COLLEEN A. BROWN, Bankruptcy Judge.
This Court previously determined that the Sheriffs of Rutland and Washington county were custodians for purposes of this case because they levied machinery belonging to R. Brown & Sons, Inc. (the "Debtor"), and had control and possession of that machinery on the date the Debtor filed this bankruptcy case. The Court also determined that the two companies that stored the levied property, LaRoche Towing & Recovery, Inc. and New England Quality Service, Inc., d/b/a Earth Waste & Metal Systems, acted as the custodians' agents and therefore had the same rights and responsibilities as the custodians for purposes of the Bankruptcy Code. The questions now before the Court with respect to the custodians and their agents are whether the charges relating to the levy and storage of the Debtor's equipment must be paid in this bankruptcy case, and if so, whether the full amount set forth in the accountings must be paid and with what priority. Additionally before the Court are the Debtor's motions to determine the amount and priority of the pre-petition and post-petition storage charges. The Debtor asserts the charges the custodians' agents seek are unreasonable and should therefore be disallowed.
For the reasons set forth below, the Court determines that, with respect to the accountings: (1) LaRoche Towing & Recovery, Inc. and Earth Waste & Metal Systems must be paid pursuant to 11 U.S.C. § 543; (2) all charges entitled to payment under § 543 are entitled to administrative expense priority under § 503, if they were actually and necessarily incurred and are reasonable; and (3) LaRoche Towing & Recovery, Inc. and Earth Waste & Metal Systems have demonstrated that the sums they seek meet these criteria. Therefore, the Court overrules the Debtor's objection to the accountings. With respect to the Debtor's motion for allowance of claims, the Court allows both LaRoche Towing & Recovery, Inc.'s and Earth Waste & Metal Systems' charges, with administrative expense priority under §§ 503 and 507, subject to the Debtor's right to timely seek an offset for any damage the storage companies caused to the stored equipment.
This Court has jurisdiction over these contested matters pursuant to 28 U.S.C. §§ 157 and 1334, and the Amended Order of Reference entered by Chief Judge Christina Reiss on June 22, 2012. This Court declares these contested matters, relating to treatment of custodian charges under § 543 and allowance of the storage companies' claims under § 502, to be core proceedings under 28 U.S.C. § 157(b)(2)(A) and (E) and § 157(b)(2)(B), respectively. The Court further declares it has authority to enter a final judgment in each of these core proceedings.
On February 7, 2013, judgment creditor Rathe Salvage, Inc. ("Rathe") obtained a writ of possession for ten pieces of the Debtor's machinery and equipment, valued
The Debtor, a scrap metal recycling and transporting business, filed a petition under Chapter 11 of the Bankruptcy Code (doc. #1) on June 18, 2013. The Debtor filed an emergency motion for turnover (doc. #17) on June 21, 2013, seeking return of the Equipment, which the Debtor alleged was vital to operation of its business. On July 9, 2013, the Debtor and Rathe entered into a stipulation (doc. #34) (the "Stipulation") which resulted in the turnover of the Equipment to the Debtor. The Stipulation includes the following terms:
(see doc. #34). The U.S. Trustee, as well as all non-insider creditors, consented to entry of the Stipulation (doc. ##36, 42 and electronic consent filed July 9, 2013). The Court entered an Order approving the Stipulation on July 9, 2013 (doc. #39).
On July 16, 2013, the Debtor filed motions for determination and allowance of pre-petition and post-petition storage claims of EWS and LRT (doc. ##44, 45), disputing the reasonableness of the fees that both entities were seeking. Rathe filed a response (doc. #54) asking the Court to allow the storage companies' charges in full and grant those charges administrative expense priority to the extent permitted by the Bankruptcy Code. Following a hearing on July 23, 2013, this Court issued a memorandum of decision with accompanying order (doc. ##62, 63) finding:
That ruling (doc. ##62, 63) also directed each of the four entities to file a statement establishing the reasonableness of the sums they included in their accountings.
Subsequently, LRT filed a motion for reconsideration and memorandum of law in support thereof (doc. ##74, 88), advancing two arguments. First, LRT argued that the Court erred in making a factual finding that the Sheriffs hired LRT and EWS to store the seized equipment. In support of this argument, LRT relied on affidavits from both Washington county Sheriff W. Samuel Hill and the owner of LRT affirming that it was Mr. Rathe who contacted LRT to make the arrangements for towing and storage, and when LRT contacted Sheriff Hill asking to whom the bill should be sent, Sheriff Hill advised him to bill Rathe. Second, LRT argued that the Court's decision would have a deleterious effect on Vermont's system of enforcing writs of execution, newly placing responsibility for the costs of execution on Sheriffs, rather than the judgment creditors.
