Opinion
Case No. 97-62183-aer7.
July 22, 2008
Dear Parties Counsel:
As you are aware, I heard the above-referenced matters from June 23 to June 25, 2008.
This letter is intended to announce my findings of fact and conclusions of law.
Overview:
Debtor Geraldine Smith filed a Chapter 13 petition pro se on April 16, 1997. Her schedules listed two pieces of real property, one an oceanfront parcel in Gold Beach, Oregon, where Debtor resided and maintained a bed and breakfast (the B B), the other a condominium in the Smuggler's Cove Condominium complex in Brookings, Oregon, which, at the time Debtor maintained as rental property. She listed the combined value of these parcels at $565,000. Debtor also listed personal property valued at $145,500. She listed six secured creditors with a total of $251,429 in claims, no priority creditors and two general unsecured creditors with a total of $10,000 in claims.
The property has also been referenced as located in Ophir, Oregon.
Three hundred and thirty-three documents later, after Debtor's default under a confirmed plan, the case was converted to Chapter 7 on November 12, 1999, on a secured creditor's motion. Mr. Roost was appointed Chapter 7 trustee (Trustee). In her schedules on conversion, Debtor listed an additional parcel of real property in Lakeside, Oregon, which apparently she was also using as a rental. The total value of her real property increased to $632,000. She listed $285,058.87 in personal property, of which $100,000 represented "books, pictures, antiques, art and collectibles." Debtor listed the original six secured creditors with claims now totaling $289,113. Again, she listed no priority creditors. Four general unsecured creditors were listed, with claims totaling $20,501.27.
Most of the filings were generated in claims litigation involving Debtor's secured creditors.
The Trustee liquidated the two main assets, the collectibles and the B B, in October, 2000, and February, 2001, respectively. Now, over seven years from the last asset sale, bogged down by extensive claims litigation initiated by the debtor and disputes over the payment of liens and administrative expenses (and discovery attendant thereto), the case is still pending. As of this letter's date, more than 1,000 main case documents have been filed, over 225 of which by the Debtor. The case has generated 48 hearings and 16 trial level letter or memorandum opinions. Counting those to the Ninth Circuit Court of Appeals, there have been 17 appeals or cross appeals in the main case and 2 in an adversary proceeding. The Debtor has filed 16 of the appeals, 2 of which are still pending.
The docket itself is 83 pages.
The Trustee labels the Debtor a vexatious obstructionist, who worked against her own interests in reducing a sizeable surplus. Debtor blames the Trustee and his professionals for neglecting their duties to efficiently and expeditiously administer this estate. The truth lies somewhere in-between. What is absolutely true is that this is the most over-litigated case I have seen in almost 25 years on the bench! It is against this largely joyless backdrop that I am called upon to resolve the present matters.
On perhaps the lone bright note, general unsecured claims have been paid in full through orders authorizing interim payment. Those claims, including interest total just over $22,000.
Unpaid Exemptions
One of the issues framed for the recent hearing is whether the Trustee has administered assets without paying the Debtor her allowed exemptions. Based on the evidence proffered at the hearing and that of which I can take judicial notice, I agree that Debtor is owed for unpaid exemptions.
Debtor filed her amended Schedule C on April 12, 2000, in which she claimed, amongst others, exemptions in wearing apparel and jewelry ($1,800), books and pictures ($600), tools of the trade of "vacation rental and preparation of court forms and typing service" ($3,000), and household goods ($3,000), under ORS 23.160(1) (a), (b), (c), and (f) respectively. The Trustee did not object to the wearing apparel/jewelry and books/pictures exemptions thus they were allowed by operation of law. He did object to the household goods and tools of the trade exemptions. The household goods exemption, which included antique collectibles, was allowed by order entered May 26, 2000. The tools of the trade exemption was allowed by order entered September 6, 2000, after a hearing on August 31, 2000. The September 6th order authorized the Trustee's liquidator to sell all personal property to which Debtor claimed an exemption and required the Trustee to deliver to the court the proceeds from the sale of such property to the extent necessary to satisfy the Debtor's claim of exemption therein, except however if the Trustee sold tools, implements or apparatus of Debtor's trade of "vocation [sic] rental and preparation of court forms," he was directed "to pay immediately . . . debtor's claim of exemption of $3,000.00."
Debtor's citations omitted subsection (1) of ORS 23.160. Her intent however was clear.
Those statutes have since been renumbered ORS 18.345(1)(a), (b,)(c), and (f) respectively.
The August 31, 2000, hearing summary indicates the deposit into court was to retain the status quo pending a motion by the Trustee to offset against the exemption proceeds certain costs incurred in picking up Debtor's property from Grants Pass, Oregon. From the record before me, it does not appear any such motion to offset was ever filed.
The Trustee's liquidator sold the personal property at auction on October 15, 2000 and filed his report on November 3, 2000. The report itemized hundreds of items sold. The Trustee argues no property subject to exemption (other than Debtor's household goods-for which Debtor was paid her exemption) was sold at the auction. I have carefully reviewed the list of items sold and find the Trustee also sold tools of the trade, wearing apparel/jewelry and books/pictures. It is uncontradicted the Trustee did not immediately deposit with the court the $2,400 representing the wearing apparel/jewelry ($1,800) and books/pictures ($600) exemptions. Nor did he immediately pay Debtor the $3,000 tools of the trade exemption. To give effect to the September 6th order, the estate will be obligated to pay simple interest on the unpaid exemptions from the October 15, 2000 sale until June 25, 2008 (the concluding date of the recent hearing), at the federal post-judgment interest rate at the time of sale (6.241%/annum). This interest totals $2,592.75, which, when added to $5,400 in unpaid exemptions, yields an estate liability to Debtor of $7,992.75.
Because Debtor was in essence an innkeeper, many "household goods" qualify as tools of her trade.
The exemption also includes "other personal items." ORS 23.160(1)(b).
If the Trustee had complied with the September 6th order, Debtor would have had immediate use of $3,000. Further, $2,400 would have been on deposit with the court, and presumably because no motion to offset (see f.n. #7 supra) was forthcoming, would have been released to Debtor.
Professionals' Fees:
Mr. Douglas Schultz as the Trustee's counsel, as well as Mr. Roost as the Trustee and as the Trustee's counsel have applied for final compensation. Before addressing the individual applications, I will discuss the general standards for approval of fees under 11 U.S.C. § 330(a).
Unless otherwise noted, all subsequent statutory references are to Title 11 of the United States Code in effect on April 16, 1997, the date this case was filed.
