Opinion
NOT FOR PUBLICATION
Argued by Video Conference and Submitted: September 21, 2007
Appeal from the United States Bankruptcy Court for the Western District of Washington. Bk. No. 01-23374. Hon. Thomas T. Glover, Bankruptcy Judge, Presiding.
Before: MARKELL, PAPPAS and JURY, Bankruptcy Judges.
MEMORANDUM
Pro se debtor, Linda Koncicky (" Debtor"), appeals the bankruptcy court's approval of the Trustee's Final Report (" Final Report") and Applications for Administrative Expenses (" Fee Applications"). While the trustee ultimately paid only a single unsecured claim in the amount of $5,659.20, the Final Report sought approval of $144,774.70 in fees and expenses. Debtor, however, provides no factual or legal basis for reversal. Upon review of the record and in light of the applicable standard of review, we conclude that we AFFIRM.
I. FACTS
On December 4, 2001, Debtor filed a voluntary petition under chapter 7. She originally included a single unsecured claim for $12,000. John S. Peterson was appointed as trustee (" Trustee"). In the normal course of investigating the Debtor's financial affairs, the Trustee discovered material misrepresentations and omissions in Debtor's schedules and Statement of Financial Affairs. After bankruptcy court approval, the Trustee retained Ronald Bell (" Bell") as his counsel to pursue a denial of Debtor's discharge. At trial, the court found that the Debtor had misrepresented her marital status and assets and had fraudulently transferred a partial interest in significant real property (" Property") to her husband. Thereafter, in a series of orders, the court denied the Debtor's discharge and directed the Debtor and her spouse to convey their individual interests in the Property to the Trustee. The enforcement of these orders proved difficult.
Unless otherwise indicated, all chapter, section and rule references are to the Bankruptcy Code, 11 U.S.C. § § 101-1330, and to the Federal Rules of Bankruptcy Procedure, Rules 1001-9036, as enacted and promulgated prior to the effective date (October 17, 2005) of the relevant provisions of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub. L. 109-8, April 20, 2005, 119 Stat. 23.
Debtor subsequently amended her schedules to include a second claim of unstated amount.
Applicants Gordon Thomas Honeywell, Eisenhower & Carlson, and Bruce Kriegman later substituted after Bell withdrew.
These orders included: Summary Judgment denying discharge and ordering turnover of the Debtor's and her spouse's interest in Property entered August 6, 2002; Findings of Fact and Conclusions of Law finding Debtor fraudulently transferred property to husband; and Order to turnover husband's interest in property.
An example of the difficulty can be seen in the efforts to enforce the bankruptcy court's order divesting the Debtor of the Property. The Trustee began his efforts in November 2002, when the Debtor submitted a Motion to Reconsider the ordered transfer. The court's denial of the motion was followed by Debtor's appeal to the BAP (which was dismissed for lack of prosecution), three attempts to reinstate the appeal, and finally an appeal to the Ninth Circuit, where she lost. Undeterred, the Debtor filed a motion for rehearing to the Ninth Circuit.
On June 15, 2006, the Ninth Circuit denied that motion, and then, following a similar action undertaken by the BAP, barred the Debtor from making further filings. During this same time period, Debtor also appealed a bankruptcy court order approving Bell's fees and costs to the United States District Court for the Western District of Washington. The district court affirmed, and Debtor again appealed to the Ninth Circuit. The Ninth Circuit also rejected this appeal.
Debtor and her spouse's continued refusal to convey the Property required another round of proceedings. On November 5, 2003, the bankruptcy court, acting on the Trustee's motion, issued a judgment vesting title of Property in the Trustee pursuant to Rule 7070. It also ordered that the Debtor and her spouse (as the Defendants) turn over the Property to the Trustee. After they failed to comply, the bankruptcy court, on August 1, 2006, authorized issuance of a Writ of Execution for the Property. It also denied Defendants' Motion to Stay Enforcement of Sale, Objection to Claims, Relief from Judgment and Orders, and other Requested Relief. Debtor and her spouse appealed this order to the BAP and filed an emergency motion for stay with the BAP on the day the writ was served. The BAP denied the motion, directing the Debtor and her spouse to file it with the bankruptcy court. The bankruptcy court issued a temporary stay of the Writ of Execution sua sponte, in order to allow the Debtor and her spouse to renew their motion with the BAP. The bankruptcy court denied the Trustee's motion for reconsideration and vacation. On September 21, 2006, the BAP denied the second motion of the Debtor and her spouse for emergency stay on the basis of a failure to show a likelihood of success of appeal on the merits.
