Filed: Mar. 21, 2016
Latest Update: Mar. 21, 2016
Summary: OPINION ON APPLICATION FOR COMPENSATION Hon. Peter G. Cary , Bankruptcy Court, District of Maine . This matter is before me on the Second Application of Molleur Law Office ("MLO") for Compensation for Services (Docket Entry ("DE") 287). In making my determination I have considered, among other things, the second fee application, the objections of debtor Mark P. Sangillo and the Chapter 13 Trustee (DE 295, 301), and MLO's responses to those objections (DE 297, 302). I also reviewed MLO's fir
Summary: OPINION ON APPLICATION FOR COMPENSATION Hon. Peter G. Cary , Bankruptcy Court, District of Maine . This matter is before me on the Second Application of Molleur Law Office ("MLO") for Compensation for Services (Docket Entry ("DE") 287). In making my determination I have considered, among other things, the second fee application, the objections of debtor Mark P. Sangillo and the Chapter 13 Trustee (DE 295, 301), and MLO's responses to those objections (DE 297, 302). I also reviewed MLO's firs..
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OPINION ON APPLICATION FOR COMPENSATION
Hon. Peter G. Cary, Bankruptcy Court, District of Maine.
This matter is before me on the Second Application of Molleur Law Office ("MLO") for Compensation for Services (Docket Entry ("DE") 287). In making my determination I have considered, among other things, the second fee application, the objections of debtor Mark P. Sangillo and the Chapter 13 Trustee (DE 295, 301), and MLO's responses to those objections (DE 297, 302). I also reviewed MLO's first fee application, the various objections to it, and MLO's responses (DE 119, 150, 160, 161, 165, and 167).
Burden of Proof and Applicable Law.
MLO bears the burden of proof as the applicant. In re Hansbury, 2015 WL 2445051, at *1 (Bankr.D.Me. May 20, 2015). The law I apply in reviewing fee applications is set forth in In re Mullen, 2014 WL 4988269, at *1 (Bankr.D.Me. Oct. 6, 2014).
Background.
Mr. Sangillo filed for bankruptcy relief on March 26, 2014. In January of 2015, MLO filed its first fee application seeking $40,443.05 in fees and $680.37 in costs. There were three objections; one each by the Trustee, creditor Paul Gosselin, and creditor T.D. Bank, N.A. Based on the concerns raised in the objections, I subsequently issued an order allowing $5,000 ($4,319.63 in fees and $680.37 in costs) as interim compensation (DE 285), denying the remainder without prejudice for future consideration upon MLO's filing of the Second Fee Application.
MLO did so on December 30, 2015. This time around MLO sought allowance of an additional $30,811.95 in fees and $474.97 in expenses, and the Trustee and Mr. Sangillo objected. A hearing was held on February 3, 2016. At the hearing and in his papers, the Trustee raised several concerns including:
1. The application was not approved by Mr. Sangillo;
2. It was unclear whether MLO would pursue Mr. Sangillo personally to recover any fees not paid through the Chapter 13 Plan;
3. MLO failed to meet its burden under 11 U.S.C. § 330(a)(4)(B);
4. $6,917.50 of time and $443.57 of costs billed were excessive;
5. Fees in excess of $14,000 should not be awarded until meaningful progress towards reorganization was established; and
6. Payment of fees sought by MLO would doom the case, and the fee application failed to satisfy 11 U.S.C. § 330 and LBR 2016(b)-1.
MLO responded to these objections by admitting the first, clarifying the second (MLO confirmed that it would only seek payment of $36,000 through the Plan or pre-petition payments), denying the third and fifth, and asserting that its voluntary agreement to waive collection of over $40,000 overcame the fourth and sixth.
Mr. Sangillo objected on the grounds that the fees sought by MLO exceed the benefits of the case. At the hearing, Mr. Sangillo offered that it was early in the case for the fees to be so high. He added that though MLO and he had a major misunderstanding in the beginning, their working relationship had since then been satisfactory.1 MLO responded to its client's objections by describing the progress made to date and noting the $40,000 collection waiver.
At the hearing, MLO, the Trustee, and Mr. Sangillo agreed that the matter was appropriate for me determine on the record before me.
Analysis.
Generally, the Bankruptcy Code permits the award of reasonable compensation for legal services rendered by debtor's counsel in connection with a chapter 13 case provided they were necessary and beneficial to the debtor's estate or the debtor. 11 U.S.C. § 330(a)(4). In keeping with my prior decisions on fee applications and as directed by Berliner v. Pappalardo (In re Sullivan), 674 F.3d 65, 69 (1st Cir. 2012), I apply a "flexible paradigm" when I consider and determine fee awards. In doing so here I can dispense with several of the Trustee's objections. First, there is no statute or rule requiring a debtor to approve counsel's fee application, however sensible or politic that might be.2 Also, MLO's plan to forgo collection of approximately $40,000 of the recovery it seeks, goes a long distance towards mollifying concerns that the bill is too rich for this case at this stage of its journey.3
However, MLO's fee application seeks approval of fees and expenses in excess of $72,0004 and for me to grant that request I would need to conclude that, notwithstanding MLO's willingness to limit its recovery to $36,000, MLO met its burden that the full amount of the fees it seeks are necessary or were based on work that was reasonably likely to benefit the estate or the debtor. 11 U.S.C. § 330(a)(4). Based on the facts set forth in the papers and the arguments made at the hearing, especially those made by Mr. Sangillo, and MLO's own offer to forego collection of more than $40,000, I conclude that MLO has not satisfied that burden with respect to the entirety of its request. I cannot conclude that all services rendered by MLO were necessary or reasonably likely to be beneficial. Therefore, I allow $36,000 in fees and $474.97 in expenses on an interim basis and deny the remainder without prejudice.5 A separate order shall enter.
