Court Opinion

ID: 9378340
Source: CourtListenerOpinion
Date Created: 2023-03-10 01:00:55.046431+00
Date Added: 2024-06-11T17:17:20.449420
License: Public Domain

Case: 22-40283        Document: 00516672096             Page: 1      Date Filed: 03/09/2023

             United States Court of Appeals
                  for the Fifth Circuit                                       United States Court of Appeals
                                                                                       Fifth Circuit

                                                                                     FILED
                                                                                 March 9, 2023
                                       No. 22-40283
                                                                                Lyle W. Cayce
                                                                                     Clerk
   In the Matter of Jimie Dianne Owsley

                                                                                     Debtor,

   Dale & Klein, L.L.P.,

                                                                               Appellant,

                                            versus

   Jimie Dianne Owsley,

                                                                                  Appellee.

                     Appeal from the United States District Court
                         for the Southern District of Texas
                               USDC No. 2:21-CV-82

   Before Richman, Chief Judge, and Haynes and Graves, Circuit
   Judges.
   Per Curiam:*
         After Jimie Owsley (“Dr. Owsley”) filed for bankruptcy, the
   bankruptcy court authorized law firm Dale & Klein, L.L.P., to represent her

         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 22-40283         Document: 00516672096              Page: 2       Date Filed: 03/09/2023

                                          No. 22-40283

   in a separate family law matter. Dissatisfied with the bankruptcy court’s fee
   award, Dale & Klein subsequently appealed, and the district court affirmed
   in part and reversed in part. We AFFIRM the district court’s order.
                                                I.
           In 2019, Dr. Owsley filed for bankruptcy. Shortly thereafter, she
   sought the bankruptcy court’s permission to retain Dale & Klein to assist her
   with some family law matters related to her 2015 divorce, including
   “modification of conservatorship, terms of possession and access, and child
   support.” The bankruptcy court obliged. During its representation of Dr.
   Owsley, Dale & Klein (1) deposed Dr. Owsley’s ex-husband (“Mr.
   Owsley”), (2) represented Dr. Owsley in a three-day trial regarding her
   petition to modify the parent-child relationship, (3) memorialized the district
   court’s ruling on Dr. Owsley’s petition, and (4) helped Dr. Owsley prepare
   for a possible appeal of her divorce decree.
           Dale & Klein subsequently submitted a fee application to the
   bankruptcy court under 11 U.S.C. §§ 328(a), 330(a), and 331. In total, it
   requested $126,128.14 in professional fees and $1,607.79 in expenses. Mr.
   Owsley objected to the fee application, and the bankruptcy court held a
   hearing. The court then issued an order and opinion disallowing many of
   Dale & Klein’s requested fees on several different grounds, ultimately
   awarding only $82,566.50 in professional fees and $1,607.79 in expenses.
   Dale & Klein appealed. The district court affirmed in part and reversed in
   part, awarding Dale & Klein an additional $7,680.50 in professional fees.
   Dale & Klein now seeks review of the district court’s order. 1

           1
              Though Mr. Owsley objected to the fee application, the district court concluded
   that Dr. Owsley is the true party in interest and the proper appellee. Dr. Owsley waived a
   brief in the district court and did not submit a response brief in this court, but this “does
   not preclude our consideration of the merits” of Dale & Klein’s appeal. Lefebure v.

                                                2
Case: 22-40283         Document: 00516672096              Page: 3       Date Filed: 03/09/2023

                                          No. 22-40283

                                               II.
           In reviewing the district court’s decision, we apply the same standard
   of review to the bankruptcy court’s decision as the district court applied. In
   re Woerner, 783 F.3d 266, 270 (5th Cir. 2015) (en banc) (internal quotation
   marks and citation omitted). We review a bankruptcy court’s award of
   attorney’s fees for abuse of discretion. Id. A bankruptcy court abuses its
   discretion where it “(1) applies an improper legal standard . . . or follows
   improper procedures in calculating the fee award,” reviewed de novo, or
   “(2) rests its decision on findings of fact that are clearly erroneous.” Id. at
   271 (quotation omitted).
                                               III.
           Dale & Klein contends that the district court erred by disallowing or
   reducing: (1) certain pre-employment fees, (2) fees for travel time, (3) fees
   associated with a deposition of Mr. Owsley and time spent drafting a family
   law order, (4) certain fees deemed “duplicative,” (5) fees it claimed were
   beyond the scope of the employment agreement, and (6) certain “vague” or
   “block-billed” fees. We consider each point of error in turn.
           First, Dale & Klein urges that the bankruptcy court abused its
   discretion by disallowing fees for unauthorized pre-employment work. Dale
   & Klein sought $1,995.00 in fees for work that preceded June 17, 2019, the
   date its authorized representation of Dr. Owsley began.                      To establish
   entitlement to these fees, Dale & Klein was required to submit a nunc pro

