UNPUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
No. 11-1886
In re: OMAR BOTERO-PARAMO,
Debtor,
-----------------------
BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,
Plaintiff – Appellant,
v.
TYSONS FINANCIAL, LLC,
Defendant - Appellee.
Appeal from the United States District Court for the Eastern
District of Virginia, at Alexandria. Anthony John Trenga,
District Judge. (1:11-cv-00370-AJT-IDD)
Argued: May 16, 2012 Decided: June 8, 2012
Before TRAXLER, Chief Judge, and KING and DUNCAN, Circuit
Judges.
Affirmed by unpublished opinion. Judge Duncan wrote the opinion
in which Chief Judge Traxler and Judge King joined.
ARGUED: Christopher Allan Glaser, JACKSON & CAMPBELL, PC,
Washington, D.C., for Appellant. Gabrielle Marcus Duvall,
LINOWES & BLOCHER, LLP, Bethesda, Maryland, for Appellee. ON
BRIEF: David H. Cox, James N. Markels, JACKSON & CAMPBELL, PC,
1
Washington, D.C., for Appellant.
Unpublished opinions are not binding precedent in this circuit.
2
DUNCAN, Circuit Judge:
This appeal arises from an adversary proceeding that
Sutton Funding, LLC (“Sutton”) initiated against Tysons
Financial, LLC (“Tysons”) on August 17, 2009, during the
pendency of Omar Botero-Paramo’s bankruptcy. Sutton sought to
have the bankruptcy court either declare that its lien against
some of Botero-Paramo’s property had priority over Tysons’s lien
or to subrogate its lien into a prior position. The bankruptcy
court granted summary judgment and awarded attorneys’ fees in
favor of Tysons. Bank of New York Mellon Trust Company, N.A.
(“BONY”), which had by then purchased Sutton’s interest in the
property, appealed both the bankruptcy court’s grant of summary
judgment and its award of attorneys’ fees in the United States
District Court for the Eastern District of Virginia. The
district court affirmed, and this appeal ensued. For the
reasons discussed below, we affirm.
I.
Omar Botero-Paramo and his wife, Maritza Urdinola,
owned two pieces of real property: 10447 New Ascot Drive, Great
Falls, Virginia (the “New Ascot Drive Property”), and 10511
Lawyers Road, Vienna, Virginia (the “Lawyers Road Property”).
3
When Botero-Paramo filed for bankruptcy on December 5, 2008, 1 his
creditors quickly learned that the paperwork effectuating the
many liens on these properties was less than a model of clarity.
We will first describe the various liens against the properties,
then the bankruptcy filing, and finally the procedural history
of this appeal.
A.
Botero-Paramo and Urdinola (collectively, the
“Debtors”) kept the Lawyers Road Property as their residence and
constructed a home on the New Ascot Drive property as a “spec”
home, that was to be sold. The earliest lien relevant to this
appeal is a June 2005 First Deed of Trust from First Savings
Mortgage for $2.79 million (the “FSM First DOT”), which the
Debtors used to purchase the New Ascot Drive Property. The FSM
First DOT was a short-term construction loan due on July 1,
2007. This lien encumbered only the New Ascot Drive Property.
The next lien in this appeal is a September 2005 Third
Deed of Trust from Congressional Funding USA, LLC for $400,000
(the “CFUSA Third DOT”). This lien encumbered only the Lawyers
1
Urdinola filed her own Chapter 11 petition on August 3,
2009. This appeal resolves pending issues in both bankruptcies.
4
Road Property. A sloppy refinancing of this lien created much
of the controversy in this case.
In December 2005, the debtors refinanced the CFUSA
Third DOT with a new loan from the same lender for $500,000 (the
“CFUSA Refinancing DOT”). As a condition for this refinancing,
CFUSA required a lien against the New Ascot Drive Property as
additional security. The closing instructions indicate that
this lien was to encumber both the Lawyers Road Property and the
New Ascot Drive Property, but, for reasons that are unclear, the
deed of trust only referenced the New Ascot Drive Property. The
attached “Balloon Rider” also mentions only the New Ascot Drive
Property on its face, although at least one of its exhibits
refers to the Lawyers Road Property, as well.
