Opinion
Jasper L. Ozbirn, Esq., of Cappello & Noël LLP, appeared on behalf of the applicant, Cappello & Noël LLP.
Jake A. Soberal, Esq., of Walter & Wilhelm Law Group, appeared on behalf of the debtor, Merced Falls Ranch, LLC.
MEMORANDUM DECISION REGARDING SUPPLEMENTAL APPLICATION FOR PAYMENT OF ATTORNEY'S FEES AND REIMBURSEMENT OF EXPENSES
W. Richard Lee United States Bankruptcy Judge
Before the court is an application filed by the law firm of Cappello & Noël LLP ("Cappello") for payment of legal fees and reimbursement of expenses under 11 U.S.C. § 328 (the "Supplemental Application"). Cappello seeks compensation for services it performed in the prior prosecution of a contested fee application and for its opposition to the Debtor's motion for entry of a final decree. The debtor, Merced Falls Ranch, LLC (the "Debtor") opposes the Supplemental Application on the grounds that the requested fees are unreasonable. Because Cappello didn't exercise prudent billing judgment in the performance of its legal services, and for the reasons set forth below, the Supplemental Application will only be allowed in part.
Unless otherwise indicated, all chapter, section and rule references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330, and to the Federal Rules of Bankruptcy Procedure, Rules 1001-9036, as enacted and promulgated after October 17, 2005, the effective date of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA), Pub. L. No. 109-8, 119 Stat. 23 (enacted Apr. 20, 2005).
This memorandum decision contains the court's findings of fact and conclusions of law required by Federal Rule of Civil Procedure 52(a), made applicable to this contested matter by Federal Rules of Bankruptcy Procedure 7052 and 9014(c). The court has jurisdiction over this matter pursuant to 28 U.S.C. § 1334, 11 U.S.C. § 328, and General Order Nos. 182 and 330 of the U.S. District Court for the Eastern District of California. This is a core proceeding as defined in 28 U.S.C. § 157(b)(2)(A).
BACKGROUND AND FINDINGS OF FACT.
The background of this dispute is recited in the court's earlier Memorandum Decision Regarding [Cappello's] Application for Payment of Contingency Fee, filed October 16, 2012 (ECF No. 245), and will not be fully revisited here. However, for purposes of this memorandum, the relevant facts may be summarized as follows:
The Debtor filed a voluntary petition under chapter 11 in August 2011, in order to stay a non-judicial foreclosure sale by its secured creditor American AgCredit, ACA("AAC"). Prior to the bankruptcy, the Debtor retained Cappello to prosecute an action in the state court for, inter alia, damages against AAC based on claims of lender liability (the "State Court Action"). The Debtor initially engaged Cappello pursuant to the terms of a fee agreement (the "Fee Agreement" or "Agreement"). The Fee Agreement provided for a hybrid fee arrangement whereby Cappello was entitled to recover both hourly fees for services rendered (outlined in sections 3.1 and 3.2 of the Fee Agreement) and a contingency fee dependent upon future events (outlined in section 3.4 of the Fee Agreement). Soon after commencement of the bankruptcy case, the Debtor filed an application seeking to employ Cappello as its "special counsel" to continue prosecuting the State Court Action. Cappello's employment was approved according to the terms of the prepetition Fee Agreement.
The acronym "ACA" stands for Agricultural Credit Association.
Before conclusion of the State Court Action, in June 2012, the Debtor and AAC confirmed a "joint" chapter 11 plan of reorganization, which effectively resolved their dispute. Following confirmation of the plan, Cappello filed an application requesting payment of a contingency fee pursuant to the terms of the Fee Agreement (the "Contingency Application"). The Debtor disputed Cappello's interpretation of the Fee Agreement and opposed the Contingency Application.
Cappello had previously filed a motion for payment of hourly fees and costs totaling $88, 245. That motion was unopposed by the Debtor and was approved by the court. Those fees have been paid.
After oral argument and the submission of supplemental briefs, this court granted the Contingency Application and awarded Cappello its entire contingency fee, in the amount of $554, 650. Cappello prepared and submitted the proposed order, which was signed on November 9, 2012. The order expressly authorized Cappello to "submit a further application for payment of the fees and expenses it has incurred in applying for and obtaining this Order."
