Law Office of David a Boone v. Derham-Burk ( 2006 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: FILIAE ELIAPO; In re: JUDY 
ELIAPO,
Debtors,
No. 03-16814
BAP No.
LAW OFFICES OF DAVID A. BOONE,
Appellant,  NC-02-01450-
MaRyB
v.
OPINION
DEVIN DERHAM-BURK; U.S.
TRUSTEE,
Appellees.

Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Brandt, Ryan, and Marlar, Bankruptcy Judges, Presiding
Argued and Submitted
March 16, 2006—San Francisco, California
Filed November 13, 2006
Before: Pamela Ann Rymer, William A. Fletcher, and
Richard R. Clifton, Circuit Judges.
Opinion by Judge William A. Fletcher
18493
18496 IN RE: ELIAPO
COUNSEL
David A. Boone, Law Offices of David A. Boone, San Jose,
California, for the appellant.
IN RE: ELIAPO 18497
Devin Derham-Burk, United States Trustee, Office of the U.S.
Trustee, San Jose, California, for the appellees.
OPINION
W. FLETCHER, Circuit Judge:
This appeal concerns the appropriate standards and proce-
dures for awarding attorney’s fees in connection with Chapter
13 bankruptcy petitions. The Bankruptcy Court for the North-
ern District of California has established three means by
which a debtor’s attorney may obtain a fee award in a Chapter
13 case. The attorney may (1) submit a fee application under
“no-look” guidelines that establish presumptive fees for a
“basic case” and specified variations thereon, (2) submit a
detailed fee application based on the hours actually spent on
the case, or (3) first submit a no-look application and later
submit a detailed application seeking additional fees based on
the hours actually spent.
In this case, Appellant Law Offices of David A. Boone
(“Boone”) initially submitted a fee application under the no-
look guidelines. Boone later submitted a second fee applica-
tion in which he sought additional fees based on the hours
actually spent. In ruling on the second application, the bank-
ruptcy court allowed a fee for a “basic case” based on the no-
look guidelines and some additional fees according to the
hours actually spent, but it refused to allow the full amount of
fees requested. The BAP affirmed. We affirm in part, reverse
in part, and remand.
I. Factual Background
On January 18, 2001, Filiae and Judy Eliapo (“the
Eliapos”) hired Boone to assist them in filing for bankruptcy.
On January 22, Boone filed a Chapter 13 petition on their
18498 IN RE: ELIAPO
behalf. A plan was first filed on February 2. The plan was
amended and re-filed on April 10. The plan was amended a
second time and re-filed on April 18.
On May 30, Boone signed a one-page application for attor-
ney’s fees under the bankruptcy court’s no-look guidelines,
reproduced infra, in the amount of $2,350. This figure
included $1,400 for the “basic case,” $750 because the case
“involve[d] real property claims,” and $200 because the case
“involve[d] vehicle loans or leases.” The bankruptcy court
approved the Eliapos’ second amended plan on June 21 and
approved Boone’s $2,350 no-look fee application on the same
day.
On February 27, 2002, Boone filed a second fee application
requesting an additional $1,248. This application included
time sheets describing the tasks performed and hours spent by
Boone. Boone had already been provided compensation, pur-
suant to his no-look application, for some of the work
described in the time sheets. Boone did not place under sepa-
rate headings the work he had performed on the “basic case,”
or the work involving “vehicle loans or leases” or “real prop-
erty claims.” Most, perhaps all, of the work for which Boone
sought additional compensation was performed after the date
on which the no-look fees were awarded. The bankruptcy
court initially scheduled a hearing on the second application,
but took the matter under submission when no objection to the
application was filed.
The bankruptcy court ruled on Boone’s second fee applica-
tion on August 2, 2002, without a hearing. The court divided
the tasks performed by Boone into two categories. The first
category was compensation for work involving “normal prep-
aration of the petition, schedules and statement of affairs and
the moving of the case to confirmation.” In re Eliapo (Eliapo
I), No. 01 50227-[J]RG, 2002 WL 31185824, at *1 (Bankr.
N.D. Cal., August 2, 2002). The court concluded that Boone
was seeking $2,254 for this work, based on 9.6 hours of work.