To further complicate matters, the parties incorrectly
filled out the form deed of trust. After some apparent
crossing-out, the CFUSA Refinancing DOT, as recorded, failed to
name a trustee and listed the intended trustee as the lender.
Tysons purchased the CFUSA Refinancing DOT on December 27, 2005,
and recorded a deed of trust correcting the above deficiencies
on July 24, 2006, but the debtors neither re-executed nor re-
acknowledged this corrected deed of trust as required by
Virginia law.
So that they could again refinance the Lawyers Road
Property in 2006, the Debtors had Tysons release its lien by
5
signing and recording a “Certificate of Release of Deed of
Trust” (the “Release”) in November 2006. As recorded on
December 19, 2006, the “Affidavit and Release” on the Release
reads: “I certify I am the holder of the above mentioned note
secured by the above mentioned Deed of Trust. The Lien thereon
created and retained on the above mentioned property is hereby
released.” The only property previously mentioned on the
Release is the Lawyers Road Property.
BONY’s predecessors did not take an interest in the
New Ascot Drive Property until June 4, 2007, when the Debtors
refinanced the FSM First DOT--the loan used to purchase that
property--with a 30-year loan from American Brokers Conduit for
$2.66 million (the “ABC DOT”). At the same time, another bank,
Secured Lending, took what it intended to be a Second Deed of
Trust (the “Secured Lending DOT”) from the debtors for $625,000.
The Secured Lending DOT was accidentally recorded before the ABC
DOT, but later subordinated to the ABC DOT.
It is nonetheless undisputed that the CFUSA
Refinancing DOT was properly recorded against the New Ascot
Drive Property, even if the document recorded contained numerous
errors. However, title reports prepared during this refinancing
did not include the CFUSA Refinancing DOT and similarly did not
reveal that Tysons now owned that lien.
6
Barclays purchased the ABC DOT for Sutton, which held
the lien until roughly one month after Sutton filed this
adversary proceeding. Then, in September 2009, BONY purchased
Sutton’s interest in the lien at a discount in light of this
ongoing litigation.
B.
Botero-Paramo filed for bankruptcy on December 5,
2008. In June 2009, he filed a motion to approve the sale of
the New Ascot Drive Property. This motion treated the CFUSA
Refinancing DOT, which was then held by Tysons, as the first
lien against the property. Tysons first objected to the sale
because it proposed to repay only the principal amount, without
any interest or other charges. Tysons later relented and
entered into a consent order on July 17, 2009, under which it
would receive the full amount of its claimed pay-off, Sutton
would receive the balance, and Secured Lending would receive
nothing.
Secured Lending objected to the sale on July 27, 2009,
claiming that Tysons should not receive anything from the sale
since it had released its lien on the New Ascot Drive Property
with the Release that it recorded on December 19, 2006. Sutton
echoed this claim when it too objected to the sale on August 7,
7
2009. Sutton began the adversary proceeding underlying this
appeal ten days later. 2
C.
In its complaint, Sutton claimed that Tysons had
released its interest in the New Ascot Drive Property, and that,
in the alternative, it was entitled to equitable subrogation
such that its lien would have priority over Tysons’s lien. 3 The
bankruptcy court granted summary judgment in favor of Tysons in
a thoughtful and well-reasoned opinion. The bankruptcy court
first decided the threshold question of whether deficiencies
with the CFUSA Refinancing DOT rendered the intended lien
unenforceable; if so, Tysons could not have priority over BONY.
Applying Virginia law, the bankruptcy court determined that the
deficiencies in the CFUSA Refinancing DOT did not render the
2
The parties entered into a consent order on September 2,
2009, that allowed the sale of the New Ascot Drive Property free
and clear of all liens for $2.78 million. The parties agreed to
hold in escrow the funds needed to resolve this appeal and to
disburse the remainder to BONY, as Sutton’s successor, to
satisfy the portion of its lien that would be paid even if it
were junior to Tysons's lien. As the bankruptcy court noted,
BONY received more pursuant to this agreement than it paid for
Sutton’s interest in the lien. J.A. 1713.
