In re Vernon-Williams, 04-37223-DOT.
| Decision Date | 27 April 2006 |
| Docket Number | No. 03-38152-DOT.,No. 03-39422-DOT.,No. 03-37773-DOT.,No. 03-34259-DOT.,No. 03-32020-DOT.,No. 03-35603-DOT.,No. 03-37772-DOT.,No. 04-37223-DOT.,No. 03-37186-DOT.,No. 03-32251-DOT.,No. 03-37623-DOT.,04-37223-DOT.,03-32020-DOT.,03-32251-DOT.,03-34259-DOT.,03-35603-DOT.,03-37186-DOT.,03-37623-DOT.,03-37772-DOT.,03-37773-DOT.,03-38152-DOT.,03-39422-DOT. |
| Citation | 343 B.R. 766 |
| Court | U.S. Bankruptcy Court — Eastern District of Virginia |
| Parties | In re Ellen Lucille VERNON-WILLIAMS, Gerald & Vicki Doelling, Jimmy & Deborah Pyles, Geraldine Bessie Markins, Michael Lee Lipscomb, Jr., Thomas D. Childrey, IV., A'Braham & Khaliyah Barakhyahu, Carrol & Melinda Wood, Zoe Laquanda Jarrell, Mary Lou Ann Ranicki, Celestine Berryman, Debtors. |
John R. Byrnes, Assistant United States Trustee.
STEPHEN C. ST. JOHN, Bankruptcy Judge.
This matter came on for hearing on March 7, 2006, upon the Omnibus Objection of the United States Trustee to certain Supplemental Fee Applications of the Boleman Law Firm. At the conclusion of the hearing, the Court took this matter under advisement. The Court has jurisdiction over these proceedings pursuant to 28 U.S.C. §§ 157(b)(2) and 1334(b). Venue is proper pursuant to 28 U.S.C. §§ 1408 and 1409. Upon consideration of the evidence and arguments presented by counsel at the hearing and the pleadings submitted, the Court makes the following findings of fact and conclusions of law.
The Boleman Law Firm, P.C. (the "Boleman Firm") provides bankruptcy services to consumer debtors and is headquartered in Richmond, Virginia. On July 29, 2004, the Boleman Firm filed a Chapter 13 Bankruptcy Petition for Ellen Lucille Vernon-Williams ("Vernon-Williams"). On April 18, 2005, the Boleman Firm filed a Supplemental Application for Compensation ("supplemental fee application") for the Boleman Firm in the Vernon-Williams case, whereby the firm requested fees and costs above the previously paid fee of $1,500.00 plus costs. The Internal Revenue Service filed an Objection to the Supplemental Fee Application ("IRS Objection") on April 25, 2005. A hearing on the supplemental fee application in the Vernon-Williams case was scheduled for May 18, 2005, before Chief Judge Douglas O. Tice, Jr. The hearing was repeatedly continued by the consent of the parties. Subsequently a status hearing was held on September 8, 2005, and an evidentiary hearing on the IRS Objection was scheduled for October 6, 2005.
Around September 30, 2005, the United States Trustee initiated objections to supplemental fee applications of the Boleman Firm through the First Omnibus Objection of the United States Trustee to Supplemental Fee Applications of the Boleman Law Firm ("First Omnibus Objection").1 This First Omnibus Objection was filed in the Vernon-Williams case and approximately one hundred and thirty-two other cases.2 On October 5, 2005, the hearing scheduled before Chief Judge Tice was cancelled by the Court, and the Court reassigned the matter to Judge Stephen C. St. John. An Order reassigning the issue of the supplemental fee applications and objections to Judge St. John was entered on October 11, 2005. On October 27, 2005, the Boleman Firm filed their Opposition to the First Omnibus Objection. Furthermore, on November 3, 2005, the Boleman Firm filed a Motion to Overrule the First Omnibus Objection. On November 16, 2005, Judge St. John conducted an initial pre-trial conference on the supplemental fee applications, objections, and motions, whereby Judge St. John set deadlines regarding related motions and responses, and continued the hearing until December 16, 2005.
At the December 16, 2005, hearing, the Court denied the Boleman Firm's Motion to Overrule the First Omnibus Objection.3 Further, the Court ordered the IRS Objection and the First Omnibus Objection to be set jointly for hearing and designated the Vernon-Williams case as the lead case for all pleadings related to the First Omnibus Objection. In addition, the Court determined that a hearing on the supplemental fee applications of the Boleman Firm in the case of Vernon-Williams and the first ten cases listed in Exhibit A to the First Omnibus Objection would be held on March 7, 2006.
