United States District Court, D. Utah
In re RONALD JAY REYNOLDS AND CHAROLETT KAY REYNOLDS, Debtors, J. KEVIN BIRD, Trustee, Appellant, PRINCE YEATES AND GELDZAHLER, Appellant.
MEMORANDUM DECISION AND ORDER
KIMBALL United States District Judge.
matter is before the court on appeal from an order of the
United States Bankruptcy Court for the District of Utah
(“bankruptcy court”) denying the full
compensation requested by Prince Yeates and Geldzahler
(“Appellant”), special counsel to the Chapter 7
Trustee, J. Kevin Bird (“Trustee”), in its First
and Final Application for Allowance of Attorney Fees and
Costs as supplemented (“Fee Application”). The
Trustee joined Appellant in filing this appeal.
Appellant's appeal is unopposed, and the court concludes
that a hearing would not significantly aid in its
determination of the issues presented. The court has
carefully considered the materials submitted by Appellant and
the law and facts relevant to this appeal. Now being fully
advised, the court issues the following Memorandum Decision
STATEMENT OF THE CASE
appeal is taken from the bankruptcy court’s Memorandum
Decision and Order (“Order Denying
Compensation”), entered on May 10, 2018, denying
Appellant the full compensation requested in its Fee
Application. Appellant requested $22, 221.50 in fees and
$853.44 in costs. The bankruptcy court denied all but $2,
896.00 of the requested fees, and approved Appellant’s
request for costs as prayed.
ISSUES ON APPEAL
has outlined three issues on appeal. However, the court
believes that the first and second issues deal with
essentially the same question, which is whether the
bankruptcy court erred by misapplying, omitting, or using
factors other than those set forth in 11 U.S.C. §
330(a)(3) and Johnson v. Georgia Highway Express,
Inc. 488 F.2d 714 (5th Cir. 1974), in determining the
reasonableness of the attorney's fees requested in
Appellant's Fee Application. The final issue on appeal is
whether the bankruptcy court abused its discretion because
its findings were without factual support in the record or
the product of an error of law.
STANDARD OF REVIEW
a bankruptcy court has erred in applying the 11 U.S.C. §
330(a)(3) and Johnson factors to the denial of a
professional's fee application is subject to de
novo review; its factual findings are reviewed under the
clearly erroneous standard. In re Commercial Fin.
Servs., 427 F.3d 804, 810 (10th Cir. 2005). “A
finding of fact is clearly erroneous if it is without factual
support in the record or if, after reviewing all of the
evidence, we are left with the definite and firm conviction
that a mistake has been made.” Id.
“Review of the bankruptcy court’s factual
determinations in connection with a fee award is highly
deferential, and the factual determinations are reviewed for
clear error.” In re Market Center East Retail
Property, Inc. 730 F.3d 1239, 1244-1245 (10th Cir.
2013). A bankruptcy court’s discretion is reviewed
under the abuse of discretion standard. “Under the
abuse of discretion standard[, ] ‘a trial court’s
decision will not be disturbed unless the appellate court has
a definite and firm conviction that the lower court made a
clear error of judgment or exceeded the bounds of permissible
choice in the circumstances.’” Moothart v.
Bell, 21 F.3d 1499, 1504 (10th Cir. 1994) (quoting
McEwan v. City of Norman, 926 F.2d 1539, 1553-54
(10th Cir. 1991)).
Filing of the Bankruptcy Petition
J. Reynolds and Charolett Kay Reynolds
(“Debtors”) filed a joint voluntary petition for
relief under Chapter 7 of the Bankruptcy Code on March 16,
2016 (“Petition Date”). The Trustee was appointed
thereafter. In their bankruptcy filings, the Debtors
disclosed two parcels of real property located in Mt.
Pleasant, Utah. Debtors stated that, on the Petition Date,
they owned a parcel of real property described as “Pine
Creek Acres #11” (“Lot 11"), valued at $25,
000.00, and secured by a trust deed in the amount of $35,
550.00. Debtors also disclosed they had owned another parcel
of real property located in Mt. Pleasant, Utah, described as
“Pine Creek Acres, Lot #9" (“Lot 9"),
which they sold pre-petition to Gary Black
(“Black”) for $1000 in cash.
Appointment of Special Counsel for the Chapter 7
26, 2016, the Trustee filed a motion to employ Appellant to
represent him as special counsel, citing that Appellant would
“[a]ssist the Trustee in investigating and recovering
any interest the bankruptcy estate may have in property
located in Sanpete County which were transferred from the
Debtors to Gary Black for less than a reasonably equivalent
value." The Trustee believed there was sufficient cause
to investigate the Debtors' sale of real property to
Black as an avoidable transfer and that there may have been
cause to object to the Debtors' discharge if the Debtors
had undervalued and sold Lot 9 with fraudulent intent. The
bankruptcy court granted the Motion to Employ Special
Motion to Extend Time to Oppose Discharge and Order
9, 2016, Appellant filed a Motion to Extend the Time to
Oppose the Debtors' Discharge. The
bankruptcy court held a hearing on the motion on July 12,
2016 and granted the motion on July 29, 2016. The bankruptcy
court extended the deadline to oppose discharge to September
17, 2016, and in the absence of opposition to ...