On August 23, 2013, the Court denied LRT's motion for reconsideration (doc. ##96, 97). In its memorandum, the Court stated:
(doc. #96, p. 4-6).
Both LRT and EWS have filed accountings (doc. ##71, 76). Neither of the Sheriffs has filed an accounting; each of them has indicated that his claim was paid in full by Rathe
On August 27, 2013, the Court conducted an evidentiary hearing regarding both the sufficiency and import of the storage companies' accountings, and the Debtor's motions for determination and allowance of pre-petition and post-petition storage claims. The evidence and arguments regarding both the accountings and claims allowance motions focused primarily on the reasonableness of the storage companies' charges. Six witnesses testified and both LRT and the Debtor introduced documentary evidence. At the conclusion of the hearing, the Court offered the parties the opportunity to file memoranda of law and all parties declined. Accordingly, the matter is fully submitted.
These contested matters raise four overlapping issues. First, does § 543
In addressing the rights and duties of custodians and their agents, the controlling provision of the Bankruptcy Code is § 543, and it provides, in pertinent part:
11 USC § 543(a)-(c) (emphasis added). The pertinent provision of state law which guides this Court's application of § 543 to the instant facts sets out the process for post-judgment levies on personal property:
12 V.S.A. § 2731.
The issues at bar with respect to the two accountings present a question of first impression in this District, the state law aspects of which have not been addressed by the Vermont Supreme Court and the bankruptcy law aspects of which have no jurisprudence directly on point. One recent bankruptcy case, however, has remarkably similar facts and is therefore quite instructive. In In re Ohakpo, 494 B.R. 269 (Bankr.E.D.Mich.2013), the following events occurred pre-petition: (1) the state court issued an order directing a court officer to seize property of one of the debtors and sell it to satisfy a judgment; (2) the officer seized two vehicles from the debtors' residence; (3) the officer hired
The bankruptcy court set forth a thorough and methodical analysis that included four inquiries that are applicable here: (a) whether the court officers who levied the property were "custodians" for purposes of the Bankruptcy Code; (b) whether it was the court officer, or the towing company he employed to carry out the levy, that was eligible to be paid as a custodian; (c) whether state law authorized payment of the costs associated with the levy under the facts presented; and (d) whether the amount the custodian claimed satisfied the legal criteria for treatment as an administrative expense. The Ohakpo court found that first, the court officers who levied the property were "custodians" for purposes of § 543; second, since the court officer had already paid the towing companies, the court officer was the party entitled to payment under § 543(c); third, Michigan law does not permit a levying court officer to be paid unless and until the property is sold; and fourth, to qualify as an administrative expense under § 503(b)(3)(E), the amount due must have been actually incurred, necessary and reasonable, and the services underlying the charges must have benefitted the estate. The Ohakpo holding does not answer the questions presented here because the salient Vermont statute is materially different from the Michigan statute, and the legal positions advocated by the parties at bar are quite dissimilar to the positions taken by the Ohakpo parties. However, since the facts in Ohakpo are so close to the facts underlying the legal issues raised here, and the same bankruptcy statutes and principles govern the issues presented in the two cases, that case provides useful guideposts for exploring the terrain the parties find themselves in.
The Ohakpo court engaged in a thorough analysis of what constitutes a custodian under the Bankruptcy Code. Based on the definition of custodian in § 101(11)
Here, the analysis is equally straightforward. As set out in this Court's memorandum of decision dated July 26, 2013, and further detailed in its subsequent memorandum of decision dated August 23, 2013 (doc. #96), the relevant state statute is clear:
12 V.S.A. § 2731 (emphasis added).
(doc. #96, p. 5).
Based on an analysis similar, though not identical, to that of the Ohakpo court, this Court found that the custodians in this case are the Rutland county Sheriff and the Washington county Sheriff who, acting pursuant to the state court writ of execution, seized and took charge of the Debtor's property for the purpose of enforcing Rathe's lien against it. The Court further found that the Sheriffs entered into arrangements with EWS and LRT to store the Equipment, and that, until it was released, EWS and LRT were responsible for the storage of the Equipment. Although the parties later demonstrated that Rathe, rather than the Sheriffs, made the arrangements with EWS and LRT, this does not change the Court's conclusion that EWS and LRT are agents of the Sheriffs with respect to possession and storage of the Equipment, because it was they who effectuated the custodial duties that the state statute imposes upon the Sheriffs.
