Charmoy v. McNeilly (In re McNeilly), Case No.: 15-30064 (AMN)

• Decision Date: 28 August 2017
• Docket Number: Case No.: 15-30064 (AMN)
• Parties: In re: JEHUJAH J. McNEILLY, Debtor SCOTT CHARMOY, ESQ., Applicant v. JEHUJAH J. MCNEILLY, Respondent
• Court: U.S. Bankruptcy Court — District of Connecticut

In re: JEHUJAH J. McNEILLY, Debtor

SCOTT CHARMOY, ESQ., Applicant
v.
JEHUJAH J. MCNEILLY, Respondent

Case No.: 15-30064 (AMN)

UNITED STATES BANKRUPTCY COURT DISTRICT OF CONNECTICUT NEW HAVEN DIVISION

August 28, 2017

Chapter 13

Re: ECF No. 55

RULING AND ORDER ALLOWING COMPENSATION OF $4,060.00 TO ATTORNEY CHARMOY

Before the court is an amended application for compensation filed pursuant to 11 U.S.C. § 330 by Scott M. Charmoy, Esq. ("Attorney Charmoy"), former counsel to the debtor, Jehujah J. McNeilly ("Ms. McNeilly"), seeking allowance of attorney's fees and costs totaling $8,650.00 incurred in the representation of Ms. McNeilly in this chapter 13 case.¹ ECF No. 55. Ms. McNeilly objected to the fee request asserting that she had already paid Attorney Charmoy approximately $16,110.00 for legal services in this bankruptcy proceeding and should owe nothing further. ECF No. 48.

For the reasons that follow, the court allows compensation (including allowance of attorney's fees and allowance of reimbursement of costs) in the total amount of $4,060.00. The court finds that Ms. McNeilly paid $2,700.00 to Attorney Charmoy in connection with this bankruptcy proceeding, leaving a balance due of $1,360.00.

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I. RELEVANT PROCEDURAL HISTORY

On January 16, 2015 (the "Petition Date"), Ms. McNeilly filed a voluntary chapter 13 bankruptcy petition, with the assistance of Attorney Charmoy. ECF No. 1. As required by Fed.R.Bankr.P. 2016(b) ("Rule 2016"), Attorney Charmoy filed a disclosure of compensation form, then known as Official Form B203.² Although the form (the "Form B203") was unsigned, it was electronically filed by Attorney Charmoy via the court's CM/ECF website.³ The Form B203 reported that Attorney Charmoy had agreed to accept $3,750.00 as compensation for legal services and that he had received all of the fee prior to the Petition Date. ECF No. 1-2, p. 8.

On September 30, 2016, Attorney Charmoy filed an application for compensation seeking allowance of compensation in the amount of $8,650.50, authorization to apply a pre-petition retainer of $2,420.00,⁴ and payment of the balance of $6,230.50 through Ms. McNeilly's chapter 13 plan, when confirmed. ECF No. 40. On the same day, Attorney Charmoy moved to withdraw as counsel. ECF No. 41. On October 31, 2016, after notice and a hearing and with Ms. McNeilly's consent, the court granted Attorney Charmoy's motion to withdraw. ECF No. 49.

Ms. McNeilly, proceeding pro se, filed an objection to the application for compensation alleging that she had fully compensated Attorney Charmoy. ECF No. 48.

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In her objection, Ms. McNeilly alleged she had agreed to compensate Attorney Charmoy a total of $4,260.00 for legal services, with $3,700.00 as the base fee for the bankruptcy plus a $250.00 consulting fee and a $310.00 filing fee. ECF No. 48, p. 4.

On November 15, 2016, Attorney Charmoy filed an amended application for compensation seeking approval of $8,650.50 in fees for legal services rendered from January 16, 2015 through and including July 5, 2016 ("Amended Application"). ECF No. 55. The Amended Application also sought an order allowing application of a pre-petition retainer of $ 1,214.50 and payment of the balance of the fees (of $ 7,436.00) through Ms. McNeilly's chapter 13 plan, when confirmed.

On May 22, 2017, the court held an evidentiary hearing on the Amended Application ("May 22 Hearing"). During the May 22 Hearing, the court admitted exhibits offered by each party and heard testimony from Attorney Charmoy, Ms. McNeilly, and Ms. McNeilly's son, William McNeilly.

After the hearing, on May 26, 2017, Attorney Charmoy filed an Amended Disclosure of Compensation, Official Form 2030, certifying that he had agreed to accept $4,200.00 for legal services rendered in connection with this bankruptcy case ("Amended 2016(b) Disclosure"). ECF No. 85. As part of the Amended 2016(b) Disclosure, Attorney Charmoy represented that in exchange for the fee of $4,200.00, he had agreed that the scope of his representation would include, among other things, "representation of the debtor in adversary proceedings and other contested bankruptcy matters" but excluded services such as representation in "contested matters." Compare ¶ 6(d) with ¶ 7 of both ECF No. 1-2, p. 8 and ECF No. 85.⁵

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II. FINDINGS OF FACT

The court finds the following facts from the record of the case and the testimony and exhibits introduced during the May 22 Hearing.

1. At some point in 2010, Ms. McNeilly, along with her son, William McNeilly, contacted, and met with, Attorney Charmoy for legal assistance in addressing a foreclosure action commenced against Ms. McNeilly relating to her property located at 10 Lester Street, West Haven, Connecticut ("2010 Meeting"). Test. J. McNeilly, ECF No. 84 at 00:10:10 - 00:10:30; Test. W. McNeilly, ECF No. 83 at 01:29:50 - 01:31:02; and Test. Charmoy, ECF No. 83 at 00:32:20 - 00:32:44.

