Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-almd-1_07-cv-00737/USCOURTS-almd-1_07-cv-00737-0/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BA

---

IN THE DISTRICT COURT OF THE UNITED STATES FOR THE

MIDDLE DISTRICT OF ALABAMA, SOUTHERN DIVISION

IN RE: )

)

FERNISA PARKER, )

)

Debtor. )

)

FERNISA PARKER, )

)

Appellee, )

) CIVIL ACTION NO.

v. ) 1:07cv737-MHT

) (WO) 

PIONEER CREDIT COMPANY OF )

ALABAMA, INC., d/b/a First )

Southeast Acceptance )

Corporation, )

)

Appellant. )

OPINION

Appellant Pioneer Credit Company of Alabama, Inc.,

doing business as First Southeast Acceptance Corporation,

asserts in this appeal that the bankruptcy court’s award

of attorneys’ fees to appellee Fernisa Parker pursuant to

11 U.S.C. § 362(k)(1), Parker v. Pioneer Credit Co. Of

Alabama, Inc., No. 05-12674, 2007 WL 1889958 (Bankr. M.D.

Ala. June 28, 2007) (Williams, B.J.), was excessive and

Case 1:07-cv-00737-MHT Document 10 Filed 09/10/08 Page 1 of 14
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unreasonable. Jurisdiction is proper under 28 U.S.C.

§ 158(a)(1). For the reasons that follow, the bankruptcy

court’s decision will be affirmed.

I. BACKGROUND

As a result of a Chapter 13 petition Parker filed in

October 2005, an automatic stay precluded creditors from

commencing judicial actions and enforcing property

judgments against her. Parker’s Chapter 13 plan required

that she surrender a 1995 Chevrolet Impala to First

Southeast to cure a debt she incurred under a security

agreement. Because the vehicle was inoperable, Parker

was unable to drive it to the company’s requested

location; instead, she provided First Southeast with

directions to the vehicle.

When Parker failed to delivery the car, First

Southeast sought relief from the automatic stay, and the

bankruptcy court terminated the stay to the extent of

permitting enforcement of a lien against the car.

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However, First Southeast filed a state-court lawsuit

seeking a money judgment against Parker, obtained a

default judgment for $ 10,084.70, and served Parker’s

employer with a process of garnishment. 

Parker responded with an adversary proceeding in the

bankruptcy court charging First Southeast with willful

violation of the stay. After a trial, the bankruptcy

court held that the company had willfully violated the

stay. The court awarded Parker $ 500.00 in actual

damages; invalidated the state court’s $ 10,084.70

judgment; and awarded $ 12,791.45 in attorneys’ fees and

expenses to Parker. 

After the bankruptcy court denied First Southeast’s

motion to alter, amend, or vacate and its alternative

motion for a new trial, the company appealed to this

court, seeking a reduction in the bankruptcy court’s

award of attorneys’ fees.

Case 1:07-cv-00737-MHT Document 10 Filed 09/10/08 Page 3 of 14
1. Prior to the 2005 amendment, § 362(h) provided in

full:

“An individual injured by any willful

violation of a stay provided by this

section shall recover actual damages,

including costs and attorneys' fees,

and, in appropriate circumstances, may

recover punitive damages.”

2. Section 362(k)(1) now provides in full:

“(k)(1) Except as provided in paragraph

(2), an individual injured by any

willful violation of a stay provided by

this section shall recover actual

damages, including costs and attorneys'

fees, and, in appropriate circumstances,

may recover punitive damages.

(2) If such violation is based on an

action taken by an entity in the good

faith belief that subsection (h) applies

to the debtor, the recovery under

paragraph (1) of this subsection against

such entity shall be limited to actual

damages.”

4

II. DISCUSSION

In 2005, the Bankruptcy Code was amended to move from

11 U.S.C. § 362(h)1

 to 11 U.S.C. § 362(k)(1)2 the language

governing the award of attorneys’ fees for willful

violations of bankruptcy stays. The relevant language in

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both pre-amendment § 362(h) and post-amendment

§ 362(k)(1) is that an “individual injured by any willful

violation of a stay ... shall recover actual damages,

including costs and attorneys’ fees ....” Because, with

the move, the relevant language did not change, case law

addressing pre-amendment § 362(h) is instructive in

interpreting § 362(k)(1).

Both parties agree that under, § 362(k)(1), an award

of attorneys’ fees is mandatory when a party willfully

violates an automatic stay. See Jove Engineering, Inc.

v. I.R.S., 92 F.3d 1539, 1559 (11th Cir. 1996) (§ 362(h)

attorneys’ fees are mandatory if the stay violation is

willful). Thus, the question here is not whether the

bankruptcy court should have awarded attorneys’ fees at

all, but rather whether the fees awarded by the

bankruptcy court were excessive and unreasonable.