Five days after the court awarded Cappello's contingency fee, on November 14, 2012, the Debtor filed a motion for entry of a final decree and for an order closing the case (the "Final Decree Motion"). The court continued the Final Decree Motion because, inter alia, it had not been served on Cappello and was not supported by evidence to show that the recently awarded contingency fee had been paid. The court ordered that Cappello be served with notice of the Final Decree Motion and the matter was then set for a further hearing on January 31, 2013. After being properly served, Cappello filed an opposition to the Final Decree Motion on the grounds that (1) the contingency fee had not yet been paid and (2) Cappello needed more time to file and litigate the current Supplemental Application. For reasons not directly related to this dispute, the court has not yet ruled on the Final Decree Motion.
Based on the Debtor's status report dated June 13, 2013, and Cappello's supplemental opposition to entry of a final decree dated June 13, 2013, the Debtor has not yet sold or refinanced its real property as provided in the chapter 11 plan and the Debtor has not yet paid Cappello's contingency fee.
Cappello now requests payment of additional hourly fees pursuant to § 328 of the Bankruptcy Code and the terms of the Fee Agreement. In addition to the contingency fee, the Fee Agreement entitles Cappello to recover its "reasonably related" hourly fees:
3.1 Attorneys' Fees. Clients agree to pay Cappello & Noël for all time spent by Cappello & Noël reasonably related to the representation of Clients. . . .
In recognition of the fact that Cappello could be receiving both a contingency fee and an hourly fee, the Fee Agreement provided for a 20% reduction in Cappello's hourly billing rates:
3.2 Application of Retainer and Hourly Rates. . . . Since Clients also may be responsible for a contingency fee pursuant to Section 3.4, Cappello & Noël will discount only its hourly fees by twenty percent (20%).
Cappello's initial billing rates for attorneys ranged from a low of $395 per hour to a high (for A. Barry Cappello) of $850 per hour. In March 2012, Cappello exercised its right under section 3.3 of the Fee Agreement to alter its existing fee schedule and sent a letter notifying the Debtor of increases in the firm's rates. The new attorney rates ranged from $425 per hour to $950 per hour.
Cappello's initial billing rates for attorneys ranged from a low of $395 per hour to a high (for A. Barry Cappello) of $850 per hour. In March 2012, Cappello exercised its right under section 3.3 of the Fee Agreement to alter its existing fee schedule and sent a letter notifying the Debtor of increases in the firm's rates. The new attorney rates ranged from $425 per hour to $950 per hour.
In this Supplemental Application, Cappello requests payment of additional hourly fees in the amount of $60, 095 and reimbursement of additional expenses in the amount of $156.15. The fees represent about 140 hours of time spent by Cappello's staff from April 19, 2012 to January 18, 2013, in preparing the prior Contingency Application, litigating that Application, preparing the order granting the Contingency Application, objecting to the Debtor's Final Decree Motion, and preparing the present Supplemental Application. Attached to the Supplemental Application are the detailed billing records showing how much time Cappello spent on these tasks (the "Billing Records").
The Debtor has not objected to the expenses requested by Cappello.
The Supplemental Application showed approximately 155 hours of work performed, but Cappello voluntarily cut about 15 hours from its request.
As with the prior Contingency Application, Cappello's Supplemental Application is opposed by the Debtor. Comparing Cappello's services to those billed by Debtor's counsel for similar work in connection with the same activities, the Debtor contends that the fees requested by Cappello are unreasonable and requests that the fees be reduced to $11, 343.75, a reduction of approximately 80%.
DISCUSSION AND CONCLUSIONS OF LAW.
Review of Professional Fees Under § 328. Cappello requests additional compensation pursuant to the terms of the previously approved Fee Agreement and § 328 of the Bankruptcy Code, which somewhat limits the scope of the court's ability to review the fee request:
where the bankruptcy court has previously approved the terms for compensation of a professional, [pursuant to § 328] when the professional ultimately applies for payment, the court cannot alter those terms unless it finds the original terms "to have been improvident in light of developments not capable of being anticipated at the time of the fixing of such terms and conditions."
Pitrat v. Reimers (In re Reimers), 972 F.2d 1127, 1128 (9th Cir. 1992) (quoting § 328(a)); see also In re Confections by Sandra, Inc., 83 B.R. 729, 731 (9th Cir. BAP 1987). When no such unforeseen circumstances exist to warrant adjustment of fees, "§ 328(a) limits the authority of the bankruptcy court to depart from the terms of the fee agreement previously approved." In re First Magnus Fin. Corp., No. AZ-08-1160-PaDMo, 2009 WL 7809001, at *8 (9th Cir. BAP Feb. 24, 2009). Generally, once the court has already and unconditionally approved the professional's employment under § 328, "[t]here is no question that [it] may not conduct a § 330 inquiry into the reasonableness of the fees and their benefit to the estate." Friedman Enters. v. B.U.M. Int'l, Inc. (In re B.U.M. Int'l, Inc.), 229 F.3d 824, 829 (9th Cir. 2000). The inquiry then, whether Cappello is entitled to an additional $60, 095 in hourly fees, begins with an analysis of the terms that have already been approved in the Fee Agreement.
