1 The original Notice of Post-Petition Mortgage Fees, Expenses, and Charges Relating to Proof

of Claim No. 11 was dated June 23, 2014. This notice was amended on April 2, 2015. The amendment

has no effect on the fees and expenses at issue in this memorandum opinion.

2015 BNH 010 

UNITED STATES BANKRUPTCY COURT

DISTRICT OF NEW HAMPSHIRE

In re: Bk. No. 14-10163-JMD

Chapter 13

Guylaine L. Taal,

Debtor

Nancy H. Michels 

Parnell, Michels & McKay, PLLC 

Londonderry, NH

Attorney for the Debtor

Gregory T. Uliasz

Feniger & Uliasz, LLP

Manchester, NH 

Attorney for Creditor St. Mary’s Bank

MEMORANDUM OPINION

I. INTRODUCTION

The Court has before it the Debtor’s objection to proof of claim no. 11 (Doc. No. 56) and

her objection to a notice of post-petition mortgage fees, expenses, and charges relating to claim

no. 11 (Doc. No. 58) (collectively the “Objections”). St. Mary’s Bank is the creditor that filed

both claim no. 11 (“POC 11”) and the post-petition fee notice (the “Post-Petition Fee Notice”).1

In this opinion, the Court addresses the portion of the Objections that relates to attorney’s fees

and expenses, which St. Mary’s Bank seeks to recover pursuant to a note and mortgage.

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2

II. JURISDICTION

This Court has authority to exercise jurisdiction over the subject matter and the parties

pursuant to 28 U.S.C. §§ 1334, 157(a), and U.S. District Court for the District of New

Hampshire Local Rule 77.4(a). This is a core proceeding in accordance with 28 U.S.C. §

157(b)(2)(A) and (G).

III. FACTS

The background of this case is complex, involving the details of a contentious

relationship between the Debtor (the “Debtor”), her non-debtor spouse (“Mr. Taal”), and St.

Mary’s Bank (the “Bank”). The Bank is the mortgagee and note-holder of the first mortgage on

the Debtor’s principal residence (the “Note,” “Mortgage,” and “Property” respectively). Mr.

Taal is not obligated on the note, but did sign the mortgage and is a co-owner of the Property. 

Mr. Taal has filed three bankruptcy cases in this Court in the past several years, all of which

were dismissed without substantial progress toward confirming a chapter 13 plan. In contrast to

Mr. Taal’s conduct of his bankruptcy cases, the Debtor obtained counsel prior to filing, has

prosecuted this case in a timely manner, and has made significant progress towards confirming a

chapter 13 plan. Aside from this brief background, the Court will not recount the details of the

relationship between the parties. The Court set out the full background of this case and the

parties’ relationship in a previous opinion. See In re Taal, 520 B.R. 370 (Bankr. D.N.H. 2014).

Continuing disputes between the Debtor and the Bank have delayed confirmation of a

chapter 13 plan in this case. First, the Bank moved to dismiss this case as a bad faith filing and

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2

 Hereinafter, all references to “§,” “section,” “Code,” and “Bankruptcy Code” are

references to title 11 of the United State Code, unless otherwise indicated.

3

 The balance of the Objections—those issues relating to accounting of pre-petition

mortgage payments—have been further contested in additional pleadings. See Doc. Nos. 124

3

asked for in rem relief pursuant to 11 U.S.C. § 362(d)(4).2

 The Court resolved that motion in

favor of the Debtor. See Taal, 520 B.R. at 380. Next, the Debtor filed the Objections. The

Court held a number of hearings on the Objections, which were filed in November 2014. The

first was on January 16, 2015. At this hearing, the Court addressed the two main issues raised in

the Objections: (1) whether the Bank had misapplied pre-petition mortgage payments; and (2)

the amount of attorney’s fees and expenses included in POC 11 and in the Post-Petition Fee

Notice. After the hearing, the Court sustained the Objections in part, ruling that the Bank had

misapplied certain pre-petition mortgage payments and directed the Bank to correct its

accounting. See January 22, 2015 Order (Doc. No. 88). The Court also ordered the Bank to

provide the Debtor with copies of the invoices supporting its attorney fee and expense claim,

which the Court directed the Debtor to respond to. See January 21, 2015 Order (Doc. No. 85). 

After the Debtor filed a response to the Bank’s fee invoices (Doc. No. 104) and a

response to the Bank’s re-accounting of pre-petition mortgage payments (Doc. No. 106), the

Court held another hearing on April 3, 2015. At the hearing, the Court determined that the fee

invoices that the Bank had provided to the Debtor were insufficiently detailed for the Court to

make a ruling on whether the fees were allowable. The Court then ordered the Bank to submit

complete copies of its fee invoices and set a new deadline for the Debtor to respond. Once the

parties made their submissions, the Court took the dispute concerning the fee and expense

invoices under advisement.3 

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and 126. The Court issued an order on June 17, 2015 (Doc. No. 132) that resolved some of the

remaining disputes with regard to pre-petition, mortgage payment accounting and a related

sanctions motion. The Court will resolve any remaining issues raised in the Objections by

separate order.

