Summary
analyzing the billing rate for a lawyer performing consumer bankruptcy work
Summary of this case from In re SpurlockOpinion
Case No. 20-32487
2022-02-25
IN RE: Mattheu S. HENSON Stephanie L. Henson, Debtors.
Scott D. Augsback, Paul J. Minnillo, Minnillo Law Group Co., LPA, Cincinnati, OH, for Debtor.
Scott D. Augsback, Paul J. Minnillo, Minnillo Law Group Co., LPA, Cincinnati, OH, for Debtor.
ORDER ON APPLICATION FOR ATTORNEY FEE SUBSEQUENT TO PLAN CONFIRMATION AND OPPORTUNITY TO OBJECT (DOC. 58)
Guy R. Humphrey, United States Bankruptcy Judge
This matter is before the court upon an application for attorney fees subsequent to plan confirmation filed by the Minnillo Law Group (doc. 58) (the "Firm" and "Application"). The Firm seeks additional fees in the amount of $700 for post-confirmation services performed in connection with this Chapter 13 case. For the reasons described below, subject to a hearing requested by the Debtors or the Firm, the court finds that the fee of $700 for additional services requested in this case is excessive and allows a fee of $500 for the services provided that are the subject of the Application. The Debtors or the Firm may, within fourteen (14) days of the entry of this order, file a memorandum explaining why the fees in the amount of $700 are warranted and request a hearing on the Application. Otherwise, the fees shall be allowed in the amount of $500.
The Application includes a total of 2 hours expended, at a rate of $350 per hour, for a total fee of $700. The fees relate to time spent in responding to a motion for relief from stay filed by creditor Guild Mortgage Company (doc. 46), which was resolved through an agreed order entered into between the Debtors and Guild (doc. 51). The Application does not seek the reimbursement of expenses.
This court recently issued and entered a decision on attorney fees sought for pre-confirmation services provided in a Chapter 13 case. In re Spear , No. 21-30649, 636 B.R. 765, 2022 Bankr. LEXIS 65 (Bankr. S.D. Ohio Jan. 10, 2022). The court will use the applicable tenets from the Spear decision as a framework for analyzing the Application.
I. Legal Analysis
A. Independent Review of Attorney Fee Applications in Chapter 13 Cases
As this court made clear in Spear , bankruptcy courts guard the public interest and the integrity of the bankruptcy system when carrying out the independent duty to review and determine the reasonableness of attorney fees in Chapter 13 cases. Spear , 636 B.R. at 768-72, 2022 Bankr. LEXIS at *6-8. This duty exists even in the absence of an objection from the trustee or another party or when the debtor appears to support the fee application. Id. ; see also Dery v. Cumberland Cas. & Sur. Co. (In re 5900 Assocs. ), 468 F.3d 326, 329-30 (6th Cir. 2006) (discussing the importance of judicial fee review in bankruptcy cases). Bankruptcy Code § 330 addresses the compensation of attorneys and states in relevant part:
(a)(1) After notice to the parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329, the court may award to ... a professional person employed under section 327 or 1103 —
(A) reasonable compensation for actual, necessary services rendered by the ... attorney and by any paraprofessional person employed by any such person; and
(B) reimbursement for actual, necessary expenses.
(2) The court may, on its own motion or on the motion of the United States Trustee, the United States Trustee for the District or Region, the trustee for the estate, or any other party in interest, award compensation that is less than the amount of compensation that is requested.
In Chapter 13 cases, courts determine the reasonableness of attorney fees under § 330 by calculating an initial estimate using the lodestar method, multiplying the number of hours reasonably expended on the matter by a reasonable hourly rate, taking into account the attorney's experience level and comparable rates in the local market. Spear, 636 B.R. at 772-73, 2022 Bankr. LEXIS at *6-8 (citing In re Boddy , 950 F.2d 334, 337 (6th Cir. 1991) ); see also In re Atwell , 148 B.R. 483, 488-89 (Bankr. W.D. Ky. 1993) ("A major factor in determining what is a reasonable hourly rate for purposes of Lodestar is whether the rate charged is comparable to rates charged by comparable attorneys in the area.") (internal citations omitted). After the lodestar analysis, courts consider other factors that "may warrant an increase or decrease in the fees awarded." Spear , 636 B.R. at 770, 2022 Bankr. LEXIS at *9 (citing Hensley v. Eckerhart , 461 U.S. 424, 433, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983) ). These factors include:
1) the novelty and difficulty of the issues; 2) the skill required to perform the services properly; 3) the preclusion of other employment resulting from counsel's acceptance of the matter; 4) the customary fee for such matters; 5) whether the fee is fixed or contingent; 6) time limitations imposed by the client or otherwise dictated by the circumstances; 7) the amount at issue and the results obtained; 8) the experience, reputation, and ability of the attorneys; 9) the undesirability of the case; 10) the nature and
length of the professional relationship between counsel and the client; and 11) awards in similar cases or under similar circumstances.
