United States District Court, W.D. Virginia, Abingdon Division
OPINION AND ORDER
P. JONES UNITED STATES DISTRICT JUDGE.
court has before it for decision the Application for Fees by
Guardian ad Litem and Attorney for the Trustee, filed by
attorney John M. Lamie. While there are no objections to the
Application, it raises issues that require extended
Factual Summary and Procedural History.
17, 1928, White Oak Lumber Company filed a petition in the
United States District Court for the Western District of
South Carolina to have Yellow Poplar Lumber Company, Inc.
(“Yellow Poplar) adjudged a bankrupt. Yellow Poplar was
adjudged a bankrupt and the bankruptcy case was closed in
1931. Eighty-two years later, on April 3, 2013, suit was
filed in the Circuit Court of Buchanan County, Virginia,
seeking a determination of the ownership of the gas estates
of certain parcels of land located in Virginia, based upon a
1929 deed from Yellow Poplar's bankruptcy
trustee. The defendants in that action removed the
case to the United States Bankruptcy Court for the Western
District of Virginia. Later, at the request of the plaintiff,
this court withdrew reference of the case from the bankruptcy
court. On December 10, 2013, the court appointed Mr. Lamie to
serve as Guardian ad Litem (“GAL”) for the
unknown successors in interest to Yellow Poplar. Order, ECF
No. 101. Other parties were added to the case,
asserting claims to the disputed property.
with the agreement of the parties, the United States District
Court for the District of South Carolina reopened Yellow
Poplar's bankruptcy case and transferred it in its
entirety to this court. Order, In re Yellow Poplar Lumber
Co., Case No. 8:28-cv-01101-BHH (Closed Case No. B-1101)
(D.S.C. July 20, 2015); Case No. 1:15CV00037, ECF No. 4. On
August 24, 2015, this court appointed Mr. Lamie to serve as
the replacement Trustee for Yellow Poplar. The court later
authorized the employment of Mr. Lamie in his capacity as an
attorney as counsel for the Trustee, along with his law firm,
Browning, Lamie & Gifford, P.C.
of the ownership claims were resolved, but the remaining
major claims involving the Trustee, Weyerhaeuser, and
defendants Range Resources-Pine Mountain, Inc.
(“RR-PM”), Range Resources-Appalachia, LLC, EQT
Production Company, and EQT Production Nora, LLC, were set
for jury trial, but on January 25, 2017, a few days before
that trial, the Trustee notified this court that the parties
had reached a settlement of the ownership claims. On February
8, 2017, Mr. Lamie filed a Settlement Agreement and
accompanying Motion for Approval of Settlement. All parties
to the Settlement Agreement subsequently filed supporting
briefs. After public notice of the proposed settlement, the
court held a hearing on the settlement on May 12, 2017. No
objections to the settlement were submitted. An Order
approving the settlement and quieting title to the subject
property was entered on June 7, 2017.
April 11, 2017, Mr. Lamie applied for payment of his fees and
expenses as GAL, Trustee, and counsel to the Trustee. ECF No.
536. He filed a supplement to his application on June 9,
2017. ECF No. 551. As GAL, Mr. Lamie provided 137 hours of
legal services at an hourly rate of $210 per hour, resulting
in fees amounting to $28, 770. ECF No. 551. He also incurred
costs of $315.48. ECF No. 536-2. As counsel to the Trustee,
he provided 206.10 hours of legal services at an hourly rate
of $250 per hour, resulting in fees amounting to $51, 525.
ECF No. 551. He also incurred costs of $5, 965. ECF No.
536-2. Mr. Lamie has requested a fee enhancement that would
bring his total requested fee award to $325, 000. ECF No.
551. For the reasons stated below, I will grant his
Fees and Costs for GAL.
the unknown successors in interest to Yellow Poplar were
named as defendants, Mr. Lamie was appointed to serve as GAL
for those unknown parties. See Fed. R. Civ. P. 17
(c)(2). Mr. Lamie is entitled to seek payment of fees for, as
well as reimbursement of costs incurred in the course of, his
service as GAL. See Doe v. Kidd, 656 F. App'x
643, 658 (4th Cir. 2016) (unpublished). Since Yellow
Poplar's possible creditors and owners were the
substantial beneficiary of Lamie's services as GAL, it is
appropriate that the fees and costs be paid from Yellow
Poplar's estate as taxed costs. Fed.R.Civ.P. 54(d)(1).
have previously found in this case, $210 per hour is a
reasonable rate for a GAL in this case. Order, June 7, 2017,
ECF No. 549 (granting petition of another GAL for certain
other unknown parties at $210 per hour); see Doe v.
Kidd, 656 F. App'x at 659-60 (noting that GAL hourly
rates between $150-$250 have been found to be reasonable). In
addition, the total fees and costs requested here are
reasonable under the circumstances. I will therefore grant
Mr. Lamie's application for fees in his capacity as GAL
in the amount of $28, 770 and his costs in the amount of
to the Settlement Agreement, costs attributable to guardians
appointed by the court are to be shared in proportion to the
ownership division for Tract 11 of the disputed property.
Settlement Agreement ¶ 9, ECF No. 520-1.
Fees and Costs for Trustee and Counsel to the Trustee.