First, the applicant has the burden of proof to show his fees and expenses are reasonable. Caplin Drysdale Chartered v. Babcock and Wilcox Co. (In re Babcock and Wilcox Co., 526 F.3d 824, 827 (5th Cir. 2008); Roderick v. Levy (In re Roderick), 185 B.R. 601, 606 (9th Cir., BAP 1995). Unlike a proof of claim for pre-petition debt, a fee application, as an administrative claim, enjoys no presumption of validity or accuracy, at least as to those aspects which are challenged. In re Allen Care Centers, Inc., 163 B.R. 180, 181 (Bankr. D. Or. 1994), aff'd, 175 B.R. 397 (D. Or. 1994), aff'd, 96 F.3d 1328 (9th Cir. 1996). In reviewing fees under § 330(a), the customary starting point is to determine the "lodestar," by multiplying a reasonable number of hours expended by a reasonable hourly rate. Boone v. Derham-Burk (In re Eliapo), 468 F.3d 592, 598 (9th Cir. 2006); see also, §§ 330(a)(3)(A) (time spent) (B) (rates charged) as factors to be considered in awarding fees. I am to examine the circumstances and manner in which services are performed and the results achieved. In re Mednet, 251 B.R. 103, 108 (BAP 9th Cir 2000). Factors to be considered include the following:
(1) Were the services authorized?
(2) Were the services necessary or beneficial to the administration of the estate at the time they were rendered?
(3) Are the services adequately documented?
(4) Are the fees requested reasonable, taking into consideration the factors set forth in section 330(a)(3)?
(5) In making the determination, the court must consider whether the professional exercised reasonable billing judgment.
Reasonable billing judgment is based on the following:
(a) Is the burden of the probable cost of legal services disproportionately large in relation to the size of the estate and maximum probable recovery?
(b) To what extent will the estate suffer if the services are not rendered?
(c) To what extent may the estate benefit if the services are rendered and what is the likelihood of disputed issues being resolved successfully?
Mednet, supra, 251 BR at 108, n. 7 (citing Unsecured Creditors' Committee v. Puget Sound Plywood, Inc., 924 F2d 955, 959 (9th Cir 1991)).
Mednet, supra, 251 BR at 108. Services reasonably likely to provide an identifiable, tangible and material benefit to the estate when rendered are compensable, even if they don't actually end up providing such a benefit (and as long as the services are otherwise compensable under § 330(a)). In re Smith, 317 F3d 918, 926, (9th Cir 2002) (construing § 330(a)(4)(A)(ii)). See also, Mednet, supra at 108 (construing § 330(a)(3)(C), and holding same). Nonetheless, when a cost-benefit analysis indicates the trustee and his professionals are the only parties likely to benefit, the services are unwarranted and the court may rightly deny fees. Mednet, supra, 251 BR at 109. Fees for preparation of a fee application are compensable. § 330(a)(6). Further, fees incurred in litigating fee applications are compensable if the applicant "demonstrates that the services for which compensation is sought satisfy the requirements of section 330(a)(4)(A) and that its case exemplifies a `set of circumstances' where the time and expense incurred by the litigation is `necessary' within the meaning of section 330(a)(1)." Smith, supra at 928 (9th Cir. 2002) (emphasis in original).
Mr. Schultz's Fees:
Mr. Schultz as the Trustee's counsel has, through an original and two supplemental applications, applied for approval of $45,044 in fees and $1,071.84 in expenses for services from November 23, 2004, through March 12, 2008. In addition, he has requested $6,642 in fees for preparing for ($1,593) and attending ($5,049), the recent hearing, for a grand total of $51,686 in fees and $1,071.84 in expenses sought. Mr. Schultz also indicated, without contest by Debtor, that he had incurred an additional $6,520 in fees during the period March 19, 2008, to June 17, 2008, which he was not applying for.
Mr. Schultz's original application included notice of an anticipated $50,000 in "future fees." I will however only rule on the portion of that estimate Mr. Schultz has actually incurred.
In applying the "lodestar," my first task is to determine a reasonable hourly rate. Multiple factors are considered when determining an hourly rate including, "the novelty and complexity of the issues, the special skill and experience of counsel, the quality of the representation, the results obtained and the superior performance of counsel." In re Johnson, Case # 04-36802-elpl3 (Bankr. D. Or. April 19, 2006) (letter op.) (Perris, J.) (quoting, Faubion v. City of Prineville, 2001 WL 34041782 at *1 (D. Or. Nov. 7, 2001)). "In determining a reasonable hourly rate, the court must look to the prevailing market rates in the relevant community. The fee applicant has the burden of showing that the requested rates are in line with those prevailing in the community for similar services of lawyers of reasonably comparable skill and reputation." Id. (citing,Faubion, supra at *4).
Mr. Schultz has charged between $225-$270/hour for his services. Paralegals and law clerks at his firm have charged between $50-$80/hour. Debtor objected to all of Mr. Schultz's rates, and to any paralegal rate above $45/hour. Mr. Schultz had the burden to show the rates were reasonable. He testified that his hourly rates were $260/hour for a few years and are now $275/hour. He also testified that his rates for this case were the same as those he charged other clients, except his family and members of his firm, whom he charged discounted rates. An attorney's customary hourly rate, while not controlling, is an indicator of the prevailing market rate. Faubion v. City of Prineville, Case No. CV-00-976-HU, 2001 WL 34041782 at *6 (D. Or. Nov. 7, 2001). While there certainly could have been "stronger" evidence from Mr. Schultz, I nonetheless will adopt his rates as the prevailing rates, as Debtor adduced no contradictory evidence. As to paralegal rates, Mr. Schultz testified that his paralegal Kirsten Schermerhorn had extensive experience, and that she charged $80/hour for paralegal work and $45/hour for work as a legal secretary. There was, however, no evidence as to her customary rate or other evidence probative of the prevailing rate for paralegals. With this dearth of evidence, what rate should I apply? For guidance I turn to Mr. Roost's earlier interim fee application, where Debtor did not object to paralegal rates of $50/hour. I infer that this is Debtor's agreed rate ceiling for the present applicants. Accordingly, I adopt them for Mr. Schultz's paralegals/law clerks.
Many of Debtor's objections, including those to the hourly rates, came through "number coded" entries on copies of the fee applications themselves. The legends of the "code" were appended thereto. I find this an acceptable method of lodging fee objections.
These rates are ceilings. If a law clerk or paralegal billed at a lower rate, that rate will be applied.
Before discussing Mr. Schultz's time spent, two matters, "disclosure" and "eligibility" impact the fee analysis. Both Debtor and the Office of the United States Trustee (UST) have alleged Mr. Schultz failed to disclose a "connection" to the case.