Spear , 636 B.R. at 770-71, 2022 Bankr. LEXIS at *10 (collecting cases and discussing incorporation of these factors into 11 U.S.C. § 330(a)(3) ). In addition, except as otherwise allowed, "the court shall not allow compensation for— (i) unnecessary duplication of services; or (ii) services that were not—(I) reasonably likely to benefit the debtor's estate; or (II) necessary to the administration of the case." 11 U.S.C. § 330(a)(4)(A).
B. Application of § 330 to Fee Application in Present Case
Unlike the court's decision in Spear , the court does take issue with the rates charged on this matter. First, the Application shows all three attorneys in the Firm charge an identical $350 per hour for all work performed, despite their differing experience levels. In addition, the Firm billed all work at the attorney rate rather than utilizing paralegals or clerical staff when possible. Thus, the total for the work performed on this matter – responding to a basic motion for relief from the stay filed by the debtors’ mortgage lender and resolving the motion with an agreed order drafted by the creditor – is $700.00 for two hours of work.
1. Hourly Rate
All of the time spent on this matter appears to have been incurred by attorney Scott D. Augsback. Mr. Augsback attended the University of Cincinnati Law School, was admitted to the Ohio bar in November 2015, and appears to have practiced consumer bankruptcy in the Southern District of Ohio since being admitted. Based upon the court's experience with and knowledge of attorney rates in Dayton and the Southern District of Ohio and the court's review of attorney rates charged in this court by counsel of comparable and greater experience for similar and other work performed, including more complex work, the court finds that the rates charged for the work performed by Mr. Augsback for the work performed on this matter is excessive. Compare this $350 rate with:
All years of admission in this decision, as well as the law school Mr. Augsback attended, are taken from the Ohio Supreme Court's website, https://www.supremecourt.ohio.gov/AttorneySearch/#/search (last visited Feb. 25, 2022). The court takes judicial notice from a review of this court's dockets that Mr. Augsback has filed matters on behalf of debtors since his admission to the Ohio bar. See e.g. In re Scott , Case No. 15-14747 (Bankr. S.D. Ohio), Doc. 1 (Chapter 13 petition filed on December 10, 2015).
"[W]e observe that certainly a bankruptcy judge's experience with fee petitions and his or her expert judgment pertaining to appropriate billing practices, founded on an understanding of the legal profession, will be the starting point for any analysis." In re Busy Beaver Building Ctrs. , 19 F.3d 833, 854 (3d Cir. 1994) (emphasis in original).
Practitioner Year Admitted Designations Billing Rate Donald F. Harker 1975 Chapter 7 Trustee $4003 Ira H. Thomsen 1979 $3754 Wayne P. Novick 1981 $4005 Paul H. Spaeth 1983 Chapter 7 Trustee $3506 Richard West 1986 $4507 Patricia J. Friesinger 2000 Chapter 7 Trustee $3108 Stephen J. Malkiewicz 2005 $3509 Andrew J. Zeigler 2006 $27510 Darlene Fierle 2006 $27511 Denis Blasius 2007 $27512 Russ B. Cope 2008 $30013 John F. Kennel 2013 $22514 Mandy A. Jamison 2014 $25015 Scott D. Augsback 2015 $350
[Editor's Note: The preceding image contains the references for footnotes , , , , , , , , , , , , ] Based upon the court's observations and the above analysis, the court finds that $250 per hour is an appropriate hourly rate for Mr. Augsback's work on this matter.
Application for Compensation, In re GYPC, Inc. , No. 17-31030 (Bankr. S.D. Ohio Jan. 26, 2022), doc. 493.
Final Application for Compensation, In re Riverrock Recycling & Crushing, LLC, No. 21-31385 (Bankr. S.D. Ohio Feb. 16, 2022), doc. 84.
Application for Compensation, In re Mitchell , No. 19-32458 (Bankr. S.D. Ohio Nov. 22, 2021), doc. 45.
Application for Compensation, In re Lynn , No. 20-32470 (Bankr. S.D. Ohio Sept. 8, 2021), doc. 48.
Application for Compensation, In re Parrett , No. 21-30589 (Bankr. S.D. Ohio Dec. 7, 2021), doc. 38.
Interim Application for Compensation, In re JFK Heating & Cooling, LLC , No. 21-30341 (Bankr. S.D. Ohio Oct. 13, 2021), doc. 84.
Application for Compensation, In re Parrett , No. 21-30589 (Bankr. S.D. Ohio Dec. 7, 2021), doc. 38.
Application for Compensation, In re Reed , No. 20-31942 (Bankr. S.D. Ohio Sep. 29, 2021), doc. 58.
