In the Matter of Sheldon BOND, Debtor. Appeal of Vicki A. Dempsey

254 F.3d 669, 2001 U.S. App. LEXIS 13740, 2001 WL 687621
CourtCourt of Appeals for the Seventh Circuit
DecidedJune 20, 2001
Docket00-2770
StatusPublished
Cited by24 cases

This text of 254 F.3d 669 (In the Matter of Sheldon BOND, Debtor. Appeal of Vicki A. Dempsey) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In the Matter of Sheldon BOND, Debtor. Appeal of Vicki A. Dempsey, 254 F.3d 669, 2001 U.S. App. LEXIS 13740, 2001 WL 687621 (7th Cir. 2001).

Opinion

CUDAHY, Circuit Judge.

Vicki Dempsey represented debtors in four bankruptcy cases before Central District of Illinois courts. In each case, Dempsey requested attorney’s fees in excess of $1,000, the Central District’s presumptive attorney’s fee limit for Chapter 13 bankruptcy cases. However, the bankruptcy court found that Dempsey failed to justify fees in excess of the $1,000 limit in any of her cases, and thus limited her fee awards to $1,000 in each case. Dempsey appealed to the district court. Following a convoluted series of procedural moves (involving a remand to the bankruptcy court for clarification and the filing by Dempsey of two “motions to reopen appeal” in the district court), the district court “affirmed” the bankruptcy court’s fee award by denying Dempsey’s second motion to reopen appeal.

I. BACKGROUND

Two years ago, Dempsey first appeared before this court to challenge the Central District’s procedure for awarding fees to Chapter 13 bankruptcy attorneys. In In the Matter of Kindhart, 160 F.3d 1176 (7th Cir.1998) [hereinafter Kindhart /], Dempsey applied to the bankruptcy court for— but was denied — fees in excess of what at the time was an $800 presumptive fee limit throughout the Central District. 1 The dis *671 trict court affirmed the $800 fee award, and Dempsey appealed to this court. Finding the $800 limit an abuse of discretion, this court reversed and directed the district and bankruptcy judges of the Central District to reexamine the manner in which they awarded fees to Chapter 13 bankruptcy attorneys. In response to our order, the district and bankruptcy judges agreed to raise the Chapter 13 presumptive fee limit to $1,000; to maintain a uniform presumptive attorney’s fee limit for Chapter 13 bankruptcy cases throughout the district; and to review the presumptive limit every 24 months. See Order of the District Court for the Central District of Illinois at 2 (Dec. 22, 1998). On remand, Dempsey’s fees were adjusted to reflect the new base fee; but she still felt short-changed and once again appealed to this court. We held that the new $1,000 fee limit was “fair and reasonable,” and thus did not modify Dempsey’s new fee award. See In the Matter of Kindhart, 167 F.3d 1158, 1159 (7th Cir.1999) [hereinafter Kindhart II].

Armed now with four new cases, Dempsey attempts to challenge once again the Central District’s presumptive fee limit. In each of these cases, Dempsey filed motions in the bankruptcy court seeking fees that exceeded the new $1,000 limit by amounts ranging from $166 to $309. In these motions, Dempsey presented detailed records of the amount of time she had spent on each case (totaling approximately 10 to 12 hours per case), and reported that she had billed this time at the rate of $110 per horn-.

Following a hearing on these motions (which was attended by Dempsey’s partner, but not by Dempsey herself), the bankruptcy court ruled that Dempsey had failed to justify in any of her four cases a fee in excess of the $1,000 presumptive fee limit. Noting that Dempsey bore the burden of establishing the reasonableness of her fees, the bankruptcy court maintained that it could not conclude that the $110 hourly rate was reasonable because “there are experienced Chapter 13 bankruptcy attorneys practicing in the Quincy area whose hourly rate is in the $90 to $100 per hour range.” See, e.g., In re Hatfield, No. 95-72240, slip op. at 6 (Bankr.C.D.Ill. May 7, 1999). Further, because Dempsey’s cases were some of the “more simple and straightforward that the Court and Dempsey have seen,” the court believed that Dempsey “would be overcompensated by an award of attorney fees above the $1,000 threshold.” Id. Accordingly, the bankruptcy court limited Dempsey’s fee to $1,000 in each case.

Dempsey appealed to the district court. That court consolidated the four cases and decided the newly consolidated case on the briefs submitted by Dempsey and the trustee. On December 8, 1999, the district court entered the following judgment in each case:

IT IS ORDERED AND ADJUDGED pursuant to Order entered by The Honorable Richard Mills, the judgment of the bankruptcy court for the Central District of Illinois is VACATED, and this case is REMANDED to the bankruptcy court for an elaboration and a more detailed explanation as to why that court denied Appellant’s motion for approval of additional fees. Case Closed.

Dempsey v. United States Bankruptcy Court (In re Hatfield), No. 99-3144 (Bankr.C.D.Ill. Dec. 8, 1999); Dempsey v. United States Bankruptcy Court (In re *672 Huber), No. 99-3145 (Bankr.C.D.Ill. Dec. 8, 1999); Dempsey v. United States Bankruptcy Court (In re Bond), No. 99-3146 (Bankr.C.D.Ill. Dec. 8, 1999); Dempsey v. United States Bankruptcy Court (In re Epperson), No. 99-3147 (Bankr.C.D.Ill. Dec. 8, 1999).

More than four months after the district court’s remand, the bankruptcy court still had not entered a new judgment. Frustrated by the delay, Dempsey filed a “motion to reopen appeal” 2 in the district court on April 20, 2000, asking that the district court allow her requested fees in their entirety, establish local bankruptcy attorney’s fee rules for all judges in the Central District and provide any other appropriate relief. Before the district court could address the merits of Dempsey’s motion to reopen appeal, the bankruptcy court ruled.

Not surprisingly, the bankruptcy court once again limited Dempsey’s fees to $1,000 per case. In addition to restating its prior reasons for denying Dempsey’s excess fee requests, the bankruptcy court’s new opinion set forth numerous general conclusions, but few specific factual findings. Among the more specific new findings were the following. First, the court complained that Dempsey had only produced an “unverified itemization setting forth her time expended and services rendered.” In re Bond, et. al, Nos. 97-74395, 98-70007, 95-72240, 98-73553, slip op. at 2 (Bankr.C.D.Ill. Apr. 27, 2000). Second, the bankruptcy court found that Dempsey failed to adequately delegate non-legal work to non-attorney members of her staff. As a result, the bankruptcy court believed that at least some of the hours expended by Dempsey should have' been billed at a staff rate, rather than at her higher attorney’s rate. Third, the bankruptcy court alleged that “Dempsey ha[d] never filed an application to be hired by the estate as required by Section 330 of the Bankruptcy Code.... Of more concern, she ha[d] never sought authority of the Court to represent the estate post-confirmation.” Id. at 12. From the record, it appears that Dempsey was given no opportunity to respond to these concerns (although some of them were raised for the first time in the bankruptcy court’s second opinion) before the bankruptcy court once again denied her fees.

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254 F.3d 669, 2001 U.S. App. LEXIS 13740, 2001 WL 687621, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-the-matter-of-sheldon-bond-debtor-appeal-of-vicki-a-dempsey-ca7-2001.