MEMORANDUM OF DECISION REGARDING CHAPTER 13 SUPPLEMENTAL FEE APPLICATION

WAYNE JOHNSON, Bankruptcy Judge.

I. INTRODUCTION.

The Travis Law Firm ("Firm"), counsel for the chapter 13 debtors, Carlos and Angeles Quiroz ("Debtors"), has filed an application for supplemental fees entitled "Application for Supplemental Fees" [docket number 73] ("Application"). The billing records of the Firm in the Application seek fees for two categories of services in this chapter 13 case: (1) $920 for opposing a motion for relief from the automatic stay1 and (2) $3,700 for preparing a declaration of the Debtors, for attending a status conference, for submitting a brief prior to the status conference and for preparing the fee application.2 The total of these figures is $4,620.3

The chapter 13 trustee, Rod Danielson ("Trustee"), has filed opposition to the Application [docket #75] and contends that the Court should allow $2,025 consisting of (1) $600 for opposing the motion for relief from the automatic stay, (2) $1,350 for preparing a declaration of the Debtors, attending a status conference and submitting a brief prior to the status conference, and (3) $75 for preparing the fee application.

For the reasons set forth below, the Court allows total fees and costs of $2,325.

II. THE APPLICABLE LEGAL STANDARD.

Section 329(b) of the Bankruptcy Code limits attorneys for debtors to "reasonable" attorney's fees. See 11 U.S.C. § 329. Under the statute, a fee charged by counsel for a debtor that "exceeds the reasonable value of any such services" is not permissible. According to the legislative history for the statute, Congress believed that fees charged by counsel for debtors "should be subject to careful scrutiny."4 Thus, the Code requires bankruptcy courts to evaluate the fees charged by counsel for debtors.

The leading case in the Ninth Circuit regarding awarding attorney's fees in chapter 13 cases is Law Offices of David A. Boone v. Derham-Burk (In re Eliapo), 468 F.3d 592 (9th Cir. 2006). As described at length in that case, when considering a fee application in a chapter 13 case, courts tend to not rely upon the lodestar method when awarding fees for routine tasks regularly performed in large numbers of chapter 13 cases and, instead, look to the "normal and customary" fees charged by other chapter 13 attorneys in the legal community. Id. at 599-600. On this subject, the Ninth Circuit cited the following cases for the "normal and customary" standard: Chamberlain v. Kula (In re Kula), 213 B.R. 729, 737 n.5 (8th Cir. BAP 1997) ("Because the majority of work in most Chapter 13 cases is normal and customary, and because of the sheer volume of such cases in most districts, the lodestar calculation may not necessarily be the best method for determining appropriate fees in those cases.") and In re Szymczak, 246 B.R. 774, 781 (Bankr. D.N.J. 2000) ("Because use of the lodestar method for calculating legal fees does not achieve fair and reasonable results for debtor's counsel in chapter 13 cases, bankruptcy courts should divide services into two categories: work that is standard or normal and customary in a chapter 13 case and work that falls outside of this standard.") as well as In re Watkins, 189 B.R. 823, 828 (Bankr. N.D. Ala. 1995) (approving use of a "normal and customary" standard for routine services in Chapter 13 cases, and use of the lodestar method for work that "falls outside of that standard").

In re flecting on the Eliapo decision ten years later, the Ninth Circuit stated that "nothing required the bankruptcy court to apply the lodestar method, Unsecured Creditors' Comm. v. Puget Sound Plywood, Inc., 924 F.2d 955, 960 (9th Cir. 1991), which, as we have previously noted, is problematic in Chapter 13 cases, see In re Eliapo, 468 F.3d 598-99 (describing the problems with applying the lodestar method in Chapter 13 cases and approving the use of presumptive fees in such cases)." Bayer Wishman & Leotta (In re Walker), 652 Fed. Appx. 539 (9th Cir. 2016).

Finally, under applicable law, attorneys who submit a fee application bear the burden of proving an entitlement to fees. A chapter 13 fee application must include evidence that the amount of fees requested is "usual and customary" in comparison to the fees charged for the same tasks performed by other chapter 13 attorneys in other cases. The applications must include sufficient evidence that the requested fees are reasonable. Bayer at **2 ("[Chapter 13 debtors' counsel] did not carry its burden of proving its entitlement to the fees requested because it failed to produce sufficient evidence that the fee request was reasonable. See 11 U.S.C. §§ 330(a)(2), (a)(3); Camacho v. Bridgeport Fin., Inc., 523 F.3d 973, 980 (9th Cir. 2008) ("[T]he burden is on the fee applicant to produce satisfactory evidence—in addition to the attorney's own affidavits—that the requested [fees are reasonable.]" (quoting Blum v. Stenson, 465 U.S. 886, 895 n.11, 104 S.Ct. 1541, 79 L. Ed. 2d 891 (1984)).").