The background is as follows. On November 30, 2004, the Trustee applied to employ Mr. Schultz as attorney for the estate. On December 3, 2004, Mr. Schultz filed the verified statement required by FRBP 2014. He did not indicate thereon any prior connections by his firm to the case. Debtor objected to the employment, mainly on the grounds that employing counsel was an unnecessary expense. After a hearing, an order was entered on January 19, 2005, employing Mr. Schultz retroactive to November 30, 2004. In spring 2006, Debtor conducted discovery on various matters related to the Smuggler's Cove Condominium Homeowner's Association (HOA), which was a creditor in the case and also the association governing the condominium in Brookings. She obtained a document showing the HOA had paid Mr. Schultz various amounts between September, 1997 and May, 1998, for legal fees. On November 6, 2006, Debtor moved to disqualify Mr. Schultz as the Trustee's counsel, based on his firm's prior representation of the HOA. On November 9, 2006, Mr. Schultz filed an amended Rule 2014 statement indicating that his firm had represented the HOA from September 19, 1997, to approximately May 21, 1998, to pursue a proof of claim in the Chapter 13 portion of the case. The representation culminated in a settlement. He averred no other connections existed. Mr. Schultz also filed an affidavit stating that after he received Debtor's motion he obtained the firm's file from storage. From what he could determine, the firm, through an (now former) associate James Shepherd, filed an amended proof of claim on the HOA's behalf, to which Debtor objected. The objection was settled as noted above. The settlement basically concluded the firm's representation and the representation was almost wholly Mr. Shepherd's. The actual attorney/client relationship was not terminated until approximately May 21, 1998. The affidavit states that since then the firm has not represented the HOA in any capacity. The affidavit further states that when Mr. Schultz submitted the original 2014 statement he did not feel the disclosure of the prior representation was necessary, as the firm had had no connections to the HOA for more than six years prior thereto. Given the limited scope of the firm's representation and the significant period of time elapsed after the representation was completed, it did not seem to him to rise to the level of a "connection," as required to be disclosed. He reiterated that his firm has had no other connections with the Debtor or creditors in the case.
Debtor's motion to disqualify was opposed and eventually denied without prejudice to raise the disclosure issue when Mr. Schultz's fees came up for consideration. She now argues all fees should be denied based on the disclosure violation. The UST argues Mr. Schultz should be assessed a $1,500 sanction for failure to disclose and also a reduction for those fees expended in giving additional disclosure, opposing the motion to disqualify and in responding to Debtor's follow-up discovery requests to investigate whether a disqualifying conflict existed based on the firm's prior representation of the HOA. At the June hearing, Mr. Schultz maintained he was aware of the prior representation but it did not rise to the level of a disclosable "connection." He further argued that even if disclosure was required, the failure was not sanctionable.
In addition, the UST recommends that fees sought opposing Debtor's discovery requests where the opposition was unsuccessful should not be compensated, although the UST admits that time spent opposing discovery of privileged and non-relevant information is compensable. It suggests a $1,000 reduction for this category.
In In re Farrington, 2007 WL 4365753 (Bankr. D. Or. 2007), this court, following well-established Ninth Circuit law, held thatall connections, past and present, no matter how seemingly trivial or remote, must be disclosed. It further held an attorney's good faith belief that disclosure is not warranted does not necessarily vitiate the failure and may lead to a denial of fees. Id.; see also, 1 BANKRUPTCY LAW § 3.41 (Oregon CLE 1999 Supp. 2007). Mr. Schultz seems to argue his failure was a "no harm, no foul" situation because he was in fact eligible to serve as the estate's counsel, however, the "harm" here is not based on whether disclosure would lead to disqualification; rather, the harm is the failure to disclose itself. Farrington, supra at *5.Farrington is again instructive. There, a Chapter 11 debtor's counsel had represented a secured creditor 15 years prior to his engagement. Still, the court held the connection must be disclosed. Despite the firm's eligibility to serve, the court sanctioned the firm $10,000 for its multiple disclosure failures. Here, Mr. Schultz's firm's representation was six years prior to his engagement but in the same case. InFarrington, the attorney, like Mr. Schultz, amended his disclosures once the issue was raised, however, such a belated amendment does not absolve. Since Mr. Schultz's fees did not benefit the estate, nor were they reasonably calculated to do so, I will deny the fees incurred in remedying Mr. Schultz's failure to disclose his firm's prior connections to the case and in complying with the UST's and Debtor's reasonable discovery requests to investigate his connections. These fees total $5,263.00.
See e.g., In Re Park Helena Corp., 63 F.3d 877 (9th Cir. 1995); In Re Triple Star Welding, Inc., 324 B.R. 778 (9th Cir. B.A. P. 2006), abrogated on other grounds, Dye v. Brown et. al. (In re AFI Holdings, Inc.), ___ F.3d ___, 2008 WL 2420706 (9th Cir. 2008).
The creditor in Farrington also loaned the debtor funds to finance his attorney's fees.
The attorney in Farrington also failed to disclose the details of his fee arrangement, the source of his fees, and the full amount of retainer received. Id. at *5-6.
Mr. Schultz is however entitled to compensation for responding to Debtor's discovery requests in pursuit of her un-validated "conspiracy" theory. See discussion below.
Debtor also questioned Mr. Schultz's eligibility to be employed. This is a separate issue from non-disclosure. I conclude Mr. Schultz's firm's prior representation was not a disqualifying conflict, thus compensation may not be denied on that basis. Under § 327(c), an attorney is not disqualified from representing a Chapter 7 estate solely because of his former or current representation of a creditor, unless a creditor or the UST objects and the court subsequently finds an actual conflict of interest. Here, I find no actual conflict of interest. Even if § 327(a), the general retention statute, applies, I find Mr. Schultz was "disinterested" and did not hold or represent an interest adverse to the estate. "Disinterestedness" under the "catch all" of § 101(14)(E) is determined case-by-case based on the totality of the circumstances. Dye v. Brown et. al. (In Re AFI Holding, Inc.), ___ F.3d ___, 2008 WL 2420706 (9th Cir. 2008). Here, the firm's representation of the HOA ended more than six years prior to its engagement by the Trustee. The evidence is uncontradicted that Mr. Schultz, while employed by the Trustee, did not participate in any substantive matter concerning the HOA. Debtor, however, has alleged nefarious "back room" conspiracy and collusion amongst the professionals in this case, including Mr. Schultz. I find the evidence absolutely lacking in this regard. Mr. Schultz was, at the time of application and throughout his engagement, eligible to serve the estate.
Lack of disinterestedness and holding an adverse interest are independent grounds to deny compensation. § 328(c).