   D’Aquilla, 15 F.4th 650, 653 (5th Cir. 2021), cert. denied, 14 S. Ct. 2732 (2022) (quotation
   omitted); see also Setser v. United States, 566 U.S. 231, 234 (2012) (exercising jurisdiction
   over an unopposed appeal of this court’s affirmance of a district court’s criminal sentence);
   Hammett v. Woodard, No. 22-10354, 2022 WL 17292268, at *1 (5th Cir. Nov. 29, 2022)
   (per curiam) (unpublished) (exercising jurisdiction over bankruptcy appeal in which no
   response briefs were filed).

                                                3
Case: 22-40283        Document: 00516672096              Page: 4       Date Filed: 03/09/2023

                                         No. 22-40283

   tunc application compliant with the Local Rules of Bankruptcy Procedure of
   the Southern District of Texas. Because Dale & Klein sought approval of
   these fees more than thirty days after its representation began, its application
   needed to explain (1) “why [it] was not filed earlier,” (2) “why the order
   authorizing employment is required nunc pro tunc,” and (3) “to the best of
   [Dale & Klein’s] knowledge, how approval of the application may prejudice
   any parties-in-interest.” Bankr. S.D. Tex. R. 2014-1(b)(2).
           Dale & Klein plainly failed to submit the requisite application.
   Moreover, its only attempt to justify the requested pre-employment fees was
   its statement that “[u]rgent family matters required advice.”                         The
   bankruptcy court (generously) noted that this “loosely satisfies” the first
   prong. However, it concluded that Dale & Klein wholly failed to satisfy Rule
   2014-1(b)(2)’s other requirements.
           We agree. Dale & Klein urges that Ms. Klein (a Dale & Klein partner)
   also testified at the fee application hearing that she intended to seek pre-
   employment fees. But even assuming her testimony constituted part of Dale
   & Klein’s “application,” it was plainly insufficient to satisfy Rule 2014-
   1(b)(2)’s remaining prongs. Therefore, the bankruptcy court did not abuse
   its discretion in disallowing these fees.
           Second, Dale & Klein argues that the bankruptcy court erred by
   refusing to award the firm Ms. Klein’s full hourly rate for her travel to a
   December 2019 hearing. 2 Yet, as the bankruptcy court noted, courts have

           2
              The relevant fee entry, which the district court reduced by fifty percent, reads
   “Attend hearing on Temporary Orders & return travel (150 miles).” Dale & Klein now
   clarifies—for the first time on appeal—that the round trip was actually 300 miles.
   Therefore, it contends, the bankruptcy court effectively reduced the fee award by seventy-
   five percent, even though it intended to reduce it by only fifty percent. Dale & Klein
   forfeited this argument. See Rollins v. Home Depot USA, 8 F.4th 393, 397 (5th Cir. 2021)
   (“A party forfeits an argument by . . . raising it for the first time on appeal.” (quotation

                                                4
Case: 22-40283         Document: 00516672096              Page: 5       Date Filed: 03/09/2023

                                          No. 22-40283

   broad discretion over whether to compensate attorneys for travel time. See,
   e.g., In re Babcock & Wilcox Co., 526 F.3d 824, 828–29 (5th Cir. 2008) (per
   curiam); Priestly v. Astrue, 651 F.3d 410, 419 (4th Cir. 2011); Thames v.
   Evanston Ins. Co., 665 F. App’x 716, 721–22 (10th Cir. 2016). Therefore, the
   bankruptcy court likewise did not abuse its discretion in disallowing these
   fees.
           Third, Dale & Klein avers that the bankruptcy court failed to explain
   why it disallowed certain fees associated with its deposition of Mr. Owsley
   and the drafting of the family law order. To be sure, a lower court must
   provide a “concise but clear explanation of its reasons for [a] fee award.”
   Hensley v. Eckerhart, 461 U.S. 424, 437 (1983). However, the bankruptcy
   court did just that. It opined that Ms. Klein was unethical and discourteous
   in conducting Mr. Owsley’s deposition, citing several specific examples from
   the deposition testimony. It similarly noted that Dale & Klein was extremely
   uncooperative with opposing counsel during the drafting of the family law
   order. As the bankruptcy court explained, the state court’s instruction to the
   parties was simple—they were to draft a “regular [] order with regular
   language.” Yet, despite that instruction, the parties’ disagreements resulted
   in them exchanging fourteen drafts of the order and appearing before the court
   two additional times.
           Though these facts speak for themselves, the bankruptcy court clearly
   articulated why such conduct rendered the requested fees excessive:
   (1) unethical behavior “diminishe[s] the value” of a law firm’s services, and

