United States Court of Appeals
For the First Circuit
No. 11-1830
IN RE DAVID SULLIVAN AND LUZ ENEIDA SULLIVAN,
Debtors.
_____________________
L. JED BERLINER,
Movant, Appellant,
v.
DENISE M. PAPPALARDO,
Trustee, Appellee.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
[Hon. Michael A. Ponsor, U.S. District Judge]
[Hon. Henry J. Boroff, U.S. Bankruptcy Judge]
Before
Selya, Circuit Judge,
Souter,* Associate Justice,
and Lipez, Circuit Judge.
L. Jed Berliner, with whom Meghan R. Bristol and Berliner Law
Firm were on brief, for appellant.
Lynne F. Riley, with whom Riley Law Group LLC was on brief,
for appellee.
March 21, 2012
*
Hon. David H. Souter, Associate Justice (Ret.) of the Supreme
Court of the United States, sitting by designation.
SELYA, Circuit Judge. Asserting that the legal fees
awarded for professional services rendered in a Chapter 13
proceeding were too meager, a bankruptcy attorney challenges the
award. The district court rejected his importunings, and so do we.
The facts are straightforward. Late in 2008, the
debtors, David Sullivan and his wife, Luz Eneida Sullivan, engaged
the appellant, L. Jed Berliner, to represent them in bankruptcy
proceedings. At the time, the debtors had a good income, but they
owed more than $115,000 in unsecured debt with no realistic
prospect of payment.
The appellant took their case. In the retainer
agreement, he estimated that his legal fees plus court costs would
total around $4,000. The retainer agreement noted, however, that
the $4,000 amount could increase should the debtors' case prove
unusually complex. The debtors accepted the terms of the retainer
agreement and paid the appellant $3,684 on account.
The appellant instituted a Chapter 13 proceeding on the
debtors' behalf. In due course, the debtors submitted a Chapter 13
plan, see 11 U.S.C. §§ 1321-1322, which was approved by the
bankruptcy court. At an appropriate point, the appellant filed an
application for attorneys' fees. See id. § 330(a)(4)(B).
In his fee application, the appellant provided an
itemized account of the hours purportedly worked and, after
crediting the debtors with the $3,684 retainer originally paid,
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requested an additional $8,173.36 in fees and expenses. The
trustee objected to the application on grounds of excessiveness.
The bankruptcy court shared the trustee's view and set
the total fee and expense figure at $3,684 (the amount of the
initial retainer). The court premised this modest award on a
finding that the case was "relatively uncomplicated." Building on
this foundation, it noted that the fees requested were much higher
than those typically charged in uncomplicated Chapter 13 cases and
determined that a great deal of the appellant's claimed work was
therefore duplicative and unnecessary. The court concluded that,
under the circumstances, aggregate fees on the order of the
debtors' up-front retainer payment were appropriate.
The appellant sought review in the district court. See
28 U.S.C. § 158(a). That court affirmed the award. This timely
second-level appeal followed. We have jurisdiction under 28 U.S.C.
§ 158(d)(1).
We review bankruptcy court orders without ceding any
special deference to the district court's intervening affirmance.
See City Sanit., LLC v. Allied Waste Servs. of Mass., LLC (In re
Am. Cartage, Inc.), 656 F.3d 82, 87 (1st Cir. 2011). In conducting
this review, we assess the bankruptcy court's legal conclusions de
novo, its factual findings for clear error, and its quantification
of fees for abuse of discretion. See Casco N. Bank, N.A. v. DN
Assocs. (In re DN Assocs.), 3 F.3d 512, 515 (1st Cir. 1993). The
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abuse of discretion standard is quite deferential: "we will set
aside a fee award only if it clearly appears that the trial court
ignored a factor deserving significant weight, relied upon an
improper factor, or evaluated all the proper factors (and no
improper ones), but made a serious mistake in weighing them." Gay
Officers Action League v. Puerto Rico, 247 F.3d 288, 292-93 (1st
Cir. 2001). In this regard, a material error of law is always an
abuse of discretion. Id. at 292.
