Opinion
No. 7-02-10188 MA.
March 5, 2009
THIS MATTER is before the Court on the Trustee's Final Application for Allowance of Fees for the Period of November 16, 2005 through December 16, 2008 ("Fee Application). (Docket No. 1052). The Fee Application seeks approval and allowance of compensation pursuant to 11 U.S.C. §§ 330, 331 for work performed by Daniel J. Behles, attorney for the Chapter 7 Trustee. The Fee Application requests approval of attorneys' fees in the amount of $6,384.00, paralegal fees in the amount of $208.00, plus applicable gross receipts taxes on fees in the amount of $444.96, plus reimbursable costs in the amount of $787.36, plus applicable tax on costs in the amount of $56.67, for total requested compensation in the amount of $7,880.99 for the period between November 16, 2005 through December 16, 2008. In accordance with the Order Authorizing Employment of Attorney for Trustee (Docket No. 783), Mr. Behles was paid interim fees and costs in the amount of $2,495.22, leaving an unpaid balance in the amount of $5,385.77.
The Debtor, Salvador Guzman, objected to the Fee Application (Docket No. 1054), and the Court held a hearing on the Fee Application on March 2, 2009, after which the Court took the matter under advisement. Even when no objections are raised, the Court has an independent duty to evaluate fee applications for reasonableness. Upon consideration of the Fee Application requesting approval of fees and expenses incurred by counsel for the Chapter 7 Trustee, the Court finds that certain of the requested fees must be disallowed as either duplicative, unnecessary, or excessive.
In re Tahah, 330 B.R. 777, 780-781 (10th Cir. BAP 2005) (stating that "[i]t is well-established that bankruptcy courts have a duty to independently evaluate the propriety of the compensation requested under § 330.") (citations omitted).
DISCUSSION
Compensation of attorneys employed by the case trustee is governed by 11 U.S.C. §§ 327 and 330. Only fees that are reasonable and necessary are compensable from the bankruptcy estate. In assessing the reasonableness of the requested fees, 11 U.S.C. § 330(a)(3) directs the court to consider such factors as the time spent on the services, the hourly rates charged for the services, and "whether the services were performed within a reasonable amount of time commensurate with the complexity, importance, and nature of the problem, issue, or task addressed." 11 U.S.C. § 330(a)(3)(A), (B), and (D). When excessive time is spent on a task, the requested fee is not reasonable and consequently must be disallowed. Similarly, compensation should not be allowed when the same task is duplicated. Tasks that are purely secretarial or clerical in nature are not compensable from the bankruptcy estate and are considered part of office overhead.
Reasonable compensation may be awarded to professional persons employed under 11 U.S.C. § 327 for "actual, necessary services rendered by . . . the professional person . . . and by any paraprofessional person employed by any such person" plus "reimbursement for actual, necessary expenses." 11 U.S.C. § 330(a)(1)(A) and(B).
See In re Vista Foods USA, Inc., 234 B.R. 121, 130 (Bankr.W.D.Okla. 1999) ("services found to be excessive, redundant, or unnecessary are not compensable.") (citing Hensley v. Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933 (1983)); In re Gillett Holdings, Inc., 137 B.R. 475, 481 (Bankr.D.Colo. 1992) ("`a debtor's estate should not bear the costs of services which were either excessive or duplicative of the efforts of other professionals.'") (quoting In re Wire Cloth Products, Inc., 130 B.R. 798, 806 (Bankr.N.D.Ill. 1991)).
Id.; In re Werth, 32 B.R. 442, 445 (Bankr.D.Colo. 1983) (noting that "fees should be carefully reviewed in light of the guidelines . . . with an eye toward eliminating . . . duplication of compensation for duplication of effort") (citations omitted).
See CF I Fabricators of Utah, Inc., 131 B.R. 474, 489 (Bankr.D.Utah 1991) (stating that where "the services provided by the paraprofessional represent a shift of tasks ordinarily performed by a lawyer or other professional, and the service is reasonable and necessary, the service is compensable. . . . [but] [i]f clerical or secretarial services shift to the paraprofessional, the service is overhead and not a reasonable charge to the estate.").
Upon review of the billing statements submitted in support of the Fee Application, the Court finds that the requested hourly rates are reasonable. The Court further finds that the following amounts must be disallowed for the reasons specified:
First Fee Application: Date Description of Work Time/ Amount Reason for Performed Amount Allowed Disallowance Requested
05/27/08 copy income tax .3 $18.00 0.00 Clerical work not compensable from bankruptcy estate 03/05/08 banking transfer money cut 1.0 $60.00 0.00 Clerical work not check for IRS; copy tax returns compensable from bankruptcy estate 08/3/07 Transfer money to write check .3 $18.00 0.00 Clerical work not for bond compensable from bankruptcy estate Total amount disallowed: $96.00 In addition, it is inappropriate to charge gross receipts taxes on costs, such as postage, photocopies and facsimile transmissions. Accordingly, the amount of $56.67 representing tax on costs charged for photocopies, postage, and facsimile transmissions will be disallowed.WHEREFORE, IT IS HEREBY ORDERED that the Fee Application is APPROVED, in part. Fees in the amount of $6,496.00, plus applicable gross receipts taxes in the amount of $438.48, plus costs in the amount of $787.36, totaling $7,721.84 for the period between November 16, 2005 and December 16, 2008 are ALLOWED. The remaining requested fees and tax on costs for the period between November 16, 2005 and December 16, 2008 are DISALLOWED. Mr. Guzman's objection to the Fee Application is overruled.
$6,592.00 - $96.00 = $6,496.00
$6,496.00 × .0675 = $438.48
ORDERED FURTHER, that the Trustee is authorized to pay Mr. Behles the allowed balance of unpaid fees and costs in the amount of $5,226.62.
$7,721.84 - $2,495.22 (amount already received) = $5,226.62