Court Opinion

ID: 4765455
Source: CourtListenerOpinion
Date Created: 2021-08-12 20:03:07.954603+00
Date Added: 2024-06-11T08:09:10.673864
License: Public Domain

NOT FOR PUBLICATION                       FILED
                        UNITED STATES COURT OF APPEALS                     AUG 12 2021
                                                                      MOLLY C. DWYER, CLERK
                                                                         U.S. COURT OF APPEALS
                                 FOR THE NINTH CIRCUIT

In re: DAVID WILLIAM                              No.   20-60020
BARTENWERFER; KATE MARIE
BARTENWERFER,                                     BAP No. 19-1178

                   Debtors,
                                                  MEMORANDUM*
------------------------------

DAVID WILLIAM BARTENWERFER;
KATE MARIE BARTENWERFER,

                   Appellants,

  v.

KIERAN BUCKLEY,

                   Appellee.

                             Appeal from the Ninth Circuit
                              Bankruptcy Appellate Panel
                Taylor, Faris, and Brand, Bankruptcy Judges, Presiding

                            Argued and Submitted July 29, 2021
                                San Francisco, California

Before: McKEOWN and NGUYEN, Circuit Judges, and HUCK,** District Judge.

       *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
       **
             The Honorable Paul C. Huck, United States District Judge for the U.S.
District Court for Southern Florida, sitting by designation.
      David and Kate Bartenwerfer appeal the Ninth Circuit Bankruptcy Appellate

Panel’s (“BAP”) decision, which affirmed the bankruptcy court’s attorneys’ fees

award in favor of Kieran Buckley. We have jurisdiction under 28 U.S.C. § 158(d).

We conduct “an independent review of the bankruptcy court’s decision without

deferring to the BAP.” In re Slyman, 234 F.3d 1081, 1085 (9th Cir. 2000). After

reviewing the bankruptcy court’s attorneys’ fees determination for an erroneous

application of the law and abuse of discretion, In re Baroff, 105 F.3d 439, 441 (9th

Cir. 1997), we affirm.

      The Bartenwerfers renovated a house in San Francisco, California, which they

subsequently sold to Buckley. Shortly after the transaction, Buckley discovered

defects in the house that were not disclosed to him by the Bartenwerfers in the real

estate transfer disclosure statement and sales contract.          Buckley sued the

Bartenwerfers in California state court for (1) breach of contract, (2) negligence, (3)

nondisclosure of material facts, (4) negligent misrepresentation, and (5) intentional

misrepresentation. A jury found in favor of Buckley on his breach of contract,

negligence, and nondisclosure of material facts claims; found against him on the

remaining claims; and awarded him damages. Buckley then moved for attorneys’

fees. Before the state court could render a decision on Buckley’s motion, the

Bartenwerfers filed for bankruptcy.

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      Buckley initiated an adversary proceeding against the Bartenwerfers in

bankruptcy court, and the bankruptcy court determined that the portion of the state

court judgment that was traceable to his nondisclosure claim could not be discharged

in bankruptcy under 11 U.S.C. § 523(a)(2)(A).

      Buckley then moved for attorneys’ fees before the bankruptcy court. The

bankruptcy court analyzed Buckley’s attorneys’ time entries, and after excluding

time billed for travel and clerical tasks, awarded Buckley attorneys’ fees that were

incurred during the state court litigation. The Bartenwerfers appealed the decision

to the BAP, which vacated the decision and remanded the case to the bankruptcy

court to determine whether Buckley’s attorneys’ fees should be apportioned between

fees that were traceable to the nondischargable claim (the nondisclosure claim) and

fees that were traceable to the dischargeable claims (the breach of contract,

negligence, negligent misrepresentation, and intentional misrepresentation claims).

      On remand, and after additional briefing, the bankruptcy court determined that

apportionment was not necessary and that its attorneys’ fees award was reasonable.

In reaching this conclusion, the bankruptcy court first imposed the burden on

Buckley to prove entitlement to his attorneys’ fees and to prove that apportionment

was not appropriate. The bankruptcy court concluded that Buckley carried his

burden by proving that his state court claims were inextricably intertwined as

demonstrated by, among other things, his amended state court complaint and the jury

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instructions, which established that apportionment was impracticable or impossible.

The bankruptcy court then shifted the burden to the Bartenwerfers to object to

specific time entries and to explain why some or all of the fees were objectionable.

The bankruptcy court conducted an extensive review of Buckley’s attorneys’ time

entries and the Bartenwerfers’ objections, and concluded that the Bartenwerfers

failed to carry their burden because the Bartenwerfers merely “highlighted a random

smattering” of time entries and “provided little analysis” as to why the fees were

objectionable. The Bartenwerfers appealed the bankruptcy court’s decision to the

BAP, which affirmed.

      The Bartenwerfers’ main argument is that the bankruptcy court erred in

imposing the burden on them to apportion Buckley’s attorneys’ fees and erred in

declining to apportion Buckley’s attorneys’ fees itself.       We disagree.     The

bankruptcy court properly applied the burden-shifting framework. See Gates v.

Deukmejian, 987 F.2d 1392, 1397–98 (9th Cir. 1992) (stating that applicant bears

burden of proving entitlement to attorneys’ fees, and opponent has burden of

submitting evidence challenging the accuracy or reasonableness of the fees) (citing

inter alia Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)).

      Additionally, the Bartenwerfers argue that the bankruptcy court erred in

concluding that they failed to carry their burden. This argument is not persuasive.

A review of the record demonstrates that the Bartenwerfers failed to object to

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specific time entries and failed to explain why some or all of Buckley’s fees were

objectionable. Thus, the bankruptcy court did not abuse its discretion by concluding

that the Bartenwerfers failed to carry their burden, or by declining to apportion

Buckley’s attorneys’ fees. See In re Arciniega, CC-17-1154, 2017 WL 6329748, at

*10–13 (9th Cir. BAP Dec. 11, 2017) (“[T]he bankruptcy court was not obliged to

apportion fees to the extent it was impractical or impossible to do so because the

subject claims arose from a common core of facts or implicated issues that were

inextricably intertwined.”) (citing Harman v. City & Cty. of San Francisco, 158 Cal.

App. 4th 407, 417 (2007)). As a final argument, the Bartenwerfers contend that the

bankruptcy court was required to, but failed to, consider the extent of Buckley’s state

court success. Again, we disagree. A review of the bankruptcy court’s attorneys’

fees analysis clearly demonstrates the bankruptcy court properly considered the

extent of Buckley’s state court success.

      We conclude that the bankruptcy court did not abuse its discretion in awarding

Buckley attorneys’ fees and in finding that the attorneys’ fees award “reflect[ed]

efficient, reasonable work habits and billing practices and are not inflated or

otherwise excessive. The fees were appropriate given the vigor with which the

parties contested the state court litigation and the fact that they ground through a

three-week trial.”

      AFFIRMED.

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