Qmect, Inc. v. Burlingame Capital Partners II et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re 	No. 04-41044 T
Chapter 11
QMECT, INC., etc.,
Debtor-in-Possession.
__________________________________/
In re 	No. 04-46443 T
Chapter 11
FRED AND LINDA KOELLING,
Debtors-in-Possession.
__________________________________/
QMECT, INC., etc., 	A.P. No. 04-4190 AT
(Consolidated with
Plaintiff, 	A.P. Nos. 04-4365 AT
and 04-4366 AT)
vs.
BURLINGAME CAPITAL PARTNERS II,
L.P., etc. et al.,
Defendants.
___________________________________/
AND RELATED ADVERSARY PROCEEDINGS
__________________________________/
Signed: September 05, 2007
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
September 07, 2007
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
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1Burlingame is also entitled to include its post-petition
attorneys’ fees in its unsecured claim against the Qmect bankruptcy
estate. 	However, Burlingame has previously foreclosed on virtually
all of the assets in that estate. 	Consequently, as a practical
matter, Burlingame is only asserting its claim for post-petition
fees and costs against the Koellings.
2
MEMORANDUM OF DECISION RE AMENDED MOTION FOR
POST-PETITION ATTORNEYS’ FEES AND COSTS
On 	May 	17, 	2007, 	the 	Court 	issued 	a 	Memorandum, 	stating 	its
conclusion 	that 	Defendant 	Burlingame 	Capital 	Partners 	II, 	L.P.
(“Burlingame”) may include its contractual post-petition attorneys’
fees and costs in its general, unsecured proof of claim against the
principals 	of 	Qmect, 	Inc. 	(“Qmect”): 	i.e., 	Debtors 	Fred 	and 	Linda
Koelling 	(the 	“Koellings”). 	The 	Court 	gave 	Burlingame 	60 	days 	to
file 	a 	supplemental 	motion 	(the 	“Supplemental 	Motion”), 	providing
more detail concerning the work done and costs incurred for which it
sought 	payment. 	The 	Koellings 	were 	given 	30 	days 	to 	file 	an
opposition 	(the 	“Opposition”), 	and 	Burlingame 	was 	given 	15 	days 	to
file 	a 	reply 	(the 	“Reply”). 	Briefing 	is 	now 	complete. 	Having
reviewed 	the 	papers 	filed, 	the 	Court 	finds 	that 	Burlingame 	is
entitled 	to 	include 	attorneys’ 	fees 	and 	costs 	in 	its 	general,
unsecured claim against the Koellings’ bankruptcy estate as set forth
below. 1
DISCUSSION
A. 	BURLINGAME’S SUPPLEMENTAL MOTION
Based 	on 	In 	re 	Fobian, 	951 	F.2d 	1149 	(9 th 	Cir. 	1991)–-the
controlling 	case 	in 	the 	Circuit 	at 	that 	time--the 	Court 	previously
held that Burlingame could only include in its pre-petition claim its
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26 	2The Court previously found that the Funding’s claim against
the Koellings had been released.
3
post-petition fees and costs for work done litigating nonbankruptcy
specific 	issues. 	Based 	on 	this 	ruling, 	Burlingame 	submitted 	an
amended fee application, seeking $489,154.28 in fees and $44,524.06
in costs. 	The work done was segregated into the following tasks and
the time and fees as to each calculated as follows:
Project 	Hours 	Fees
Discovery 	420.5 	$140,857.50
Motion Practice-
Dispositive Motions 	613.4 	178,512.50
Motion Practice -
Other 	432.6 	150,801.00
Trial Preparation 	378.3 	117,282.42
Trial and Continued
Trial Preparation
During Trial 	683.4 	238,773.48
Post-Trial 	74.5 	28,077.50
Legal and Fact Research
Regarding Claims and
Causes of Action 	12.0 	3,861.00
Total: 	2,614.7 	$858,165.40
The 	total 	was 	then 	reduced 	by 	43 	percent 	based 	on 	an 	allocation 	of
the 	fees 	incurred 	between 	Burlingame 	and 	Electrochem 	Funding 	LLC
(“Funding”), Burlingame’s affiliate, based on the relative amounts of
their debt. 2 	This resulted in a reduced fee request of $489,154.28
for 	nonbankruptcy 	specific 	work. 	The 	request 	was 	supported 	by 	a
brief narrative description of the work performed in each project and
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by redacted time sheets. 	Unredacted time sheets were submitted for
in camera review.
