Opinion
Nos. 82-C-846; 82-C-847; 82-C-885; 82-C-886; 82-C-903.
January 3, 1983.
Attorneys' Fees — Appeals — Standard of Review
Although the petitioner, an attorney, presented evidence and supporting arguments that a higher fee award to him may be reasonable, the district court on appeal must affirm the bankruptcy court's fee award if the petitioner fails to demonstrate the award to have been arbitrary, capricious, and unreasonable. See Rule 810 at ¶ 20,310.
[Opinion of the Court]
Petitioner, the attorney for the bankrupt debtors in each of the above actions, appeals the attorney fee award in each case made by the Bankruptcy Court. Petitioner's appeals are dismissed.The facts, as they concern petitioner's ground for appeal, are as follows:
FACTS
Petitioner represented each of the above parties, husbands and wives in all cases, in proceedings under Chapter 13 of the Bankruptcy Act, before Bankruptcy Judge Robert Martin. In each case, petitioner submitted a wage earner plan wherein the bankrupt parties would repay 100% of their secured and unsecured debts. It appears that each of the plans was accepted.
Also in each case, petitioner submitted attorney fee requests which were to be paid from within the plan. Each of the bankrupts approved of the fee charged. The attorney fee in each case was for $1,200, although petitioner reduced his fee in 82-C-846 to $800 because an expected challenge to the plan by a creditor did not materialize.
The itemized fee in each case was as follows (with exceptions noted below):
1. Initial Attorney/Client interviews $450.00 2. Two Court appearances 180.00 3. Preparation of Plan by Legal Assistant 100.00 4. Clerical Support, Staff and Paperwork 70.00 5. Follow-up Creditor Contacts (with specifics) 400.00 __________ Total $1,200.00
Only one court appearance was claimed in 82-C-846 for $90.
Only $90 on this item was charged in 82-C-846. Also, in 82-C-885 and 82-C-886, only $200 was listed, but in each, petitioner itemized another $200 charge: for opposition to a claim by a creditor in 82-C-885, and for initial work on return of back wages in 82-C-886.
Petitioner charged a uniform $90 per hour for attorney time and $20 per hour for legal assistant's time, except that only $85 per hour for attorney time was listed in 82-C-846. In addition, petitioner observed a self-imposed ceiling on charges of $1,200, thus lowering his hourly fee in some of the cases. The hours worked in each case, the percentage of indebtedness represented by the fees, and the amount awarded by the Bankruptcy Court, all according to petitioner's filings, are as follows. Awarded Case No. Attorney Legal Assistant % of In debtedness
The minor discrepencies between the itemizations provided to the Bankruptcy Court and to this Court are noted. Far greater detail has been offered here than appears to have been available to Judge Martin.
$500.00 82-C-846 8 hrs. 5.5 hrs. 20% $800.00 82-C-847 15 hrs. 5 hrs. 15% $600.00 82-C-885 12.5 hrs. 6 hrs. 7% $600.00 82-C-886 14.5 hrs. 5 hrs. 10% $550.00 82-C-903 11.5 hrs. 5 hrs. 2.5%
The hearing notes provided in the record before this Court show that petitioner was awarded $800 in this case. The discrepancy is noted, but is not relevant to this Court's decision. It also appears that petitioner lowered his request to $800 in this case, but reinstated his demand for $1,200.
Although the transcripts of the hearings on the attorney fee issue in these cases have not been provided, it appears that one was held in each case. The record before the Court in each case except 82-C-903 includes handwritten notes concerning the hearing, apparently by Judge Martin. The notes indicate that he considered the usual and customary fee to be $450 as per the Eastern District of Wisconsin, that the comparative difficulty of some of the cases was noted; that, in 82-C-885, three hours concerning a driving license problem had been charged, and that, in 82-C-847, the Court's award was $650 plus $150 for efforts regarding the return of a security deposit.
Petitioner asserts in his brief in each case that he is the major practitioner in the area in Chapter 13 cases where 100% payment to creditors is obtained; that he has investigated the charges made by other local practitioners, and that his $90 per hour charge is within the range of other attorneys, although he tends to spend more time with each case in order to get 100% repayment; and, in effect, that the policy considerations favoring 100% repayment (which petitioner consistently attempts to obtain) require more deference to his fee requests.