IN RE: ELIAPO 18499
The court wrote that, absent “extraordinary circumstances,”
compensation for this work should not exceed the $1,400
Boone had already been paid for the “basic case” under the
no-look guidelines. The court held that there were no extraor-
dinary circumstances, and it refused to award additional fees
beyond the $1,400 already awarded.
Pursuant to his no-look application, Boone had been
awarded $200 for work involving “vehicle loans or leases.”
Even though Boone did not list work under that heading in his
second application, it is apparent from the confirmed plan and
the second fee application that Boone had indeed done such
work. The confirmed plan lists a secured claim by
“Americredit” with “value of collateral” of $20,618, for
which a minimum of $50 per month is to be paid. Schedule
B of the plan lists a 2000 Dodge Durango with a “current
market value” of $20,618, and Schedule D lists Americredit
as a secured creditor with a claim of $30,179.74. Boone’s sec-
ond fee application lists various tasks pertaining directly to
this secured claim: “Prepare letter to Americredit” for .1 of an
hour on 2/7/2001; “Receive and Review correspondence from
Americredit regarding value of collateral (.1); Telephone Call
to Dawn at Americredit regarding same (.2)” on 3/14/2001;
and “Telephone call to Dawn . . . regarding value of Dodge
Durango; left message” on 3/19/2001 for .1 of an hour, “No
Charge.” The application lists other tasks, such as “Prepare
schedules and Statement of Financial Affairs” for 1.4 hours,
that obviously include work relating to the secured loan on the
vehicle. However, in ruling on the second application, the
bankruptcy court wrote, “The vehicle loan is $30,179 and
encumbers a 2000 Dodge Durango. There is no suggestion of
a problem in this area.” Eliapo I, at *1. The court added noth-
ing to the $1,400 “basic case” guideline fee to take into
account Boone’s work involving this vehicle loan.
The second category of tasks Boone performed involved
motions for relief from the automatic stay brought by the first
and second mortgage holders. Pursuant to his no-look applica-
18500 IN RE: ELIAPO
tion, Boone had been awarded an additional $750 for work
involving “real property claims.” The court concluded that
Boone was seeking $1,219 for this work, based on 5.2 hours
of work related to these motions. The court wrote that this
work “appears suspect.” However, “given the debtor prob-
lems with their mortgage payments,” the court declined to
“second guess” the time spent on these motions. Id. It there-
fore awarded the full $1,219 for the work related to motions
for relief from the automatic stay.
The court awarded a total attorney’s fee of $2,744 based on
the second application — $1,400 for the basic case, an addi-
tional $1,219 for work on the stay motions, and an additional
$125 for preparation of the second application. The court did
not award the $200 guideline amount for work involving “ve-
hicle loans or leases.” Because Boone had already been
awarded $2,350 based on his no-look application, the net
award based on his second application was $394. This amount
was $854 less than the net amount Boone had requested in the
second application.
The Bankruptcy Appellate Panel (“BAP”) affirmed the
decision of the bankruptcy court. Law Offices of David A.
Boone v. Derham-Burk (In re Eliapo) (Eliapo II), 298 B.R.
392 (9th Cir. BAP 2003). Boone now appeals to this court,
listing numerous questions in his brief. The questions overlap
to a considerable extent and may be reduced to four: First, do
the no-look presumptive fee guidelines violate 11 U.S.C.
§ 330? Second, did the bankruptcy court’s criterion for award-
ing additional fees beyond the no-look presumptive fees vio-
late § 330? Third, did the bankruptcy court abuse its
discretion in ruling on Boone’s second application without a
hearing? Fourth, did the bankruptcy court abuse its discretion
in refusing to give Boone $200 credit for having performed
work involving “vehicle loans or leases”? All but the fourth
question were raised in Boone’s appeal to the BAP.1
1
Neither the United States trustee nor the Chapter 13 trustee filed briefs
in this court or the BAP. See Eliapo II, 298 B.R. at 401 n.14. It would
have been of great assistance to us and the BAP if such briefs had been
filed.
