In re: Allana Baroni, CC-16-1345-TaKuL CC-16-1383-TaKuL

Debtor Allana Baroni owned a Nevada condominium secured by a 2005 note and deed of trust; she disputed Wells Fargo’s status as holder/successor beneficiary but never denied the underlying debt.
Baroni filed chapter 13, converted to chapter 11, and confirmed a plan that bifurcated secured/unsecured claims and contemplated litigation to determine whether Wells Fargo held the Condo claim.
Baroni sued to disallow or recharacterize Wells Fargo’s proof of claim; the bankruptcy court granted summary judgment to Wells Fargo and this Panel affirmed in Baroni I.
After prevailing, Wells Fargo moved for attorneys’ fees under the deed of trust; the bankruptcy court awarded $50,620.76 and ruled the fee award should be added to Wells Fargo’s allowed (unsecured) claim and treated under the confirmed chapter 11 plan.
Baroni appealed the fee award; Wells Fargo cross-appealed the treatment/discharge ruling. The Panel affirmed both the fee award and the conclusion that the fee claim arose pre-confirmation and is subject to plan treatment.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Wells Fargo was entitled to attorneys’ fees under the deed of trust	Baroni: Wells Fargo wasn’t a party to the deed; only the original Lender could request fees and an intervening 2013 assignment broke Wells Fargo’s chain	Wells Fargo: Summary judgment established it as noteholder/successor beneficiary and the 2010 assignment controls; 2013 assignment irrelevant	Court: Affirmed fee award — Wells Fargo shown to be holder/successor beneficiary and entitled to reasonable fees under California law
Whether the fee award is part of Wells Fargo’s claim and subject to plan treatment/discharge	Baroni: Fees are prepetition (contractual) and therefore can be added to the claim and discharged under the plan	Wells Fargo: Post-confirmation/postpetition fees incurred because of debtor’s litigation threat should not be treated as pre-confirmation; creditor not required to accept speculative treatment	Court: Affirmed that fee claim arose pre-confirmation under Ninth Circuit "fair contemplation" test (analogous to Castellino Villas); fees are part of the allowed claim and subject to plan treatment/discharge

Siegel v. Fed. Home Loan Mortg. Corp., 143 F.3d 525 (9th Cir. 1998) (postpetition attorney-fee liability may be treated as post-discharge where debtor voluntarily "returned to the fray")
Ybarra v. Boeing N. Am., Inc., 424 F.3d 1018 (9th Cir. 2005) (postpetition fees not discharged when debtor took affirmative postpetition steps reviving litigation)
Castellino Villas v. Castellino Villas, A.K.F. LLC, 836 F.3d 1028 (9th Cir. 2016) (applies "fair contemplation" test; contingent contractual fee claims can arise prepetition and be discharged where postpetition litigation continuation was within parties' contemplation)
SNTL Holdings Corp. v. Centre Ins. Co., 571 F.3d 826 (9th Cir. 2009) (attorneys’ fees arising from prepetition contracts fall within Bankruptcy Code definition of "claim" and may be contingent prepetition obligations)