In entering the judgment and order, the bankruptcy court considered: the Trustee's Motion; Declaration of Plaintiff's Counsel in Support of Motion for Entry of Judgment Pursuant to FRBP 7070 and other Applicable Law; prior Summary Judgment, Findings of Fact and Conclusions of Law and related order; Defendants' Opposition to Motion for Entry of Judgment Pursuant to FRBP 7070; Debtor's Opposition to Motion for Order Compelling Debtor to Turn Over Property of the Estate; Debtor's Motion to Stay Enforcement and for Waiver or Reduction of Supersedeas Bond; and the Trustee's Reply and Opposition to Debtor's Opposition and to Debtor's Motion.
When the marshal resumed execution of the writ, the Debtor and her spouse agreed to participate in settlement negotiations with the Trustee, which resulted in an agreement dated October 5, 2006 (" Settlement Agreement"). The terms of the settlement included agreement by Debtor and her spouse: to pay $144,456.00 to the estate, to withdraw or dismiss their pending motions and appeals, to cooperate as necessary to carry out the terms, and to not file any further pleadings or documents not in accordance with the terms of the Settlement Agreement.
The agreement required an immediate payment of $50,000 with the balance of $94,456.00 due within 60 days, which could be funded by a home equity loan or reverse mortgage on the Property.
Paragraph 16 of the Settlement Agreement provides in pertinent part as follows:
On October 24, 2006, the Debtor and her spouse filed a response of non-opposition to the Trustee's motion to approve the Settlement Agreement. Thereafter, on October 31, 2006, the bankruptcy court issued its order approving the Settlement Agreement. On or about December 7, 2006, the Debtor made her final payment to the Trustee under the agreement.
On March 14, 2007, after the Fee Applications were filed, the Trustee filed the Final Report requesting allowance of fees and expenses in the amount of $144,774.70. On April 12, 2007, apparently contrary to the Settlement Agreement, see note 8, the Debtor filed an objection to the report. On April 20, 2007, at hearing, the bankruptcy court approved the Final Report and the Fee Applications. The court overruled Debtor's objections, finding that she had raised only dissatisfaction with the outcome of rulings already settled rather than refuting that the Trustee and professionals had met the criteria for award of compensation under section 330.
The difference, between the settlement amount paid by the Debtor and the amount of fees and expenses requested by the Trustee, reflects accrued interest credited to the Debtor.
On April 24, 2007, the bankruptcy court issued its order approving the report and awarding compensation. In response, and again contrary to the Settlement Agreement, the Debtor filed this appeal to the BAP.
II. JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. § § 1334, 157(b)(2)(A), (B). This court has jurisdiction under 28 U.S.C. § § 158(a) and (b).
III. ISSUES
Did the bankruptcy court abuse its discretion in approving Trustee's Final Report and Fee Applications pursuant to 11 U.S.C. § 330?
IV. STANDARD OF REVIEW
We review the bankruptcy court's award of attorney fees for abuse of discretion. Smith v. Edwards & Hale, Ltd. (In re Smith), 317 F.3d 918, 923 (9th Cir. 2002). We find an abuse of discretion if we have a definite and firm conviction that the bankruptcy court committed a clear error of judgment. Mendez v. Salven (In re Mendez), 367 B.R. 109, 113 (9th Cir. BAP 2007).
Factual findings made in the course of awarding compensation are not disturbed unless clearly erroneous. See Friedman Enters. v. B.U.M Int'l Inc. (In re B.U.M. Int'l, Inc.), 229 F.3d 824, 830 (9th Cir. 2000); Rule 8013. A finding is not " clearly erroneous" unless, based on the entire evidence, the reviewing court is left with the definite and firm conviction that a mistake has been committed. United States v. United States Gypsum Co., 333 U.S. 364, 395, 68 S.Ct. 525, 92 L.Ed. 746 (1948).
