In re Buchholz

GUY R. HUMPHREY UNITED STATES BANKRUPTCY JUDGE

Chapter 13

ORDER DENYING MOTION TO ALTER OR AMEND JUDGMENT PURSUANT TO FEDERAL RULE OF BANKRUPTCY PROCEDURE 9023 (DOC. 41)

GUY R. HUMPHREY UNITED STATES BANKRUPTCY JUDGE

On October 13, 2022 the court conducted an evidentiary hearing to address the appropriateness of the maximum "no-look" fee ($4,350) as compensation for work performed by Andrew J. Zeigler, counsel in this Chapter 13 case. See LBR 2016-1(b)(2)(A) (amended by General Order 50-1) (providing a no-look fee of up to $4,350 as attorney compensation for certain enumerated tasks in a Chapter 13 case). The court heard oral argument from counsel and considered the Affidavit of Andrew J. Zeigler (doc. 23) (the "Affidavit") in evidence. Mr. Zeigler did not present any witnesses or documentary evidence.

Based upon counsel's arguments and the facts set forth in the Affidavit, and in accordance with the court's oral decision announced on October 20, 2022, the court granted the fee in part and awarded Andrew Zeigler fees in the amount of $3,660. Therefore, the court reduced the "no-look" fee award by $690. Doc. 37.

Mr. Zeigler has moved under Rule 59(e) of the Federal Rules of Civil Procedure. A motion to alter or amend a judgment requires legal error, "newly discovered evidence," "an intervening change in controlling law," or the prevention of manifest injustice. U.S. ex rel. SNAPP, Inc. v. Ford Motor Co., 532 F.3d 496, 507 (6th Cir. 2008). Such a request is applicable to this contested matter by Federal Rule of Bankruptcy Procedure 9023. Mr. Zeigler's motion argues that the court made a "clear error of law." Doc. 41 at 1.

Mr. Zeigler notes correctly that the court relied to a great extent on its prior decision in In re Spurlock, 642 B.R. 269 (Bankr. S.D. Ohio 2022). However, he argues that the court applied a different legal analysis to determining his appropriate hourly rate. In Spurlock, debtor counsel provided evidence that his hourly rate was $250. Id. at 274. The court found that rate was reasonable, and went further, by finding that at counsel's experience level, he "could command" $300 per hour and calculated the loadstar by using that figure as reasonable. Id. at 292 n.43. This conclusion was based on the rates charged by similarly experienced consumer bankruptcy counsel in the Southern District of Ohio. Id. (citing In re Henson, 637 B.R. 13, 17 (Bankr. S.D. Ohio 2022)).

Mr. Zeigler noted in his affidavit that he is a "Board Certified Specialist in Consumer Bankruptcy Law" by the "American Board of Certification" and, therefore, the court should consider this factor in evaluating an appropriate no-look fee for the work he did in this case. Affidavit ¶ 7, 10. Board certification is one of the relevant factors the court is required to consider in determining a reasonable fee. 11 U.S.C. § 330(a)(3)(E). Section 330 lists other enumerated factors for the court to consider but ultimately requires the court to consider "all relevant factors." 11 U.S.C. § 330(a)(3).

Mr. Zeigler argues that the court did not follow its "objective" standard in Spurlock of determining a reasonable hourly rate and instead used a "subjective" standard of noting Mr. Zeigler had never charged $350 for any itemization. Doc. 41 at 2. Mr. Zeigler believes that he is entitled to the $300 rate in Spurlock, plus an additional $50 for his board certification.

The court did not change its legal analysis from Spurlock. Instead, the court reviewed the evidence that counsel provided and applied the law to these facts, as explained in Spurlock and other similar decisions of this court. In the absence of sufficient evidence to apply a higher lodestar figure to this case, the Spurlock fee of $3,660 was applied. Mr. Zeigler conceded that the work he did was substantially similar to that of Spurlock. Affidavit at ¶ 14. Nor did he present evidence, such as an itemization, of the time spent in this case. Therefore, the court's determination of the time required for a Chapter 13 case of this nature as articulated in Spurlock applied. Further, the court determined that there was no sufficient evidentiary basis to conclude that additional time beyond that set out in the Spurlock lodestar analysis should be credited here.

