Butler Innovative Solutions, Inc.

UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF COLUMBIA
In re
BUTLER INNOVATIVE SOLUTIONS,
INC.,
Debtor.
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Case No. 08-00065
(Chapter 7)
MEMORANDUM DECISION AND ORDER RE ATTORNEY’S FEES SOUGHT PURSUANT
TO ORDER ADJUDGING DEBTOR’S PRINCIPALS TO BE IN CIVIL CONTEMPT
On July 10, 2008, as a result of a hearing on July 8, 2008,
this court issued an Order Holding Debtor’s Principals in Civil
Contempt, and that order was entered by the clerk on July 11,
2008, and mailed to John A. Butler and Keith H. Barkley on July
13, 2008. 	That order provided in pertinent part as follows:
ORDERED that the petitioning creditors, Suddath
Relocation Systems of Maryland, Inc. d/b/a Suddath
Relocation Systems, The Kane Company, and Project
Solutions Group, Inc., shall recover of John A. Butler
and Keith H. Barkley, jointly and severally, their
legal fees in pursuing the contempt motion, with
payment of this compensatory contempt sanction to be
delivered to the law firm of Scopelitis, Garvin, Light,
Hanson & Feary, P.C., on behalf of the petitioning
creditors in an amount to be determined by separate
order pursuant to a statement of attorneys’ fees filed
by that firm on 14 days notice to Mr. Butler and Mr.
Barkley of an opportunity to object to the
reasonableness of the fees and expenses requested[.]
The order below is hereby signed.
Signed: July 29, 2008.
_____________________________
S. Martin Teel, Jr.
United States Bankruptcy Judge
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The petitioning creditors filed and served a Statement of
Attorneys' Fees on July 9, 2008, and the Statement included
notice to Butler and Barkley that they had 14 days after service
to file an opposition to the Statement. 	Neither Butler nor
Barkley filed an opposition to the Statement by the deadline of
Monday July 28, 2008.
I
The time entries filed with the Statement of Attorney’s Fees
may include time that (1) ought not be treated as attributable to
the contempt at issue (failure to comply with an order to file
the documents that a debtor is required to file under Fed. R.
Bankr. P. 1007) or (2) ought to be disallowed as on-the-job
training regarding procedures and civil contempt that experienced
counsel in this bankruptcy court would not have been required to
incur. 	For example:
• 	A 2.0 hour time entry of 05/20/2008 for $520.00
reflects time for “Attention to local rules relative to
requirements for motions; revisions to motion
requesting show cause order; prepare memorandum of
support for trustee's turnover motion; and email to
trustee regarding motion for show cause.” [Emphasis
added.]
• 	A 2.7 hour time entry of 07/07/2008 for $405.00
reflects time for “Conduct initial analysis for
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show-cause hearing of facts and law surrounding
estate's desire to obtain possession of building;
analyze effect of federal bankruptcy law on D.C.
landlord-tenant law; analyze relevant statutes and
cases on Debtor's failure to comply with orders to
produce schedules and turn over financial records;
summarize analysis for use at show-cause hearing.
[Emphasis added.]
• 	A 1.5 hour time entry of 07/07/2008 for $487.50
reflects time for “Review report from Trustee re: visit
to property, Trustee conversation with Barkley about
turn-over; review court cases on contempt powers;
prepare timeline for show-cause hearing.” [Emphasis
added.]
As to the first point, the turnover motion has nothing to do
with the contempt at issue, and, indeed, the turnover order
itself warned that failure to comply might subject the debtor’s
principals to civil contempt sanctions (which obviously would
have to be prosecuted through a contempt motion distinct from the
contempt motion for failure to comply with the order to file
documents required by Fed. R. Bankr. P. 1007, the contempt
pursuant to which attorney’s fees are being awarded). 	Similarly,
issues regarding obtaining possession of building, and D.C.
landlord-tenant law have nothing to do with the order compelling
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the debtor’s principals to file the documents required by Fed. R.
