Jacobowitz v. Double Seven Corporation, 21372.

• Decision Date: 05 June 1967
• Docket Number: No. 21372.,21372.
• Citation: 378 F.2d 405
• Parties: Henry JACOBOWITZ, Appellant, v. DOUBLE SEVEN CORPORATION, Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

378 F.2d 405 (1967)

Henry JACOBOWITZ, Appellant, v. DOUBLE SEVEN CORPORATION, Appellee.

No. 21372.

United States Court of Appeals Ninth Circuit.

June 5, 1967.

Daniel T. Bergin, Fennemore, Craig, Allen & McClennen, Phoenix, Ariz., for appellant.

Tom Roof, Randolph, Warner & Angle, O'Connor, Cavanagh, Anderson, Westover, Killingsworth & Beshears, Jennings, Strouss, Salmon & Trask, Phoenix, Ariz., for appellee.

Before MERRILL and KOELSCH, Circuit Judges, and CURTIS, District Judge.

CURTIS, District Judge:

This is an appeal from an order of the district court affirming, with some modifications, an order of a referee in bankruptcy fixing fees for the trustee's attorney. The attorney requested an allowance of $11,410.00, but the referee allowed, and the district court approved, a fee of $7,500.00. The appellant here contends that the fee allowed was so low, under the circumstances, as to amount to an abuse of discretion.

After two hearings before the referee, during which considerable expert testimony was taken, the referee made the following findings of fact, conclusions of law, and order:

"FINDINGS OF FACT

"1. That all the allegations of the petitioner, Henry Jacobowitz, as contained in his two petitions pertaining to the allowance of his attorney\'s fees, are true as stated, including, among other things:

"(a) That over a period of more than three years he expended approximately three hundred forty-two (342) hours, plus four (4) full days of trial time before the United States District Court, in plenary proceedings, in performing legal services for the estate;

"(b) That he successfully prosecuted, in behalf of the estate, four plenary actions, one of which was tried to a jury, as a result of which he enhanced the assets of this estate by cash in the sum of $30,500.00;

"(c) That the defendants in the plenary proceedings were ably represented by prominent members of the local Bar and that the recoveries were difficult, not only because they involved intricate questions of law, but because the records of the bankrupt were inadequate and in many instances completely wanting and the trustee, as is often the case in proceedings of this nature, had to rely in main, on the testimony of the bankrupt whose interests were contrary to those of the trustee, and upon the testimony of the defendants on cross-examination;

"(d) That he obtained the withdrawal and waiver of certain creditors\' claims aggregating in excess of $75,000.00 thereby increasing the amount to be distributed pro rata among the remaining creditors by approximately $15,000.00.

"2. The petitioner exhibited great skill in meeting the intricate and difficult legal propositions encountered.

"3. The trustee herein, himself an attorney, testified that the fee prayed for by the petitioner is reasonable.

"4. The Creditors\' Committee recommends the allowance of the fee as prayed for.

"5. The collective expert testimony of the attorneys who testified herein, all experienced and knowledgeable in this field, is to the effect that the fee as prayed for is reasonable and, in fact, on the low side.

"6. The minimum fee recommended by the Maricopa County Bar Association for work of this nature is $30.00 per hour, plus $250.00 per day in Court and the fee requested by applicant is predicated upon these rates.

"7. The total recovery herein amounts to $61,269.15; total fees and other administrative expenses as requested amount to $23,602.36, or 38.5% of the recovery; the total fees and other expenses allowed, including petitioner\'s fee in the amount of $7,500.00, total $16,789.98, or 27.4% of the recovery. Cases of this size closed throughout the United States during the fiscal year 1965 were administered for a cost averaging 19.9% of the recovery, according to figures recently released by the Administrative Office of the United States Courts; costs for previous years range from 18.4% to 20.7%.

"CONCLUSIONS OF LAW

I.

"The total fee of $11,410.00 asked by petitioner would be a reasonable sum for like services rendered by an attorney in private employment according to schedules of fees as recommended by the Maricopa County Bar Association.

II.

"The amount of compensation allowable in bankruptcy proceedings is not measured by the amount which counsel would have received for the same services in private employment.

III.

"The `economical spirit of the Bankruptcy Act\' demands that an attorney be paid in bankruptcy matters an amount appreciably less than he could command for similar services in purely private employment.

"Now, therefore, after again considering the matter and taking into account the size of this estate and the proportionate amount thereof recovered through the efforts of petitioner, the time expended by him in dealing with the matters involved, his ability and experience, the difficulty and intricacy of the legal propositions determined, the skill employed by petitioner, the opposition met, the opinions evidenced touching the reasonableness of the fee requested, all in the light of the limitation of the `economical spirit of the Bankruptcy Act\' and the total costs incurred in the administration of the estate as related to the size thereof,

"IT IS ORDERED that the previous allowance of $7,500.00 to the petitioner, plus expenses, remain in full force and effect."

Upon review the district court affirmed the referee's order, with the following modifications:

Paragraph II of the conclusions of law was modified to read as follows:

"The amount of compensation allowable in bankruptcy proceedings is not measured by the amount which counsel would have received for the same services in private employment but can be and frequently is less. The amount of compensation ordered by the Court depends on the circumstances of each case."

The...