Source: https://casetext.com/case/in-re-eliapo-2?resultsNav=false
Timestamp: 2019-02-16 21:51:59
Document Index: 212276810

Matched Legal Cases: ['§ 330', '§ 330', '§ 294', '§ 330', '§ 330', '§ 330', 'art, 461', '§ 330', 'art, 167', '§ 329', '§ 329', '§ 102', '§ 1322', '§ 502', '§ 330', '§ 330', '§ 330', '§ 330', '§ 330', '§ 330', '§ 330']

In re Eliapo, 298 B.R. 392 | Casetext
298 B.R. 392 (B.A.P. 9th Cir. 2003)
Negative treatment on appeal by 9th Cir. in 2006In re Eliapo468 F.3d 592 (9th Cir. 2006)
United States Bankruptcy Appellate Panel, Ninth CircuitAug 28, 2003
…The second category of tasks Boone performed involved motions for relief from the automatic stay brought by…
…1. Legal Standard Under § 330(a)(4)(B) of the Bankruptcy Code, courts may award reasonable compensation to…
finding that presumptive fees do not violate the requirements of § 330 that attorney&apos;s fees should be reasonable as long as the "assigned values are the result of a direct review of the marketplace"
discussing presumptive fees as implemented in the Northern District of California
BAP No. NC-02-1450-MaRyB, Bankruptcy No. 01-50227
Argued and Submitted on June 18, 2003.
David A. Boone, Law Offices of David A. Boone, San Jose, CA, for The Law Offices of David A. Boone.
Before MARLAR, RYAN, and BRANDT, Bankruptcy Judges.
The Northern District of California is among many districts throughout the country which have established, or are in the process of establishing, formal guidelines or local rules to allow presumptively reasonable and standardized attorneys' fees for consumer and business chapter 13 cases without requiring a detailed fee application, in the absence of an objection. See generally, Keith M. Lundin, Chapter 13 Bankruptcy § 294.1 (3d ed. 2002). These are sometimes referred to by the bankruptcy bar and trustees as "no look" fees. See, e.g., in re Wright, 290 B.R. 145, 147 (Bankr.C.D.Cal. 2003).
We affirm, concluding that the bankruptcy court's dual-standard approach complied with § 330.
Local Rule 9029-1 provides that the judges "may adopt, and as needed revise, guidelines concerning the allowance and disallowance of professional fees and expense reimbursement and the contents and format of applications therefor filed pursuant to 11 U.S.C. § 330(a) and 331 and F.R.Bankr.P.2016(a). . . . [The] guidelines are not intended to be local rules, and shall not have the force and effect thereof." N.D. Cal. L.B.R. 9029-1.
Apparently, the court then added $125 for Boone's preparation of the fee application, resulting in a total award of $2,744 ($1,400 + $1,219 + $125 = $2,744). The award was $394 greater than the original $2,350 fee award ($2,744 — $2,350 = $394), but $854 less than what Boone had requested in the Final Application. Boone timely appealed the Order.
The bankruptcy court's award of attorneys' fees will not be disturbed on appeal absent an abuse of discretion or an erroneous application of law. Smith v. Hale (In re Smith), 317 F.3d 918, 923 (9th Cir. 2002), cert. denied sub nom. Smith v. Grimmett, ___ U.S. ___ , 123 S.Ct. 2074, 155 L.Ed.2d 1060 (2003).
A customary review of a fee application under § 330 starts with a determination of the "lodestar," by multiplying a reasonable number of hours expended by a reasonable hourly rate. See Unsecured Creditors' Comm. v. Puget Sound Plywood, Inc., 924 F.2d 955, 960 (9th Cir. 1991). The lodestar formula is a means of putting a market rate on particular legal services rendered in a case. See Hensley v. Eckerhart, 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); Yermakov, 718 F.2d at 1471.
In chapter 13 cases, the lodestar approach may not adequately measure the reasonableness of many routine tasks performed by attorneys. Instead, a "normal and customary" standard reflects that "a real market rate for certain routinized services exists and can be used directly. . . ." See In re Szymczak, 246 B.R. 774, 779 (Bankr.D.N.J. 2000) (adopting "normal and customary" standard for routine chapter 13 services) (citing In re Patronek, 121 B.R. 728, 732 (Bankr.E.D.Pa. 1990) (concluding "that the handling of a Chapter 13 bankruptcy case is the paradigm of a repetitious sort of legal task, the value of which can be directly valued by review of the marketplace")).
