In re Giger
In re Giger
Opinion of the Court
DECISION AND ORDER DENYING “FORMER CHAPTER 7 TRUSTEE’S MOTION FOR RELIEF FROM ORDER/OR TO ALTER OR AMEND ORDER”
Anthony Manhart, the former chapter 7 trustee, moves to alter or amend the order
Charles Giger is a lobsterman. He commenced this case under chapter 7 of the Bankruptcy Code.
Manhart then asked the court to award him an administrative expense claim for his services as chapter 7 trustee.
Fessenden’s primary argument was that I could allow this award without judicial scrutiny, despite “[t]he admonition of the Supreme Court in Espinosa ” because he and Giger had given their consent and non-objecting parties would not be harmed.
Manhart said his request was for reasonable compensation for actual, necessary services under § 330(a) and, thus, it should be allowed on the consent of the parties as an administrative expense under § 503(b)(2).
Section 330(a) is subject to §§ 326, 328 and 329.
This leaves former trustees in converted cases out in the cold. To surmount the plain meaning of §§ 326(a) and 330(a), Manhart cited several cases with outcomes in his favor. These decisions allowed former trustees to be paid on equitable grounds for policy reasons.
I was not persuaded. Dissentient policy concerns should not matter when the language of a statute is plain. See Lomas Mortgage, Inc. v. Louis, 82 F.3d 1, 4 (1st Cir. 1996); Mosquera-Perez v. I.N.S., 3 F.3d 553, 555 (1st Cir. 1993). The rules of construction serve to dampen a judge’s temptation to legislate a favorable result when the obligatory one is unkind;
Accordingly, I denied Manhart’s request for compensation.
Before me now is Manhart’s motion to alter or amend under Fed.R.Civ.P. 59(e) and Fed.R.Civ.P. 60(b)(6).
Manhart’s first point is that I wrongly said he “acknowledges that there is no statutory authority for the award he seeks.” It is true that Manhart gave §§ 330(a) and 503(b)(2) as the bases for his request. But every decision he cited in support of compensation was premised upon something other than the plain language of the statute. Because it makes no difference, I will concede the point and say that he relied upon those statutes.
His second point is that § 326(a) acts merely as a cap on compensation. I disagree for the reasons stated above.
His third point is that no one disputed that he had provided actual, necessary services or said that the award he sought was unreasonable. True. Nonetheless, as explained above, the statute does not provide for compensation under these circumstances. So any award would be unreasonable, even one for actual, necessary services. That said, to avoid the need for an evidentiary hearing, I find and conclude that Manhart provided actual, necessary services.
On the ultimate question, my view is unchanged. For the reasons stated above, Manhart is not entitled to an award of compensation. A manifest error of law is “ ‘[a]n error that is plain and indisputable, and that amounts to a complete disregard of the controlling law.’ ” Venegas-Hernandez v. Sonolux Records, 370 F.3d 183, 195 (1st Cir. 2004) (quoting Black’s Law Dictionary p. 593 (7th ed. 1999)). There are decisions going both ways. In the absence of a decision from the First Circuit, or compelling reasons, choosing one path over the other is not manifest error.
The former chapter 7 trustee’s motion to alter or amend is DENIED.
. This order is issued without hearing pursuant to D. Me. Local Bankruptcy Rule 9013-1(h).
. Unless otherwise indicated, all statutory references are to title 11 of the United States Code, 11 U.S.C. §§ 101, et seq., as amended ("the Bankruptcy Code”).
. A debtor who is a Maine resident may opt for exemptions under state law. See 11 U.S.C. § 522(b)(2); 14 M.R.S.A. § 4426. Manhart determined that Giger’s lobster boat was not exempt because it exceeded the "5 tons burden” allowed under Maine law. Gig-er's current plan shows a claim against in the amount of $83,074.52 secured by the boat, traps and equipment. Manhart had determined the value of the boat to be in excess of $140,000.00.
. Chapter 12 allows for the adjustment of debts of a family farmer or fisherman with regular annual income. See 11 U.S.C. § 1201, et seq.
. See 11 U.S.C. § 348(e).
. The chapter 12 has not been smooth sailing. Fessenden brought a motion to dismiss stating that Giger had made no plan payments and had failed to appear at five scheduled § 341 meetings. The hearings on Fessen-den’s motion and Giger's third plan occurred on January 9, 2014. Those hearings were continued by agreement to give Giger an opportunity to make plan payments.
