Court Opinion

ID: 9838908
Source: CourtListenerOpinion
Date Created: 2023-09-08 18:00:40.986999+00
Date Added: 2024-06-11T09:06:44.915387
License: Public Domain

Case: 23-30003        Document: 00516887966             Page: 1      Date Filed: 09/08/2023

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

                                     ____________                                           FILED
                                                                                     September 8, 2023
                                      No. 23-30003                                     Lyle W. Cayce
                                     ____________                                           Clerk

   In the Matter of Sharon Sylvester,

                                                                                      Debtor,

   Sharon Sylvester,

                                                                                Appellant,

                                            versus

   Chaffe McCall, L.L.P.,

                                                                                     Appellee.
                     ______________________________

                     Appeal from the United States District Court
                        for the Eastern District of Louisiana
                              USDC No. 2:22-CV-2065
                     ______________________________

   Before Smith, Southwick, and Higginson, Circuit Judges.
   Stephen A. Higginson, Circuit Judge:*
         Sharon Sylvester filed for bankruptcy. At the conclusion of her Chap-
   ter 7 proceedings, the bankruptcy court approved a fee application submitted
   by the law firm that assisted the Chapter 7 trustee. Sylvester appealed the

         _____________________
         *
             This opinion is not designated for publication. See 5th Cir. R. 47.5.
Case: 23-30003          Document: 00516887966                  Page: 2   Date Filed: 09/08/2023

                                            No. 23-30003

   award. Our court held that the bankruptcy court applied the incorrect legal
   standard, vacated the award of attorneys’ fees, and remanded the case for
   further proceedings consistent with that opinion. In re Sylvester, 23 F.4th 543
   (5th Cir. 2022). On remand, the bankruptcy court granted the law firm’s fee
   application in part, and the district court affirmed. Because the bankruptcy
   court did not abuse its discretion, we AFFIRM.
                                                  I.
          As explained more fully in our court’s previous opinion,1 Sharon Syl-
   vester filed for Chapter 13 bankruptcy in 2018. The bankruptcy converted her
   case into a Chapter 7 proceeding in 2019 and appointed Barbara Rivera-Ful-
   ton as the trustee. The bankruptcy court granted Rivera-Fulton’s application
   to employ Chaffe McCall as general counsel to assist with reviewing and liq-
   uidating Sylvester’s real property. The trustee paid all of Sylvester’s debts,
   with some remaining funds expected to be distributed to Sylvester at the con-
   clusion of the case.
          In 2020, Chaffe submitted a fee application seeking $16,185 in attor-
   neys’ fees. Sylvester opposed, arguing that most of the services performed by
   Chaffe were duties statutorily assigned to the trustee that did not require le-
   gal expertise. The bankruptcy court granted the fee application in full, finding
   that the demarcation between what tasks should solely be performed by the
   trustee and those that could be delegated to counsel were “not black and
   white.” Because of this difficulty, the bankruptcy court granted Chaffe “lee-
   way” and assumed that the work performed by Chaffe required legal exper-
   tise in light of the positive outcome of the bankruptcy proceeding. Sylvester

          _____________________
          1
              In re Sylvester, 23 F.4th 543 (5th Cir. 2022).

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                                     No. 23-30003

   appealed to the district court, which affirmed. Sylvester then appealed to our
   court.
            Our court addressed the appropriate legal standard for the award of
   attorneys’ fees under § 330(a) of the Bankruptcy Code. In re Sylvester, 23
   F.4th 543 (5th Cir. 2022). Section 330(a) allows courts to award “reasonable
   compensation for actual, necessary services rendered” by professional per-
   sons, such as attorneys, employed under § 327 of the Code; however, §
   330(a) does not define “necessary.” Interpreting interrelated provisions of
   the Bankruptcy Code, our court held that “a court may compensate an attor-
   ney under § 330(a) only for services requiring legal expertise that a trustee
   would not generally be expected to perform without an attorney’s assis-
   tance.” Id. at 548–49. Our court also emphasized that the attorney requesting
   compensation under § 330(a) bears the burden of justifying the services ren-
   dered. Id. at 549–50.
            Our court then determined that the bankruptcy court erred in two
   ways when it granted Chaffe’s application for fees in full. Id. at 549. First, the
   bankruptcy court failed to identify and separate Chaffe’s non-compensable
   services because of the stated difficulty in delineating between legal and non-
   legal services and in light of the successful bankruptcy result. Id. Second, the
   bankruptcy court ignored that the attorney requesting compensation bears
   the burden of justifying the services rendered when it assumed that the tasks
   performed by Chaffe required legal expertise. Id. at 549–50. Our court then
   vacated the fee award and remanded the case for further proceedings con-
   sistent with that opinion. Id. at 550.
                                            II.
            We apply the same standard of review as the district court in reviewing
   the bankruptcy court’s decision. In re Woerner, 783 F.3d 266, 270 (5th Cir.
   2015) (en banc). We review the bankruptcy court’s award of attorneys’ fees

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                                       No. 23-30003

   for abuse of discretion. Id. “An abuse of discretion occurs where the bank-
   ruptcy court (1) applies an improper legal standard, reviewed de novo, or fol-
   lows improper procedures in calculating the fee award, or (2) rests its deci-
   sion on findings of fact that are clearly erroneous.” Id. at 270–71 (quotation
   omitted). “A bankruptcy court is entitled to substantial deference in its de-
   termination as to whether a particular service required attorney expertise.”
   In re Sylvester, 23 F.4th at 549. We will only overturn the factual findings of
   the bankruptcy court if “we are left with a ‘firm and definite conviction’ that
   the bankruptcy court committed a mistake.” In re Bradley, 960 F.2d 502, 507
   (5th Cir. 1992) (quoting in part United States v. U.S. Gypsum Co., 333 U.S.
   364, 395 (1948)).
                                            III.
          On June 21, 2022, the bankruptcy court issued a new memorandum
   opinion and order, granting Chaffe’s fee application in large part. Chaffe
   sought $16,185 in attorneys’ fees and $338 in associated costs. After detailing
   the factual and procedural background of the case, the bankruptcy court re-
   cites the proper legal standard for reviewing a request for attorneys’ fees un-
   der § 330(a) as set forth by our court in our 2022 decision. The bankruptcy
   court found that three of Chaffe’s time entries, totaling $605, “fall into the
   broad categories identified as §704(a) trustee duties and could have been per-
   formed by the Trustee herself without legal assistance,”2 but that the remain-
   der of the entries are “reasonable and necessary and rendered toward the
   completion of the case.”
          In its new opinion, the bankruptcy court does not address specific time
   entries beyond the three it identifies as not compensable, but writes that

          _____________________
          2
            As required by our court’s mandate, see In re Sylvester, 23 F.4th at 549, the
   bankruptcy court identified and separated out Chaffe’s non-compensable services.

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                                     No. 23-30003

   Chaffe’s attempt to craft a deal that would pay off all the claims of the estate
   and allow the primary real property at issue to stay in the debtor’s family took
   skill and required Chaffe to handle “legal matters including analyzing and
   resolving tax, insurance, and title issues on behalf of the Trustee.”
          While the bankruptcy court should have provided more detail sup-
   porting its conclusion that the majority of the time claimed by Chaffe McCall
   was “necessary” under § 330(a), we are not left with a “firm and definite
   conviction” that its factual finding is incorrect. See In re Bradley, 960 F.2d at
   507 (citation omitted).
          AFFIRMED.

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