I have carefully reviewed Debtor's coded objections as well as those in narrative. She argues Mr. Schultz's fees exceed the thresholds estimated in the employment application. However, those figures, as the application states, are merely estimates, which I find were made in good faith. Further, it is disingenuous for Debtor to argue fees exceeding the estimate are non-compensable when it was largely her litigiousness which necessitated the fees. Debtor also argues Mr. Schultz should be denied fees for "coming up to speed." Here, the Trustee originally retained himself as the estate's counsel in December, 1999. Mr. Schultz was retained approximately five years later when the Trustee decided to resign from the active practice of law for personal reasons. I cannot fault the Trustee for this decision. In a typical case, his duties as counsel would have ended. Mr. Schultz is entitled to be compensated for "coming up to speed."
The application estimates the attorney fees at $12,500 or less to:
1) respond to Debtor's demand to inspect trustee's files ($2,500 or less);
2) resolve disputed claims with claimants and debtor ($2,500 or less);
3) handle objections and appeals regarding administrative expense claims ($7,500 or less); and
4) provide incidental services regarding the administration of the estate (such fees not to exceed the greater of $1,000 or 10% of the total compensation requested).
Debtor argues fees for services before Mr. Schultz's appointment are not compensable. Mr. Schultz and his paralegal charged for preparing the employment application and 2014 verified statement. I will disallow this time, not because it is non-compensable as a matter of law, but rather because Mr. Roost, as an experienced trustee, was capable of preparing the employment application himself and, as discussed above, the verified statement, while Mr. Schultz's responsibility, was inaccurate. These total $112.50 in attorney time plus $15.00 of paralegal time (at $50/hour) for a reduction of $127.50.
See extended discussion of this subject below with regard to Mr. Roost as the Trustee's counsel.
Debtor next argues all fees on the "Rush" matter should be disallowed. I disagree. Although an inordinate amount of the parties' resources was (and is being) taken up with the Rush lien, nevertheless it was a matter which needed resolution because the lien attached to the proceeds of the B B. Thus, reasonable fees are compensable, however fees for excessive research are not. Further, fees incurred in corresponding with the court and drafting an order authorizing payment of the Rush lien in January, 2006, are also not compensable. At that point adversary proceeding #05-7043 (which had been filed by Debtor at the court's direction) was pending. The adversary sought to determine the respective lien rights of the parties. Counsel's premise was that the adversary had been untimely filed, thus an order authorizing payment of the lien was appropriate, however, Debtor, while filing the adversary past the court's November 8, 2005, deadline, had timely filed a motion to extend that deadline, which was still pending. As such, counsel's submission was premature and never acted upon.
Debtor uses the present setting to continue to argue the merits of whether the lien should have been paid. I will not indulge her. I dismissed the adversary proceeding to determine the lien's validity. The Trustee has paid the claim pursuant to court order. The Bankruptcy Appellate Panel (BAP) affirmed the adversary's dismissal. Although Debtor's appeal to the Ninth Circuit Court of Appeals is pending, the BAP's decision has not been stayed. This is the law of the case and I will not revisit it.
This includes a pending appeal to the Ninth Circuit Court of Appeals.
The lien derived from an Oregon Supreme Court judgment entered August 31, 1992, for $1,204.10 plus 9% post judgment simple interest. The lien only totaled $2,763.80 when paid.
In fact, I never formally acted on the motion to extend; that I allowed the adversary proceeding to go forward, indicated the motion was granted by implication.
Debtor took an aggressive posture in her discovery requests. Eventually, she subpoenaed documents from practically every creditor and other party in interest with any connection to her dealings in southern Oregon, all in search of a conspiracy that wasn't there. Two of those subpoenas went to Mr. Schultz and the Trustee. The fees incurred for defending privileged documents, work product and over-broad document requests are compensable, however, fees for analyzing, researching, conferring with third parties and to whatever extent, defending against subpoenas served on the other parties are not compensable. In most cases those parties were represented by counsel and in any event the Trustee simply had no interest in protecting these parties from Debtor's discovery.
Other miscellaneous deductions are for: 1) computerized research costs where the research cannot be identified; 2) monitoring functions charged at attorney time when paralegal time was more appropriate (e.g. checking PACER for appeal status); 3) excessive legal research on quashing Debtor's subpoenas on Messrs Schultz and Roost; 4) drafting Trustee's "position" memorandum on Debtor's motion to recuse, as the memorandum was ultimately stricken as untimely; 5) work the Trustee could have performed without the assistance of counsel (e.g. analyzing the final report; dealing with the Karen Clark claim when the Trustee was available to do so; initial analysis and objection to amended exemptions; conferencing as to recovery of the 1966 Porsche-see discussion below).
The disallowed time for the Rush matter, subpoenas on third parties and the miscellaneous deductions total $4,618.00 in attorney and law clerk time plus $132.50 of paralegal time (at $50/hour) for a total of $4,750.50 plus $247.99 in costs.
Mr. Schultz's applications when re-computed at $50/hour for his paralegal, leaving in place the hourly rates charged by Mr. Schultz, his law clerks and his associates, reduce his request to $50,764. With the further reductions noted above, Mr. Schultz is entitled to an award of $40,623.00. I will add to this the $6,250 in additional fees incurred during the period March 19, 2008, to June 17, 2008, which Debtor did not contest at the hearing. Mr. Schultz is thus awarded $46,873 in fees and $823.85 in expenses ($1,071.84 sought minus $247.99 disallowed).
Mr. Roost's Fees as Attorney:
Mr. Roost, as counsel for the Trustee has filed a final fee application for $30,866 in fees, which includes $10,617.38 previously received as interim compensation. Debtor objects to any further compensation and also requests that the court order disgorgement of the interim compensation received. As with Mr. Schultz, she raises "eligibility" issues based on an unfounded "conspiracy" or "collusion" theory which I reject. Mr. Roost was eligible to serve throughout his engagement as the estate's counsel.
Again, in determining the "lodestar," I must first determine a reasonable hourly rate. Mr. Roost's application indicates he billed attorney time from $175-$215/hour and paralegal time at $60/hour. Debtor objected to any attorney rate above $175/hour. She also objected to the paralegal rate. Based on my "prevailing rate" findings as to Mr. Schultz and his paralegal, I will overrule Debtor's objection to Mr. Roost's hourly rates and set his paralegal's hourly rate at $50, noting this was the rate conceded by Debtor in Mr. Roost's interim fee application.
