CASE NO. 401-41614-DML-13United States Bankruptcy Court, N.D. Texas, Fort Worth Division.
January 31, 2002
MEMORANDUM OPINION AND ORDER REGARDING COMPENSATION
DENNIS MICHAEL LYNN, United States Bankruptcy Judge.
Before the Court is the Application for Approval of Chapter 13 Attorney Fees (the “Application”) filed by Ebert Law Offices, P.C. (the “Firm”) on October 10, 2001. The Application was heard by the Court on December 17. The Court at that time took the matter under advisement, inviting the Firm to provide supplementary information regarding the Debtors’ plan. The Firm provided a letter describing Debtors’ plan to the Court on December 21, 2001, with which it enclosed prior correspondence to the Judges of this Court and the Chapter 13 Standing Trustees concerning the inadequacy of the “standard” fee (currently $1,750) allowed in chapter 13 cases.[1] While this Court understands the concern of the Firm and other members of the consumer bar regarding the amount of the “standard” fee, this Memorandum Opinion is not the appropriate context for discussion of that subject.
This Court has an independent duty to review applications for compensation. See 3 COLLIER ON BANKRUPTCY ¶ 330.04[4][c] (15th ed rev. 2001); see also In re Evangeline Refining Co., 890 F.2d 1312, 1325-26 (5th Cir. 1989). Because the Application and other requests for compensation by the Firm are at the highest end of the spectrum of charges for representation of chapter 13 debtors, the Court has spent considerable time in studying the Application, including the detailed time entries on its Exhibit A. In addition, the Court has reviewed the entire file for this chapter 13 case and has evaluated this chapter 13 case in terms of other chapter 13 cases it has had before it, considering the requirements imposed on counsel, the quality of the work product and the charges therefore. This Memorandum Opinion constitutes the Court’s findings of fact and conclusions of law.[2] See FED. R. BANKR. P. 7052 and FED. R. BANKR. P. 9014.
Though the Court concludes that the Firm’s charges for work common to every chapter 13 case (preparation of schedules, statement of affairs, preliminary plan, etc.) exceed amounts billed by other counsel, the Court will not adjust the fees sought in the Application on that basis. Instead the Court will analyze the Application pursuant to 11 U.S.C. § 330. According to the Application, the Firm consists of four attorneys: David B. Ebert (“DBE”), billed at $175 per hour, Carey D. Ebert (“CDE”), billed at $225 per hour, E. Bruce Ebert (“EBE”), billed at $250 per hour and Stephanie Marshall, who billed no time in this case. The Firm also employs two paralegals who bill at $60 per hour. The Firm specializes in bankruptcy law and is particularly active and knowledgeable in consumer bankruptcy cases.
Based on time spent, the Firm calculated its fees (the “lodestar” amount) at $6,786.00. However, the Firm proposed in the Application to reduce that amount to $5,300.00. The Firm also seeks reimbursement of expenses in the amount of $285.10.[3] The Debtors paid $900 to the Firm prior to filing. Thus, the Firm asks that at this time the Court award it a total of $4,685.10 to be paid by the chapter 13 trustee through the Debtors’ plan.
In the Application, the Firm cites as its accomplishments for its clients (1) stopping harassment by creditors; (2) assisting the Debtors in creating a viable budget; (3) saving the Debtors’ business; and (4) enjoining the pursuit of the Debtors by the IRS and substantially reducing the claim of the IRS. While many of these accomplishments are the automatic result of a chapter 13 filing (e.g., staying the IRS and creditor harassment) or confirmation of a chapter 13 plan (e.g., establishing a viable budget and preserving Debtors’ business), the Court has not questioned any time entry clearly related to these tasks.[4]
From the perspective of creditors of the Debtors, this case has not been an astounding success. The preliminary plan proposed by Debtors provided no return to unsecured creditors. After review by the Standing Chapter 13 Trustee, this was somewhat improved, allowing for a 2% return to unsecured creditors. The plan did, however, preserve Debtors’ homestead and provide for retention by them of various items subject to liens and used in Debtors’ business.
Given the minute return to unsecured creditors, it is appropriate to begin analysis of the allowability of the fees sought with the time spent by attorneys at the Firm reviewing claims[5] (the Court reviewed all claims itself, expending approximately 30 minutes in doing so). Exhibit “A” to the Application reflects .2 hour spent by EBE reviewing one claim. DBE spent 2.6 hours reviewing 13 claims. CDE spent 3.4 hours reviewing claims (2.6 hours on 13 individual claims and .8 hour in connection with the final plan). Most of the claims were unsecured, and those that were secured were not attacked. Often the same one-page unsecured claim was reviewed by two attorneys. Whether the claim consisted of a one-page form or included attached exhibits, .2 hour was the time invariably spent by each attorney in its review.
