UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
COVINGTON DIVISION
IN RE:
KENNETH ARVEL LOOMIS
REBECCA ANN LOOMIS
DEBTORS CASE NO. 89-00887
MEMORANDUM OPINION
This matter is before the Court on the Application of Union Light, Heat & Power Company ("ULH & P"), a creditor of the debtors, for Allowance of Administrative Expense Claim. ULH & P's claim is based on utility services rendered to the debtors during their Chapter 13 case filed in this Court on August 28, 1989, and converted to a Chapter 7 case on February 5, 1992. The amount of the claim is $560.45. Claims for administrative expenses are governed by 11 U.S.C.
'503, while determinations of priority are made pursuant to 11 U.S.C. '507 as modified by '726(b).The issue of whether a utility is entitled to an administrative expense priority for utility service provided to debtors during the pendency of their Chapter 13 case and prior to its conversion to a Chapter 7 case has previously been ruled on in In re Tracy Dale Damron and Marlene Louise Damron, Civil Action No. 91-127 (U.S.D.C., E.D.Ky 1991). Therein Judge Unthank set out criteria to be met if a utility is to be granted an administrative expense priority. First of all, the residence to which the utility service is provided must remain in the Chapter 13 estate in order for the utility service to be considered an "actual" and "necessary" cost of "preserving the estate" pursuant to
'503.Other significant requirements are the limiting of the claim to no more than three months of billings, and a corresponding restriction on the amount that may be claimed in that the amount may not be excessive. In the case being considered here, the record shows that the debtors retained ownership of their home during the pendency of their Chapter 13 plan. The amount claimed by ULH & P, $560.45, appears, however, to represent billing for more than three months' worth of utility service. The copy of the bill submitted with ULH & P's Application designates this amount as "Total Amount Past Due". The budget submitted by the debtors in their Chapter 13 statement showed that their monthly utility bill was $125.00. Three months of service would therefore total $375.00. This Court will therefore allow ULH & P's claim in that amount.
In conclusion it is therefore the opinion of this Court that according to the criteria set out by Judge Unthank in the Damron case, ULH & P's Application for Allowance of Administrative Expense Claim in the amount of $560.45 should be denied, and its claim allowed to the extent of $375.00, or three months' worth of service. The remainder of ULH & P's claims will be general unsecured claims. An order in conformity with this opinion will be entered separately.
Dated:
By the Court -
_____________________________
Judge
Copies to:
Debtors
Rosemary E. Grieme, Esq.
William I. Bubenzer, Esq.
James A. Nolan, Esq., Trustee
U.S. Trustee
mloomis.opi