The only remaining issue is the appropriate hourly rate to be used in conducting the lodestar analysis. As to that rate, the court gave credit to Mr. Zeigler for the same $300 fee rate the counsel in Spurlock "could command" because both counsel are experienced consumer bankruptcy counsel practicing in the Southern District of Ohio. Like the counsel in Spurlock, this rate is more than counsel has charged in his itemizations (for work outside the no-look fee) but Zeigler was credited with this objectively reasonable rate anyway. See e.g. In re Steward, 21-30573, Doc. 63 (charging $295 per hour for a fee application); In re Billberry, 19-30339, Docs. 93, 95 (charging $295 per hour for two separate fee applications); In re Salyers, 21-30545, Doc. 75 (charging $295 per hour for a fee application). The court did not further increase the hourly rate for the lodestar calculation based upon Mr. Zeigler's board certification because there was insufficient evidence to support it. Specifically, the court considered Mr. Zeigler's sworn statement that he is "a Board-Certified Specialist in Consumer Bankruptcy Law by the American Board of Certification" and "one of 8 attorneys in the State of Ohio that has earned [this] distinction." Affidavit ¶ 7. Then, Mr. Zeigler argued that his rate for purposes of the lodestar calculation should be $50 higher than the $300 used as a reasonable rate in Spurlock based on this certification. He "directed the court's attention" to a Memorandum from the Bankruptcy Court for the Western District of Michigan (the "Memorandum") as evidence that his certification is worthy of $50 more than a non-board certified attorney. Doc. 41 at 2-3. From the court's independent review of the Memorandum, the court observed that the Western District of Michigan has established a maximum no-look fee of $4,000, a presumptive hourly rate of $250 for most bankruptcy counsel, and a presumptive hourly rate of $300 for certified counsel. Memorandum at 4. It appears that the $50 "premium" suggested by Mr. Zeigler is based upon this difference. However, the higher $300 rate provided for certified counsel in the Memorandum is the same rate the court used in computing the fee in Spurlock. Thus, the court's calculation in Spurlock is consistent with the Memorandum for certified counsel.

Just as in Spurlock, the court considered the counsel's actual hourly rate but allowed a higher rate as reasonable. Mr. Zeigler has routinely charged less than $300 per hour and, like the counsel in Spurlock, has a reasonable hourly rate for consumer bankruptcy counsel in the Dayton area. The court also considered the issue of the certification issue in detail as a possible differentiating factor. The court made the following points about this certification and the Memorandum upon which Mr. Ziegler relies: (1) the Memorandum specifically states the no-look fee is not an "entitlement[]" and simpler cases may warrant a lower fee [Memorandum at 4]; (2) routinely claiming the no-look fee in simpler cases in which it is not warranted may lead to the court requiring itemization [Memorandum at ¶ 19]; (3) Mr. Zeigler's hourly rate is comparable to similarly experienced consumer bankruptcy counsel in the Dayton area; and (4) the court found that certification commendable but noted that the Southern District of Ohio's local bankruptcy rules do not differentiate between certified counsel and those that are not in determining the no-look fee. See LBR 2016-1 (Bankr. S.D. Ohio effective Oct. 1, 2020). The court is not aware, after independent research, of any other bankruptcy court jurisdiction setting a presumptive hourly rate based on a board certification. Mr. Zeigler also did not provide any evidence for the court to weigh about the specifics of earning this certification, how it is maintained, or any information about the "American Board of Certification" itself. Finally, the court repeats that board certification is only one factor to be considered in reviewing a fee application. 11 U.S.C. § 330(a)(3).

Having failed to demonstrate that this court committed legal error, Mr. Zeigler's motion under Rule 59(e) is denied.

IT IS SO ORDERED.