Opinion ID: 3039499
Heading Depth: 4
Heading Rank: 6

Heading: On its own motion or the motion of any

Text: party in interest, the court may order a hear- ing to review any fee paid or unpaid. The “Rights and Responsibilities” form, referred to in paragraph (A)(1)(a), supra, is signed by both the Chapter 13 debtor and his or her attorney. In pertinent part, that form provides, If the initial fees ordered by the court are not sufficient to compensate the attorney for the legal services rendered in the case, the attorney further agrees to apply to the court for any additional fees. . . . If the debtor disputes the legal services provided or the fees charged by the attorney, an objection may be filed with the court and the matter set for hearing. A. Consistency of Guidelines with 11 U.S.C. § 330 Boone argues that the bankruptcy court’s presumptive fee guidelines are inconsistent with 11 U.S.C. § 330. We disagree. The customary method for assessing an attorney’s fee application in bankruptcy is the “lodestar,” under which “the 18506 IN RE: ELIAPO number of hours reasonably expended” is multiplied by “a reasonable hourly rate” for the person providing the services. Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Unsecured Creditors’ Comm. v. Puget Sound Plywood, Inc., 924 F.2d 955, 960 (9th Cir. 1991). However, the lodestar method is not mandatory. See Unsecured Creditors’ Comm., 924 F.2d at 960 (“Although [In re Manoa Finance Co., 853 F.2d 687 (9th Cir. 1988),] suggests that starting with the ‘lodestar’ is customary, it does not mandate such an approach in all cases.”); In re Busy Beaver Bldg. Ctrs., Inc., 19 F.3d 833, 856 (3d Cir. 1994) (“While bankruptcy fees are commonly calculated using the lodestar method, . . . § 330 by no means ossifies the lodestar approach as the point of departure in fee determinations.”). [3] We see nothing in § 330 that prevents a bankruptcy court from issuing and then relying on guidelines establishing presumptive fees for routine services in Chapter 13 cases. Such presumptive fees, if set at an appropriate level, have a number of virtues. First, use of presumptive fees in a no-look application saves attorney time that would otherwise be spent preparing detailed applications using the lodestar method. Saving attorney time has the potential, perhaps even likely, consequence of lowering attorney’s fees. Second, use of presumptive fees encourages efficient use of attorney time by providing fair compensation to efficient practitioners and by preventing inefficient practitioners from passing on the cost of their inefficiency. As stated by Judge Lundin, Three or four hours of attorney time and a like num- ber of hours of paralegal time in an experienced debtors’ attorney’s office can produce excellent results in a “typical” Chapter 13 case. Another lawyer who less regularly handles Chapter 13 cases might double or triple the time investment to pro- duce the same or less desirable results. Applying IN RE: ELIAPO 18507 normal lodestar methodology can penalize the efficient volume counsel by reducing the fee in each case while rewarding the inefficient practitioner with higher fees. 4 Keith M. Lundin, Chapter 13 Bankruptcy § 294.1, at 294-22 to -23 (3d ed. 2000 & Supp. 2004). Third, the presumptive fee guidelines benefit attorneys by providing for earlier payment of fees. In this case, Boone was awarded the $2,350 requested in his no-look fee application several months before he even filed his second fee application. Indeed, since a no-look fee is intended to cover all services required in the usual case, an attorney who opts to file a no-look application may receive full payment even before all the services covered by that payment have been performed. Fourth, use of presumptive fees saves time that a busy bankruptcy court would otherwise be required to spend dealing with detailed fee applications. As stated by the BAP in this case, “[T]he sheer volume of chapter 13 cases and the rarity of creditor or debtor objections to attorney’s fees in such cases make court review of each fee application or fee arrangement administratively burdensome.” Eliapo II, 298 B.R. at 399; see also 4 Lundin, supra, § 294.1, at 294-25 to -26 (“It is almost inconceivable that bankruptcy courts would engage in full-scale lodestar calculation of debtors’ attorneys’ fees in every Chapter 13 case, especially in districts with high-volume Chapter 13 programs.”). [4] As the BAP noted in this case, bankruptcy courts around the country have been experimenting for several years with presumptive fees for routine services in Chapter 13 cases, based on guidelines issued by the Executive Office of the United States Trustee. See Eliapo II, 298 B.R. at 399. The Fifth Circuit has recently approved the use of a “precalculated lodestar” as a basis for awarding attorney’s fees in “typical” Chapter 13 cases. In re Cahill, 428 F.3d 536, 541 (5th Cir. 18508 IN RE: ELIAPO 2005) (“This precalculated lodestar aids bankruptcy courts in disposing of run-of-the-mill Chapter 13 fee applications expeditiously and uniformly, obviating the need for bankruptcy courts to make the same findings of fact regarding reasonable attorney time expenditures and rates in typical cases for each fee application that they review.”). The Seventh Circuit has also approved the use of presumptive fees in routine Chapter 13 cases. See In re Kindhart, 160 F.3d 1176 (7th Cir. 1998) (approving concept of presumptive fee schedule in Chapter 13 cases and remanding to the bankruptcy court to review and update its presumptive fees); In re Kindhart, 167 F.3d 1158 (7th Cir. 1999) (approving use of updated presumptive fees); see also Bueno v. U.S. Bankr. Court (In re Bueno), 248 B.R. 581, 583 (D. Colo. 2000) (approving use of presumptive fees for routine services in Chapter 13 case); Chamberlain v. Kula (In re Kula), 213 B.R. 729, 737 n.5 (8th Cir. BAP 1997) (“Because the majority of work in most Chapter 13 cases is normal and customary, and because of the sheer volume of such cases in most districts, the lodestar calculation may not necessarily be the best method for determining appropriate fees in those cases.”); In re Argento, 282 B.R. 108, 116-17 (Bankr. D. Mass. 2002) (adopting “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”); In re Szymczak, 246 B.R. 774, 781 (Bankr. D.N.J. 2000) (“Because use of the lodestar method for calculating legal fees does not achieve fair and reasonable results for debtor’s counsel in chapter 13 cases, bankruptcy courts should divide services into two categories: work that is standard or normal and customary in a chapter 13 case and work that falls outside of this standard.”); In re Pedersen, 229 B.R. 445, 447-49 (Bankr. E.D. Cal. 1999) (using presumptive fees for routine services in Chapter 13 case); In re Watkins, 189 B.R. 823, 828 (Bankr. N.D. Ala. 1995) (approving use of a “normal and customary” standard for routine services in IN RE: ELIAPO 18509 Chapter 13 cases, and use of the lodestar method for work that “falls outside of that standard”). We emphasize that the no-look guidelines establish only presumptive fees. If a Chapter 13 practitioner does not wish to apply for fees under the no-look guidelines, he or she is free not to do so and to submit instead a detailed fee application using the lodestar method. Or, if the practitioner has already submitted a no-look application and received presumptive fees, he or she is free to seek additional fees using the lodestar method if the presumptive fees have not provided fair compensation for the time spent on the case. Of course, a practitioner who chooses the latter approach must accept the possibility that the bankruptcy court may take a fresh look at his entire fee application, not just that portion of the application relating to “additional” fees. [5] We therefore conclude that reliance on presumptive guideline fees for routine services in Chapter 13 cases is consistent with § 330.