In re Wyche
This text of 425 B.R. 779 (In re Wyche) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. Virginia primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
MEMORANDUM OPINION
STEPHEN C. ST. JOHN, Bankruptcy Judge.
These matters first came on for hearing on August 6, 2009, upon two Applications for Compensation filed by the Boleman Law Firm. The first Application was filed in Case No. 08-73778 on June 11, 2009. The second Application was filed in Case No. 09-70602 on the same day. The first hearing was continued to September 3, 2009, upon the Chapter 13 Trustee’s motion, in order to allow the Trustee time to review additional documentation provided by the Boleman Law Firm. At the hearing held September 3, 2009, the Court continued the matter in order to conduct an evidentiary hearing. The evidentiary hearing was scheduled for October 6, 2009. At the conclusion of the October 6, 2009, evidentiary hearing, the Court took these matters under advisement. The Court has jurisdiction over these proceedings pursuant to 28 U.S.C. §§ 157(b)(2) and 1334(b). Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. Upon consideration of the evidence and arguments presented by counsel at the hearing and the pleadings submitted, the Court makes the following findings of fact and conclusions of law.
I. PARTIES AND PROCEDURAL HISTORY
The Boleman Law Firm, P.C. (“Bole-man”) provides bankruptcy services to consumer debtors and is headquartered in Richmond, Virginia. At the hearing on October 6, 2009, Mark Leffler (“Leffler”) appeared on behalf of Boleman. Kelly Barnhart appeared on behalf of R. Clinton Stackhouse, Jr., the Chapter 13 Trustee.
The Wyche Case
On November 5, 2008, Boleman filed a Chapter 13 Petition for Jasper Wyche, Jr., and Anita Brendetta Wyche (the “Wyche Case,” Case No. 08-73778-SCS). On June [783]*78311, 2009, Boleman filed a Notice and Application for Compensation for the Boleman Law Firm in the Wyche Case (the “Wyche Application”), whereby the firm requested reimbursement for expenses in the amount of $655.71.1 The Chapter 13 Trustee filed a Response to the Wyche Application (“Trustee’s Response”) on June 29, 2009. The Trustee’s Response requested that the Wyche Application be denied, asserting that the application contained insufficient information to allow the Trustee to determine whether the expenses were actual and necessary and whether the expenses incurred were in the best interests of the debtors or their creditors. The Trustee alleged that the itemized statement attached to the Application as Exhibit A failed to disclose the type of documents copied or printed, the number of pages copied or printed from each document, the month in which the expense was incurred, and the number of documents mailed at each postage rate.2 A hearing on the Wyche Application was scheduled for August 6, 2009. The hearing was continued upon the Trustee’s motion in order to allow the Trustee time to review additional documentation provided by Boleman. At the continued hearing on September 3, 2009, the Court determined that an eviden-tiary hearing should be conducted as to the Wyche Application and the Trustee’s Response.3 The evidentiary hearing was scheduled for October 6, 2009.
The Brewer Case
On February 18, 2009, Boleman filed a Chapter 13 Petition for Jason Allen Brewer, Sr., and Gabrielle Stephens Brewer (the “Brewer Case,” Case No. 09-70602-SCS). On June 11, 2009, Boleman filed a Notice and Application for Compensation for the Boleman Firm in the Brewer Case (the “Brewer Application”), whereby the firm requested reimbursement for expenses in the amount of $435.63.4 The Chapter 13 Trustee filed a Response to the Brewer Application that was similar in both form and substance to the Trustee’s Response filed in the Wyche Case. Because of the similarity between the Wyche and Brewer Applications and the consistency in the Trustee’s Responses to both, the Court elected to conduct hearings on the Wyche and Brewer proceedings together. Accordingly, a hearing on the Brewer Application was scheduled for August 6, 2009, at the same time as the hearing on the Wyche Application. Like in the Wyche Case, the hearing was continued upon the Trustee’s motion in order to allow the Trustee time to review additional documentation provided by Bole-man. At the continued hearing on September 3, 2009, the Court determined that [784]*784an evidentiary hearing should be conducted as to the Brewer Application and the Trustee’s Response.5 The evidentiary hearing was scheduled for October 6, 2009, at the same time as the evidentiary hearing on the Wyche Application was scheduled to be held.
II. FINDINGS OF FACT
The Boleman Law Firm was formed by G. Russell Boleman in 1991. Mr. Boleman currently serves as Chief Executive Officer of the firm. The firm maintains its principal office in Richmond, Virginia. Boleman also operates offices in Virginia Beach and Hampton, Virginia.
John Bollinger (“Bollinger”) testified on behalf of Boleman at the evidentiary hearing. Bollinger stated that he has been employed as an attorney by Boleman since 1994. He also testified that his time is split between the Richmond and Virginia Beach offices with the majority of his time being spent in Richmond. Bollinger stated that he is familiar with the procedures employed by Boleman in handling Chapter 13 cases by virtue of his personal experience as a practicing attorney with the firm. Bollinger further testified that he has trained other employees in following the established procedures and that his current duties include ensuring firm-wide compliance with the same. Transcript of October 6, 2009, hearing, at 7-8 (hereinafter Tr.).
During his testimony at the evidentiary hearing, Bollinger generally described the various stages of interaction between Boleman employees and the firm’s Chapter 13 clients. According to Bollinger, Boleman attorneys are trained and instructed to follow a specific protocol in working with clients to prepare for filing their bankruptcy petitions. Because the contested applications for reimbursement seek remuneration for copy, printing, and postage expenses, Bollinger discussed such expenses as they are typically incurred during each stage of a client’s Chapter 13 case. Bollinger described Boleman’s handling of Chapter 13 cases as follows.
After cheeking in with a front-desk clerk at one of Boleman’s offices, new clients seeking bankruptcy advice are assisted by an attorney through the “intake” process, which Bollinger characterized as involving a “general discussion as it relates to any type of assets, liabilities, income and expenses .... ” Tr. at 10. Bollinger indicated that, during the intake process, certain required disclosures are made and various bankruptcy and non-bankruptcy options are discussed. If the intake stage concludes with a determination that bankruptcy shall be filed by Boleman on the client’s behalf, an administrator is assigned to collect necessary information and documentation.6 Tr. at 10.
In the course of gathering information about a client’s financial condition, Bole-man uses “several on-line services.” Tr. at 15.
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MEMORANDUM OPINION
STEPHEN C. ST. JOHN, Bankruptcy Judge.
These matters first came on for hearing on August 6, 2009, upon two Applications for Compensation filed by the Boleman Law Firm. The first Application was filed in Case No. 08-73778 on June 11, 2009. The second Application was filed in Case No. 09-70602 on the same day. The first hearing was continued to September 3, 2009, upon the Chapter 13 Trustee’s motion, in order to allow the Trustee time to review additional documentation provided by the Boleman Law Firm. At the hearing held September 3, 2009, the Court continued the matter in order to conduct an evidentiary hearing. The evidentiary hearing was scheduled for October 6, 2009. At the conclusion of the October 6, 2009, evidentiary hearing, the Court took these matters under advisement. The Court has jurisdiction over these proceedings pursuant to 28 U.S.C. §§ 157(b)(2) and 1334(b). Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. Upon consideration of the evidence and arguments presented by counsel at the hearing and the pleadings submitted, the Court makes the following findings of fact and conclusions of law.
I. PARTIES AND PROCEDURAL HISTORY
The Boleman Law Firm, P.C. (“Bole-man”) provides bankruptcy services to consumer debtors and is headquartered in Richmond, Virginia. At the hearing on October 6, 2009, Mark Leffler (“Leffler”) appeared on behalf of Boleman. Kelly Barnhart appeared on behalf of R. Clinton Stackhouse, Jr., the Chapter 13 Trustee.
The Wyche Case
On November 5, 2008, Boleman filed a Chapter 13 Petition for Jasper Wyche, Jr., and Anita Brendetta Wyche (the “Wyche Case,” Case No. 08-73778-SCS). On June [783]*78311, 2009, Boleman filed a Notice and Application for Compensation for the Boleman Law Firm in the Wyche Case (the “Wyche Application”), whereby the firm requested reimbursement for expenses in the amount of $655.71.1 The Chapter 13 Trustee filed a Response to the Wyche Application (“Trustee’s Response”) on June 29, 2009. The Trustee’s Response requested that the Wyche Application be denied, asserting that the application contained insufficient information to allow the Trustee to determine whether the expenses were actual and necessary and whether the expenses incurred were in the best interests of the debtors or their creditors. The Trustee alleged that the itemized statement attached to the Application as Exhibit A failed to disclose the type of documents copied or printed, the number of pages copied or printed from each document, the month in which the expense was incurred, and the number of documents mailed at each postage rate.2 A hearing on the Wyche Application was scheduled for August 6, 2009. The hearing was continued upon the Trustee’s motion in order to allow the Trustee time to review additional documentation provided by Boleman. At the continued hearing on September 3, 2009, the Court determined that an eviden-tiary hearing should be conducted as to the Wyche Application and the Trustee’s Response.3 The evidentiary hearing was scheduled for October 6, 2009.
