U.S. Bankruptcy Court, Western District of NY denies attorney's fees

In a Chapter 13 proceeding, the trustee asked that attorney's fees be reduced. The debtor applied for additional fees.

Reviewing the facts in In re Walter & Geneva Johnson, U.S. Bankruptcy Court, Western District of New York Judge Carl L. Bucki determined $1,600 in attorney's fees was reasonable. However, the debtor's application for $150 in additional fees was denied.

The Facts

On May 7, Walter and Geneva Johnson filed a petition for relief under Chapter 13 of the Bankruptcy Code.

At the confirmation hearing, the court determined that as a condition for confirmation, the debtor would need to move for the avoidance of a lien and to resolve an objection filed by the Internal Revenue Service (IRS).

The confirmation hearing was adjourned to Aug. 17. By that date, the debtor had not resolved the outstanding tax dispute so the confirmation hearing was adjourned to Sept. 14.

The trustee, by way of a motion returnable at the time of the second adjourned hearing on confirmation, sought to dismiss the case for failure to prosecute. The trustee asked that [the $1,600 in fees] payable to the debtor's attorney be reduced, 'unless the debtor's attorney can establish to the court's satisfaction that the reason for the delays in this case are attributable only to the debtor or other factors beyond the attorney's control.'

Prior to the Sept. 14 hearing, the IRS withdrew its confirmation objection. The trustee withdrew the motion to dismiss and the request for a reduction of fees.

The debtor's attorney moved for an additional allowance of $150, to compensate for the two adjournments in the case as well as the time required to respond to the trustee's motion for a reduction of fees. The trustee objected to the request for the additional allowance.

Court's Analysis

In most Chapter 13 cases, this court will not require the attorneys for a debtor to submit time records relative to their services, Judge Bucki wrote. Rather, ... the court relies upon the recommendation of the trustee and upon the court's understandings about the normal and customary costs of representation.

In this case, the debtor's attorney sought $1,600 in fees. Judge Bucki reasoned the amount [fell] within the upper range of what the court has deemed to be reasonable.

Although the court did not set an absolute limit on legal fees in a Chapter 13 proceeding, Judge Bucki placed scrutiny on an atypically high request for fee allowances, especially in the context of objection from the trustee. Given such scrutiny, the court determined a fair consideration of the fee requested [was] possible only upon a review of time records of services rendered throughout the case.

The court found [e]ntitlement to an additional fee [depended] not only upon the performance of an unexpected legal task, but also upon the totality of all services rendered.

In this case, the attorney maintained a large Chapter 13 practice and, the judge noted the presentation of case-specific time records may be cumbersome and time consuming in itself.

The court accepted the position of the Chapter 13 trustee that $1,600 in attorney's fees were reasonable for customary services.

The court, however, was willing to consider any supplemental fee request, if supported by the time records of counsel.

Conclusion

Judge Bucki found that the attorney's fees were reasonable. The court denied the debtor's application for additional fees. The application was denied without prejudice for renewal upon a submission of time records for all of the services performed.

Copyright 2005 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.