Hard-Mire Restaurant Holdings LLC v. JH ZIDELL PC

CourtDistrict Court, N.D. Texas
DecidedSeptember 16, 2020
Docket3:19-cv-02263
StatusUnknown

This text of Hard-Mire Restaurant Holdings LLC v. JH ZIDELL PC (Hard-Mire Restaurant Holdings LLC v. JH ZIDELL PC) is published on Counsel Stack Legal Research, covering District Court, N.D. Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hard-Mire Restaurant Holdings LLC v. JH ZIDELL PC, (N.D. Tex. 2020).

Opinion

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

IN RE: § HARD MIRE RESTAURANT § HOLDINGS, LLC, § § Debtor. § ______________________________________ § § HARD-MIRE RESTAURANT § HOLDINGS, LLC, § § Appellant, § § v. § Civil Action No. 3:19-CV-2263-K § JH ZIDELL PC, § § Appellee. §

MEMORANDUM OPINION AND ORDER

Appellant Hard-Mire Restaurant Holdings, Inc. appeals from an order and corresponding memorandum opinion of the United States Bankruptcy Court for the Northern District of Texas, Dallas Division in Appellant’s Chapter 11 bankruptcy proceeding which awarded attorneys’ fees and costs to Appellee JH Zidell PC. The Court has carefully reviewed the parties’ briefing, the appellate record, and the applicable law. For the following reasons, the Court AFFIRMS the Bankruptcy Court’s order and memorandum opinion awarding reasonable attorneys’ fees and costs to Appellee. I. Factual and Procedural Background On January 18, 2016, Plaintiff- Claimant Jose Jorge Dominguez (“Mr.

Dominguez”) sued Appellant Hard-Mire Restaurant Holdings, Inc. (“Appellant”), his former employer, in federal district court for unpaid overtime wages in violation of the Fair Labor Standards Act (the “FLSA”). Mr. Dominguez was represented by Appellee J.H. Zidell, P.C. (“Appellee”) in the FLSA action. Shortly before the second trial setting

in the district court for May 7, 2018, Appellant filed a Chapter 11 bankruptcy petition. In the adversary proceeding in the Bankruptcy Court, Mr. Dominguez filed a Proof of Claim (“POC 6”) for damages related to his unpaid overtime wages totaling $101,253.75. Appellee also filed a Proof of Claim (“POC 7”) for pre-petition attorneys’ fees and costs totaling $25,000. Both POC 6 and 7 were filed on August 23, 2018.

The Bankruptcy Court fixed September 5, 2018, as the bar date. Appellant filed an Objection to POC 6 and to POC 7 on March 11, 2019. Appellant denied that any violation of the FLSA had occurred as to Mr. Dominguez and objected to Appellee’s claim until the Bankruptcy Court determined the amount, if any, owed to Mr.

Dominguez for his FLSA claim and, consequently, any attorneys’ fees and costs owed to Appellee. The Bankruptcy Court conducted an evidentiary hearing on Appellant’s Objection on June 12, 2019, and issued a memorandum opinion with its findings on July 25, 2019. The Bankruptcy Court found that Mr. Dominguez was not an employee

who was exempt from the FLSA overtime pay requirements and that he was entitled to overtime pay. Furthermore, the Bankruptcy Court stated that it “cannot find that the [Appellant’s] FLSA violations were in good faith and that there was an objectively

reasonable basis for the violations.” Based on its factual findings and legal conclusions, the Bankruptcy Court overruled Appellant’s Objection to POC 6 in part and allowed Mr. Dominguez’s claim for damages under the FLSA in the reduced amount of $19,357.64. The Bankruptcy Court then concluded that Mr. Dominguez would be entitled to attorneys’ fees and costs because he was awarded damages under the FLSA,

and this would be determined in a separate opinion. Appellee filed a Verified Motion for Attorneys’ Fees and Costs Pursuant to 29 U.S.C. § 216(b) (the “Verified Motion”) seeking fees and costs totaling $101,505.42. Appellant filed a response in opposition. The Bankruptcy Court addressed the fees

motion in a memorandum opinion: (1) finding Mr. Dominguez was entitled to an award of reasonable attorneys’ fees and costs pursuant to the FLSA; (2) concluding the requested pre-petition fees were limited to $25,000.00 as claimed in POC 7; (3) determining the reasonableness of the requested attorneys’ fees; and (4) assessing

which costs were recoverable. The Bankruptcy Court ultimately found Appellee should be awarded reasonable attorneys’ fees and costs in a reduced amount of $64,099.20, which was reflected in a separate order. It is the memorandum opinion and the order awarding reasonable fees and costs from which Appellant appeals. II. Applicable Legal Standards In an appeal from a bankruptcy court, the district court applies the same

standard of review used by federal appellate courts. This Court reviews the bankruptcy court’s factual findings for clear error, with proper deference to the bankruptcy court’s opportunity to make credibility determinations. See In re Dennis, 330 F.3d 696, 701 (5th Cir. 2003). “A finding of fact is clearly erroneous only if ‘on the entire evidence,

the court is left with the definite and firm conviction that a mistake has been committed.’” Id. (quoting In re Perez, 954 F.2d 1026, 1027 (5th Cir. 1992)). The Court reviews the bankruptcy court’s conclusions of law de novo. In re Dennis, 330 F.3d at 701. A bankruptcy court’s award of attorneys’ fees is reviewed for an abuse of discretion. In re Woerner, 783 F.3d 266, 270 (5th Cir. 2015); see Steele v. Leasing Enters.,

Ltd., 826 F.3d 237, 249 (5th Cir. 2016) (district court’s award of attorneys’ fees under FLSA reviewed for abuse of discretion). “An abuse of discretion occurs where the bankruptcy court (1) applies an improper legal standard [, reviewed de novo,] or follows improper procedures in calculating the fee award, or (2) rests its decision on findings

of fact that are clearly erroneous.” Id. at 270-71 (internal quotation omitted). III. Issues on Appeal In its Notice of Appeal, Appellant identified seven appellate issues: Issue 1: Whether the Bankruptcy Court erred as a matter of law in holding that 29 U.S.C. § 216(b) mandates the award of post-petition attorneys’ fees and costs to a

prevailing plaintiff in a proceeding under Title 11, United States Code. Issue 2: Whether the Bankruptcy Court erred as a matter of law in allowing the claim of Appellee in an amount in excess of $25.000.00 (i.e., the original amount set

forth in Appellee’s Claim No. 7). Issue 3: Whether the Bankruptcy Court erred as a matter of law in awarding attorneys’ fees and costs to Appellee in connection with the unsecured claim (Claim No. 6) of Jose Jorge Dominguez. Issue 4: Whether the Bankruptcy Court erred as a matter of law in awarding

post-petition attorneys’ fees and costs to Appellee without the filing of the appropriate motions under 11 U.S.C. §§ 502 and 506(b). Issue 5: Whether the Bankruptcy Court erred as a matter of law in not requiring Appellee to seek estimation of its Claim under 11 U.S.C. § 502.

Issue 6: Whether there was sufficient evidence as to the reasonableness of the Appellee’s attorney [sic] fees and costs under the factors and reasonableness standards of Johnson v. Ga. Highway Express, Inc. Issue 7: Whether the total amount of attorneys’ fees and costs was reasonable

in light of the amount of the allowed overtime claim (Claim No. 6) of Jose Jorge Dominguez.

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Hard-Mire Restaurant Holdings LLC v. JH ZIDELL PC, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hard-mire-restaurant-holdings-llc-v-jh-zidell-pc-txnd-2020.