The Brewer Case
On February 18, 2009, Boleman filed a Chapter 13 Petition for Jason Allen Brewer, Sr., and Gabrielle Stephens Brewer (the “Brewer Case,” Case No. 09-70602-SCS). On June 11, 2009, Boleman filed a Notice and Application for Compensation for the Boleman Firm in the Brewer Case (the “Brewer Application”), whereby the firm requested reimbursement for expenses in the amount of $435.63.4 The Chapter 13 Trustee filed a Response to the Brewer Application that was similar in both form and substance to the Trustee’s Response filed in the Wyche Case. Because of the similarity between the Wyche and Brewer Applications and the consistency in the Trustee’s Responses to both, the Court elected to conduct hearings on the Wyche and Brewer proceedings together. Accordingly, a hearing on the Brewer Application was scheduled for August 6, 2009, at the same time as the hearing on the Wyche Application. Like in the Wyche Case, the hearing was continued upon the Trustee’s motion in order to allow the Trustee time to review additional documentation provided by Bole-man. At the continued hearing on September 3, 2009, the Court determined that [784]*784an evidentiary hearing should be conducted as to the Brewer Application and the Trustee’s Response.5 The evidentiary hearing was scheduled for October 6, 2009, at the same time as the evidentiary hearing on the Wyche Application was scheduled to be held.
II. FINDINGS OF FACT
The Boleman Law Firm was formed by G. Russell Boleman in 1991. Mr. Boleman currently serves as Chief Executive Officer of the firm. The firm maintains its principal office in Richmond, Virginia. Boleman also operates offices in Virginia Beach and Hampton, Virginia.
John Bollinger (“Bollinger”) testified on behalf of Boleman at the evidentiary hearing. Bollinger stated that he has been employed as an attorney by Boleman since 1994. He also testified that his time is split between the Richmond and Virginia Beach offices with the majority of his time being spent in Richmond. Bollinger stated that he is familiar with the procedures employed by Boleman in handling Chapter 13 cases by virtue of his personal experience as a practicing attorney with the firm. Bollinger further testified that he has trained other employees in following the established procedures and that his current duties include ensuring firm-wide compliance with the same. Transcript of October 6, 2009, hearing, at 7-8 (hereinafter Tr.).
During his testimony at the evidentiary hearing, Bollinger generally described the various stages of interaction between Boleman employees and the firm’s Chapter 13 clients. According to Bollinger, Boleman attorneys are trained and instructed to follow a specific protocol in working with clients to prepare for filing their bankruptcy petitions. Because the contested applications for reimbursement seek remuneration for copy, printing, and postage expenses, Bollinger discussed such expenses as they are typically incurred during each stage of a client’s Chapter 13 case. Bollinger described Boleman’s handling of Chapter 13 cases as follows.
After cheeking in with a front-desk clerk at one of Boleman’s offices, new clients seeking bankruptcy advice are assisted by an attorney through the “intake” process, which Bollinger characterized as involving a “general discussion as it relates to any type of assets, liabilities, income and expenses .... ” Tr. at 10. Bollinger indicated that, during the intake process, certain required disclosures are made and various bankruptcy and non-bankruptcy options are discussed. If the intake stage concludes with a determination that bankruptcy shall be filed by Boleman on the client’s behalf, an administrator is assigned to collect necessary information and documentation.6 Tr. at 10.
In the course of gathering information about a client’s financial condition, Bole-man uses “several on-line services.” Tr. at 15. According to Bollinger’s testimony, these services include NADA7 and Kelley Blue Book for vehicle valuation, in addition to Zillow, Bank of America, and other sources used to estimate the value of real property. Tr. at 15. Equifax, a credit [785]*785reporting agency providing online services, is also used during the intake process to access additional credit and financial information. Tr. at 11. Bollinger testified that documents are printed directly from these websites and inserted into a client’s file. Tr. at 13, 16. When questioned as to the reason for Boleman’s retention of these documents, Bollinger responded that the practice is done as part of the firm’s due diligence in handling its clients’ bankruptcy cases. Tr. at 13, 16. When all client information has been gathered, it is compiled and organized into a “work product sheet” for the reference of Boleman attorneys and administrators who may later assist in the handling of that particular client’s case. Tr. at 11.
Also during intake, clients review a contract setting forth the terms of Boleman’s representation. Boleman provides, in addition, certain disclosures required by the Bankruptcy Code. Tr. at 10-14. Copies of these documents are made during intake. Copies of the “intake form,” credit authorization pages, and client questionnaires are also rendered as a matter of routine during the initial intake stage. If additional information is required for the case to proceed, Boleman will print a “documents needed” sheet for the client to consult as further preparations are made. Bollinger represented to the Court that the normal intake process had been followed by Bole-man in both the Wyche and Brewer cases. Tr. at 14.
Bollinger identified the next stage of the Boleman process as the “sign appointment.” Between the intake stage and the sign appointment, Boleman attorneys and administrators review the information and documentation provided by the client. The bankruptcy petition is generated along with schedules, statements, and the Chapter 13 Plan. Bollinger testified that these documents are printed and placed in the client file. Bollinger testified that “[s]ometimes [these documents] are copied as well.” Tr. at 21. During the sign appointment, the client pays the required filing fees and is provided a receipt from Boleman. A copy of the receipt is placed in the client’s file. Additional documentation is collected at this time, which may include pay stubs, tax forms, and bills. Those documents are copied and placed in the client’s file. Tr. at 20-21.
Bollinger explained that credit counseling also occurs during the sign appointment. Credit counseling is facilitated by an administrator or by a Boleman attorney and involves interface between the client and an online credit counselor.8 Several documents are printed during credit counseling, such as a unique user identification and password page, a summary of the client’s budget information as it was entered into the credit counseling system, and a confirmation page. Tr. at 23-25.
When credit counseling has been completed, several additional documents are provided to the client. One such document instructs the client where payments to creditors should be directed during the bankruptcy case. A timeline is also provided to help the client understand the expected progression of his or her case from beginning to end. Another document setting forth “the rights and responsibilities of each of the parties, which would include the Boleman Law Firm and the ... clients themselves” is printed at the sign appointment and thoroughly discussed before the meeting concludes. The rights and responsibilities document is copied, in addition to any other bills, statements, and forms that may not theretofore have been duplicated. Tr. at 27-28.
[786]*786After the sign appointment, two Bole-man attorneys review the client file for possible errors and omissions. A billing form is filled out at this stage, which was described by Bollinger as “a document that’s generated internally for accounting purposes.” Tr. at 28. The document is copied and retained for the purpose of “making sure that all of the fees and expenses are accounted for accordingly in the Plan, the standard of compensation, and also the statement of financial affairs.” Bollinger stated that Boleman’s normal practices were followed prior to, during, and after the sign appointment stages in the Wyche and Brewer cases. Additionally, the firm’s usual methods of tracking attorney time, events, and expenses were employed in the handling of both matters. Tr. at 29-30. Bollinger described those tracking methods as follows.
Boleman attorneys use specific software known as “Abacus” for managing and recording their time. Bollinger explained that employees are required to record their actions regarding specific tasks undertaken for the client in the client’s Abacus file. The firm prefers that these actions be recorded contemporaneously with their completion but allows employees twenty-four hours in which to record the actions after they have been performed. Abacus keeps a chronological record of actions and events that have occurred in connection with each client’s bankruptcy case. Tr. at 17-19.
For tracking internal expenditures in its handling of Chapter 13 cases, Boleman uses a separate electronic system known as “Equitrac.” Equitrac is designed to generate itemized records indicating the number of printouts and paper copies rendered in connection with each bankruptcy case. These records are organized by task and used by Boleman in its efforts to collect reimbursement of expenses from its clients. Tr. at 34-36. To operate, Equit-rac requires the entry of a user identification number by a Boleman employee. The user then identifies a specific client by last name or case number. Once the client file is located, the user inputs a brief description of the task for which printouts or copies are required. When the print or copy job has been completed, Equitrac automatically records the number of printouts or copies made incident to the described task. Logs are generated for each client’s case and are comprised of lines indicating the date, task description, number of printouts or copies created, and the initials of the Boleman employee responsible for each print or copy job. Tr. at 34-36.
