In re Armstead

• Decision Date: 20 October 1989
• Docket Number: Bankruptcy No. 88-11390S,Adv. No. 88-2113S.
• Citation: 106 BR 405
• Parties: In re Jean I. ARMSTEAD, Debtor. Jean I. ARMSTEAD, Plaintiff, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Samuel R. Pierce, Jr., Secretary of the U.S. Department of HUD; Joseph Russell, Chief Loan Management Branch, Philadelphia Area Office; and Comm. of PA School Employees Retirement Fund, Defendants.
• Court: U.S. Bankruptcy Court — Eastern District of Pennsylvania

106 B.R. 405 (1989)

In re Jean I. ARMSTEAD, Debtor Jean I. ARMSTEAD, Plaintiff, v. UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, Samuel R. Pierce, Jr., Secretary of the U.S. Department of HUD; Joseph Russell, Chief Loan Management Branch, Philadelphia Area Office; and Comm. of PA School Employees Retirement Fund, Defendants.

Bankruptcy No. 88-11390S, Adv. No. 88-2113S.

United States Bankruptcy Court, E.D. Pennsylvania.

October 20, 1989.

COPYRIGHT MATERIAL OMITTED

Virginia R. Powel, Asst. U.S. Atty., Peter M. Campanella, Regional Counsel, Region III, U.S. Dept. of Housing and Urban Development, Philadelphia, Pa., for Federal defendants.

Roger V. Ashodian, Delaware County Legal Assistance, Chester, Pa., for plaintiff/debtor.

Patricia Jenkins, Media, Pa., for defendant-mortgagee.

Edward Sparkman, Philadelphia, Pa., Standing Chapter 13 Trustee.

OPINION

DAVID A. SCHOLL, Bankruptcy Judge.

A. INTRODUCTION

The present contested matter is, hopefully, the final chapter in a sequence of two actions instituted by JEAN I. ARMSTEAD, a mortgagor and later the Debtor in the above-captioned bankruptcy case (hereinafter "the Debtor"), to review a series of denials of her application for an assignment of her federally-insured home mortgage to the Defendant, the UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT (hereinafter this Defendant and several of its employees, also named as Defendants, are referred to collectively as "HUD").¹ Presented here are several unusual issues arising out of the Debtor's Application for attorneys' fees in the amount of $19,947.44² under the Equal Access to Justice Act, 28 U.S.C. § 2412 (hereinafter referred to as "the EAJA"). We conclude that the Debtor's Application is timely; that she is a prevailing party; that her counsel is entitled to compensation for services performed in the HUD administrative process subsequent to our remand Order; that HUD's position in this matter was not "substantially justified" and that her counsel is entitled to the hourly rate of compensation originally sought. However, we also conclude that this court lacks jurisdiction to consider compensation for services performed prior to the filing of the instant proceeding in this court, including services performed in a previous separate federal case challenging the initial denial of her Application, and that the Debtor's attempt to obtain compensation for services performed in her main bankruptcy case is also improper. Therefore, noting no objection to the hours of services for which compensation is sought nor the description of services provided in the Application, we shall award her $10,366.00.

B. PROCEDURAL AND FACTUAL BACKGROUND

The tortuous procedural history and factual background of the Debtor's efforts to review the denial of her assignment Application are recited in detail in our previous Opinion of March 21, 1989, and will not be repeated in toto here. See In re Armstead, 97 B.R. 798, 799-803 (Bankr.E.D.Pa. 1989). There, we remanded HUD's denial of the Debtor's Application for an assignment back to that agency. It bears repeating, however, that the Debtor's Application for an assignment, which was filed almost five years ago in January, 1985, was originally summarily dismissed by HUD because the Debtor allegedly failed to timely take action necessary to effect a further appeal. This decision was reversed in a sharply-worded Opinion of the Third Circuit Court of Appeals (hereinafter "the 3rd Circuit") in Armstead v. United States Dep't of HUD, 815 F.2d 278 (3d Cir.1987). Thereafter, on remand, HUD denied the Application on its merits in a letter of February 29, 1989. 97 B.R. at 799. In order to prevent the loss of her home, the Debtor apparently filed the instant bankruptcy case on April 25, 1988, and, on October 4, 1988, filed the adversary proceeding in issue to review HUD's denial of her Application. Id. The result was our decision of March 21, 1989. Id.