4

IV. DISCUSSION

The current dispute between the Debtor and Bank focuses on attorney’s fees and other

expenses that the Bank incurred both pre-petition and post-petition, which the Bank asserts are

recoverable under the Note and Mortgage. The Debtor has proposed a chapter 13 plan that

would cure any defaults under the Note and Mortgage and maintain regular payments to the

Bank during the life of the plan. See Chapter 13 Plan Dated January 30, 2014, ¶ 5 (Doc. No. 8);

§ 1322(b)(5).

Legal Standard Applicable to Fees and Expenses

When a chapter 13 plan proposes to cure a default under § 1322(b)(5) the amount

necessary to cure the default is determined under state law. Specifically, § 1322(e) overrides the

default rules pertaining to secured claims set down in § 506(b), such as a secured creditor only

being entitled to attorney’s fees if the value of its collateral exceeds the value of its secured

claim. Section 1322(e) provides:

Notwithstanding subsection (b)(2) of this section and sections 506(b) and

1325(a)(5) of this title, if it is proposed in a plan to cure a default, the amount

necessary to cure the default, shall be determined in accordance with the

underlying agreement and applicable nonbankruptcy law.

Here, the Bank is claiming attorney’s fees and expenses in POC 11 and in the Post-Petition Fee

Notice. Pursuant to § 1322(e), the Court will determine the Cure Amount of the attorney’s fees

and expenses under state law and the provisions of the Note and Mortgage. 

Three different parts of the Note and Mortgage govern the Bank’s ability to recover

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5

attorney’s fees and other costs from the Debtor. Paragraph 7 of the Note, entitled “Borrower’s

Failure to Pay as Required,” provides in section (E):

Payment of the Note Holder’s Costs and Expenses

If the Note Holder has required me to pay immediately in full as described above,

the Note Holder will have the right to be paid back by me for all of its costs and

expenses in enforcing this Note to the extent not prohibited by applicable law.

Those expenses include, for example, reasonable attorneys’ fees. 

Section 9 of the Mortgage provides:

Protection of Lender’s Interest in the Property and Rights Under this

Security Instrument.

If (a) Borrower fails to perform the covenants and agreements contained in this

Security Instrument, (b) there is a legal proceeding that might significantly affect

Lender’s interest in the Property and/or rights under this Security Instrument

(such as a proceeding in bankruptcy . . . ) . . . then Lender may do and pay for

whatever is reasonable or appropriate to protect Lender’s interest in the Property

and rights under this Security Instrument, including protecting and/or assessing

the value of the Property . . . . Lender’s actions can include, but are not limited

to: . . . (b) appearing in court; and (c) paying reasonable attorney’s fees to protect

its interest in the Property and/or rights under this Security Instrument, including

its secured position in a bankruptcy proceeding. . . . Any amounts disbursed by

Lender under this Section 9 shall become additional debt of Borrower secured by

this Security Instrument. These amounts shall bear interest at the Note rate from

the date of disbursement and shall be payable, with such interest, upon notice

from Lender to Borrowing requesting payment.

Finally, § 14 of the Mortgage provides:

Loan Charges.

Lender may charge Borrower fees for services performed in connection with

Borrower’s default, for the purpose of protecting Lender’s interest in the Property

and rights under this Security Instrument, including, but not limited to, attorneys’

fees, property inspection and valuation fees. In regard to any other fees, the

absence of express authority in this Security Instrument to charge a specific fee to

Borrower shall not be construed as a prohibition on the charging of such fee. 

Lender may not charge fees that are expressly prohibited by this Security

Instrument or by Applicable Law.

Under the mortgage, “Applicable Law” is defined in sub-section (H) of the definitions section

(page 2 of the Mortgage) to mean “all controlling applicable federal, state and local statutes,

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4

 Although § 1322(e) directs the Court to determine the Cure Amount under state law, the

parties agreed that the federal lodestar approach to determining whether attorney’s fees are

reasonable was persuasive, given the language of the Note and Mortgage. The Court concludes

that New Hampshire law allows for this approach, where no New Hampshire statute is

controlling. See Town of Barrington v. Townsend, 164 N.H. 241, 249 (2012) (in determining

6

regulations, ordinances and administrative rules and orders (that have the effect of law) as well

as all applicable final, non-appealable judicial opinions.”

Under New Hampshire law, a request for attorney’s fees “must be grounded upon

statutory authorization, a court rule, an agreement between the parties, or an established

exception to the rule that each party is responsible for paying his or her own counsel fees.” In

the Matter of Hampers & Hampers, 154 N.H. 275, 289 (2006) (quotation omitted). An

agreement between the parties that shifts attorney’s fees is interpreted by “giving the language

used by the parties its reasonable meaning.” Turner v. Shared Towers VA, LLC, 167 N.H. 196,

207 (2014). Here, the Note and Mortgage plainly provide the Bank with the ability to recover

attorney’s fees and other costs from the Debtor under certain circumstances. The parties agree

that the Bank may recover attorney’s fees and other expenses as long as they are “reasonable or

appropriate to protect [the Bank’s] interest in the Property and rights under” the Note and

Mortgage. See Mortgage § 9. The parties disagree, however, as to whether specific tasks the

Bank’s attorney performed fall within the definition of fees chargeable to the Debtor. The

parties also disagree as to whether the Bank’s attorney expended a reasonable amount of time on

specific tasks. Finally, the parties disagree about whether certain expenses related to the

foreclosure process are reasonable. 