Before the Court could rule on the reasonableness of these fees
and 	costs, 	the 	United 	States 	Supreme 	Court 	overruled 	Fobian. 	In
Travelers Casualty & Surety Co. of America v. Pacific Gas & Electric
Co., 127 S. Ct. 1199 (2007), the Supreme Court held that, in allowing
an 	unsecured 	creditor 	its 	post-petition 	fees 	and 	costs 	based 	on 	a
contractual 	attorneys’ 	fee 	clause, 	there 	was 	no 	basis 	for
distinguishing 	between 	work 	done 	on 	bankruptcy 	specific 	issues 	as
opposed to nonbankruptcy specific issues. 	It left open the question
of 	whether 	an 	unsecured 	creditor 	was 	entitled 	to 	include 	any 	post-
petition fees or costs in its claim.
This issue was then presented to the Court in this case. 	After
briefing 	and 	argument, 	the 	Court 	held 	that 	an 	unsecured 	creditor
could 	include 	such 	fees 	and 	costs 	in 	its 	claim. 	As 	a 	result,
Burlingame filed a supplemental motion (the “Supplemental Motion”),
detailing the fees and costs incurred litigating bankruptcy specific
issues. 	In 	the 	Supplemental 	Motion, 	with 	respect 	to 	such 	issues,
Burlingame seeks $603,598.79 in fees and $83,671.42 in costs incurred
litigating bankruptcy specific issues. 	The work done on bankruptcy
specific issues is divided into eleven categories with the time spent
and fees incurred specified as to each as follows:
Project 	Hours 	Fees
Motion to Dismiss 	200.5 	$ 66,952.00
Miscellaneous
Bankruptcy Matters 	251.4 	90,865.50
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Valuation 	32.2 	12,415.00
Cash Collateral 	510.9 	197,959.50
Motion for Relief from
Stay/Appointment of
a Trustee 	542.7 	187,356.25
Final Motion for Relief
From Stay 	973.0 	360,179.00
Miscellaneous
Bankruptcy Research 	53.6 	23,751.00
FRBP 2004 Examination
Motions 	51.2 	18,800.50
Attorneys’ Fees 	145.4 	50,496.50
Settlement Discussions 	38.0 	16,627.50
Appeal from Final
Relief from Stay
Order 	100.0 	33,542.50
Totals 	2,898.9 	$1,058,945.25
In 	the 	Supplemental 	Memorandum, 	the 	work 	done 	in 	each 	category 	is
described briefly. 	As with the work done on nonbankruptcy specific
matters, 	this 	amount 	is 	reduced 	by 	43 	percent, 	resulting 	in 	an
additional fee request of $603,598.79. 	The Supplemental Memorandum
is supported by the Declaration of Marlene M. Moffitt (the “Moffitt
Declaration”), to which is attached, segregated by category, a line
item description of the services provided, the person providing them,
the 	time 	spent, 	the 	hourly 	rate 	of 	the 	professional 	performing 	the
service, and the fees incurred. 	These time sheets are unredacted.
In the Supplemental Memorandum, costs are segregated into three
categories: 	(1) 	$79,163.32 	specially 	identifiable 	with 	bankruptcy
related 	issues, 	(2) 	$41,821.07 	not 	specifically 	identifiable 	with
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bankruptcy 	related 	issues 	from 	invoices 	issued 	by 	the 	law 	firm 	of
Allen Matkins Leck Gamble Mallory & Natsis LLP (“Allen Matkins”), and
(3) $25,807.58 not specifically identifiable with bankruptcy related
issues from invoices issued by the law firm of Pachulski Stang Ziehl
Young 	Jones 	& 	Weintraub 	LLP 	(the 	“Pachulski 	Firm”) 	for 	a 	total 	of
$146,791.97. 	Again, this amount is reduced by 43 percent, resulting
in 	a 	cost 	request 	of 	$83,671.42. 	Further 	detail 	is 	provided 	with
respect 	to 	these 	costs 	in 	Exhibits 	12, 	13, 	and 	14 	to 	the 	Moffitt
Declaration.
Burlingame 	contends 	that 	the 	substantial 	sums 	sought 	are
reasonable and were necessary given the “no holds barred” nature of
the 	Debtor’s 	and 	Creditors’ 	Committee’s 	litigation 	strategy. 	It
notes that it prevailed on all of the significant issues during the
case. 	In the end, it was granted relief from the automatic stay and
foreclosed on virtually all of Qmect’s assets.
