Fighting like cats and dogs may be acceptable in a matrimonial case, but not when special counsel represents a debtor who is restructuring her debt in chapter 11.
Bankruptcy Judge Marvin Isgur of Houston knocked 36% off a matrimonial lawyer’s fee application, based in large part on the special counsel’s discourteous conduct toward her adversary and his counsel.
“One of the things that I love about this opinion is the link between incivility and actual value to the estate,” Prof. Nancy Rapoport told ABI. “Good lawyers,” she said, “can be firm and aggressive without being uncivil, and when a bankruptcy judge takes into account how much time is wasted by responding to incivility, that’s a lesson for us all.”
Prof. Rapoport is the Garman Turner Gordon Professor of Law at the Univ. of Nevada at Las Vegas William S. Boyd School of Law. She is an expert on ethics who is often appointed as fee examiner in major reorganizations.
Special Counsel’s Role
The debtor was a doctor who confirmed a chapter 11 plan. With Judge Isgur’s approval, the debtor had hired a matrimonial lawyer as special counsel to modify her parent/child relationship in state court. When all was done, special counsel filed a final fee application for about $128,000.
In his April 5 opinion, Judge Isgur allowed about $84,000, reducing the request by some $45,500.
In matrimonial matters, Judge Isgur said that litigants “often feel enmity toward one another.” Still, he said, “professionalism” requires counsel “to strive to minimize — rather than participate in — acrimonious conduct.”
In the case before him, Judge Isgur said that “enmity” appeared to have affected the lawyer’s “duty to act civilly, which resulted in elevated attorneys’ fees.” He held a hearing and meticulously combined through special counsel’s time records.
Judge Isgur’s opinion cites copious authority on virtually every issue that can be raised regarding a contested fee application. He supplemented his 37-page opinion with 26 pages of charts listing every time entry and specifying why some were disallowed or reduced.
Judge Isgur buttressed his conclusions with citations to the record, including transcripts of depositions in the matrimonial proceeding. The transcripts, he said, showed how special counsel and her adversaries “were frequently less than courteous toward each other.”
The ‘Air of Incivility’
Although he criticized both sides, Judge Isgur said that the debtor’s matrimonial lawyer “glaringly failed to act courteously during [the former husband’s] deposition.” He reproduced pages of deposition transcript to show how an “air of incivility pervaded” the deposition and how the debtor’s lawyer “acted discourteously toward” the former husband and his counsel.
Special counsel’s conduct was also evident at the fee hearing, where Judge Isgur saw how the lawyer had been “uncompromising.”
“Based on this Court’s observations in open Court, [special counsel’s] inappropriate behavior unnecessarily and excessively expanded the number of hours [that the matrimonial firm] billed.” He said that the “estate will not bear the excess resulting from [special counsel’s] unprofessional conduct.”
Judge Isgur reduced the lead lawyer’s hourly rate from $350 to $300 because her “inability or unwillingness to act professionally” warranted “a reduction in her hourly rate.”
On a granular level, Judge Isgur noted time entries totaling about $45,500 for reduction or disallowance for the usual reasons in bankruptcy cases, such as fees that were unsupported, excessive, duplicative, unnecessary, non-compensable, clerical, block billed or vague.
Fighting like cats and dogs may be acceptable in a matrimonial case, but not when special counsel represents a debtor who is restructuring her debt in chapter 11.
Bankruptcy Judge Marvin Isgur of Houston knocked 36% off a matrimonial lawyer’s fee application, based in large part on the special counsel’s discourteous conduct toward her adversary and his counsel.
“One of the things that I love about this opinion is the link between incivility and actual value to the estate,” Prof. Nancy Rapoport told ABI. “Good lawyers,” she said, “can be firm and aggressive without being uncivil, and when a bankruptcy judge takes into account how much time is wasted by responding to incivility, that’s a lesson for us all.”
Prof. Rapoport is the Garman Turner Gordon Professor of Law at the Univ. of Nevada at Las Vegas William S. Boyd School of Law. She is an expert on ethics who is often appointed as fee examiner in major reorganizations.
Special Counsel’s Role
The debtor was a doctor who confirmed a chapter 11 plan. With Judge Isgur’s approval, the debtor had hired a matrimonial lawyer as special counsel to modify her parent/child relationship in state court. When all was done, special counsel filed a final fee application for about $128,000.
In his April 5 opinion, Judge Isgur allowed about $84,000, reducing the request by some $45,500.
In matrimonial matters, Judge Isgur said that litigants “often feel enmity toward one another.” Still, he said, “professionalism” requires counsel “to strive to minimize — rather than participate in — acrimonious conduct.”
In the case before him, Judge Isgur said that “enmity” appeared to have affected the lawyer’s “duty to act civilly, which resulted in elevated attorneys’ fees.” He held a hearing and meticulously combined through special counsel’s time records.
Judge Isgur’s opinion cites copious authority on virtually every issue that can be raised regarding a contested fee application. He supplemented his 37-page opinion with 26 pages of charts listing every time entry and specifying why some were disallowed or reduced.
Judge Isgur buttressed his conclusions with citations to the record, including transcripts of depositions in the matrimonial proceeding. The transcripts, he said, showed how special counsel and her adversaries “were frequently less than courteous toward each other.”