The Contractual 20% Reduction of the Hourly Fees.
First, the court notes that nothing in the Supplemental Application suggests that Cappello applied the 20% reduction to its hourly billing rates as required by the Fee Agreement. Specifically, the last sentence of section 3.2 of the Agreement provides, "Since Clients also may be responsible for a contingency fee pursuant to section 3.4, Cappello & Noël will discount only its hourly fees by twenty percent (20%)." Because this court has already awarded Cappello its contingency fee pursuant to section 3.4 of the Agreement, it follows that the Debtor is entitled to a 20% reduction of the hourly fees charged pursuant to section 3.2.By the plain language of section 3.2, the 20% reduction is a "discount" of the billing rate, not a reduction of the hours that were billed. In recognition of this provision in the Fee Agreement, the court must first reduce the fees requested in the Supplemental Application by 20%. Therefore, before the court gives further consideration to the Application, the amount of its fee request will be reduced to $48, 076.
At the hearing on February 28, 2013, the court asked the attorney appearing for Cappello whether the contractual 20% reduction had been applied to the fees requested. The attorney responded that he was unsure whether that had occurred.
The last sentence of section 3.2 was drafted in a less-than-artful way. Nevertheless, this sentence is susceptible to only one reasonable interpretation and the court construes it to mean that (1) Cappello was obligated to reduce its hourly fees by 20% (based on the placement of the words "may" and "will" in the sentence without any subsequent qualifications) and (2) the obligation was not expressly conditioned on the requirement that a contingency fee actually be awarded or paid. To the extent this contractual language may be ambiguous, the court notes that the Fee Agreement must be strictly construed against the attorney who drafted it. See In re Cnty. of Orange, 241 B.R. 212, 221 (C.D. Cal. 1999) (citing Alderman v. Hamilton, 205 Cal.App.3d 1033, 1037 (1988)). Thus, regardless of whether the last sentence of section 3.2 is ambiguous or not, and regardless whether the Debtor has of yet paid the contingency fee, the 20% reduction in billing rates must apply.
The court acknowledges that Cappello did voluntarily reduce the number of hours it billed from 155 to 140 hours in the Supplemental Application. However, this reduction amounted to only 10% of the hours reportably worked and does not appear to have been intended as a way of complying with the last sentence of section 3.2.
After application of the contractual discount, the court will not further review the billing rates charged by Cappello. The Debtor has not objected to the hourly rates and Cappello's billing rates, and the right to adjust those billing rates, were agreed to in the Fee Agreement. The constraints of § 328 limit review of the terms of Cappello's employment, even if the applicable billing rates do not represent the prevailing market rates in the relevant community.
The Hours Billed and the Prudent Billing Judgment Test.
Even though the court may be bound by governing principals to honor Cappello's discounted hourly rates, those principals do not also preclude judicial review of the hours reflected in the Supplemental Application. By its terms, § 328 allows the court to review and adjust Cappello's fee request based on "developments not capable of being anticipated" at the time of the agreement. One assumption that the Debtor, and the court, were entitled to make when entering into and approving the Fee Agreement, was that Cappello would exercise prudent billing judgment for the time it billed to the Debtor. If, as discussed below, Cappello failed to exercise prudent billing judgment, that certainly would be a "development not capable of being anticipated" when the court approved the Fee Agreement. Accordingly, the court is not bound by § 328 and the terms of the Fee Agreement to compensate Cappello for all of the hours reflected in the Supplemental Application.
While an attorney's exercise of reasonable billing judgment is typically an implicit understanding in an hourly fee arrangement between the attorney and the client, the Fee Agreement in this case may be interpreted as expressly including a "reasonableness" component. Section 3.1 of the Agreement, provided, in part, that "Clients agree to pay Cappello & Noël for all time spent by Cappello & Noël reasonably related to the representation of Clients."