Fee awards are commonplace in Chapter 13 cases. The
standard is familiar: a bankruptcy court may award reasonable fees
to a lawyer for a Chapter 13 debtor in line with "the benefit and
necessity" of the services rendered. 11 U.S.C. § 330(a)(4)(B).
Other considerations to be factored into the decisional calculus
include the expertise of the attorney; the time expended by him;
the reasonableness of the time given the nature, importance, and
complexity of the case; and the reasonableness of the billing rates
requested. Id. § 330(a)(3).
The section 330 factors mirror those encapsulated in the
traditional lodestar approach to calculating attorneys' fees. See
In re Spillane, 884 F.2d 642, 647 (1st Cir. 1989). Consequently,
we have recognized that the lodestar method is an appropriate
measuring device for attorneys' fees in bankruptcy cases. See id.
Under the lodestar method, a court determines a fee award
by "multiplying the number of hours productively spent by a
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reasonable hourly rate to calculate a base figure." Torres-Rivera
v. O'Neill-Cancel, 524 F.3d 331, 336 (1st Cir. 2008); see In re
Spillane, 884 F.2d at 647. When computing the number of hours
productively spent, the court should discount time spent on
unnecessary, duplicative, or overworked tasks. Gay Officers Action
League, 247 F.3d at 295-96.
In the case at hand, the bankruptcy court examined both
the hourly rates and the number of hours billed. The court
accepted the rates but concluded that the appellant and his staff
were claiming an excessive number of hours. The appellant asserts
that the court committed three errors in reaching this conclusion.
We address each assignment of error in turn.
To begin, the appellant contends that the bankruptcy
court distorted the fee calculation by failing explicitly to
identify and assess each of the factors enumerated in section 330.
This contention misconstrues the lodestar method, which is designed
to "provide[] a 'flexible paradigm' not meant to bind the nisi
prius court to any single way of calculating the number of hours
reasonably expended." Weinberger v. Great N. Nekoosa Corp., 925
F.2d 518, 526-27 (1st Cir. 1991) (quoting United States v. Metro.
Dist. Comm'n, 847 F.2d 12, 16 (1st Cir. 1988)). Given the nature
of this paradigm, a bankruptcy court need not march mechanically
through a checklist of the section 330 factors when fashioning a
fee award. See Metro. Dist. Comm'n, 847 F.2d at 15 (warning that
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mechanical approaches to fee awards "sacrifice substance on the
altar of form"); see also In re Thirteen Appeals Arising Out of San
Juan Dupont Plaza Hotel Fire Litig., 56 F.3d 295, 308 (1st Cir.
1995) (stating that lodestar method should not "be applied in a
formulaic or mechanical fashion" (internal quotation marks
omitted)). Rather, it suffices if the court makes a fee
calculation that takes the section 330 factors fairly into account.
In this instance, it is nose-on-the-face plain that the
bankruptcy court did enough to satisfy this standard. It first
found the hourly rates reasonable. See 11 U.S.C. § 330(a)(3)(B),
(F). It then found that many of the enumerated hours were
duplicative and unnecessary in view of the uncomplicated nature of
the case. See id. § 330(a)(3)(A), (C)-(D). With these findings in
place, it cannot plausibly be said that the bankruptcy court failed
to consider the section 330 factors. That the court did not
reference all of those factors explicitly is of no moment.
Next, the appellant criticizes the factfinding that
undergirds the fee award. In particular, he takes aim at the
bankruptcy court's determination that the debtors' case was
"relatively uncomplicated." He argues that the debtors' bankruptcy
proceeding differed from the mine-run in three ways. In our view,
however, these asserted distinctions do not compel the conclusion
that the appellant would have us draw.
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As a general rule, the trial court is best positioned to
judge the relative complexity of a proceeding. See Foley v. City
of Lowell, 948 F.2d 10, 19 (1st Cir. 1991). This case presents no
exception to the general rule. In reviewing the bankruptcy court's
finding that the debtors' Chapter 13 proceeding was uncomplicated,
our role is limited to determining whether the bankruptcy court was
clearly wrong. We will reverse only if, after reviewing the record
as a whole, we are left with "the irresistible conclusion that a
mistake has been made." United States v. One Star Class Sloop
Sailboat, 546 F.3d 26, 35 (1st Cir. 2008) (internal quotation marks
omitted). It is against this backdrop that we assay the trio of
distinctions mounted by the appellant.
