Memorandum of Decision Re: Arbitration of Attorney Fees

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Judge's Decisions
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re RANDOLPH DALE,                                                                        No. 97-14615      Debtor(s). ______________________________________/
Memorandum of Decision re Fees
     Debtor Randolph Dale hired attorney Lysbeth Goodman to file a Chapter 13 bankruptcy for him in January, 1998. She agreed to perform the "basics" of a Chapter 13 for a flat fee of $3,500.00, paid by Dale's mother. There was no agreement regarding other services which might become necessary.      After the filing, Dale became involved in difficult and protracted litigation with a former attorney of his who was a creditor in the Chapter 13 case. Goodman represented Dale ably in this litigation and, through the court's alternative dispute resolution program, reached a fair and just settlement of the litigation. Dale at first rejected the settlement and fired Goodman. Dale later accepted the settlement.      Goodman's application for fees is now before the court. She seeks $19,016.66 in fees and $589.29 in expenses, less the $3,500.00 she received. Dale objects, alleging that the $3,500.00 was supposed to be Goodman's total fee.      The court begins its analysis by noting that the fee Goodman seeks is fair and reasonable and well-earned. The case was very difficult, and she was able to assist Dale in the negotiation of a fair settlement.      Goodman was remiss in failing to provide Dale with a written fee agreement clearly spelling out her entitlement to fees. However, in the absence of such an agreement the attorney is still entitled to a reasonable fee. Cal. Bus. & Prof. Code § 6148(c). The fees sought by Goodman are reasonable.      The court is completely unconvinced by Dale's unsworn assertions that he thought Goodman was doing all of her work for a fixed $3,500.00 fee. Goodman discussed her fees with Dale at various times in the case, and told him that about $10,000.00 had accrued as of May, 1998. She did not give him monthly statements or otherwise inform him as to the extent of her fees, so that the $20,000.00 figure might have been a surprise. However, there is no doubt that Dale knew that Goodman's fees were increasing and that he would be liable for fees over and above the $3,500.00.      The court finds no merit to Dale's assertion that he has a right to have Goodman's fees arbitrated pursuant to state law. Section 330(a)(4)(B) of the Bankruptcy Code specifically provides that it is the province of the bankruptcy court to allow reasonable compensation to the debtor's attorney in a Chapter 13 case; any contrary provision of state law is trumped. Even if state law did apply, Dale waived any right to arbitration by filing a pleading in this court on October 13, 1998, objecting to Goodman's fees and specifically requesting the court to deny them.. See Cal. B&P .Code § 6201(d)(1).      For the foregoing reasons, Dale's objection to Goodman's fees will be overruled and the fees allowed as filed. State fee arbitration proceedings commenced by Dale shall be permanently enjoined. Goodman shall submit an appropriate form of order forthwith.
Dated: November 24, 1998                                                                          ____________________________                                                                                                                      Alan Jaroslovsky                                                                                                                      United States Bankruptcy