 	11 U.S.C. § 329(b); see Waldo, 417 B.R. at
892-96.
**END OF MEMORANDUM**
2 11 U.S.C. § 362(a).
3 11 U.S.C. § 524(a).
MEMORANDUM RE ATTORNEY FEES 	-4-
Case: 10-33208 Doc# 17 Filed: 04/29/11 Entered: 04/29/11 15:18:02 Page 4 of 5

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Court Service List
Alexander Alberto Castillo
339 Valencia Drive
South San Francisco, CA 94080
Michael Shemtoub, Esq.
Law Offices of Michael Shemtoub
8383 Wilshire Blvd. #702
Beverly Hills, CA 90211
MEMORANDUM RE ATTORNEY FEES 	-5-
Case: 10-33208 Doc# 17 Filed: 04/29/11 Entered: 04/29/11 15:18:02 Page 5 of 5