III. FEES FOR ADDRESSING THE MOTION FOR RELIEF FROM STAY.

A. No Evidence Of Reasonableness Of The Fees.

When submitting a fee application, the law requires applicants to provide evidence that their fees are reasonable in comparison to similar services rendered by other attorneys. It is not enough to simply provide the billing records of the applicants showing the work performed in one case. Instead, the applicants must also provide evidence that the fees are reasonable in comparison to fees of other attorneys. Requested fees must be "usual and customary" in amount. This requires some evidence of the custom and practice in the legal community for the task at hand.

In this case, the Firm did not provide any such evidence in support of its Application. Rather, the Firm simply provided its own billing records with no evidence that the amounts sought are "usual and customary" in comparison to other attorneys. That hampers the ability of the Court to evaluate the Application.

However, as discussed in greater detail below, the Court faced this same situation in the case of In re Kevin Walker, 6:09-bk-28706-WJ in which a chapter 13 attorney filed a fee application with billing entries but provided no evidence of reasonableness. In that situation, the Court reviewed 125 similar fee applications filed by chapter 13 attorneys performing the same task. Given that the Court reviews and processes hundreds of supplemental fee applications every year, the Court sees quite a bit of evidence regarding the amount of fees charged by chapter 13 debtors' attorneys.

On appeal, both the District Court and the Court of Appeals affirmed this approach. See Bayer Wishman & Leotta (In re Walker), 2014 U.S. Dist. LEXIS 117644 (C.D. Cal. 2014), affirmed, 652 Fed. Appx. 539 (9th Cir. 2016). In particular, the District Court noted that in the Walker case (like this one) the "supplemental fee application did not contain any information to demonstrate the reasonableness of the fees for the particular task at issue." 2014 U.S. Dist. LEXIS 117644 at *8. In this context, the District Court stated that "[i]n the absence of such evidence, the Court conducted its own independent study to determine a reasonable fee in which it compiled information concerning 125 cases where fee applications were filed in the Riverside Division seeking compensation for the same task . . . This Court finds that the Bankruptcy Court did not err or abuse its discretion, but instead followed a reasonable approach and reached a reasonable conclusion as to the value of the services at issue based on the information available." Id. at *8-*10. The Court of Appeals affirmed, stating that the "fee study relied upon by the bankruptcy court . . . consisting of 125 supplemental fee requests filed in the Riverside Division for preparation of a Chapter 13 status report . . . provided concrete evidence of the comparative unreasonableness of BWL's fee request." 652 Fed. Appx. at 540.

As in the Walker case, the Firm has not provided evidence of reasonableness of its fees. Therefore, as in the Walker case, the Court has spent considerable time reviewing hundreds of other fee applications for services similar to the services set forth in the Application by the Firm. The data found by the Court is listed on the attached exhibits and discussed below.

B. The Aggregate Results From 168 Fee Applications.

In considering and analyzing the Application, the Court has reviewed 168 fee applications filed in other chapter 13 cases which this Court has considered and approved in the past. A list of those 168 applications is attached as Exhibit 1. The 168 fee applications are listed in chronological order.

Over the years, the Court has considered thousands of supplemental fee applications filed by attorneys for chapter 13 debtors. The fee applications pertain to dozens of different kinds of services rendered during a chapter 13 case. The Court has considered 168 fee applications that pertain to motions for relief from stay.

The 168 fee applications listed on Exhibit 1 involve chapter 13 cases in which a creditor filed a motion for relief from the automatic stay and counsel for the debtors assisted the debtors in dealing with the motion.5 As set forth on the last page of Exhibit 1, attorneys for chapter 13 debtors have requested on average $507.47 in fees and costs for addressing a motion for relief from stay and they have agreed to accept an average of $442.58 in allowed fees and costs. The difference, of course, is based on objections by the chapter 13 trustee.

In 123 of the 168 cases, counsel for the chapter 13 debtors requested an amount of fees and costs and the trustee agreed with that request. The trustee did not object to 123 of the fee applications. Thus, in 73% of the cases,6 the trustee agreed with the amount requested by counsel for the debtors.

In 27% of the cases, however, counsel for the debtors requested an amount which the trustee considered too high and, therefore, the trustee filed an objection suggesting a lower amount. In all of these instances (45 cases), counsel for the debtors agreed to the reduction in fees requested by the trustee. The parties reached an agreement without court adjudication.

This is an important fact. The Court did not adjudicate any of the 168 fee applications.7 Nor has the Court posted guidelines regarding such tasks or otherwise weighed in (prior to this decision in this case) as to the appropriate amount of fees for responding to a motion for relief from the automatic stay. Instead, the parties reached their own decisions regarding the appropriate amount of the fees (with or without an objection by the trustee).

