Opinion
Case No. 14-10611
08-09-2018
In re: Christopher W. Straka & Kathleen M. Straka, Debtors
Chapter 13 ORDER GRANTING IN PART THE FIRST APPLICATION OF JEFFREY P. WHITE AND ASSOCIATES , P.C. FOR COMPENSATION OF LEGAL SERVICES
This matter is before the Court on the First Application of Jeffrey P. White and Associates, P.C. ("JPWA") for Compensation of Legal Services [Dkt. No. 97] and the supplement thereto [Dkt. No. 108]. After an initial hearing on the fee application on June 28, 2018, [Dkt. No. 104], the Court issued an order directing the trustee to pay JPWA $5,000.00 on account of the fees and expenses described in the fee application, permitting JPWA to supplement the fee application, and granting the trustee additional time to respond to any such supplement [Dkt. No. 106]. The trustee then filed a detailed objection to the supplemental fee application. [Dkt. No. 112.] After a continued hearing on the fee application on August 2, 2018, the Court took the matter under advisement. [Dkt. No. 114.]
At the outset of this chapter 13 case, the debtors' counsel certified that he had agreed to accept $3,000.00 as compensation for services rendered or to be rendered on behalf of the debtors in contemplation of or in connection with their case, and that he had received a retainer covering that agreed fee. [Dkt. No. 1.] Later, counsel certified that he had received a retainer of $3,281.00. [Dkt. No. 5.] He also indicated that the debtors' plan would include an administrative reserve of not less than $6,000.00 to cover additional fees and costs. Id. Now, nearing the end of the case, counsel seeks more than $24,500 in fees and expenses. [Dkt. No. 108.] In an effort to justify this request, counsel points to certain developments in the case that he contends were not capable of being anticipated at the outset. Specifically, Mr. Straka inherited certain property, including an IRA, from a stepparent after confirmation. That inheritance necessitated a certain amount of motion practice, including a motion to modify the plan and several motions seeking authority to take annual required minimum distributions. There were also certain tax issues relating to a corporation owned by Mr. Straka that had ceased doing business prior to the chapter 13 filing. This case involved a few wrinkles that are not encountered in a routine chapter 13 case.
A lawyer cannot be expected to foresee every potential complication in a case and there will undoubtedly be cases where unforeseen developments lead to more work—and thus more fees—than originally anticipated. To a certain extent, this is one of those cases. However, the Court is not persuaded that the specific amount requested ($24,552.60) is justified under 11 U.S.C. § 330.
A. Fees
Certain entries in the supplement to the fee application lack sufficient detail for the Court to assess the reasonableness of the services rendered. The vague entries include:
| Date | Professional Services | Hours/Rate | Amount |
|---|---|---|---|
| 2/13/2014 | Conference with MW re: input issues | 0.4$280.00/hour | $112.00 |
| 2/14/2014 | Conference with MW re: input issues; review file | 0.9$280.00/hour | $252.00 |
| Total | 1.3 hours | $364.00 |
The supplement to the fee application contains a request for compensation for JPWA's work on an amendment to the debtors' plan in October 2014. The related entries are:
| Date | Professional Services | Hours/Rate | Amount |
|---|---|---|---|
| 10/24/2014 | Review plan and objections/comments made by theTrustee | 0.2$280.00/hour | $56.00 |
| 10/24/2014 | Review status of payments and claims docket | 0.3$280.00/hour | $84.00 |
| 10/24/2014 | Calculate how to amend plan to meet newobligations | 0.5$280.00/hour | $140.00 |
| 10/24/2014 | Revise plan | 0.5$280.00/hour | $140.00 |
| 10/24/2014 | Review revised plan with client | 0.2$280.00/hour | $56.00 |