Even if Cappello's lack of prudent billing judgment does not constitute a "development[ ] not capable of being anticipated, " the court would still engage in a "reasonableness" analysis. Since nothing in the Fee Agreement fixed or established the number of hours Cappello was allowed to bill the Debtor, the court is not departing from any provision of the Agreement by considering whether the hours actually billed were reasonable. See Confections by Sandra, 83 B.R. at 733 (remanding to bankruptcy court for determination as to whether hours expended by attorney, who was employed under § 328, were reasonable under the circumstances); see also Unsecured Creditors' Committee v. Puget Sound Plywood, Inc., 924 F.2d 955, 960 (9th Cir. 1991) (noting in dicta that where "bankruptcy court [has] approved an hourly rate, [but has] not fix[ed] the number of allowed hours, that matter still would be subject to the court's review").
Whenever the court must determine the reasonableness of the hours expended by a fee applicant, a universal consideration in the court's analysis is whether the applicant exercised reasonable or prudent billing judgment when it billed for those fees. See Roberts, Sheridan & Kotel, P.C. v. Bergen Brunswig Drug Co. (In re Mednet), 251 B.R. 103, 109 (9th Cir. BAP 2000) ("Professionals always must exercise proper billing judgment."); Lobel & Opera v. U.S. Tr. (In re Auto Parts Club, Inc.), 211 B.R. 29, 33 (9th Cir. BAP 1997) ("Professionals have an obligation to exercise billing judgment."); see also Puget Sound Plywood, 924 F.2d at 958-59 (noting that a bankruptcy professional had an "obligation to exercise billing judgment" and did not have "free reign to run up a tab" without considering several factors). On this "billing judgment" issue, the Supreme Court has commented,
[A court] . . . should exclude from [the] initial fee calculation hours that were not "reasonably expended." Cases may be overstaffed, and the skill and experience of lawyers vary widely. Counsel [who is requesting fees] should make a good faith effort to exclude from a fee request hours that are excessive, redundant, or otherwise unnecessary, just as a lawyer in private practice ethically is obligated to exclude such hours from his fee submission. In the private sector, "billing judgment" is an important component in fee setting. It is no less important here.
Hensley v. Eckerhart, 461 U.S. 424, 434 (1983) (citations omitted) (internal quotation marks omitted) (Civil Rights Attorney's Fees Awards Act context). Thus, "[i]t does not [necessarily] follow that the amount of time actually expended is the amount of time reasonably expended." Copeland v. Marshall, 641 F.2d 880, 891 (D.C. Cir. 1980) (en banc) (emphasis added).
"The [applicant] applying for fees bears the burden of proving the reasonableness of those fees." Dalessio v. Pauchon (In re Dalessio), 74 B.R. 721, 724 (9th Cir. BAP 1987) (§ 506(b) context). It is not sufficient for the applicant to simply represent that all of the time claimed was usefully spent, and the court should not uncritically accept those representations. Jordan v. Multnomah Cnty., 815 F.2d 1258, 1263 n.8 (9th Cir. 1987). Instead, the applicant must show that the time spent was reasonably necessary and that it made a good faith effort to exclude excessive, redundant, or unnecessary hours. Id. And unless the court is satisfied that the fee applicant exercised prudent billing judgment, the court is not required to accept the actual hours expended as being reasonable.
Categories of Tasks Performed.
The tasks that make up the Supplemental Application can be categorized into four time blocks: (1) preparing the Contingency Application (from April 19 to July 18, 2012); (2) defending against the Debtor's objection to the Contingency Application (from August 9 to September 21, 2012); (3) preparing the order allowing the contingency fee (from October 19 to November 13, 2012); and (4) preparing the Supplemental Application and the objection to the Final Decree Motion (from November 28, 2012 to January 18, 2013). The threshold question is whether these tasks are reasonably related to in the scope of Cappello's employment. The court answers this question in the affirmative.
The concept of reasonableness when applied to a body of legal work invokes a combination of objective and subjective inquiries. Objectively, the court must be persuaded that the legal work performed in a particular case was consistent with the kind of legal service which a similarly situated creditor might require. The court must also determine that the value of the legal services is consistent with the cost of similar legal services for similar work. Subjectively, the court must inquire whether the professionals exercised prudent billing judgment in the decisions that were made to engage the legal services, the way the work was assigned, and the manner in which it was actually performed. As the Bankruptcy Appellate Panel has opined,
Reasonableness embodies a range of human conduct. The key determinant is whether the [attorney applying for fees] incurred expenses and fees that fall within the scope of the fees provision in the agreement, and took the kinds of actions that similarly situated [attorneys] might reasonably conclude should be taken, or whether such actions and fees were so clearly outside the range as to be deemed unreasonable.