In determining whether the attorney’s fees included in the Cure Amount are reasonable,

the Court finds the federal lodestar approach to fees persuasive.4

 Under this approach, the Court

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whether attorney’s fees were recoverable under New Hampshire statute, federal lodestar

approach was not controlling). In general, when assessing attorney’s fee awards, the New

Hampshire Supreme Court looks to the New Hampshire Rules of Professional Conduct, which

includes factors that jibe with the lodestar method. See Funtown USA, Inc. v. Conway, 129

N.H. 352, 356 (1987) (quoting Couture v. Mammoth Groceries, Inc., 117 N.H. 294, 296 (1977)). 

7

“multipl[ies] the number of hours productively spent by a reasonable hourly rate.” Berliner v.

Pappalardo (In re Sullivan), 674 F.3d 65, 69 (1st Cir.2012) (quoting Torres-Rivera v. O’NeillCancel, 524 F.3d 331, 336 (1st Cir. 2008)). Here, the parties are not in dispute over the hourly

rate applied—$250 per hour for attorney time and $85 for paralegal time—and the Court finds

that these hourly rates are reasonable and commensurate with the usual rates charged in the

community for the type of work involved.

With the hourly rates determined, the Court will now focus on the number of hours

productively spent. In making this assessment, the Court should subtract time expended “on

unnecessary, duplicative, or overworked tasks.” Sullivan 674 F.3d at 69. This approach is

flexible; “[t]he court need not follow a rigid prescription when reducing fees; it may either

eliminate specific hours or reduce the overall fee award to a reasonable amount.” In re Little,

484 B.R. 506, 511 (B.A.P. 1st Cir. 2013). If a court reduces fees substantially, “then it must

provide a sufficiently detailed explanation . . . to establish the basis for the reduction.” In re

Graham, 2013 BNH 002, 6, No. 12-11152-JMD, 2013 WL 587305 at *3 (Bankr. D.N.H. Feb. 14,

2013). 

The majority of the parties’ dispute focuses on whether certain time the Bank’s attorney

spent was unnecessary, duplicative, or overworked. The Bank provided a detailed fee report that

includes attorney billing sheets and an overall summary that breaks the time down into

individual categories and summarizes the work on a general level. See Doc. No. 123 (the “Fee

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5

 To the extent necessary to discuss Mr. Taal’s prior bankruptcy filings, the Court takes

judicial notice of the docket in each case. Mr. Taal’s first bankruptcy case was assigned case no.

12-12575-BAH. 

8

Report”). For the sake of convenience, the Court has broken down the following analysis into

categories that mirror those in the Fee Report. The Court will go through each category,

summarizing the positions of the parties, and then determining the allowable amount of fees. 

Fee Categories

The following attorney’s fees are included in POC 11, meaning that any reduction in

these fees will affect the total amount of the Bank’s pre-petition claim.

(1) Appellate Proceedings Arising from Mr. Taal’s First Bankruptcy Case

In this category, the Bank seeks to recover for work its attorney did to analyze issues

relating to the automatic stay and Mr. Taal’s appeal of his first bankruptcy case. The Debtor

objects to these fees as not being related to the Property.

Mr. Taal’s first bankruptcy case was filed on August 15, 2012.5 It was dismissed on

January 25, 2013. Mr. Taal filed several motions to alter or amend the dismissal order—which

were denied—and ultimately appealed the dismissal order to the U.S. District Court for the

District of New Hampshire. This Court denied a motion to stay pending appeal.

As this was Mr. Taal’s first bankruptcy filing, an automatic stay arose pursuant to §

362(a) when he filed the petition, staying any action the Bank might have taken against Mr.

Taal’s interest in the Property. The automatic stay terminated when the Court dismissed the

case, but Mr. Taal’s several attempts to overturn the dismissal order arguably confused the date

upon which the stay ceased to exist. Here, the Court finds that the time the Bank’s attorney

spent allowable under the Note and Mortgage, given the potential impact of the automatic stay

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6

 The Court has combined the next two sections of the Fee Report, entitled “Default on

Loan and Initiation of Foreclosure Proceedings First Time” and “Confirmation of Title” as both

are integrally related to the Bank’s first foreclosure attempt.

9

on the exercise of the Bank’s rights under the Mortgage.

Total time allowed: 1.2 hours of attorney time and 1.6 hours of paralegal time. 

(2) First Foreclosure Attempt6

Here, the Bank seeks to recover fees for services related to its first attempt to foreclose

on the Property. This first attempt only proceeded to the issuing of an acceleration notice on the

Note before Mr. Taal filed his second bankruptcy petition. See In re Taal, 520 B.R. at 373. The

Bank’s attorney completed tasks such as reviewing the Note and Mortgage, dealing with title

issues—which were complicated because Mr. Taal and the Debtor had deeded the Property to a

trust without the Bank’s knowledge, see id. at 374—and drafting and sending notices of default

and an acceleration notice. In total, the Bank’s spent 16.4 hours of attorney time and 5.6 hours

of paralegal time on these matters. The Debtor argues that the time spent here was excessive for

a power of sale foreclosure proceeding in New Hampshire.

Overall, the Court agrees with the Debtor and finds the time spent on the foreclosure

excessive. In total, the Bank’s professionals spent over 20 hours only getting to the point where

they were sending the first notices of default and acceleration, in what was essentially an

ordinary power of sale foreclosure. To the extent the Bank’s review of the Property’s chain of

title was complicated by the Debtor and Mr. Taal’s actions, the Court finds the fees reasonable. 