The Vermont statute makes clear that the judgment debtor is liable for the costs of safe-keeping the property upon which the court officer has levied. As of the petition date, the Sheriffs had not paid their agents. Therefore, as of the petition date, the Debtor owed the agents for all charges relating to the levy upon, and storage of, the Equipment. The pertinent bankruptcy statute is also clear: under § 543, any custodian in possession of property of the estate on the date of the filing of the petition must turn over that property to the trustee and file an accounting. See 11 U.S.C. § 543(b)(1). The agents were in possession of the Debtor's property on the date of the filing and were thus required to release the Equipment and file an accounting. See 11 U.S.C. § 543(b)(2). They were also eligible to be paid the charges reflected on the accountings. See § 543(c)(2).
This latter provision states that the Court, "after notice and a hearing, shall
The custodian statute is silent as to how, or from whom, payment shall be made. Ohakpo, 494 B.R. at 284. One means of providing for payment would be to direct Rathe to pay LRT and EWS and then add the sum of those payments to Rathe's secured claim. However, no party has requested that approach, and in the absence of an agreement among the parties to do this, the Court lacks Constitutional authority to compel Rathe to do this. The only payment the court may "provide" is to direct a party who is both obligated on the debt and subject to this Court's jurisdiction to make payment in a manner consistent with the Bankruptcy Code. Germane to this issue are the two Bankruptcy Code provisions which describe the process for allowance and treatment of administrative expenses in Chapter 11 cases:
11 U.S.C. §§ 503(b)(3)(E), 1129(a)(9)(A). Therefore, to the extent the charges incurred by LRT and EWS are allowed as administrative expenses, confirmation of the Debtor's plan shall be conditioned upon the Debtor paying the allowed administrative expense on the effective date of the plan (unless LRT and EWS consent to different treatment).
The parties did not specifically address the extent to which the charges should be treated as administrative expenses. In the Stipulation with Rathe, the Debtor agreed not to oppose administrative expense priority for any post-petition storage fees approved by the Court (doc. #39, p. 3). The Debtor seeks a determination of the pre- and post-petition storage charges, and invokes Bankruptcy Code sections 501, 502, and 503 (doc #44, 45). In its response, Rathe requests the Court grant administrative expense priority to the charges "to the extent permitted by the Bankruptcy Code" (doc #54 at ¶ 7).
Addressing first the post-petition storage charges, the key statute is § 503(b)(1)(A). It provides administrative expense priority for the actual, necessary costs and expenses of preserving the estate. Since there is no estate until the filing of a bankruptcy petition, only post-petition expenses typically qualify for administrative expense treatment under § 503(b)(1)(A). See Helen-May Holdings, LLC v. Geltzer (In re Kollel Mateh Efraim, LLC), 456 B.R. 185, 192 (S.D.N.Y. 2011). Pursuant to this general rule with respect to post-petition charges, the storage charges incurred post-petition are eligible for treatment as administrative expense priority claims. See § 503(b)(1)(A); see also In re R & G Props., 2009 WL 1396285 at *4-5, 2009 Bankr.LEXIS 1318 at *12 (Bankr.D.Vt. April 30, 2009).
Next, the Court turns to the pre-petition storage charges. As noted above, generally only the charges incurred post-petition would be treated as administrative expenses. However, the treatment of pre-petition charges allocable to a custodian's fees and expenses is an exception to the general rule. The salient statute unequivocally allows administrative expense priority for custodian charges incurred pre-petition. See In re 245 Assocs., 188 B.R. 743, 748 (Bankr.S.D.N.Y.1995) (holding § 503(b)(3)(E) applies solely to pre-petition services). Each court that has considered the issue has concluded, in part in reliance upon the legislative history, that § 503(b)(3)(E) is intended to provide administrative expense priority for a custodian's pre-petition fees and expenses. See, e.g., In re Lake Region Operating Corp., 238 B.R. 99, 101 (Bankr.M.D.Pa.1999); 245 Assocs., 188 B.R. at 748; In re Kenval Marketing Corp., 84 B.R. 32, 34 (Bankr. E.D.Pa.1988).
Szwak v. Earwood (In re Bodenheimer, Jones, Szwak, & Winchell L.L.P.), 592 F.3d 664, 672 (5th Cir.2009) (citing In re Snergy Props., Inc., 130 B.R. 700, 704 (Bankr.S.D.N.Y.1991)). Therefore, the storage charges incurred pre-petition are
Whether the agents' charges were incurred pre-petition or post-petition, in order to qualify for administrative expense priority, they must have been actually and necessarily incurred. See R & G Props., 2009 WL 1396285 at *3, 2009 Bankr.LEXIS 1318 at *8.