Dalessio, 74 B.R. at 723.
It is undisputed that an attorney employed by the estate is entitled to compensation for preparing and presenting a fee application to the court. In re Nucorp Energy, Inc., 764 F.2d 655, 662 (9th Cir. 1985). Similarly, compensation may be awarded for successfully litigating the fee application (i.e., by defending against objections to the fee application) may be awarded as well. See Smith v. Edwards & Hale, Ltd. (In re Smith), 317 F.3d 918, 928-29 (9th Cir. 2002) (requiring fee applicant to show that time and expense spent litigating fee application was necessary), abrogated on other grounds by Lamie v. U.S. Tr., 540 U.S. 526 (2004); Boldt v. Crake (In re Riverside-Linden Inv. Co.), 945 F.2d 320, 323 (9th Cir. 1991) (holding that bankruptcy court did not abuse discretion in denying fees incurred by fee applicant in unsuccessfully opposing objection to fee application).
Here, Cappello has a right to be compensated for reasonable services connected with preparation of both the Contingency Application and this Supplemental Application. Additionally, Cappello is entitled to compensation for its successful defense of the Contingency Application and for preparation of the resulting order, both of which were reasonably related to the Contingency Application. Lastly, Cappello's work in objecting to the Debtor's Final Decree Motion was reasonably related to defense of the Contingency Application since the objection resulted from the Debtor's failure to pay the contingency fee that had been awarded. Thus, the court has no problem with the categories of work reflected in the Supplemental Application. The only remaining issue relates to the amount of time Cappello expended to perform these tasks.
Application to the Fee Applicaton.
Upon review of the Billing Records, the court is not persuaded that Cappello exercised prudent billing judgment as a general matter. These records show several, varied instances where Cappello "overlawyered" on certain tasks or otherwise billed for excessive, redundant, or unnecessary work. Specifically, the following issues support the court's conclusion:
Time Spent Preparing the Contingency Application.
Based on the Billing Records, it appears that Cappello spent approximately 30 hours, between April 19, 2012, and July 18, 2012, at a billed cost of approximately $25, 175, to prepare and file the Contingency Application. That amount of time is patently excessive and particularly troubling given that Cappello only requested the award of a contingency fee. The Contingency Application did not require the production and analysis of time records, and the amount of the proposed contingency fee was readily calculable. Excluding the exhibits (copies of other documents already filed in the case), the Contingency Application consisted of a four-page motion, a seven-page declaration of attorney Thielemann, and a five-page narrative summary. There was nothing particularly remarkable or complicated about the Contingency Application and much of the material was unnecessary. For example, it was not necessary to offer biographical summaries of Cappello's attorneys since its employment had already been approved and it was only requesting payment of a contingency fee fixed by contract under the Fee Agreement.
Cappello notes that much of the time spent preparing the Contingency Application was actually work performed in anticipation of the Debtor's forthcoming objection. However, Cappello billed an additional $10, 585 for work performed after the objection was filed, between August 9, 2012, and September 21, 2012, when the court finally took the matter under submission after the filing of supplemental briefs. This time appears, from a review of the pleadings filed, to be unreasonably excessive. The only legal standard cited by Cappello in support of its contingency fee was the basic standard for the application of § 328. There was no analysis relating to the contract interpretation issue, which was the ultimate issue in the dispute. Indeed, most of the court's decision awarding Cappello's contingency fee was based on the court's own independent research. It appears that Cappello either spent very little time researching the relevant legal issues or simply researched the wrong ones. Whichever may be the case, the time spent preparing and defending the Contingency Application was unreasonable.
Time Spent Preparing An Order Allowing the Contingency Fee.
Similarly, the amount of time spent preparing the order allowing Cappello's contingency fee showed a lack of prudent billing judgment. When the court issued its memorandum decision allowing the contingency fee, Cappello was directed to submit an appropriate order. What Cappello had to do at that point was fairly straightforward: just prepare and lodge with the court an order approving the contingency fee. Yet, Cappello somehow spent 14 hours between October 19 and November 13, 2012, at a billed cost of $7, 272.50 completing this simple task.
