UNITED STATES BANKRUPTCY COURT
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NORTHERN DISTRICT OF CALIFORNIA
PAMELA ANNE BERG, No. 98-13970
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[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 ____________________________
United States Bankruptcy