United States Court of Appeals
Fifth Circuit
F I L E D
REVISED NOVEMBER 3, 2005
October 12, 2005
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT Charles R. Fulbruge III
Clerk
No. 05-20145
Summary Calendar
In the Matter Of: BOBBY CAHILL; JANICE CAHILL
Debtors
______________________________
WALKER & PATTERSON, P.C.
Appellant
Appeal from the United States District Court
for the Southern District of Texas
Before KING, Chief Judge, and DAVIS and STEWART, Circuit Judges.
PER CURIAM:
Appellant law firm Walker & Patterson, P.C., represented
debtors Bobby and Janice Cahill in a Chapter 13 bankruptcy
proceeding. Walker & Patterson now appeals the district court’s
order affirming the bankruptcy court’s award of reduced
attorneys’ fees in that proceeding. For the following reasons,
we AFFIRM.
I. FACTUAL AND PROCEDURAL BACKGROUND
On September 11, 2003, Walker & Patterson filed a Chapter 13
case on behalf of Bobby and Janice Cahill in the United States
Bankruptcy Court for the Southern District of Texas. Walker &
Patterson initially filed with the petition a Chapter 13 plan
proposing sixty monthly payments of $226.34 to the trustee to pay
three secured claims, two Internal Revenue Service priority
claims, and $2500 of attorneys’ fees.1 The plan also allotted
$382.53 to unsecured creditors (roughly a one-percent payment of
the unsecured claims) and proposed that the Cahills continue to
make monthly payments on their mobile home and on a fishing boat
used purely for recreational purposes. After responding to
motions from various creditors and moving to postpone the
confirmation hearing, Walker & Patterson filed an amended plan
that, among other things, increased the balance of attorneys’
fees to be paid under the plan to $3000.
After the bankruptcy court confirmed the Cahills’ amended
Chapter 13 plan, Walker & Patterson filed a fee application
together with contemporaneous time records. According to the
time records, Walker & Patterson spent 13.20 attorney hours on
the case, 2.05 paralegal hours, and $12.33 in out-of-pocket
expenses. Based on its hourly rates, Walker & Patterson claimed
a total amount of $3758.08.
Although no objection was filed to the fee request, the
bankruptcy court sua sponte entered an order for a hearing on the
1
Because Walker & Patterson had already accepted $500 in
compensation from the Cahills, $2500 represented the “balance
due” on a fee totaling $3000.
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request. After the hearing, the bankruptcy court found that
Walker & Patterson’s initial fee request was unreasonably high
given that “[t]here was nothing terribly unusual about the case,”
and, “[i]f anything, the case appear[ed] to involve less activity
than most.” In re Cahill, Order Allowing Fees for Debtors’
Counsel, No. 03-43024-H2-13, at 2 (Bankr. S.D. Tex. Sept. 19,
2004).
Applying the criteria for “reasonable compensation”
enumerated in 11 U.S.C. § 330(a)(3) (2000) and the factors set
forth in Johnson v. Georgia Highway Express, Inc., 488 F.2d 714,
717-19 (5th Cir. 1974), the bankruptcy court awarded Walker &
Patterson $17372 in attorneys’ fees plus $12.33 in expenses based
on the following findings: (1) the time spent by Walker &
Patterson greatly exceeded that spent by other counsel in a
typical Chapter 13 case, and in some cases Walker & Patterson’s
attorneys duplicated each other’s efforts; (2) the rates that
Walker & Patterson charged exceeded the reasonable and customary
hourly rate for Chapter 13 practitioners in the area; (3) Walker
& Patterson performed unnecessary work pertaining to the payment
of a secured claim to keep a boat used solely for recreational
purposes; (4) Walker & Patterson did not adequately prepare the
case for the first confirmation hearing and did not perform its
2
This amount includes the $500 that Walker & Patterson
received previously; thus, the actual amount outstanding was
$1237.
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services in a particularly timely manner; (5) the proposed fee
amount substantially exceeded the customary compensation for
comparably skilled non-bankruptcy practitioners, and no adequate
basis for a premium was shown; (6) the case was less novel, less
complicated, and less undesirable than most; (7) the fee was not
contingent; (8) neither the case nor the client imposed
exceptional time constraints; (9) the attorney-client
relationship was not a factor in this case; and (10) the typical
attorneys’ fee award in similar cases totaled $1737. The
bankruptcy court determined that, given the totality of these
findings, $1737 was a reasonable fee for a “typical” Chapter 13
proceeding such as this one. The bankruptcy court made this
determination relying on the lodestar calculation in General
Order 2004-5, “Order Regarding Chapter 13 Debtors’ Counsel’s
Fees,” U.S. Bankr. Ct. Rules S.D. Tex., 427-36 (as entered Apr.
