Memorandum of Decision Re: Request for Fees

DO NOT PUBLISH This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re PAMELA ANNE BERG,                                                 No. 98-13970      Debtor(s). ______________________________________/
Memorandum on Request for Fees
     Attorney Stanley Feingold is a judgment creditor of debtor Pamela Berg. After he obtained his judgment, he recorded an abstract which created a lien on Berg's real property. Following confirmation Berg's Chapter 13 plan, Feingold has filed the present motion seeking to recover $15,543.00 in alleged fees and costs incurred during the bankruptcy proceedings. Most of this amount is for attorneys' fees, even though Feingold represented himself in proceedings before the court. Feingold bases his motion primarily on § 506(b) of the Bankruptcy Code, and secondarily on § 503(b).      Section 506(b) provides, in pertinent part: To the extent that an allowed secured claim is secured by property . . . there shall be allowed to the holder of such claim . . . any reasonable fees, costs, or charges provided for under the agreement under which the claim arose. (emphasis added)      Feingold takes the position that this section is applicable because his judgment arose out of a contract containing an attorneys' fee clause. However, he has misinterpreted the statute. While his initial claim against Berg may have arose from an agreement, his secured claim arose out of the recording of an abstract of judgment. Section 506(b) applies only to secured claims. It is not a basis for allowing fees, costs and charges to a nonconsensual secured creditor, as his secured claim was created involuntarily and did not arise out of an agreement. See 8 Collier on Bankruptcy (15th Ed. Rev.), ¶ 1300.73[1][e], p.1300-149-50. ("[A]n oversecured creditor holding a nonconsensual lien is entitled to interest under section 506(b), but not to fees, costs and charges." There is accordingly no basis for granting Feingold's motion under § 506(b).      As a backup position, Feingold alleges that his efforts caused Berg to reveal $100,000.00 in cash which she had not disclosed, and this money formed the basis for the plan which was eventually confirmed. He therefore seeks reimbursement pursuant to § 503(b). Section 503(b)(4) allows as an expense of administration "reasonable compensation for professional services rendered by an attorney . . . of an entity whose expense is allowable under paragraph (3) of this subsection . . . ." The problem with this argument is that Berg does not fit within any of the § 503(b)(3) categories.      Of the six specified categories of § 503(b)(3), those described in (A), (C), (E) and (F) are clearly inapplicable. Subsection (B) does allow an administrative expense to a creditor that recovers property concealed by the debtor, but only after court approval which Feingold never sought. Subsection (D) allows an administrative expense claim to a creditor who makes a substantial contribution to a case, but this subsection only applies to cases under Chapter 9 or Chapter 11. Since Feingold is not covered by any part of § 503(b)(3), he cannot recover his attorneys' fees under § 503(b)(4).      For the foregoing reasons, Feingold's motion will be denied. Berg's request for sanctions will be denied. Berg's attorney Costin shall submit an appropriate form of order.
Dated: November 18, 1999                                                                        ____________________________                                                                                                                      Alan Jaroslovsky                                                                                                                      United States Bankruptcy