| 10/24/2014 | Further revision of plan | 0.2$280.00/hour | $56.00 |
| 10/24/2014 | Review final revision of plan with client | 0.1$280.00/hour | $28.00 |
| Total | 2.0 hours | $560.00 |
JPWA continues to charge in the minimum 0.1-hour increment for tasks that take only a few seconds to complete and that do not involve any legal judgment or skill. This Court has made this observation with respect to JPWA in the past. See, e.g., In re Morin, No. 16-20271, 2017 WL 83348, at **1-2 (Bankr. D. Me. Jan. 3, 2017) (disallowing compensation for certain tasks that could not have taken much time and did not require the exercise of legal skill or judgment). In this case, examples of this type of billing include:
| Date | Professional Services | Hours/Rate | Amount |
|---|---|---|---|
| 1/9/2015 | Review Trustee consent to order of confirmation | 0.1$280.00/hour | $28.00 |
| 9/16/2015 | Review Trustee consent to form of order on Motionto Allow and Disallow Claims | 0.1$280.00/hour | $28.00 |
| 10/24/2016 | Review notice of appearance by Toyota | 0.1$300.00/hour | $30.00 |
| 11/16/2016 | Review trustee consent to filed order | 0.1$300.00/hour | $30.00 |
| Total | 0.4 hours | $116.00 |
|---|
JPWA also continues to charge attorney or paralegal rates for work that could be performed by a legal assistant. This Court has previously disallowed similar requests for compensation by JPWA and others. See, e.g., In re Abbott, No. 11-10059, 2016 WL 1643861, at *2 (Bankr. D. Me. Apr. 22, 2016). In this case, examples of this type of billing include:
| Date | Professional Services | Hours/Rate | Amount |
|---|---|---|---|
| 12/26/2014 | File amended schedules I and J | 0.2$75.00/hour | $15.00 |
| 4/7/2015 | File certification of tax return transmission withcourt | 0.1$75.00/hour | $7.50 |
| 10/2/2015 | File revised Order on MA[D]C | 0.2$75.00/hour | $15.00 |
| 5/2/2016 | File Motion to Modify Plan and set for hearing | 0.3$90.00/hour | $27.00 |
| 6/15/2016 | File notification of tax return submission with thecourt | 0.1$90.00/hour | $9.00 |
| 11/16/2016 | File proposed order on Motion to Modify | 0.2$90.00/hour | $18.00 |
| 12/28/2016 | File motion to withdraw [from] inherited IRA | 0.1$300.00/hour | $30.00 |
| 12/11/2017 | File notice of tax transmission to trustee with thecourt | 0.1$90.00/hour | $9.00 |
| 12/11/2017 | File response to trustee objection to IRAwithdrawal with the court | 0.1$90.00/hour | $9.00 |
| 3/18/2018 | File motion to borrow from 401k and set same forhearing | 0.1$90.00/hour | $9.00 |
| 5/25/2018 | File Notice of Final Cure and Cos with the Court | 0.2$90.00/hour | $18.00 |
| 5/25/2018 | File and set for hearing request for discharge andfinal fee app | 0.3$90.00/hour | $27.00 |
| 5/25/2018 | File motion to strip liens and motion to avoidjudgment liens and set[]for hearing | 0.3$90.00/hour | $27.00 |
| Total | 2.2 hours | $220.50 |
In this case, JPWA spent an excessive amount of time on certain routine tasks that could have been accomplished, for the most part, with the use of prescribed forms. For example, on March 18, 2018, counsel made a dozen discrete billing entries all related to preparation of a request for a discharge under 11 U.S.C. § 1328(a):
| Date | Professional Services | Hours/Rate | Amount |
|---|---|---|---|
| 3/18/2018 | Draft request for discharge | 0.4$300.00/hour | $120.00 |
| 3/18/2018 | Draft proposed order on request for discharge | 0.1$300.00/hour | $30.00 |
| 3/18/2018 | Draft proposed order of discharge and NOH | 0.2$300.00/hour | $60.00 |
| 3/18/2018 | Draft letter to clients enclosing and explainingrequest for discharge | 0.2$300.00/hour | $60.00 |
| 3/18/2018 | Draft email to client attaching request for dischargedocs | 0.1$300.00/hour | $30.00 |
| 3/18/2018 | Review file for status of tax return filings; Draftemail to Chris requesting copy of 2017 taxes | 0.2$300.00/hour | $60.00 |