3
Tysons counterclaimed but the bankruptcy court declined to
decide those claims because deciding Sutton’s, then BONY’s,
claims settled all of the issues in the case.
8
lien unenforceable; at the very least, it could be enforceable
as an equitable mortgage.
Turning to the question of whether the Certificate of
Release of Deed of Trust released Tysons’s lien against the New
Ascot Drive Property, the bankruptcy court determined that the
Release conformed with neither the statutory form for a
“Certificate of Satisfaction,” which would release all of the
property covered by a lien, nor the statutory form for a
“Certificate of Partial Satisfaction,” which would release only
some of the property covered by a lien. The bankruptcy court
determined that the Release was more similar to a partial
satisfaction since it lacked the phrase “has been paid in full,”
which Virginia law requires when a satisfaction releases all of
the property covered by a lien. Also supporting this conclusion
was that the Release claimed only to release the lien “on the
above-mentioned property,” here, the Lawyers Road Property.
Accordingly, the bankruptcy court found that the Release applied
only to the Lawyers Road Property and that the New Ascot
Property remained encumbered.
As to subrogation, the bankruptcy court found that the
equities did not favor granting BONY the same priority as the
FSM First DOT. In reaching this conclusion, the bankruptcy
court noted that BONY was not a holder in due course, but had
9
purchased its interest after the deed of trust “had been
squarely challenged in litigation.” J.A. 1726.
Finally, the bankruptcy court awarded Tysons's
attorneys' fees at a separate hearing on February 28, 2011.
J.A. 2164. 4 Relevant to this appeal, the bankruptcy court found
that it could “almost take judicial notice of what are
prevailing fees in the Virginia area for bankruptcy-related
litigation.” J.A. 2159. Although Tysons had presented only
testimony from its own attorney on the reasonableness of its
fees, the bankruptcy court found that these fees were
comfortably with the normal range of its experience and
therefore found the fees to be reasonable.
BONY appealed to the district court, which affirmed
the holdings of the bankruptcy court in all respects. We will
consider first the claims that the bankruptcy court decided on
summary judgment and then its award of attorneys’ fees and
costs.
4
The bankruptcy court capped any fee award at the sum held
in escrow in excess of the value of Tysons’s lien. Therefore,
although Tysons actual fees exceeded the amount in escrow, the
bankruptcy court refused to award it a damages award against
BONY. J.A. 2110.
10
II.
We begin our analysis of the claims decided on summary
judgment by briefly considering the standard of review. We then
turn to BONY’s claim that Tysons lacked an enforceable lien
against the New Ascot Drive Property. Finding its lien
enforceable, we proceed to consider BONY’s argument that Tysons
released its lien against the New Ascot Drive Property when it
recorded the Release on December 19, 2006, and conclude that the
Release did not cover the New Ascot Drive Property. We finally
examine, and ultimately reject, BONY’s alternative argument that
it is entitled to equitable subrogation because the proceeds of
its lien paid off the FSM First DOT.
A.
When reviewing a district court’s decision on appeal
from a bankruptcy court, we apply the same standard of review
that the district court applied when it reviewed the decision of
the bankruptcy court. Terry v. Meredith (In re Stephen S.
Meredith, CPA, P.C.), 527 F.3d 372, 375 (4th Cir. 2008).
We review a grant of summary judgment by the
bankruptcy court and its affirmance by the district court de
novo. United Rentals, Inc. v. Angell, 592 F.3d 525, 530 (4th
Cir. 2010). “Summary judgment in bankruptcy is governed by
Federal Rule of Bankruptcy Procedure 7056, which incorporates
11
the standards of Federal Rule of Civil Procedure 56 into
bankruptcy proceedings.” Id. Accordingly, “we view the facts
and the reasonable inferences drawn therefrom in the light most
favorable to the nonmoving party.” Id.
B.
