Court Opinion

ID: 9687315
Source: CourtListenerOpinion
Date Created: 2023-08-24 16:23:25.329005+00
Date Added: 2024-06-11T18:18:25.642328
License: Public Domain

ELLIOTT, Bankruptcy Judge,
dissenting:
I dissent.
As Judge Volinn stated in In re Powerine Oil Co., 71 B.R. 767, 770 (9th Cir.BAP 1986):
A bankruptcy court’s award of attorneys’ fees will not be disturbed on appeal absent an abuse of discretion or an erroneous application of the law.
In a more recent case, In re Film Ventures International, 1987, 75 B.R. 250, the court stated:
However, it has long been held that the trial court is in the best position to resolve disputes over legal fees. See Dickenson Industrial Site v. Cowan, 309 U.S. 382, 389 [60 S.Ct. 595, 599, 84 L.Ed. 819] (1940); Official Creditors’ Committee of Fox Markets v. Ely, 337 F.2d 461, 466 (9th Cir.1964). Thus, the standard of review is whether the court abused its discretion. In re Nucorp Energy, Inc., 764 F.2d 655, 657 (9th Cir.1985); In re Wavelength, Inc., 61 B.R. 614, 621 (9th Cir.BAP 1986).
Although members of this Panel might have made a different allowance of attor*725ney’s fees, I see no abuse of discretion in the bankruptcy judge’s allowance of $4,874.35.
In addition, I disagree with the majority’s conclusion that an oversecured creditor should not file relief from stay proceedings and that therefore attorney’s fees incurred by the creditor are not “reasonable” within the meaning of 11 U.S.C. § 506(b).
An automatic stay under 11 U.S.C. § 362 is, in effect, a statutory injunction against foreclosure. If the debtor sued the creditor in state court to obtain injunctive relief against foreclosure, and obtained a temporary restraining order, surely the secured creditor would be entitled to recover his attorney’s fees in responding to the lawsuit and in obtaining a dissolution of the stay against foreclosure.
I do not understand why the result should be different in bankruptcy. As stated by Judge Ayers in the Matter of Bouquet Investments, 32 B.R. 988, 990 (Bankr.C.D.Calif.1983):
After all, the State of California provides a mechanism for creditors who want to liquidate their collateral when debtors default on their obligations. It cannot have been the purpose of Congress to establish the Bankruptcy Court as a federal court of review for the state law of creditors’ rights.
The majority would impose a new, and I submit, unwarranted element into relief from stay litigation. If an oversecured creditor should not file a relief from stay motion, at least in the early stages of the case, a number of new issues are created. Among them: how much of an equity cushion is required, must the creditor wait until the equity cushion has eroded before seeking relief, and would this new rule apply where the secured creditor is an individual who relies on the income from the deed of trust for support as opposed to a financial institution, In re Bouquet Investments, Id.
I would follow the well reasoned decisions in In re Carey, 8 B.R. 1000 (Bankr.S.D.Calif.1981) and in In re Brunei, 54 B.R. 462 (Bankr.D.Colo.1985) holding that an ov-ersecured creditor may recover reasonable attorney’s fees.