In Re Perkins

244 B.R. 835, 2000 Bankr. LEXIS 134, 2000 WL 194356
CourtUnited States Bankruptcy Court, D. Montana
DecidedFebruary 16, 2000
Docket19-60269
StatusPublished
Cited by15 cases

This text of 244 B.R. 835 (In Re Perkins) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Montana primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Perkins, 244 B.R. 835, 2000 Bankr. LEXIS 134, 2000 WL 194356 (Mont. 2000).

Opinion

FINDINGS OF FACT, CONCLUSIONS OF LAW and ORDER

RALPH B. KIRSCHER, Chief Judge.

In this Chapter 7 bankruptcy, after due notice, hearing was held January 6, 2000, at Billings on the Application to Pay Professional Fees and Costs filed by Joseph V. Womack, who is serving as both the Chapter 7 Trustee and counsel for the Trustee. Mr. Womack seeks an award of fees in the sum of $84.00 pursuant to 11 U.S.C. § 330. 1 In response to Mr. Wom-ack’s fee request, the U.S. Trustee, through counsel, filed, pursuant to 28 U.S.C. § 586(a)(3)(A), “Comments of U.S. Trustee on Application to Pay Professional Fees” on December 27, 1999, prompting the Court to set the fee request for hearing in hopes of clarifying a very unclear area of the law, at least in this jurisdiction.

JURISDICTION

This Court has jurisdiction over this proceeding pursuant to 28 U.S.C. § 1334, and venue is proper pursuant to 28 U.S.C. § 1409. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) concerning the administration of bankruptcy estates. This Order contains the Court’s findings of fact and conclusions of law pursuant to F.R.B.P. 7052.

BACKGROUND

Debtor commenced this case on October 2, 1998, by filing a voluntary Chapter 7 bankruptcy petition, and Mr. Womack was appointed Interim Trustee of the estate on October 6, 1998. The § 341(a) first meeting of creditors was held November 16, 1998, and thereafter, Mr. Womack became the Trustee.

On January 25, 1999, Mr. Womack, as Trustee, filed a “Petition to Serve as Attorney” requesting permission to appoint himself as attorney for the estate representing that “[s]ome assets may arise only because of the efforts of the Trustee, as attorney in adversary actions. As such, this Trustee wishes to employee himself as counsel, on a contingency fee basis for adversary actions and on an hourly basis for other legal work.” An Order appointing the Trustee to serve as attorney was entered on January 25,1999.

*838 Thereafter, on October 22, 1999, the Trustee filed an objection to the second Proof of Claim filed by Community 1st Federal Credit Union (“Community 1st FCU”) arguing that the second claim appeared to be a duplicate of the first claim filed by Community 1st FCU. The objection was noticed for hearing. However, before the hearing was held, the Trustee filed a “Motion for Order Disallowing Second Proof of Claim dated February 2, 1999, of Community 1st Federal Credit Union” accompanied by a letter from the President and CEO of Community 1st FCU in which Community 1st FCU represented that it would withdraw its second Proof of Claim dated February 2, 1999. The Court granted the Trustee’s motion, denying Community 1st FCU’s second Proof of Claim. The Trustee, as attorney, has not taken any other action in this case and the record does not reflect that any assets have been recovered.

As a result of the above, the Trustee filed the instant fee request, seeking an award of fees and costs from the estate in the sum of $84.00 of which $24.00 is for drafting the objection, $36.00 is for drafting the motion and order to disallow Community 1st FCU’s Proof of Claim, and $24.00 is for filing the instant fee request. Mr. Womack’s request for fees was followed by the U.S. Trustee’s comments on December 27, 1999. After due notice, a hearing was held January 6, 2000, at Billings, with Dan McKay of the U.S. Trustee’s office and Mr. Womack appearing. No exhibits were introduced into evidence but both Mr. McKay and Mr. Womack presented their positions on this fee issue. The Court then took the matter under advisement and deems the matter ready for decision.

APPLICABLE LAW

One of the most unpleasant judicial duties bankruptcy judges are called upon to perform involves reviewing fee applications submitted by professionals. See American Benefit Life Ins. Co. v. Baddock (In the Matter of First Colonial Corp. of America), 544 F.2d 1291, 1301 (5th Cir.1977) (“the determination of what constitutes reasonable compensation for services furnished by an attorney in a bankruptcy proceeding can be a distasteful task.”), reh’g denied, 547 F.2d 573 (5th Cir.), cert. denied, 431 U.S. 904, 97 S.Ct. 1696, 52 L.Ed.2d 388 (1977) (legislatively overruled on other grounds). The Court’s task is especially unpleasant when the Trustee is permitted to serve not only as trustee but also as the attorney for the trustee, because in such instances, the Court is generally presented with two fee requests. The first by the trustee and the second by the trustee as attorney. The Court’s task in such situations is to first evaluate the services performed by the trustee and trustee’s attorney to ascertain whether such services involve typical trustee duties as set forth in 11 U.S.C. § 704. If the services performed do involve typical trustee duties, the amount of allowable compensation is determined in accordance with 11 U.S.C. § 330, as limited by § 326. If the services provided do not involve typical trustee duties, the trustee/attorney may then be entitled to compensation under § 330, subject to the limitations imposed by § 328.

As the Third Circuit Court of Appeals recognized, “[t]he line between legal and non-legal services and between necessary legal services and ministerial duties of the Trustee, requiring only sound business judgment, is not easy to draw.” In re Meade Land and Dev. Co., Inc., 527 F.2d 280, 285 (3rd Cir.1975) (overturned on other grounds by the Bankruptcy Act of 1978). Given the difficulties attendant with reviewing trustee/attorney fee requests, the burden is on the trustee/attorney to clearly demonstrate the legal nature of the work involved. In re Air Vermont, Inc., 114 B.R. 48, 51 (Bankr.Vt.1988); In re Gary Fairbanks, Inc., 111 B.R. 809, 811 (Bankr.N.D.Iowa 1990) (“The burden is on the trustee to demonstrate that services for which attorneys fees are sought are not *839 duties generally performed without the assistance of counsel.”); In re Smith, 6 Mont. B.R. 231, 232, 109 B.R.

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Bluebook (online)
244 B.R. 835, 2000 Bankr. LEXIS 134, 2000 WL 194356, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-perkins-mtb-2000.