Thus, when considering all 168 fee applications, attorneys for chapter 13 debtors have agreed, on average, to accept $442.58 for assisting debtors in addressing a motion for relief from stay. The figure of $442.58 includes all attorney's fees, all costs, all fees for appearing at hearings and all work associated with preparing the fee application itself. The figure of $442.58 is all inclusive.

The sum of $442.58, however, is inadequate for two reasons. First, this figure is based on 168 fee applications filed over nine years. Over a time period spanning nearly a decade, inflation casts a shadow that cannot be ignored. And while the country has enjoyed relatively stable inflation rates for several decades, the ever steady march of time still causes unyielding increases in costs and prices for goods and services.

For this reason, the Court has further segregated the data from the 168 cases on Exhibit 1 by three time periods spanning three years each: 2011-2013, 2014-2016 and 2017-2019. As set forth on the last page of Exhibit 1, the averages during all three time periods have steadily increased. During the most recent period (2017-2019) — which covers 40 fee applications — attorneys for chapter 13 debtors have requested on average $700.18 in fees and costs for addressing a motion for relief from stay and, on average, they have agreed to accept $545.04 in allowed fees and costs. Thus, the agreed average ($545.04) for the last three years is about $100 more than the agreed average for all nine years ($442.58).

However, while the Firm would undoubtedly support an increase from $442.58 to $545.04, the figure of $545.04 is too low for a second reason: the variety of services rendered. Not all motions for relief from stay are created equal. Or rather, not all motions for relief from stay require the same response.

Some motions for relief from stay can be ignored. Other motions require virtually no response. Still other motions for relief from stay require some opposition.

Therefore, in determining a reasonable fee for the Firm, further analysis is needed. The Court needs to focus more keenly on the services rendered by the Firm in this case.

C. Table A: Unopposed Motions Not Involving Fraud.

In reviewing the 168 fee applications and the services rendered, the Court has reorganized the data on Exhibits 2 and 3 by subgroups of similar services rendered. Whereas Exhibit 1 lists all 168 applications chronologically, Exhibits 2 and 3 group those same 168 fee applications by subgroups. Exhibits 2 and 3 contain all the same information as in Exhibit 1 but organized differently.

Exhibit 2 contains three tables: A, B and C. Table A includes instances in which debtors did not oppose a creditor obtaining relief from the automatic stay to recover property of the debtors. This could occur for several reasons. In some cases, chapter 13 debtors propose under their chapter 13 plan to abandon vehicles or real property and, therefore, when the lender files the motion for relief from stay, debtors do not oppose. In other cases, debtors propose to retain real property or vehicles under their plan but later (post-confirmation) they give up because the financial drain is too great. In such cases, debtors do not want the property and, therefore, do not oppose relief from the automatic stay.

In such instances, counsel for the debtors will very often file nothing at all in response to the motion for relief from stay. In rare instances, however, counsel will file a very short form pleading stating that the debtors do not oppose the motion. Table A lists 41 fee applications which cover this type of scenario. As listed at the end of Table A, attorneys for chapter 13 debtors that have assisted with motions for relief from stay under these circumstances have requested on average $162.16 in fees and costs and, on average, they have agreed to accept $140.69 in allowed fees and costs. The figure of $140.69 includes all attorney's fees, all costs and all work associated with preparing the fee application itself.

D. Table B: Cases Involving Fraud With No Opposition or Limited Opposition.

Table B on Exhibit 2 lists ten fee applications involving so-called "hijacked" cases. These are instances when a dishonest person who is not a debtor in bankruptcy seeks to stall a foreclosure or eviction without filing his or her own bankruptcy case but by "hijacking" an existing bankruptcy case filed by an honest debtor. Instead of filing his or her own bankruptcy case, the dishonest person allegedly transfers some portion (or all) of real property to an honest debtor (often picked at random) who is currently in a pending bankruptcy case for the sole purpose of invoking the automatic stay in the bankruptcy case of the honest debtor. In most instances, the debtors selected at random in these "hijacked" cases have no connection with the transferee and have no desire to receive a transfer of any interest in the property. In some cases, the alleged transfers are fake (i.e. the alleged transfer documents are not recorded or otherwise valid). In most of these cases, the debtor is not involved in the fraud and disavows the property. Indeed, the honest debtors typically do not even learn of the fraud until a creditor files a motion in the case.

When this scenario occurs and the lender files a motion for relief from the automatic stay, many debtors simply ignore the motion. Because debtors disavow the property, they have no interest in defeating the motion. In rare instances, however, counsel for the debtors will file a brief responding to the motion and disavowing the property that is the subject of the motion. Sometimes counsel for the debtors will characterize the responsive brief as non-opposition or limited opposition. With respect to the latter, the debtors disavow the property (and consent to relief from stay) but they oppose any findings that the debtors were involved in the fraudulent activity.