Because the present controversy pivots on the expenses Boleman incurred for printing and copying in the course of handling the Wyche and Brewer cases, extensive evidence from the Equitrac system was presented to the Court. In support of its Expense Applications, the Boleman Law Firm provided logs generated by Equitrac to demonstrate the purposes for which printouts and copies were made. The Equitrac logs generated in the Wyche and Brewer cases are reproduced below.9
[787]*787The Wyche Case
Count Rate Amount Date Description Type
2 0.15 $ 0.30 10/3/2008 PACER Web Check Copy
1 0.15 $ 0.15 10/3/2008 PACER Summaty Page Copy
1 0.15 $ 0.15 10/3/2008 Client ID, SSN Card Copy
0.15 $ 0.15 10/3/2008 Zillow Property Valuation Copy
0.15 $ 1.50 10/3/2008 Equifax Credit Reporting Copy
0.15 $ 0.30 10/3/2008 NADA Vehicle Valuation Copy
0.15 $ 1.20 10/3/2008 Basic Intake Consultation Documents Copy
0.15 $ 2.70 10/3/2008 Internal Intake Documents-Client Fills Out Copy
0.15 S 0.90 10/21/2008 Internal Work Product/Client Information Sheet Copy
0.15 $ 0,30 10/21/2008 Worksheet for Calculating Plan Amounts Copy
0.15 $ 9.30 10/21/2008 Chapter 13 Petition for Client Review Copy
0.15 $ 1.35 10/21/2008 Chapter 13 Plan for Client Review Copy
0.15 $ 0.60 10/21/2008 Schedules I, J, Special Notices Copy
0.15 $ 12,75 10/21/2008 Bills Provided by Clients for Attorney Review Copy
0.15 $ 1.35 11/5/2008 Paperwork Signed by Clients Copy
0.15 $ 2.70 11/5/2008 Schedules for Client Review Copy
0.15 $ 1.35 11/5/2008 Chapter 13 Plan for Client Review Copy
0,15 $ 0.30 11/5/2008 Receipt of Payment by Client Copy
0.15 $ 0.30 11/5/2008 Credit Counseling — User ID and Password Copy
0.15 $ 0.60 11 /5/20Q8 Credit Counseling -- Disclosures Copy
0.15 $ 0.60 11/5/2008 Credit Counseling - Budget Liability List Copy
0.15 $ 0,60 11/5/2008 Credit Counseling--Confirmation of Completion Copy
0.15 $ 3.45 11/5/2008 Unknown— Possibly Related to Sign Appt. Copy
0.15 $ 2.40 11/5/2008 Rights and Responsibilities Copy
0.15 $ 1.65 11/5/2008 Schedules Reprinted During Sign Appt, Copy
0.15 $ 9.15 11/5/2008 Petition Provided to Client Copy
0.15 $ 0.30 11/5/2008 ECF Notice of Petition Filing Provided to Client Copy
0.15 $ 3.90 11/5/2008 Internal Documents Primed During Sign Appt. Copy
[788]*7880.15 $ 0.75 11/5/2008 Mortgage Documents for Client and Lenders Copy
0.15 $ 030 11/6/2008 341 Notice for Client and File Copy
0,15 $ 0.15 11/6/2008 Petition Letter for Client Convenience Copy
0.15 $ 0.30 11/6/2008 Internal Billing Form for Accounting Dept. Copy
0.15 $ 1.35 11/6/2008 Plan Reprinted-Purpose Unknown Copy
0.15 $ 0.15 11/6/2008 Copy of Credit Counseling Confirmation Copy
0.15 $ 0.45 11/11/2008 Air Flight Itinerary Faxed by Client Copy
0.15 $ 0.45 11/11/2008 Air Flight Itinerary Faxed by Client — Duplicate Copy
0.15 $ 0.15 11/11/2008 ECF Notice of Plan Filing for Client File Copy
0.15 $ 6.15 1 l/l 1/2008 Plan Mail Covers for Service to Creditors Copy
0.15 $116.85 11/11/2008 Chapter 13 Plan for Service to Creditors Copy
0.15 $ 0.15 11/11/2008 Plan Cover Letter Provided to Client Copy
0.15 $ 0.15 11/11/2008 Plan Envelope for Parties Not on Matrix Copy
0.15 $ 0.15 11/11/2008 Plan Envelope for Parties Not on Matrix Copy
0,15 $ 0.15 11/11/2008 Plan Envelope for Parties Not on Matrix Copy
0.15 $ 0.15 11/12/2008 Request to Reschedule 341 Faxed to Trustee Copy
0.15 $ 0.15 11/12/2008 Notice of Rescheduled 341 Copy
0.15 $ 0.15 11/12/2008 ECF Notice of Rescheduled 341 for File Copy
0.15 $ 6.15 11/12/2008 Mail Covets for Rescheduled 341 Meeting Copy
0.15 $ 12.90 11/12/2008 Notice of Rescheduled 341 for Service Copy
0,15 $ 0.15 11/12/2008 Envelope for Mailing Notice to Debtor Copy
0,15 $ 0.15 11/12/2008 Envelope for Mailing Notice to Trustee Copy
0.15 $ 0.15 11/14/2008 Bills Provided by Client Copy
0.15 $ 0,15 11/14/2008 Bills Provided by Client Copy
0.15 $ 0.15 11/14/2008 First Payment by Client Processed by Firm Copy
0.15 $ 0.15 11/14/2008 Envelope to Trustee for Mailing First Payment Copy
0.15 $ 0.15 11/21/2008 Creditor Change of Address Copy
0.15 $ 0.15 0.15 $ 0.15 11/25/2008 Creditor Change of Address — Duplicate Copy 12/2/2008 Documentation Requested by Creditor Copy
0.15 $ 0.15 12/2/2008 Documentation Requested by Creditor Copy
0.15 $ 0.30 12/3/2008 Proof of Insurance Provided to Creditor Copy
0.15 $ 0.15 12/3/2008 Proof of Insurance Envelope Copy
0.15 $ 0.15 12/3/2008 Roof of Insurance Envelope Copy
0.15 $ 0.30 12/3/2008 Proof of Insurance Provided to Creditor Copy
0.15 $ 0.15 12/3/2008 Proof of Insurance Provided to Creditor Copy
0.15 $ 0.15 12/3/2008 Proof of Insurance Notice of Default Copy
0.15 $ 0.15 12/15/2008 Objection Letter to Client Copy
0.15 $ 0.15 12/15/2008 Objection Letter to Client-Envelope Copy
0.15 $ 0,15 12/15/2008 Objection Letter to Client Copy
0,15 $ 0.15 12/15/2008 Objection Letter to Client - Envelope Copy
0.15 $ 1.35 12/17/2008 Modified Plan Provided to Client Copy
0.15 $ 0.30 12/17/2008 ECF Notice ofFiting of Modified Plan Copy
0.15 $ 6.15 12/17/2008 Mail Covers for Service of Modified Plan Copy
0.15 $119.70 12/17/2008 Modified Plan forService Copy
0.15 $ 0.15 12/17/2008 Envelope for Client orTrustes Copy
0.15 $ 0.15 12/19/2008 Envelope for Client or Trustee Copy
0.15 $ 0.15 12/19/2008 Objection Letter to Client Copy
0.15 $ 0.15 12/19/2008 Envelope to Ciient to Correct Misspelling Copy
[789]*7890.15 $ 1.35 1/9/2009 Second Modified Plan for Client Review Copy
0.15 $ 0.15 1/13/2009 Document to be used for Confirmation Hearing Copy
0.15 $ 0.30 1/13/2009 ECF Notice of Filing Second Modified Plan Copy
0.15 $ 0.15 1/13/2009 Plan Envelope for Parties Not on Matrix Copy
0.15 $ 6.15 1/13/2009 Plan Mail Covers for Service to Creditors Copy
0.15 $ 4.50 1/13/2009 Second Modified Plan for Service Copy
0.15 $116.85 1/13/2009 Second Modified Plan for Service Copy
0.15 $ 0.15 1/13/2009 Plan Envelope for Parties Not on Matrix Copy
0.J5 $ 0.15 1/13/2009 Plan Envelope for Parties Not on Matrix Copy
0.15 $ 0.30 1/21/2009 Order Denying Confirmation Copy
0.15 $ 0.15 1/21/2009 Error Copy
0.35 $ 0.15 1/21/2009 Envelope to Trustee with Endorsed Order Copy
0.15 $ 0.30 i/29/2009 Consent Order Copy
0.15 $ 0.15 1/29/2009 Envelope Related to Consent Order Copy
0.15 $ 0.45 2/16/2009 Pre-Confirmation Certificate Signed by Client Copy
0.15 $ 0.15 2/16/2009 Envelope for Pre-Confirmation Certificate Copy
0.15 $ 0.30 3/6/2009 ECF Notice of Filing of Pre-Confirmation Cert Copy
0.15 $ 0.15 6/11/2009 Cost Application —Exhibit A Copy
0.15 $ 1.05 6/11/2009 Cost Application Copy
0.15 $ 0.45 6/11/2009 Cost Application - Order Copy
0.15 $ 0.15 6/11/2009 Cost Application — Exhibit A Revised Copy
0.15 $ 0.45 6/11/2009 Cost Application — Order Revised Copy
0.15 $ 6.45 6/11/2009 Plan Mail Covers for Cost Application Copy
0.15 $ 38.70 6/11/2009 Cost Application for Service Copy
DUPLICATION TOTAL $519,00
1.85 $ 1.85 11/6/2008 Petition to Clients Postage
0.42 $ 18.48 11/11/2008 Plan for Service on Creditors Postage
0.42 $ 18.06 11/12/2008 Notice of Rescheduled 341 for Service Postage
0.42 $ 0.42 12/2/2008 Proof of Claim Letter (Client Request) Postage
0.42 $ 0.84 12/3/2008 Proof of Insurance to Secured Creditor Postage
0.42 $ 0.42 12/3/2008 Letter of Default (Proof of Insurance) Postage
0.42 $ 0.42 12/15/2008 Letter to Client
0.42 $ 0.42 12/15/2008 Objection letter to Client Postage
0.42 $ 17.64 Modified Han for Service Postage
0.42 $ 0.42 12/9/2008 Objection Letter to Client Postage
0.42 $ 18,48 1/13/2009 Second Modified Plan for Service Postage
0.42 $ 0.42 I /29/2009 Order to Trustee Postage
0.42 $ 0.42 2/16/2009 Pre-Confirmation Certification Postage
0.42 $ 31.92 6/11/2009 Cost Application for Service Postage
0.42 $ 15.54 6/11/2009 Cost Application for Service Postage S3
POSTAGE TOTAL ‘>'$125,75
In addition to the amounts represented above for duplication and postage, Bole-man seeks reimbursement for two other types of expenses through the Wyche Application. Boleman seeks reimbursement for expenses associated with a “Simplified Equifax Credit Report” in the amount of $10.00. Also, Boleman seeks reimbursement for “PACER” charges in the total amount of $0.96. The total amount of all expenses for which Boleman has applied in the Wyche Case is $655.71.
