In Re Atwell

148 B.R. 483, 1993 Bankr. LEXIS 4, 23 Bankr. Ct. Dec. (CRR) 1396
CourtUnited States Bankruptcy Court, W.D. Kentucky
DecidedJanuary 5, 1993
Docket19-30337
StatusPublished
Cited by16 cases

This text of 148 B.R. 483 (In Re Atwell) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, W.D. Kentucky primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Atwell, 148 B.R. 483, 1993 Bankr. LEXIS 4, 23 Bankr. Ct. Dec. (CRR) 1396 (Ky. 1993).

Opinion

*487 MEMORANDUM OPINION

HENRY H. DICKINSON, Bankruptcy Judge.

The subject of awards of attorney fees is perhaps the “most delicate” issue which a Bankruptcy Court must consider. See In re Chou-Chen Chemicals, Inc., 31 B.R. 842 (Bkrtcy.W.D.Ky.1983). This matter is before the Court along with several other Chapter 13 fee applications as a result of the Sixth Circuit’s remand of In re Boddy, 950 F.2d 334 (6th Cir.1991) to this Court for consideration of an award of a Chapter 13 fee request under the “lodestar” standard of Pennsylvania v. Delaware Valley Citizens’ Council for Clean Air, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987). 1 In this opinion we will articulate guidelines under lodestar for the award of fees in Chapter 13 cases.

LEGAL DISCUSSION

I. Procedure for Future Chapter IS Applications

As noted by the Sixth Circuit in Boddy, Bankruptcy Courts may not arbi: trarily impose flat fee limitations on debtor’s counsel in bankruptcy proceedings. Boddy, 950 F.2d at 338. See also In re Paster, 119 B.R. 468, 470 (E.D.Pa.1990). However it has been widely noted that in consumer bankruptcy cases some guidelines concerning fees may be established to prevent Bankruptcy Courts from being overwhelmed by hearings on Chapter 13 fee applications. See 11 U.S.C. § 330 (“after notice ... and a hearing ... the Court may award ... the debtor’s attorney (1) reasonable compensation for actual necessary services rendered ... and (2) reimbursement for actual necessary expenses”) See also In re McClanahan, 137 B.R. 73 (Bkrtcy.M.D.Fla.1992) (discussion of flat fees and reduction of excessive flat fee); In re Fricker, 131 B.R. 932 (Bkrtcy. E.D.Pa.1991) (fee application requirements in Chapter 13); In re Bush, 131 B.R. 364 (Bkrtcy.W.D.Mich.1991) (court has duty to review fees even when no objection raised by any party, nature of Chapter 13 practice discussed); In re Patronek, 121 B.R. 728 (Bkrtcy.E.D.Pa.1990) (guidelines needed to prevent rubber stamping, general guidelines discussed); In re Lanigan and Nailing, 101 B.R. 530 (Bkrtcy.N.D.Ill.1986) (procedures relating to payment of Chapter 13 attorney fees); In re Taylor, 100 B.R. 42 (Bkrtcy.D.Col.1989) (procedures relating to awards of Chapter 13 attorney fees).

Therefore, in the interest of clarifying and codifying the practice of this Court concerning Chapter 13 cases consistent with the guidelines setforth by the Sixth Circuit in Boddy this Court adopts the following procedure for all future Chapter 13 debtor’s attorney fee applications.

In all Chapter 13 cases filed after January 1, 1993 the debtor’s attorney shall elect, by no later than the hearing on the confirmation of the Chapter 13 plan, to either accept a flat fee awarded by this Court not to exceed $875.00 for all legal expenses incurred and/or to be performed for the debtor between the filing of the Chapter 13 petition, and the filing of the statement of allowed claims, or to request compensation on an hourly basis. This Court shall annually review the question of average Chapter 13 awards to determine if the $875.00 flat fee award should be adjusted. Counsel who accept a flat fee may still file an application for additional attorney fees, if their employment agreement with the debtor so allows, for any additional legal fees and expenses incurred after the filing of the schedule of allowed claims.

In the event an attorney elects to accept a flat fee awarded by the Court in the amount of $875.00 or less, and no objection to the flat fee is made by any party in interest prior to the confirmation hearing, then the debtor’s counsel shall not be required to file a fee application.

However if the debtor’s counsel either elects not to accept the flat fee awarded by this Court at the hearing on confirmation or wishes to request more than $875.00 in *488 legal fees and expenses, then that attorney shall make that election prior to or at the hearing on confirmation of the Chapter 13 plan and must then make a fee application under the guidelines of In re J.F. Wagner’s Sons Co., 135 B.R. 264 (Bkrtcy.W.D.Ky. 1991); In re Belknap, 103 B.R. 842 (Bkrtey.W.D.Ky.1989) and this opinion for an award of fees.

In the notice of the first meeting of creditors issued by this Court, all creditors shall be informed that this Court has the discretion to award attorney fees and expenses of $875.00 or less to counsel for the debtor in a Chapter 13 case without debt- or’s counsel being required to file a detailed fee application or any further notice and hearing.

As noted above, this procedure allows the Court to review all Chapter 13 fee awards without requiring debtor’s counsel to prepare detailed fee requests- in every case. If any party in interest wishes to object to a flat fee award under this procedure a full fee application shall be prepared by debtor’s counsel and a hearing held on the matter. This Court has determined from a Lodestar analysis of the numerous Chapter 13 cases before it that currently in an average uncomplicated Chapter 13 bankruptcy the reasonable compensation for actual and necessary services rendered is approximately $875.00, based on 9-10 hours of reasonable hours expended at a reasonable billing rate of between $85.00 and $100.00. This Court has determined that absent any objection, that a detailed review of Chapter 13 fee applications in this amount or less is generally unwarranted. Unlike the $650.00 flat fee discussed in Boddy, this award is not an established fixed fee which circumvents the meaning of 11 U.S.C. § 330, See Boddy, 950 F.2d at 337 but is rather an exercise of judicial discretion designed to prevent unnecessary fee applications and hearings in the majority of Chapter 13 cases.

II. Standard for Evaluating Lodestar Fee Awards

The Lodestar method of determining an award of attorney fees involves “multiplying the attorney’s reasonable hourly rate by the number of hours reasonably expended." In re Boddy, 950 F.2d at 337. [emphasis added] This method of determining fees under 11 U.S.C. § 330 applies with equal force in Chapter 7, 11, 12 and 13 cases. In re Reed, 890 F.2d 104 (8th Cir.1989); Matter of Malewicki, 142 B.R. 353 (Bkrtcy.D.Neb.1992).

While the Lodestar standard is easy to articulate, defining its two key terms is not so simple. As one team of commentators noted:

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Cite This Page — Counsel Stack

Bluebook (online)
148 B.R. 483, 1993 Bankr. LEXIS 4, 23 Bankr. Ct. Dec. (CRR) 1396, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-atwell-kywb-1993.