Erik Sundquist v. Dennise Henderson ( 2020 )


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  •                                  NOT FOR PUBLICATION                     FILED
    UNITED STATES COURT OF APPEALS                   OCT 27 2020
    MOLLY C. DWYER, CLERK
    U.S. COURT OF APPEALS
    FOR THE NINTH CIRCUIT
    In re: ERIK J. SUNDQUIST; RENEE                     No.   19-60016
    SUNDQUIST,
    BAP No. 17-1347
    Debtors,
    ------------------------------                      MEMORANDUM*
    DENNISE HENDERSON; LAW OFFICE
    OF DENNISE HENDERSON,
    Appellants,
    v.
    ERIK J. SUNDQUIST; RENEE
    SUNDQUIST,
    Appellees.
    Appeal from the Ninth Circuit
    Bankruptcy Appellate Panel
    Lafferty III, Brand, and Spraker, Bankruptcy Judges, Presiding
    Submitted October 23, 2020**
    San Francisco, California
    Before: HAWKINS, N.R. SMITH, and R. NELSON, Circuit Judges.
    *
    This disposition is not appropriate for publication and is not precedent
    except as provided by Ninth Circuit Rule 36-3.
    **
    The panel unanimously concludes this case is suitable for decision without
    oral argument. See Fed. R. App. P. 34(a)(2).
    Dennise Henderson (“Henderson”), who represented debtors in the underlying
    bankruptcy proceeding, appeals the decision of the Bankruptcy Appellate Panel
    (“BAP”) affirming the Bankruptcy Court’s order expunging an attorneys’ fee lien
    Henderson had filed against the debtors. We review the bankruptcy court’s decision
    independently, Beaupied v. Chang (In re Chang), 
    163 F.3d 1138
    , 1140 (9th Cir.
    1998), and we affirm.
    Henderson represented the debtors in a very successful adversary proceeding
    stemming from violation of the automatic stay. Under 11 U.S.C. § 362(k), her
    attorney’s fees are part of the damage award.         Although Henderson initially
    attempted to seek at 30% contingent fee award, she later agreed before the court to
    “only seek the lesser of the contingency fee agreement or the reasonable hourly rate
    times the number of hours expended consistent with the Lodestar method.” The
    bankruptcy court canceled the contingent fee agreement pursuant to 11 U.S.C. § 329,
    which permits the court to cancel any agreement that “exceeds the reasonable value
    of any such services,” and awarded instead the full number of hours worked times
    an hourly rate of $300. Nonetheless, Henderson later filed an attorneys’ fee lien
    against the debtors, apparently seeking some higher fee based on the “extraordinary
    result” in this case, which necessitated debtors’ current action to expunge the lien.1
    1
    We note that Henderson’s notice of appeal designated only the November 2017
    order expunging her lien and not the initial March 2017 decision which canceled the
    contingency fee agreement and awarded lodestar fees. See Fed. R. App. P.
    2
    The bankruptcy court acted well within its discretion in canceling
    Henderson’s contingency fee agreement, awarding her lodestar fees instead, and
    expunging the lien. First, counsel expressly agreed to accept the lodestar calculation
    as a reasonable fee.     Second, the bankruptcy court has broad discretion in
    determining the amount of fees that are reasonable, especially considering the
    court’s unique position to observe the attorney’s performance during the course of
    the bankruptcy proceedings. See America’s Serv. Co. v. Schwartz-Tallard (In re
    Schwartz-Tallard), 
    803 F.3d 1095
    , 1101 (9th Cir. 2015) (explaining how bankruptcy
    judges retain the discretion to eliminate unnecessary or plainly excessive fees under
    § 362(k)). The bankruptcy court described in great detail the poor performance of
    counsel, including its opinion that the damages proven might have been even higher
    with a better presentation. It expressed doubt that Henderson’s services were worth
    $300 an hour, but ultimately decided this figure was fair because of the risk of
    3(c)(1)(B). “When a party seeks to argue the merits of an order that does not appear
    on the face of the notice of appeal, we consider (1) whether the intent to appeal a
    specific judgment can be fairly inferred and (2) whether the appellee was prejudiced
    by the mistake.” Le v. Astrue, 
    558 F.3d 1019
    , 1022–23 (9th Cir. 2009) (internal
    quotations and citations omitted). Here, the subject matter of the two orders are
    necessarily intertwined, as the November order refers back to and expands on the
    reasoning of the earlier order. In addition, much of the briefing before the
    bankruptcy court, BAP, and this court addresses the propriety of the original March
    2017 order. We thus conclude that we have jurisdiction to address the merits of both
    orders. See One Indus., LLC v. Jim O’Neal Distrib., Inc., 
    578 F.3d 1154
    , 1159 (9th
    Cir. 2009).
    3
    nonpayment counsel had assumed.2 Counsel was thus fully compensated for her
    time and services by this award, and had no basis for filing the lien against debtors.3
    AFFIRMED.
    2
    Henderson also argues she was entitled to a bonus or enhancement for her clients’
    “extraordinary result.” In denying this request, the bankruptcy court did not err.
    Though “declin[ing] to consider the bonus requested by the appellant” has
    constituted legal error, see Burgess v. Kelnske (In re Manoa Fin. Co.), 
    853 F.2d 687
    ,
    691–92 (9th Cir. 1988), the bankruptcy court here considered Henderson’s
    enhancement arguments, ultimately exercising its discretion to deny that request
    based on Henderson’s performance. See Sundquist v. Bank of America, N.A. (In re
    Sundquist), 
    576 B.R. 858
    , 876–77 (Bankr. E.D. Cal. 2017) (noting the bankruptcy
    court “accepted [Henderson’s claimed rate, reasoning that it included an implicit
    enhancement (perhaps 50 percent) above normal lodestar for an attorney of her
    caliber of performance that could be justified as accommodating the risk of
    nonpayment”).
    3
    The motion filed by Appellants for an extension of time to file a reply brief [Dkt.
    Entry No. 53] is granted. The reply brief filed on July 29, 2020, is deemed filed.
    4