Ultimately, on May 22, 1989, HUD granted the Debtor's Application for an assignment. The instant motion was filed thereafter in this court on June 22, 1989.³ In that Application, the Debtor sought compensation for all services by her counsel at Delaware County Legal Assistance Association (hereinafter "DCLAA") from the time of her initial consultation with DCLAA on August 10, 1985, through the litigation of the case ultimately decided by the 3rd Circuit, and through the preparation of the instant Application. We note that, on October 3, 1988, the 3rd Circuit denied, without explanation, a motion to reconsider its previous denial of an EAJA Application filed by the Debtor directly with that court. No further review of this Order was sought.

On August 11, 1989, HUD filed a lengthy Response in the form of a Brief to the Debtor's instant motion. The parties came before us on August 22, 1989, to argue the motion, after which we entered an Order of August 23, 1989, requesting the parties to submit additional Briefs on or before September 18, 1989 (the Debtor), and October 2, 1989 (HUD), addressing the following issues:

(1) whether fees may be awarded for services in the parties\' original action; (2) whether fees may be awarded for services in administrative proceedings; (3) how the hourly rate for reimbursement of counsel should be established; and (4) whether the Defendants were "substantially justified" in defending this proceeding.

. . . . .

The Debtor's counsel, in a fashion we consider improperly casual,⁴ belatedly filed the Debtor's Brief on September 22, 1989. HUD then requested an extension of time to reply, and we allowed it an extension until October 10, 1989. We note that HUD has persisted in asserting issues other than those recited above, i.e., that the Debtor's motion was untimely filed and that she was not a "prevailing party," despite our indications that we perceived no merit in its positions on these issues.

C. LEGAL CONCLUSIONS/DISCUSSION

1. This Matter Involves Interpretation of the EAJA.

The instant matter concerns strictly issues of interpretation of the EAJA. That statute provides, in pertinent part, as follows, at 28 U.S.C. §§ 2412(b), (d)(1), (d)(2)(A):

(b) Unless expressly prohibited by statute, a court may award reasonable fees and expenses of attorneys, in addition to the costs which may be awarded pursuant to subsection (a), to the prevailing party in any civil action brought by or against the United States or any agency or any official of the United States acting in his or her official capacity in any court having jurisdiction of such action. The United States shall be liable for such fees and expenses to the same extent that any other party would be liable under the common law or under the terms of any statute which specifically provides for such an award.

. . . . .

(d)(1)(A) Except as otherwise specifically provided by statute, a court shall award to a prevailing party other than the United States fees and other expenses, in addition to any costs awarded pursuant to subsection (a), incurred by that party in any civil action (other than cases sounding in tort), including proceedings for judicial review of agency action, brought by or against the United States in any court having jurisdiction of that action, unless the court finds that the position of the United States was substantially justified or that special circumstances make an award unjust.

(B) A party seeking an award of fees and other expenses shall, within thirty days of final judgment in the action, submit to the court an application for fees and other expenses which shows that the party is a prevailing party and is eligible to receive an award under this subsection, and the amount sought, including an itemized statement from any attorney or expert witness representing or appearing in behalf of the party stating the actual time expended and the rate at which fees and other expenses are computed. The party shall also allege that the position of the United States was not substantially justified. Whether or not the position of the United States was substantially justified shall be determined on the basis of the record (including the record with respect to the action or failure to act by the agency upon which the civil action is based) which is made in the civil action for which fees and other expenses are sought.

(C) The court, in its discretion, may reduce the amount to be awarded pursuant to this subsection, or deny an award, to the extent that the prevailing party during the course of the proceedings engaged in conduct which unduly and unreasonably protracted the final resolution of the matter in controversy.

(2) For the purposes of this subsection —

(A) "fee and other expenses" includes the reasonable expenses of expert witnesses, the reasonable cost of any study, analysis, engineering report, test, or project which is found by the court to be necessary for the preparation of the party\'s case, and reasonable attorney fees (The amount of fees awarded under this subsection shall be based upon prevailing market rates for the kind and quality of the services furnished, except that (i) no expert witness shall be compensated at a rate in excess of the highest rate of compensation for expert witnesses paid by the United States; and (ii) attorney fees shall not be awarded in excess of $75 per hour unless the court determines that an increase in the cost of living or a special factor, such as the limited availability of qualified attorneys for the proceedings involved, justifies a higher fee) (emphasis added); . . .

2. The Debtor's Motion was Timely Filed Within Thirty (30) Days of the Final Agency Action.

This issue involves consideration of 28 U.S.C. § 2412(d)(1)(B). The Debtor filed the instant application for attorneys' fees on June 22, 1989. HUD contends that the application is not timely because this court's Order dated March 21, 1989 (which HUD mistakenly identifies as March 29, 1989), which remanded this matter to HUD, should be...