B. 	KOELLINGS’ OPPOSITION
In 	their 	opposition 	to 	the 	Supplemental 	Motion, 	the 	Koellings
incorporate 	by 	reference 	their 	objections 	to 	Burlingame’s 	original
fee request. 	There were four categories of fees and costs which they
contended 	were 	not 	reasonable: 	(1) 	$72,043.80 	in 	fees 	incurred 	in
connection 	with 	the 	adversary 	proceeding 	initiated 	by 	the 	Official
Creditors’ 	Committee 	(the 	“Committee”), 	(2) 	$30,401.50 	in 	fees
supported 	only 	by 	vague 	time 	entries, 	(3) 	$26,219.25 	in 	fees 	and
$18,900 	in 	costs 	incurred 	in 	connection 	with 	Burlingame’s 	failed
attempt to call Steven Cowan (“Cowan”) as an expert witness, and (4)
$16,642.50 	in 	fees 	described 	as 	“unnecessary.” 	The 	Koellings 	also
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3Burlingame concedes that, upon review of its time sheets, it
noted one item that should not have been included in the fee
request. 	Thus, it agrees that its fees in this category should be
reduced $187.50 to $71,856.30.
7
raise three objections to the Supplemental Motion: (5) to the $66,952
in 	fees 	and 	costs 	incurred 	prosecuting 	an 	unsuccessful 	motion 	to
dismiss 	the 	bankruptcy 	case, 	(6) 	to 	the 	$50,496.50 	incurred
litigating Burlingame’s right to its post-petition fees and costs and
(7) 	to 	the 	$232,631.29 	in 	fees 	and 	costs 	incurred 	by 	the 	Pachulski
Firm for which the Pachulski Firm is suing them for payment. 	Each of
these objections is addressed below.
(1) Committee’s Adversary Proceeding
Burlingame seeks $72,043.80 in fees incurred in connection with
the 	adversary 	proceeding 	initiated 	by 	the 	Official 	Creditors’
Committee (the “Committee”), challenging the validity of Burlingame’s
and 	Funding’s 	security 	interests 	under 	state 	law. 3 	The 	Koellings
contend 	that 	Burlingame 	is 	not 	entitled 	to 	these 	attorneys’ 	fees
because 	the 	litigation 	was 	with 	the 	Committee, 	not 	with 	Qmect.
Burlinagme 	disagrees. 	It 	asserts 	that 	it 	is 	entitled 	to 	recover
these fees because the Committee undertook that litigation on behalf
of 	Qmect 	and 	the 	estate. 	The 	Court 	agrees 	with 	Burlingame. 	Any
other 	conclusion 	would 	permit 	a 	chapter 	11 	debtor 	to 	circumvent 	an
attorneys’ fees clause permitting the Creditors’ Committee to pursue
litigation 	on 	the 	contract 	containing 	the 	clause. 	Thus, 	the
Koellings’ 	objection 	to 	these 	fees 	will 	be 	overruled, 	and 	the 	fees
will be allowed.
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4The Koellings filed a motion in limine shortly before trial,
seeking to exclude Cowan on the ground that his proposed expert
testimony was inadmissible. 	The Court granted the motion.
8
(2) Vague Time Entries
The 	Koellings 	object 	to 	$30,401.50 	in 	fees 	which 	they 	contend
are 	supported 	only 	by 	vague 	time 	entries. 	Burlingame 	disputes 	that
the 	time 	entries 	objected 	to 	are 	vague. 	It 	contends 	that 	the 	time
entries 	in 	question 	should 	be 	read 	in 	the 	context 	of 	other 	time
entries. 	Moreover, 	Burlingame 	notes 	that 	the 	Court 	stated 	in 	the
Memorandum 	of 	Decision, 	denying 	its 	original 	motion 	without
prejudice, 	that 	its 	fee 	request 	need 	not 	comply 	with 	the 	rigorous
format requirements of the Court’s Fee Guidelines for court appointed
professionals.
The 	Court 	has 	reviewed 	the 	time 	entries 	objected 	to 	by 	the
Koellings as too vague. 	With only a few exceptions, the Court finds
them 	sufficiently 	specific 	to 	pass 	muster 	even 	under 	the 	stringent
standards 	set 	by 	the 	Court’s 	Fee 	Guidelines. 	The 	exceptions 	are
sufficiently 	clear, 	in 	context, 	to 	support 	the 	Court’s 	finding 	of
reasonableness. 	This 	objection 	by 	the 	Koellings 	will 	also 	be
overruled, and the fees will be allowed.