   omitted)); see also In re IFS Fin. Corp., 803 F.3d 195, 204 n.13 (5th Cir. 2015) (noting that
   we will not “review an issue presented for the first time on appeal of a bankruptcy court’s
   decision” (quotation omitted)). Regardless, even a seventy-five percent reduction still
   wouldn’t constitute an abuse of discretion because Dale & Klein never clarified that it only
   sought half of Ms. Klein’s travel time. In re Evangeline Ref. Co., 890 F.2d 1312, 1326 (5th
   Cir. 1989) (“The applicant bears the burden of proof in a fee application case.”).

                                                5
Case: 22-40283        Document: 00516672096              Page: 6      Date Filed: 03/09/2023

                                         No. 22-40283

   (2) such incivility “unnecessarily and excessively expanded the number of
   hours Dale & Klein billed.”
           Dale & Klein’s only response is that the bankruptcy court gave short
   shrift to the complexity and idiosyncrasies of these matters.                    But our
   precedent generally bars us from second-guessing such factual findings. See
   In re Cahill, 428 F.3d 536, 542 (5th Cir. 2005) (per curiam). Moreover, Dale
   & Klein not only fails to counter the conclusion that the parties’
   disagreements prolonged proceedings—it concedes this. Accordingly, the
   bankruptcy court did not err in disallowing and reducing fees associated with
   these matters.
           Fourth, Dale & Klein contends that the bankruptcy court erred by
   disallowing certain fees it deemed “duplicative.” The firm first asserts that
   the court failed to explain why it deemed these entries repetitive. We
   disagree.     The bankruptcy court’s opinion includes an appendix that
   identifies each disallowed fee entry and references the other entry it
   duplicates.3 This suffices as the “concise but clear explanation” required.
   Hensley, 461 U.S. at 437.
           Additionally, Dale & Klein avers that the bankruptcy court
   misidentified certain pairs of entries as duplicative which actually refer to
   distinct activities. We agree that it’s possible that some entries could refer to
   different iterations of a single “type” of task. However, given the court’s
   particularized assessments and the vagueness of the relevant entries, 4 we

           3
            The district court subsequently identified a few small errors in this appendix and
   the subsequent calculation, which it corrected.
           4
             For instance, the challenged entries feature non-specific descriptions like
   “[c]orrespondence to [client]” and “[r]eviewed signed outgoing discovery.”

                                               6
Case: 22-40283      Document: 00516672096           Page: 7    Date Filed: 03/09/2023

                                     No. 22-40283

   cannot agree that it clearly erred in excluding these “duplications.” See
   Walker v. U.S. Dep’t of Hous. & Urb. Dev., 99 F.3d 761, 768 (5th Cir. 1996).
            Fifth, Dale & Klein contends that the bankruptcy court erred by
   disallowing certain billing entries based on the court’s mistaken assumption
   that they related to a possible appeal. In the district court, Dale & Klein urged
   that the bankruptcy court incorrectly concluded that the appeal wasn’t
   within the scope of the firm’s authorized representation. Here, however,
   Dale & Klein seems to have realized that the disallowed fee entries
   correspond to its preparation for the trial on the petition for modification of
   the parent-child relationship—which plainly was within the scope of the
   employment order. Even assuming this argument has merit, Dale & Klein
   forfeited it by failing to raise it below. See Rollins v. Home Depot USA, 8 F.4th
   393, 397 (5th Cir. 2021); In re IFS Fin. Corp., 803 F.3d 195, 204 n.13 (5th Cir.
   2015).
            Finally, Dale & Klein urges that the bankruptcy court abused its
   discretion by disallowing certain entries because they were too “vague” or
   “block-billed.” Notably, Dale & Klein does not contest the appropriateness
   of reducing fees on these bases. Rather, it simply contends that the relevant
   entries were not vague or block-billed. Based on our review of the relevant
   entries, we conclude that these factual findings were not clearly erroneous.
                                         IV.
            In sum, the bankruptcy court did not abuse its discretion in
   disallowing the relevant requested fees. The district court’s judgment is
   AFFIRMED.

                                          7