The threshold question in this appeal is whether
Tysons ever had an enforceable lien against the New Ascot Drive
Property. As discussed above, the CFUSA Refinancing DOT had
three deficiencies: (1) it failed to name a trustee; (2) it
named the intended trustee as the beneficiary (otherwise known
as the lender); and (3) it failed to mention the Lawyers Road
Property. Tysons attempted to correct these deficiencies by
filing a corrected deed of trust in 2006, but the debtors
neither re-executed nor re-acknowledged this corrected deed of
trust. The bankruptcy court noted that correcting the trustee
and beneficiary did not materially alter the estate being
conveyed but ultimately declined to rest its decision on this
ground since a failure to name a trustee nonetheless creates an
enforceable mortgage under Virginia law. 5
5
BONY’s suggestion that the CFUSA Refinancing DOT did not
create a lien against the Lawyers Road Property is irrelevant to
this appeal, and we express no opinion on that question.
12
We find the Virginia Supreme Court’s decision in Bank
of Christianburg v. Evans, 178 S.E. 1 (Va. 1935), largely
dispositive on this issue. That decision explains that “it is
well settled that a deed of trust on real estate to secure
creditors, in which the name of the trustee is left blank, is an
equitable mortgage, and may be enforced as such upon the
principle that equity will treat that as done which, by
agreement, is to be done.” Id. at 2. BONY suggests that
Virginia’s revised property codes, which require the listing of
a trustee, changed this rule. However, it cites no case law
supporting this claim. We decline to read Virginia’s
requirements for deeds of trust as eliminating the longstanding
doctrine of equitable mortgages absent any Virginia authority
indicating that such a fundamental change was intended.
BONY further contends that Tysons’s lien is invalid
because the CFUSA Refinancing DOT named the trustee as the
beneficiary instead of Congressional Funding, and as a result,
only the trustee had the authority to convey the lien to Tysons.
As the bankruptcy court noted, BONY has cited no authority for
the proposition that “mere misidentification of the lender’s
name invalidates an otherwise proper deed of trust.” J.A. 1716.
Indeed, “the principle that equity will treat that as done
which, by agreement, is to be done,” Bank of Christianburg, 178
S.E. at 2, appears equally applicable to misidentified lenders.
13
We agree with the bankruptcy court that as recorded, the deed of
trust was sufficient to give a subsequent searcher notice that
there was a lien against the New Ascot Drive Property. Indeed,
as we discuss in greater detail in addressing equitable
subrogation, BONY has argued neither that the lien was
improperly recorded nor that one of the deficiencies on the deed
of trust would prevent a title search from finding the lien. In
sum, we find Tysons’s lien to be enforceable.
C.
We find BONY’s second argument--that the Release
terminated Tyson’s lien against the New Ascot Drive Property--
also lacking merit. As the district court noted, the usual
process for releasing a deed of trust in Virginia is to file
either a “Certificate of Satisfaction” or a “Certificate of
Partial Satisfaction.” Va. Code Ann. § 55-66.3(A)(1). Section
55-66.4 contemplates a partial satisfaction through which a lien
covering multiple properties would be released only as to some
of the properties. 6 As the bankruptcy court correctly observed,
the statutory forms for a complete release and a partial release
6
For the sake of clarity, we refer to a “Certificate of
Satisfaction” as a “complete satisfaction” since it releases all
of the property encumbered by a lien and a “Certificate of
Partial Satisfaction” as a “partial satisfaction” since it
releases only some of the property encumbered by a lien.
14
differ in that a complete satisfaction has the lender certify
that it has been paid in full while the partial satisfaction has
the lender certify that “[t]he lien of the above-mentioned deed
of trust securing the above-mentioned note is released insofar
as the same is applicable to _____ (description of property)
recorded in deed book _____ at page _____ in the clerk's office
of this court.” Id. at § 55-66.4:1.
Although the Release does not comply exactly with
either form--for example, it styles itself as a “release”
instead of a “satisfaction”--it better comports with the form of
a partial satisfaction. As noted above, the “Affidavit and
Release” reads: “I certify I am the holder of the above
mentioned noted secured by the above mentioned Deed of Trust.