As listed at the end of Table B, attorneys for chapter 13 debtors that have assisted with motions for relief from stay under these circumstances have requested on average $488.88 in fees and costs and, on average, they have agreed to accept $442.50 in allowed fees and costs. The figure of $442.50 includes all attorney's fees, all costs, all court appearances and all work associated with preparing the fee application itself.

E. Table C: Miscellaneous.

Finally, the last table on Exhibit 2 — Table C — lists eleven fee applications involving relatively infrequent miscellaneous responses to motions for relief from stay in chapter 13.

F. Table D: Motions For Relief From Stay Opposed By Debtors.

In evaluating fees in this case, it is important to not include the data in Tables A, B and C on Exhibit 2 because the tasks performed by the Firm in this case were (slightly) different. The Firm provided a bit more services in this case than the attorneys did in the 62 cases described in Tables A, B and C. And since the average fees for services in Tables A, B and C are considerably lower, they depress the figure of $545.04 mentioned earlier. In other words, the figure of $545.04 will be higher when focusing more precisely on the services rendered in this case.

Table D on Exhibit 3 contains the data most relevant to the current application filed by the Firm. Table D lists 106 fee applications in instances in which a chapter 13 debtor fell behind in making post-confirmation secured debt payments on a home mortgage or vehicle or other secured debt and desired to defeat the motion by arranging for an adequate protection order or by converting to conduit payments. Those are the facts in this case.

1. The Quiroz Relief From Stay Motion

Specifically, in this case, the Debtors fell behind in making the mortgage payments on their home post-petition. The failure to make payments during the chapter 13 case constituted a default under the terms of their confirmed chapter 13 plan. In response, the lender (Bank of America) filed a motion for relief from the automatic stay [docket #54]. As required under the local rules, the lender used a mandatory court form motion.

The Firm responded on behalf of the Debtors and filed an opposition brief [docket #56]. The motion was resolved by a stipulation converting from direct payments to the mortgage lender to conduit payments using a plan modification. The chapter 13 trustee prepared a stipulation (using information received from counsel for the lender and Debtors) which the parties executed [docket #65]. The chapter 13 trustee then prepared an order modifying the chapter 13 plan consistent with the stipulation which the Court entered [docket #67].

This is a common occurrence which the Court and the parties regularly encounter in confirmed chapter 13 cases. When a chapter 13 debtor defaults in making direct payments to a lender post-confirmation, the matter is almost always resolved either with an adequate protection order or an order converting to conduit payments. This Court requires the latter, but the work involved is the same for both. Either way, the parties negotiate terms to cure the arrearage and provide for future payments and then the Court enters an order consistent with the terms negotiated by parties.

The work performed by the Firm in this case was typical for this scenario. The Firm reviewed the form motion for relief from stay and then drafted a very short response brief. The opposition brief filed by the Firm on March 15, 2019 was a very short form pleading. The brief itself consisted of two sentences. The attached declaration consisted of one sentence (paragraph 3) as well as the common introductory language in paragraphs 1 and 2 (found in nearly all declarations). So, the pleading basically consisted of three sentences.

The opposition brief filed by the Firm was also clearly a form that the Firm had used on many occasions before. The opposition brief is nearly identical in form and substance to similar briefs filed by the Firm in other chapter 13 cases handled by the Firm including:

The Court's comments about the Firm using a short form opposition brief are not meant to sound critical. The bare bones brief filed by the Firm worked. Most chapter 13 attorneys for debtors in this situation file bare bones briefs and then quickly resolve the matter either through an adequate protection order or converting to conduit payments. That is a regular occurrence in chapter 13 cases and the situation almost never requires meaningful briefing by either the moving party or the opposing party.

In addition to the short brief, counsel for the debtors will typically communicate on several occasions (either by phone or e-mail) with their clients and counsel for the lender (and the trustee) to exchange the information needed for the stipulation to cure the arrearage and arrange for making of future payments. The lender or the chapter 13 trustee then prepares the stipulation which counsel for the debtors typically reviews and signs. The lender or the chapter 13 trustee then prepares a proposed order consistent with the terms and submits it to the Court. The billing records of the Firm reflect that the Firm provided these common services in this case.

Finally, counsel for debtors will often appear at one or two hearings regarding the motion for relief from stay. In such circumstances, the parties almost always jointly ask for a continued hearing to finish working on their stipulation. The hearings are typically very short and do not involve any disputed oral argument. In some cases, if the parties act quickly enough and promptly submit a stipulation and order, the hearing is avoided entirely.

Table D lists 106 fee applications involving this same scenario. The Table is divided into three parts. Part 1 lists fee applications in 79 cases in which counsel for the debtors performed the same work as in this case. Specifically, counsel for the debtors reviewed the motion for relief from stay, filed a bare bones objection to the motion, communicated with the debtors and counsel for the lender, arranged for an adequate protection order or a plan modification converting to conduit payments, appeared at one or two hearings and prepared a fee application.