14, 2004) (West 2005), a per curiam order setting forth standards
to guide bankruptcy courts in awarding Chapter 13 attorneys’ fees
in “typical” cases.3
Walker & Patterson appealed the bankruptcy court’s award of
fees to the district court, contending that the bankruptcy court
erred by relying on the General Order 2004-5 “typical case”
3
General Order 2004-5 was authored by Judge Isgur and
signed by all of the bankruptcy judges in the Southern District
of Texas. The Order reflects that in signing the Order, all of
the bankruptcy judges adopted the procedures, but not necessarily
the reasoning, set forth therein. General Order 2004-5 at 427,
fn.1.
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lodestar calculation to determine the total fee awarded instead
of using the traditional lodestar approach, and that Walker &
Patterson should have received the full amount requested in its
fee application. The district court affirmed the bankruptcy
court’s fee award. This appeal followed.
II. DISCUSSION
A. Standards of Review
We review the district court’s decision by applying the same
standard of review to the bankruptcy court’s conclusions of law
and findings of fact that the district court applied. In re
Jack/Wade Drilling, Inc., 258 F.3d 385, 387 (5th Cir. 2001). We
therefore review the bankruptcy court’s award of attorneys’ fees
for abuse of discretion. In re Coho Energy, Inc., 395 F.3d 198,
204 (5th Cir. 2004); In re Barron, 325 F.3d 690, 692 (5th Cir.
2003). An abuse of discretion occurs where the bankruptcy court
(1) applies an improper legal standard or follows improper
procedures in calculating the fee award, or (2) rests its
decision on findings of fact that are clearly erroneous. In re
Evangeline Refining Co., 890 F.2d 1312, 1325 (5th Cir. 1989).
Accordingly, we review the bankruptcy court’s legal conclusions
de novo and its findings of fact for clear error. Coho Energy,
395 F.3d at 204; Barron, 325 F.3d at 692.
B. Analysis
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Walker & Patterson argues that the district court erred by:
(1) affirming the bankruptcy court’s use of a “typical case”
lodestar calculation as provided in General Order 2004-5 rather
than a traditional lodestar calculation for analyzing its fee
request under 11 U.S.C. § 330; (2) affirming the factual finding
that Walker & Patterson’s attorneys duplicated each other’s
efforts in preparing the case, a factor which justified a
reduction of the fee request; and (3) affirming the factual
finding that Walker & Patterson had not adequately prepared the
case for confirmation. We consider each of these arguments in
turn.
1. Calculation of Attorneys’ Fees
Section 330 of the Bankruptcy Code gives bankruptcy courts
discretion to award reasonable compensation to debtors’ attorneys
in bankruptcy cases. 11 U.S.C. § 330(a)(1)(A). This authority
includes the discretion, upon motion or sua sponte, to “award
compensation that is less than the amount requested.”
Id. § 330(a)(2). Section 330(a)(3) further directs courts to
“consider the nature, the extent, and the value of” the legal
services provided when determining the amount of reasonable
compensation to award, taking into account “all relevant
factors,” including, but not limited to:
(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the
administration of, or beneficial at the time at which
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the service was rendered toward the completion of, a
case under this title;
(D) whether the services were performed within a
reasonable amount of time commensurate with the
complexity, importance, and nature of the problem,
issue, or task addressed; and
(E) whether the compensation is reasonable based on the
customary compensation charged by comparably skilled
practitioners in cases other than cases under this
title.
Id. § 330(a)(3).
The Fifth Circuit has traditionally used the lodestar method
to calculate “reasonable” attorneys’ fees under § 330. In re
Fender, 12 F.3d 480, 487 (5th Cir. 1994). A court computes the
lodestar by multiplying the number of hours an attorney would
reasonably spend for the same type of work by the prevailing
hourly rate in the community. Shipes v. Trinity Indus., 987 F.2d
311, 319 (5th Cir. 1993). A court then may adjust the lodestar
up or down based on the factors contained in § 330 and its
consideration of the twelve factors listed in Johnson, 488 F.2d
at 717-19.4 See Fender, 12 F.3d at 487. While the bankruptcy
4
The Johnson factors are as follows:
(1) the time and labor required;
(2) the novelty and difficulty of the
questions;
(3) the skill requisite to perform the legal
service properly;
(4) the preclusion of other employment by the
attorney due to acceptance of the case;
(5) the customary fee;
(6) whether the fee is fixed or contingent;
(7) time limitations imposed by the client or
the circumstances;
(8) the amount involved and the results
obtained;
-7-
court has considerable discretion in applying these factors, In
re First Colonial Corp. of America, 544 F.2d 1291, 1298 (5th Cir.