Accordingly, the Court shall disallow 50% of the fees relating to the foreclosure work but allow

all the time for work on the examination of the chain of title. See Fee Report at §§ B and C. 

Time allowed for foreclosure related work: 12.8 hours of attorney time * 50% + 3.9 hours

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7

 The automatic stay expired thirty days into the case pursuant to § 362(c)(3) because this

was Mr. Taal’s second bankruptcy case pending within the same year after a dismissed case.

10

of paralegal time * 50% = 6.4 hours of attorney time + 1.95 hours of paralegal time.

Time allowed for title work: 3.6 hours of attorney time and 1.7 hours of paralegal time.

Total time allowed: 10 hours of attorney time and 3.65 hours of paralegal time.

(3) Mr. Taal’s Second Bankruptcy Case and Related Appellate Proceedings

The Bank seeks to recover attorney’s fees relating to Mr. Taal’s second bankruptcy

filing. The Bank’s attorney apparently performed work on a motion to limit the stay and Mr.

Taal’s attempt to avoid a judicial attachment that the Bank held on the Property. The Bank’s

attorney also did work to stop Mr. Taal from extending the automatic stay. In total, this work

adds up to 4 hours of attorney time. The Debtor objects to these fees, arguing that they are either

supported by vague time entries or are unrelated to the Property.

The Court will disallow these fees because the services relating to the motion to limit the

stay were unnecessary and because Mr. Taal’s motion to avoid lien was not related to the Bank’s

rights under either the Note or Mortgage. The work relating to the motion to limit the stay was

unnecessary because the automatic stay expired by operation of law, without the Bank’s

intervention, and Mr. Taal did not seek to reinstate it.7

 Further, the Bank never actually filed any

motions relating to the automatic stay.

 Mr. Taal’s Motion to avoid lien pursuant to § 522(f) (Doc. No. 56 in case no. 13-11253-

BAH) was not an attempt to avoid the Mortgage, but an attempt to avoid a judicial attachment on

the Property for a debt unrelated to the Note. Because the debt at issue was wholly unrelated to

the Note or Mortgage and the attachment did not affect the validity or priority of the Mortgage,

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8

 The Court has combined sections F and G of the Fee Report. The reference to the “New

Hampshire Banking Commission” should undoubtedly be to the “New Hampshire Banking

Department” or the “New Hampshire Banking Commissioner.” The Court has utilized the

Bank’s nomenclature in this opinion to avoid any confusion. 

11

any fees or costs the Bank incurred defending the lien avoidance motion are not recoverable

here.

Total time allowed: None. 

(4) Second Foreclosure Attempt

Here the Bank seeks to collect attorney’s fees for the second foreclosure attempt it

initiated, after the Court dismissed Mr. Taal’s second bankruptcy case. According to the Bank,

its professionals spent 8.8 hours of attorney time and 2.2 hours of paralegal time updating prior

work. The Debtor argues that this time is excessive, and the Court agrees. Given that the Court

has allowed fees for nearly the same amount of work for the first foreclosure, work which the

bank’s attorney completed just a few months earlier, taking an additional 10 hours to update that

work is unreasonable. The Court also notes that this foreclosure was interrupted, at an early

stage, by the filing of Mr. Taal’s third bankruptcy case, before the Bank even had an opportunity

to notice the foreclosure sale. See In re Taal, 520 B.R. at 373. Accordingly, the Court shall only

allow 25% of the amount requested.

Total time allowed: 8.8 * 25% + 2.2 * 25% = 2.2 hours of attorney time and .55 hours of

paralegal time.

(5) Banking Commission Complaint8

The Bank seeks to recover fees for Mr. Taal’s two complaints filed with the New

Hampshire Banking Commission. The Debtor argues that these complaints were unrelated to the

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9

 The Court has combined sections I and J of the Fee Report.

12

Note or Mortgage. There is nothing in the record to indicate how Mr. Taal’s complaints to the

Banking Commission affected the Bank’s rights under the Note or Mortgage. Accordingly, the

Court shall disallow the 8.1 hours of attorney time the Bank claims.

Total time allowed: None.

(6) Mr. Taal’s Third Bankruptcy Filing

The Bank asserts its right to collect attorney’s fees relating to Mr. Taal’s third

bankruptcy, including analyzing the implications of the automatic stay. As this was Mr. Taal’s

third bankruptcy filing with two prior cases dismissed during that year, the automatic stay did

not come into effect upon the filing of the petition. See § 362(c)(4). The Bank filed a motion to

confirm the stay was not in effect, and Mr. Taal moved to reimpose the stay, to which the Bank

objected. See Doc. Nos. 33, 34, and 41 in case no. 13-12346-JMD. For this work, the Bank

seeks fees for 3.9 hours of attorney time under the Note and Mortgage. The Debtor objects to

this time as unrelated to the Property. The Court finds these attorney’s fees allowable. Given

Mr. Taal’s multiple filings and motion to impose the automatic stay, which could have affected

the Bank’s rights under the Mortgage, the Court finds the time and effort expended by the Bank

to be recoverable and reasonable.

Total time allowed: 3.9 hours of attorney time.