A third requirement is that the charges must be reasonable. The custodian statute provides for "payment of reasonable compensation for services rendered and costs and expenses incurred by [a] custodian." § 543(c)(2). At the evidentiary hearing, counsel for Rathe argued that the adjective "reasonable" modifies only the clause "compensation for services rendered," and specifically does not modify "costs and expenses." It was his position that § 543(c)(2) provides payment only of reasonable compensation but of all costs and expenses — reasonable or not.
The parties have not presented, and the Court has not found, any case law explicitly addressing this potential ambiguity in the text of § 543(c)(2). However, every case the Court has found has imposed a reasonableness requirement on all charges sought under § 543(c)(2). See In re Sevitski, 161 B.R. 847, 856 (Bankr.N.D.Okla. 1993) (denying custodian's request for administrative expense priority for his fees and expenses because they were unreasonable and excessive); In re Posadas Assoc., 127 B.R. 278, 280 (Bankr.D.N.M.1991) (holding that the Court shall provide for the payment of expenses incurred by the custodian in preparation for the turnover if they are reasonable). Ohakpo does not squarely address the question, but states "Section 543(c)(2) requires the Court to provide for the payment of a custodian's reasonable fees and expenses." 494 B.R. at 284. In all of these cases, the courts appear to read the adjective "reasonable" to modify both the compensation and costs and expenses components of § 543(c)(2), and the Court finds this reading to most soundly implement the overall and equity-based mandates of the Bankruptcy Code.
Some courts have analogized payments sought by custodians to compensation sought by professionals. The statute governing compensation of professionals states in pertinent part that only "(A) reasonable compensation for actual, necessary services ... and (B) reimbursement for actual, necessary costs" will be allowed. 11 U.S.C. § 330(a)(1)(A) and (B). As in § 543(c)(2), one might read this to mean that only the compensation allowed under § 330 must be reasonable. But, the courts have consistently interpreted this provision to require that expenses as well as compensation be reasonable, see, e.g., In re Fibermark, Inc., 349 B.R. 385, 401, 412 (Bankr.D.Vt.2006) (holding that, across a myriad of categories, a professional's expenses may only be reimbursed if they are reasonable). Moreover, it is unlikely Congress would have intended to limit the
For all of these reasons, the Court determines that LRT and EWS may be paid its expenses, pursuant to § 543, only to the extent their charges were actually and necessarily incurred and are reasonable.
This Court has ruled that the custodian has the burden of proof with respect to allowance of the custodian's charges. R & G Props., 2009 WL 1396285 at *3, 2009 Bankr.LEXIS 1318 at *8. This comports with the decisions of other courts, see Sevitski, 161 B.R. at 854 (holding burden on custodian to show his entitlement to an administrative expense priority), and applies here as well. The custodian or its agent must establish these criteria by a preponderance of the evidence. In re HNRC Dissolution Co., 343 B.R. 839, 843 (Bankr.E.D.Ky.2006) (holding claimant has the burden of proving entitlement to an administrative expense by a preponderance of the evidence). "`Preponderance of the evidence' has been defined as the weight, credit, and value of the aggregate evidence on either side." In re Smith, 2013 WL 665991, at *6-7, 2013 Bankr.LEXIS 687, at *18-19 (Bankr.D.Vt. Feb. 22, 2013) (citing Glinka v. Bank of Vermont (In re Kelton Motors, Inc.), 130 B.R. 170, 174 (Bankr.D.Vt.1991) (citing 30 Am.Jur.2d, Evidence, § 1164, at 339 (2d Ed. 1967))). This standard requires the custodian or agent to prove their case as "upon all the evidence ... more probably true than false." Smith, 2013 WL 665991 at *7, 2013 Bankr.LEXIS 687 at *19 (citing Nissho-Iwai Co., Ltd. v. M/T Stolt Lion, 719 F.2d 34, 38 (2d Cir.1983)).
Here, the burden is on LRT and EWS to demonstrate, by a preponderance of the evidence, that their charges were actually and necessarily incurred and are reasonable. The Court will therefore review the evidence presented to ascertain whether the agents have satisfied this burden.