Debtor objects to the fees incurred in the B B's sale. In particular, she alleges the Trustee, through his counsel, moved to sell the B B without a signed purchase agreement, that the prospective sale then fell through and because of the delay, the estate lost opportunities to sell to alternate purchasers. Debtor's objections are not well founded. The notice/motion to sell the B B free and clear of liens was filed on April 11, 2000. Donald and Rogie Shutt were the purchasers. At that point, the Trustee had a pending counteroffer to the Shutts. All parties were aware, from the outset, that any sale would need court approval. I find no fault in the Trustee initiating that court-approval process. In fact, on April 13, 2000, the Shutts accepted the Trustee's counteroffer, although they unilaterally lowered the amount of earnest money. The hearing on the motion was held on May 22, 2000. The sale was approved to the Shutts or substitute purchasers for $425,000 or higher by order entered May 26, 2000. The evidence indicates the Shutts got cold feet and despite the Trustee's realtor's best efforts, the sale fell through. I find this unremarkable. Real estate sales often fall through. As it turned out, the Trustee managed to sell the B B to substitute purchasers for $425,000 in early, 2001.
It does not appear that this was a "deal killer" as the Trustee went forward with the motion.
Mr. Roost has submitted detailed time records as well as a narrative reflecting his activities in the case. Debtor in turn has objected to many of the itemized entries using her numbered "code." Most of the "coded" objections are to tasks Debtor claims should have been performed without the assistance of counsel. Under § 328(b) compensation to a trustee who is also employed as the estate's attorney, for performance of any of the trustee's duties that are generally performed without an attorney's assistance, are not compensable legal services. As a general proposition, a trustee will be held to the standard of a sophisticated pro se litigant and will be expected to handle routine administrative matters without the need of counsel. See, e.g., In re King, 88 B.R. 768, 770-71 (Bankr. E.D. Va. 1988) (listing a trustee's typical administrative tasks for which counsel may in general, not be compensated). "[A] case trustee may only employ professionals for tasks that require special expertise beyond that expected of an ordinary trustee." Ferrette Slater v. U.S. Trustee (In re Garcia), 335 B.R. 717, 727 (9th Cir. B.A. P. 2005). For instance, applications for employment,Id. at 726, as well as simple sale notices/motions, In Re McKenna, 93 B.R. 238, 241 (Bankr. E.D. Cal. 1988), generally do not require counsel. In contrast, services performed in an adversary proceeding or a contested matter where the trustee is required to appear and defend, have been held to be proper services for trustee's counsel. In re Perkins, 244 B.R. 835, 842 (Bankr. D. Mt. 2000). Preparation of legal documents such as a stipulation and release have also been held to be compensable legal services, even if the documents are not complex. Ferrette Slater, supra at 728. The above parameters are not without flexibility given the appropriate circumstances. As the court inKing stated: "In unique circumstances when matters normally handled by the trustee involve complex legal issues, and the applicant has demonstrated the need for his involvement, courts have allowed compensation. The burden, however, is entirely on the attorney requesting compensation to justify the services rendered." King, supra at 770-771 (internal citations omitted).
I have carefully examined these entries. In a typical case, I agree the Trustee would not have needed counsel for many of them, especially with regard to sale of the B B and the antiques and collectibles. Here, however Debtor took the litigation route at most every opportunity, necessitating court filings and appearances for which counsel was needed Such opposition was often rooted in a misinterpretation of the law. For instance, she battled against turnover of allegedly "exempt" items of personal property. It took a hearing and court order to disavow her of the notion that particular items could be "cherry picked" as exempt. Telling was her testimony at the recent hearing, that she would only comply with the Trustee's requests if he obtained a court order. This misconstrues her duties to cooperate with the Trustee, § 521(3) and to surrender estate property. § 521(4). Debtor's opposition to the Trustee's requests invariably required a written response by the Trustee and appearance at a hearing, all for which it was reasonable to employ counsel. Further, Debtor's litigiousness cast a specter of threatened litigation against the Trustee personally. Given this atmosphere, with the few exceptions noted below, I find it reasonable for Trustee to have employed counsel to perform the tasks involving the sale of the estate's assets and for monitoring the case's progress.
This is borne out by Debtor's recently filed objection to Mr. Roost's fees where she asks the court's permission to sue him in state court.
I will, however, deny compensation for certain services which I find either clerical or trustee tasks, including the following: 1) preparing notices to abandon and conferences with creditors relating thereto; 2) drafting applications to employ professionals; 3) phone calls to the court re: scheduling hearings; 4) corresponding with the U.S. Trustee's office re: audit of the file; 5) reviewing proofs of claim before they were in a litigation posture; 6) preparing the interim report and interim application for Trustee's compensation, as well as the notice thereof; 7) paralegal time corresponding with Mr. Thomas Huntsberger when Mr. Huntsberger also charged for the time; 8) conferencing with creditors regarding the § 341 meeting of creditors; 9) reviewing exemptions and drafting and filing initial objections thereto; 10) conferencing with creditors regarding assets allegedly owned by 3rd parties; 11) conferencing with the liquidator regarding overdue rent on storage facilities; and 12) attending an aborted Rule 2004 exam because the examinee did not get proper service. The total denied for these services is $1,599 in attorney time and $170 in paralegal time (at $50/hour).
Mr. Huntsberger represented the estate from April 17, 2000, to August 1, 2000, when Mr. Roost was out of the country.
There are two additional matters which merit discussion. The first concerns the Rush lien. As noted above, Mr. Schultz's time relating to this matter is largely compensable. Mr. Roost's is not. The Rush claim/lien arose from a suit for strict foreclosure of a land sales contract filed by multiple plaintiffs (including John and Judy Rush) against Debtor in Curry County Circuit Court in 1989. The case was resolved on summary judgment in the plaintiffs' favor and a Decree of Strict Foreclosure (Decree) was entered on or about January 24, 1992. The Decree reduced Debtor's obligation under the land sales contract to a money judgment totaling approximately $82,000, which included $35,599.78 in attorney's fees and $493.00 in costs. It gave Debtor a 10 day equitable redemption period to pay all amounts due, failing which Debtor's interest in the subject real property would be foreclosed and plaintiffs would be entitled to immediate possession. The Decree then provided:
The money judgments described above shall be satisfied and canceled if not so paid by Defendant during the ten (10) day [redemption] period and thereafter on strict foreclosure Defendant's taking possession of the property described herein [sic]. Plaintiffs shall have no money judgments against Defendant.
The "described" money judgments included the attorney's fees and costs awards.
A copy of the Decree is attached hereto as Exhibit A.
It is uncontroverted that Debtor did not pay the redemption amount and that plaintiffs retook possession of the subject real property. Under the Decree's plain terms, Debtor's obligations thereunder, including liability for attorney's fees and costs, were cancelled and satisfied. After the Decree's entry, Debtor filed a petition for a writ of mandamus in the Oregon Supreme Court which was denied. As part of that proceeding, the Supreme Court entered a judgment against Debtor in favor of Judge Richard Barron and Judy Rush for $1,204.10 in fees and costs, plus 9% post judgment simple interest.