2. Attorney Charmoy had represented William McNeilly before the 2010 Meeting. The evidence shows that Attorney Charmoy provided legal services to William McNeilly related to two cases pending in the United States District Court for the District of Connecticut. Test. J. McNeilly, ECF No. 84 at 00:31:00 - 00:31:30.

3. During the 2010 Meeting, the McNeillys and Attorney Charmoy discussed the option of commencing a chapter 13 bankruptcy case in order to save Ms. McNeilly's 10 Lester Street property. Test. Charmoy, ECF No. 83 at 00:32:20 - 00:32:44.

4. During the 2010 Meeting, Attorney Charmoy estimated that, on average, he charged approximately $4,500.00 to represent a debtor in a chapter 13 bankruptcy proceeding. Test. W. McNeilly, ECF No. 83 at 01:30:50 - 01:32:00. William McNeilly believed that this amount was on the higher side but in the "ballpark" compared to other estimates he had received from attorneys for chapter 13 cases.

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Test. W. McNeilly, ECF No. 83 at 01:31:10 - 01:32:00. William McNeilly advised his mother to proceed with representation by Attorney Charmoy at the amount of $4,500.00. Test. W. McNeilly, ECF No. 83 at 01:30:50 - 01:32:00.

5. As a result of the 2010 Meeting, Ms. McNeilly retained Attorney Charmoy to provide legal services to her regarding the foreclosure action on 10 Lester Street and a possible chapter 13 bankruptcy filing. Test. Charmoy, ECF No. 83 at 00:32:20 - 00:33:55; Test. J. McNeilly, ECF No. 84 at 00:11:40 - 00:11:55; Test. W. McNeilly, ECF No. 83 at 01:30:50 - 01:32:00.

6. For the purposes of Attorney Charmoy's pending Amended Application, the relevant terms of engagement by Ms. McNeilly are the terms of his representation relating to the bankruptcy proceeding, rather than the foreclosure proceeding. However, while the evidence is clear that Ms. McNeilly hired Attorney Charmoy for a bankruptcy case, whether a "contested" motion pursuant to 11 U.S.C. § 506(a) was included in the original fee or even contemplated by the parties is unaddressed in the record.

7. Ms. McNeilly testified that she executed Exhibit A, a document entitled "Agreement to Provide Legal Services - Chapter 13 Bankruptcy" ("Retainer Agreement"). Test. J. McNeilly, ECF No. 84 at 00:42:15 - 00:42:38. However, she also testified that she did not read or fully understand the Retainer Agreement. Test. J. McNeilly, ECF No. 84 at 00:44:00 - 00:44:50; 00:49:00 - 00:49:45.

8. The Retainer Agreement contained the following relevant provisions:

1. LEGAL SERVICES TO BE PROVIDED: You agree that the LAW FIRM will represent YOU in the following matter:

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Preparation and filing of a voluntary Chapter 13 bankruptcy petition, attendance at 341 meetings, prosecution of uncontested lien avoidance motions pursuant to 11 U.S.C. § 522 and 11 U.S.C. § 506 and any and all work necessary to confirm an uncontested Chapter 13 plan.

The legal work includes consultation and advice, preparation of Chapter 13 schedules, commencement and defense of all appropriate litigation with LAW FIRM'S areas of practice and expertise, drafting of Plan, defense of pre-confirmation motions for relief from stay, lien avoidance, and all matters pertaining to confirming an uncontested Chapter 13 Plan.

LEGAL SERVICES EXCLUDED FROM THIS AGREEMENT include any work not listed above or any work after confirmation of your plan or after conversion of your case, including without limitation matters such as motion to modify the Plan after Confirmation, defense of motions to dismiss or defense of motions for relief from stay, and matters which result from YOUR failure to make payments to the Chapter 13 trustee or to a creditor. If you need any services after confirmation of the Chapter 13 Plan, you will be billed separately under the terms of a separate agreement.

2. ADDITIONAL LEGAL SERVICES. If YOU need any other services which may or may not be related to the above matter, You and the LAW FIRM may make a new agreement to provide the other services.

3. A. INITIAL PAYMENT. The LAW FIRM will begin work on your case upon receipt of part or all of the initial retainer of $3,750.00. ... This agreement is null and void unless initial payment is made. You agree that the LAW FIRM may apply to the Court for additional fees, and agree to be responsible for all such additional fees, REGARDLESS OF ANY REDUCTION IN SAME BY THE COURT AND REGARDLESS OF WHETHER YOUR CASE IS CONVERTED TO CHAPTER 7.⁶

B. HOURLY RATE. YOU agree to pay the LAW FIRM for legal services performed pre-confirmation as approved by the Bankruptcy Court at the following current rates:

Services of	Rate per Hour
Scott M. Charmoy	$300.00
Sheila S. Charmoy	$300.00
Paralegal	$110.00

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C. ADJUSTMENT OF HOURLY RATES. The LAW FIRM may from time to time adjust its hourly rates. You will be notified 30 days prior to such an adjustment by letter which will set forth the adjustments. You will be billed after the effective date of the adjustment at the new rate.

Exhibit A, p. 1 - 2.

9. Even though the Retainer Agreement was dated December 2010, Ms. McNeilly did not file for

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