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In re Riverside-Linden Investment Co.

filed: September 30, 1991.

IN RE: RIVERSIDE-LINDEN INVESTMENT CO., DEBTOR. RALPH O. BOLDT, TRUSTEE; ESTES & HOYT, APPELLANTS,
v.
KATHRYN CRAKE; EARL HAFER, APPELLEES



Appeal from the Ninth Circuit Bankruptcy Appellate Panel. BAP No. SC-88-1976-As VP. Ashland, Volinn, and Perris, Judges, Presiding.

Harry Pregerson, Melvin Brunetti and Thomas G. Nelson, Circuit Judges. Opinion by Judge Brunetti.

Author: Brunetti

BRUNETTI, Circuit Judge

Appellant law firm Estes and Hoyt ("E & H") appeals the decision of the Bankruptcy Appellate Panel ("BAP") affirming the Bankruptcy Court's denial of attorney's fees. We have jurisdiction pursuant to 28 U.S.C. sections 158(d) and affirm.

I.

E & H was hired by the Bankruptcy Trustee for debtor, Riverside-Linden Investment Company ("Riverside-Linden"), to assist in the sale of Riverside-Linden's property and in the liquidation and winding up of the estate. On December 30, 1987, E & H filed a final fee application which requested reimbursement for fees incurred (1) investigating an unopposed claim by the sole remaining creditor ("the Hafer claim") while the estate was solvent; (2) opposing a motion by Kathryn Crake ("Crake"), a partner in Riverside-Linden, to dismiss the case or compel distribution; and (3) investigating the history and formation of Riverside-Linden in preparing tax returns. The final application noted that the request assumed no objections to the application. In the event the application was contested, E & H requested leave to file a supplemental fee application.

Crake objected to the final fee application. The Bankruptcy Court sustained Crake's objections and denied fees incurred to investigate the Hafer claim, opposing Crake's motion to dismiss, and the tax return investigations. See In re Riverside-Linden Inv. Co., 85 Bankr. 107 (Bankr. S.D. Cal. 1988). The BAP affirmed the Bankruptcy Court's decision, see In re Riverside-Linden Inv. Co., 99 Bankr. 439 (9th Cir. BAP 1989), and we affirmed in In re Riverside-Linden Inv. Co., 925 F.2d 320 (9th Cir. 1991) (per curiam) (" Riverside-Linden I ").

On May 26, 1988, E & H filed a supplemental fee application. The supplemental application sought $3418 in fees incurred opposing Crake's objection to the final fee application. The supplemental application also sought, for the first time, $6266.32 in interest on fees and costs from May 21, 1985, the date following the date the estate was invoiced, through June 15, 1988, plus $9.97 per day thereafter, and fees incurred in researching whether E & H was entitled to such interest and calculating the amount of the requested interest.

Crake objected to the supplemental application and the Bankruptcy Court sustained most of Crake's objections and disallowed fees incurred in opposing Crake's objection to the final fee application, for interest on fees prior to the date they were awarded, and fees incurred in determining whether it was entitled to interest and the calculations of such interest. See In re Riverside-Linden Inv. Co., 89 Bankr. 848, 849-50 (Bankr. S.D. Cal. 1988). Although the BAP disagreed in part with the reasoning of the Bankruptcy Court, it affirmed in In re Riverside-Linden Inv. Co., 111 Bankr. 298 (9th Cir. BAP 1990) (" Riverside-Linden II "). E & H filed this appeal.

II.

We consider whether the Bankruptcy Court erred in disallowing fees incurred opposing unsuccessfully Crake's objection to E & H's final fee application and determining that interest on attorney's fees payable from the estate under 11 U.S.C. § 726(a)(5) accrues on the date the fees are awarded. We will not disturb a bankruptcy court's award of attorney's fees absent a finding that the court abused its discretion or erroneously applied the law. Riverside-Linden I, 925 F.2d at 322; In re Nucorp Energy, Inc., 764 F.2d 655, 657 (9th Cir. 1985).

A. Fees incurred opposing Crake's objection to the final fee application.

Crake objected to E & H's final fee application on several grounds. The Bankruptcy Court sustained most of the objections and this court affirmed in Riverside-Linden I. It is the additional fees incurred by E & H in its unsuccessful opposition to Crake's objection that we consider in this appeal. E & H argues that the fees were incurred preparing and presenting its fee application, and therefore compensable under In re Nucorp Energy, Inc., 764 F.2d 655 (9th Cir. 1985). We disagree.

In Nucorp, the Bankruptcy Court disallowed fees incurred by a law firm preparing and presenting to the court its unopposed fee application. We reversed. The starting point of our decision in Nucorp was 11 U.S.C. § 330(a)(1). ...


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