The Lien thereon created and retained on the above-mentioned
property is hereby released.” The only property previously
mentioned on the release is the Lawyers Road Property. Notably
absent is any language suggesting that the lender had been paid
in full as would be customary for a complete release. In sum,
we read the plain language of the Release as applying only to
the lien against the Lawyers’ Road Property. 7 Accordingly, we
agree with the bankruptcy court that because Tysons’s lien was
7
We have considered BONY’s other arguments in favor of
construing the Certificate of Release of Deed of Trust as a
complete satisfaction and find them to be without merit.
15
recorded before BONY’s, Tysons’s lien has priority over BONY’s
unless BONY can show that it is entitled to assume a prior
position through subrogation.
D.
BONY seeks to have us give its lien the same priority
as the FSM First DOT through equitable subrogation, and thereby
grant it priority over Tysons’s lien. As the Virginia Supreme
Court explained in Federal Land Bank of Baltimore v. Joynes, 18
S.E.2d 917 (Va. 1942), “[s]ubrogation is the substitution of
another person in the place of the creditor to whose rights he
succeeds in relation to the debt.” Id. at 920. It is “not
dependent upon contract, nor upon privity between the parties”
but is “the creature of equity, and is founded upon principles
of natural justice.” Id. “Subrogation not being a matter of
strict right, but purely equitable in its nature, dependent upon
the facts and circumstances of each particular case, no general
rule can be laid down which will afford a test in all cases for
its application.” Id. Virginia courts have “‘long been
committed to a liberal application of the principle of
subrogation.’” Centreville Car Care v. N. Am. Mortg. Co., 559
S.E. 2d 870, 872 (Va. 2002) (quoting Joynes, 18 S.E. 2d at 920).
Although the fact-intensive inquiry required in
subrogation claims does not generally support bright line rules,
16
Virginia courts have traditionally adhered to two guiding
principles when deciding the merits of a subrogation claim:
“First, subrogation is not appropriate where intervening
equities are prejudiced.” Id. (internal citations removed). As
the Joynes court explained, “[i]n the case of conventional
subrogation where the lender of money lent it with the intention
and understanding that he be substituted to the position of the
creditor whose debt he paid, but without taking an assignment,
where there are no intervening equities to be prejudiced, the
matter will be treated as if an assignment has been executed.”
18 S.E. 2d at 920. The second guiding principle is that the
“ordinary negligence of the subrogee does not bar the
application of subrogation where an examination of the facts . .
. shows that the equities strongly favor the
subrogee.” Centerville, 559 S.E. 2d at 872 (internal quotation
marks and alterations removed).
BONY claims that the bankruptcy court did not properly
analyze its claim under these principles. BONY’s argument in
this regard comprises two issues: whether the purchaser of a
lien assumes the equitable position of the seller, and, if so,
whether subrogation is appropriate, or equitable, under these
circumstances. As to the former, the bankruptcy court expressed
its reluctance to conclude that BONY assumed Sutton’s position
vis-à-vis whether the equities favored subrogation. As to the
17
latter, the bankruptcy court also disagreed, finding that the
equities did not favor subrogation.
We need not decide the complex threshold question of
whether the purchaser of an interest in a lien assumes the
equitable position of the seller under Virginia law. Even
assuming that BONY stepped into the equitable position of Sutton
and ABC, the original lender, we find that subrogation is
inappropriate in these circumstances because it would prejudice
Tysons.
BONY argues that it is entitled to priority over
Tysons because the proceeds of its lien paid off the FSM First
DOT and Tysons intended for its lien to be junior to the FSM
First DOT. Thus, BONY argues that not giving its lien priority
over Tysons’s lien would give Tysons more than it bargained for.
