UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
RUBY JEAN JENNINGS CASE NO. 96-60001
TINA GAIL PENNINGTON CASE NO. 96-60002
MEMORANDUM OPINION AND ORDER
This matter is before the Court upon the Trustee's Motion for the Return of Attorney's Fees filed on February 27, 1996 by James D. Lyon, Trustee in both cases. The debtors in these cases are mother (Ruby) and daughter (Tina).
The record reflects that the attorney for the debtors charged each debtor $1,000 for filing of these chapter 7 proceedings. The Trustee, in his motion and argument before the Court, contends that the sum of $1,000 for each of these two cases is excessive and seeks the return of an unspecified portion of the fee.
The attorney for debtor, in each case, has filed his Attorney's Objection to Trustee's Motion for the Return of Attorney's Fees and the matter was heard before the Court on March 8, 1996 and submitted for decision. The attorney for the debtors has not kept time records in either case and contends that the motion of the Trustee is frivolous.
The Trustee's argument in this case is that, since the cases are substantially similar in assets and liabilities, virtually "two for the price of one" cases, that it is unfair to charge the debtors $1,000 each as attorney's fees.
A review of the files indicate that the debtors jointly own a home and, apparently, a 1992 Dodge pickup truck. They have very few assets other than furniture and clothing. While Ruby has somewhat more indebtedness than Tina, the substantial bulk of the indebtedness relates to the house, which appears to be over- encumbered, and the Dodge pickup. There does appear to be a substantial similarity in the cases although they are clearly not identical. The Court finds that the time to prepare the two petitions, schedules and statements of affairs and do the other work involved is substantially less than that involved in two non-related chapter 7 proceedings and, hence, a time savings is effected by the attorney in representing the debtors. While one creditor, NBD Bank, has sought and received an extension of time to file a complaint for objecting to discharge or dischargeability, no such action has as of this writing been filed. The record reflects an Agreed Order in each case apparently agreeing to the sale of the residence jointly owned by the two debtors. While the Court does not have the advantage of a listing of the time spent and services rendered by attorney for the debtors regarding the proceedings, the cases, on the surface, seem routine.
Awards of attorney's fees pursuant to 11 U.S.C.'330 must be made in accordance with the lodestar method. Ample precedent dictates that the Court apply the lodestar method of determining appropriate attorney's fees in actions before federal courts. Pennsylvania v. Delaware Valley Citizens Council for Clear Air, 483 U.S. 711, 107 S.Ct. 3078, 97 L.Ed.2d 585 (1987); Hensley v. Eckerhart, 461 U.S. 424, 103 S.Ct. 1933, 76 L.Ed.2d 40 (1983); In re Boddy, 950 F.2d 334 (6th Cir. 1991).
In the present case, the review of attorney's fees already paid by a chapter 7 debtor is made pursuant to 11 U.S.C.'329. While there is some difference in standards as between '329 and '330, it would appear mandatory to apply the lodestar method in the evaluation of attorney's fees under '329. In re Boddy, supra. In re Costello, 150 B.R. 675 (Bankr.E.D.Ky 1992).
The Supreme Court cases cited above dealt with situations in which a successful plaintiff's attorney sought an award of attorney's fees from defendants pursuant to federal statute providing for recovery of attorney's fees by a successful plaintiff. In Hensley v. Eckerhart, supra, the Court stresses that the attorney requesting an award of fees should submit evidence supporting the time and hourly rates in support of the requested fee. Failing to adequately document the requested award may warrant a reduction in the award. In the present case, the Court is not awarding fees but examining them pursuant to 11 U.S.C.'329. While the principles of the lodestar method are clearly applicable, and it might be argued that bankruptcy counsel should have kept account of time expended and services performed because of the statutory provision for examination of his dealings with the debtors, it would be fundamentally unfair to penalize the attorney solely for failing to keep time records for the services performed where, as here, it is clear to all that he has rendered valuable and competent services to his clients. Rather, the Court will look to other factors to determine the appropriate fee herein.
In the absence of adequate time records it is difficult for an attorney to contend that an exceptional amount of time was devoted to the case particularly where the Court's file does not reveal extensive litigation concerning the matter. For this reason and upon a review of the Court's file herein, the Court finds that the within proceedings were routine proceedings. The attorney involved is experienced and has a record of being effective in his advocacy for his clients.
Pursuant to Judge Lee's ruling in Costello, supra, and his quotation from the Boddy decision, the reasonable value of the services as determined by what other competent attorneys would charge for the services is relevant. Based upon rulings in this district, a representative range of present charges by competent counsel in this area for the practice of routine chapter 7 cases is from approximately $500 to $1000. In consideration of all of the above, the Court believes that a competent and experienced practitioner, such as the attorney herein, could practice the within cases in approximately 7 1/2 hours each, and that an appropriate fee for routine cases of this nature in this area is $100 per hour. This fee may well be below the normal hourly fee charged by the attorney involved in these actions but represents the value of services in routine cases such as these which, so far as the record reveals, did not require special skills. In summary, an appropriate fee is $750 per case.
The Court therefore concludes that the sum of $250 should be refunded with respect to each such attorney fee. Such refunds should be made to the debtor if such sum is abandoned by the trustee in each case, otherwise, to the trustee in such case.
Therefore, it is hereby ORDERED as follows:
1. The attorney for the debtor shall refund the sum of $250 in each case herein; and
2. Such refund shall be made to the Trustee herein unless the Trustee files a notice of abandonment of such sum within 14 days of the entry of this Order; and
3. Upon filing of any such notice of abandonment by the Trustee, payment shall be made directly to the debtor(s).
Dated this _____ day of May, 1996.
Joe T. Roberts, Esq.
James Lyon, Esq.