During litigation over the Rush lien, Debtor reported that she contacted the Oregon Supreme Court which in turn modified the judgment to remove Judge Barron's name.
This Supreme Court judgment created the lien which was eventually paid.
Mr. Roost discovered the Rush judgment lien in spring 2000, when it appeared on a title report issued in preparation for the B B's sale. According to his fee application, in May, 2000, Mr. Roost reviewed the Decree, the Supreme Court judgment and a letter from the plaintiff's foreclosure counsel, John Gardner.
The lien was noted on the title report as belonging to John Rush, per a judgment entered August 31, 1992, for $97,173.44.
As discussed above, Mr. Roost sold the B B in February, 2001, under an order entered in May, 2000, allowing the sale free and clear of liens, with the liens, including the Rush lien, to attach to the proceeds of sale. In February, 2004, almost four years after first reviewing the Decree and Supreme Court judgment, Mr. Roost began corresponding with Mr. Gardner regarding the lien. Mr. Gardner took the position that the attorney's fees and costs awarded in the Decree survived the strict foreclosure and that with interest plus the amounts owed under the Supreme Court judgment, his clients were owed $77,858.89. Evidently, despite the Decree's clear terms, Mr. Roost agreed. In late April, 2004, he wrote Debtor a letter, attaching a copy of the Decree and restating Mr. Gardner's position. He advised that he and Mr. Gardner had settled the claim for $50,000 and that a notice of intent to settle on those terms would be going out. He then queried Debtor whether Mr. Gardner was in error. Without waiting for a response, Mr. Roost filed a notice of intent to settle the claim for $50,000. Debtor filed an objection thereto, noting that under the Decree's plain terms, upon strict foreclosure, her personal obligations (including the attorney's fees and costs) had been cancelled. On August 6, 2004, Mr. Roost withdrew the notice of intent. His withdrawal noted "on further review of the matter, your trustee has come to the conclusion that the debtor's objections are well founded." It is clear from the above, that Debtor's objection triggered Mr. Roost's re-review. It is also clear his initial review was sorely lacking. He mis-interpreted the Decree's plain terms and/or simply accepted Mr. Gardner's position without scrutiny. I will deny all fees for any attorney services regarding the "Rush" lien. This, however, only totals $646.00. Because the quality of Mr. Roost's work was so poor on this matter, a further fee reduction of $5,000 is in order. But for Debtor's objection, the estate would have paid out approximately $47,500 more than it was actually liable for.
At the recent hearing, Mr. Roost testified that Debtor's objection wasn't helpful in determining the Rush lien's validity; rather it merely caused him to re-review the Decree and conduct his own research. I find this testimony simply not credible, especially in light of his acknowledgment of Debtor's "well founded" position.
While "quality" of the representation is usually accounted for in the hourly rate approved, Johnson, supra, I have found it easier to simply separate out the Rush matter and assess disallowance by way of a flat deduction. See, Eliapo, supra, (in setting a reasonable fee, court is not bound in all respects to a "lodestar" analysis).
Another instance in which the Trustee was prepared to overpay concerns Ed Hirte's claim. Back in the Chapter 13 portion of the case, Debtor objected to Mr. Hirte's proof of claim. After hearing, the claim was allowed at $8,418.50 plus statutory interest until paid. Debtor appealed. The BAP remanded to recalculate the claim's amount in light of a payment Debtor had made. Before the hearing on remand, Debtor and Mr. Hirte stipulated to the amount of the claim at $5,979.74 as of the petition date. The stipulation was filed with the court on October 25, 1999. On May 8, 2000, Mr. Hirte filed amended proof of claim #25 for the amount of the stipulation. The claim indicates it supersedes all prior claims. Its attachment notes it was filed as a clarification at Debtor's request. Despite the stipulation and proof of claim #25, from February, 2004, to August, 2004, the Trustee negotiated with Mr. Hirte's counsel, Mr. Spicer, regarding the claim's amount. In July, 2004, the Trustee prepared a notice of intent to settle the claim and corresponded with Debtor as to same. Debtor responded, presumably objecting to the proposed settlement amount. On August 10, 2004, Mr. Roost wrote Debtor agreeing that his settlement with Mr. Hirte was "not based on the most current documentations." From a review of the file, it does not appear the Trustee ever noticed the settlement. Mr. Roost has not met his burden to show his negotiations and preparation of the notice of intent were "reasonable" under the § 330 factors. As such I will deny $666.50 in attorney fees for that matter.
Computing the paralegal time at $50/hour, Mr. Roost's application is reduced to $30,787.50. With the deductions (computing the paralegal time at $50/hour), enunciated above, I will allow Mr. Roost $22,706.00 for his services as Trustee's counsel. Deducting the $10,617.18 in interim compensation received, permits a current award of $12,088.82.
Mr. Roost's Fees as Trustee:
Mr. Roost has applied for $25,950.20 in fees and $294.95 in expenses as Trustee, of which he has previously received $3,826.42 in interim fees and $197.90 in interim expenses. He has submitted detailed time records in support of his application. These records indicate 133.4 hours spent on the case, not including preparation for and attendance at the recent two and a half day hearing, which conservatively total 22 hours, making Mr. Roost's time on the case, as Trustee, approximately 155.4 hours. The fees applied for are the maximum allowed under § 326(a). Debtor objects to any current award and asks the court to order disgorgement of the interim fees and expenses previously received.
As a threshold, Debtor attacks Trustee's eligibility to serve, again based on her conspiracy and collusion theory. For the reasons stated above, I reject this argument. She further argues that because Mr. Roost "ratified" Mr. Schultz's disclosure violation, he should be penalized. The evidence, however, shows Trustee was in no way involved in Mr. Schultz's lack of disclosure.
