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In re Cripps

United States District Court, W.D. Michigan, Southern Division

March 31, 2017

In re Lon W. Cripps and Deborah E. Cripps, Debtors.
v.
BARBARA P. FOLEY, Trustee, Appellee. LON W. CRIPPS, DEBORAH E. CRIPPS and DIETRICH LAW FIRM, Appellants,

          OPINION

          JANET T. NEFF United States District Judge.

         Appellant Dietrich Law Firm (“Dietrich Law”) appeals from an order of the Bankruptcy Court approving in part and denying in part Dietrich Law's application for attorney fees in connection with its representation of the Debtors in their Chapter 13 bankruptcy. Having considered the parties' appellate briefs and the record, the Court finds oral argument unnecessary. “[T]he facts and legal arguments are adequately presented in the briefs and record, and the decisional process would not be significantly aided by oral argument.” Fed.R.Bankr.P. 8019. The Court affirms the decision of the Bankruptcy Court.

         I. Facts

         On June 22, 2010, the Debtors, Lon W. Cripps and Deborah E. Cripps (the “Cripps” or “Debtors”) filed a Voluntary Petition for relief under Chapter 13 of the Bankruptcy Code. Appellant Dietrich Law represented the Cripps in their bankruptcy case.

         The Debtors' Chapter 13 plan provided for the full payment of general secured creditors over a period of sixty months. In re Cripps, 549 B.R. 836, 842 (Bankr. W.D. Mich. 2016). On November 6, 2015, the Trustee issued her notice/letter to the Debtors concerning completion of the Chapter 13 plan, and on the same date issued a notice of final cure of mortgage payments. Id. at 842-43. The payroll orders, by which Debtors had made the required payments to their Chapter 13 case by payroll deductions, were terminated by the Bankruptcy Court on November 9, 2015. Id. at 843, n.6.

         On December 7, 2015, the Trustee filed a report of plan completion, and the Debtors filed their certificate regarding domestic support obligations. Two days later, on December 9, 2015, Dietrich Law filed its final fee application, [1] seeking an additional $686.60 in fees and expenses, which was later limited to $642.60 by agreement of the parties. Id. at 843-44, n.8.

         The Trustee filed an objection to the fee application on December 16, 2015, contending that the court should not award Dietrich Law compensation to be paid as an administrative expense because the application was untimely in light of the letter to the Cripps, the report of plan completion, and the imminent entry of the discharge. Id. at 843. Further, Dietrich Law's delay in filing the application would prejudice the Cripps by impairing their fresh start and/or precluding the entry of their discharge. Id. at 843-44.

         On January 13, 2016, during the pendency of the instant fee matter, the Bankruptcy Court entered a Discharge in the Cripps' case. Id. at 843.

         Following oral argument on Dietrich Law's pending application for fees, the Bankruptcy Court took the matter under advisement. Id. at 844. On May 13, 2016, the Bankruptcy Court issued an Opinion and Order approving in part and denying in part the fee application. The court awarded compensation in the amount of $642.60 pursuant to 11 U.S.C. § 330(a), but determined that the compensation awarded shall not be paid as an administrative expense under 11 U.S.C. § 503, and was discharged pursuant to 11 U.S.C. §§ 524(a) and 1328(a) (Dkt 11-2 at PageID.118).[2] The Order also stated that “nothing contained herein shall preclude the Debtors from voluntarily satisfying the compensation awarded herein pursuant to 11 U.S.C. § 524(f).”

         Dietrich Law now appeals the Bankruptcy Court's decision on its fee request.

         II. Legal Standard

         “The bankruptcy court has broad discretion in determining the amount of attorneys' fees, and the award may be reversed only on a showing that the bankruptcy judge abused its discretion.” Solomon v. Wein (In re Huhn), 145 B.R. 872, 874-875 (W.D. Mich. 1992). “An abuse of discretion occurs only when the bankruptcy court fails to apply the proper legal standard and procedure in making the fee determination or bases the award on clearly erroneous findings.” Id.

         The bankruptcy court's conclusions of law are reviewed de novo. Rowell v. Chase Manhattan Auto. Fin. Corp. (In re Rowell), 359 F.Supp.2d 645, 647 (W.D. Mich. 2004). Issues of statutory interpretation are questions of law, and are thus subject to review de novo. Mitan v. Duval (In re Mitan), 573 F.3d 237, 241 (6th Cir. 2009); ITT Indus. v. BorgWarner, Inc., 506 F.3d 452, 457 (6th Cir. 2007). “Under a de novo standard of review, the reviewing court decides an issue independently of, and without deference to, the trial court's determination.” Menninger v. Accredited Home Lenders (In re Morgeson), 371 B.R. 798, 800 (B.A.P. 6th Cir. 2007).

         III. ...


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