First, the appellant posits that the debtors' income was
above the median and that, therefore, counsel was required to
perform a convoluted means test prior to filing the Chapter 13
plan. See 11 U.S.C. §§ 707(b), 1325(b). But nothing in the record
compels the conclusion that the bankruptcy court erred in finding
that, notwithstanding the need for a means test calculation, the
debtors' case was not complex. The bankruptcy court has extensive
experience with the means test and did not believe that the
necessity for performing the test in this case justified the
unusually high fees requested. The inference drawn by the
bankruptcy court is plausible, and the trier's choice among
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plausible inferences cannot be clearly erroneous. See One Star
Class Sloop Sailboat, 546 F.3d at 35.
In an effort to blunt the force of this reasoning, the
appellant insists that the means test required for the debtors was
especially intricate and made the case extraordinary. But the
bankruptcy court rejected this characterization, and the appellant
has given us no compelling reason to question the court's
conclusion.1
Second, the appellant asserts that the debtors demanded
unusually frequent communications, which significantly increased
his billable hours. This purported need for extensive
communications did not impress the bankruptcy court — and we
understand why. It strains credulity that even the most loquacious
client could cause legal bills to triple (and if that happened, one
would have ample reason to question the lawyer's management of the
case). After all, lawyers have an obligation to keep hand-holding
within reasonable limits.
The appellant also says that the case required him to
consult on a real estate transaction that carried potential
consequences for the Chapter 13 proceeding. This may be so, but
the appellant has pointed to no facts in the record that would
1
We note in passing that the appellant's own form retainer
agreement strongly suggests that, even when taking the need for a
means test calculation into account, a Chapter 13 proceeding should
generate far less than $11,000 in legal fees.
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entitle us to second-guess the bankruptcy court's conclusion that
the proposed property sale did not unduly complicate the Chapter 13
proceeding. Because the bankruptcy court's characterization of the
case as uncomplicated was not clearly erroneous, we must honor it.
The appellant has one last shot in his sling. In Bogan
v. City of Boston, we explained that where "a fee award is
substantially reduced, the trial court is expected to provide a
detailed explanation for its action." 489 F.3d 417, 430 (1st Cir.
2007). Embracing this language, the appellant declares that the
bankruptcy court should have scrutinized his fee application line
by line and discarded each duplicative or unnecessary entry one by
one. In the absence of such an analysis, his thesis runs, the fee
award lacks the requisite "detailed explanation."
This argument rests on a faulty premise. A bankruptcy
court's explanation of its fee award need not proceed line by line
through the fee application. See Foley, 948 F.2d at 20 (rejecting
the requirement of a "comprehensive accounting and line-by-line
review" (internal quotation marks omitted)); see also Pearson v.
Fair, 980 F.2d 37, 46 (1st Cir. 1992) (stating that a court need
not "set forth an exacting, line-by-line explanation of [its]
conclusion that the requested award of attorneys' fees must be
reduced").
There is no requirement that a bankruptcy court, in
explaining a fee award, be precise to the point of pedantry.
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Instead, the explanation need only be sufficiently detailed to
allow a reviewing court to ascertain the trial court's thought
processes and glean the basis for its award. See Torres-Rivera,
524 F.3d at 340 (upholding reduction in fee award where lower court
provided a plausible rationale for its decision).
The reasoning advanced by the bankruptcy court in this
case clears that hurdle. The court stated that the appellant's
hourly rates were reasonable but that, given the banal nature of
the case, the hours claimed were excessive — and it adequately
explained why it had come to that conclusion. At the bottom line,
the court, based on its extensive experience with similar cases,
determined that the appellant could have properly represented the
debtors' interests while consuming far fewer than the 58 billable
hours claimed. No more was exigible. See id.
We need go no further. For the reasons elucidated above,
we uphold the challenged fee award.
Affirmed.
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