(7) Various State Court matters9

Here, the Bank argues that it is entitled to recover time spent litigating with Mr. Taal in

state court. The Debtor identifies the lawsuit in question as one relating to a separate loan

between the Bank and Mr. Taal, which the Bank does not dispute. The Court shall disallow

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13

these fees because they do not appear to relate to the Bank enforcing or protecting its rights

under the Note and Mortgage. In total, the Bank has requested 9.6 hours of attorney time and 1.6

hours of paralegal time in this category.

Total time allowed: None.

(8) Third Foreclosure Attempt

Here the Bank seeks fees it incurred in relation to its third attempt to foreclose on the

Property. The Bank seeks to recover 32.6 hours of attorney time and 13.7 hours of paralegal

time for these efforts. According to the Bank, this time was spent updating its earlier work,

preparing sale notices, working with the auctioneer, setting a budget, planning the day of the

sale, organizing security for the sale, canceling the sale (after the Debtor filed her bankruptcy

petition), and meeting with potential buyers at the canceled sale. The Debtor objects to the

amount of time spent, arguing that it is nearly three times the amount that would be customarily

charged for a power of sale foreclosure.

Again, the Court finds these fees to be excessive. The Court understands the difficult

relationship between the Bank, the Debtor, and Mr. Taal. This relationship was strained to the

point that a state court issued a restraining order. Undoubtedly, this relationship complicated the

foreclosure process, and the Court finds it reasonable that the fees would be higher than normal

under these circumstances. But, expending over 40 hours of combined attorney-paralegal time is

excessive, and the Bank has not provided a sufficient explanation why so much time was

necessary or appropriate to protect its interest in the Property. The Court has already allowed

approximately 15 hours of time for the first and second foreclosure attempts. The work to

update those prior efforts to be used for round three should have been straightforward. The

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10 The Court has combined sections M and N of the Fee report. From this point forward,

the attorney time relates to the Post-Petition Fee Notice, not POC 11.

14

Court will reduce the fees for the third foreclosure attempt by 50%. The Court finds that

approximately 20 hours for a difficult foreclosure is reasonable, considering that a good portion

of the work was to update prior title reports and letters previously drafted.

Total time allowed: 32.6 * 50% + 13.7 * 50% = 16.25 hours of attorney time and 6.85

hours of paralegal time. 

(9) Injunction to Stop Foreclosure

In this category, the Bank seeks compensation for time and effort its attorney expended

halting Mr. Taal’s effort to enjoin its third foreclosure attempt in the U.S. District Court for the

District of New Hampshire. Mr. Taal appealed the denial of his request for an injunction to the

U.S. Court of Appeals for the First Circuit and the United States Supreme Court. The Debtor

objects to these fees as unrelated to the Property. The Court finds these fees to be reasonable. In

total, the Bank expended 4.7 hours of attorney time defending against Mr. Taal’s efforts in this

area. These efforts were related to the Bank enforcing its rights to enforce the Mortgage via

foreclosure. 

Total time allowed: 4.7 hours of attorney time.

(10) Initial Review of the Debtor’s Bankruptcy Petition10

The Bank argues that it is entitled to recover fees related to work its attorney did upon the

Debtor’s filing of her chapter 13 petition. This work includes reviewing the petition, reviewing

proofs of claims filed by other creditors, conferencing with the Bank’s representatives, and legal

research regarding the bankruptcy’s impact on the foreclosure sale and issues relating to the

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15

automatic stay. In total, the Bank is seeking 39.2 hours of attorney time and 9.7 hours of

paralegal time for this work. The Debtor argues again that these fees are plainly excessive, that

reviewing other creditors’ claims does not relate to the Property, and that some of the issues

marked as related to the initial filing in the detailed time sheets in fact relate to the Bank’s efforts

later in the case.

The Court finds that while this time is compensable under the Note and Mortgage—it all

appears to relate to protecting the Bank’s interest in the Property—the amount spent on an initial

review of the petition, proofs of claim, and automatic stay issues is excessive under the

circumstances present. The Bank’s attorney should have been familiar with the specific facts of

this case given Mr. Taal’s three prior filings and the various state court matters. As far as initial

review goes, the legal and factual issues involved are very similar. 

The Court will allow additional time as this bankruptcy filing was Mrs. Taal’s and not

Mr. Taal’s. This fact cuts both ways, however. One key difference between the bankruptcies of

Mr. Taal and the Debtor is the Debtor’s representation by legal counsel. Debtor’s counsel

completed and filed the petition, which inevitably made it easier for the Bank to review the

petition and have confidence in its content. Additionally, the Fee Report shows that the Bank’s

attorney was in communication with Debtor’s counsel after the filing of the petition, something

that also likely facilitated the Bank’s initial review. The Court does not find that the difficult

relationship between the Bank and the Taals should have been a complicating factor in an initial

review of the petition. At base, however, the Bank is requesting more than 40 hours of time for

the initial review of a routine chapter 13 petition where the Bank, its staff, attorney, and attorney

support staff were all throughly familiar with the facts involved. The amount of time spent is

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16

unreasonable. Accordingly, the Court will allow 33% of the time requested.

Total time allowed: 39.2 * 33% + 9.7 * 33% = 13 hours of attorney time and 3.2 hours of

paralegal time. 