On January 4, 2006, the Court denied the Boleman Firm's Motion for Immediate Allowance of Supplemental Fees and granted the Motion for an Order Directing the Chapter 13 Trustee to Hold Monies and Not Close Cases. On February 15, 2006, the Court entered a Consent Order Resolving the IRS Objection in the Vernon-Williams case (between the Boleman Firm and the Internal Revenue Service). On February 27, 2006, the United States Trustee and the Boleman Firm each filed their respective lists of exhibits and witnesses. The Boleman Firm objected to Exhibit 168 and Exhibit 169 of the United States Trustee on February 28, 2006.4 On March 5, 2006, the Boleman Firm filed Plaintiff's Pre-Trial Memorandum, and on March 6, 2006, the United States Trustee also filed a Pre-Trial Memorandum. The hearing regarding the First Omnibus Objection to supplemental fee applications filed in the Vernon-Williams case and the first ten cases set forth in Exhibit A to the First Omnibus Objection commenced on March 7, 2006, and continued through March 8, 2006, whereby the Court allowed the parties ten days to file post-trial briefs and took the matter under advisement.
The Boleman Firm was formed by G. Russell Boleman ("Boleman") in 1991. Currently, the Boleman Firm consists of approximately thirteen lawyers and nineteen paraprofessionals and has its principal office in Richmond, Virginia. The firm also maintains an office in Virginia Beach, Virginia. Boleman owns ninety percent of the shares of the Boleman Firm, and Laura Alridge and Mark Leffler each own five percent. Boleman testified that the Boleman Firm limits its practice to debtor representation and approximately forty percent of the Chapter 13 filings in Richmond are filed by his firm. He also testified that in 2005, the Boleman Firm filed approximately 1,750 Chapter 13 bankruptcy cases. Furthermore, he testified that the Boleman Firm filed approximately 450 supplemental fee applications in 2005.
It is uncontested that the Boleman Firm enjoys an excellent reputation in the community. The Boleman Firm is involved in pro bono work, continuing legal education, and other community events and organizations. Boleman testified that he is an "AV" rated consumer bankruptcy attorney and has also been rated by Virginia Business magazine as one of Virginia's best bankruptcy lawyers. Furthermore, Boleman stated that he, and other lawyers in the firm, speak, write, and publish regularly. Additionally, Boleman testified that the Boleman Firm achieves a seventy percent success rate in their cases, where success is defined as the debtors completing their Chapter 13 Plans and receiving a discharge from bankruptcy. Bruce White, a Richmond, Virginia, attorney; Robert Hyman, a Chapter 13 Trustee for the Richmond Division of this Court; and Bruce Matson, a Chapter 7 Trustee for the Richmond Division of this Court and a shareholder in the Richmond office of the law firm LeClair Ryan, P.C., all testified to their belief that the quality of the work performed by the Boleman Firm is extremely good, and that the hourly rates the firm charged in these cases were very reasonable.5
The Court heard extensive testimony regarding the Boleman Firm's detailed process for handling Chapter 13 bankruptcy cases. The Boleman Firm alleges that it has created a systematic and streamlined process for handling Chapter 13 bankruptcy cases. Clients are not assigned to a specific attorney; rather, the Boleman Firm assigns its lawyers and non-lawyers ("administrators") to address distinct steps in the bankruptcy process. Pl. Pre-Trial Mem., at 4. The firm segments the division of labor into two distinct groups: the Pre-341 Group and the Post-341 Group. Each group is further separated by task; therefore, the division of labor at the Boleman Firm is divided by tasks rather than clients. The Pre-341 Group handles the following tasks: (1) inquiry calls; (2) intake appointments; (3) petition preparation; (4) sign appointment; (5) electronic case filing ("ECF"); and (6) Section 341 Meeting of Creditors.6 The Post-341 Group handles all matters that arise for a client after the Section 341 Meeting. The Boleman Firm has a voluminous policy and procedures manual which documents the various tasks to be completed by the Pre-341 and Post-341 Groups and explains the process ("Boleman Manual"). Pl. Exh. 1.
Mark Leffler ("Leffler"), an attorney with the Boleman Firm since 2000, testified that he believes the Boleman Manual and segmentation of the tasks ensures efficiency. Furthermore, Leffler testified that each task has specific quality control sheets, check-lists and procedures associated with it to ensure quality control. See, e.g., Pl. Exh. 17; Pl. Exh. 18. He also testified that the Boleman Firm uses specific software known as "Abacus," and the employees are required to record their actions regarding specific tasks undertaken for the client in the client's Abacus file. Additionally, he testified that the members of the firm check each others' work, the quality control sheets, and Abacus to ensure all the required steps are completed. Tr. at 27. Leffler testified that this method of record keeping allows any member of the firm to provide services to the client; thus, clients do not have to be specifically assigned to an individual attorney. Further, Leffler testified that these detailed procedures and steps ensure that the employees of the Boleman Firm follow the same steps in every case.
However, Leffler's testimony also revealed that not all tasks submitted on the supplemental fee applications are recorded in Abacus. The United States Trustee questioned...
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