Kenneth Hines, Jr.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
IN RE: :
:
KENNETH HINES, JR. : Case No. 06-11358PM
: Chapter 13
Debtor :
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - :
MEMORANDUM OF DECISION
This case, filed March 14, 2006, is before the court following the failure of counsel to
respond to this court’s Order to justify the fee charged of $3,500.00. Inasmuch as counsel did not
attend a meeting of creditors with the Debtor, the services appear to consist of filing the petition
and schedules, together with a Notice of Intent to Sell Property of the Debtor. Following entry of
an Order on May 25, 2006, approving the sale, Debtor filed a motion on May 30, 2006, to
dismiss his case. An Order With Notice Dismissing Chapter 13 Case was entered that same date,
and the case was closed on June 23, 2006.
By Order entered June 6, 2006, counsel was directed to justify, within 10 days of entry of
the Order, her fee of $3,500.00 charged for services rendered to Debtor. Counsel failed to
respond. On June 16, 2006, the court entered an Order Limiting Fee of Counsel (to $850.00) and
Directing Refund to Debtor. Counsel filed a response on June 26, 2006, describing the services
rendered by her, including consultations with secured creditors and with the Chapter 13 Trustee.
Counsel stated that in view of the circumstances that her fee of $3,500.00 is fair and equitable.
The court finds first that all of the services described by counsel are normally rendered in any
case under Chapter 13 and that counsel’s Disclosure of Compensation drastically limited services
to be rendered for an extraordinary fee.
Date signed August 19, 2006
Entered: August 21, 2006 Case 06-11358 Doc 44 Filed 08/21/06 Page 1 of 3

Some history is appropriate. Before the enactment of the 2005 Amendments to the
Bankruptcy Code, most Chapter 13 cases with disclosure of compensation for limited services, as
used by counsel in this case, were in the range of $1,250.00 to $1,750.00. Following enactment
of the Reform Act, the fees have gone up in the light of increased responsibility on the part of
counsel and increased services required on the part of counsel. Here, counsel’s primary efforts
were concerned with the sale of Debtor’s house to himself and to his mother that he owned with
his estranged wife. The effort was accomplished, and Debtor gives credit to the party handling
settlement for convincing his wife to go along with the proposition. Debtor appeared in court
and expressed satisfaction with respect to the manner in which he was treated by counsel and
with his success in transferring title to the property.
Not disclosed to the court until the hearing was the fact that counsel received $400.00
from the Debtor during pendency of the Chapter 13 case, contrary to her Disclosure of
Compensation and to the Plan that she prepared for the Debtor providing for payments of her fee
by the Chapter 13 Trustee. It was further disclosed that counsel received an additional $2,000.00
in connection with the refinancing and drafting of a sales contract. The court is advised that
counsel received the balance of the $3,500.00 retainer out of the settlement proceeds, although it
is not clear whether credit was given for the $400.00 previously paid by the Debtor. In summary,
counsel received at least $5,500.00 from the Debtor.
Counsel urges that the $3,500.00 payment is governed by the retainer agreement.
However, counsel overlooks the provisions of § 329(b) of the Bankruptcy Code that requires the
court to inquire as to the reasonable value of all services rendered and to order the return of any
payment where those sums are excessive. This case was dismissed, as shown in counsel’s
Exhibits 2, 3, and 4, wherein, somehow, counsel expected the Chapter 13 Trustee to tell her what
would be required to pay all creditors under the Plan, when the bar date for filing claims had not
passed, and the Debtor had not participated in a § 341 Meeting of Creditors. Finally, while
counsel states that she spent 25 hours in connection with the handling of this incomplete case, no
statement of services was filed by counsel, and the court has no evidence before it as to the time
required to perform the services in question.
Considering all of the circumstances, but for the fact of the Debtor’s expression of
satisfaction with the services rendered, the court would not allow a fee in excess of $2,000.00.
An appropriate order will be entered.
Case 06-11358 Doc 44 Filed 08/21/06 Page 2 of 3

cc:
Kenneth Hines, Jr., 13020 Rosebay Drive, Germantown, MD 20874
Sari Karson Kurland, Esq., 211 Jersey Lane, Rockville, MD 20850
Nancy S. Grigsby, Trustee, P.O. Box 958, Bowie, MD 20718
End of Memorandum
Case 06-11358 Doc 44 Filed 08/21/06 Page 3 of 3