Although it is undoubtedly true that Tyson’s predecessor, CFUSA,
originally had a lien junior to the FSM First DOT, the FSM First
DOT was due on July 1, 2007. In other words, the CFUSA
Refinancing DOT would become the senior lien 18 months after it
was recorded. We find that the Virginia Supreme Court’s
decision in Centreville Car Care v. North American Mortgage Co.,
559 S.E.2d at 373, instructive on this point. There, the court
found that effectively extending the term of a senior lien would
prejudice a junior lienholder. Id. at 373. Centerville Car
Care had a lien of $150,000 against a property valued at
18
$210,000. Id. Centerville was undersecured because its lien
was junior to a $199,000 lien held by Fleet Bank against this
same property. Id. The court explained that “[n]evertheless,
Centreville had the right to anticipate that the obligors would
ultimately satisfy these loans to extinguish the liens upon
their interests in the property.” Id.
BONY seeks to distinguish Centreville by contending
that in a typical construction financing arrangement that Tysons
would have expected the short-term FSM First DOT to be replaced
with long term financing once a home was built on the property.
However, BONY has presented no evidence to support this
proposition. Although we construe facts in favor of the non-
moving party on summary judgment, we need not accept
conjecture. Celotex Corp. v. Catrett, 477 U.S. 317, 323-324
(1986) (“One of the principal purposes of the summary judgment
rule is to isolate and dispose of factually unsupported claims
or defenses, and we think it should be interpreted in a way that
allows it to accomplish this purpose.”). BONY has shown no
issue of material fact suggesting that the bankruptcy court
inappropriately granted summary judgment on the question of
whether subrogation would prejudice Tysons.
Further counseling against subrogation is BONY’s
failure to show that the equities “strongly favor”
subrogation. Centerville, 559 S.E. 2d at 872. As we have
19
noted, the fact that the title report on which BONY relied
failed to indicate any liens other than the FSM First DOT does
not aid its cause. In Virginia, sellers are deemed to have
constructive notice of all recorded liens. Fox v. Templeton,
329 S.E. 2d 6, 8-9 (Va. 1985) (“A purchaser of real estate has
constructive notice of the recorded title papers of his vendor,
and is charged with notice of all that an actual examination of
them would disclose.”). In fact, BONY conceded at oral argument
that the CFUSA recording served as notice of the lien. To the
extent that the title report on which BONY relied failed to
reflect it, BONY must seek relief elsewhere. On the undisputed
facts presented here, where, as noted, BONY has already received
more from the sale of the property than it paid for Sutton’s
interest, we find no basis for finding that the equities
strongly favor BONY. Accordingly, we hold that the bankruptcy
court properly granted summary judgment in favor of Tysons on
BONY’s claim for subrogation.
III.
A.
We lastly turn to BONY’s contention that the
bankruptcy court improperly granted Tysons's attorneys’ fees.
We review an award of attorneys’ fees for abuse of
discretion. Robinson v. Equifax Info. Servs., LLC, 560 F.3d 235,
20
243 (4th Cir. 2009). Where courts are statutorily permitted to
award attorneys’ fees, our review “is sharply circumscribed”
because we recognize that “a district court has close and
intimate knowledge of the efforts expended and the value of the
services rendered.” Id. (quoting Plyler v. Evatt, 902 F.2d 273,
277-78 (4th Cir. 1990)). We see no reason not to afford a
district court’s affirmance of a bankruptcy court’s award of
fees this same deference. Accordingly, we reverse the
bankruptcy court’s award only if we determine it to be “clearly
wrong.” Id.
B.
The crux of BONY’s argument is that Tysons failed to
meet its burden to establish the prevailing market rate of
attorneys’ fees in the relevant community where the bankruptcy
court sat, namely, Alexandria, Virginia. To calculate an award
of attorney's fees, we “first determine a lodestar figure by
multiplying the number of reasonable hours expended times a
reasonable rate.” Robinson, LLC, 560 F.3d at 243. This circuit
uses a 12-part test to determine the reasonableness of the rate
and the hours billed:
(1) the time and labor expended; (2) the novelty and
difficulty of the questions raised; (3) the skill
required to properly perform the legal services
rendered; (4) the attorney’s opportunity costs in
pressing the instant litigation; (5) the customary fee
21
for like work; (6) the attorney’s expectations at the
outset of the litigation; (7) the time limitations
imposed by the client or circumstances; (8) the amount
in controversy and the results obtained; (9) the
experience, reputation and ability of the attorney;
(10) the undesirability of the case within the legal
community in which the suit arose; (11) the nature and
length of the professional relationship between
attorney and client; and (12) attorneys’ fees awards
in similar cases.
