In Re: Gloria Montano

Filing 21

OPINION by Judge Dale S. Fischer, (Made JS-6. Case Terminated.)(SEE OPINION FOR SPECIFICS) (bp)

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

CV 18-3013 DSF
In re GLORIA MONTANO

Opinion

Debtor’s counsel, A.O.E. Law & Associates, has appealed the
Bankruptcy Court’s refusal to approve the payment of certain fees
connected with two adversarial actions. In short, the Bankruptcy
Court found that the work undertaken was not reasonably likely
to benefit the estate because Appellant’s work basically prolonged
the inevitable result of the adversarial actions. Specifically, the
Bankruptcy Court found that it was, or should have been,
apparent at the time Appellant entered the case that the
adversarial actions would be resolved through the sale of certain
real property and the distribution of the sale funds to the two
secured creditors who had filed the adversarial actions.
A bankruptcy court’s denial of requested fees is reviewed for
abuse of discretion. In re Park-Helena Corp., 63 F.3d 877, 880
(9th Cir. 1995). Appellant tries to work its appeal into a de novo
standard of review by arguing that the Bankruptcy Court did not
apply the proper legal standard for the denial of fees. This is
unpersuasive. There is no indication that the Bankruptcy Court
misunderstood or ignored the relevant standard. A bankruptcy
court “shall not allow compensation” for services not “reasonably

likely to benefit the debtor’s estate.” 11 U.S.C. § 330(a)(4)(A).
Whether the work was “likely to benefit the debtor’s estate” is also
relevant to the reduction of fees authorized by 11 U.S.C. §
330(a)(3). The Bankruptcy Court received evidence, heard
argument, and decided that the requested fees were not likely to
have benefited the debtor’s estate when Appellant undertook to
provide the services.
The Bankruptcy Court did not abuse its discretion in denying
the fees. Evidence supported its conclusion that much of
Appellant’s work was not likely to benefit the debtor’s estate
because the work was an unnecessarily wasteful way of getting
the case back around to the result that everyone knew, or should
have known, was going to occur from the very beginning. The
Bankruptcy Court also appears to have additionally believed that
denial of the fees was warranted under § 330(a)(3) because the
services were not performed in a reasonable amount of time given
the complexity of the issues.1 Appellant provides various
arguments as to why that is not the case, but the Bankruptcy
Court did not abuse its discretion in so deciding.
The order of the Bankruptcy Court is AFFIRMED.
IT IS SO ORDERED.

Date: September 18, 2018

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S.
Dale S Fischer
United States District Judge

Notably, the Debtor testified that her (relatively simple) case was passed
among numerous attorneys at Appellant’s firm. The testimony gave a clear
impression that almost any time a new matter came up in the bankruptcy,
the Debtor was faced with dealing with a new lawyer.

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