1977), it must explain the weight given to each factor that it
considers and how each factor affects its award. Fender, 12 F.3d
at 487; Evangeline Refining Co., 890 F.2d at 1327-28 (“If a court
awards fees but fails to explain why compensation was awarded at
the level it was given, it is difficult, if not impossible, for
an appellate court to engage in meaningful review of a fee
award.”).
We find nothing improper in the bankruptcy court’s use of
the precalculated lodestar amount contained in General Order
2004-5 in this case. General Order 2004-5 attempts to clarify
and streamline bankruptcy courts’ review of Chapter 13 attorneys’
fee applications, addressing the need for both efficiency and
flexibility in handling the large number of Chapter 13 cases that
bankruptcy courts in the Southern District of Texas review each
year.5 General Order 2004-5 at 427; cf. Hensley v. Eckerhart,
461 U.S. 424, 437 (1983) (noting that “[a] request for attorneys’
(9) the experience, reputation and ability of
the attorneys;
(10) the “undesirability” of the case;
(11) the nature and length of the professional
relationship with the client; and
(12) awards in similar cases.
Johnson, 488 F.2d at 719.
5
General Order 2004-5 indicates that approximately 26,000
Chapter 13 cases are currently pending before bankruptcy courts
in the Southern District of Texas, and approximately 12,000 more
will be filed in the next year. General Order 2004-5 at 427.
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fees should not result in a second major litigation.”). To this
end, General Order 2004-5 provides bankruptcy courts with
reasonable attorney time estimates for completing a “typical”
Chapter 13 case and customary rates for Chapter 13 services in
the Southern District of Texas, which, when multiplied together,
yield a typical lodestar amount of $1737.6 General Order 2004-5
at 433. This precalculated lodestar aids bankruptcy courts in
disposing of run-of-the-mill Chapter 13 fee applications
expeditiously and uniformly, obviating the need for bankruptcy
courts to make the same findings of fact regarding reasonable
attorney time expenditures and rates in typical cases for each
fee application that they review.
General Order 2004-5 nevertheless anticipates that
bankruptcy courts evaluating traditional fee applications will
continue to analyze and adjust fee applications on a case-by-case
6
According to General Order 2004-5, the time typically
spent on a Chapter 13 case is 5.7 attorney hours and 5.3
paralegal hours; the reasonable and customary rates are $235 per
hour for attorneys and $75 per hour for paralegals. General
Order 2004-5 at 433. Walker & Patterson argues that the
bankruptcy court’s reliance on these factual findings in General
Order 2004-5 was improper because “General Order 2004-5 makes
significant factual findings without the benefit of an
evidentiary hearing, open forum discussion or public comment.”
Appellant’s Br. at 10. This argument is without merit because
Walker & Patterson was afforded an evidentiary hearing on its fee
request in which the bankruptcy court, while incorporating
General Order 2004-5 into its analysis, considered and ruled on
the disputed factual issues specific to Walker & Patterson’s
claim. See In re United States Golf Corp., 639 F.2d 1197, 1202
(5th Cir. 1981) (requiring the bankruptcy court to hold an
evidentiary hearing on an attorneys’ fee request if there are
disputed factual issues).
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basis using the lodestar analysis and flexible Johnson factors,
ensuring that the lodestar amount in an atypical case will be
adjusted to reflect the specifics of that case.7 Id. at 2. This
approach strikes the proper balance between the need for
efficient disposal of attorneys’ fee applications and the need
for a flexible approach that provides for adjustment of the
lodestar when necessary.8
In this case, the bankruptcy court did not abuse its
7
The majority of General Order 2004-5 consists of a
discussion of the preapproval of reasonable fixed fee amounts in
“typical” cases, using the lodestar calculation of $1737 and
applying the § 330 and Johnson factors to determine a range of
acceptable fixed fees that courts may preapprove with minimal
scrutiny. We decline to address this portion of General Order
2004-5 because the fee arrangement in this case was not fixed.