(3) Expert Witness Fees
The Koellings object to $26,219.25 in fees and $18,900 in costs
incurred 	in 	connection 	with 	Burlingame’s 	failed 	attempt 	to 	call
Steven Cowan (“Cowan”) as an expert witness. 4 	Burlingame argues that
it is entitled to these fees and costs because they were reasonably
incurred even though they ultimately did not benefit the litigation.
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In support of this contention, it cites Thayer v. Wells Fargo Bank,
92 Cal. App. 4 th 819, 839 (2001). 	It also notes that several of the
time entries included in the relevant exhibit do not in fact relate
to this task.
The 	Court 	agrees 	with 	the 	Thayer 	court 	that 	fees 	and 	costs
should 	not 	disallowed 	simply 	because, 	in 	hindsight, 	they 	did 	not
produce results in a case. 	The test of reasonableness is applied in
foresight, not in hindsight. 	However, the Court concludes that the
fees and costs in this category were not reasonably incurred, even as
so viewed.
The Koellings filed a motion in limine prior to trial to exclude
Cowan’s testimony. 	In opposition to the motion, Burlingame indicated
that it intended to call Cowan to testify on the meaning of certain
contractual documents and on the custom and practice in the lending
industry in connection with the types of transactions involved here.
The 	Court 	found 	the 	proposed 	testimony 	unnecessary. 	The 	Court 	now
finds 	that 	the 	proposed 	testimony 	was 	so 	clearly 	unnecessary 	that
incurring 	these 	fees 	and 	costs 	was 	unreasonable. 	Therefore, 	this
objection will be sustained, and the fees and costs in question will
be disallowed.
(4) Unnecessary Fees
Finally, the Koellings argue that $16,642.50 of the fees sought
by 	Burlingame 	were 	unnecessary 	and 	should 	be 	denied. 	These 	fees
relate to the testimony of David Ferree (“Feree”), a vice president
of Comerica Bank (“Comerica”). 	Comerica was the original holder of
Qmect’s senior secured debt which was acquired by Burlingame shortly
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5In the end, the Court admitted the business records in
question under the general rule permitting documents whose
authenticity cannot be reasonably questioned. 	However, the work
performed by Burlingame, and Ferree’s presence as a witness did not
lead to this result.
10
before 	the 	chapter 	11 	case 	was 	filed 	and 	then 	assigned 	to 	Funding.
Feree’s 	testimony 	was 	offered 	by 	Burlingame 	to 	establish 	the 	basis
for Funding’s claim and to authenticate documents in Comerica’s files
relating 	to 	Qmect’s 	and 	the 	Koellings’ 	banking 	relationship 	with
Comerica.
As the record reflects, Feree had virtually no usefulness as a
witness. 	It was disclosed at trial (and should have been discovered
before 	trial 	by 	Burlingame) 	that 	Feree 	became 	responsible 	for 	the
Qmect/Koelling account only shortly before the debt was acquired by
Burlingame. 	At trial, therefore, he had virtually no usefulness as
a 	percipient 	witness. 	Moreover, 	as 	detailed 	in 	the 	Court’s
memorandum, 	Feree 	was 	unable 	to 	authenticate 	the 	relevant 	account
records, 	because 	he 	had 	no 	knowledge 	of 	the 	manner 	in 	which 	the
records were prepared. 5 	Again, this flaw in his capacity to testify
should have been discovered by Burlingame prior to trial. 	The Court
concludes 	that 	the 	fees 	incurred 	litigating 	this 	issue 	are
unreasonable and should be disallowed.
(5) Motion to Dismiss
The Koellings object to the award of $66,952 in fees incurred in
connection 	with 	the 	motion 	to 	dismiss 	the 	bankruptcy 	case. 	The
motion 	was 	filed 	shortly 	after 	the 	case 	was 	filed. 	The 	Koellings
contend that it was summarily dismissed. 	They object to the award of
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these fees and costs incurred for a matter on which Burlingame failed
to prevail.