As listed at the end of Table D, Part 1, attorneys for chapter 13 debtors that have provided these services — the same services provided in the Quiroz case — in these 79 cases have requested on average $687.93 in fees and costs and, on average, they have agreed to accept $586.73 in allowed fees and costs. The figure of $586.73 includes all attorney's fees, all costs, all court appearances and all work associated with preparing the fee application itself.

Part 2 of Table D lists nine fee applications in which counsel for the chapter 13 debtors provided all the same services but provided a lengthier opposition brief. In these nine cases, counsel for the debtors provided longer opposition briefs and not the bare bones briefs filed in this case and the 79 cases listed in Part 1. As listed at the end of Table D, Part 2, attorneys for chapter 13 debtors that have provided these services — the same services provided in the Quiroz case with a longer opposition brief — in these 9 cases have requested on average $653.80 in fees and costs and, on average, they have agreed to accept $591.17 in allowed fees and costs. The figure of $591.17 includes all attorney's fees, all costs, all court appearances and all work associated with preparing the fee application itself.

Finally, Part 3 of Table D lists eighteen fee applications in which counsel for the chapter 13 debtors provided all the same services without filing any brief. In other words, counsel for the debtors helped debtors oppose a motion for relief from stay and obtain an adequate protection order (or convert to conduit payments) without filing any brief. As listed at the end of Table D, Part 3, attorneys for chapter 13 debtors that have provided these services in these eighteen cases have requested on average $539.92 in fees and costs and, on average, they have agreed to accept $508.70 in allowed fees and costs. The figure of $508.70 includes all attorney's fees, all costs, all court appearances and all work associated with preparing the fee application itself.

Overall, at the end of Exhibit 3, the Court has listed the aggregated numbers for all 106 fee applications. Overall, attorneys for chapter 13 debtors that have provided the same services in 106 cases similar to the current case have requested on average $659.90 in fees and costs and, on average, they have agreed to accept $573.86 in allowed fees and costs. The figure of $573.86 includes all attorney's fees, all costs, all court appearances and all work associated with preparing the fee application itself.

In order to take into account the impact of inflation, the Court has broken down these figures by time period. During the most recent period (2017-2019) — which covers 32 fee applications — attorneys for chapter 13 debtors have requested on average $788.04 in fees and costs for addressing a motion for relief from stay and, on average, they have agreed to accept an average of $608.34 in allowed fees and costs. Thus, the agreed average ($608.34) for the last three years is about $25 more than the agreed average for all nine years ($573.86) and about $60 more than the figure of $545.04 mentioned above. By focusing more tightly on fee applications involving the same services rendered by the Firm, the average agreed fee in the community is $608.34 (not $573.86 or $545.04).

2. The Fees In This Case.

When comparing this data to the current case, it is clear that the amounts sought by the Firm in this case are unusually high. The Firm seeks $920 for resolving a motion for relief from stay but the average amount of fees awarded for 106 similar fee applications for similar fees over the last nine years is $573.86. For the last three years (2017-2019), the average amount of fees which chapter 13 debtors and trustees have agreed upon for similar services is $608.34. The request of the Firm is about $210 higher.

In addition, the average amount of fees and costs awarded in connection with the 79 fee applications for services identical to the services provided by the Firm in this case (see Table D, part 1) is $586.73. Thus, the request for $920 is well above the "usual and customary" fees charged by other chapter 13 debtors' attorneys for similar services.

Also, 98% of the 106 fee applications listed on Exhibit 3 involved instances in which counsel for the debtors asked for less than $920 (or asked for more than $920 that but agreed to less than $920 after an objection by the trustee) for the same services provided by the Firm. One hundred and four of the 106 fee applications resulted in agreed fee awards of less than $920 for the same services provided by the Firm in this case.

Stated differently, 98% of other chapter 13 debtors attorneys were more efficient than the Firm in this case and efficiency matters to the Ninth Circuit. In its decision in Law Offices of David A. Boone v. Derham-Burk (In re Eliapo), 468 F.3d 592 (9th Cir. 2006), the Ninth Circuit indicated that when courts evaluate fees charged by debtors' counsel in chapter 13 cases, they should do so in a manner that "encourages efficient use of attorney time by providing fair compensation to efficient practitioners and by preventing inefficient practitioners from passing on the cost of their inefficiency." Id. at 599. The Court leaned in favor of rewarding efficient practice and avoiding rewarding inefficient practice. The Court commented further (quoting Judge Lundin) as follows:

Thus, the Ninth Circuit decision in Eliapo emphasized efficiency when considering fee applications and encourages bankruptcy courts to avoid rewarding less efficient efforts. As a result, awarding $920 to the Firm would not be consistent with Eliapo because the level of efficiency by the Firm was in the bottom 2%.