The evidence shows that the Equipment was stored for a total of 116 days, of which 95 were pre-petition and 21 were post-petition. During the 21-day period following the Debtor's petition, the Debtor was actively engaged in negotiations with judgment creditor Rathe regarding adequate protection payments and conditions of turnover, and did not request that the Court rule on the turnover motion during this time. The parties entered into the Stipulation and immediately thereafter LRT and EWS released the levied property to the Debtor. No one has disputed the Debtor's statement that the Equipment is vital to its business (doc. #17 ¶ 5). Likewise, the record is clear that if Rathe had liquidated the Equipment rather than turning it over, the Debtor would not have been able to operate or generate income from which to fund a plan.
There is also no dispute in the record, and there was no evidence presented contesting, that the storage charges at issue were actually incurred or that they were necessary to effectuate the writ of execution upon which the Sheriffs were acting. Hence, the record establishes that the charges LRT and EWS were actually and necessarily incurred.
At the evidentiary hearing, the parties directed most of their arguments and evidence to the question of whether
Debtor's counsel failed to present sufficient evidence to call into question the facts established by the storage companies. Debtor's counsel introduced three witnesses, including the Debtor's principal, in support of its position that the fees LRT and EWS charged were not reasonable. One witness, Russell Dimmick, owner of Lucky's Trailer Sales, Inc. and Lucky's Leasing, testified he charges a much lower long-term storage rate, $50 per month, at his facilities in South Burlington. However, Mr. Dimmick also testified he had previously stored a large vehicle, on a short-term basis, after a tow truck delivered it to his facility, and in that instance, he charged $100 per day, a price identical to that charged by LRT and EWS. He explained that he charged that higher fee because he understood $100 per day was the customary storage rate under those circumstances. Additionally, Mr. Dimmick testified that his only experience with property levied by a sheriff or other court officer was in selling it, typically pursuant to an arrangement with a bank. And, when he sold property for a bank, he did not charge any fees for storing that property. Mr. Dimmick was credible, but did not effectively challenge the reasonableness of the LRT and EWS storage charges.
One of the Debtor's other witnesses, Thomas J. Hirchak, III, an auctioneer and the vice president of The Thomas Hirchak Company, testified that his company regularly stores all types of personal property at its facility, located in Williston, Vermont (in Chittenden county). He testified that his company charges a significantly lower daily rate of under $10 per day, i.e., 80-90% less than what EWS and LRT charged for storing the Debtor's Equipment. However, he made this statement in the context of his description of a large, pre-established contract with the U.S. Marshal Service, to store and sometimes sell a wide variety of seized assets. Additionally, Mr. Hirchak testified that his company waives all storage fees for property that it sells. The Debtor did not elicit testimony from Mr. Hirchak to elucidate the storage fees that the Hirchak Company charges for independent storage, or what portion of its business is devoted to storage of property it does not sell. Mr. Hirchak did testify that, although his company does not distinguish between long and short-term storage in setting storage rates, there is a wide variation in how long
The Debtor's owner, Robert Edward Brown, testified that his company also stores equipment, and it charges $100 per month for storage of tractor trailers and mobile homes — in stark contrast to the EWS and LRT charges of $50 to $100 per day. The Debtor's counsel did not elicit testimony from Mr. Brown about whether this storage rate applied to long-term or short-term storage, or whether the Debtor had ever stored equipment on which a sheriff had levied, or whether Mr. Brown believed $100 per month to be a reasonable rate for storage of property levied by a sheriff. While Mr. Brown's testimony came across as sincere, competent and credible, it did not directly address the particular charges at issue.
The only significant evidence the Debtor elicited that bears on the reasonableness of the rates EWS and LRT charged is that neither EWS nor LRT differentiate between long-term and short-term storage in setting their rates. However, even if the Court were to find the Debtor had presented evidence that proved some companies offer long-term storage rates and they are substantially lower than the rates LRT and EWS charged, the Debtor neither proved that the Sheriffs had the option of storing the equipment with out-of-county storage sites nor that the Sheriffs were aware of, or required to hire, the less expensive entities.
Additionally, in determining what fees are to be paid in this bankruptcy case to state officers who levied the Debtor's property pre-petition and were still in possession of that property on the date the Debtor filed its bankruptcy petition, the Court must take into account the state statute under which the court officers were proceeding. See Ohakpo, 494 B.R. at 282. The controlling state statute, 12 V.S.A. § 2731, requires that the property "shall be safely kept by the officer at the debtor's expense, until sold or the execution is otherwise satisfied." Notably, it is silent as to how the officer is to accomplish this. It leaves to the court officer's discretion the best means for safely keeping the property.