In its reply, Burlingame argues that its fees and costs incurred
in 	connection 	with 	its 	motion 	to 	dismiss 	should 	not 	be 	disallowed
simply 	because 	the 	motion 	was 	not 	successful. 	It 	notes 	that 	a
determination 	of 	the 	reasonableness 	of 	fees 	must 	be 	based 	on 	the
totality 	of 	circumstances 	as 	determined 	at 	the 	time 	the 	fees 	are
incurred, 	not 	with 	the 	benefit 	of 	20/20 	hindsight. 	Fees 	may 	be
reasonable 	even 	if 	the 	litigant 	does 	not 	prevail 	on 	the 	particular
issue or theory. 	Moreover, Burlingame asserts, the reasonableness of
fees 	should 	not 	be 	based 	on 	the 	success 	or 	failure 	of 	“one 	battle
along 	the 	road 	to 	victory.” 	Burlingame 	was 	clearly 	the 	prevailing
party 	overall 	in 	connection 	with 	the 	bankruptcy 	case 	and 	this
adversary 	proceeding. 	Thus, 	Burlingame 	contends, 	the 	Koellings
cannot 	question 	the 	reasonableness 	of 	any 	of 	the 	fees 	incurred 	in
connection 	with 	a 	particular 	motion 	simply 	because 	the 	motion 	was
unsuccessful.
The Court agrees with Burlingame that the reasonableness of fees
and 	costs 	must 	be 	judged 	based 	on 	the 	totality 	of 	circumstances 	as
they appeared when the fees and costs were incurred. 	It also agrees
that fees and costs may have been reasonably incurred even though the
motion 	(or 	opposition) 	for 	which 	they 	were 	incurred 	was 	not
successful. 	However, the Court disagrees that the ultimate success
of 	a 	litigant 	in 	a 	proceeding 	ensures 	that 	all 	the 	fees 	and 	costs
incurred along the way were reasonable.
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The 	Court 	has 	reviewed 	the 	motion 	to 	dismiss 	and 	related
pleadings 	and 	docket 	entries. 	Having 	done 	so, 	the 	Court 	concludes
that the fees were reasonably incurred. 	Qmect’s chapter 11 petition
was filed on February 27, 2004. 	Burlingame’s motion to dismiss the
case or, in the alternative, for relief from the automatic stay was
filed 	on 	March 	5, 	2004, 	only 	six 	days 	later. 	Contrary 	to 	the
Koellings’ contention that the motion was summarily denied, the Court
held a three day evidentiary hearing on the motion: i.e., on March 26
and April 1 and 2, 2004.
The 	motion 	was 	based, 	among 	other 	grounds, 	on 	the 	debtor’s
having 	improperly 	handled 	hazardous 	waste, 	having 	failed 	to 	make
contributions 	to 	employees’ 	401(k) 	plans, 	and 	having 	failed 	to
maintain 	critical 	insurance. 	Although 	the 	motion 	was 	ultimately
denied, 	the 	continued 	protection 	of 	the 	automatic 	stay 	was
conditioned 	on 	the 	appointment 	of 	an 	examiner 	to 	ensure 	Qmect’s
future compliance with requirements for the handling of its hazardous
waste. 	Under 	these 	circumstances, 	the 	Court 	is 	unable 	to 	conclude
that 	it 	was 	unreasonable 	for 	Burlingame 	to 	seek 	dismissal 	or 	stay
relief so early in the case. 	Given the nature of Qmect’s opposition
to the motion, the fees incurred were also reasonable in amount.
(6) Fees Incurred Litigating Right to Post-Petition Fees
The 	Koellings 	contend 	that 	Burlingame 	is 	requesting 	that 	they
pay 	$50,496.50 	in 	fees 	and 	costs 	incurred 	litigating 	its 	rights 	to
includes 	post-petition 	fees 	and 	costs 	in 	its 	unsecured 	claim. 	The
Koellings 	concede 	that 	the 	United 	States 	Supreme 	Court’s 	ruling 	on
this 	issue 	required 	some 	of 	these 	fees 	and 	costs 	to 	be 	incurred.
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However, 	they 	contend 	that 	some 	of 	the 	work 	done 	by 	counsel 	for
Burlingame, giving rise to these fees and costs, was necessitated by
Burlingame’s 	failure 	to 	file 	a 	proper 	fee 	application 	in 	the 	first
place.
In its reply, Burlingame argues that it is well established that
the fees and costs incurred seeking an award of attorneys’ fees and
costs 	are 	recoverable. 	It 	notes 	that 	the 	amount 	of 	fees 	and 	costs
that 	Burlingame 	seeks 	in 	this 	category 	is 	only 	$28,783, 	not
$50,496.50, after reducing the total incurred by 43 percent. 	It also
notes 	that 	this 	represents 	only 	2.4% 	of 	the 	total 	fees 	and 	costs
requested.
