Sylvester v. Chaffe McCall
- Summarized by David Baker , Law Office of David G. Baker
- 4 years 1 month ago
- Case Type:
- Consumer
- Case Status:
- Reversed and Remanded
- Citation:
- No. 21-30186 (5th Circuit, Jan 14,2022) Published
- Tag(s):
-
- Ruling:
- Bankruptcy court's decision awarding attorney fees to attorney that represented trustee reversed and remanded for further proceedings consistent with the opinion.
- Procedural context:
- This was an appeal by a chapter 7 debtor whose creditor received a 100% dividend, nonetheless leaving money for distribution to the debtor. The trustee had hired an attorney represent her, with the court's permission, and the attorney applied for compensation. The bankruptcy court granted the application in full, and the debtor appealed to the district court, which also affirmed. The debtor appealed to the 5th Circuit, which reversed and remanded. Per curium opinion.
- Facts:
- Sharon Sylvester filed for bankruptcy in 2018. The bankruptcy court converted Sylvester’s case to a Chapter 7 proceeding on April 18, 2019, and appointed Barbara Rivera-Fulton as trustee. The trustee filed an application with the court to employ Chaffe McCall (“Chaffe”) as general counsel. The application stated that Chaffe would help investigate, review, and liquidate Sylvester’s real property, and also “act as general counsel for [trustee] and . . . assist [trustee] in evaluating other bankruptcy issues affecting the estate.” The court granted the trustee’s application. The bankruptcy proceeding went well—the trustee and Chaffe fully paid Sylvester’s debts and were able to preserve some funds to disburse to Sylvester at the conclusion of the proceedings.
After the creditors were fully paid, Chaffe filed a fee application with the bankruptcy court, seeking $16,185 in fees for 57.6 hours of attorney services. Chaffe’s application included an itemized description of services performed. Sylvester opposed Chaffe’s fee application, arguing that many or most of the services Chaffe performed for the trustee were duties statutorily assigned to the trustee that did not require legal expertise. The bankruptcy court granted the application despite some reservations about whether some tasks actually required an attorney's expertise. The district court affirmed.
On appeal to the 5th Circuit, reviewed the standard to be applied under 330(a) and held the the applicant did not met that standard. A court may compensate an attorney under § 330(a) only for services requiring legal expertise that a trustee would not generally be expected to perform without an attorney’s assistance. Although the line between legal and non-legal services may be "murky", that does not mean that a court may avoid its duty to make the determination; it is the applicant's burden to demonstrate that the standard is met.
- Judge(s):
- Smith, Elrod, and Oldham
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