Court Opinion

ID: 4581079
Source: CourtListenerOpinion
Date Created: 2020-10-27 20:02:20.302405+00
Date Added: 2024-06-11T13:44:34.669938
License: Public Domain

NOT FOR PUBLICATION                     FILED
                        UNITED STATES COURT OF APPEALS                   OCT 27 2020
                                                                      MOLLY C. DWYER, CLERK
                                                                       U.S. COURT OF APPEALS
                                 FOR THE NINTH CIRCUIT

In re: ERIK J. SUNDQUIST; RENEE                     No.   19-60016
SUNDQUIST,
                                                    BAP No. 17-1347
                   Debtors,

------------------------------                      MEMORANDUM*

DENNISE HENDERSON; LAW OFFICE
OF DENNISE HENDERSON,

                   Appellants,

  v.

ERIK J. SUNDQUIST; RENEE
SUNDQUIST,

                   Appellees.

                             Appeal from the Ninth Circuit
                              Bankruptcy Appellate Panel
            Lafferty III, Brand, and Spraker, Bankruptcy Judges, Presiding

                                 Submitted October 23, 2020**
                                   San Francisco, California

Before: HAWKINS, N.R. SMITH, and R. NELSON, Circuit Judges.

       *
          This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
         The panel unanimously concludes this case is suitable for decision without
oral argument. See Fed. R. App. P. 34(a)(2).
      Dennise Henderson (“Henderson”), who represented debtors in the underlying

bankruptcy proceeding, appeals the decision of the Bankruptcy Appellate Panel

(“BAP”) affirming the Bankruptcy Court’s order expunging an attorneys’ fee lien

Henderson had filed against the debtors. We review the bankruptcy court’s decision

independently, Beaupied v. Chang (In re Chang), 163 F.3d 1138, 1140 (9th Cir.

1998), and we affirm.

      Henderson represented the debtors in a very successful adversary proceeding

stemming from violation of the automatic stay. Under 11 U.S.C. § 362(k), her

attorney’s fees are part of the damage award.         Although Henderson initially

attempted to seek at 30% contingent fee award, she later agreed before the court to

“only seek the lesser of the contingency fee agreement or the reasonable hourly rate

times the number of hours expended consistent with the Lodestar method.” The

bankruptcy court canceled the contingent fee agreement pursuant to 11 U.S.C. § 329,

which permits the court to cancel any agreement that “exceeds the reasonable value

of any such services,” and awarded instead the full number of hours worked times

an hourly rate of $300. Nonetheless, Henderson later filed an attorneys’ fee lien

against the debtors, apparently seeking some higher fee based on the “extraordinary

result” in this case, which necessitated debtors’ current action to expunge the lien.1

1
  We note that Henderson’s notice of appeal designated only the November 2017
order expunging her lien and not the initial March 2017 decision which canceled the
contingency fee agreement and awarded lodestar fees. See Fed. R. App. P.

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      The bankruptcy court acted well within its discretion in canceling

Henderson’s contingency fee agreement, awarding her lodestar fees instead, and

expunging the lien. First, counsel expressly agreed to accept the lodestar calculation

as a reasonable fee.     Second, the bankruptcy court has broad discretion in

determining the amount of fees that are reasonable, especially considering the

court’s unique position to observe the attorney’s performance during the course of

the bankruptcy proceedings. See America’s Serv. Co. v. Schwartz-Tallard (In re

Schwartz-Tallard), 803 F.3d 1095, 1101 (9th Cir. 2015) (explaining how bankruptcy

judges retain the discretion to eliminate unnecessary or plainly excessive fees under

§ 362(k)). The bankruptcy court described in great detail the poor performance of

counsel, including its opinion that the damages proven might have been even higher

with a better presentation. It expressed doubt that Henderson’s services were worth

$300 an hour, but ultimately decided this figure was fair because of the risk of

3(c)(1)(B). “When a party seeks to argue the merits of an order that does not appear
on the face of the notice of appeal, we consider (1) whether the intent to appeal a
specific judgment can be fairly inferred and (2) whether the appellee was prejudiced
by the mistake.” Le v. Astrue, 558 F.3d 1019, 1022–23 (9th Cir. 2009) (internal
quotations and citations omitted). Here, the subject matter of the two orders are
necessarily intertwined, as the November order refers back to and expands on the
reasoning of the earlier order. In addition, much of the briefing before the
bankruptcy court, BAP, and this court addresses the propriety of the original March
2017 order. We thus conclude that we have jurisdiction to address the merits of both
orders. See One Indus., LLC v. Jim O’Neal Distrib., Inc., 578 F.3d 1154, 1159 (9th
Cir. 2009).

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nonpayment counsel had assumed.2 Counsel was thus fully compensated for her

time and services by this award, and had no basis for filing the lien against debtors.3

      AFFIRMED.

2
 Henderson also argues she was entitled to a bonus or enhancement for her clients’
“extraordinary result.” In denying this request, the bankruptcy court did not err.
Though “declin[ing] to consider the bonus requested by the appellant” has
constituted legal error, see Burgess v. Kelnske (In re Manoa Fin. Co.), 853 F.2d 687,
691–92 (9th Cir. 1988), the bankruptcy court here considered Henderson’s
enhancement arguments, ultimately exercising its discretion to deny that request
based on Henderson’s performance. See Sundquist v. Bank of America, N.A. (In re
Sundquist), 576 B.R. 858, 876–77 (Bankr. E.D. Cal. 2017) (noting the bankruptcy
court “accepted [Henderson’s claimed rate, reasoning that it included an implicit
enhancement (perhaps 50 percent) above normal lodestar for an attorney of her
caliber of performance that could be justified as accommodating the risk of
nonpayment”).
3
 The motion filed by Appellants for an extension of time to file a reply brief [Dkt.
Entry No. 53] is granted. The reply brief filed on July 29, 2020, is deemed filed.

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