Final Application for Compensation, In re Riverrock Recycling & Crushing, LLC, No. 21-31385 (Bankr. S.D. Ohio Feb. 16, 2022), doc. 84.
Final Application for Compensation, In re Riverrock Recycling & Crushing, LLC, No. 21-31385 (Bankr. S.D. Ohio Feb. 16, 2022), doc. 84.
Application for Compensation, In re Overholser , No. 21-30847 (Bankr. S.D. Ohio Jan. 26, 2022), doc. 36.
Application for Compensation, In re Dick , No. 21-30466 (Bankr. S.D. Ohio Dec. 13, 2021), doc. 56.
Application for Compensation, In re Overholser , No. 21-30847 (Bankr. S.D. Ohio Jan. 26, 2022), doc. 36.
The court does not intend to establish standard rates. Instead, the court agrees with the rationale set out by Judge Dickinson in In re Atwell , "However, by considering the customary fees of comparable attorneys this court does not mean to fashion a ‘standard and customary’ fee structure for bankruptcy practitioners. Rather this factor will primarily be used when hourly rates of a particular attorney significantly exceed the typical range of hourly rates requested in similar bankruptcy cases ." 148 B.R. at 489.
2. Amount of Billed Time
In this case, and unlike Spear , the court does not find the amount of time expended excessive.
3. Overall Fee and Comparable Fees in Similar Cases
Like Spear , when viewed as a whole, the total hours expended multiplied by the hourly rate charged for these services results in what the court believes is an excessive amount for the total fees charged for the service. In reaching this conclusion, the court exercises its ability to compare the requested fees to those awarded for similar work performed by counsel in other bankruptcy cases. Here, debtors’ counsel performed work to address a situation that arises frequently in this court. Creditors often file motions for relief from stay to which debtor counsel must respond. These disputes are then regularly resolved by agreed orders similar to the one filed in the present case. In its review of similar work performed by other counsel, the court found that the charges for such work typically fall in the range of $225 to $500 as opposed to the $700 requested here. The court notes several examples:
• In In re Kinstle , counsel charged $225 for similar work on a motion for relief from stay. No. 3:17-bk-33382 (Bankr. S.D. Ohio Dec. 20, 2021) doc. 103.
• In In re McClain , counsel also charged $225 for similar work performed. No. 3:19-bk-31677 (Bankr. S.D. Ohio Apr. 8, 2021), docs. 49-50.
• In In re Shivere , counsel charged $515.60 to perform relief from stay work that appears to have been more complicated than that presented here, spending approximately 4 hours on the matter. No. 3:19-bk-30799 (Bankr. S.D. Ohio June 16, 2021), doc. 35.
• In In re Howell , counsel charged $747 for over seven hours of work on a complicated motion for relief from stay issue that involved a co-debtor and submitted three pages of time entries in support of the fee application. No. 18-33257 (Bankr. S.D. Ohio June 30, 2021), doc. 58.
The court reminds counsel that "the hourly fee awarded should be adjusted when a significant percentage of the total work completed is of such a routine nature. Compensation for routine work should be discounted." In re Ferkauf, Inc ., 42 B.R. 852, 858 (Bankr. S.D.N.Y. 1984). Thus, counsel need to push work down to the lowest available rate for which such work can be competently performed or otherwise adjust the billing accordingly so that clients are not excessively billed for the level of the work performed. See Atwell , 148 B.R. at 492 ("[B]illing judgment must be exercised by debtor's counsel in determining the ‘reasonable number of hours’ for which fees will be requested under Lodestar."); Hensley , 461 U.S. at 434, 103 S.Ct. 1933 ("[Attorneys] should make a good faith effort to exclude from a fee request hours that are excessive, redundant or otherwise unnecessary...").
Judge Kendig has identified the routine legal matters to which Chapter 7 trustees attend in In re Kieffer , 306 B.R. 197, 207 (Bankr. N.D. Ohio 2004). Routine matters in a Chapter 13 case are illustrated by the tasks provided for by the no-look fee in Local Bankruptcy Rule 2016-1(b)(2)(A).
II. Conclusion
As in Spear , this court must assess the fees requested by the Firm in the larger framework of all the Chapter 13 and other bankruptcy cases which come before the court. When this court compares the services provided in this case by the Firm with the services provided by other counsel in other Chapter 13 cases for similar work performed, the court finds that the total fees requested in this case are not in line with the other cases and with Chapter 13 services provided by counsel in Dayton and the Southern District of Ohio.
Subject to an objection by the Firm within 14 days of the entry of this order, the court allows fees in the amount of $500.00 for the Application. Any objection shall be filed not later than 14 days from the entry of this order. In the event either the Debtors or the Firm file a memorandum and request a hearing, any party-in-interest may file a responsive memorandum within seven (7) days of the filing of such memorandum.
In the absence of a timely objection, this order shall become final.