ORDER
JOHN FULLAM, Senior District Judge
AND NOW, this 9th day of August 2010, upon consideration of the defendant's motion for summary judgment (document number 29), and the plaintiffs' response thereto, IT IS ORDERED:
That the defendant's motion is DENIED.
e awards in the state courts.
OUT OF POCKET CHARGES
ORIX contends that the charges it incurred for a variety of services are properly payable out of the collateral; Debtor objects that they were not necessary. For example, ORIX had in its files the appraisal that was done when the loan was first made in 1999. When the dispute arose between it and Debtor, it obtained another appraisal and related services (ORIX exhibit 12), at a cost of $8,500.00. (The appraisal was admitted into evidence at an earlier hearing on modification of the automatic stay.) The reasonableness of this expenditure is apparent. See 1095 Commonwealth Ave. Corp., 204 B.R. at 305 ("[T]he necessity of the appraisals is self-evident: Citizens needed to know and monitor the value of the properties that secured its claim."). Indeed, the mere recitation of the two dates of the appraisals — 1999 and 2009 — makes the objection almost frivolous.
The two invoices for the appraisal are dated April 24, 2009 and June 23, 2009 and appear in ORIX's exhibit 12.
Orix exhibit 12 also contains two invoices that total $4,604.70, dated September 22, 2009 and November 25, 2009, related to expert witnesses and litigation over the appraisals. The Court finds these reasonable and necessary under Section 506(b).
In a similar vein, most of the other expenses are also reasonably related to allowing ORIX to protect and manage its collateral. A survey (ORIX exhibit 16, pages 3-4, for $10,800) would be needed to ensure there had been no encroachments since the previous survey years before; the encroachments would not necessarily announce themselves. An environmental audit (ORIX exhibit 15, costing $2,300, and ORIX exhibit 16, pp. 1-2, costing $3,027.22) is an obvious necessity, given the insidiousness of environmental contamination and the enormous cost it can impose on an owner of contaminated property. The property condition report and ESA review report (ORIX exhibit 13) totaling $1100 would be standard and almost minimal in the scheme of things. Payment of the real estate taxes (ORIX exhibit 11) in the amount of $6,966.92 is not contested. Debtor's Reply Brief, at 6. Doc 151.
Purchase of the unsecured claim of Matt Grose dba The Lawn Barber in the amount of $4,932 for prepetition landscape care services would not appear to be reimbursable as a section 506(b) expense. However, Debtor does not oppose its being so treated, Reply Brief at 6 (doc 151), and therefore the Court will allow it to be collected from the collateral.
ORIX requests reasonable travel fees (travel, parking, food, lodging) in connection with managing the property and, later, the litigation (ORIX exhibit 10), in the amount of $4,605.68. See 1095 Commonwealth Avenue Corp., 204 B.R. at 304 (modest parking and travel expenses allowed as part of reimbursable attorneys' fees). Finally, given that the guaranty collection actions were appropriately commenced, the Frizzel Group bills that total $4,850.96 searching for assets to be attached were not unreasonable. See ORIX exhibit 14. The delinquent tax search fees of $350 listed in ORIX's Motion to Allow seems to have not been put into evidence. Nevertheless, they are de minimus and a totally reasonable expense that should be allowed.
ORIX exhibit 10 is comprised of documentation of travel expenses to the property, six trips incurred post petition and three prepetition. The three prepetition trips cost $1,037.83. Clearly these charges are not post-petition expenses, but are just as clearly an expense reasonably incurred in connection with maintaining the collateral and allowable under section 502. The postpetition trips were reasonable under section 506, and total $3,567.85.
SUMMARY OF COSTS AND EXPENSES ALLOWED TO DATE
In its post-hearing briefs, ORIX claimed that it was entitled to reimbursement for additional fees and costs incurred subsequent to those represented by the exhibits. For example, ORIX may seek reimbursement of Thuma Walker bills beginning in January 2010 (including for litigating the issues addressed in this memorandum opinion, though the Debtor is already objecting to those), for JMBM bills beginning in February 2010, for ATB bills for March 2010, etc. At least some of those expenses might be reimbursable. Debtor and ORIX should confer on this issue, and present the Court with a process for resolving that dispute, or at least request a hearing from the Court if they cannot agree on anything.
ORIX'S 502 CLAIM AMOUNT TYPE OF CHARGE $ 7,548,776.47 principal balance $ 11,360.91 prepetition scheduled interest $ 24,344.80 unaccrued interest 4/1/10 to 4/15/10 $ 7,339.08 prepetition default rate interest $ 6,571.77 prepetition Thuma Walker fees $ 0.00 prepetition late fees (all paid 4/15/10) $ 1,037.83 prepetition travel expenses $ 7,599,430.86 TOTAL PREPETITION CLAIM ORIX'S 506(b) CLAIM AMOUNT TYPE OF CHARGE $ 361,926.09 postpetition scheduled interest $ 233,802.38 postpetition default rate interest $ 0.00 postpetition late fees on balloon $ 8,500.00 appraisal $ 4,604.70 litigation fees relating to appraisal $ 10,800.00 survey $ 5,327.22 environmental study $ 4,932.00 Lawn Barber claim $ 6,966.92 real estate taxes $ 1,100.00 property condition and ESA report $ 4,850.96 Frizzell bills $ 3,567.85 postpetition travel expenses $ 42,115.75 postpetition Thuma Walker fees to 12/31 $ 120,511.13 postpetition JMBM fees $ 0.00 postpetition ATB fees $ 350.00 lien/delinquent tax search fees $ 809,355.00 TOTAL 506(b) CLAIM $ 8,408,785.86 TOTAL PREPETITION AND POSTPETITION CLAIMS
Therefore, ORIX's prepetition and postpetition claims total $8,408,785.86. ORIX has received $8,143,574.00 (see p. 17 above). Therefore, the remaining unpaid balance owed to ORIX is $265,211.86.
ORIX filed its proof of claim for $7,594,379.71; the Court has found that the claim was actually for slightly more, $7,599,430.86. ORIX has been paid $8,143,574.00, so the Court deems that the allowed prepetition claim has been paid in full. The postpetition claim, based on section 506(b), has been paid in part — $544,143.14 — and the balance is $265,211.86.
The Court will enter orders 1) granting in part ORIX's Motion to Allow in the amount of $265,211.86 and ordering the Clerk to disburse that sum to ORIX, and 2) overruling Debtor's objection to ORIX's proof of claim, consistent with the findings and conclusions set out above. The Court declines to award punitive damages against ORIX as requested in Debtor's Brief. Doc 147-1 at 13.