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Chung & Press, LLC v. Branigan

United States District Court, D. Maryland, Southern Division

October 16, 2017

CHUNG & PRESS, LLC, Appellant,
v.
THIMOTHY P. BRANIGAN, TRUSTEE Appellee.

          MEMORANDUM OPINION

          GEORGE J. HAZEL, United States District Judge

         Bankruptcy debtor's counsel Chung & Press. LLC ("Appellant") appeals a January 11. 2017 order by the U.S. Bankruptcy Court for the District of Maryland granting, in part. Debtor Counsel's Interim Application for Compensation and Reimbursement of Lxpenses, ECF No. 1-2. The Bankruptcy Court reduced Appellant's request for attorney's fees from $14, 602.50 to $9, 300.00. United States Trustee filed an Amicus brief pursuant to 11 U.S.C. § 307 defending the Bankruptcy Court's Order. Oral argument is deemed unnecessary because the facts and legal arguments are adequately presented in the briefs and record, and the decisional process would not be significantly aided by oral argument. See Fed. R. Bankr. P. 8019. For the reasons that follow, the Court will affirm the Bankruptcy Court's Order.

         I. BACKGROUND

         Debtor William T. Starner filed for Chapter 13 bankruptcy relief under the provisions of 11 U.S.C. $$ 1301 et seq. on July 10. 2014. ECF No. 1-2 at I.[1] Appellant filed a Disclosure o\' Compensation pursuant to Bankruptcy Rule 2016(b) stating that it had accepted a $3, 645 retainer and would charge Debtor at a rate of $495 per hour for legal representation. Id., at 1. The Bankruptcy Court entered an order confirming Debtor's Chapter 13 plan on September 2, 2015, which pays creditors $9, 760.00 over a period of 36 months. Id., at 3. According to the Bankruptcy Court. Debtor's Chapter 13 case was relatively routine, "with the only wrinkle being the Debtor's dispute with his ex-spouse." Id. at 2.

         On February 23. 2016. Appellant filed a Fee Application requesting $14, 602.50 in fees and $211.50 in expenses for work performed between May 5. 2014 and January 12. 2016 reflecting its disclosed rate of $495 per hour. Id. at 3: HCF No. 2-50. The Bankruptcy Court held a hearing on the Fee Application on August 16. 2016, ECF No. 5. and reduced Appellant's fee award to $9, 300.00. ECF No. 1-2 at 13. The Bankruptcy Court denied Appellant's Motion to Alter or Amend the reduced fee award on February 10. 2017. ECF No. 1 -3. and this appeal followed. ECF No. 1.

         II. STANDARD OF REVIEW

         The Court has jurisdiction over the appeal pursuant to 28 U.S.C. § 158(a). See also Mori Runta v. Gorman, 721 F.3d 241, 246 (4th Cir.2013) (parties of bankruptcy cases can appeal orders that dispose of discrete disputes within the larger case). The Court reviews the Bankruptcy Court's findings of fact for clear error and conclusions of law de novo. See In re Merry-Go-Round Enterprises. Inc.. 400 F.3d 219. 224 (4th Cir. 2005): In re Kielisch, 258 F.3d 315. 319 (4th Cir. 2001). The amount of an attorney's fee award is left to the discretion of the trial court, which has close and intimate knowledge of the efforts expended and the value of the services rendered. Arnold v. Burger King Corp. 719 F.2d 63. 67 (4th Cir. 1983).

         III. DISCUSSION

         Appellant alleges that the Bankruptcy Court erred in reducing its fee award because the Bankruptcy Court 1) failed to consider the customary compensation charged by similar practitioners in non-bankruptcy actions. 2) incorrectly concluded that a paralegal could have performed 4.2 hours of work billed by Appellant, and 3) improperly considered the presumptively reasonable standard flat fee set forth in Appendix F of the Local Bankruptcy Rules for the District of Maryland (the "no look" fee). ECF No. 8.

         In a Chapter 13 proceeding, "the court may allow reasonable compensation to the debtor's attorney .. . based on a consideration of the benefit and necessity of such sen ices to the debtor and the other factors set forth in this section." 11 U.S.C. § 330(a)(4)(b). The Local Bankruptcy Rules allow bankruptcy counsel to charge a flat fee in representing Chapter 13 debtors. The fee is presumptively reasonable but not mandatory. See Loc. Bankr. R. App'x F; see also In re Kestner, No. 12-32831-RAC. 2015 WL 1855357. at *11 (Bankr. D. Md. Apr. 20. 2015). However, if debtor's counsel chases an alternate arrangement, such as an hourly rate, counsel must file an application in accordance with the Bankruptcy Code. In re Kestner, No. 12-32831-RAC. at * 11. The bankruptcy court has both the power and duty to review the fee application. See 11 U.S.C. § 329(b): In re Courtois, 222 B.R. 491. 494 (Bankr. D. Md. 1998).

         Section 330(a)(3) of the Bankruptcy Code sets forth the factors the bankruptcy court must apply to determine the reasonable fee as follows:

In determining the amount of reasonable compensation to be awarded to an examiner, trustee under chapter 11. or professional person, the court shall consider the nature, the extent, and the value of such services, taking into account all relevant factors, including- (A) the time spent on such services; (B) the rates charged for such services: (C) whether the services were necessary to the administration of. or beneficial at the time at which the service was rendered toward the completion of, a case under this title: (D) whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed; (E) with respect to a professional person, whether the person is board certified or otherwise has demonstrated skill and experience in the bankruptcy field: and (F) whether the compensation is reasonable based on the customary compensation charged by comparably skilled practitioners in cases other than cases under this title.

11 U.S.C. § 33Q(aX3).

         In determining the reasonableness of the fee sought here, the Bankruptcy Court applied a hybrid of the lodestar analysis and twelve-factor test set forth in Johnson v. Georgia Highway Express. Inc.,488 F.2d 714 (5th Cir. 1974) as adopted by the Fourth Circuit in Barber v. Kimbrell's inc.,577 F.2d 216 (4th Cir. 1978). See ECF No. 1-2 at 6-7. Under the lodestar analysis, a reviewing court multiplies the number of hours reasonably expended by a reasonable hourly rate. See Daly v. Hill, 790 F.2d 1071. 1084 (4th Cir. 1986). The court may then assess the overall reasonableness of the lodestar by considering the twelve Johnson factors, specilically: (1) the time and labor required; (2) the novelty and difficulty of the questions raised; (3) the skill requisite to perform the legal services properly; (4) the preclusion of employment by the attorney due to acceptance of the case; (5) the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and abilitv of the attornevs; (10) the undesirability of the case; (11) the nature and length of the professional relationship between the attorney and the client: and ...


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