In re: Heath, No. 09-40660-JDP (Bankr. D. Idaho, March 28, 2011).
Can a creditor in a bankruptcy proceeding obtain attorney's fees from the debtor's estate? A recent Idaho bankruptcy court wrestled with this issue.
Jackson Lumber, Inc. became a creditor of the debtors Brian and Brandie Heath when Brian did not pay for construction supplies that Jackson Lumber gave him. Jackson Lumber went to state court in Wyoming, where the company resided, and obtained a judgment against the Heaths for $55,000. When the Heaths filed for Chapter 7 bankruptcy a year later, Jackson Lumber sought to have his judgment declared nondischargeable in the Heaths' bankruptcy.
Under the Bankruptcy Code, prevailing party's fees may not be recovered unless authorized by the parties' contract or a statute. Because Jackson Lumber did not demonstrate that it was entitled to attorney's fees under either, the court denied it attorney's fees. However, costs may be awarded to a prevailing party whenever not prohibited by law. Because there was no prohibition on costs being awarded in this case, the court granted Jackson Lumber costs for clerk fees, fees for transcripts and for witnesses, and for making copies, totaling $2,004.65.