(11) 2004 Exam

Here, the Bank seeks compensation for time its attorney spent preparing for a 2004

examination of the Debtor. The Bank avers this required detailed preparation and review of all

the documents related to the case. The Courts finds the time the bank spent on this matter to be

reasonable given the level of detail and amount of preparation required to conduct a 2004

examination, especially in light of the factually complex background in this case. The Court

shall further address the Debtor’s objection to these fees in a later section.

Total time allowed: 10.5 hours of attorney time and 6.2 hours of paralegal time. 

(12) 341 Meeting

The Bank also asks for compensation for the time its attorneys spent at the 341 meeting

of creditors in this case. The Bank sent two attorneys, given its contentious relationship with the

Debtor. In total Bank’s attorneys worked 5 hours on matters related to the 341 meeting,

including attendance and preparation. The Court finds this amount of time reasonable, and

having two attorneys attend the meeting was reasonable under the circumstances. The Court will

further address the Debtor’s objection to these fees in a later section.

Total time allowed: 5 hours of attorney time.

(13) Filing Proof of Claim and Objection to Plan

The Bank is seeking reimbursement for attorney’s fees it incurred filing its proof of claim

in this case and its objection to the chapter 13 plan. In total, the Bank claims a right to

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11 RSA 361-C:2 mirrors § 25 of the Mortgage:

If a retail installment contract or evidence of indebtedness provides for attorney's fees to

be awarded to the retail seller, lender or creditor in any action, suit or proceeding against the

retail buyer, borrower or debtor involving the sale, loan or extension of credit, such contract or

evidence of indebtedness shall also provide that:

I. Reasonable attorney's fees shall be awarded to the buyer, borrower or debtor if he

prevails in

(a) Any action, suit or proceeding brought by the retail seller, lender or creditor;

or

(b) An action brought by the buyer, borrower or debtor; and

17

reimbursement for 22.8 hours of attorney time and 9.4 hours of paralegal time for these matters. 

The Debtor argues that some of this time should be disallowed either because POC 11 contained

errors when it was initially filed or because the confirmation objection lacked merit. The Court

finds this time to be allowable under the Note and Mortgage. There is no indication that the

accounting errors in the proof of claim were introduced or caused by the Bank’s attorney. The

Court also notes that the confirmation hearing has not yet been concluded, so the Court cannot

rule that the Bank’s objection to confirmation lacks merit. Accordingly, the Court finds that the

Debtor’s objections to these fees unsustainable. 

Total time allowed: 22.8 hours of attorney time and 9.4 hours of paralegal time.

(14) Motion to Dismiss and for In Rem Relief

Here, the Bank seeks compensation for the Motion to Dismiss and for In Rem Relief that

it brought against the Debtor seeking to have the case dismissed. In total the Bank spent 111.3

hours of attorney time and 41.8 hours of paralegal time on this matter. The Debtor’s primary

objection to these fees relies on a section of the Mortgage that the Court has not yet discussed.

Section 25 of the Mortgage11 provides for fee-shifting in favor of the Debtor, under

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II. If a buyer, borrower or debtor successfully asserts a partial defense or set-off,

recoupment or counterclaim to an action brought by the retail seller, lender or creditor,

the court may withhold from the retail seller, lender or creditor the entire amount or such

portion of the attorney fees as the court considers equitable.

12 At page 13, paragraph 19 of the Bank’s Response to the Objections (Doc. No. 82), the

Bank refers to § 506(c). The Court assumes this was a typographical error, as Center discusses §

506(b), and § 506(c) relates to the trustee’s ability to recover costs from a secured creditor,

which is inapposite to the matter at hand.

18

certain conditions:

Attorneys’ Fees.

Pursuant to New Hampshire Revised Statutes Annotated Section 361-C:2, in the

event that Borrower shall prevail in (a) any action suit or proceeding, brought by

Lender, or (b) any action brought by Borrower, reasonable attorneys’ fees shall be

awarded to Borrower. Further, if Borrower shall successfully assert a partial

defense or set-off, recoupment or counterclaim to an action brought by Lender, a

court may withhold from Lender the entire amount or such portion of its

attorneys’ fees as the court shall consider equitable.

The Debtor successfully prevailed against the Bank’s Motion to Dismiss and for In Rem Relief. 

See In re Taal, 520 B.R. at 380. Based on these facts, the Debtor asserts, under § 25 of the

Mortgage, that (1) the Bank should not be allowed to collect any of the fees it requests for these

matters and (2) that the Bank should have to pay the Debtor’s attorney’s fees to defend the

Motion to Dismiss. 

The Bank’s sole argument against applying § 25 of the Mortgage in this fashion rests on

a faulty legal premise. The Bank argues that 11 U.S.C. § 506(b) preempts RSA 361-C:2, citing

this Court’s decision In re Center, 282 B.R. 561 (Bankr. D.N.H. 2002).12 In Center, the Court

held that “section 506(b) of the Bankruptcy Code preempts state law with respect to the

enforceability of an attorneys' fee provision contained in an agreement under which a creditor's

claim arises.” 282 B.R. at 568. This holding and Center in general are irrelevant to this case

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19

because the Debtor’s chapter 13 plan proposes to cure and maintain the Debtor’s obligation to

the Bank under the Note and Mortgage pursuant to § 1322(b)(5) . In such plans, § 1322(e)

directs the Court to look to state law to determine the Cure Amount, “notwithstanding §

506(b).” See Gagne v. Countrywide Home Loans, Inc. (In re Gagne), 378 B.R. 439, 443 (Bankr.