[790]*790The Brewer Case
Rats Amount Date Description Type
0.15 $ 2.70 2/1012009 Interna! Intake Materials Copy
0.15 $ 0,30 2/10/2009 PACER Web Check Copy
0.15 $ 0.90 2/10/2009 PACER Web Check Copy
0.15 $ 0.15 2/10/2009 Client ID and SSN Copy
0.15 $ 0.75 2/10/2009 Equifax Credit Report Copy
0.15 $ 0.30 2/10/2009 NADA Vehicle Valuation Copy
0.15 $ 0.45 2/10/2009 Kelley Blue Book Vehicle Valuation Copy
0.15 $ 1.20 2/10/2009 Basie Intake Consultation Documents (Internal) Copy
0.15 $ 0.75 2/17/2009 Chapter 13 Plan for Client Review Copy
0.15 $ 0,60 2/17/2009 Chapter 13 Pian - Duplicate Copy
0.15 $ 9.30 2/17/2009 Chapter 13 Petition for Client Review Copy
0,15 $ 0.45 2/17/2009 Affidavit for Imposition of 5tay Copy
0.15 $ 0.30 2/17/2009 Abacus-generated Receipt Copy
0,15 $ 0,30 2/Í7/2009 Credit Counseling-User ID, Password Copy
0.15 $ 0.30 2/17/2009 Credit Counseling - Legal Disclosures Copy
0.15 $ 0.30 2/17/2009 Credit Counseling —Budget Liabilities Copy
0.15 $ 0,60 2/17/2009 Credit Counseling - Confirmation Certificate Copy
0.15 $ 3.15 2/17/2009 Schedules Reprinted for Client Copy
0.15 $ 4.20 2/17/2009 Documents Related to Sign Appt (Unspecified) Copy
0.15 $ 3,90 2/17/2009 Documents Related to Sign Appt (Unspecified) Copy
0.15 $ 0.15 2/18/2009 Billing Form for Client Copy
0.15 $ 1.05 2/18/2009 Schedule I and Plan Requested by Creditor Copy
0.15 $ 9.15 2/18/2009 Petition, Schedules, Statements for CiientReview Copy
0.15 $ 0.15 2/18/2009 ECF Notice of Filing of Petition for Client Copy
0.15 $ 0.15 2/18/2009 ECF Notice of Filing of Petition Tor File Copy
0.15 $ 0.30 2/19/2009 Notice of 341 Meeting for Client and File Copy
0.15 $ 0.15 2/19/2009 Petition Letter For Client Convenience Copy
0.15 $ 0.15 2/19/2009 ECFNotice of Filing-Credit Counseling for File Copy
0.15 $ 0.15 2/1 9/20Q9 ECF Notice of Filing - Plan (for File) Copy
0.15 $ 0.15 2/19/2009 Envelope for Sending Plan to Client Copy
0.15 $ 8.25 2/19/2009 Plan Mail Covers for Service Copy
0.15 $ 0.15 2/19/2009 Plan Cover Letter For Client Copy
0.15 $ 66.00 2/19/2009 Chapter 13 Plan for Service Copy
0.15 $ 2.55 2/23/2009 Motion to Continue Stay (Draft) Copy
0.15 S 2.55 2/23/2009 Motion to Continue Stay (Final) Copy
[791]*7910.15 $ 0.30 2/25/2009 ECF Notice of Filing - Motion to Continue Stay Copy
0.15 $ 0.60 2/25/2009 Motion to Expedite —Order Copy
0.15 $ 0.30 2/25/2009 Motion to Expedite Copy
0.15 $ 0.30 2/25/2009 Motion to Expedite Revised Copy
0.15 $ 0.45 2/25/2009 Notice of Motion to Expedite Copy
0.15 $ 0.15 2/25/2009 ECF Notice of Filing -Motion to Expedite Copy
0.15 $ 0.15 2/25/2009 ECF Notice of Filing -Notice of Mot. to Expedite Copy
0.15 $ 0.15 2/25/2009 Service Envelope Copy
0.15 $ 855 2/25/2009 Mail Covers Copy
0.15 $ 128.10 2/25/2009 Motion to Extend, Expedite--Service Copies Copy
0.15 $ 0,15 2/25/2009 Motion to Extend, Expedite-File Copy Copy
0.15 $ 0.60 2/27/2009 Endorsed Order from Trustee-File Copy Copy
0.15 $ 1.05 3/4/2009 Attorney Notes for Hearing Copy
0.15 $ 0.60 3/5/2009 Attorney Notes for Hearing Copy
0.15 $ 3.15 3/13/2009 Tax Returns Provided to Trustee Copy
0.15 $ 0.15 3/13/2009 Proof of Vehicle Insurance Copy
0.15 $ 0.60 3/16/2009 Endorsed Order from Trustee Copy
0.15 $ 0,15 3/16/2009 Payment Received, Processed by Ron Copy
0.15 $ 0.15 3/16/2009 Payment Received from Client Sent to Trustee Copy
0.15 $ 0.75 3/24/2009 Endorsed Order from Trustee - File Copy Copy
0,15 $ 0.45 4/6/2009 Pre-Confirmation Certification Signed by Client Copy
0.15 $ 0.15 4/6/2009 Envelope for Pre-Confirmation Certification Copy
0.15 $ 0.15 4/13/2009 ECF Notice of Filing -Pre-Confirmation Cert. Copy
0,15 $ 0.15 4/16/2009 Envelope for Creditor Requesting Service Copy
0.15 $ 0.15 4/23/2009 Envelope for Creditor Requesting Service (dup) Copy
0.15 $ 0.15 4/23/2009 Creditor Change of Address Copy
0,15 $ 10.95 6/11/2009 Plan Mail Covers for Service of Cost Application Copy
0.15 $ 43.80 6/11/2009 Cost Application for Service Copy
DUPLICATION TOTAL . $324.75
0.42 $ 23.52 2/19/2009 Chapter 13 Plan Postage 56
1,85 $ 1.85 2/19/2009 Petition Senuo Client Postage 1
0,75 $ 0.75 2/19/2009 Client Documents Postage 1
3,29 $ 6.58 2/25/2009 Motion to Extend Postage 2
0,58 $ 33.64 2/25/2009 Motion to Extend Postage 58
0.42 $ 0.42 3/16/2009 Payment to Trustee Processed by Firm Postage 1
0.42 $ 0.42 4/16/2009 Pre-Confirmation Certification to Client Postage 1
0.42 $ 0.42 4/24/2009 Proof of Claim Information Postage 1
5.32 $ 10.64 6/11/2009 Cost Application Postage 2
0.42 $ 20.16 6/11/2009 Cost Application Postage 49
POSTAGE TOTAL ! $ 98.40
In addition to the amounts represented above for duplication and postage, Bole-man seeks reimbursement for two other types of expenses through the Brewer Application. Boleman seeks reimbursement for expenses associated with a “Simplified Equifax Credit Report” in the amount of $10.00. Also, Boleman seeks reimbursement for “PACER” charges in the total amount of $2.48. The total amount of all expenses for which Boleman has applied in the Brewer Case is $435.63.
