Opinion ID: 515110
Heading Depth: 2
Heading Rank: 2

Heading: Application of the Contingent Fee Agreement to Proceedings Under Section 328(a)

Text: 34 As set forth above, Sonn was informed that the estate had no funds to pay his fees if he agreed to pursue the estate's claim against Voth in state court. The proposed order for approval of his appointment was presented to the court by Sonn and the trustee. This document states on its face that any award of compensation is subject to further order of court. The order was also conditioned upon compliance with section 328(a). That statute expressly provides for court approval of the terms and conditions of any fee agreement. It further states that 35 the court may allow compensation different from the compensation provided under such terms and conditions after the conclusion of such employment, if such terms and conditions prove to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions. 36 11 U.S.C. Sec. 328(a) (1984) (emphasis added). 37 At the time he was employed by the trustee, Sonn was aware that the estate was without funds and that the only source of payment would be one-third of any court award recovered by the Wolfs against Voth. Further, Sonn was aware that, if challenged, he would be required to defend his contingent fee agreement under section 328(a). The contingent fee agreement is silent concerning counsel's right to additional compensation for time spent defending the agreement's validity in the bankruptcy court. 38 In the absence of an express provision to the contrary, it is our view that a contingent fee agreement pursuant to section 328(a) includes all services necessary to obtain final approval from the court of this form of payment. See Hoffman v. Burkhammer, 373 Mich. 187, 128 N.W.2d 503, 507 (1964) (an agreement to represent a client in connection with said Estate and to contest said Will would indicate to a layman that the attorney would serve him until the matter was finally settled). Accordingly, the district court erred in awarding hourly fees in addition to the amount payable under the contingent fee agreement. 39