Memorandum of Decision Re: Skip-Payment Nightmare

FOR THE NORTHERN DISTRICT OF CALIFORNIA In re FLOYD E. SQUIRES, III                                           No. 1-86-01289      Debtor. ___________________________/ FLOYD E. SQUIRES, III,      Plaintiff,    v.                                                                              A.P. No. 1-90-0043 WELLS FARGO BANK, et al.,      Defendants. ______________________________/
Memorandum and Order
     The debtor's confirmed Chapter 11 plan provided that the debtor and plaintiff in this action, Floyd Squires, could skip a certain number of payments to secured creditor and defendant Wells Fargo Bank. Some time after confirmation, a dispute arose between Squires and Wells Fargo as to whether Squires was current in his obligations under his plan; the "skip-payment" provisions created an accounting nightmare.      Taking the position that Squires was in default, Wells Fargo commenced foreclosure proceedings. Squires filed this adversary proceeding to stop the foreclosure, alleging that he was current with his payments.      On May 3, 1990, Squires tendered to Wells Fargo all of the delinquent payments Wells Fargo claimed. The only remaining issue is whether Wells Fargo may recover its attorneys' fees and foreclosure costs.      The deed of trust executed by Squires provides that Wells Fargo may recover an attorneys' fees it is forced to pay to protect its interest. Section 506(b) of the Bankruptcy Code provides that secured creditors such as Wells Fargo may recover such fees from the debtor to the extent that they are reasonable.      On August 1, 1990, the court ruled that the debtor had created the confusion surrounding his payments, and that Wells Fargo was accordingly entitled to recover those fees spent dealing with the confusion, as well as its foreclosure costs. The court excluded from recovery only those fees and expenses incurred in the unsuccessful arguments of Wells Fargo that it was not subject to the terms of the plan.      After reviewing the fee request, the court determines that it is reasonable and should be approved as filed. The court is satisfied that no fees have been sought for the excluded matter. While the time spent on some items may seem somewhat high, this is more than offset by the very reasonable rate of $90 per hour.      Accordingly, Wells Fargo shall recover attorneys' fees and expenses in the amount of $19,540.74 and foreclosure costs in the amount of $3,011.90, for a total of $22,552.64. This amount shall be added to the principal of the two notes on a pro rata basis, bear interest at the note rates, and be all due and payable when the notes mature. The debtor's monthly payments shall not be changed.      SO ORDERED.
Dated: October 25, 1990                                                                              _______________________                                                                                                                      Alan Jaroslovsky                                                                                                                      U.S. Bankruptcy