At the Court’s request, Boleman additionally provided copies of several lease, service, and maintenance agreements between Boleman and its copy equipment lessors. On cross-examination by counsel for the Chapter 13 Trustee, Bollinger admitted that Boleman had not reviewed the actual expenses associated with rendering [792]*792duplications as it might be calculated using the lease agreements provided to the Court.10 Instead, Bollinger explained, Boleman arrived at the reimbursement expense multiplier of $0.15 per page in reliance on this Court’s Standing Order 08-1 and the opinion rendered by Chief Judge Tice in In re Helquist.
III. CONCLUSIONS OF LAW
Before addressing the issue of whether Boleman is entitled to reimbursement of the expenses for which the firm has applied, it is appropriate for this Court to address its duty to review applications for reimbursement of expenses. In these and other instances, it is incumbent upon the Court to remain mindful that the burden to reimburse fees incurred by counsel for a Chapter 13 debtor ultimately falls upon creditors of the bankruptcy estate. “[S]ince every dollar received by the applicant results in one dollar less for the creditors,” justification for reimbursement of expenses is an absolute necessity. See Cont’l Ill. Nat’l Bank & Trust Co. v. Wooten (In re Evangeline Refining Co.), 890 F.2d 1312, 1326 (5th Cir.1989) (citing In re Hotel Assocs., 15 B.R. 487, 488 (Bankr.E.D.Pa.1981)). The Court’s duty to examine expense reimbursement applications derives from the need to “protect the estate, lest overreaching attorneys or other professionals drain it of wealth which by right should inure to the benefit of unsecured creditors.” In re Busy Beaver Bldg. Ctrs., 19 F.3d 833, 844 (3d Cir.1994).
Boleman seeks reimbursement of expenses in the Wyche and Brewer cases pursuant to 11 U.S.C. §§ 330(a) and 503(b)(2), Federal Rule of Bankruptcy Procedure 2016, and Standing Order No. 08-1.12
[793]*793As the primary statute governing compensation of professionals in bankruptcy cases, 11 U.S.C. § 380(a)(1)(B) authorizes the court to award to professionals “reimbursement for actual, necessary expenses.” 13 Section 330(a)(4)(A) mandates that “the court shall not allow compensation for (i) unnecessary duplication of services; or (ii) services that were not (I) reasonably likely to benefit the debtor’s estate; or (II) necessary to the administration of the case.” Further, § 330(a)(4)(B) makes clear that in an individual Chapter 13 case, “the court may allow reasonable compensation to the debtor’s attorney for representing the interests of the debtor in connection with the bankruptcy case based on a consideration of the benefit and necessity of such services to the debtor and the other factors set forth in this section.” In applying this portion of § 330(a), courts generally require that expenses incurred were actually necessary for the proper representation of the particular client from whom reimbursement is sought. In re Washington Mfg. Co., 101 B.R. 944, 957 (Bankr.M.D.Tenn.1989); In re Wildman, 72 B.R. 700, 707 (Bankr.N.D.Ill.1987); In re Island Helicopter Corp., 53 B.R. 71, 72 (Bankr.E.D.N.Y.1985) (“Out-of-pocket [reimbursable] expenses are those expenses which can clearly be traced and allocated to a particular client.”). In order to be reimbursable, expenses must be incurred by a “professional person employed under section 327 or 1103.” 11 U.S.C. § 330(a)(1). As with the award of fees for services, the reimbursement of expenses is entitled to be paid as an administrative priority expense. 11 U.S.C. §§ 503(b)(2), 507(a)(2).
It is well established that the applicant must carry the burden to demonstrate that expenditures were actually necessary for proper administration of the bankruptcy case before the court may order the expense reimbursed. See, e.g., Caplin & Drysdale, Chartered v. Office of the United States Trustee, Region 5 (In re Babcock & Wilcox Co.), Case No. 06-9964, 2007 WL 854304, at *3 (E.D.La. Mar.15, 2007) (“It is incumbent upon the party seeking reimbursement to prove that its expenses were ‘necessary’ under Section 330(a).”); In re S.T.N. Enters., Inc., 70 B.R. 823, 832 (Bankr.D.Vt.1987). By use of the term “may” in 11 U.S.C § 330(a)(1), 'Congress expressly authorizes bankruptcy courts to exercise discretion in awarding reimbursement for expenses to debtors’ attorneys if the burden is not met. In re Nat’l Paragon Corp., 68 B.R. 337, 340 (Bankr.E.D.Pa.1986), overruled on other grounds, 76 B.R. 73 (E.D.Pa.1987).14 This [794]*794discretion is also impliedly authorized by the absence of further definition in the Bankruptcy Code as to the terms “expenses” and “necessary.” Id. In declining to offer further guidance as to the meaning of these words, Congress left to the bankruptcy courts the task of identifying those expenses that may be reimbursed to applicants as actual and necessary. Id.
The importance of this task in the Eastern District of Virginia cannot be overstated. As Judge Mitchell of this Court has explained:
The standard form of [Chapter 13] plan is this district is a so-called “pot” plan rather than a “percentage” plan. In a percentage plan, creditors receive a set percentage of their allowed claims while leaving the exact amount the debtor will pay in flux until all claims are resolved. In a pot plan, by contrast, the debtor pays a fixed amount, and unsecured creditors are paid pro rata from the “pot” that remains after payment of priority and secured claims. The form plan in this district requires the debtor to provide a good-faith estimate of the dividend on unsecured claims, but the percentage shown is simply an estimate, and the actual dividend may be either higher or lower depending the amount of claims that are ultimately filed and allowed.
In re Murphy, 327 B.R. 760, 763 n. 3 (Bankr.E.D.Va.2005), aff'd, 474 F.3d 143 (4th Cir.2007) (citing In re Witkowski, 16 F.3d 739, 741, 746 & n. 11 (7th Cir.1994)) (explaining difference between a “pot” and “percentage” plan); see also Robins v. Burke (In re Burke), Case No. 85-00404-NN (E.D.Va. Feb. 20, 1987) (unpublished) (MacKenzie, J.) (holding that the amount, rather than the percentage, controls the debtors’ obligation to pay their unsecured creditors under the Chapter 13 plan). Accordingly, in a Chapter 13 case where fewer allowed claims or claims in amounts lesser than anticipated by the debtor are filed, the filing creditors receive a higher percentage of distribution from the Chapter 13 Trustee and more of their claims are paid, unless the Court approves additional administrative expenses. In re Vernon-Williams, 343 B.R. 766, 808 n. 51 (Bankr.E.D.Va.2006), overruled on other grounds, Boleman Law Firm, P.C. v. U.S. Trustee, 355 B.R. 548 (E.D.Va.2006).
If this Court approves the additional administrative expense sought by Bole-man in these matters, distributions available to unsecured creditors in the Wyche and Brewer cases will be commensurately diluted. In determining which expenses are actual and necessary, therefore, this Court holds the applicants flush to their burden of proving the propriety of reimbursement from creditors of the estate. Expenses that cannot be fairly characterized as “actual and necessary” to case administration should not be passed on to creditors of the estate. Rather, expenses that cannot be shown as actual or necessary must be absorbed by the parties who caused them to be incurred.
[795]*795Every law firm routinely makes paper copies and computer printouts in the course of conducting its business. While many of these duplications may be necessary to the firm’s day to day operations, few will meet the standard of necessity demanded by the Bankruptcy Code for administrative expense reimbursement. The remainder of these copy and print expenses belong to the category of “overhead,” a grouping into which all ongoing expenses of running a business must fall. Overhead charges must not be passed on to creditors of a bankruptcy estate. In re Mkt. Res. Dev. Corp., 320 B.R. 841, 846 (Bankr.E.D.Va.2004) (“Neither an attorney nor a trustee may charge a bankruptcy estate for his or her overhead. For example, attorneys do not separately charge clients for ... printing documents or copying statements and checks. Those are clerical functions normally included in an attorney’s overhead which is taken into account in the attorney’s hourly rate charged to the client.”). In a Chapter 13 bankruptcy, the estate and its creditors already bear the burden of remitting reasonable hourly fees to debtor’s counsel.15 Counsel may not double-bill the estate for overhead expenses that have already been factored into the established hourly rate.