In reviewing the data further, 80% of the 106 fee applications listed on Exhibit 3 involved instances in which counsel for debtors asked for less than $675 (or asked for more than that but agreed to less than $675) for the same services provided by the Firm. Eighty-five of the 106 fee applications resulted in agreed fee awards of less than $675 for the same services provided by the Firm in this case. From the Court's perspective, it makes sense to focus on the level of efficiency of the top 80%. Requiring practitioners in the bottom 20% to contemplate reaching for the level of efficiency of the top 80% seems reasonable.

Accordingly, for all these reasons, the Court will allow $675 in fees and costs for services rendered by the Firm in connection with (1) the motion for relief from stay and (2) one-third of the work related to preparation of the fee application.

IV. FEES FOR THE DEBTORS' DECLARATION AND THE STATUS CONFERENCE.

A. The Post-Confirmation Default.

The next category of services performed by the Firm pertains to a declaration of the Debtors regarding the status of direct payments in the case. Under the terms of the confirmed chapter 13 plan, the Debtors proposed to make payments during the course of the case directly to the following secured creditors: Bank of America,8 Td Auto Finance,9 Toyota Motor Credit Co.10 and Visterra Credit Union/Altura.11 Section 1326(c) of the Bankruptcy Code provides for a bankruptcy trustee to make disbursements to creditors during a case but the Debtors proposed to make payments to these secured creditors directly. The Debtors committed in their chapter 13 plan to make payments every month directly to the creditors without the Trustee acting as the disbursing agent. Accordingly, the Court confirmed the chapter 13 plan on that basis.

Unfortunately, the motion for relief from stay by Bank or America revealed that the Debtors defaulted in making those monthly payments. Bank of America provided evidence that the Debtors had failed post-confirmation to make three mortgage payments.12 The motion indicated that the Debtors were delinquent in the amount of $4,838.23 post-confirmation.

Because the Debtors had failed to make direct payments to one creditor (Bank of America), the Court directed the Debtors to provide information regarding whether or not they had paid the other secured creditors (Td Auto Finance, Toyota Motor Credit Co. and Visterra Credit Union/Altura). Without this information, it was unclear whether the default by the Debtors in the chapter 13 case was limited to simply Bank of America or was more extensive. In response, counsel for the Debtors prepared a standard secured debt payment history declaration and, thankfully, it revealed that the Debtors were not in default to the other creditors. The information provided in the declaration indicated that the Debtors had not defaulted in making payments to any creditor other than Bank of America.

B. The Secured Debt Payment History Declaration.

The Court has created and posted a form secured debt payment history declaration and the Firm used that form in preparing the declaration in this case.13 In this case, the Firm modified the form slightly by inserting some additional sentences. However, most of the document filed in this case consists of the Court form.

This form declaration has been submitted hundreds of times in chapter 13 cases. As with so many other discrete tasks in chapter 13, a rhythm has emerged over the years regarding the amount of fees that are reasonable and customary for preparing this form declaration for debtors. Indeed, there has been litigation about this very issue which culminated with a decision by the Ninth Circuit Court of Appeals.

There are four instances in which the secured debt payment history declaration is typically submitted to the court: (1) with a motion by debtors to continue or impose the automatic stay, (2) prior to confirmation, (3) annually post-confirmation and (4) prior to a status conference. With respect to the first two instances, submitting the declaration is considered part of the cost of pursing another task (i.e. a motion by the debtors to continue or impose the automatic stay or confirmation of a chapter 13 plan). Preparing the declaration under those circumstances is not separately compensable.

1. Fee Applications for Annual Secured Debt Payment History Declarations.

With respect to the third instance, in some cases the confirmation order provides that debtors will file annual declarations regarding payments which the debtors asked for permission to pay directly post-confirmation. The Court has reviewed 228 fee applications filed by counsel for chapter 13 debtors for fees and costs associated with filing the annual declarations. They are listed on Exhibit 4 and, as set forth on the last page of Exhibit 4, attorneys for chapter 13 debtors have requested on average $400.93 in fees and costs for filing an annual secured debt payment history declaration and, on average, they have agreed to accept $312.79 in allowed fees and costs. The figure of $312.79 includes all attorney's fees and costs for preparing the declaration and all work associated with preparing the related fee application.

2. Fee Applications for Secured Debt Payment History Declarations And Status Conferences.

With respect to the fourth instance in which a secured debt payment history declaration is submitted — in connection with appearing at a status conference — the amount of work involved is, for several reasons, a bit more than the work associated with submitting the annual secured debt payment history declaration. First, obviously, the fourth task usually involves an appearance at the status conference and, therefore, more time for counsel.