IN RE: ELIAPO 18501
II. Standard of Review
We independently review the bankruptcy court’s rulings on
appeal from the BAP. See Salazar v. McDonald (In re Sala-
zar), 430 F.3d 992, 994 (9th Cir. 2005); Miller v. Cardinale
(In re DeVille), 361 F.3d 539, 547 (9th Cir. 2004). “Because
we are in as good a position as the BAP to review bankruptcy
court rulings, we independently examine the bankruptcy
court’s decision, reviewing the bankruptcy court’s interpreta-
tion of the Bankruptcy Code de novo and its factual findings
for clear error.” United States v. Hatton (In re Hatton), 220
F.3d 1057, 1059 (9th Cir. 2000); see also Am. Law Ctr. PC
v. Stanley (In re Jastrem), 253 F.3d 438, 441 (9th Cir. 2001).
We will not disturb a bankruptcy court’s award of attorney’s
fees “absent an abuse of discretion or an erroneous applica-
tion of the law.” In re Nucorp Energy, Inc., 764 F.2d 655, 657
(9th Cir. 1985); see also Dawson v. Wash. Mutual Bank (In
re Dawson), 390 F.3d 1139, 1145 (9th Cir. 2004). That is, we
will not reverse an award of fees unless we have a definite
and firm conviction that the bankruptcy court committed clear
error in the conclusion it reached after weighing all of the rel-
evant factors.
III. Discussion
[1] A bankruptcy court in a Chapter 13 case “may allow
reasonable compensation to the debtor’s attorney for repre-
senting the interests of the debtor in connection with the bank-
ruptcy case based on a consideration of the benefit and
necessity of such services to the debtor and the other factors
set forth in this section.” 11 U.S.C. § 330(a)(4)(B). The “other
factors” are listed in § 330(a)(3). At the date of Boone’s fee
application, that section provided:
In determining the amount of reasonable compensa-
tion to be awarded, the court shall consider the
nature, the extent, and the value of such services,
taking into account all relevant factors, including—
18502 IN RE: ELIAPO
(A) the time spent on such services;
(B) the rates charged for such services;
(C) whether the services were necessary to the
administration of, or beneficial at the time at which
the service was rendered toward the completion of
[the case];
(D) whether the services were performed within a
reasonable amount of time commensurate with the
complexity, importance, and nature of the problem,
issue, or task addressed; and
(E) whether the compensation is reasonable based
on the customary compensation charged by compa-
rably skilled practitioners in cases other than cases
under this title.
11 U.S.C.A. § 330(a)(3)(A)-(E) (West 2004).2 The bankruptcy
court has sua sponte authority to “award compensation that is
less than the amount of compensation that is requested.” Id.
§ 330(a)(2).
[2] Local Bankruptcy Rule 9029-1 for the Northern District
of California allows the bankruptcy court to adopt guidelines
for attorney’s fees. The local rule provides, in pertinent part,
The Judges of the Bankruptcy Court or any division
thereof may adopt, and as needed revise, guidelines
concerning the allowance and disallowance of pro-
fessional fees and expense reimbursement and the
2
The Bankruptcy Abuse Prevention and Consumer Protection Act of
2005 has now added to the list of considerations whether the professional
is “board certified or otherwise has demonstrated skill and experience in
the bankruptcy field.” See 11 U.S.C.A. § 330(a)(3) (West 2004 & Supp.
2006).
IN RE: ELIAPO 18503
contents and format of applications therefor filed
pursuant to 11 U.S.C. §§ 330(a) and 331 and Fed. R.
Bankr. P. 2016(a) . . . . Although referenced herein,
such guidelines are not intended to be local rules,
and shall not have the force and effect thereof.
Bankr. N.D. Cal. R. 9029-1. As authorized by Local Rule
9029-1, bankruptcy judges for the Northern District have
adopted guidelines establishing presumptive fees for routine
services in Chapter 13 cases. The guidelines in effect when
Boone represented the Eliapos provided as follows:3
A. FEE APPLICATIONS.
1. Counsel may receive an order approv-
ing fees up to the amounts set forth in Para-
graph 2 without filing a detailed application
if:
a. Counsel has filed and served the Chap-
ter 13 Trustee with an executed copy of
the “Rights and Responsibilities of Chap-
ter 13 Debtors and Their Attorneys,”
copies of which are available in the
Clerk’s Office and in the Office of the
Chapter 13 Trustee;
b. Counsel has accepted no more than
$500 as a retainer in the case, unless
counsel thereafter applies for and
receives court approval of a larger
advance retainer; and
3
The current guidelines may be found at http://www.canb.uscourts.gov/
(follow “Guidelines” hyperlink; then follow “San Jose Division” hyperlink
to pdf). The current guidelines have increased the presumptive no-look fee
for a “basic case” to $1,800.