According to its Billing Records, Cappello did a significant amount of unnecessary work related to this task, such as performing additional legal research (after the court had already decided the issues in its memorandum decision) and seeking the Debtor's bankruptcy counsel's signature for the order (when the court did not require the Debtor's approval). It is unclear why Cappello chose to do these things. Whatever the reasons, the firm should not have billed for all of that work in its Supplemental Application. Again, the Billing Records show that Cappello did not exercise prudent billing judgment.
Double Billing for Internal Conferences.
Next, when members of the firm had internal office or email conferences with one another, Cappello, for the most part, appropriately included only one billing entry for each conference. However, there were five instances of "double billing" and one instance of "triple billing, " where two or more attorneys each billed for the same conference. Cappello fails to explain why a "team" of expensive attorneys was required to present and defend Cappello's interests at the end of this case. These additional entries should not have been included in the Supplemental Application.
Hours Expended by Attorney Cappello.
The Supplemental Application included 1.5 hours billed by attorney A. Barry Cappello. Mr. Cappello is a well- respected, highly-specialized and very expensive attorney who bills his time at $950 an hour-nearly twice the rate of the next costliest attorney in the firm. It is unclear why his participation in these matters was necessary, especially in light of the fact that the attorney who was assigned to present the Contingency and Supplemental Applications, Troy A. Thielemann, is promoted as the head of "the firm's appellate research and writing department, where he is responsible for overseeing the preparation of substantial written materials including complaints, summary judgment mentions, trial motions, and appellate briefs." If Mr. Cappello felt compelled to oversee and supervise Mr. Thielemann's work product, then Mr. Cappello's time should have been logged as an internal administrative expense and not billed to the Debtor.
Unrelated Services.
Lastly, Cappello improperly included in its Billing Records the time spent researching and contacting bankruptcy attorneys in the Fresno area to represent Cappello in the Debtor's bankruptcy case. Again, it's not clear why Cappello felt it needed to retain the services of a local bankuptcy attorney, but this appears to be a task that should have been treated as an internal overhead expense; it should not have been billed to the Debtor. Determination of the Allowed Amount of Fees. Once the court finds that a fee applicant has not exercised prudent billing judgment, the court has the discretion to determine the reasonable amount of fees to be allowed. In light of Cappello's lack of prudent judgment as discussed above and evidenced throughout the Billing Records, the court is persuaded that a downward adjustment to the already-discounted fee is appropriate. In reducing the fees, the court must "provide a concise but clear explanation of its reason for the fee award, " Hensley, 461 U.S. at 437, and must also "articulate with sufficient clarity the manner in which it makes its determination." Chalmers v. City of Los Angeles, 796 F.2d 1205, 1211 (9th Cir. 1986), amended, 808 F.2d 1373 (9th Cir. 1987). However, this does not require the court to include detailed calculations in its explanations, but "something more than a bald, unsupported amount is necessary." Id. at 1211 n.3.
Given the variety and pervasiveness of the issues relating to how Cappello performed its work, and the difficulty in scrutinizing and recalculating each individual entry in the Billing Records, the court finds it appropriate to reduce the discounted fee request by half. Cf. Leichty v. Neary (In re Strand), 375 F.3d 854, 861 (9th Cir. 2004) (finding no abuse of discretion when bankruptcy court reduced by half the attorney's fees requested in fee application). Therefore, Cappello will be entitled to fees in the amount of $24, 038.
To fall in line with the requirements of § 328, the court clarifies that no adjustment is being made to the hourly rates charged by Cappello. Instead, to reach the $24, 038 figure, the court is reducing the amount of time for each billing entry by half. See Chalmers, 796 F.2d at 1211 n.3 ("While the [court] need not set forth in exhaustive detail the method of calculating an attorney's fee award, at the very least [it] must set forth the number of hours compensated and the hourly rate applied.").
CONCLUSION.
Based on the foregoing, the court finds and concludes that Cappello is entitled to reasonable compensation for the work it performed in preparing and litigating the Contingency Application and protecting its interest. However, Cappello was at all times required to exercise prudent billing judgment, and its right to be compensated for the time spent in the case was qualified by the "reasonableness" standard applicable generally to the award of attorney's fees in bankruptcy cases. Pursuant to the terms of the Fee Agreement, Cappello's fees are subject to an immediate 20% reduction. Thereafter, and for the reasons stated above, the court is not persuaded that Cappello exercised prudent billing judgment for the 140 hours that it billed to the Debtor. Accordingly, Cappello's request for additional fees will be allowed in the amount of $24, 038. Its request for reimbursement of expenses will be allowed in full in the amount of $156.15. No additional fees will be awarded for litigating the present dispute.