V. DISCUSSION
Awards of compensation to trustees and their professionals are evaluated based upon the criteria contained in section 330. The bankruptcy court has wide discretion to award reasonable compensation and reimbursement for actual, necessary services rendered, and expenses incurred, by the trustee and those professionals employed by the trustee. See Southwestern Media, Inc. v. Rau, 708 F.2d 419 (9th Cir. 1983); 11 U.S.C. § 330. In determining if compensation is reasonable, the court looks to the nature, extent, and value of the services rendered, taking relevant factors into consideration. 11 U.S.C. § 330(a)(3). " Determinations as to necessity, reasonableness, etc., involve questions of fact, " Stalnaker v. DLC, Ltd., (In re DLC, Ltd.), 295 B.R. 593, 608 (8th Cir. BAP 2003), which as noted above are subject to a clearly erroneous standard.
Here, the record amply demonstrates that the amounts awarded were within the discretion of the bankruptcy court. The record shows that the Trustee filed the Final Report with the bankruptcy court and, along with his professionals, made application to the court for compensation and reimbursement of fees incurred in fulfilling their duties. The Fee Applications included detailed description of the services rendered, explanation of why they were necessary, and itemization of costs and fees, pursuant to the requirements of Rule 2016(a). Further, the record shows that the Debtor established a pattern of failing to cooperate, obstructing court orders, and initiating proceedings without basis.
The extent and amount of attorneys' fees are almost exclusively the result of Debtor's prevarications and obduracy. She persisted in pursuing myriad unsuccessful appeals and other unwarranted actions, all of which unnaturally and unnecessarily prolonged an otherwise routine voluntary chapter 7 case.
Debtor's actions are most puzzling in light of the facts that she settled with the Trustee, supported the court's approval of the settlement, made full payment to the Trustee per the settlement in the amount of $144,456.00, and only then, contrary to the terms of the Settlement Agreement (see Note 8) objected to the Final Report and Fee Applications and then filed this appeal. In short, the Debtor has turned out to be her own worst enemy.
We read the court approved Settlement Agreement to have required Debtor to seek court approval before filing both an objection to the Final Report and Fee Applications and this appeal. The record reveals no attempt to do so. We, however, will not pursue this further in light of the fact that the Trustee did not object to Debtor's filings.
The bankruptcy judge took all of this into consideration when he approved the Final Report and Fee Applications. As he stated:
Ms. Koncicky, you know, I can't really spend any time telling you what I already told you during the trial. Sadly you've created your own problems here. And they've now mushroomed into just, you know, $100,000 of expenses to you. It's too bad. But, you know, even today, most of what you raise are dissatisfactions with things and excuses concerning -- either dissatisfaction with prior rulings that have been settled on appeal; or, you know, in the case of the settlement, an argument that it's somehow extortion. You had a lawyer involved with it. You've had several lawyers in the case. But it's time for all of this to end so -
Tr. Of Proceedings at 8:8-19, Apr. 20, 2007.
Deference is given to the judge's familiarity with the necessity of the trustee to respond, and with the nature and extent of the services rendered in responding, to the numerous actions taken by the Debtor. In re Continental Ill. Sec. Litig., 962 F.2d 566, 568 (7th Cir. 1992). Based on the evidence in the record and deference to the judge's familiarity with the case, the judge's determination that the Trustee's and professionals' substantial fees and expenses were reasonable is not clearly erroneous.
We make this determination in light of the rule that, " [a] party opposing a fee application must carry the burden of explaining what therein is unreasonable or, at least, what would be reasonable under the circumstances." In re Blackwood Assocs., L.P., 165 B.R. 108, 112 (Bankr. E.D.N.Y. 1994) (citing In re Hunt's Health Care, Inc., 161 B.R. 971, 981-982 (Bankr. N.D. Ind. 1993) as quoting Steinlauf v. Continental Ill. Corp. (In re Continental Ill. Sec. Litig.), 962 F.2d 566, 570 (7th Cir. 1992)). " [Debtor has] the responsibility to challenge the information and produce evidence controverting that produced by the applicant." In re Schugg, 2007 WL 1089676, *10 (Bankr. D. Ariz. Apr. 10, 2007). The court must, however, construe pro se briefs liberally to ascertain Debtor's contentions. Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 1988). Yet, the court need not ferret out arguments and seek to substantiate them in law when Debtor fails to do so. See DeBuono v. Fanelli (In re Fanelli), 263 B.R. 50, 62 (Bankr. N.D.N.Y. 2001).