Burlingame 	disputes 	that 	its 	original 	fee 	application 	was
deficient. 	It notes that the Court had previously stated that it was
not 	required 	to 	comply 	with 	the 	same 	standards 	applicable 	to 	fee
applicants pursuant to 11 U.S.C. § 330. 	Moreover, it contends that,
if it had prepared its original fee application in the format it was
ultimately 	required 	to 	utilize, 	it 	would 	have 	incurred 	the 	same
amount of fees and costs at that stage of the proceeding.
The 	Court 	concludes 	that 	the 	Koellings’ 	opposition 	on 	this
ground 	is 	without 	merit 	and 	should 	be 	overruled. 	Most 	of 	the 	fees
and 	costs 	were 	reasonably 	incurred, 	litigating 	difficult 	and 	novel
issues. 	While the Court found Burlingame’s original fee application
insufficiently specific, particularly given the amounts in question,
the 	standards 	for 	fee 	applications 	by 	counsel 	not 	covered 	by 	§ 	330
are 	not 	clearly 	defined. 	Thus, 	it 	was 	not 	unreasonable 	for
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Burlingame 	to 	have 	filed 	a 	fee 	application 	in 	the 	first 	instance
lacking sufficient specificity.
(7) Fees and Costs Billed by the Pachulski Firm
The 	Koellings 	contend 	that 	Burlingame 	has 	failed 	to 	pay 	the
Pachulski 	Firm 	for 	the 	work 	performed 	in 	this 	bankruptcy 	case.
Therefore, Burlingame should not be permitted to include these fees
and 	costs 	in 	its 	unsecured 	claim. 	As 	evidence 	of 	Burlingame’s
failure 	to 	pay, 	the 	Koellings 	submit 	the 	Declaration 	of 	Chris 	D.
Kuhner, 	to 	which 	is 	attached 	a 	copy 	of 	a 	complaint 	filed 	by 	the
Pachulski 	Firm 	in 	San 	Francisco 	Superior 	Court, 	seeking 	payment 	of
its fees and costs in the amount of $232,631.29.
In its reply, Burlingame notes that, as with other categories of
fees and costs, after reducing the total incurred by 43 percent, it
is only seeking to recover from the Koellings $132,600, not $232,631.
Burlingame 	concedes 	that 	it 	has 	a 	fee 	dispute 	with 	the 	Pachulski
Firm. 	However, 	it 	contends 	that 	this 	should 	not 	prevent 	the 	Court
from 	allowing 	its 	request 	for 	allowance 	of 	the 	fees 	as 	part 	of 	its
claim. 	However, 	Burlingame 	proposes 	that 	this 	amount 	be 	reserved
until the fee dispute has been resolved. 	The Court agrees that this
would be appropriate.
CONCLUSION
Burlingame’s motion for permission to include its post-petition
fees and costs in its unsecured claim against the Koelling estate is
granted and Burlingame’s objections are overruled except as set forth
below:
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(1) The Koellings’ objection to the fees and costs incurred in
connection with Burlingame’s failed attempt to call Steven Cowan as
an expert witness is sustained, and these fees are disallowed.
(2) 	The 	Koellings’ 	objection 	to 	the 	fees 	related 	to 	the
testimony of David Ferree as unnecessary is sustained, and these fees
are disallowed.
(3) 	The 	issue 	of 	whether 	the 	fees 	and 	costs 	billed 	by 	the
Pachulski 	Firm 	should 	be 	disallowed 	is 	reserved 	for 	later
determination, 	after 	Burlingame’s 	dispute 	with 	the 	Pachulski 	Firm
with respect to the fees and costs has been resolved.
Burlingame 	is 	directed 	to 	submit 	a 	proposed 	form 	of 	order 	in
accordance with this decision.
END OF DOCUMENT
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COURT SERVICE LIST
Paul E. Manasian
Manasian & Rougeau, LLP
400 Montgomery St., Ste. 1000
San Francisco, CA 94104
Robert R. Moore
Allen Matkins Leck Gamble & Mallory LLP
Three Embarcadero Center, 12 th Floor
San Francisco, CA 94111
Philip J. Nicholsen
Law Offices of Philip J. Nicholsen
221 Main St., #740
San Francisco, CA 94105
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