Availability of Fee Award.
matter is governed by the Bankruptcy Act of 1898 (“1898
Bankruptcy Act”) and the 1973 Rules of Bankruptcy
Procedure (“Former Bankruptcy Rules”). See Op
& Order 3-4, ECF No. 397. I thus consider the
appropriateness of Mr. Lamie's requested fees and costs
under these statutes and rules.
regard to a Trustee's compensation, the 1898 Bankruptcy
Trustees shall receive, as full compensation for their
services, payable after they are rendered . . . from estates
which they have administered, such commissions on sums to be
paid as dividends and commissions as may be allowed by the
courts, not to exceed . . . one per centum on such sums in
excess of ten thousand dollars.
Bankruptcy Act § 48(a) (1898) (repealed). In addition,
where a Trustee performs any court-authorized “legal or
other service” that are not required as part of his
bankruptcy Trustee duties, he is entitled to
“[a]dditional compensation” beyond the statutory
cap. Fed.R.Bankr.P. 219(c)(2) (1973).
attorney who performs “professional services” in
connection with a case, including serving as counsel to the
Trustee, is also entitled to compensation. Fed.R.Bankr.P.
219(c)(3) (1973) (“Compensation may be allowed an
attorney . . . for professional services.”). Such
professional services must “requir[e] and utiliz[e]
legal skill, ” In re Emergency Beacon Corp.,
43 B.R. 672, 674-75 (Bankr. S.D.N.Y.1984), and be previously
authorized by the court. In re Kornstein's,
Inc., 56 B.R. 481, 482 (Bankr. D.R.I. 1985). The
compensation of such attorney is not subject to the one
percent statutory cap; instead, it must simply be
“reasonable.” Fed.R.Bankr.P. 219(c)(1) (1973)
(“The compensation allowable by the court to a trustee
. . . [or] attorney . . . shall be reasonable.”). See
also Fed.R.Bankr.P. 219 (1973) advisory committee's note
(“[A]llowances to attorneys . . . are not subject to
the limitations imposed by § 48 of the Act on the
compensation of . . . trustees.”).
Amount of Fee Award.
compensation given to a Trustee performing legal services or
an attorney serving as counsel to a Trustee must be
“reasonable.” Fed.R.Bankr.P. 219(c). The factors
courts must consider in determining whether compensation is
“reasonable” have evolved over time. Former
Bankruptcy Rule 219(c)(1) enumerates specific factors that
courts should consider in awarding a Trustee's or
attorney's compensation: “the nature, extent, and
value of the services rendered as well as . . . the
conservation of the estate and the interests of
creditors.” Fed.R.Bankr.P. 219(c)(1) (1973). The
Advisory Committee further stated that the “principal
factors which enter into a determination of what is
reasonable are the time spent, the intricacy of the questions
involved, the size of the estate . . ., the results obtained
and the ‘economic spirit' of the Bankruptcy Act to
curtail unnecessary expenses.” Fed.R.Bankr.P. 219
(1973) advisory committee's note (quoting In re
Paramount Merrick, Inc., 252 F.2d 482, 485 (2d Cir.
Fourth Circuit has expanded on these factors. In 1976,
echoing the Advisory Committee, it held in a bankruptcy case
that courts must consider (1) “the time spent, ”
(2) “the character of the services rendered, ”
(3) “the results achieved, ” (4) “the size
of the estate, ” (5) “the evidence relating to
the services rendered, ” and (6) “‘the
economic spirit' of the [Bankruptcy] Act.” New
England Merchs. Nat'l Bank v. O'Donnell (In
re Farrington Mfg. Co.), 540 F.2d 653, 657 (4th Cir.
1976). A court's ultimate goal, it explained, is to
balance the “public interest in attracting competent
counsel in bankruptcy proceedings” with “doing
equity to the estate and its creditors.” Id.
(citing Jacobowitz v. Double Seven Corp., 378 F.2d
405, 408 (9th Cir. 1967)).
years later, the Fourth Circuit further expanded this
analysis by adopting the twelve factors enumerated by the
Fifth Circuit in Johnson v. Georgia Highway Express,
Inc., 488 F.2d 714 (5th Cir. 1974), holding that
“these factors must be considered by district courts .
. . in arriving at a determination of reasonable
attorneys' fees” and that “any award must be
accompanied by detailed findings of fact with regard to the
factors considered.” Barber v. Kimbrell's,
Inc., 577 F.2d 216, 226 (4th Cir. 1978).
twelve Johnson factors are:
(1) [T]he time and labor expended; (2) the novelty and
difficulty of the questions raised; (3) the skill required to
properly perform the legal services rendered; (4) the
attorney's opportunity costs in pressing the instant
litigation; (5) the customary fee for like work; (6) the
attorney's expectations at the outset of the litigation;
(7) the time limitations imposed by the client or
circumstances; (8) the amount in controversy and the results
obtained; (9) the experience, reputation and ability of the
attorney; (10) the undesirability of the case within the
legal community in which the suit arose; (11) the nature and
length of the professional relationship between attorney and
client; and (12) attorneys' fees awards in similar cases.
Id. at 226 n.28. Barber was not a
bankruptcy case, but the Fourth Circuit has applied its
holding to attorney's fee awards in the bankruptcy
context. Harman v. Levin, 772 F.2d 1150, 1152 (4th
Cir. 1985). The court has also provided additional
guidance for district courts applying the Johnson
[D]istrict courts [should] . . . first ascertain the nature
and extent of the services supplied by the attorney from a
statement showing the number of hours worked and an
explanation of how these hours were spent. The court should
next determine the customary hourly rate of compensation.
These are essentially Johnson factors 1 and 5. The court
should then multiply the number of hours reasonably expended
by the customary hourly rate to determine an initial amount
for the fee award. ...