The courts, which had always exercised wide discretion in determining reasonable and necessary fees under § 330(a), next sought to develop uniform fees for standard procedures, through local rules, general orders, or informal recommendations by the chapter 13 trustee. See, e.g., in re Kindhart, 167 F.3d 1158, 1159-60 (7th Cir. 1999) (accepting a uniform presumptive base fee limit of $1,000 for the Central District of Illinois Bankruptcy Court, which is reviewable every two years); Bueno v. United States Bankruptcy Court (In re Bueno), 248 B.R. 581, 583 (D.Colo. 2000) (a bankruptcy judge is not forbidden from formulating "presumptively normal billing rates or normal expectations of the time necessary to complete discrete tasks"); George T. Carlson Assocs. v. United States Bankruptcy Court (In re Ingersoll), 238 B.R. 202, 209 (D.Colo. 1999) (directing bankruptcy judges to work with members of bankruptcy bar, United States trustee and chapter 13 trustee to adopt a uniform practice for reviewing fee applications); Bachman v. Laughlin (In re McKeeman), 236 B.R. 667, 669-70 (8th Cir. BAP 1999) (holding it was not arbitrary for a court to consider amounts charged in a "typical" chapter 13 case); In re Pappas Rose, P.C., 229 B.R. 815, 81720 (W.D.Okla. 1998) (guidelines for payment of attorneys' fees are not contrary to law); In re Pedersen, 229 B.R. 445, 448 (Bankr.E.D.Cal. 1999) (optional chapter 13 fee guidelines, provided by general order, "are nothing more than a presumption that compensation is reasonable if paid in the amounts and in the manner prescribed").
Section 329(b) permits the court to deny compensation or cancel a fee agreement if it is unreasonable. The court, on its own initiative, may review for reasonableness any agreement for compensation between the debtor and his or her attorney, pursuant to § 329. See also F.R.Bankr.P.2017(b). "Section 330 sets out the standard by which courts should determine the reasonableness of fees under § 329." Am. Law Center PC v. Stanley (In re Jastrem), 253 F.3d 438, 443 (9th Cir. 2001). Under these provisions, the bankruptcy court may order the return of any attorneys' fees that exceed the reasonable value of the services provided. Id.
B. Additional Fee Request
The Sixth Circuit's approach has been roundly criticized for placing the lodestar approach above all others in chapter 13 cases, for it is only one means of determining reasonableness. See Puget Sound Plywood, 924 F.2d at 960; In re Busy Beaver Bldg. Ctrs., 19 F.3d 833, 856 (3d Cir. 1994). See also Chamberlain v. Kula (In re Kula), 213 B.R. 729, 737 n. 5 (8th Cir. BAP 1997) (stating, in dicta, that the lodestar calculation is not required in chapter 13 cases, however, the court should make a finding that such calculation is inappropriate under the circumstances); In re Argento, 282 B.R. 108, 116-17 (Bankr.D.Mass. 2002) (adopting "a standard that incorporates both the `initial fixed fee standard' for what can be described as the usual services inherent in any routine chapter 13 case and the lodestar method for those services which exceed the routine tasks"); Szymczak, 246 B.R. at 779-80; In re Watkins, 189 B.R. 823, 828 (Bankr.N.D.Ala. 1995) (courts may allow initial fee based on "normal and customary" standard). The Third Circuit sums up the majority view:
"Due process only requires a meaningful hearing appropriate to the nature of the case." City Equities Anaheim, Ltd. v. Lincoln Plaza Dev. Co. (In re City Equities Anaheim, Ltd.), 22 F.3d 954, 959 (9th Cir. 1994) (citation omitted). See also 11 U.S.C. § 102(1) ("`after notice and a hearing' . . . means after such notice as is appropriate in the particular circumstances, and such opportunity for a hearing as is appropriate in the particular circumstances").
Moreover, the local rules only require a hearing when the compensation exceeds $500, and the bankruptcy court limited the additional compensation to $394; that rule also authorizes the court to dispense with a hearing. See N.D. Cal. L.B.R. 90141(b)(1)(B).
