At a hearing on the approval of my attorneys fees in a Chapter 13 case, the judge questioned the fees I attributed to defending a motion for relief from stay which was granted after three hearings. Wasn’t this a lost cause from the start, she asked?
My reply was that I had raised questions of creditor misconduct as well as the issue about whether the moving party was the correct person to be bringing a motion for relief from stay. This issue is developing as a serious issue nationwide as it is revealed that the original notes are no where to be found, and whatever transfers of those notes have not been accomplished according to long standing rules of law.
I replied to the judge that the client had directed me to oppose the motion and had not objected to the fees I sought for the effort. My application was approved.
But the longer I thought about it afterwards, the more troubling I found the judge’s inquiry.
- Suppose I knew objectively that the debtor was in default and had no hope of getting current? Does that relieve me of my undertaking of loyalty to the interests of the client? Doesn’t the Rights and Responsibilities statement in the Northern District obligate me to defend motions for relief from stay?
- Does it mean that if I take a position that the judge believes I should have known from the beginning was a loser, I do so without pay?
- Am I obligated to withdraw if my view of the probability of success differs from the actual outcome?
Like so much in bankruptcy these days, I don’t have any answers. But the fact the question was raised from the bench is disturbing.