Debtor's main objections stem from the Trustee's administration. First, there is the matter of the 1966 Porsche. Debtor's Chapter 7 schedules listed this vehicle with a value of $7,500. It was not drive-able, but was intact. In early 2000, the Trustee, through his liquidator Mike Milam, picked up the vehicle from Debtor and put it into storage. Mr. Milam then noticed an auction and received several bids. Ultimately, the Trustee found problems with the vehicle's title and on August 10, 2001, noticed an intent to abandon it. No one objected and the abandonment became effective on August 27, 2001. At that point, the vehicle should have been returned to Debtor. Almost seven years later, however, it remained in storage with Mr. Milam. Debtor claims she did not ask for turnover earlier because she thought it had been sold, having received a copy of the notice of auction, but not a copy of the notice of intent to abandon. In any event, it was not incumbent on the Debtor to affirmatively seek turnover. Mr. Roost testified he simply assumed Mr. Milam had returned the vehicle. Whatever Mr. Milam's role, he was the Trustee's agent and Mr. Roost bears responsibility, at least vis-a-vis Debtor. Debtor asks that the Trustee be surcharged the vehicle's value plus interest from the effective date of abandonment. Debtor, however, produced no evidence of how much value the vehicle had lost while in storage. She was, however, deprived of its use for almost seven years. To compensate her, I will accept the UST's recommendation and surcharge the Trustee the interest that value would have earned. I will accept the $7,500 scheduled value and apply interest at the federal post judgment interest rate (3.45%) in effect on the effective date of abandonment (August 27, 2001) until the conclusion of the recent hearing on June 25, 2008. This totals $1,767.29.
At the recent hearing's conclusion, I ordered the vehicle's turnover to the Debtor.
I will leave it to Mr. Milam and Mr. Roost to resolve, in another forum, any dispute as to who should ultimately bear responsibility for Debtor's loss.
Another administrative lapse was the failure to timely abandon various estate assets. As discussed above, the Trustee only administered the B B and the collectibles. I do not fault this limited administration. It was enough to pay all creditors and create a surplus estate. Further, the evidence indicates the Trustee did his due diligence as to other listed assets and made an appropriate business decision not to administer them. These included the Porsche, the condominium in Brookings, the Lakeside property, several receivables, an aging mobile home, and two old trailers, however, the Trustee only abandoned, by notice, two assets, the Porsche and the condominium. The other assets will simply be "deemed abandoned" under § 554(c) upon the case's closure. Debtor complains that through the lapse of time many of these "deemed abandoned" assets have lost part or all of their value. I acknowledge the Trustee's position that Debtor could have forced the issue, at any point, by moving to compel abandonment under § 554(b). However, good administration is not the Debtor's onus. I also acknowledge the UST's position that typically the bulk of a bankruptcy estate's assets are abandoned at closing under § 554(c). Again, this is not a "typical" case. At some point, the Trustee should have realized this case would stay open long past any typical case. Exactly when this point arose I cannot say with certainty, but surely it was years before the recent hearing in June, 2008. A Chapter 7 trustee has statutory duties to close the estate as expeditiously as possible as is compatible with the best interests of the parties, § 704(1) and to account for all property received. § 704(2). Inherent in these duties is ridding the estate, in a timely manner, of assets which are of no use to it.
The Trustee abandoned the condominium by notice filed December 6, 2000.
Debtor advocates surcharging the Trustee claiming the deemed abandoned property as well as the condominium, lost value. I reject these arguments. As to the condominium, the Trustee attempted to administer it by marketing it with his realtor and collecting rent thereon. He abandoned it in late 2000, on his realtor's advice after he had evicted a recalcitrant tenant. I find no undue delay in administration of this asset. As to the deemed abandoned assets, again Debtor could at any time have moved to compel their abandonment. Further, her evidence of lost value was speculative at best.
Also reflecting on the Trustee's administration is his failure, on several occasions, to obey court orders. For example, the May 26, 2000, order allowing the B B's sale specifically required that Debtor's $25,000 homestead exemption be paid from closing. The Trustee, however, initially only authorized payment of $23,000, imposing a unilateral $2,000 holdback for anticipated clean-up expenses. Eventually, the Debtor was paid the $2,000 but that does not vitiate the Trustee's failure to comply. In addition, as discussed above, the Trustee failed to obey the September 6, 2000, order requiring payment and deposit of certain personal property exemptions.
I concede this failure may have been due to the Trustee's mistaken belief that only household goods were sold at the auction.
On several occasions, the Trustee performed work that was unnecessary. For instance, on April 24, 2000, the IRS filed proof of claim #23 for $43,089.49 secured. It then filed an amended proof of claim on August 28, 2000, for the same amount, changing the status from secured to general unsecured. Debtor objected and at an October 27, 2000, hearing the IRS' counsel withdrew the claim on the record, stating Debtor had no tax liability. The IRS followed up by filing a letter with the court on November 3, 2000, formally withdrawing proof of claim #28. This letter was served on the Trustee. Despite the amendment from secured to unsecured and the claim's subsequent withdrawal, the Trustee corresponded with the IRS on February 4, 2004 inquiring about the amount of a lien which appeared on the title report for the B B, as well as the status of proof of claim #28. The IRS responded by letter dated February 19, 2004, confirming that Debtor had no tax liability and that the lien would soon be released. Despite the above, on May 3, 2004, the Trustee objected to proof of claim #23 as duplicative of claim #28, when, in fact, it had been superceded by claim #28. Despite its previous withdrawal, he also objected to proof of claim #28 on the basis that it had been paid in full. These objections prompted yet another series of letters from the IRS dated May 14, 2004, formally withdrawing proof of claim #23 and re-withdrawing #28. The Trustee testified that his May 3rd objections were to "clean up the claims file." However, by then it was clear that Debtor had no tax liability and the IRS was claiming none.
A similar instance of wasted work occurred this year. Back in September, 2007, the BAP awarded creditor Marie Webre a $2,962 judgment against Debtor as a sanction for a frivolous appeal. Ms Webre then asserted the judgment as proof of claim #35 against the bankruptcy estate. At a hearing earlier this year, the Trustee requested authority to pay the claim. At that time I mentioned, that at first blush, the claim looked like a post-petition claim against Debtor personally, rather than a claim against the estate. I did not, however, rule on the matter. Picking up on my comments, the Trustee filed an objection to the claim on the grounds I had mentioned. Ms Webre requested a hearing on the objection. At the April 3, 2008, hearing, the Trustee quizzically "took no position" on his objection, explaining that while he had filed the objection based on my comments, he nevertheless thought the estate had liability. I had no choice to construe the Trustee's comments as a withdrawal of his objection. The claim was thus allowed, and ordered paid after the hearing. Nevertheless, the Trustee could have saved the court and Ms Webre time by not filing the objection in the first place.
My comments above are not intended as a wholesale critique of the Trustee's performance. I recognize this was not an easy case to administer. In many respects the Trustee is to be commended for shepherding it through its seemingly endless maze of litigation. That said, there were notable lapses in efficient administration which ultimately must be reflected in the fee award. Applying the § 330(a) criteria, I will award Mr. Roost a Trustee's fee of $16,000.00 (which includes the Porsche surcharge). Reducing this by the $3,826.42 in interim compensation received renders a current award of $12,173.58. I will allow all of the $294.95 in expenses applied for, reducing same by the interim award of $197.90, leaving a current award of $97.05.
