James F Hart, Jr.

1:07-bk-11088NmbNov 7, 2007

Full text

1Of the total amount requested, $4,595.00 represents fees for professional services.
Velarde & Pierce has already received $1,320.00 as a retainer.
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UNITED STATES BANKRUPTCY COURT
DISTRICT OF NEW MEXICO
In re: 	JAMES F. HART, 	No. 13-07-11088 MA
Debtor.
ORDER GRANTING, IN PART, and DENYING, IN PART
APPLICATION FOR ALLOWANCE AND PAYMENT OF COMPENSATION
AND REIMBURSEMENT OF EXPENSES AND COSTS
THIS MATTER is before the Court on the Application for Allowance and Payment of
Compensation and Reimbursement of Expenses and Costs (“Fee Application”) filed by counsel
for the Debtors, Velarde & Pierce. 	The Fee Application seeks approval of $5,161.47
representing fees, expenses, costs and gross receipts taxes. 1 Upon review of the Fee
Application, the Court finds that some of the requested fees and expenses must be disallowed. In
reaching this determination, the Court FINDS:
1. Pursuant to 11 U.S.C. § 330(a)(4)(B),
In a chapter 12 or chapter 13 case in which the debtor is an individual, the court
may allow reasonable compensation to the debtor’s attorney for representing 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).
2. The Court has an independent duty to evaluate the reasonableness of fees, even when
no objections to an application for compensation have been filed. See In re Tahah, 330 B.R.
777, 780-781 (10 th Cir. BAP 2005) (noting that “[i]t is well-established that bankruptcy courts
have a duty to independently evaluate the propriety of the compensation requested under §
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330.”)(citation omitted).
3. Reasonableness is determined based upon such factors as the amount of time spent on
the service, the rate charged, and whether the services were necessary to the administration of
the bankruptcy estate. 11 U.S.C. § 330(a)(3). 	Compensation will not be allowed for
“unnecessary duplication of services”, for services that “were not reasonably likely to benefit the
estate” nor for services that are not “necessary to the administration of the case.” 11 U.S.C. §
330(a)(4)(A). Similarly, when excessive time is billed for uncomplicated matters, the attorney is
not entitled to compensation for the total requested amount despite the fact that the work was
actually done. 	See In re Colorado-Ute Elec. Ass’n, Inc., 132 B.R. 174, 177 (Bankr.D.Colo.
1991) (“In applying for fees, attorneys ‘should make a good-faith effort to exclude from a fee
request hours that are excessive, redundant, or otherwise unnecessary.’” (quoting Hensley v.
Eckerhart, 461 U.S. 424, 434, 103 S.Ct. 1933, 1939-1940, 76 L.Ed.2d 40 (1983)). In re
Reconversion Technologies, Inc., 216 B.R. 46, 56 (Bankr.N.D.Okla. 1997) (In determining the
amount of reasonable compensation, the court “should disallow hours that were 'duplicative,
unproductive, excessive, or otherwise unnecessary.’” (quoting In re Shades of Beauty, Inc., 56
B.R. 946, 951 (Bankr.E.D.N.Y.1986) (citations omitted).
4. Purely secretarial or clerical tasks are not compensable from the bankruptcy estate,
even if such tasks are performed by paralegals or legal assistants. See In re CF & I Fabricators
of Utah, Inc., 131 B.R.474, 489 (Bankr. D.Utah 1991) (stating that where “the services provided
by the paraprofessional represent a shift of tasks ordinarily performed by a lawyer or other
professional, and the service is reasonable and necessary, the service is compensable . . . . [but]
[i]f clerical or secretarial services shift to the paraprofessional, the service is overhead and not a
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reasonable charge to the estate.”). 	The issue of whether time billed for a paraprofessional’s
