Opinion
No. 10-44367-EDJ-11.
March 29, 2011
MEMORANDUM RE FEE APPLICATION
MacDonald Associates, counsel for the debtor in the above-captioned chapter 11 case, has requested a final allowance of attorneys fees in the sum of $309,462 and expense reimbursement in the sum of $6,468.93. The court will allow fees in a reduced amount as hereinafter provided.
The two primary billers in this case were Iain A. MacDonald ("MacDonald") and Reno F.R. Fernandez III ("Fernandez"). MacDonald is a highly experienced bankruptcy practitioner. As of April 16, 2010, the date of the petition herein, MacDonald had been a member of the California State bar for over 38 years. MacDonald billed his time in this case at the rate of $450 per hour prior to June 1, 2010, and at the rate of $550 per hour thereafter.
Fernandez, by contrast, is a relatively young and less experienced attorney. He was admitted to the California bar on December 4, 2007. Thus, at the date of the petition herein, Fernandez had been practicing law for slightly in excess of two years, four months. The fee application at issue requests an allowance for Fernandez's at the rate of $335 per hour for the time he spent prior to June 1, 2010, and at the rate of $450 per hour thereafter.
The primary method for calculating fees in bankruptcy cases is the "lodestar." In re Manoa Finance Co., Inc., 853 F.2d 687 (9th Cir. 1988). Under this method, the appropriate allowance is generally the number of hours the applicant actually and reasonably expends in the performance of compensable services, multiplied by a reasonable hourly rate. Manoa Finance Co., 853 F.2d at 691. See also, Unsecured Creditors' Committee v. Puget Sound Plywood, Inc., 924 F.2d 955, 957-58 (9th Cir. 1991).
Here, the court finds that Fernandez's hourly billing rate is excessive. On June 1, 2010, Fernandez, who had then been a member of the California State bar for two and one-half years, started billing at the same hourly rate at which MacDonald, with over 38 years of experience, was billing at the outset of this case.
The court finds that $335 an hour to be the more reasonable hourly rate for Fernandez in this case, and requests MacDonald Associates to submit a proposed order providing for a final allowance of fees herein that have been recalculated accordingly from the date of commencement of this case.
Thus the final allowance would be an amount equal to the time spent by the professionals other than Fernandez multiplied by the hourly rates specified in the application, plus the time spent by Fernandez from the date of the petition multiplied by $335 per hour. The additional fees allowed would therefore be the amount so calculated minus the amount of interim fees paid to date. The order may also provide for the allowance of expense reimbursement as requested.
In reducing fees, the court is in no way suggesting that the court observed any deficiencies in the quality of the services Fernandez rendered, or that any such services were not beneficial to his client. However, one the factors that influences the establishment of a reasonable hourly rate is experience, because of the wisdom and efficiencies that go with it. See 11 U.S.C. § 330(a)(3)(E) (reasonable compensation to be determined in part by the professional's experience in the bankruptcy field); see also, In re Maruko Inc., 160 B.R. 633, 640-41 (Bkrtcy.S.D.Cal 1993) (holding that counsel's lack of experience warranted a reduction in fees). For Fernandez, such experience will come, but as of today, it still lies ahead.
Notice Recipients
Recipients of Notice of Electronic Filing:
District/Off: 0971-4 User: twashingt Date Created: 3/29/2011 Case: 10-44367 Form ID: pdfeoc Total: 2 aty Iain A. Macdonald iain@macdonaldlawsf.com aty Reno F.R. Fernandez r.fernandez@macdonaldlawsf.com TOTAL: 2Notice Recipients
Recipients of Notice of Electronic Filing:
District/Off: 0971-4 User: twashingt Date Created: 3/29/2011 Case: 10-44367 Form ID: pdfeoc Total: 2 aty Iain A. Macdonald iain@macdonaldlawsf.com aty Reno F.R. Fernandez r.fernandez@macdonaldlawsf.com TOTAL: 2