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Bankruptcy Plaintiff Inappropriately Runs Up Legal Fees and is Awarded Only 10% as a Result

In a recent decision coming out of a United States Bankruptcy Court in Texas, the Judge addressed the reasonableness of the plaintiff’s requested legal fees. The court considered plaintiff Darren Jackson’s inequitable behavior leading up to his bankruptcy filing as well as various unrelated costs included in his requested fees.

R.D. Auto, an auto repair shop, had performed automobile services on Jackson’s car despite his unstable financial situation. After his inability to pay, despite being employed, R.D. Auto repossessed the automobile. Jackson filed for bankruptcy but R.D. Auto refused to turn over the vehicle, violating the automatic stay. During the proceeding against R.D. Auto, Jackson was awarded approximately $3,000 in actual and punitive damages.

At a later hearing, Jackson requested over $25,000 in legal fees. The Court found only about $5,000 of these fees, those incurred from the drafting of the complaint up until the defendant’s admission of the automatic stay violation, to be “necessary and reasonable.” Jackson “mistakenly” included almost $200 in locksmith fees in his request, which was later deducted from his award. The Court also suggested that Jackson improperly ran up legal fees, since close to 80% of the fees were attributed to services performed after R.D. Auto admitted to violating the automatic stay. As a result, the Court reduced the fee award to just over 10% of the amount requested.

*In re Jackson (Bankr. S. D. Tex., November 15, 2011)

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