work is compensable must focus on “whether additional compensation for the services is
reasonable, or whether payment for the service is included in overhead and the rate charged to
the estate by the professional.” Id. at 490 n.16 (citation omitted).
5. The fee applicant bears the burden of showing entitlement to the requested
compensation. See In re Recycling Industries, Inc., 243 B.R. 396, 402 (Bankr.D.Colo. 2000) (“It
is well settled that the burden of proof as to the reasonableness of compensation is on the fee
applicant.”); In re Amdura Corp., 139 B.R. 963, 968 (Bankr.D.Colo. 1992).
6 	After review of the itemized billing statement attached to the Fee Application, the
Court finds that some entries must be disallowed because they are not reasonable or necessary.
Specifically, the following entries are disallowed for the reasons stated:
Date 	Entry 	Time 	Amount 	Reason for Disallowance
5/11/07 	prepare draft of letter to client
re: unfiled tax returns
.3 	$25.50 	Secretarial
5/22/07 	prepare draft of letter to
trustee re: additional
documents
.3 	$25.50 	Secretarial
5/30/07 	Prepare draft of letter to client
re: unfiled tax returns
.3 	$25.50 	Secretarial; duplicates
entry on 5/11/07
6/7/07 	Prepare draft of letter to client
re: continued sec. 341 meeting
of creditors
.3 	$25.50 	Secretarial
6/8/07 	prepare draft of letter to
trustee re: documents
.3 	$25.50 	Secretarial
6/19/07 	Prepare draft of letter to IRS
re: 2004 - 2006 tax returns
.3 	$25.50 	Secretarial
Case 07-11088-m7 Doc 37 Filed 11/07/07 Entered 11/07/07 13:42:30 Page 3 of 5
2$4,595.00 less disallowed amount of $309.50.
3$4,285.50 + $175.00 (taxable expenses) X .06875 = $306.66.
4
6/19/07 	Prepare draft of letter to
NMTR re: 2004 - 2006 tax
returns
.3 	$25.50 	Secretarial
6/20/07 	prepare draft of letter to
trustee re: documents
.3 	$25.50 	Secretarial
7/3/07 	prepare draft of letter to client
re: failure to make mortgage
payments
.3 	$25.50 	Secretarial
9/17/07 	Telephone conference with
counsel representing IRS re
resolution of confirmation
issues
.4 	$80.00 	Duplicates entry on
following day
TOTAL DISALLOWED: 	$309.50
6. 	The Fee Application reflects total expenses in the amount of $234.45. Of this
amount, $59.45 represents postage costs. Gross receipts taxes were charged on the total amount.
Postage charges are actual, direct costs upon which it is not appropriate to charge gross receipts
taxes. Accordingly, $4.09, representing gross receipts tax at the rate of 6.875% on $59.45 must
be disallowed. 	Gross receipts taxes will be charged on the allowed fees plus photocopy charges
in the amount of $175.00.
WHEREFORE, IT IS HEREBY ORDERED, that the Fee Application is approved, in
part, and denied, in part. Total fees in the amount of $4,285.50 2 and costs in the amount of
$234.45 are allowed, plus applicable New Mexico gross receipts taxes in the amount of $306.663
(at the rate of 6.875% as reported on the Fee Application), less $1,320.00 which counsel has
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4$4,520.95 + 306.66 = $4,826.61 less $1,320.00 = $3,506.61.
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already received, leaving a balance of allowed fees and costs in the amount of $3,506.614 due
and compensable from the bankruptcy estate. The remainder of fees requested in the Fee
Application are disallowed.
_________________________________________
MARK B. McFEELEY
United States Bankruptcy Judge
COPY TO:
Chris W Pierce 	Kelley L. Skehen 	United States Trustee
Velarde & Pierce 	Chapter 13 Trustee 	PO Box 608
2531 Wyoming Blvd. NE 	625 Silver Ave. SW 	Albuquerque, NM 87103
Albuquerque, NM 87112 	Albuquerque, NM 87102
Case 07-11088-m7 Doc 37 Filed 11/07/07 Entered 11/07/07 13:42:30 Page 5 of 5

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