The task before this Court is to determine whether the monies expended by the Boleman Law Firm for duplication16 are reimbursable under the Bankruptcy Code. That is, this Court must identify those expenses that have been so “necessary” to the administration of the bankruptcy case so as to render them properly chargeable to creditors of the estate. This decision demands a careful scrutiny of the two applications presented, a thorough understanding of what the administration of a Chapter 13 case entails, and a nuanced interpretation of the phrase “actual and necessary” as it is used in § 330(a) of the Bankruptcy Code.
Other courts have endeavored to distinguish reimbursable expenses from overhead costs so as to prohibit the overcharging of a bankruptcy estate. See, e.g., In re Nat’l Paragon Corp., 68 B.R. at 341 (“In the absence of specific Code instruction, we believe that which costs to be allowed are entirely in our discretion and we are inclined to consider as ‘necessary’ only those expenses which we do not consider as overhead.... ”). Overhead costs have been held to include “library expense, rent and utility expense, secretarial and clerical expense, office supply expense, telephone expense, and the local commuting and meal expense of individual employees.” In re Thacker, 48 B.R. 161, 164 (Bankr.N.D.Ill.1985) (citing In re Global Int’l Airways Corp., 38 B.R. 440, 444 (Bankr.W.D.Mo.1984) (disallowing secretarial expenses); In re Rego Crescent Corp., 37 B.R. 1000, 1009, 1012, 1018 (Bankr.[796]*796E.D.N.Y.1984) (disallowing costs for local transportation, library, secretarial and in-town meal expense); In re Horn & Hardart Baking Co., 30 B.R. 938, 942 (Bankr.E.D.Pa.1983) (disallowing clerical and support staff expenses)). As the Thacker court explained, “[t]hese expenses have a common characteristic in that they are incurred by the firm on a day-to-day basis, no matter whom it represents.... The traditional way to spread these kinds of daily expenses among all the firm’s clients is for the firm to structure its hourly rates to take such expenses into consideration.” In re Thacker, 48 B.R. at 164. On the other hand, “[c]ompensable, out-of-pocket expenses are those which can be clearly and fairly charged to the Debtors. Court fees, transcription fees, out-of-town travel expenses, delivery service, long-distance telephone calls and postage expenses, are examples of expenses which can be clearly traced to an applicant’s representation of Debtors, as opposed to the firm’s other clients.” Id.
The Thacker court’s distinction between overhead and reimbursable expenses comports with the Bankruptcy Code in that it permits reimbursement only for expenditures made to satisfy the particular necessities of individual case administration. Meanwhile, the Thacker definition disallows costs connected to the daily operations of a law firm. Such daily operations include efforts by individual attorneys and staff to ensure that the service they provide merits compensation at designated hourly rates. Materials used as part of such efforts include office supplies such as legal pads and pens for taking notes as well as copies and printouts of documents rendered for the benefit of an attorney’s review. When copies and printouts are used to equip an attorney, who is part of a law firm, to render the services for which it is already compensated on an hourly basis, costs for such duplication must be understood as overhead. In re New Hampshire Elec. Coop., 146 B.R. 890, 892 (Bankr.D.N.H.1992) (“To allow these ‘overhead’ costs to be recouped from particular clients as reimbursable expenses would basically allow the attorneys to recover those costs twice.”) (citing In re Orthopaedic Tech., Inc., 97 B.R. 596 (Bankr.D.Colo.1989)). Overhead duplications include those used in case preparation and in attorney-client discussions. In re Howard, No. 89-4-3543, Adv. No. 90A-0089, 1991 WL 79915, at *3 (Bankr.D.Md. May 2, 1991) (“Specifically, the in-house copying costs ... appear to be items of overhead involved in case preparation.”). These costs are incurred by an attorney in the course of acting as an attorney and thus incurred by a law firm as part of its business of offering legal services to the public.17 By contrast, reimbursable expenses are those necessary for a particular client’s bankruptcy case to proceed.
Because expenditures for duplication may fall on either side of the line dividing reimbursable expenses from overhead costs,18 it is necessary to explore the pur[797]*797pose behind each duplication for which Boleman seeks reimbursement. It is critical at this juncture to distinguish (“overhead duplications” or “in-house duplications”) from those duplications made at the demand of the bankruptcy cases themselves (“reimbursable duplications”). To evaluate the demands of the Wyche and Brewer Chapter 13 cases, this Court must look to the Bankruptcy Code and to other applicable rules governing Boleman’s handling of those matters. Insofar as duplication is required by those statutes and rules for the administration of a Chapter 13 case, they are “necessary” within the meaning of 11 U.S.C. § 330(a) and therefore give rise to reimbursable expense.
In the cases sub juris, expenses incurred for duplication in connection with effectuating service of process are the most basic examples of necessary and thus reimbursable expenses. Service of process is essential to the administration of a Chapter 13 case by legal mandate as well as practical necessity as it is indisputably required by the Federal Rules of Bankruptcy Procedure and the applicable Local Bankruptcy Rules (“Local Rules”). An important example is found in Local Rule 3015-2, which directs that any Chapter 13 Plan that is filed with the Court contain proof of service setting forth the date and manner of service and the names and addresses of all parties to whom the Plan was mailed or transmitted. Similarly, principles of due process permeating the Bankruptcy Code as well as the applicable procedural rules demand that notice be given to creditors and parties in interest prior to significant events in a bankruptcy case. Local Rule 2002-l(A) explicitly provides that except as otherwise provided by federal statute or court order, “the proponent of any action shall give notice to all parties affected thereby.” Since the proponent of many actions in an individual bankruptcy case is the debtor, compliance with Local Rule 2002-1(A) may require duplication of documents by counsel on his behalf.
Duplication is also required of bankruptcy practitioners in this jurisdiction who employ the Electronic Case Files system that has been established as part of the official infrastructure of this Court. Those attorneys are bound by CM/ECF Policy 7 entitled “Retention Requirements.” Subsection (A) of Policy 7 embodies a specific mandate pertaining to an attorney’s maintenance of documents in paper form:
[Documents that are electronically filed and require original signatures, other than that of the User, shall be maintained in paper form by the User for the duration of the case, including any related adversary proceeding or period of appeal. Upon request of the Court, the User shall provide original documents for review.
The Boleman attorneys handling the Wyche and Brewer cases are users of CM/ ECF; therefore, they are required to maintain in paper form filed documents requiring original signatures. Duplications of filed documents requiring original signatures, like duplications required by the statutes and Local Rules previously described, are “necessary” for compliance with directives governing attorneys handling Chapter 13 cases. As a result, Bole-man is entitled to reimbursement for the expenses arising therefrom. However, as Bollinger testified, the electronically mailed ECF notices are printed for the records of Boleman’s clients and to assist the firm in organizing case documents [798]*798chronologically.19 Thus, they are not “necessary” to the administration of a Chapter 13 case within the meaning accorded to that term by the Bankruptcy Code.
“PACER”20 is an online service providing access to United States Appellate, District, and Bankruptcy Court records and related documents. PACER is a service of the United States judiciary, and its Service Center is run by the Administrative Office of the United States Courts. PACER assists attorneys in determining whether their clients have previously filed bankruptcy cases in this or other districts. Such an investigation is necessary to determine a debtor’s eligibility to obtain a discharge under the Bankruptcy Code. 11 U.S.C. § 1328 provides certain restrictions on a debtor’s eligibility to receive a Chapter 13 discharge if such a debtor has previously received a discharge in bankruptcy within a specified number of years immediately preceding the filing of his or her case.21 11 U.S.C. § 727 contains similar restrictions.22 To ensure that a client will not be barred from receiving a discharge under §§ 1328 or 727, Boleman must use the judiciary’s PACER service to search for any records pertaining to previous bankruptcies filed by the firm’s clients. The Court is satisfied that this PACER search is necessary to the administration of a Chapter 13 case. Accordingly, the expenses associated with PACER searches, including printouts incidental thereto, will be allowed as reimbursable expenses.
Analysis compels the opposite conclusion regarding expenses for Equifax, Zillow, and other online assessment tools that are neither provided, maintained, nor officially recognized by the United States Courts. Although use of these services may be useful to debtors’ attorneys in learning pertinent facts of a client’s bankruptcy case before it is filed, attorneys are under no obligation to learn of such facts in this manner. While these online sources may present the most convenient means by which to gain knowledge about a client’s financial situation, the convenience [799]*799inures to the attorney s benefit only. In addition, the Court is aware of no requirement that printouts be rendered in connection with third-party credit reporting or property valuation. Expenses incurred in the course of using Equifax, Zillow, and other valuation websites, including the costs of printing, are not necessary within the meaning of the Bankruptcy Code. These costs will therefore not be reimbursed.
To preclude confusion as to which expenses this Court has determined to be reimbursable and which costs are viewed as overhead, indications have been included on the charts below. Disallowed expenses have been omitted and subtracted from total expenses allowed.