Second, the declaration submitted in advance of the status conference tends to require a little additional work. Although the secured debt payment history declaration should be cumulative (i.e. cover all years of the entire post-petition period) whether submitted annually or prior to a status conference, the annual declaration (which does not involve a status conference) is easier to prepare because an attorney need only collect data for the prior year and add it to the annual declaration from the year before. Thus, less work is involved for any given annual declaration.

However, when the Court sets a status conference (due to a post-petition default) and requests that the debtors provide a cumulative declaration, counsel must (usually for the first time) prepare a declaration for the entire post-petition period. This usually happens in cases in which (for various reasons) the debtors have not previously submitted any secured debt payment history declarations. Thus, the declarations under these circumstances tend to involve a bit more work and information.

Third, the declarations submitted in connection with a status conference tend to involve non-conduit cases (which are then typically converted, to some extent, into conduit cases). Non-conduit cases involve more direct payments for more secured creditors than conduit cases. The more direct payments that occur in a case, the lengthier the secured debt payment history declaration. So, again, while the degree is not particularly great, the declarations submitted in connection with a status conference tend to be a bit longer.

For these three reasons, the work involved in submitting a secured debt payment history declaration and attending a status conference tends to be a bit more than simply submitting an annual declaration.

In contemplating the appropriate amount of fees and costs, the Court first encountered this issue in 2013 in the case of In re Kevin Walker, 6:09-bk-28706-WJ. In that case, counsel for a chapter 13 debtor filed a fee application requesting $1,622.34 in fees and costs in fees for the same services rendered in this case: preparing a cumulative secured debt payment history declaration in connection with a status conference.14 The chapter 13 trustee objected and the Court awarded $600.15

In doing so, the Court surveyed 125 fee applications which indicated that attorneys for chapter 13 debtors were requesting, on average, $565.06 for such services.16 For this reason, the Court awarded $600 to counsel. An appeal followed and both the district court and the Ninth Circuit Court of Appeals affirmed the ruling of this Court. See Bayer Wishman & Leotta (In re Walker), 2014 U.S. Dist. LEXIS 117644 (C.D. Cal. 2014), affirmed, 652 Fed. Appx. 539 (9th Cir. 2016).

The Court has now supplemented its research. In addition to the 125 fee applications studied in the Walker case, the Court has reviewed an additional 447 fee applications for the same services. In total, the Court has compiled data regarding 572 fee applications for this specific task (preparing a declaration and appearing at the status conference) and all of that data is listed on Exhibit 5. Exhibit 5 lists all the data from the original 125 fee applications in the Walker case17 plus the additional 447 fee applications. All 572 fee applications address the same task as in this case: preparing a declaration in connection with a status conference (and the cost of preparing the fee application).

As set forth on the last page of Exhibit 5, attorneys for chapter 13 debtors have requested on average $650.55 in fees and costs for filing a secured debt payment history declaration and, on average, they have agreed to accept $576.64 in allowed fees and costs. The figure of $576.64 includes all attorney's fees and costs for preparing the declaration, appearing at the status conference and all work associated with preparing the related fee application. Thus, a fee of $600 continues to be appropriate.

3. Indexing For Inflation.

However, it should be noted that the original decision in the Walker case (involving the study of 125 fee applications) was based on a review of fee results generated without judicial intervention. In other words, the data from the 125 fee applications in the Walker case reflected allowed amounts based on agreements between counsel for the debtors and the trustee. Either counsel for the debtor proposed an amount of fees and the trustee agreed or the trustee objected and then the parties resolved the matter by agreement.

In all 125 instances, the Court did not weigh in on the matter. Indeed, the Court had never posted any type of "no-look" or presumptive fee for these services or otherwise provided its own guidance (prior to Walker). The parties (counsel for the debtors and trustees) worked that out amongst themselves. That changed, of course, with the Walker decision.

Once the Court approved a fee of $600 in the Walker case (based on the 125 fee applications filed to that point in time), it unavoidably provided guidance for the parties (even though the Court did not publish the decision). That was reinforced when both the District Court and Court of Appeals affirmed the Court's decision. Thus, it should not be surprising that the fees awarded in the subsequent 447 fee applications have also hovered (on average) in the vicinity of $600.

So the figure of $600 does reflect a "usual and customary" fee for this type of service but it does need to be increased because of inflation. While the nature of the services in all 572 applications is the same and has remained the same since the 2013 Walker decision, the value of money has not. Ever corrosive, the steady march of time has eroded the value of $600. The value of $600 in 2013 is not the same as the value of $600 in 2019.

Thankfully, guidance to address this problem is readily available. Congress enacted section 104 of the Bankruptcy Code which indexes for inflation the exemption amounts listed in section 522 of the Bankruptcy Code and other sections of the Code. Every three years, the figures in the Code change based on inflation. Section 104(b) entrusts to the Judicial Conference of the United States ("Judicial Conference") the task of revising these numbers every three years based on the rate of inflation over the prior three-year period.