. Manhart’s initial request was for $3750. Later, in his supplemental brief, he expressed a willingness to accept lesser amounts; $3064.66 under the so-called "constructive disbursement theory”; or $578.00 based upon 3.4 hours at his hourly rate of $170.00.
. Fessenden was referring to United Student Aid Funds, Inc. v. Espinosa, 559 U.S. 260, 130 S.Ct. 1367, 176 L.Ed.2d 158 (2010). The admonition is: “Section 1325(a) does more than codify this principle, it requires bankruptcy courts to address and correct a defect in a debtor's proposed plan even if no creditor raises the issue.” Id. at 277, n. 14, 130 S.Ct. 1367. Section 1325(a) is the chapter 13 equivalent of § 1225(a).
. In pertinent part, § 330(a)(1) states, "[ajfter notice to parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329, the court may award to a trustee ... for reasonable compensation for actual, necessary services....” 11 U.S.C. § 330(a)(1) (emphasis added).
. The current plan is Giger’s third attempt at confirmation. It was filed after I denied Manhart's request for compensation and pro
. See 11 U.S.C. § 1225(a)(1).
. See 11 U.S.C. §§ 507(a)(2) and 1226(a) and (b)(1).
. See 11 U.S.C. § 1226(a).
. See 11 U.S.C. §§ 348(d) and 349.
. At the hearing, Fessenden mentioned, offhand, that the law may require that he and Manhart share an aggregate compensation. Yet, despite his concern, neither party addressed the issue of aggregate compensation in his supplemental brief. I made my decision on what was before me.
. Section 503(b) provides: "After notice and a hearing, there shall be allowed administrative expenses ... including ... (2) compensation and reimbursement awarded under section 330(a).” This language is compulsory because the exercise of judicial discretion is presumed to have occurred when compensation is awarded under § 330(a).
. In pertinent part, § 330(a)(1) provides:
After notice to the parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329, the court may award to a trustee ... (A) reasonable compensation for actual, necessary services rendered by the trustee....
. In pertinent part, 11 U.S.C. § 326(a) provides:
In a case under chapter 7 or 11, the court may allow reasonable compensation under section 330 of this title of the trustee for the trustee’s services, payable after the trustee renders such services, not to exceed ... upon all moneys disbursed or turned over in the case by the trustee to parties in interest, excluding the debtor, but including holders of secured claims.
. " '[Ajbsent extraordinary services, chapter 7, 12 and 13 trustee fees should be presumed reasonable if they are requested at the statutory rate.’ ” In re Trask, 2013 WL 1397332
. The policy reasons offered include: avoiding perverse incentive, discouraging the concealment of assets, encouraging a trustee's diligent discovery of assets, fundamental fairness, encouraging trustees to undertake efforts on behalf of the estate, and not penalizing diligent former chapter 7 trustees.
. In this jurisdiction, "[qjuantum meruit, sometimes labeled ‘contract implied in fact,' involves recovery for services or materials provided under an implied contract." See Paffhausen v. Balano, 708 A.2d 269, 271 (Me. 1998). It rests on a contract inferred from the conduct of the parties. Id. Quantum me-ruit does not apply to Manhart's bid for compensation because no contract may be inferred from the conduct of the parties. There was no bargain in fact'between Manhart and Giger; nor was there one between Manhart and the chapter 12 estate. Manhart’s conclusion that the lobster boat was non-exempt property occurred as an exercise of his statutory duties. Moreover, he held no sway, beyond his right to appear and be heard, in the matter of Giger’s conversion.
. Consider this: What if Giger had pressed his entitlement to an exemption and, for policy reasons, I had concluded that the Maine legislature never intended to deprive a hard working lobsterman like him of a boat exceeding 5-tons burden?
. See Lamie v. U.S. Trustee, 540 U.S, 526, 538, 124 S.Ct. 1023, 157 L.Ed.2d 1024 (2004) (“ ‘There is a basic difference between filling a gap left by Congress' silence and rewriting rules that Congress has affirmatively and specifically enacted.’ ” (quoting Mobil Oil Corp. v. Higginbotham, 436 U.S. 618, 625, 98 S.Ct. 2010, 56 L.Ed.2d 581 (1978))).
. These rules are applicable in bankruptcy cases under Fed. R. Bankr.P. 9023 and Fed. R. Bankr.P. 9024.
Reference
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- In re Charles GIGER, Debtor
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