In re England, 586 B.R. 795

Two Chapter 13 debtors (England and Ochab) moved under Fed. R. Bankr. P. 3002.1(e) to disallow postpetition mortgage fees listed by their mortgagees as recoverable under 11 U.S.C. § 1322(b)(5).
Both creditors filed Rule 3002.1(c) notices claiming postpetition charges: Lakeview (England) claimed $300 "Bankruptcy/Proof of claim fees" and $350 "Plan Review"; Freedom (Ochab) claimed $400 "Attorney Fees" and $500 "Bankruptcy/Proof of claim fees."
England's mortgage permits recovery of expenses and attorneys’ fees only in connection with foreclosure under a power-of-sale provision; the claimed fees were incurred in bankruptcy, not foreclosure.
Ochab’s mortgage contains a broad Section 9 authorizing lender costs (including reasonable attorney’s fees) to protect the lender’s interests in proceedings such as bankruptcy, making the claimed fees contractually authorized on their face.
The court applied Alabama substantive law (mortgage choice-of-law clause) and Rule 1.5 reasonableness factors to assess whether fees are contractually recoverable and, if so, whether they are reasonable and adequately substantiated.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether mortgage allows postpetition fees charged in bankruptcy	England: mortgage does not authorize fees for bankruptcy-related actions; fees are not recoverable	Lakeview: mortgage authorizes recovery of "expenses" and thus fees are recoverable	Held for England: mortgage only authorized fees tied to foreclosure; disallowed notice in full
Whether mortgage allows postpetition fees charged in Ochab	Ochab: fees must be tied to mortgage language and be reasonable	Freedom: mortgage Section 9 permits fees to protect lender in bankruptcy; Rule 3002.1 notice sufficient	Held for Ochab (partially): mortgage permits recovery, but creditor failed to substantiate and justify reasonableness; notice disallowed with leave to amend
Whether Rule 3002.1 notice alone establishes prima facie entitlement to fees	Debtors: notice is not evidentiary; creditor must substantiate when challenged	Creditors: Form 410S2 notice suffices and no further documentation required absent challenge	Held: once debtor moves under Rule 3002.1(e), burden shifts to creditor to substantiate and justify fees; notice alone is not enough
Whether the amounts claimed ($300–$500 items) are reasonable	Debtors: amounts (plan review; proof-of-claim) are excessive and ministerial	Creditors: such tasks justify the fees charged	Held: fees for routine tasks (plan review; proof-of-claim filing) are unreasonable here; creditor must provide detailed support to justify any allowed fees

Lunceford v. Monumental Life Ins. Co., 641 So.2d 244 (Ala. 1994) (mortgage allows fee recovery only where contractually imposed)
Peebles v. Miley, 439 So.2d 137 (Ala. 1983) (factors for determining reasonableness of attorneys’ fees)
Johnson v. Georgia Highway Express, Inc., 488 F.2d 714 (5th Cir. 1974) (lodestar/fee reasonableness factors adopted in fee determinations)
Willow Lake Residential Ass'n, Inc. v. Juliano, 80 So.3d 226 (Ala. 2010) (Alabama reads a reasonableness limitation into fee recovery provisions)
Taylor v. Jones, 276 So.2d 130 (Ala. 1973) (mortgage may provide for attorney fees in collecting a debt when unambiguous)
Lytle v. Robertson, 170 So. 484 (Ala. 1936) (absent mortgage provision, attorney's fees are not recoverable)
Austin Apparel, Inc. v. Bank of Prattville, 872 So.2d 158 (Ala. Civ. App. 2003) (provisions permitting fees must be unambiguous)
Ex parte Burnham, Klinefelter, Halsey, Jones & Cater, P.C., 674 So.2d 1287 (Ala. 1995) (Alabama precedent permitting reasonable contractual fee recovery)