D.N.H. 2007) (“ [Section] 506(b) has no applicability in the cure situation in which a debtor is

merely keeping the original contract in place and bringing it up to date.”) (citing Collier On

Bankruptcy ¶ 1322.18 (Alan N. Resnick & Henry J. Sommer eds. 15th ed. 2015). 

The Court finds that § 25 of the Mortgage and the provisions of RSA 361-C:2 are

enforceable in the bankruptcy context. The language of § 25 refers to “any action suit or

proceeding” brought by the Bank. Section 9 of the Mortgage uses the term “proceeding” to refer

to a “proceeding in bankruptcy.” The Court sees no reason that these terms should not be

afforded consistent meaning throughout the Mortgage, especially where both sections deal with

attorney’s fees. Second, the plain and ordinary meaning of the terms “action,” “suit,” or

“proceeding” encompasses contested matters in a bankruptcy proceeding. 

This approach has been followed by courts in other states dealing with similar contracts

and statutes. In In re Giusto, the bankruptcy court awarded attorney’s fees to a debtor who

successfully defended against a mortgagee’s motion for relief from stay. In re Giusto, 532 B.R.

760 (Bankr. N.D. Cal. 2015). The court based the fee award on the language on California’s

version of RSA 361-C:2, Cal. Civ. Code § 1717 (“CCC § 1717”). After noting that CCC § 1717

allowed reciprocal attorney’s fees for “an action on a contract,” the court conducted an analysis

of California law and determined that a stay relief motion in a bankruptcy case would be “an

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action on a contract.” After making this determination, the court awarded attorney’s fees to the

debtor. See also In re Johnson 460 B.R. 234, 248 (Bankr. E.D. Ark. 2011) (in a contested matter

awarding attorney’s fees to the debtor based on a state law fee shifting statute that applied to

various types of collection actions) rev’d on other grounds by J.P. Morgan Chase Bank, N.A. v.

Johnson, 470 B.R. 829 (E.D. Ark. 2012). Given the language of the Mortgage, RSA 361-C:2,

and the example in Giusto the Court will accept that the fee shifting provisions of § 25 of the

Mortgage apply to the Motion to Dismiss. 

With regard to the Bank’s claimed attorney’s fees for the Motion to Dismiss and for In

Rem Relief, the Court finds it equitable to disallow the Bank’s fees. Both § 25 of the Mortgage

and RSA 361-C:2(II) provide the Court with discretion to disallow the Bank’s fees when the

Debtor prevails in an action brought by the Bank, such as the Motion to Dismiss. See Gaucher

v. Cold Springs RV Corp., 142 N.H. 299 (1997) (holding that trial court had discretion under

RSA 361-C:2(II) to withhold creditor’s attorney’s fees when debtor was successful in bringing

affirmative defense). The Motion to Dismiss was an “action” the Bank brought against the

Debtor. The Court finds it equitable to disallow the Bank’s fees, which are significant and

would potentially impact the Debtor’s ability to successfully reorganize under chapter 13. In its

Motion to Dismiss, the Bank asserted that this case had been filed in bad faith and should be

viewed merely as an extension of Mr. Taal’s legal crusade against the Bank. The Court found

the Bank’s claims to be unsupported and that the Debtor had conducted this case in good faith,

making all the required payments to the Bank post-petition and attempting to comply with all the

requirements imposed upon her under the Bankruptcy Code. See Taal 520 B.R. at 379. Given

the language in the Mortgage, and under all the circumstances, the Court finds it inequitable

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under the terms of the Note, Mortgage, and applicable state law that the Debtor would have to

finance litigation against herself when she ultimately prevailed. 

Under the language of § 25 of the Mortgage and RSA 361-C:2, awarding the Debtor

attorney’s fees is mandatory if the Debtor prevails (“in the event that Borrower shall prevail in

(a) any action suit or proceeding, brought by Lender, or (b) any action brought by Borrower,

reasonable attorneys’ fees shall be awarded to Borrower”) (emphasis added). Here, it is

undisputed that the Debtor prevailed on the Motion to Dismiss, and the Court must award her

attorney’s fees. The Court will address the specifics of this fee award in the context of a fee

application filed by Debtor’s counsel.

(15) Miscellaneous Objections

Finally, the Debtor raised several general objections to the Bank’s attorney’s fees

throughout her Objections, which the Court now addresses. The first relates to the Fee Report. 

The Debtor argued that the arithmetic in the Fee Report was inaccurate because the Bank had not

correctly summed the billable hours in its time sheets. The Debtor did not claim to have

reviewed each calculation and the ones she claimed were inaccurate, were only off by a few

hundred dollars. Given the extent to which the Court has already adjusted the Bank’s

recoverable attorney’s fees, it does not find it necessary to conduct a detailed review of the

arithmetic. The Court has already approved what it finds to be a reasonable amount of fees for

the work performed.