18504 IN RE: ELIAPO
c. No objection to the requested fees has
been raised.
2. The maximum fee which can be
approved through the procedure described
in Paragraph 1 is:
$1400 for the basic case; and an addi-
tional
$750 if the case involves real property
claims;
$400 if the case involves state or federal
tax claims;
$200 if the case involves vehicle loans or
leases;
$1200 if the case involves an operating
business;
$300 if the case involves support arrears
claims; and
$300 if the case involves student loans.
3. If an executed copy of the “Rights and
Responsibilities of Chapter 13 Debtors and
Their Attorneys” is not filed, counsel has
accepted more than $500 without court
approval, or there is an objection, an order
will not be entered automatically pursuant
to these Guidelines.
4. If counsel elects to be paid other than
pursuant to these Guidelines, all fees
including the retainer shall be approved by
the court whether or not the fees are pay-
able through the Chapter 13 Trustee’s
Office and whether or not fees are paid for
IN RE: ELIAPO 18505
services in connection with the Chapter 13
case.
5. If counsel applies for fees, counsel
shall comply with Rules 2002 and 2016 of
the Federal Rules of Bankruptcy Procedure
as well as the “Guidelines for Compensa-
tion and Expense Reimbursement of Pro-
fessionals” adopted by the Bankruptcy
Judges of the Northern District of Califor-
nia.
6. On its own motion or the motion of any
party in interest, the court may order a hear-
ing to review any fee paid or unpaid.
The “Rights and Responsibilities” form, referred to in para-
graph (A)(1)(a), supra, is signed by both the Chapter 13
debtor and his or her attorney. In pertinent part, that form pro-
vides,
If the initial fees ordered by the court are not suffi-
cient to compensate the attorney for the legal ser-
vices rendered in the case, the attorney further agrees
to apply to the court for any additional fees. . . .
If the debtor disputes the legal services provided
or the fees charged by the attorney, an objection may
be filed with the court and the matter set for hearing.
A. Consistency of Guidelines with 11 U.S.C. § 330
Boone argues that the bankruptcy court’s presumptive fee
guidelines are inconsistent with 11 U.S.C. § 330. We dis-
agree.
The customary method for assessing an attorney’s fee
application in bankruptcy is the “lodestar,” under which “the
18506 IN RE: ELIAPO
number of hours reasonably expended” is multiplied by “a
reasonable hourly rate” for the person providing the services.
Hensley v. Eckerhart, 461 U.S. 424, 433 (1983); Unsecured
Creditors’ Comm. v. Puget Sound Plywood, Inc., 924 F.2d
955, 960 (9th Cir. 1991). However, the lodestar method is not
mandatory. See Unsecured Creditors’ Comm., 924 F.2d at
960 (“Although [In re Manoa Finance Co., 853 F.2d 687 (9th
Cir. 1988),] suggests that starting with the ‘lodestar’ is cus-
tomary, it does not mandate such an approach in all cases.”);
In re Busy Beaver Bldg. Ctrs., Inc., 19 F.3d 833, 856 (3d Cir.
1994) (“While bankruptcy fees are commonly calculated
using the lodestar method, . . . § 330 by no means ossifies the
lodestar approach as the point of departure in fee determina-
tions.”).
[3] We see nothing in § 330 that prevents a bankruptcy
court from issuing and then relying on guidelines establishing
presumptive fees for routine services in Chapter 13 cases.
Such presumptive fees, if set at an appropriate level, have a
number of virtues. First, use of presumptive fees in a no-look
application saves attorney time that would otherwise be spent
preparing detailed applications using the lodestar method.
Saving attorney time has the potential, perhaps even likely,
consequence of lowering attorney’s fees.
Second, use of presumptive fees encourages efficient use of
attorney time by providing fair compensation to efficient
practitioners and by preventing inefficient practitioners from
passing on the cost of their inefficiency. As stated by Judge
Lundin,
Three or four hours of attorney time and a like num-
ber of hours of paralegal time in an experienced
debtors’ attorney’s office can produce excellent
results in a “typical” Chapter 13 case. Another law-
yer who less regularly handles Chapter 13 cases
might double or triple the time investment to pro-
duce the same or less desirable results. Applying
IN RE: ELIAPO 18507
normal lodestar methodology can penalize the effi-
cient volume counsel by reducing the fee in each
case while rewarding the inefficient practitioner with
higher fees.