So, for example, the Judicial Conference followed the statute in 2016 and increased the exemption amounts by 3.016% effective April 1, 2016.18 Three years later, the Judicial Conference again followed section 104 and increased the exemption amounts (and other dollar amounts in the Code) by 6.218% effective April 1, 2019.19 Using these figures means that $600 in fees in 2013 is now equivalent to $650 in fees in 2019.20

C. Conclusion.

Accordingly, for all the reasons state above, the Court will award $650 for all attorney's fees and costs for preparing the declaration, appearing at the status conference and one-third of the work associated with preparing the related fee application.

V. FEES FOR THE DEBTORS' BRIEF.

Finally, the last task in the fee application filed by the Firm is unique. The Firm prepared a brief (separate from the declaration) in advance of the status conference. The Firm seeks $1,600 for four hours of work (at $400 per hour) preparing the brief ("Brief").21

The Brief is a bit perplexing. It makes several legal arguments that have been rejected by courts in the Ninth Circuit.

For example, the Brief argues that payments made by a debtor directly to creditors under a confirmed plan are not "payments under the plan" within the meaning of section 1328(a) of the Bankruptcy Code.22 Counsel argues (in effect) that a chapter 13 debtor can obtain a chapter 13 discharge without making direct payments. In effect, counsel contends that direct payments are optional.

However, an "overwhelming majority of courts" throughout the country have rejected this argument including the Bankruptcy Appellate Panel for the Ninth Circuit Court of Appeals. In Derham-Burk v. Mrdutt (In re Mrdutt), 600 B.R. 72 (9th Cir. BAP 2019), the BAP stated that "we join the overwhelming majority of courts holding that a chapter 13 debtor's direct payments to creditors, if provided for in the plan, are `payments under the plan' for purposes of a discharge under § 1328(a). . . ." Id. at 81. The BAP used the phrase "overwhelming majority" twice in the decision and cited numerous cases in support.23 Indeed, there are at least several dozen published24 and unpublished decisions25 that embrace the view that direct payments are "payments under the plan" within the meaning of section 1328(a).

In the Brief, the Firm cited two cases in its favor, but the BAP specifically considered and rejected both cases.26 Instead, the BAP followed the "overwhelming majority" of other cases in the country that reached a different conclusion.

As a result, it is problematic that the Brief filed by the Firm did not address (or even mention or acknowledge) that a very large majority of the caselaw on this issue contradicts the position asserted in the Brief. When briefing a legal issue, counsel does have a duty to advise the Court of contrary authority when adopted by most courts in the country. At least some of the dozens of contrary decisions should have been mentioned in the Brief.27

Second, the Brief filed by the Firm also argued that the powers of bankruptcy courts are limited under section 105(a). The Brief argued that bankruptcy courts lack the power to dismiss a case unless the trustee or a creditor requests such action.28 The Firm did not provide any caselaw in support of this assertion and there is Ninth Circuit caselaw to the contrary.

Again, the Bankruptcy Appellate Panel for the Ninth Circuit Court of Appeals has specifically held that bankruptcy courts "can dismiss a case sua sponte under Section 105(a)." Tennant v. Rojas (In re Tennant), 318 B.R. 860, 869 (9th Cir. BAP 2004). The Tennant case involved a chapter 13 case. Similarly, the Ninth Circuit has also held that a bankruptcy court can convert a chapter 13 case to chapter 7 sua sponte pursuant to section 105(a). Rosson v. Fitzgerald (In re Rosson), 545 F.3d 764, 771 n.8 (9th Cir. 2008) ("Although the statute provides for conversion "on request of a party . . . or the . . . trustee," 11 U.S.C. § 1307(c), there is no doubt that the bankruptcy court may also convert on its own motion. See id. § 105(a) ("No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.").").

Again, it is problematic that the Brief filed by the Firm did not provide case authority in supports of its assertion and did not cite the applicable (and contrary) Ninth Circuit decisions on that issue. When briefing a legal issue, counsel does have a duty to advise the Court of contrary Ninth Circuit authority.

Finally, the Brief is only five pages long and at least a full page covers introductory and background information and another half page consists of a lengthy quotation of a statute. The Firm seeks compensation for four hours of work for drafting the Brief but it is difficult to conclude that each of the five pages required, on average, about 48 minutes to draft (i.e. four hours or 240 minutes total).

Accordingly, in light of these issues, the Court will allow two and one-half of the four hours requested for (1) preparing the Brief and (2) one-third of the costs of preparing the fee application. At $400 per hour, that computes to allowed fees of $1,000 of the $1,600 requested.

VI. CONCLUSION.

Accordingly, for the reasons set forth above, the Court hereby awards $675, $650 and $1,000 for a total of $2,325 in allowed fees and costs.

IT IS SO ORDERED.

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