City of Vallejo v. Hutson et al

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re No. 04-41779 TG
Chapter 13
HAROLD WAYNE HUTSON, etc.,
Debtor.
___________________________/
CITY OF VALLEJO, A.P. No. 05-4253 AT
Plaintiff,
vs.
HAROLD WAYNE HUTSON, etc.,
et al.,
Defendant.
___________________________/
MEMORANDUM RE CITY’S APPLICATION FOR PAYMENT OF FEES AND COSTS
The application of the City of Vallejo for attorneys’ fees and
costs in connection with the filing of the above-captioned
proceeding came before the Court on September 8, 2005 at 2:00 p.m.
Appearances were stated on the record. At the conclusion of the
hearing, the Court took the matter under submission so as to
determine whether the filings to date gave the Court a sufficient
Signed: September 10, 2005
________________________________________
LESLIE TCHAIKOVSKY
U.S. Bankruptcy Judge
________________________________________
Entered on Docket
September 12, 2005
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 05-04253 Doc# 31 Filed: 09/10/05 Entered: 09/12/05 15:13:44 Page 1 of 5

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basis to make a ruling on the application. After reviewing the
record, the Court concludes that they do not.
The complaint alleges that a series of stop notices were
served by one of the above-captioned debtor’s (the “Debtor”)
subcontractors. After the first two were served, a release bond
was provided to the City of Vallejo (the “City”), and the funds
then due were released. However, thereafter, the City still held
approximately $20,000 in retention funds. The work was completed
on March 30, 2004. The Debtor filed a chapter 13 petition on
April 1, 2004.
The subcontractor served a third stop notice on April 13,
2004. This may or may not have been duplicative of the earlier
stop notices. No release bond was provided with respect to this
stop notice. As a result, the City refused to release the
retention funds to the Debtor and instead filed an interpleader
action, first in state court, later in this court. The complaint
purports to attach the stop notices and other documents as
exhibits. However, no exhibits to the complaint were filed.
Thereafter, the City filed an application for fees and
expenses, summarizing the allegations of the complaint and
asserting that it had incurred certain attorneys’ fees and
expenses in connection with filing the interpleader. No
evidence–-e.g., declarations under penalty of perjury by persons
competent to testify to the facts stated, copies of relevant
documents identified by the declarations--was filed supporting
this application. In addition, the summary of the time spent and
Case: 05-04253 Doc# 31 Filed: 09/10/05 Entered: 09/12/05 15:13:44 Page 2 of 5

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work done was insufficiently detailed to permit the Court to
determine whether the fees are reasonable.
Defendants Insurance Company of the West and Explorer
Insurance Company (the “Sureties”) filed an opposition to the
City’s fee application. For various reasons, they contended that
the City was required by law, once the release bonds were
provided, to release the retention funds. They do not address the
fact that a third stop notice was served by the subcontractor
after the release bond was provided and the monies then due were
released. Moreover, their opposition suffers from the same lack
of supporting evidence as the City’s fee application. The City’s
response to the opposition is also unsupported by any evidence.
In their opposition, the Sureties contend that the
interpleader action and the City’s fee application violated Rule
9011 of the Federal Rules of Bankruptcy Procedure. However, they
do not appear to have complied with Rule 9011(c)(1) by requesting
this relief in a separate motion and giving the City 21 days after
service of the motion to withdraw the offending pleading.
Therefore, their request for sanctions will be denied.
CONCLUSION
The City’s application for fees and costs will be denied
without prejudice. If the City wishes to proceed with its
application, it should file and serve on interested parties within
30 days sufficient evidence to support the factual allegations of
the complaint and its application, including a detailed
description of the work performed and time spent for which fees
Case: 05-04253 Doc# 31 Filed: 09/10/05 Entered: 09/12/05 15:13:44 Page 3 of 5

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and costs are requested. If this is done, the Sureties will have
14 days from the date of service of the supplement to the
application to file any further opposition, with appropriate
supporting evidence. The City will then have an additional 7 days
from the date of service of any further opposition to file a
response. The City should submit a proposed form of order when
the additional briefing is complete. The order will alert the
Court to the fact that the matter is ripe for decision. No
further hearing will be set unless the Court concludes that one is
required.
END OF DOCUMENT
Case: 05-04253 Doc# 31 Filed: 09/10/05 Entered: 09/12/05 15:13:44 Page 4 of 5

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COURT SERVICE LIST
Matthew P. Shelton
Law Offices of J. Michael Pisias, Jr.
177 Post St., Ste. 700
San Francisco, CA 94108
Claudia M. Quintana
Deputy City Attorney
City of Vallejo
555 Santa Clara St.
P.O. Box 3068
Vallejo, CA 94590
Martha G. Bronitsky
Chapter 13 Trustee
P.O. Box 5004
Hayward, CA 94540-5004
Case: 05-04253 Doc# 31 Filed: 09/10/05 Entered: 09/12/05 15:13:44 Page 5 of 5