Count Amount Date Description Type
2 $ 0.30 10/3/2008 PACER Web Check Copy
$ 0.15 ID, Card
10/3/2008 Zillow Property Valuation Copy
10/3/2008 Equifax Credit Reporting Copy
10/3/2008 NADA Vehicle Valuation Copy
IQ/3/2008 Basic Intake Consultation Documents Copy
10/3/2008 Internal Intake Documents-Client Fills Out Copy
10/21/2008 Internal Workproduct/Client Information Sheet Copy
10/21/2008 Worksheet for Calculating Plan Amounts Copy
10/21/2008 Chapter 13 Petition for Client23 Copy
10/21/2008 Chapter 13 Plan for Client Review24 Copy
10/21/2008 Schedules 1,I. Special Notices Copy
10/21/2008 Bills Provided by Clients for Attorney Review Copy
11/5/2008 Paperwork Signed by Clients Copy
11/5/2008 Schedules for Client Review25 Copy
11/5/2008 Chapter 13 Plan for Client Review26 Copy
11/5/2008 Receipt of Payment by Client
11/5/2008 Credit Counseling - User ID and Password Copy
11/5/2008 Credit Counseling-Disclosures
11/5/2008 Credit Counseling —Budget Liability List Copy
11/5/2008 Credit Counseling-Certificate of Completion Copy
11/5/2008 Unknown - Possibly Related to Sign Appt. Copy
U/5/2008 Rights and Responsibilities Copy
[800]*80011/5/2008 Schedules Reprinted During Sign Appt Copy
11/5/2008 Petition Provided to Client*' Copy
11/5/2008 ECF Notice of Petition Filing Provided to Client Copy
11/5/2008 Internal Documents Printed During Sign Appt. Copy
0.15 $ 0.75 11/5/2008 Mortgage Documents for Client and Lenders Copy
1 i/6/2008 341 Notice for Client and File Copy
13/6/2008 Petition letter for Client Convenience Copy —
Internal Form for Dept. Copy
11/6/2008 Plan Reprinted ~ Purpose Unknown Copy
11/6/2008 Copy of Credit Counseling Confirmation Copy
11/11/2008 Air Flight Itinerary Faxed by Client Copy
1 l/l 1/2008 Air Flight Itinerary Faxed by Client-Duplicate Copy
li/11/2008 ECF Notice of Plan Filing for Client File Copy
il/i 1/2008 Plan Mail Covers for Service to Creditors Copy
0.15 $116.85 13 for Service to Creditors
to
o.i5 11/11/2008 Plan Envelope for Parties Not on Matrix Copy
o.is 11/11/2008 Plan Envelope for Parties Not on Matrix Copy
o.i5 11/12/2008 to Reschedule 341 Faxed to Trustee Copy
o.is 11/12/2008 Notice of Rescheduled 341 Copy
cus 11/12/2008 ECF Notice of Rescheduled 341 for File Copy
0.15 11/12/2008 Mail Covers for Rescheduled 341 Meeting Copy
0,15 11/12/2008 Notice of Rescheduled 341 for Service Copy
11/12/2008 Envelope for Mailing Notice to Debtor Copy
I i/12/2008 Envelope for Mailing Notice to Trustee Copy
11/14/2008 Bills Provided by Client Copy
11/14/2008 First Payment by Cltenl Processed by Firm Copy
11/14/2008 Envelope to Trustee for Mailing First Payment Copy
11/21/2008 Creditor Change of Address Copy
11/25/2008 Creditor Change of Address- Duplicate Copy
0.15 $ O.IS 12/2/2008 Documentation Requested by Creditor Copy
o.is $ ais !2/2/2008 Documentation Requested by Creditor Copy
i 2/3/2008 Proof of Insurance Provided to Creditor Copy
12/3/2008 Proof of Insurance Envelope Copy
0.15 $ 0.30 12/3/2008 Proof of Insurance Provided to Creditor Copy
0.15 $ 0,15 12/3/2008 Proof of Insurance Provided to Creditor Copy 12/3/2008 Proof of Insurance Envelope Copy
12/3/2008 Proof of Insurance Notice of Default Copy
12/15/2008 Objection Letter to Client Copy
12/15/2008 Objection Letter to Client -- Envelope Copy
[801]*801Editors Note: The preceding image contains the reference for footnote27.
12/15/2008 Objection Letter to Client - Envelope Copy
12/17/2008 Modified Plan Provided to Client28 Copy
12/17/2008 ECF Notice of Filing of Modified Plan Copy
12/17/2008 Mail Covers for Service of Modified Plan Copy
$119.70 12/17/2008 Modified Plan for Service Copy 00
Envelope or Trustee Copy
• or Copy
Copy
to to
1/9/2009 Second Modified Plan forCilent Review Copy
1/13/2009 Documentto be used for Confirmation Hearing Copy
1/13/2009 ECF Notice of Filing Second Modified Plan Copy
1/13/2009 Plan Envelope for Patties Not on Matrix Copy
1/13/2009 Pian Mail Covers for Service to Creditors Copy
$ 4.50 1/13/2009 Second Modified Plan for Service Copy
$ 116.85 1/13/2009 Second Modified Plan for Service Copy *vO
Envelope for Parties Not on Matrix Copy
1/21/2009 Order Denying Confirmation
to Trustee with Endorsed Order Copy
Order Copy
to Consent Order Copy
Pre-Confirmation Certificate Signed by Client Copy
Pre-Confirmation Certificate Copy
3/6/2009 ECFNoticeofFiling of Pre-Confirmation Cert. Copy
6/11/2009 Cost Application--Exhibit A Copy
6/11/2009 Cost Application-Order Copy
1.05 6/11/2009 Cost Application Copy
$ 0.15 Cost Application-Exhibit A Revised Copy
$ 0.45 6Í/11/2009 Cost Application — Order Revised Copy
6/11/2009 Plan Mail Covers for Cost Application Copy
38.70 Cost Application for Service Copy 20
DUPLICATION TOTAL $413,55
1.85 11/6/2008 PetJlion to Clients Postage V*
0.42 $ 18.48 - Plan for Service on Creditors Postage
0.42 $ 18,06 11/12/2008 Notice of Rescheduled 341 for Service VJ
0.42 S 0.42 Claim Letter (Client Request) Postage tfí,
0.42 $ 0.84 Proof of Insurance to Secured Creditor Postage -Vi
[802]*80212/3/2008 Letter of Default (Proof of insurance) Postage
12/1 S/2008 Objection Letter to Client Postage
12/15/2008 Objection Letter to Client Postage
I 2/1 7/2008 Modified Wan for Service Postage
12/9/2008 Objection Letter to Client Postage
i/13/2009 Second Modified Plan for Service Postage
1/29/2009 Order to Trustee Postage
2/16/2009 Pre-Confirmation Certification Postage
6/11/2009 Cost Application for Service Postage $ 31.92
6/11/2009 Cost Application for Service Postage $ 15.54
POSTAGE TOTAL $ 121.80
TOTAL DUPLICATION AND POSTAGE $ 535.35
Count Date Description Type IT
2/10/2009 Internal Intake Materials Copy U) r-
2/10/2009 FACER WBb Check Copy IA r-
2/10/2009 PACER Web Check Copy U>
2/10/2009 Client ID and SSN Copy to ^
2/10/2009 Equifax Credit Report Copy (O ^
2/10/2009 NADA Vehicle Valuation Copy v-
2/10/2009 Kelley Blue Book Vehicle Valuation Copy y-
2/10/2009 Basic Intake Consultation Documents (Internal) Copy iA r-
2/17/2009 Chapter 13 Plan printed by Bonnie Lenox29 Copy tO r-%
2/17/2009 Plan printed by Bonnie Lenox- Attachments Copy M) v-,
2/17/2009 Chapter 13 Petition for File30 Copy tfi
2/17/2009 Affidavit for Imposition of Stay Copy U) r
2/17/2009 Abacus-generated Receipt Copy U) r
[803]*8030.15 2/17/2009 Credit Counseling - User ID, Password Copy
0.15 2/17/2QQ9 Credit Counseling - Legal Disclosures Copy
0.15 2/17/2009 Credit Counseling- Budget liabilities Copy
0.15 2/17/2009 Credit Counseling - Confirmation Certificate Copy
0.15 2/17/2009 Schedules Reprinted for Copy31
0.15 2/17/2009 Documents Related to Sign Appt (Unspecified) Copy
0.15 2/17/2009 Documents Related to Sign Appt (Unspecified) Copy
0.15 2/18/2009 Billing Form for Client Copy
0.15 2/18/2009 Schedule i and Plan Requested by Creditor Copy
0.15 2/18/2009 Petition, Schedules, Statement for Client Review32 Copy
0.15 2/18/2009 ECF Notice of Filing of Petition for Client Copy
0.15 2/18/2009 ECF Notice of Fifing of Petition for File Copy
0.15 2/19/2009 Notice of 341 Meeting for Client and File Copy
0.15 2/19/2009 Petition Letter For Client Convenience Copy
1 0.15 2/19/2009 ECF Notice of Filing - Credit Counseling (for Fite) Copy
1 0.15 2/19/2009 ECF Notice of Filing-Plan (for Re) Copy
1 0.15 2/19/2009 Envelope for Sending Plan to Client Copy
55 0.15 2/19/2009 Plan Mail Covers for Service Copy
1 0.15 2/19/2009 Plan Cover Letter For Client Copy
440 0.15 2/19/2009 Chapter 13 Plan for Service Copy
17 0.16 2/23/2009 Motion to Continue Stay (Draft) Copy
17 0.15 2/23/20Q9 Motion to Continue Stay (Final) Copy
2 0.15 2/25/2009 ECF Notice of Filing - Motion to Continue Stay Copy
4 0.15 2/25/2009 Motion to Expedite - Order Copy
2 0,15 2/25/2009 Motion to Expedite Copy
2 0.15 2/25/2009 Motion to Expedite Revised Copy
3 0.15 2/25/2009 Notice of Motion to Expedite Copy
1 0.15 2/25/2009 ECF Notice of Filing-Motion to Expedita Copy
1 0.15 2/25/2009 ECF Notice of Filing - Notice, Motion to Expedite Copy