The total fees sought for review of claims is $1,300.00. Most of the time spent reviewing claims was before the 2% return to unsecured creditors was incorporated in the plan. The Court finds that $1,300.00 and the time spent reviewing claims was neither reasonable nor beneficial to the Debtors or the estate. The Court recognizes that a claims review is necessary, and will therefore allow the .8 hour spent on September 24, 2001 by CBE in connection with the final plan.[6] Thus, of the $1,300 sought in connection with claims, the Court will allow $202.50 and disallow the balance. See 11 U.S.C. § 330(a)(3)(A) and (a)(4)(B).
Exhibit A to the Application reflects billings at the time of Debtors’ chapter 13 filing of .6 hour by EBE, .4 hour by CBE, .4 hour by DBE and 2.7 hours by paralegals in preparation, review and filing of an “emergency” chapter 13 petition. The petition in the Court’s records is the standard form and required no more than completion of a dozen blanks (such as the Firm’s name and address) and making a few check marks. Any required information not readily ascertainable by the Firm would have been easily provided by the Debtors. Thus the Court finds that the fees sought in connection with the “emergency petition” ($472.00) should be reduced to $170.00[7] and the balance of $302.00 disallowed. See 11 U.S.C. § 330(a)(3)(D).
On April 10, 2001 both CDE and DBE reviewed the file worksheet and preliminary plan, each spending 1.3 hours on the task (the time entries do not reflect that the review was “in conference;” the Court has not in this case reduced fees sought for intra-office conferences). The Court finds this duplication of effort, for which a total of $510.00 is sought, unnecessary. Accordingly, the Court will allow $200 and disallow the remaining $310.00. See 11 U.S.C. § 330(a)(4)(A)(i).
The Debtors’ initial § 341 meeting, for which CDE charged 1.5 hours, was continued. At the continued § 341 meeting DBE billed 3.5 hours. Obviously some this time was “waiting” time.[8] While the Court recognizes counsel is entitled to some compensation for time spent waiting for a case to be called, the Court finds the amount here sought ($950.00) excessive. The firm will be allowed $600.00 for attendance at the § 341 meetings, and $350 will be disallowed. See 11 U.S.C. § 330(a)(3)(D).
Exhibit “A” to the Application reflects .2 hour spent on March 26, 2001 by each of DBE and CDE reviewing a notice of appearance. The notice is contained in the Court’s records and is four typewritten lines. Similarly, on both April 13 and April 19 DBE billed .3 hour for review of a filed notice of bankruptcy in “Justice Court, 1st percent [sic].” The total sought for these activities was $185. The Court will allow $45.00 and disallow the balance. See 11 U.S.C. § 330(a)(4)(A)(i).
Exhibit “A” to the Application also reflects considerable paralegal time spent coaxing the Debtors into providing information or dissuading the Standing Chapter 13 Trustee from seeking dismissal of the case. The Court estimates these entries exceed $200.00 of the fees sought.
The Court would note that the Firm routinely billed .2 attorney hours and .4 paralegal hours for letters of transmission. There are also paralegal and attorney entries on April 17, 2001 concerning an “[a]mended Notice of Hearing on Debtor’s [sic] Modification of Plan after Confirmation.” At that date the final plan had not been drafted and confirmation had not occurred. Similarly, on March 7, .4 hour of DBE and a paralegal’s time are charged for a letter “re file marked copy of plan, petition, statement and schedules.” The preliminary plan, statement of affairs and schedules however, were not filed until April 12. On August 6, 2001, CDE charged .2 hour for a service described only as “2000.” These entries cast doubt on the Firm’s accuracy in billing. Finally, the Court, as noted, has carefully reviewed the file in the case. Untypically, there are few pleadings (other than forms) filed on behalf of Debtors. In fact, only a motion to extend time for filing schedules appears to have been specially prepare — and that motion refers in its prayer to the wrong debtors. For these reasons, the Court concludes the fees should be reduced by another $500.00.[9] See 11 U.S.C. § 330(a)(3).
This results in a total reduction of the Firm’s lodestar amount of $2,700.00. As the lodestar was $6,786.0010, the Firm is entitled to $4,086.00 in fees and $285.10 in expenses. Having received $900.00 as a retainer, there remains $3,471.10 due. However, the Court holds that $200 of charges should be borne by Debtors. Therefore, it is
ORDERED that Ebert Law Offices P.C.. be awarded, in addition to amounts previously paid, fees of $3,186.00 and expenses of $285.10, for a total of $3,471.10; and it is further
ORDERED that the Standing Chapter 13 Trustee pay to such firm $3,271.[10] in installments, such installments calculated consistently with and in addition to the amounts (1) payable pursuant to their plan to the trustee by Debtors and (2) the regular expenses of the Debtors; and it is further
ORDERED that the Debtors pay such firm $200.00 on such terms as will not interfere with their performance of their plan; and it is further
ORDERED that the Standing Chapter 13 Trustee review Debtors’ plan to determine whether it should be amended to account for this decision. Signed the 31st day of January, 2002.