Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Molloy v. Sikes

United States District Court, W.D. Louisiana, Shreveport Division

February 7, 2018

KEVIN R. MOLLOY
v.
LUCY G. SIKES

          HORNSBY, JUDGE

          MEMORANDUM RULING

          S. MAURICE HICKS, JR. MAGISTRATE, JUDGE

         Before the Court is an appeal (Record Document 1) of the Bankruptcy Court's Order (Bankruptcy Record Document 41) denying Appellant Kevin R. Molloy's (“Appellant”) “Application for Compensation by Attorney for Debtor Requesting an Ex Parte Order Approving Compensation” and the subsequent Order (Bankruptcy Record Document 45) denying Appellant's “Motion to Vacate Order.” For the reasons which follow, the Bankruptcy Court's orders are REVERSED.

         FACTUAL AND PROCEDURAL BACKGROUND

         On February 26, 2015, the Debtor Mario C. Marshall (“Debtor”) filed a voluntary petition under Chapter 13 of the United States Bankruptcy Code. At that time, the Debtor maintained full time employment as a tow truck driver for Tow Masters. See Record Bankruptcy Case 15-10350, Page ID #55. The Debtor filed his Chapter 13 bankruptcy petition in an effort to prevent the seizure of his 2011 Ford F-150, upon which Shreveport Federal Credit Union maintained a lien. See Record Bankruptcy Case 15-10350, Page ID #44.

         At the Debtor's Section 341 meeting of creditors, held on April 6, 2015, the Debtor informed the Trustee and Debtor's counsel (Appellant) that he left his employment at Tow Masters in order to begin working as an independent taxi driver through the IP Taxi Service. The Chapter 13 Trustee objected to the Debtor's proposed Chapter 13 plan, in part, on the basis of the Debtor's new employment and requested verified copies of all pay records from the date of hire. See Record Bankruptcy Case 15-10350, Page ID #146.

         On June 30, 2015, the Debtor filed a “Corrected Amended Chapter 13 Plan Before Confirmation and Amended Schedules I and J, ” (Record Bankruptcy Case 15-10350, Page ID #177), reflecting the Debtor's anticipated new income and expenses. See Record Bankruptcy Case 15-10350, Pages ID #190-196. The Chapter 13 Trustee filed an “Objection to the Amended Plan” and requested that the Debtor provide the Trustee with income records. See Record Bankruptcy Case 15-10350, Page ID #205.

         Business records were provided to the Chapter 13 Trustee and, on August 25, 2015, an “Amended Chapter 13 Plan Before Confirmation” was filed to resolve the Trustee's objection and to surrender a rent-to-own television and recliner. See Record Bankruptcy Case 15-10350, Page ID #216. Nonetheless, the Chapter 13 Trustee objected to the amended Chapter 13 plan, questioning the feasibility of the Debtor's plan based upon the reduced income reflected in the Debtor's records. After the Debtor had a number of confirmation hearings on his Chapter 13 plan and continued to make payments, the Debtor decided to convert his Chapter 13 case to one under Chapter 7.

         With the Debtor's approval and before any motion to convert the case had been filed, Appellant filed an “Application for Compensation by Attorney for Debtor Requesting an Ex-Parte Order Approving Compensation” (the “Application”). See Record Bankruptcy Case 15-10350, Pages ID #259-261. The Application sought ex-parte attorney fees pursuant to Local Bankruptcy Rule 2016-1. See id. The compensation for attorney fees sought in the Application were for services provided in the Chapter 13 case. See id. The Application recognized that the Debtor intended to convert his case to one under Chapter 7. See id. On January 25, 2016, the Bankruptcy Court denied the Application for the following reasons:

See Harris v. Viegelahn, 2015 WL 2340847, [1] the Supreme Court has held that plan payments in the hands of a chapter 13 trustee return to the debtor upon conversion. Chapter 13 trustees cannot pay creditors from accumulated plan payments after conversion; such an act would contravene 348(3)'s termination of their services, and distribute property to creditors that is not part of the estate in the converted case pursuant to 348(f)(1).

Record Bankruptcy Case 15-10350, Page ID #262.

         In response to the Court's denial of the Application, the Appellant filed a “Motion to Vacate Order” on January 27, 2016, asking the Bankruptcy Court to reconsider its denial of the fee application as Harris v. Viegelahn does not apply to prevent the payment of attorney fees prior to a Chapter 13 case. See Record Bankruptcy Case 15-10350, Pages ID #264-267. On January 28, 2016, the Court entered an “Order Denying Motion to Vacate and Request for Expedited Hearing” and provided written reasons for the denial.[2] See Record Document 1-1. Appellant filed the instant appeal on February 2, 2016. See Record Document 1. In support of the appeal, Appellant filed a brief on April 18, 2016. See Record Document 4. No. opposition brief has been filed.

         LAW AND ANALYSIS

         A. Jurisdiction

         The United States Bankruptcy Court has the authority to issue final orders pursuant to 28 U.S.C. § 157(b). This United States District Court for the Western District of Louisiana, Shreveport Division has subject matter jurisdiction, pursuant to 28 U.S.C. § 158(a)(1) and 28 U.S.C. § 1334(b), to hear appeals from a final order of the Bankruptcy Court. “Final orders” of a Bankruptcy Court under 28 U.S.C. § 158 include both (1) “a final determination of the rights of the parties to secure the relief they seek” and (2) “a final disposition of a discrete dispute within the larger bankruptcy case.” Bartee v. Tara Colony Homeowners Ass'n (In re Bartee), 212 F.3d 277, 282 (5th Cir. 2000).

         B. Standard of Review

         In reviewing a bankruptcy court decision, a district court functions as an appellate court and applies the standards of review generally applied in federal courts of appeal. See In re Webb,954 F.2d 1102, 1103-04 (5th Cir. 1992). Because the same standard of review applies to both the District Court and Court of Appeals when these Courts are reviewing the decisions of a Bankruptcy Court, the District Court is tasked with reviewing “the bankruptcy court's award of attorney fees for abuse of discretion.” In re Woerner, 783 F.3d 266, 270 (5th Cir. 2015). According to the Fifth Circuit, “‘[a]n abuse of discretion occurs where the bankruptcy court (1) applies an improper legal standard or follows improper procedures in calculating the fee award, or (2) rests its decision on finding of fact that are clearly erroneous.'” Id. at 270-271, citing In re Cahill, 428 F.3d 536 at 539 (5th Cir. 2005). Legal conclusions are reviewed de novo. See Id.; In re Herby's Foods, Inc., 2 F.3d 128, 130 (5th Cir. 1993). A bankruptcy court's findings of fact are reviewed for clear error, with proper deference to that court's opportunity to make credibility ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.