1 0.15 2/25/2009 Service Envelope Copy
57 0.15 2/25/2009 Mail Covets Copy
854 0.15 2/25/2009 Motion to Extend, Expedite - Service Copies Copy
[804]*8040.1S 0.1S 0.15 0.15 0.15 $ 3.15 0.15 $ 0.15 0.15 $ 0.60 0.15 0.15 0.15 o.i5 o.i5 o.i5 0.15 o.i5 q.15 0.15 0.15 $ 43.80 2/25/2009 Motion to Extend, Expedite ~ File Copy Copy 2/27/2Q09 Endorsed Order from Trustee-File Copy Copy 3/4/2009 Attorney Notes for Hearing Copy 3/5/2009 Attorney Notes for Hearing Copy 3/13/2009 Tax Returns Provided to Trustee Copy 3/13/2009 Proof of Vehicle Insurance Copy 3/16/2009 Endorsed Order from Trustes Copy 3/16/2009 Payment Received from Client Processed by Firm Copy 3/16/2009 Payment Received from Client Sent to Trustee Copy 3/24/2009 Endorsed Order from Trustee-Fite Copy Copy 4/6/2009 Pre-Confirmation Certification Signed by Client Copy 4/6/2009 Envelope for Pre-Confirmation Certification Copy 4/13/2009 ECF Notice of Filing - Pre-Conf. Certification Copy 4/16/2009 Envelope for Creditor Requesting Service Copy 4/23/2009 Envelope for Creditor Requesting Service (Dup) Copy 4/23/2009 Creditor Change of Address Copy 6/11/2009 Plan Mall Covers for Service of Cost Application Copy 6/11/2009 Cost Application for Service Copy
DUPLICATION TOTAL $248.10
2/19/2QQ9 Chapter 13 Plan Postage cjt
2/19/2009 Petition Sent to Client Postage ,
2/19/2009 Client Documents Postage ,
2/25/2009 Motion to Extend Postage
2/25/2009 Motion to Extend Postage cn
3/16/2009 Payment to Trustee Processed by Firm Postage ,
4/16/2009 Pre-Confirmation Certification to Client Postage ,
4/24/2QQ9 Proof of Claim Information Postage .
6,32 $ 10.64 6/11/2009 Cost Application Postage
0.42 $ 20.16 6/11/2009 Cost Application Postage ■«»
POSTASE TOTAL . $ 87.96 ■
TOTAL DUPUCATON AND POSTAGE I $ 336.06
Similarly situated applicants have argued that their expenses should be allowed as reimbursable because duplication costs are passed on to its clients as a matter of firm custom and traditional course. This argument merits credibility in other jurisdictions in which tradition does assist courts in defining “reimbursable expense.” In addressing photocopying along with postage and travel expenses, one court distinguished those expenses from overhead “because they are incurred on behalf of a particular client, and accordingly have traditionally been expenses which are billed to that client.” In re Nat’l Paragon Corp., 76 B.R. at 74 (emphasis added).
Even if Boleman had argued before this Court that its duplication expenses should be reimbursed based upon an established tradition, this contention would have failed. No court in this jurisdiction has adopted a strict test of tradition by which to interpret 11 U.S.C. § 330(a), and the Court declines to do so here. Accepting that traditional practice may be a helpful indicator of an expenditure’s proper character, this Court would require a robust showing that a tradition in fact exists before recognizing that tradition in an analysis of the law. Like other courts, this Court would require “proof of at least a local, if not regional, practice of professionals, both in bankruptcy and in other fields.” In re Washington Mfg. Co., 101 B.R. at 961. No evidence has been presented to suggest that in-house copying [805]*805and printing expenses are passed on to clients in any practice of professionals other than within Boleman itself.
While this Court acknowledges that a tradition must begin somewhere, it will not begin here absent some proof that there is a justification for its birth. Id. It is doubtless that billing for photocopies and computer printouts is the policy at Boleman, but Boleman does not establish tradition for this district or this Court. Moreover, proof of justification for Bole-man’s practice is manifestly absent from the records in these cases and no tradition is begat here. While the practice of the legal profession and its various traditions may be considered, the standards codified in the Bankruptcy Code must prevail above all. Boleman has adduced no evidence tending to demonstrate that traditional practice militates in favor of passing in-house copy and print expenses on to Chapter 13 clients, and ultimately, their creditors. Such expenses are not “necessary” within the meaning of the Bankruptcy Code, and this Court reiterates its finding that the overhead duplications, as they have been designated by this Court’s disal-lowance, give rise to overhead costs that are not reimbursable under 11 U.S.C. § 330(a).
The applicants have met then-burden to demonstrate that the expenses for which this Court has approved reimbursement are actual and necessary within the meaning of the Bankruptcy Code. The applicants have therefore also demonstrated that their actual costs exceed the $300.00 proscribed by Standing Order 08-l.33 In maintaining alignment with Standing Order 08-1 and the Memorandum Opinion issued by Chief Judge Tice in In re Helquist, this Court will not deny copy reimbursement allowed at a rate of $0.15 per printed side. Accordingly, this Court will allow expense reimbursement in the Wyche Case in the amount of $536.31.34 This Court will also allow expense reimbursement in the Brewer Case in the amount of $338.54.35 All expenses requested in excess of these amounts must be denied as overhead costs that are not necessary for the administration of the Chapter 13 cases and therefore not reimbursable by creditors of the estates.
IV. CONCLUSION
Observing that most courts have categorically denied or approved reimbursement for duplication expenses,36 this [806]*806Court emphasizes the logical rectitude of a more attentive approach. A blanket categorization of duplication expenses into “overhead” or “not overhead” ignores the important practical nuance at play in Wyche, Brewer, and in nearly every bankruptcy case. That is, duplications rendered in connection with each client file will not be of uniform nature. The Bankruptcy Code demands that courts look more closely to assess whether each expense is necessary to the particular client’s case or for the convenience of the particular client’s lawyer. In the latter situation, duplication expenditures should be identified as non-reimbursable overhead costs. Because some of the duplication costs for which Boleman seeks reimbursement are properly cast as overhead, they are not “necessary” within the meaning of 11 U.S.C. § 330(a) and shall not be reimbursed.
The significance of this Court’s endeavors in these cases extends beyond the minutiae contained in the facts of the Wyche and Brewer bankruptcies. This Court has wrestled with one of the most fundamental questions of bankruptcy administration: which of the expenses of administration of a bankruptcy case should be borne by the filing attorney, and which expenses may be legitimately put to creditors of the estate. Because allowed administrative expenses reduce the dividend available to creditors to whom money is owed, this question has not been answered without due consideration by this Court. After much evidentia-ry review and careful legal analysis, this Court concludes that expense reimbursement of $536.31 must be allowed in the Wyche Case, and expense reimbursement of $338.54 must be allowed in the Brewer Case. Expenses exceeding those amounts must be denied, as the applicants failed to meet their burden to demonstrate that they are “actual and necessary” within the meaning of 11 U.S.C. § 330(a).
A separate Order will be entered consistent with the findings contained in this Memorandum Opinion.
The Clerk is ORDERED to forward a copy of this Memorandum Opinion to the Debtors; counsel for the Debtors; R. Clinton Stackhouse, Jr, Chapter 13 Trustee; and to Deberá F. Conlon, Assistant United States Trustee.
Related
Cite This Page — Counsel Stack
425 B.R. 779, 2010 Bankr. LEXIS 400, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-wyche-vaeb-2010.