Bankr. P. 1007.
As to the second point, the attorney’s fees here, for a
total of 17.8 hours, appear to be excessive. 	Civil contempt is a
relatively straightforward matter that experienced counsel should
be able to pursue in a straightforward manner without research
into court rules or case law: all that must be shown is (1) a
plain and unambiguous order of the court; (2) receipt of that
order by the party allegedly in contempt; (3) a failure to comply
with the order. 	The circumstances of this case did not suggest
any defense such as impossibility of performance. 	If the 6.2
hours of time entries quoted in the bulleted items above were
eliminated, that would reduce the total time to 11.6 hours and
the total fees to $3,663.00 which is within the range of
reasonableness in light of the fact that some additional time was
spent communicating with one of the principals in an attempt to
secure compliance.
The court will give the petitioning creditors a 15-day
opportunity to respond to the court’s concerns. 	If no response
is filed, the court will reduce the compensation by eliminating
the $1,412.50 attributable to the 6.2 hours of time set forth in
the bulleted items above, and enter a judgment for the resulting
reduced amount of $3,663.00.
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II
The petitioning creditors’ proposed order would direct that
the fees of $5,075.50 be paid within seven days of entry of the
order, with a failure to pay the fees potentially subject to the
imposition of additional contempt sanctions. 	Compensatory
contempt sanctions of the character involved here are an award
for damages arising from the contempt, and ought not be treated
any differently than any other judgment for monetary damages.
Contempt is ordinarily an inappropriate vehicle for collecting a
monetary award. 	See In re Nivens, 2001 WL 1018219
(Bankr. M.D. Ga. July 3, 2001). 	As observed in In re Smith, 2007
WL 2429450 (Bankr. D.D.C. Aug. 23, 2007):
"[W]hen a party fails to satisfy a court-imposed money
judgment the appropriate remedy is a writ of execution,
not a finding of contempt ." 	Combs v. Ryan's Coal Co.,
785 F.2d 970, 980 (11th Cir.), cert. denied sub nom.
Simmons v. Combs, 479 U.S. 853 (1986). 	Accord In re
Estate of Bonham, 817 A.2d 192, 195-96 (D.C. 2003) (use
of contempt to collect counsel fee award); Aetna Cas. &
Sur. Co. v. Markarian, 114 F.3d 346, 349 (1st Cir.
1997); Shuffler v. Heritage Bank, 720 F.2d 1141,
1147-48 (9th Cir. 1983); Granfinanciera, S.A. v.
Nordberg (In re Chase & Sanborn Corp.), 872 F.2d 397
(11th Cir.1989); In re Property of Adam, 100 P.3d 77,
88 (Haw. Ct. App. 2004); Ardex Labs., Inc. v.
Cooperider, 319 F.Supp.2d 507, 509 (E.D.Pa.2004) (writ
of execution, not contempt, proper course for enforcing
award of attorney's fees). [Footnote omitted.]
A judgment already drafted by the court will award the reasonable
amount of attorney’s fees that the court later determines were
incurred by reason of the contempt, but the judgment will not be
enforceable by way of contempt sanctions.
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III
In light of the foregoing, it is
ORDERED that within 15 days after entry of this order, the
petitioning creditors shall file a memorandum showing cause, if
any they have, why the fees awarded ought not be limited to
$3,663.00.
[Signed and dated above.]
Copies to: Chapter 7 Trustee; Office of United States Trustee;
and:
Butler Innovative Solutions, Inc., Debtor
4705 Alcon Drive
Temple Hills, MD 20748-3717
John A. Butler
4705 Alcon Drive
Temple Hills, MD 20748-3717
Keith H. Barkley
104 Bohemian Drive
Middletown, DE 19709-9282
Kim D. Mann, Esq.
Scopelitis, Garvin, Light, Hanson & Feary, P.C.
1850 M Street N.W., Ste. 280
Washington, D.C. 20036
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