Unlike with other attorneys’ fees provisions, see,

e.g., Civil Rights Attorney's Fees Awards Act of 1976, 42

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3. Section 1988 provides in part:

“(b) Attorney's fees

In any action or proceeding to enforce

a provision of sections 1981, 1981a,

1982, 1983, 1985, and 1986 of this

title, title IX of Public Law 92-318 [20

U.S.C.A. § 1681 et seq.], the Religious

Freedom Restoration Act of 1993 [42

U.S.C.A. § 2000bb et seq.], the

Religious Land Use and Institutionalized

Persons Act of 2000 [42 U.S.C.A.

§ 2000cc et seq.], title VI of the Civil

Rights Act of 1964 [42 U.S.C.A. § 2000d

et seq.], or section 13981 of this

title, the court, in its discretion, may

allow the prevailing party, other than

the United States, a reasonable

attorney's fee as part of the costs,

except that in any action brought

against a judicial officer for an act or

omission taken in such officer's

judicial capacity such officer shall not

be held liable for any costs, including

attorney's fees, unless such action was

clearly in excess of such officer's

jurisdiction.”

(Emphasis added).

6

U.S.C. § 1988,3

 Congress in crafting § 362(k)(1) did not

modify the term “attorneys’ fees” with the word

“reasonable.” The text instead leaves “unclear whether

the court is required to determine reasonableness of

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attorney’s fees ... when the fees are awarded as

compensatory sanctions for violations of the automatic

stay.” In re Lickman, 297 B.R. 162, 197 (Bankr. M.D.

Fla. 2003) (Corcoran, B.J.). Courts have consistently

applied a reasonableness standard to § 362(h) based on 11

U.S.C. § 330(a)(1)(A), which provides for “reasonable

compensation for actual, necessary services” rendered in

other bankruptcy proceedings. See, e.g., In re Roman,

283 B.R. 1, 11 (B.A.P. 9th Cir. 2002) (“We endorse the

use of the principles used in § 330 as a guide for

awarding attorneys’ fees under § 362(h).”); Sucre v. MIC

Leasing Corp., 226 B.R. 340, 351 (Bankr. S.D. N.Y. 1998)

(Gonzalez, B.J.) (“In determining the reasonableness of

attorneys’ fees under § 362(h), the Court will utilize

the ‘lodestar’ method ordinarily used in determining the

reasonableness of fees sought pursuant to § 330 of the

Bankruptcy Code.”); United States v. Price, 176 B.R.

807, 808 (N.D. Ill. 1993) (Holderman, J.) (“To the extent

that services performed are compensable under § 330,

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attorneys’ fees have been incurred by the estate and can

be awarded pursuant to § 362(h).”), aff'd, 42 F.3d 1068

(7th Cir. 1994). This court therefore concludes that the

§ 330 reasonableness standard applies to § 362(k)(1)

attorneys’ fees requests.

Applying § 330, the Eleventh Circuit Court of Appeals

has instructed that, “Attorneys fees in bankruptcy cases

should be no less, and no more, than fees received for

comparable non-bankruptcy work.” Grant v. George

Schumann Tire & Battery Co., 908 F.2d 874, 879 (11th Cir.

1990) (emphasis omitted). Thus, the court should use the

lodestar approach. Id. at 878-79. The lodestar “is the

number of hours (tempered by billing judgment) spent in

the legal work on the case, multiplied by a reasonable

market rate in the local area.” Dillard v. City of

Greensboro, 213 F.3d 1347, 1353 (11th Cir. 2000). In

determining the allowable hours and rates that make up

the lodestar, “a judge must 1) determine the nature and

extent of the services rendered; 2) determine the value

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4. These twelve factors are: (1) the time and labor

required, (2) the novelty and difficulty of the legal

questions, (3) the skill required to perform the legal

service properly, (4) the preclusion of other employment

by the attorney due to acceptance of the case, (5) the

customary fee for similar work in the community, (6)

whether the fee is fixed or contingent, (7) time

limitations imposed by the client or the circumstances,

(8) the amount involved and the results obtained, (9) the

experience, reputation, and ability of the attorney, (10)

the undesirability of the case, (11) the nature and

length of the professional relationship with the client,

and (12) awards in similar cases. Johnson, 488 F.2d at

717-19.

5. Additionally, First Southeast does not challenge

the fee award on the ground that the services and rates

charged by the Parker’s attorneys reflect poor billing

judgment. Hensley v. Eckerhart, 461 U.S. 424, 433

(1983). That is, First Southeast does not contend that

the fee applicant included in her “fee application[]

(continued...)

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of those services; and 3) consider the factors laid out

in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714

(5th Cir. 1974) and explain how they affect the award.”4

Grant, 908 F.2d at 877-78 (footnotes omitted).