In sum, the Court finds that, with respect to the accountings, the Court must provide for payment of LRT's and EWS's pre-petition and post-petition storage charges as administrative expenses because LRT and EWS have established by a preponderance of the evidence that the storage fees set out in their accountings were actually and necessarily incurred and are reasonable; and the Debtor's objection must be overruled.
The Court turns next to the Debtor's motions (doc. ##44, 45) seeking a determination of the amount and priority of the claims of LRT and EWS. The Court has found it must provide payment to LRT and EWS in this case, pursuant to § 543, and that the accountings which LRT and EWS have filed, along with the other proof they presented, establish that their charges are entitled to administrative expense priority under § 503. Therefore, LRT's and EWS's pre-petition and post-petition charges will be allowed in full as administrative expenses, and unless the Debtor establishes an offset due to damage to the Equipment or LRT and EWS consent to different treatment, the Debtor must provide for payment of these charges in the manner described in § 503 to meet the confirmation requirements of § 1129.
Fixing the amount of each claim requires resolution of discrepancies between the values set forth in the accountings and the Debtor's motions, including the duration of the storage, whether to allow charges for the Towncar and Pine Box Trailer, and how to treat the $10,000 payment the Stipulation required the Debtor to make to the storage companies. The parties presented no proof on these issues at the hearing and the Court therefore relies on the record to ascertain the amount due and the agents' right to allowance on these four components of the accountings.
The Court finds first, that EWS and LRT are the most reliable sources for fixing the term of the storage and they both describe the storage term to be 116 days, that the Debtor's 117-day storage term is an error, and will compute the claim using a storage term of 116 days.
By contrast, no one disputes that the Pine Box Trailer is the Debtor's property. In its accounting (doc. #71), EWS states that it could have, but failed to, list this item on its original invoice to the Debtor (apparently through an oversight). Since EWS included the Pine Box Trailer in its accounting and it was in the control of the custodian on the date of the petition, the storage charges allocable to this item will be allowed.
Last, if the Debtor made the $10,000 payment described in the Stipulation that sum must be subtracted from the total storage charges to be paid. There is nothing in the record to indicate that the Debtor is in default of its obligations under the Stipulation, so the Court presumes that both LRT and EWS received their pro rata share of this $10,000 payment and will compute the amount due accordingly.
In reliance upon these determinations, the Court allows the claim of EWS as an administrative expense in the amount of $43,000 (computed as 116 days at $425 per day, minus the payment of $6,300), and allows the claim of LRT as an administrative expense in the amount of $25,300 (computed as 116 days at $250 per day, minus the payment of $3,700).
In the Stipulation, the Debtor preserved its right to seek an offset to the amount it owes to the storage companies for damages it alleges EWS and LRT caused to the Equipment (doc. #34 at p. 3). The Debtor has not yet commenced actions seeking this relief; to the extent it timely initiates a proceeding and obtains a judgment against EWS and LRT, it would be an offset against the claims allowed in this ruling.
For the reasons set forth above, the Court reaches the following conclusions of law with respect to the accountings before the Court. First, the Court must provide for payment to LaRoche Towing & Recovery, Inc. and Earth Waste & Metal Systems, pursuant to § 543, for the charges incurred in connection with the levied Equipment. Second, all pre-petition and post-petition charges LaRoche Towing & Recovery, Inc. and Earth Waste & Metal Systems list in their accountings, except for the Towncar, are eligible for administrative expense priority, under § 503, because they were actually and necessarily incurred and are reasonable. Third, LaRoche Towing & Recovery, Inc. and Earth Waste & Metal Systems, as the custodians' agents, had the burden of proof with respect to the accountings, were required to prove their right to payment by a preponderance of the evidence, and they have done so. Last, under the controlling state statute, the Sheriffs had discretion to hire the entities they deemed best suited to assist them in carrying out their duty to take control of, and protect, the levied property, there is nothing in the record to indicate that they abused that discretion, and this factor weighs in favor of allowing payment of all charges incurred in connection with the levy of the Debtor's property. Consequently, the Court overrules the Debtor's Objection to the Accountings.
With respect to the Debtor's motions for a determination of the amount and priority of the storage companies' charges, the Court allows the LaRoche Towing & Recovery, Inc. and Earth Waste & Metal Systems claims with administrative expense priority in the amount of $25,300
This constitutes the Court's findings of fact and conclusions of law.
For the reasons set forth in the memorandum of decision of even date, IT IS HEREBY ORDERED
SO ORDERED.
11 U.S.C. § 101(11).