8
Walker & Patterson suggests that the Sixth Circuit has
rejected this line of reasoning in In re Boddy, 950 F.2d 334 (6th
Cir. 1991), in holding that the bankruptcy court in that case
abused its discretion by awarding a predetermined maximum
attorneys’ fee amount for “normal and customary” legal services
instead of adhering to the traditional lodestar method. That
case is easily distinguished from the instant case, however,
because the bankruptcy court in Boddy mechanically awarded the
predetermined maximum fee without conducting any further analysis
to determine whether the case was “normal and customary” or
whether an adjustment of the fee amount was appropriate. Id. at
337. Consistent with our analysis in this case, the Sixth
Circuit explained:
[W]e do not hold that the bankruptcy court can never
consider the “normal and customary” services rendered
in a Chapter 13 bankruptcy. The court can legitimately
take into account the typical compensation that is
adequate for attorneys’ fees in Chapter 13 cases, as
long as it expressly discusses these factors in light
of the reasonable hours actually worked and a
reasonable hourly rate.
Id. at 338.
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discretion by using the precalculated lodestar amount to
determine Walker & Patterson’s fee award because it properly
applied the § 330 and Johnson factors to the specific facts of
the case, setting forth a reasoned analysis and providing reasons
why the lodestar amount did not need to be adjusted. See In re
Evangeline Refining Co., 890 F.2d at 1327-28 (emphasizing that a
bankruptcy court must explain its reasons for its award of
attorneys’ fees). Moreover, the bankruptcy court did not give
the General Order lodestar calculation a disproportionate amount
of weight in its analysis as Walker & Patterson suggests: Its
findings that Walker & Patterson’s attorneys spent an
unreasonable amount of time on the case, duplicated each other’s
efforts, performed unnecessary work, were unprepared for the
confirmation hearing, and were handling a case that presented no
novel or complex issues support its conclusion that this case did
not warrant an upward adjustment of the lodestar amount under §
330 or Johnson. Compare In re United States Golf Corp., 639 F.2d
1197, 1199 (5th Cir. 1981) (holding that the bankruptcy court
abused its discretion by applying a predetermined “maximum limit”
to reduce the requested amount of attorneys’ fees “despite the
favorable findings [it] had made of the Johnson factors”).
2. Factual Finding of Duplication of Effort
Walker & Patterson next argues that the bankruptcy court
erred in finding that Walker & Patterson’s attorneys duplicated
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each other’s efforts in their preparation of the Chapter 13 case,
a factor that affected the bankruptcy court’s lodestar analysis.
Because we review the bankruptcy court’s findings of fact
for clear error, we will defer to a bankruptcy court’s factual
findings unless, after reviewing all of the evidence, “we are
left with a ‘firm and definite conviction’ that the bankruptcy
court made a mistake.” In re Bradley, 960 F.2d 502, 507 (5th
Cir. 1992) (quoting United States v. United States Gypsum Co.,
333 U.S. 364, 365 (1948)). After reviewing the billing records
in this case, the bankruptcy court found evidence that the
attorneys had worked on overlapping pieces of the case and spent
excess time bringing each other up to speed on tasks begun by the
other. Additionally, the bankruptcy court found some indication
that the billing records may not have been contemporaneous and
correct. After our review of the record, nothing leaves us with
a “‘firm and definite conviction’ that the bankruptcy court made
a mistake” in making these factual findings. Id.; see also In re
Young, 995 F.2d 547, 549 (5th Cir. 1993) (deferring to the
bankruptcy court’s findings of fact in the absence of evidence of
clear error).
3. Factual Finding of Inadequacy of Preparation
Finally, Walker & Patterson challenges the bankruptcy
court’s finding that Walker & Patterson failed to prepare the
case adequately for the first confirmation hearing. In light of
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our deferential standard of review, we also decline to disturb
this finding of fact. The bankruptcy court is in a better
position to make this factual determination than we are,
particularly because it presided over the Chapter 13 proceeding
and confirmation hearing at issue. See United States Golf Corp.,
639 F.2d at 1207-08 (recognizing “the importance of the
bankruptcy judge’s closeness to the issues raised in an
application for attorneys’ fees; the bankruptcy judge has not
only presided over the evidentiary hearing, but also had the
opportunity to observe the performance of the attorney throughout
his employment in the bankruptcy court.”).
According to the bankruptcy court, Walker & Patterson moved
to postpone the first confirmation hearing because it was
unprepared, and throughout the case it provided services that
were “minimally timely to avoid dismissal of the case for delay
prejudicial to creditors.” Cahill, Order Allowing Fees for
Debtors’ Counsel at 5. Given the bankruptcy court’s superior
position to make this determination and because nothing in the
record leads us to believe that this finding was clearly
erroneous, we will not reverse it. See In re Acosta, 406 F.3d
367, 373 (5th Cir. 2005) (“If the bankruptcy court’s account of
the evidence is plausible in light of the record viewed as a
whole, we will not reverse it.”).
III. CONCLUSION
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For the foregoing reasons, we AFFIRM the judgment of the
district court.
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