Opinion ID: 2630997
Heading Depth: 5
Heading Rank: 3

Heading: work to defend the Receiver's fee applications

Text: Hawaii Ventures argues that Receiver Park's and her professionals' work in defending a fee application are not chargeable to the Estate. In support of its contention, Hawaii Ventures points to certain entries in Ning, Lilly & Jones' invoice (dated November 7, 2001), attached to the cumulative interim fee application: DATE DESCRIPTION HOURS AMOUNT 10/01/01 Review emails from Receiver; email Receiver; 4.70 $587.50 review redraft of supplemental order; confer with Ke-ching Ning regarding supplemental order and cover letter; draft summary of [Hawaii Ventures'] and Receiver's form of orders Fees & Costs pleadings; confer with Ke-ching Ning; conduct further research regarding receiver's compensation ; make revisions Kona Surf: confer Ke-ching Ning regarding our draft msj. 10/17/01 Draft letter to our parties informing 1.10 $ 71.50 them of [Hawaii Ventures'] objection to our October fees; pull documents in preparation to fee application. 10/17/01 Conference with Ke-ching Ning regarding 5.70 $712.50 [Hawaii Ventures'] objection to fees ; review emails regarding ILWU['s] motion; review [Hawaii Ventures'] objection to fees and Ke-ching Ning's email; review [Hawaii Ventures'] reply to Rec'r memorandum regarding procedure for interim allowances and payment of compensation and reimbursement of costs; research regarding burden of objecting party 2 telephone calls with Ron Tom regarding removal of equipment and fees objection ; telephone message to S. Mau[, i.e., Hawaii Ventures' counsel,] regarding equipment removal Kona Surf: Review draft of objection to Koa Hotel's submission. 10/17/01 Objection from [Hawaii Ventures'] on 1.20 $270.00 everyone's fees and costs; discuss need to file fee application. Letter to parties regarding statute of fund deposits. Communications on ILWU['s] interim appeal motion. Follow-up on transfer of equipment to [Hawaii Ventures]. 10/19/01 Review email from S. Mau and Receiver; draft 8.90 $1,112.50 fee application. 10/22/01 2 brief conferences with Ke-ching Ning 4.40 $550.00 regarding equipment removal; draft letter to S. Mau regarding equipment removal; telephone call with Ron Tom regarding equipment removal; telephone message to Receiver regarding fee application ; review research regarding and continue drafting opposition to ILWU['s] motion to file interlocutory appeal; telephone call with received regarding fee app; review Ke-ching Ning's comments to fee app draft; confer with Elsonne regarding fees memorandum; longer conference with Ke-Ching Ning regarding her comments to draft. (Emphases added.) Moreover, a brief review of the Receiver's final motion for instructions  particularly, the portion discussing her request for fees and costs, appears to indicate that work relating to fee applications were also charged: DATE DESCRIPTION HOURS AMOUNT 07/21/02 Summarize the objections to fees for 1.40 $175.00 Receiver. 07/22/02 Review draft billing to be sent to 2.30 $287.50 Receiver. Draft fee app[lication] replies. 07/22/02 Review/comment [Hawaii Ventures]'s 0.50 $112.50 objections to fee app[lications]. 07/25/02 Begin pulling exhibits for fee 1.50 $97.50 application reply; draft declaration of JHJ for same, continue drafting declaration incorporating JHJ's revisions. A receiver is generally entitled to compensation from the estate for services rendered in protecting the estate. See, e.g., Sec. & Exch. Comm'n v. Elliott, 953 F.2d 1560, 1577 (11th Cir.1992) (Even though a receiver may not have increased, or prevented a decrease in, the value of the collateral, if a receiver reasonably and diligently discharges [her] duties, [she] is entitled to compensation. (Citations omitted.)). However, several courts have held that receivers are not entitled to recover fees and expenses associated with litigation involving the propriety of the fees to be awarded to them because, as the United States Court of Appeals for the Third Circuit explained, the law imposes on a party the duty to pay [her] own fees and expenses in vindicating [her] personal interests. . . . It is our understanding that services necessarily involved in preparing [fee] application to the district court and defending them there are not compensable. Larchwood Gardens, 420 F.2d at 534; In re Imperial ÷ 400' Nat'l, Inc., 432 F.2d 232, 239 (3d Cir.1970) (time not legally compensable [includes] that spent in applying for or in defending interim fee awards) (footnote omitted); Sec. & Exch. Comm'n v. W.L. Moody & Co., Bankers ( Unincorporated ), 374 F.Supp. 465, 490 (S.D.Tex.1974) (holding that a [r]eceiver's preparation for and attendance at hearings on the fees will not be considered in setting [her] fee); In re Polycast Corp., 289 F.Supp. 712, 719 (D.Conn. 1968) (denying allowance for time charged for preparing the trustee's fee application); Depositors' Comm. v. Fin. Mgmt. Task Force, Inc., 809 P.2d 1095, 1098 (Colo.Ct. App.1991) (concluding that the services rendered in defending the receiver's fee request were of no benefit to the estate  the services rendered were for the sole benefit of the fiduciary and its counsel). As the above tables clearly demonstrate, Receiver Park's fee applications included fees relating to the preparation and defense of the charged fees, which are not chargeable against the Estate and should not have been considered in awarding fees. Although the circuit court, in ruling on the various fee applications, reduced the amount of fees requested, it is impossible to determine whether those reductions were attributable to the preparation and/or defense of the charged fees because the court did not provide any explanation for its reductions. Absent such explanation, we cannot effectively review whether the circuit court abused its discretion in awarding fees as it did. Accordingly, we vacate the awards of fees reflected in the circuit court orders filed on January 15, 2002, October 16, 2002, and May 12, 2003 (totaling $312,483.93) and remand this matter to the circuit court for clarification and, if necessary, a redetermination of the amount to be awarded to the Receiver and her professionals in light of the views expressed herein. Cf. Price v. AIG Hawai`i Ins. Co., 107 Hawai`i 106, 113, 111 P.3d 1, 8 (2005) (reminding all judges to specify the grounds for awards of attorneys' fees and the amounts awarded with respect to each ground. Without such an explanation, we must vacate and remand awards for redetermination and/or clarification. (Citations omitted.)). [31]