In re Galdabini

472 B.R. 575, 2012 WL 2050238, 2012 Bankr. LEXIS 2591
CourtUnited States Bankruptcy Court, D. Idaho
DecidedJune 6, 2012
DocketNo. 10-04160-TLM
StatusPublished
Cited by1 cases

This text of 472 B.R. 575 (In re Galdabini) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Idaho primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Galdabini, 472 B.R. 575, 2012 WL 2050238, 2012 Bankr. LEXIS 2591 (Idaho 2012).

Opinion

MEMORANDUM OF DECISION

TERRY L. MYERS, Chief Judge.

On April 17, 2012, the chapter 7 trustee, Richard E. Crawforth (“Trustee”), filed “Trustee’s Final Report” and proposed distribution, Doc. No. 50 (the “TFR”), “Trustee’s Application for Compensation and Reimbursement of Expenses,” Doc. No. 51 (“Application”), and the required notice of the TFR and the Application, Doc. No. 52 (“Notice”). No objections or [576]*576other responses to the TFR or the Application were received as a result of the Notice, save a terse docket text entry from the Office of the U.S. Trustee acknowledging that such office had “reviewed” the same. Doc No. 53.

The TFR, Application and Notice indicate that Trustee proposes to distribute $175,597.28 (the balance of the funds of the estate after prior authorized distributions). The Application seeks compensation for Trustee of $12,466.06, and expense reimbursement to Trustee of $40.71. The submissions acknowledge that the requested compensation is the “maximum amount” allowable in the case under § 326(a).1 There are no priority unsecured creditors to be paid, and Trustee’s counsel has previously been allowed and paid $7,532.45.2 Thus, the net funds remaining after Trustee’s requested compensation would be $163,090.51. This would allow for a 33.8% dividend to holders of nonpriority unsecured claims.

Upon review, the Court issued an Order to Supplement the Record, requiring Trustee to provide certain materials in support of the Application’s requested compensation. Doc. No. 55 (“Order”). This Order specifically referenced the Court’s prior decision in In re B & B Autotransfusion Servs., Inc., 443 B.R. 543 (Bankr.D.Idaho 2011).3 The Order further required Trustee to include in his supplementation of the record a “sworn affidavit ... which includes an itemization setting forth the date and times spent providing all services rendered ... together with a narrative discussion or explanation of any other information” Trustee wanted the Court to consider.

Trustee filed an Affidavit in Support of Trustee’s Fees and Expenses, Doc. No. 57 (“Affidavit”). Though not “sworn” as instructed, the Court accepts the Affidavit as Trustee’s submission in response to the Order. The Affidavit, however, lacks the itemization of services by date and time expended that the Order required. It is, rather, a brief and general narrative of the course of events in this chapter 7 liquidation, along with argument in support of the Application.

The Court has carefully reviewed the Affidavit as well as the balance of the record in this case. Certain matters may be highlighted.

Edward Galdabini and Jennifer Rowell Galdabini (“Debtors”) filed this case on December 28, 2010. Debtors’ petition and schedules disclosed their ownership of residential real property in Nampa, Idaho, with an alleged fair market value of $230,000 and a secured claim of $205,000, the balance being claimed as exempt. The secured claim was scheduled as held by Jim and Becky Rowell, that surname being the same as the joint debtor’s middle name. The Rowells were, in fact, her parents.

In exercise of his duties, Trustee requested that the Rowells provide documentation of their security interest. The documentation he received consisted of a promissory note that had been recorded in the Canyon County real property records. Trustee further checked those records, and obtained a preliminary title report. He then retained counsel to pursue litigation to avoid the Rowells’ asserted lien and [577]*577secured claim. See Adv. No. 11-06022-TLM.

That adversary proceeding was concluded by a stipulated judgment entered on October 21, 2011, following approval of a compromise under Fed. R. Bankr.P. 9019 in the chapter 7 case on October 4, 2011. See Doc. No. 33 (motion), Doc. No. 36 (order); see also Adv. Doc. No. 9 (stipulation), Adv. Doc. No. 10 (judgment). Under the compromise and judgment, the lien or security interest of the Rowells was avoided, and preserved for the benefit of the bankruptcy estate; the Rowells agreed to pay $8,000 in settlement of a related preference claim; and Trustee agreed to sell the estate’s interest in the real property to the Rowells for $170,000. Debtors agreed in the same compromise and stipulated judgment that the preserved lien was superior to their homestead exemption. The compromise also provided that the Rowells would be allowed to share in distributions from the estate based on their filed proof of claim in the amount of $398,784.08.4

Trustee had the assistance of counsel throughout this process. Counsel later sought allowance of compensation and reimbursement of expenses under § 330, and all requested amounts were allowed.

Given that Trustee failed to provide the itemization of services he rendered, the Court has again reviewed the submissions of his counsel. See Doc. No. 43 (“Counsel’s Application”). Counsel’s Application asserts:

The Trustee hired the attorneys to assist in avoiding a Deed of Trust/Loan from the debtors to the parents on a home which was otherwise free and clear of other encumbrances. The attorneys investigated the facts, drafted and filed the complaint to avoid the transfer and preferential payments. The attorneys then engaged in extensive settlement negotiations with [Rowells’ counsel], Ultimately the attorneys were able to arrive at a compromise which included a stipulated judgment and purchase of the home by the debtors’ parents. The attorneys’ services resulted in the benefit of a recovery to the estate of approximately $18^,000 which included approximately $10,000 in a preference recovery from the debtors’ parents.

Id. at 3 (emphasis added). The detailed time entries supporting Counsel’s Application have also been re-reviewed. See Doc. No. 43-1. Certain of those entries describe meetings or conversations between counsel and Trustee, and also a hearing where the Court’s minute entry reflects Trustee’s appearance. Those entries total a maximum of 4.5 hours.5 Id. at 1-4. Counsel’s submissions support the above quoted language from their summary that emphasizes their role in undertaking and resolving the litigation, including the compromise and related sale.6

[578]*578The Affidavit also notes that Trustee (a) collected Debtor’s tax refunds; (b) recovered the amount of non-exempt bank accounts on the date of filing; and (c) negotiated a private sale to Debtors of nonexempt equity in a vehicle. The TFR and other documents of record establish that the respective recoveries for the benefit of the estate from these three items were (a) $5,569.84 in net tax refunds,7 (b) $31.34 in accounts, and (c) $720.00 from the vehicle.

Trustee performed the usual and ordinary duties required in all cases, including handling the accounts in which estate funds were deposited, and preparing for and conducting a § 341(a) meeting. His Affidavit also asserts work performed in reviewing proofs of claim for coherence with the schedules and for appearance of validity and, “after resolution of all objections to proofs of claim,” his preparation of the TFR and related submissions.8

DISPOSITION

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Cite This Page — Counsel Stack

Bluebook (online)
472 B.R. 575, 2012 WL 2050238, 2012 Bankr. LEXIS 2591, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-galdabini-idb-2012.