Teresa Ines Luyo

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF MARYLAND
at Greenbelt
In Re: 	*
TERESA INES LUYO
* 	Case No. 	07-21585PM
* 	Chapter 	13
*
*
Debtor(s) 	*
MEMORANDUM TO COUNSEL FOR THE DEBTOR
(Application for Compensation)
Before the court is the Application for Compensation filed by Edward V. Hanlon, Esquire,
counsel for the Debtor. Counsel seeks payment forthwith of the $2,659.00 balance due of a total fee
charged in the amount of $3,990.00. This would result in payment in advance for all services to be
rendered over the possible five-year life of this case, except for certain specified items such as
adversary proceedings that would call for additional charges. The Chapter 13 Trustee filed an
objection to Counsel’s Application. In response to the Trustee’s objection, Counsel filed the same
document that he has filed in several other cases following the receipt of objections to his fee
applications and various court rulings. This 27-page memorandum is largely devoted to an attack on
Appendix F of the Local Bankruptcy Rules of this court. His theme is that the Local Bankruptcy
Rules are a nullity.
The efficacy of Appendix F is not the issue before the court. Appendix F was developed
with the aid of two local organizations of bankruptcy lawyers in an effort to simplify the
compensation process for lawyers filing bankruptcy cases under Chapter 13. It represents the
conclusions of the Bench and Bar as to what would be the reasonable value of services customarily
Date signed May 12, 2008
Entered: May 13, 2008 Case 07-21585 Doc 26 Filed 05/13/08 Page 1 of 3

rendered in cases under Chapter 13. The idea was to create presumptively reasonable fees in the
knowledge that some cases would deviate from the norm, but over the passage of time counsel’s
fees would even out. The process of the creation of this Appendix is described by Chief Judge Keir
in the case of In re Bellamy, 379 B.R. 86, 96 (BC Md. 2007). Chief Judge Keir also points out in
the Bellamy decision that nothing prevents counsel seeking a deviation from the standards of
Appendix F from filing a proper application for compensation. This is precisely what is now before
the court. This court has authority under § 329(b) of the Bankruptcy Code to review fee
applications whether or not there is an objection. In re Courtois, 222 B.R. 491, 494 (BC Md.
1998); In re Morgan, 48 B.R. 148, 149 (BC Md. 1985). Congress enacted 11 U.S.C. § 329(b) to
afford protection to debtors who often file for bankruptcy protection in haste without acting as
reasonably-informed consumers and who often choose the first lawyer to whom they are
recommended or who may solicit them. See, Land v. First Nat’l Bank in Alamosa (In re Land), 116
B.R. 798, 804 (D. Col. 1990), aff’d 943 F.2d 1265 (CA10 1991).
Regardless of whether Appendix F is controlling, it is authoritative considering the joint
effort that went into its creation. The court finds that the services to be rendered under the
Disclosure of Compensation are half-way between the service levels of the presumptively
reasonable fees set forth in paragraphs 4.A. and 4.B. of Appendix F to the Local Bankruptcy Rules.
Thus, most likely the court would, but for Counsel’s opting out, allow compensation as set forth in
paragraph 4.D. of Appendix F. That is, with $2,000.00 allowed as of confirmation and the balance
of the fee payable at the rate of $125.00 a month thereafter. However, Counsel expressly took
himself out of the area of protection accorded fee arrangements presumptively deemed allowable by
Appendix F. Since Counsel has nearly five years of service remaining in his representation of the
Debtor, Counsel will, from time to time, have to file applications for interim compensation under
11 U.S.C. § 331.
In the Application and Response, Counsel filed boilerplate pleadings that duplicate
pleadings filed in several other cases. The pleadings are insufficient. Counsel must file a
supplement to his interim Application to deal with the factors of time and labor expended and
results obtained. Any such application is more helpful to the court were it to conform to the
requirements of the Compensation Guidelines of this court contained in Appendix D to the Local
Rules. Particular attention should be paid to the requirements of daily time entries and organization
by tasks. Counsel has the burden of proof of establishing the reasonableness of his request for
compensation. Hensley v. Eckerhart, 461 U.S. 424, 437 (1983).
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The court will defer its ruling on this Application pending receipt of the additional data that
will enable it to be informed as to the key factor of the time and labor expended in this case.
Finally, from its experience in the administration of thousands of these cases, the court observes
that there is little benefit to the Debtor of the “reduced” fees for certain work likely to be required
by the Debtor after confirmation. The court notes that in several Chapter 13 cases involving this
“reduction,” debtors often have been unrepresented in the most critical aspect of the case after
confirmation. That is, debtors fall behind in payments to secured creditors who then seek relief
from the automatic stay of 11 U.S.C. § 362(a) to enable them to foreclose on debtors’ residences --
the protection of which triggered the filing of the bankruptcy case in the first instance.
cc:
Edward V. Hanlon, Esq., 5510 Cherrywood Lane, Suite G, Greenbelt, MD 20770
Teresa I. Luyo, 9720 Green Apple Turn, Upper Marlbobo, Md 20772
Nancy S. Grigsby, Trustee, P.O. Box 958, Bowie, MD 20718
United States Trustee, 6305 Ivy Lane, #600, Greenbelt MD 20770
End of Memorandum
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