In this appeal, First Southeast does not challenge

the number of hours that Parker’s counsel expended on

legal work; instead, the company challenges the rates

charged by her counsel.5

 

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5.(...continued)

excessive, redundant, or otherwise unnecessary [hours],

which are hours that would be unreasonable to bill to a

client and therefore to one's adversary irrespective of

the skill, reputation, or experience of counsel.” ACLU v.

Barnes, 168 F.3d 423, 427 (11th Cir. 1999).

10

Two attorneys performed work on Parker’s behalf:

David G. Poston and Michael D. Brock. The attorneys have

provided a chronological itemization of the services they

rendered, the dates the attorneys engaged in these

services, the time expended on each of these activities,

and their hourly rates. See Barnes, 168 F.3d at 427 (“A

well-prepared fee petition ... would include a summary,

grouping time entries by the nature of the activity or

state of the case.”) (citation omitted). Both attorneys

billed $ 215.00 an hour in July 2006, and, starting in

August 2006, both began charging $ 250.00 an hour.

To support these rates, Parker has filed affidavits

signed by Poston and Brock. Poston reports that he has

practiced law for roughly 16 years, focusing on

bankruptcy and other forms of consumer litigation; Brock

has practiced for 13 years, focusing exclusively on

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consumer-bankruptcy cases. Both represent that, during

the course of this litigation, their standard billing

rates have been $ 215.00 an hour and $ 250.00 an hour. 

Additionally, Parker successfully recovered fees for

other services, such as work performed by a paralegal and

by one of Poston’s associates. The paralegal worked 3.75

hours at a rate of $ 70.00 an hour, and also worked

another 15.5 hours at a rate of $ 75.00 an hour; this

amounts to $ 1,425.00. The fee application requested

$ 587.50 for work performed by Poston’s associate; the

associate worked 4.70 hours at a rate of $ 125.00.

Finally, Parker recovered expenses for envelopes

($ 1.50), postage ($ 3.30), photocopying ($ 66.00), and

deposition costs ($ 322.25). 

Parker seeks a total fee of $ 12,791.45, which is

calculated as follows:

Attorney Brock 6.26 hrs. x $ 215/hr. $ 1,345.90

22.28 hrs. x $ 250/hr. 5,570.00

Attorney Poston .50 hrs. x $ 215/hr. 107.50

13.45 hrs. x $ 250/hr. 3,362.50

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Associate 4.70 hrs. x $ 125/hr. 587.50

Paralegal 3.75 hrs. x $ 70/hr. 262.50

15.58 hrs. x $ 75/hr. 1,162.50

Expense Envelopes 1.50

Postage 3.30

Photocopying 66.00

Depositions 322.25

TOTAL $ 12,791.45

First Southeast argues that the rates charged by

Poston and Brockton are excessive. The company relies

primarily on Tillman v. Barro, Adv. Proc. No. 04-1301

(Bankr. M.D. Ala. Aug. 29, 2005) (Williams, B.J.), where

Poston sought $ 200.00 an hour for attorneys’ fees for

work performed in consumer-bankruptcy litigation. The

bankruptcy court determined that $ 175.00 would be a more

appropriate rate because of counsel’s limited experience

with the specific statute governing that case, combined

with the fact that $ 175.00 was what Poston generally

charged clients at that time.

The Tillman case is of limited utility in deciding

the current matter for three reasons. First, “a court

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should hesitate to give controlling weight to prior

awards [because] prior awards are not direct evidence of

market behavior; the court is not a legal souk.” Hall v.

Lowder Realty Co., Inc. 263 F.Supp.2d 1352, 1366 (M.D.

Ala. 2003) (Thompson, J.) (quoting Dillard, 213 F.3d at

1355). Second, even though prior awards can sometimes be

relevant in evaluating the market rate of an attorneys’

services, id., Poston has highlighted post-Tillman cases

in which he was awarded fees at a rate of $ 250.00 an

hour. See, e.g., Thompson v. D.A.N. Joint Venture III,

L.P., Civil Action No. 1:05cv938-TFM (M.D. Ala. June 19,

2007) (Moorer, M.J.). Indeed, Postman represents that,

since the Tillman case, he has prosecuted over 140

consumer-litigation cases. Third, the uncontradicted

affidavits filed in this case show that the rates sought

by Parker’s attorneys are the actual rates the attorneys’

charged their clients. The rate an attorney “charges

clients is powerful, and perhaps the best, evidence of

his market rate.” Dillard, 213 F.3d at 1355.

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***

For the above reasons, this court holds that the

bankruptcy court did not err in awarding attorneys’ fees

of $ 12,791.45. The bankruptcy court’s decision should

be affirmed. An appropriate judgment will be entered. 

DONE, this the 10th day of September, 2008.

 /s/ Myron H. Thompson 

UNITED STATES DISTRICT JUDGE

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