The Court recognizes that petitioner has not come close to establishing these assertions as facts. Nor does the record show that such arguments were made before Judge Martin. The records of some of the cases reflect that petitioner did attempt to show unusual difficulties in obtaining 100% repayment.
Respondent has made no response to petitioner's requests on appeal except for submitting the required portions of the record for appeal.
MEMORANDUM
Petitioner has, with unusual precision, misstated the scope of this Court's review.
The petitioner has asserted that the legal question on appeal is as follows:
Is the attorney fee requested by appellant in [each case] a reasonable fee and should the reduction of fee ordered be modified?
Taken from the brief for 82 C 846 and referenced in the other briefs.
In effect, this question reverses the content of the correct question and may even transfer the burden of proof to the respondent. The proper question is not whether petitioner's request was reasonable, but whether the award was arbitrary, capricious or unreasonable. With all due respect to petitioner, he has presented no evidence whatsoever on this question. At best, and the argument is weak, petitioner has presented some evidence that a higher award might be reasonable, but not that the award made was unreasonable.
Petitioner does present some case law on the proper considerations for purposes of a reasonable fee award, including the attorney's ability, assistance to clients (with a lengthy list of endorsements from his clients), customary fees, fee as a percentage of the award, and the like. However, in light of the standard of review in this Court, as contained in Bankruptcy Rule 810 (the reasonableness of an attorney fee award is a finding of fact), petitioner's arguments are not relevant unless he shows that respondent used arbitrary or capricious considerations. He has not done so, and the Court cannot say that the Bankruptcy Court's conclusion about the fees it awarded was unreasonable.
For the discretion of bankruptcy judges as it concerns the reasonableness of attorney fees, petitioner is directed to In re Devers, 12 B.R. 140, (D.C.D.C. 1981) and Matter of Scarboro, 13 B.R. 439 (D.C.Ga. 1981). It is clear that the Bankruptcy Court's discretion should be disturbed only for abuse of discretion. While this record does not show how the Bankruptcy Court exercised its discretion, the Court will not assume an abuse of discretion. It is, after all, petitioner's burden to show the abuse. He has not done so.
In addition, it is clear that attorney fee requests should be supported by detailed documentation. In re LHD Realty Corp., 20 B.R. 722 (Bkrtcy. Inc. 1982). This Court does not have any evidence from which to infer the extent of petitioner's documentation before the Bankruptcy Court, except that it appears deficient.
Finally, there is no appearance in the record of specific findings of fact from the Bankruptcy Court. Although this Court has treated Judge Martin's award as a finding of fact as to the reasonableness of the award in each case, it appears that some Circuits, most notably the First and Fifth, have differing requirements concerning such findings. The Fifth Circuit requires the Bankruptcy Court to make findings of fact, Matter of U.S. Golf Corp., 639 F.2d 1137 (5th Cir. 1981). The First Circuit, on the other hand, appears to require that appellants ask the Bankruptcy Court for the findings. In re Lorraine Botelho, 8 B.R. 305 (Bkrtcy. App. 1st Cir. 1981); In re El San Juan Hotel Corp., 12 B.R. 154 (D.C. P.R. 1981). The approach of the First Circuit, by putting the burden where it belongs — on the moving party — seems more reasonable.
In conclusion, it is beyond question that petitioner has failed to carry his burden of showing that the awards of the Bankruptcy Court in these cases were unreasonable. On the contrary, it appears that the awards are, on their face, reasonable, and the Bankruptcy Court has not abused its discretion.
Although this Court does not view petitioner's fee requests as unreasonable, and may have approved them in that no one, neither the debtors nor any creditors, was heard to complain, it is clear that this Court's scope of review is far too limited to reverse the Bankruptcy Court's exercise of discretion.
Accordingly,
ORDER
IT IS ORDERED that the above named appeals from the Bankruptcy Court of the Western District of Wisconsin are DISMISSED.