4 Keith M. Lundin, Chapter 13 Bankruptcy § 294.1, at 294-22
to -23 (3d ed. 2000 & Supp. 2004).
Third, the presumptive fee guidelines benefit attorneys by
providing for earlier payment of fees. In this case, Boone was
awarded the $2,350 requested in his no-look fee application
several months before he even filed his second fee applica-
tion. Indeed, since a no-look fee is intended to cover all ser-
vices required in the usual case, an attorney who opts to file
a no-look application may receive full payment even before
all the services covered by that payment have been performed.
Fourth, use of presumptive fees saves time that a busy
bankruptcy court would otherwise be required to spend deal-
ing with detailed fee applications. As stated by the BAP in
this case, “[T]he sheer volume of chapter 13 cases and the rar-
ity of creditor or debtor objections to attorney’s fees in such
cases make court review of each fee application or fee
arrangement administratively burdensome.” Eliapo II, 298
B.R. at 399; see also 4 Lundin, supra, § 294.1, at 294-25 to
-26 (“It is almost inconceivable that bankruptcy courts would
engage in full-scale lodestar calculation of debtors’ attorneys’
fees in every Chapter 13 case, especially in districts with
high-volume Chapter 13 programs.”).
[4] As the BAP noted in this case, bankruptcy courts
around the country have been experimenting for several years
with presumptive fees for routine services in Chapter 13
cases, based on guidelines issued by the Executive Office of
the United States Trustee. See Eliapo II, 298 B.R. at 399. The
Fifth Circuit has recently approved the use of a “precalculated
lodestar” as a basis for awarding attorney’s fees in “typical”
Chapter 13 cases. In re Cahill, 428 F.3d 536, 541 (5th Cir.
18508 IN RE: ELIAPO
2005) (“This precalculated lodestar aids bankruptcy courts in
disposing of run-of-the-mill Chapter 13 fee applications expe-
ditiously and uniformly, obviating the need for bankruptcy
courts to make the same findings of fact regarding reasonable
attorney time expenditures and rates in typical cases for each
fee application that they review.”). The Seventh Circuit has
also approved the use of presumptive fees in routine Chapter
13 cases. See In re Kindhart, 160 F.3d 1176 (7th Cir. 1998)
(approving concept of presumptive fee schedule in Chapter 13
cases and remanding to the bankruptcy court to review and
update its presumptive fees); In re Kindhart, 167 F.3d 1158
(7th Cir. 1999) (approving use of updated presumptive fees);
see also Bueno v. U.S. Bankr. Court (In re Bueno), 248 B.R.
581, 583 (D. Colo. 2000) (approving use of presumptive fees
for routine services in Chapter 13 case); Chamberlain v. Kula
(In re Kula), 213 B.R. 729, 737 n.5 (8th Cir. BAP 1997)
(“Because the majority of work in most Chapter 13 cases is
normal and customary, and because of the sheer volume of
such cases in most districts, the lodestar calculation may not
necessarily be the best method for determining appropriate
fees in those cases.”); In re Argento, 282 B.R. 108, 116-17
(Bankr. D. Mass. 2002) (adopting “standard that incorporates
both the ‘initial fixed fee standard’ for what can be described
as the usual services inherent in any routine chapter 13 case
and the lodestar method for those services which exceed the
routine tasks”); In re Szymczak, 246 B.R. 774, 781 (Bankr.
D.N.J. 2000) (“Because use of the lodestar method for calcu-
lating legal fees does not achieve fair and reasonable results
for debtor’s counsel in chapter 13 cases, bankruptcy courts
should divide services into two categories: work that is stan-
dard or normal and customary in a chapter 13 case and work
that falls outside of this standard.”); In re Pedersen, 229 B.R.
445, 447-49 (Bankr. E.D. Cal. 1999) (using presumptive fees
for routine services in Chapter 13 case); In re Watkins, 189
B.R. 823, 828 (Bankr. N.D. Ala. 1995) (approving use of a
“normal and customary” standard for routine services in
IN RE: ELIAPO 18509
Chapter 13 cases, and use of the lodestar method for work that
“falls outside of that standard”).