Conclusion:
Except as discussed above, I reject all of Debtor's other arguments regarding her objections to the final report and to professionals' fees.
Debtor is entitled to payment of $7,992.75 on her exemptions. Mr. Schultz and his firm are entitled to payment of $46,873.00 in fees and $823.85 in expenses. I decline his request for a $5,000.00 set aside for future fees. Mr. Roost is entitled to payment of $12,088.82 in fees as the Trustee's counsel and $12,173.58 in fees and $97.05 in expenses as Trustee. Debtor is entitled to any surplus remaining after the above payments. The Trustee's final report will be approved. An appropriate order of distribution will be entered. As I announced at the June hearing, the Trustee is to wait 30 days before distributing the estate to allow any party in interest to obtain a stay of the Distribution Order.
Given the case's history, I am under no illusion that entry of the Distribution Order will end matters. In that vein, I reiterate my admonition, voiced at the conclusion of the recent hearing that a motion to reconsider is only granted on very limited grounds and is not a substitute for an appeal.
Counting adversary proceedings, Debtor has filed 15 motions to reconsider.
The above constitute my findings of fact and conclusions of law under FRBP 7052; they shall not be separately stated.
IN THE CIRCUIT COURT FOR THE STATE OF OREGON FOR THE COUNTY OF CURRY JOHN RUSH and JUDY RUSH, ) Husband and Wife, ) GARY WILLHOFT and BRENDA WILLHOFT, ) Case No. 89CV232 Husband and Wife, ) JOHN RESLOCK and JUDITH RESLOCK, ) Husband and Wife, ) DECREE OF STRICT ROY RESLOCK and MILLETTE RESLOCK, ) FORECLOSURE OF Husband and Wife, ) LAND SALE CONTRACT ) Plaintiffs, ) ) vs. ) ) GERALDINE BECKER, ) aka GERALDINE BECKER-SMITH, ) an individual, ) ) Defendant. ) THIS MATTER having come before the Court on the motion of Plaintiffs for summary judgment based on the affidavits and exhibits attached thereto and the records and files herein at hearing held or. the 26th day of November, 1991 with Plaintiffs appearing through their attorney, JAMES W. GARDNER, and Defendant appearing by telephonic communication and the Court having reviewed all writter matter submitted by each of the parties and the legal arguments by each of the parties and the records and files herein, makes the following;FINDINGS OF FACT:
1) The Court having previously dismissed the answer and amended counterclaim and cross-claims of the Defendant and allowing no further time to plead the orders of the Court dated the ___ day of ___, 1991.
2) That there is no genuine issue as to any material fact and Plaintiffs are entitled to judgment as a matter of law.
3) Defendant owes to Plaintiffs the following sums under the contract of sale between the parties dated the 2nd day of January, 1987.
a) The sum of $11,807.88 plus interest at 9.5% per annum from February 15, 1989 until paid.
b) Based upon the Plaintiffs' assignment of and Defendant's assumption of an additional contract of sale from Vendor Arthur K. Brewer to Plaintiffs described in the parties contract outlined above the sum of $34,214.46 plus interest at 9% per annum from February 16, 1989 until paid.
c) Vendor Arthur K. Brewer described above never acknowledged or consented to the assignment by Plaintiffs to Defendant of Vendee's interest nor was no there any release or novation of Plaintiffs by said Arthur K. Brewer as Vendees under said contract.
d) Plaintiffs are entitled to their reasonable attorneys fees and costs for title examination pursuant to clause 14 of the above described contract between the parties and their statutory costs under Oregon law.
NOW THEREFORE IT IS ADJUDGED AND DECREED AS FOLLOWS:
1) Defendant is required to pay to Plaintiffs, through the Clerk of the Court, the following sums:
a) The sum of $11,807.88 plus interest at 9.5% per annum the February 15, 1989 until paid under the contract of sale between the parties.
b) The sum of $34,214.46 plus interest thereon at 9% per annum from February 16, 1989 until paid pursuant to the contractual agreements with Arthur K. Brewer, Vendor.
c) Plaintiffs' reasonable attorneys fees as follows:10,414.00 6,359.28 18,826.50
James W. Gardner of Gold Beach, Oregon $ Jeffrey Campbell James C. Potepan of Medford, Oregon $ Andrew S. Bisom of Santa Ana, California $ Total attorneys fee judgment of $___ plus interest at 9% per annum until paid.d) Costs and disbursements as outlined in Plaintiffs' cost bill on file herein in the amount of $___ plus 9% interest until paid.
2) If Defendant pays said sums to the Clerk of the Court within ten (10) days, Plaintiffs shall deliver their deed to the property described below to Defendant.
3) If Defendant fails to pay these sums to the Clerk of the Court within ten (10) days, Defendant shall be forever foreclosed of any interest in the real property described in Exhibit "A" attached hereto and by reference incorporated herein and the sums previously paid by Defendant to Plaintiffs or Third Party Brewer under the contract shall belong to Plaintiffs or Third Party Brewer free of all right and claim of the Defendant. The sums previously paid by Defendant to Plaintiffs or any other person under the contract described above shall belong to Plaintiffs or any other third person.
4) That this decree shall stand as cancellation of the contract between the Plaintiffs and Defendant hereto absolutely and forever and Plaintiffs shall be entitled to immediate possession of the real property described in Exhibit "A" after the ten (10) day period described above.
5) The Sheriff of Curry County, Oregon, after said ten (10) day period and upon failure of Defendant to pay said judgments to Plaintiffs shall place Plaintiffs in immediate possession of the real property described in Exhibit "A" the subject of this suit.
MONEY JUDGMENT A. Judgment Creditor: John Rush, et al B. Judgment Creditor's Attorney: James W. Gardner C. Judgment Debtor: Geraldine Becker aka Geraldine Becker-Smith D. Amount of Judgment: 1) The sum of $11,807.88 plus interest thereon at the rate of 9.5 per annum from February 15, 1989 until paid under the contract of sale between the parties.2) The sum of $34,214.46 together with interest at the rate of 9% per annum from February 16, 1989 until paid pursuant to the contractual agreements with Arthur K. Brewer, Vendor.
3) Plaintiffs reasonable attorneys fees pursuant to said contract and total in the amount of $___ plus 9% per annum until paid.
4) Costs and disbursements as outlined in Plaintiffs' cost bill on file herein in the amount of $___ plus 9% per annum until paid.
5) The money judgments described above shall be satisfied and canceled if not so paid by Defendant during the ten (10) day period described above and thereafter on strict foreclosure Defendant's taking possession of the property described herein. Plaintiffs shall have no money judgments against Defendant.