Id. at 243-44 (quoting Barber v. Kimbrell’s Inc., 577 F.2d 216,
226 n.28 (4th Cir. 1978)). The court has previously explained
that the party seeking fees has the burden of proving the
reasonableness of the rate sought. Id. “In addition to the
attorney’s own affidavits, the fee applicant must produce
satisfactory specific evidence of the prevailing market rates in
the relevant community for the type of work for which he seeks
an award.” Id. at 244 (internal quotation marks and emphasis
removed).
BONY argues that Tysons should have submitted
affidavits from local attorneys other than its own counsel since
the Bankruptcy Court was not itself qualified to determine
whether Tysons’s fees were reasonable for the Alexandria area. 8
8
BONY also argues that Tysons’s own attorney, Ms. Duvall,
was unable to provide adequate testimony about reasonable
attorneys’ fees in the community because she is not a member of
the Virginia bar. BONY has offered no authority suggesting that
only members of the Virginia bar are qualified to testify about
reasonable attorneys’ fees in Alexandria. We do not think that
the district in which a testifying attorney is barred is
dispositive in this inquiry.
22
Although this court has reversed and remanded fee awards where
the only evidence that the prevailing party presented was
affidavits from her own counsel, id. at 245, we have not
previously considered whether a bankruptcy court may consider
its own expertise when determining the reasonableness of the
rate charged by attorneys as the bankruptcy court did in this
case. Several of our sister circuits have recognized that when
the prevailing party has failed to provide adequate evidence of
reasonable fees, a district court may rely on its own expertise
in determining a reasonable hourly rate, as the bankruptcy court
did here. E.g., Miele v. N.Y. State Teamsters Conference
Pension & Ret. Fund, 831 F.2d 407, 409 (2d Cir. 1987) (opining
that a district court may rely on its knowledge of private firm
hourly rates in the community in assessing the reasonableness of
fees); Norman v. Housing Auth. of City of Montgomery, 836 F.2d
1292, 1303 (11th Cir. 1988) (“Where documentation is inadequate,
the district court is not relieved of its obligation to award a
reasonable fee, but the district court traditionally has had the
power to make such an award without the need of further
pleadings or an evidentiary hearing.”); Lucero v. City of
Trinidad, 815 F.2d 1384, 1385 (10th Cir. 1987) (“The
establishment of hourly rates in awarding attorneys’ fees is
within the discretion of the trial judge who is familiar with
the case and the prevailing rates in the area”); see also CoStar
23
Group, Inc. v. LoopNet, Inc., 106 F. Supp. 2d 780, 788 (D. Md.
2000) (“Evidence of the prevailing market rate usually takes the
form of affidavits from other counsel attesting to their rates
or the prevailing market rate. However, in the absence of
sufficient documentation, the court may rely on its own
knowledge of the market.” (citations omitted)). Here, the
bankruptcy court observed that it had several similar cases
before it in which it had awarded attorneys’ fees. It
determined that Tysons sought fees that were within the range of
fees awarded in those similar cases. Based on these
comparables, it then thoroughly analyzed whether certain costs
that Tysons claimed were better considered overhead and whether
certain issues were overlawyered. Although this approach lacked
the usual expert testimony, because nearly every case on a
bankruptcy court’s docket involves reviewing attorneys’ fees and
costs in the community, we find that bankruptcy courts are, in
certain circumstances, particularly qualified to determine the
reasonableness of fees based on their own expertise. Moreover,
BONY has not argued that Tysons’s fees were unreasonable, only
that Tysons did not meet its burden of proving that its fees
were reasonable. We see little value in remanding a case only
so that it can generate additional attorneys’ fees. On these
facts, we hold that the bankruptcy court did not abuse its
discretion when it awarded Tysons's attorneys’ fees and costs.
24
IV.
For the foregoing reasons, we affirm the judgment of
the district court.
AFFIRMED
25