| 3/18/2018 | Review file in preparation to close out case | 0.1$300.00/hour | $30.00 |
| 3/18/2018 | Review order confirming plan in preparation toclose out case | 0.1$300.00/hour | $30.00 |
| 3/18/2018 | Review order on MADC in preparation to close outcase | 0.2$300.00/hour | $60.00 |
| 3/18/2018 | Review schedules in preparation to close out case | 0.2$300.00/hour | $60.00 |
| 3/18/2018 | Review file to make sure all taxes have been filedin prep to close out case | 0.1$300.00/hour | $30.00 |
| 3/18/2018 | Review public records to make sure no lienavoidance or other pre[-]discharge issues areoutstanding | 0.3$300.00/hour | $90.00 |
| Total | 2.2 hours | $660.00 |
JPWA also spent an excessive amount of time working on a motion to modify the debtors' plan to account for Mr. Straka's inheritance. That work amounted to at least 12.3 hours expended between November 2015 and November 2016, including time spent preparing for and attending four separate hearings. Although the issues raised by the inheritance were not run-of-the-mill, they could have reasonably been addressed in a more efficient manner. For example, counsel had knowledge of those issues for more than five months before he filed the motion to modify and should have been prepared to provide the trustee with the information that he would have expected the trustee to request. Those preparations were not undertaken, and counsel did not move to continue any of the unproductive hearings that followed as a result. This type of inefficiency is neither acceptable nor compensable under 11 U.S.C. § 330(a).
B. Expenses
JPWA seeks reimbursement of $12.00 for an expense incurred on December 11, 2014. The expense is described as "1/6 of $72.00." The Court could surmise that this is part of the CourtCall fee for Mr. White's telephone appearance on December 11, 2014. Perhaps counsel had six different cases scheduled for hearing that day and received a bill of $72.00 from CourtCall. But, JPWA separately seeks reimbursement for $30.00 for CourtCall on December 11, 2014. Thus, it appears that these expenses are duplicative. The $30.00 charge is disallowed.
C. Conclusion
Reviewing and approving fee applications requires some degree of second-guessing. There is simply no way around that. Here, the Court does not question the necessity or reasonableness of what Mr. White and his paralegal did in this case. However, the combination of Mr. White's relatively high hourly rate (at least compared to most chapter 13 practitioners in this District), his decision to perform certain tasks (rather than delegating them to a paralegal or a legal assistant), and his billing practices yields a requested fee that is unreasonable given the nature of the work performed. See 11 U.S.C. §§ 330(a)(3)(D), (F). Even when JPWA's total bill in this case is reduced to account for the examples of the unreasonable fees and expenses listed above, the remaining request for fees and expenses still exceeds an amount that is reasonable. Cf. Berliner v. Pappalardo (In re Sullivan), 674 F.3d 65, 71 (1st Cir. 2012) ("There is no requirement that a bankruptcy court, in explaining a fee award, be precise to the point of pedantry. Instead, the explanation need only be sufficiently detailed to allow a reviewing court to ascertain the trial court's thought processes and glean the basis for its award.").
The Court has carefully considered the supplemental fee application, the trustee's objection, and the docket in the case. Based on the factors set forth in 11 U.S.C. § 330(a)(3), the Court allows compensation in the amount of $19,429.40 and reimbursement of expenses in the amount of $570.60 for a total award of $20,000.00. To the extent that JPWA has requested any additional compensation or reimbursement in this case, that request is disallowed. Dated: August 9, 2018
/s/_________
Michael A. Fagone
United States Bankruptcy Judge
District of Maine