We emphasize that the no-look guidelines establish only
presumptive fees. If a Chapter 13 practitioner does not wish
to apply for fees under the no-look guidelines, he or she is
free not to do so and to submit instead a detailed fee applica-
tion using the lodestar method. Or, if the practitioner has
already submitted a no-look application and received pre-
sumptive fees, he or she is free to seek additional fees using
the lodestar method if the presumptive fees have not provided
fair compensation for the time spent on the case. Of course,
a practitioner who chooses the latter approach must accept the
possibility that the bankruptcy court may take a fresh look at
his entire fee application, not just that portion of the applica-
tion relating to “additional” fees.
[5] We therefore conclude that reliance on presumptive
guideline fees for routine services in Chapter 13 cases is con-
sistent with § 330.
B. Criterion for Awarding Additional Fees
Boone argues that the bankruptcy court used an inappropri-
ate criterion for awarding fees beyond the presumptive fees.
We disagree.
In refusing to award additional fees beyond the $1,400 pre-
sumptive fee for the “basic case,” the bankruptcy court wrote:
In seeking additional fees, applicant describes two
basic areas in which work was performed. The first
deals with the normal preparation of the petition,
schedules and statement of affairs and the moving of
the case to confirmation. For this work applicant
billed 9.6 hours (26 time entries) at a cost of $2,254.
In a basic case such as this the cost of these services
18510 IN RE: ELIAPO
should not exceed the guideline amount of $1,400
absent extraordinary circumstances.
No extraordinary circumstances are evident.
There were two objections by the Trustee. The first
indicated that the debtors had omitted their monthly
property tax obligation from Schedule J — Current
Expenditures. Delinquent property taxes were set
forth on Schedule D so applicant was aware of the
tax problem and neglected to address it on Schedule
J. The Trustee’s second objection simply pointed out
that when applicant filed an amended plan for the
debtors it neglected to have one of the debtors sign
it. Another administrative error.
....
The problems faced by Applicant in this case seem
no more difficult than those faced by Chapter 13
practitioners on a regular basis. There is no justifi-
cation shown for the filing and confirmation of the
plan in this case exceeding the guideline amount of
$1,400.
Eliapo I, at *1 (emphasis added).
[6] It is apparent from its order that the bankruptcy court
declined to award more than the presumptive guideline
amount of $1,400 for a “basic case” because it concluded that
there was nothing out of the ordinary about the Eliapos’ case.
That is, as stated by the court, the problems in the Eliapos’
case were “no more difficult than those faced by Chapter 13
practitioners on a regular basis.” Id. It might have been prefer-
able for the court to have avoided the word “extraordinary”
because of the potential for misinterpretation, but we do not
understand the court to have required that there be extremely
unusual circumstances. In context, it is apparent that court
used the word “extraordinary” to mean merely “out-of-the-
IN RE: ELIAPO 18511
ordinary” or “atypical” — that is, extra-ordinary — circum-
stances. So understood, the bankruptcy court’s criterion for
awarding additional fees was proper.
The purpose of the guidelines is to set presumptive fees for
ordinary cases. The guidelines contemplate that a Chapter 13
practitioner should be awarded additional fees in out-of-the-
ordinary cases. In such cases, the bankruptcy court may award
additional fees based on a detailed fee application. Indeed,
this is precisely what the bankruptcy court did in this case
when it awarded $1,219 (i.e., $469 above the presumptive no-
look fee of $750) for out-of-the-ordinary work done by Boone
in opposing the mortgage lenders’ motions for relief from the
automatic stay. Boone contends that he also should have been
awarded additional attorney’s fees for work unrelated to either
the real property or the vehicle loan. However, the bankruptcy
court concluded that the problems necessitating this work
were typical problems encountered in a Chapter 13 case, and
that Boone therefore deserved no more than the presumptive
fee.
[7] We hold that the bankruptcy court applied the appropri-
ate criterion in determining Boone’s entitlement to additional
compensation, and that the application of this standard did not
conflict with § 330.
C. Hearing
Boone argues that he was improperly denied a hearing and
a prompt decision on his second fee application. We agree
that Boone was improperly denied a hearing.4
4
We disagree with Boone’s additional argument that the bankruptcy
court abused its discretion, or that he was denied due process, when the
bankruptcy court took six months to rule on his second fee application.