Here, with minor exceptions, Debtor merely repeats verbatim the objections made to the bankruptcy court. She contends that the fees charged by the Trustee and other professionals were either not actually incurred or were not necessary as required pursuant to section 330. Beyond a protracted series of disconnected questions and statements as to the propriety of various charges, the Debtor provides no legal basis or factual evidence to support her conclusions of impropriety on the part of the bankruptcy court, the Trustee, or his professionals.
Debtor's legal arguments are a mixture of relevant and irrelevant (and in some cases, nonexistent) legal authority. As to those statutes and rules that may be relevant, Debtor makes only conclusory statements as to their application. To support her contention that the court abused its discretion, for example, she states categorically that the court did not review the Final Report pursuant to sections 327-330. Debtor Br. p. 22. Debtor does not, however, provide any discussion applying the cited law.
Debtor continues by citing cases that are either irrelevant or erroneously applied. For example, she cites to Valley Eng'g v. Elec. Eng'g Co., 158 F.3d 1051 (9th Cir. 1998) stating that a " [c]reditor claim has been dismissed when hides a document important to other party, " with no further discussion as to its relevance. Debtor Br. p. 23. She also cites to Mass. Mut. Life Inc. Co. v. Brock, 405 F.2d 429, 432 (5th Cir. 1968). Although it is unclear what point this case supports, in any event its holding is misapplied. The holding in the case, that bankruptcy professionals cannot be compensated at the same rate as other practitioners, was overruled by the enactment of section 330(a)(3)(E) to recognize that compensation of bankruptcy practitioners should be in parity with that of others.
Debtor's factual evidence is also deficient. Quite literally, the Debtor, in large part, merely questions the amount, propriety of, or need for individual charges. For example, the Debtor asked: " (for what was the check?)" [sic]; " How many pages is one creditor's matrix to read it 0.75 hour?." [sic]; " Phone Discussion with Trustee 1.10 hour?" [sic]; " What Mr. Bell discussed what he already did not discussed in previous 33 conferences?" [sic] Debtor Br. pp. 11-12. Debtor otherwise makes conclusory statements regarding specific work or charges. Again by example, the Debtor states: " 6 hours is excessive." " No proof." " Any charge for Motions to shorten time is unnecessary and costly expense." [sic] Id . p. 15.
Debtor also asserts a number of other objections unrelated to fees. For example, Debtor charges that the Trustee violated the automatic stay, terminated her appeals and motions, initiated frivolous lawsuits, and deprived Debtor of her right to conversion. Debtor Br. pp. 4-6, 8. Debtor defends transfer of the Property to her husband as being in accordance with a separation agreement (Debtor Reply Br. p. 3), although it has been determined to be illusory. She again represents herself as being single, as she did in her petition, based upon a definition in " Webster Dictionary" [sic] that it means the same as " separated, " although she does not dispute that she is married. Id . As pointed out by the bankruptcy court these issues were either previously decided and/or are not before the court.
VI. CONCLUSION
The bankruptcy court did not clearly error in finding that the services provided by the Trustee and his professionals were actual and necessary, or that the amounts requested were reasonable under the circumstances. And Debtor did not produce adequate proof to the contrary. Therefore the bankruptcy court did not abuse its discretion in approving the Trustee's Final Report and the Fee Applications. WE AFFIRM.
" b. [Debtor and her spouse] agree that they will not file any further pleadings or documents in the Debtor's chapter 7 case (except, to the extent applicable, any pleadings for withdrawal/dismissal described above and any pleadings supporting approval of the agreement). c. [Debtor and her spouse] agree that they will not file any further appeals of any kind relating to the Debtor's chapter 7 case, the Action, or any order approving this agreement."