In re Campos Wholesale Inc.

166 B.R. 914, 1994 U.S. Dist. LEXIS 5252, 1994 WL 171167
CourtDistrict Court, N.D. California
DecidedApril 19, 1994
DocketNos. C-93-2630, C-93-2942 and C-93-3154
StatusPublished
Cited by1 cases

This text of 166 B.R. 914 (In re Campos Wholesale Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Campos Wholesale Inc., 166 B.R. 914, 1994 U.S. Dist. LEXIS 5252, 1994 WL 171167 (N.D. Cal. 1994).

Opinion

OPINION AND ORDER IN CONSOLIDATED APPEAL AFFIRMING ORDERS OF BANKRUPTCY COURT

WILKEN, District Judge.

I.

INTRODUCTION

This matter came on regularly for hearing on March 25, 1994 before the Northern District of California, the Honorable Claudia Wilken presiding, on the consolidated appeal of the United States Trustee from the orders of the bankruptcy court in three separate actions awarding attorney Ray Olmstead fees at rate determined to be reasonable rather than at the billing rate mentioned in the applications for authorization of employment. This Court took the matter under submission. Based upon the written submissions and oral arguments of all counsel, the Court now affirms the orders of the bankruptcy court.

II.

JURISDICTION AND STANDARD OF REVIEW

The district court has jurisdiction over this appeal pursuant to 28 U.S.C. § 158(a).

The bankruptcy court’s award of attorneys’ fees will not be disturbed on appeal absent an abuse of discretion or an erroneous application of the law. Unsecured Creditors’ Committee v. Puget Sound Plywood Inc., 924 F.2d 955, 957 (9th Cir.1991). The bankruptcy court’s findings of fact are binding on the district court unless clearly erroneous. Id. The bankruptcy court’s con-elusions of law are reviewed de novo. Ragsdale v. Haller, 780 F.2d 794, 795 (9th Cir.1986).

III.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

Debtor Campos Wholesale, Inc. filed a Chapter 7 petition on December 5, 1988. Raymond Carey was appointed Chapter 7 trustee by the United States Trustee. In early 1989, Carey contacted attorney Olm-stead. Olmstead quoted an hourly rate of $125.00, and Carey and Olmstead agreed that Olmstead would represent Carey. No written contract was executed, but Olmstead prepared for Carey an application and proposed order for bankruptcy court authorization of his employment.

The application stated that “the terms for employment are that Mr. Olmstead will bill at the rate of $125 per hour.” The proposed order stated, on one hand, that the employment was being authorized “on the terms set forth” in the application and, on the other hand, that the trustee was authorized to pay Olmstead “a reasonable fee for his services” upon application to and order of the court. Neither the application nor the order cited statutory authorization for the proposed order. On March 15, 1989, Bankruptcy Judge Alan Jaroslovsky signed the proposed form of order.

Olmstead performed work for the estate from 1989 until June 1991, providing monthly billing statements throughout to the trustee reflecting a billing rate of $125.00 per hour. In 1992, Olmstead filed an application for compensation requesting fees for all services provided at the rate of $150.00 per hour. Olmstead’s client, the trustee appointed by the United States Trustee, did not oppose the fee request, but the United States Trustee filed an objection.

The bankruptcy court, Judge Jaroslovsky presiding, held a hearing on the fee application. The court awarded the fees at the requested hourly rate of $150.00 on the grounds that it was reasonable. E.R. tab 6, p. 3-4. The U.S. Trustee moved for reconsideration of the order, on the grounds that [916]*916the bankruptcy court improperly enhanced the contractually required fee. The motion was denied without prejudice to a further motion supported by a declaration from Carey that the parties intended to limit the fees to $125.00 per hour. The court stated that it would honor any such a contractual limitation intended by Carey and Olmstead. On the record before it at the time, however, the court held that $150.00 per hour was the minimum reasonable fee. In support of that holding, the court made the following factual findings in its memorandum of decision:

1. At the time Olmstead was hired, there were no assets in the estate, so that if he had been unsuccessful there would have been no funds available to pay him;

2. Through Olmstead’s efforts, the trustee recovered over $20,000 for distribution;

3. There was a delay in closing the estate through no fault of Olmstead’s because the largest recovery made for the estate was to be paid over time; and

4. Based on the court’s own knowledge of prevailing rates in the area for attorneys of Olmstead’s experience: (a) the prevailing rate at the time of the hearing was $175.00 to $200.00 per hour; (b) the prevailing rate at the time of the original application was “in the $150 range;” and (c) in the circumstances of the case, a fee award of $125.00 per hour would be unfairly low. E.R. tab 10.

The U.S. Trustee again moved for reconsideration, submitting a declaration from Carey stating that he and Olmstead had agreed upon the hourly rate of $125.00 and that their agreement was embodied in the application for employment authorization prepared by Olmstead. The bankruptcy court held an evidentiary hearing on the motion for reconsideration. Judge Jaroslov-sky asked Carey whether he had bargained for the rate of $125.00 to apply to the entire employment, or whether the language of the application was just “some wording that got into Mr. Olmstead’s computer which was not a subject of express understanding between” the parties. Carey responded that the wording in the application was Olmstead’s and that he did not recall bargaining for the rate to continue throughout the job.

Judge Jaroslovsky stated that the reason for his inquiry was that the common practice in the district is that compensation rates are not set at the beginning of employment, although the professional’s current hourly rate is stated in the application. Instead the reasonable fee is determined by the court at the end of the employment. Carey agreed that this was the common practice and stated that he did not have a specific discussion with Olmstead that they would vary from this practice. The court found that there was no contractual limitation of the fees intended by Carey and Olmstead and therefore denied the motion for reconsideration. A final order approving the attorneys fees was issued on March 25, 1993.

A timely notice of appeal was filed by the United States Trustee on April 2, 1993. Upon the joint motion of the parties, this appeal was consolidated with the appeals in In re American Lifestyles, Inc., C-93-2942, and Sonoma Vintner’s Club, Inc., C-93-3154. Each of the consolidated cases involve an award of fees at the rate of $150.00 per hour to Olmstead for representation provided to Carey as Chapter 7 trustee, with applications and orders for employment authorization identical to those in Campos.

IV.

DISCUSSION

1. Appellant has standing in this matter.

The Ninth Circuit has not considered the issue of whether the United States Trustee has standing to appeal a bankruptcy court award of attorneys fees. In general, the Ninth Circuit limits appellate standing to a “person aggrieved” by the bankruptcy court decision, which it defines as one who is “directly and adversely affected pecuniarily by an order of the bankruptcy court.” In re Fondiller,

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Bluebook (online)
166 B.R. 914, 1994 U.S. Dist. LEXIS 5252, 1994 WL 171167, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-campos-wholesale-inc-cand-1994.