Opinion ID: 1577466
Heading Depth: 1
Heading Rank: 11

Heading: Trustee's Tacit Validation of Cohn's Practice

Text: Cohn next argues that because the Chapter 13 trustee was aware of his practice as early as 1991, but did not object to it until 1998, he was entitled to believe that his practice had the trustee's approval. Additionally, he argues that because the Western District had adopted a system for awarding attorney's fees based on efficiency and presumptions of reasonableness, rather than engaging in the strict lodestar analysis required by the Sixth Circuit, he was acting in good faith by working within the framework established by the local bankruptcy court. The record firmly establishes that the trustee did know about Cohn's procedure for seven years prior to bringing the objections that resulted in In re Phillips . The trustee attributed the delay in addressing Cohn's procedure to the fact that, we are so big, we involve so many processes that processes just go on ... you can't look at each and every process each and every day. Things ... don't get reviewed until some event triggers a review.... Cohn argues that the Western District's method for awarding fees based on a presumption of reasonableness was not in strict compliance with the Sixth Circuit's pronouncement that bankruptcy courts must conduct a lodestar analysis in awarding attorney's fees. See Boddy, 950 F.2d at 337 (the establishment of a fixed fee for certain `normal and customary' services is directly contrary to the plain `actual, necessary services rendered' language of 11 U.S.C. § 330). Judge Brown and the trustee both testified that the Western District's method is distinguishable from Boddy , as the Western District uses only a presumption of reasonableness, rather than a fixed fee. In any event, our task is not to assess the correctness of the bankruptcy court's procedures; Cohn's argument amounts to an assertion that because the bankruptcy court may not have been in strict compliance with the Bankruptcy Code, he was not required to comply either. We reject this argument. Although the bankruptcy court acknowledged that both the trustees and the court itself shared some responsibility for allowing Cohn's use of section 1305 to persist for so long, the bankruptcy court ultimately laid the blame squarely upon Cohn, as did the hearing panel. The trial court agreed that Cohn violated the disciplinary rules, but found that the trustee's delay in addressing Cohn's procedure militated against the imposition of sanctions. Evidence of the trustee's inaction did not, however, convince the hearing panel or the chancellor that Cohn did not violate the Disciplinary Rules charged in the petition. Judge Brown and the expert witnesses testified before the hearing panel that, rather than making assumptions, if a practitioner was unsure of whether his attorney's fee filings were correct, the proper thing to do would be to ask the trustee. Although we also believe the trustee and the bankruptcy court share some responsibility for allowing Cohn's practice to continue for seven years, we decline to adopt Cohn's argument that, essentially, the trustee and the court are to blame for not catching him sooner. We believe the primary responsibility is Cohn's for initiating and continuing the practice until he was stopped, and we agree that the preponderance of the evidence supports the conclusion that Cohn did violate the disciplinary rules as charged.