We agree with the BAP, which wrote in rejecting this argument, “The pos-
ture of the chapter 13 case, or the novelty of the issues raised by Boone’s
Final Application, may have required greater scrutiny by the bankruptcy
court. When the bankruptcy court conducts a third-party review of a fee
application, it must proceed cautiously.” Eliapo II, 298 B.R. at 405.
18512 IN RE: ELIAPO
[8] Section 330(a)(1) allows attorney’s fees to certain bank-
ruptcy professionals, providing that a bankruptcy court “may
award” fees “[a]fter notice to the parties . . . and a hearing.”
However, the Supreme Court has recently construed
§ 330(a)(1) narrowly, specifically noting that Chapter 13
debtors’ attorneys are awarded fees under § 330(a)(4)(B)
rather than § 330(a)(1). See Lamie v. United States Tr., 540
U.S. 526, 537 (2004). Unlike § 330(a)(1), § 330(a)(4)(B) con-
tains no explicit notice-and-hearing requirement. It provides
simply,
In a chapter 12 or chapter 13 case in which the
debtor is an individual, the court may allow reason-
able compensation to the debtor’s attorney for repre-
senting the interests of the debtor in connection with
the bankruptcy case based on a consideration of the
benefit and necessity of such services to the debtor
and the other factors set forth in this section.
11 U.S.C. § 330(a)(4)(B). We therefore conclude that the
notice-and-hearing requirement of § 330(a)(1) does not apply
to a fee application in a Chapter 13 case. Cf. Nelson v. Mickel-
son (In re Pfleghaar), 215 B.R. 394, 397 (8th Cir. BAP 1997)
(applying notice-and-hearing requirement of § 330(a)(1) to a
fee application under Chapter 13 prior to the Supreme Court’s
decision in Lamie).
[9] However, Bankruptcy Rule 2017(b) does apply to
Chapter 13 fee applications. Bankruptcy Rule 2017(b) pro-
vides that a bankruptcy court, on its “own initiative,”
after notice and a hearing may determine whether
any payment of money or any transfer of property,
or any agreement therefor, by the debtor to an attor-
ney after entry of an order for relief in a case under
the Code is excessive, whether the payment or trans-
fer is made or is to be made directly or indirectly, if
IN RE: ELIAPO 18513
the payment, transfer, or agreement therefor is for
services in any way related to the case.
Fed. R. Bankr. P. 2017(b). We construe the notice-and-
hearing requirement of Rule 2017(b) as incorporating 11
U.S.C. § 102(1), which defines “notice and a hearing.” Sec-
tion 102(1)(A) provides: “ ‘after notice and a hearing’, or a
similar phrase . . . means after such notice as is appropriate
in the particular circumstances, and such opportunity for a
hearing as is appropriate in the particular circumstances[.]” 11
U.S.C. § 102(1)(A).
[10] Section 102(1)(B)(i) authorizes the bankruptcy court
to “act without an actual hearing” after appropriate notice if
“such hearing is not requested timely by a party in interest.”
Id. § 102(1)(B)(i). Thus, if no objection to the fee application
is filed by an interested party and if the bankruptcy court
intends to grant the full amount requested, no hearing is
required. However, if the bankruptcy court materially reduces
the amount requested, the bankruptcy court has assumed a
role that is adverse to the fee applicant. In that event, some
sort of hearing is required. As the Third Circuit explained in
Busy Beaver, “a bankruptcy court, when it disallows certain
fees, simulates the role of an adversary, albeit to a circum-
scribed degree, requiring that any ‘disputed’ matter be
resolved at a fair hearing.” 19 F.3d at 846 n.16.5
We note that “hearing” under § 102(1)(A) has been inter-
preted flexibly. The Third Circuit in Busy Beaver was careful
to note that the “anatomy of the hearing lies within the sound
5
The Third Circuit in Busy Beaver assumed that 11 U.S.C. § 330(a)(1)
governed fee awards for debtors’ attorneys. We recognize that, after
Lamie, the controlling provision is § 330(a)(4)(B), which unlike
§ 330(a)(1) does not include an express notice-and-hearing requirement.
But Busy Beaver also relied on Rule 2017(b). See Busy Beaver, 19 F.3d
at 845 n.15 (“Section 330(a) begins ‘[a]fter notice . . . and a hearing,’ a
phrase Rule 2017(b) also contains.”) (alteration and ellipsis in original).