Neither has Boone established any prejudice due to the court's delay in rendering its decision. The Ninth Circuit has clearly held that there is no right to a fee enhancement because of a delay in payment. Malpass v. Rodgers (In re Music Merchants, Inc.), 208 B.R. 944, 947 (9th Cir. BAP 1997) (stating there is "no authority for the proposition that awarded fees must be adjusted for delay in payment") (emphasis in original). Moreover, an administrative expense claim for these attorney's fees is not entitled to postpetition interest until the court actually awards the fees. See Boldt v. Crake (In re Riverside-Linden Inv. Co.), 945 F.2d 320, 324 (9th Cir. 1991); see also 11 U.S.C. § 1322(a)(2); § 502(b)(2); 3 Collier on Bankruptcy, supra, ¶ 330.03[3].
RYAN, Bankruptcy Judge, concurring.
The Guidelines are designed to provide an efficient method for disbursing fees to chapter 13 attorneys without further detailed fee application or hearing. Various courts have approved fixed fees for certain categories of services. See, e.g., in re Finlasen, 250 B.R. 446, 449 (Bankr. S.D.Fla. 2000) (referring to Local Rule 2016-1(B)(2) and the "Chapter 13 Fee Guidelines"); In re Pedersen, 229 B.R. 445 (Bankr.E.D.Cal. 1999). Ideally, the system advances the interest of judicial economy by avoiding a detailed review of fee applications under § 330. This purpose, however, is not achieved if the attorneys are allowed to later request a § 330 review after opting for the fixed fees. Such a system is self-defeating because there is no real choice being made. Attorneys will likely first choose to accept the "no look" fees and later file a fee application if dissatisfied with the fixed fees previously received.
Therefore, given the ambiguity and lack of specificity of the Guidelines, I would defer to the court's § 330 review, which is given great deference. See Gill v. Wittenburg (In re Fin. Corp. of America), 114 B.R. 221, 224 (9th Cir. BAP 1990). Here, the bankruptcy court divided the work performed by Boone into two categories: basic services and real property claims. Boone also requested $125 for the preparation of the fee application. Finding that the $1,400 provided under the Guidelines was sufficient to cover the basic services, the court declined to award Boone any additional fees in this category. However, the court awarded the $1,219 without "second guessing" the time invested by Boone in the stay motions. Apparently, the court also awarded the $125 to Boone for filing the fee application. Although the court did not make detailed findings regarding its fee awards under § 330, I agree with the majority that the court satisfied § 330 and would affirm the bankruptcy court.
For example, in In re Argento, 282 B.R. 108 (Bankr.D.Mass. 2002), the attorney filed a fee application for $12,837.50. In the application, the attorney disclosed that $1,500 was paid prepetition as a retainer. The Argento court allowed the $1,500 because the attorney intended it to cover the routine services. Id. at 117. As to the remaining requested fees, the Argento court held that the attorney performed services "that clearly went beyond the routine and were of benefit to his clients." Id. Therefore, the Argento court reviewed the remaining fees under the lodestar approach. Because the attorney in Argento did not opt for "no look" fees, Argento is distinguishable.
Similarly, In re Szymczak, 246 B.R. 774 (Bankr.D.N.J. 2000), involved a different factual scenario. There, the attorney filed a fee application seeking an allowance of fees in the amount of $9,691.25. The court issued an order awarding only $2,250. The attorney filed a reconsideration motion, which was granted by the court. It subsequently revised the allowance of fees to $3,350. Specifically, the Szymczak court awarded the $1,500 for normal and customary chapter 13 services, and applied the lodestar analysis to extraordinary work performed. Id. at 78182. Therefore, like Argento, Szymczak is distinguishable because it did not involve a situation where the attorney opted for "nolook" fees and later sought additional fees under § 330.
Finally, in In re Watkins, 189 B.R. 823 (Bankr.N.D.Ala. 1995), the second attorney filed a fee application for additional fees after the debtor's chapter 13 case was reinstated. In determining whether the new attorney was entitled to additional fees, the Watkins court first applied the normal and customary standard. Id. at 832. Finding that the attorney's late retention in the case resulted in extraordinary work, the Watkins court applied the lodestar analysis and granted the requested fees in part. Id. at 835. Again, Watkins is distinguishable because it did not involve an attorney who opted for "no look" fees and later sought a § 330 review.