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Bayer Wishman & Leotta v. Danielson

United States District Court, C.D. California

August 22, 2014

ROD DANIELSON, Chapter 13 Trustee and TYRONE MACEY, Appellees.


DEAN D. PREGERSON, District Judge.

Presently before the Court is an appeal filed by Appellant Bayer Wishman & Leotta ("Appellant") of an award of attorney's fees by the Bankruptcy Court (Riverside Division). Having considered the submissions of the parties, this Court affirms the Bankruptcy Court's award.[1]

I. Background

Appellant, who is counsel for debtor Tyrone Macey in a Chapter 13 bankruptcy case, appeals the Bankruptcy Court's partial denial of an application for attorney's fees and costs for services performed on behalf his client. In particular, Appellant sought fees and costs incurred in the preparation of a Status Report required by an order of the Court issued on April 23, 2013. (See Opening Brief, Excerpt of the Record ("E.R.") Tab 6 at 46-50.) The required Status Report presented information and documentation concerning payments of claims which the debtor's chapter 13 plan provided would be paid by the debtor. (Id.)

Appellant's Application for Supplemental Fees, filed with the Bankruptcy Court on July 2, 2013, sought $1, 195.86, including $1, 120 in fees and $75.86 in costs, in connection with its preparation of the Status Report. (E.R. Tabs 9 and 10 at 99-116.) The Application and supporting memorandum justified the fees sought solely on the basis of the attorney's hourly rate of $350 and the number of hours of work performed carrying out various tasks in preparing the Status Report; no other information was presented to demonstrate the reasonableness of the fees sought for the task at issue. Id.)

On July 3, 2013, the Trustee filed an objection to the application. (See E.R. Tab 12 at 122.) The Trustee argued that "[t]he fees requested for these tasks exceed the usual and customary standard for fees for similar tasks in this district and the division" and that "counsel has submitted no evidence that the fees are reasonable, and no evidence that these tasks were out-of-the-ordinary' warranting the higher fees requested." (Id.) The Trustee recommended the approval of $600 in fees and costs. (Id.)

The Bankruptcy Court held a hearing on the fee application on July 29, 2013. During the hearing, the Court heard arguments regarding the fee request in the instant case as well as an application by the same attorney for supplemental fees for the same task in In re Kevin Walker, EDCV13-01430-DDP. As further described below, during the hearing, the Court presented the results of its own independent investigation to assess the reasonableness of Appellant's supplemental fee request, which involved analysis of 125 cases in which bankruptcy counsel sought supplemental fees before the Riverside Division for the same task. (See E.R. Tab 13(a) at 129-33.) The Court found, on the basis of this analysis, that, despite the high quality of Appellant's Status Report, the fees sought by Appellant were excessive. (Id.) The Court approved fees and costs in the amount of $600. (Id. at 129.)

Appellant appealed the Bankruptcy Court's award and Appellee moved to transfer the appeal to this Court on August 8, 2013.

II. Standard of Review

This Court will not disturb a bankruptcy court's award of attorneys' fees "absent an abuse of discretion or an erroneous application of the law." In re Eliapo , 468 F.3d 592, 596 (9th Cir. 2006) (citing In re Nucorp Energy, Inc. , 764 F.2d 655, 657 (9th Cir. 1985)). The Court "will not reverse an award of fees unless it has a definite and firm conviction that the bankruptcy court committed clear error in the conclusion it reached after weighing all of the relevant factors." Id.

III. Discussion

The gravamen of Appellant's appeal is that the Bankruptcy Court erred in not approving the full amount of fees sought by Appellant by declining to use the "loadstar" method, which was the basis for the Appellant's requested fees. This Court disagrees.

The Bankruptcy Court for the Central District of California provides for use of a court-approved Rights and Responsibilities Agreement Between Chapter 13 Debtors and Their Attorneys ("RARA") (form F. 3015-1.7.RARA). Use of a RARA is optional. If a RARA is used, and the attorney seeks fees for certain tasks set forth in bold font in the RARA in an amount that does not exceed specified maximums ($5, 000 in a case in which the debtor is engaged in a business; $4, 000 in all other cases), such fees may be approved by the court without the need for the attorney to file any further fee application or to hold any hearing. Local Bankruptcy Rules ("LBR") 3015-1(v)(1)-(2) and Appendix IV. These are customarily referred to as "no look" or "presumptive" fees.

If the attorney performs tasks on behalf of the debtor not set forth in bold type in the RARA, the attorney may apply to the court for supplemental fees and costs. LBR 3015-1(v)(1). However, such applications are reviewed by both the chapter 13 trustee and the court. Id . The application must be filed in accordance with 11 U.S.C. ยงยง 330 and 331, Rules 2016 and 2002 of the Federal Rules of Bankruptcy Procedure, and LBR 2016-1 and 3015-1, as well as the "Guide to ...

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