Thus, the court’s analysis remains relevant here.
18514 IN RE: ELIAPO
discretion of the bankruptcy judge, and would not necessarily
require the presentation of oral testimony.” Id. “The essential
point is that the court should give counsel a meaningful
opportunity to be heard.” Id. (emphasis in original). The bank-
ruptcy court should “apprise the [fee] applicant of the particu-
lar questions and objections it harbors” and should give the
applicant “an opportunity to rebut or contest the court’s con-
clusions.” Id. at 846-47; see also In re Spillane, 884 F.2d 642,
646-47 (1st Cir. 1989) (holding that cross-examination is not
required in hearing on fee application). Depending on the cir-
cumstances, the hearing requirement may be satisfied without
oral presentation of evidence and without oral argument. That
is, the “hearing” requirement may, in appropriate circum-
stances, be satisfied by written submission. All that is
required is that the applicant be given “a reasonable opportu-
nity to present legal argument and/or evidence to clarify or
supplement his Application.” Pfleghaar, 215 B.R. at 397; see
also Busy Beaver, 19 F.3d at 846.
[11] In this case, Boone was not given “notice and a hear-
ing” within the meaning of 11 U.S.C. § 102(1). We therefore
remand for notice and a hearing consistent with that section.
We emphasize that the notice-and-hearing definition in
§ 102(1) is flexible and sensitive to context. Chapter 13 fee
applications are typically rather simple, even in cases where
fees beyond the presumptive no-look fees are sought. So long
as fair notice and an opportunity to be heard are afforded, the
bankruptcy court has considerable freedom to fashion proce-
dures for notice and a hearing that are “appropriate in the par-
ticular circumstances.” 11 U.S.C. § 102(1)(A). Because we
hold that Bankruptcy Rule 2017(b) required notice and a hear-
ing before the bankruptcy court reduced the compensation
requested in Boone’s second fee application, we do not need
to reach the question whether the Due Process Clause also
required notice and a prior hearing.
IN RE: ELIAPO 18515
D. Presumptive Fee for Work Involving Vehicle Loan
Finally, Boone argues that the district court abused its dis-
cretion in failing to award the $200 presumptive fee for work
involving a vehicle loan. We do not reach that question.
[12] As indicated in our factual narrative, supra, it is appar-
ent that Boone did do work involving the Eliapos’ secured
loan on their 2000 Dodge Durango. However, Boone failed to
raise this issue when he appealed to the BAP. As we recently
stated in Burnett v. Resurgent Capital Services (In re Bur-
nett), 435 F.3d 971, 975-76 (9th Cir. 2006), “Absent excep-
tional circumstances, issues not raised before the BAP are
waived.” See also Moldo v. Matsco, Inc. (In re Cybernetic
Servs., Inc.), 252 F.3d 1039, 1045 n.3 (9th Cir. 2001). One
established “exceptional circumstance” is “when the issue is
one of law and either does not depend on the factual record,
or the record has been fully developed.” El Paso City v. Am.
W. Airlines, Inc. (In re Am. W. Airlines, Inc.), 217 F.3d 1161,
1165 (9th Cir. 2000). The issue of compensation for work
involving the vehicle loan depends on the factual record, and
it is not clear that the record has been fully developed. The
“exceptional circumstance” exception does not apply, and we
therefore hold that Boone has waived the issue on appeal.
However, we expect that Boone will be able to raise the issue
on remand when the bankruptcy court has a hearing on his
application.
Conclusion
We hold that the bankruptcy court’s use of the presumptive
no-look guideline fees for routine Chapter 13 cases was con-
sistent with 11 U.S.C. § 330, that the court’s criterion for
awarding additional fees beyond the presumptive no-look fees
was proper under § 330, and that the court’s failure to hold a
hearing on the application for additional fees violated Bank-
ruptcy Rule 2017(b). We therefore affirm in part and reverse
in part. We remand to allow the bankruptcy court to hold a
18516 IN RE: ELIAPO
hearing on Boone’s application for additional fees, noting that
the court has substantial discretion to fashion an appropriate
hearing procedure.
AFFIRMED in part, REVERSED in part, and
REMANDED. The parties shall bear their own costs on
appeal.