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socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 38452
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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We had an adversary proceeding from the BK court for our civil

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We had an adversary proceeding from the BK court for our civil case. The order was for 523(a). Fraud only. No money for attorneys fees was on the adversary proceeding order. The bankruptcy court discharged the debtor/builder from what he owed us in defects for $1.5 million until our case was heard. BK court was then going to decide if the discharge should be granted to the debtor pending out come of trial. The adversary proceeding was not filed in our civil case and no motions about the adversary proceeding orders were presented or given to the judge or jury during the trial.Instead the debtor was tried with the other 2 defendants that did not file bankruptcy and all the evidence was presented equally to all defendants. Because of this, the jury did award us a money award from the debtor but the judge rescinded it based on the jury verdict question, what percent was each person responsible. The was a non disclosure case and construction defect case. The jury put us down as 45% responsible, the debtor/builder 35% and the real estate agent 20%. From the percentages the judge ruled in favor of the plaintiffs even though the jury claimed we were harmed by the builder and he committed intentional misrepresentation, concealment and negligence. The judge then awarded attorney fees to the debtor/builder for $94,000 even though $30,000 was discharged to his lawyer in his BK. The builder/ debtor was charged this from his attorney before he filed Bk. If anything I would think the builder would only be able to collect attorneys fees after the BK and only for the Fraud charges in the adversary proceeding order from the BK courts. The real estate agent claimed $40,000, she had been in the case from the beginning, 2009. Shouldn't the judges ruling be based on the Fraud only case and not what was previously done prior to the debtors/builder BK? Should I submit the rulings to the Trustee to show that the debtor is claiming fees he shouldn't be. He did not claim any assets from this case in his BK.
Submitted: 3 years ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 3 years ago.
Shouldn't the judges ruling be based on the Fraud only case and not what was previously done prior to the debtors/builder BK?

A: Yes -- unless the fraud action was based upon a contract between creditor and debtor that contains an attorney's fee provision. If such a provision exists, then the language of the contract provision controls the extent of a party's right to attorney's fees.

Should I submit the rulings to the Trustee to show that the debtor is claiming fees he shouldn't be. He did not claim any assets from this case in his BK.

A: You could do this -- it may be that the trustee will decide that some of the attorney's fees are based upon a prepetition claim -- in which case, the fees would be part of the bankruptcy estate.

Please let me know if I can clarify my answer or provide further assistance.

And, thanks for using justanswer.com!

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