The Debtor has also argued that various parts of the Fee Report, such as the fees

generated at the 341 meeting and 2004 exam, were actually used for the purpose of filing the

Motion to Dismiss and should be disallowed under § 25 of the Mortgage. The Court does not

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22

find sufficient evidence in the record to support this claim. The pleading the Bank filed to

request the 2004 exam (Doc. No. 12) appears to relate to the feasibility of the Debtor’s proposed

chapter 13 plan. Additionally, the Bank would have been entitled to conduct a 2004 exam and

was entitled to attend and question the Debtor at the 341 meeting, even if it had not filed the

Motion to Dismiss. Accordingly, the Court shall overrule this portion of the Debtor’s objection.

To the extent that the Debtor raises other objections to the Bank’s fees not explicitly

addressed in this opinion, the Court either finds those objections to be de minimis in light of the

substantial reduction of the Bank’s attorney fee claim or without merit and shall overrule them. 

(16) Expenses

The Bank seeks expenses in addition to the attorney’s fees previously discussed. The

Bank included $8,258.20 in foreclosure related expenses in amended POC 11. These expenses

include newspaper publications required by state statute, appraisal fees, and fees incurred by the

Bank’s auctioneer, James R. St. Jean. These fees, although on the higher end, are reasonable

given all the circumstances of this case and given the Bank’s duty to conduct the sale in such a

manner to achieve the best price possible. In Murphy v. Financial Development Corp., the New

Hampshire Supreme Court described the duty a mortgagee owes to a mortgagor in conducting a

foreclosure sale as “essentially that of a fiduciary.” 126 N.H. 536 (1985). A mortgagee “must

exert every reasonable effort to obtain a fair and reasonable price under the circumstances.” Id.

(internal quotation omitted). Given this standard, the Court cannot say that the Bank’s efforts

were unreasonable. Further, the Debtor has not provided any countervailing evidence to

demonstrate that the Bank’s foreclosure expenses were unreasonable or excessive. 

The Bank also seeks reimbursement for costs its attorney incurred, both pre-petition and

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13 In the columns labeled “Time Requested” and “Time Allowed” the abbreviations “A:”

indicates attorney time billed and allowed at $250.00 per hour and “P:” indicates paralegal time

billed and allowed at $85.00 per hour.

23

post-petition. These costs amount to $200.17 for the pre-petition period and $1,889.52 for the

post-petition period. The Debtor has objected to these costs as insufficiently supported. After

reviewing the Fee Report and time sheets attached, the Court shall sustain the Debtor’s objection

to the $1,193.70 for “Sharon R Fagan.” There is no evidence in the record indicating who this

person is or what the expense relates to. The Court will allow the remainder of the expenses,

which appear to be sundry filings fees and copying charges. 

Total expense amount allowed: $8,258.20 + $200.17 + $1,889.52 - $1,193.70 =

$9,154.19. 

(17) Summary Table

The following table summarizes the preceding discussion:13

Category Time Requested Fees

Requested

Time Allowed Fees Allowed

Pre-Petition Fees To be Included in POC 11

(1) Taal Appeal of

1st Bankruptcy

Dismissal

A: 1.2

P: 1.6

$436.00 All $436.00

(2) 1st 

Foreclosure

Attempt 

A: 16.4

P: 5.6

$4,576.00 A: 10

P: 3.65

$2,810.25

(3) Taal Appeal of

2nd Bankruptcy

Dismissal

A: 4 $1,000.00 None $0.00

(4) 2nd Foreclosure

Attempt

A: 8.8

P: 2.2

$2,387.00 A: 2.2

P: .55

$596.75

(5) Banking

Commission

Complaint

A: 8.1 $2,025.00 None $0.00

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(6) Taal 3rd

Bankruptcy Filing

A: 3.9 $975.00 All $975.00

(7) State Court

Matters

A: 9.6

P: 1.6

$2,536.00 None $0.00

(8) 3rd Foreclosure

Attempt

A: 32.6

P: 13.7

$9,314.50 A: 16.25

P: 6.85

$4,644.75

(9) Injunction to

Stop Foreclosure

A: 4.7 $1,175.00 All $1,175.00

Sub-Total PrePetition Fees114 $24,424.50 56.2 $10,637.75

Post-Petition Fees to be Included in Post-Petition Fee Notice and Cure Amount

(10) Initial Work

for Debtor’s

Bankruptcy

A: 39.2

P: 9.7

$10,624.50 A: 13

P: 3.2

$3,522

(11) 2004 Exam A: 10.5

P: 6.2

$3,152.00 All $3,152.00

(12) 341 Meeting A: 5 $1,250.00 All $1,250.00

(13) Proof of

Claim and

Objection to

Confirmation

A: 22.8

P: 9.4

$6,499.00 All $6,499.00

(14) Motion to

Dismiss

A: 111.3

P: 41.8

$31,378.00 None $0.00

Sub-Total PostPetition255.9 $52,903.50 69.2 $14,423.00

Sub-Total All

Fees:

369.9 $77,328.00 121 $25,060.75

(15) Expenses Requested: 

$10,347.89 

Allowed: 

$9,154.19 

GRAND TOTAL ALLOWED: $34,214.94

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V. CONCLUSION

For the reasons set forth above and by separate order, the Court shall sustain in part and

overrule in part the Objections. This opinion constitutes the Court’s findings of fact and

conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. 

ENTERED at Manchester, New Hampshire.

Date: /s/ J. Michael Deasy

J. Michael Deasy

Bankruptcy Judge

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