Unpublished Disposition, 894 F.2d 409 (9th Cir. 1990)

MEMORANDUM^** 

SUMMARY

Appellant, the debtor in a Chapter 11 proceeding, appeals pro se from affirmance of an award of fees to appellee, her former counsel. We affirm the award of preconfirmation fees on the ground that the extension of the fee application deadline specified by appellee's confirmed Plan did not modify the Plan but rather was made by the bankruptcy court pursuant to its power under Article VIII(g) of the Plan and based upon its findings supported by uncontradicted testimony. We affirm the award of postconfirmation fees on the ground that the bankruptcy court's findings that appellee's postconfirmation work was warranted, appellant always intended to pay the fees, and the bankruptcy court had power to extend the fee deadline implicitly constituted a finding that no conflict of interest existed, which was not clearly erroneous.

BACKGROUND

Appellant argues that appellee was not entitled to preconfirmation fees for four reasons. (1) Appellee lacked standing to seek the extension because it constituted a "modification" of the confirmed Plan, which only the debtor or proponent of a plan may accomplish under 11 U.S.C. § 1127. (2) The 'modification' without disclosure to creditors violated their rights under 11 U.S.C. § 1125. (3) The bankruptcy court lacked power to permit this 'modification' because it materially affected creditors' interests in violation of Article VI of the Plan. (4) Appellee's request for the extension brought three years after the deadline constituted an untimely request for relief from the Order Confirming the Plan under Bankruptcy Rules 9006(b) and 9024, and Fed.R.Civ.Pro. 60(b). Appellant argues that appellee was not entitled to fees for work performed after the deadline ("postconfirmation fees") because of a conflict between counsel's interest in obtaining an extension of the deadline and the debtor's interest in avoiding a time-barred claim.

The bankruptcy court extended the deadline pursuant to its power under the Plan to extend any deadline for cause, based on its finding that appellee did not submit the fee application by the deadline per appellant's request and promise to pay. The bankruptcy court allowed postconfirmation fees based on its findings that the work was warranted and necessitated by appellant's failure to abide by her Plan. The district court affirmed extension of the deadline on the ground that appellant had executed a voluntary waiver of it, and affirmed postconfirmation fees on the ground that evidence supported the bankruptcy court's findings.

STANDARD OF REVIEW

In reviewing a district court's affirmance of a bankruptcy court decision, the role of the court of appeals is essentially the same as that of the district court; the circuit court reviews findings of fact under the clearly erroneous standard and conclusions of law de novo. Ragsdale v. Haller, 780 F.2d 794, 795 (9th Cir. 1986); Bankruptcy Rule 8013 ("Findings of fact ... shall not be set aside unless clearly erroneous, and due regard shall be given to the opportunity of the bankruptcy court to judge the credibility of the witnesses."). We uphold a bankruptcy court's award of attorneys' fees absent an abuse of discretion or erroneous application of the law. In Re Nucorp Energy, Inc., 764 F.2d 655, 657 (9th Cir. 1985).

* Preconfirmation Fees

A debtor must abide by the terms of her confirmed plan. 11 U.S.C. § 1141(a) ("the provisions of a confirmed plan bind the debtor...."); In Re General Coffee Corp., 85 B.R. 905, 906 (Bankr.S.D. Fla. 1988) (an unappealed court order confirming a plan binds all parties under section 1141(a)).

Contrary to appellant's view, the extension of the bar date did not constitute a "modification" of the Plan under section 1127. Rather, the bankruptcy court extended the deadline pursuant to its broad power under Article VIII(g) of the Plan to extend any deadline specified by the Plan "for cause" and "as the court shall determine to be appropriate."

The bankruptcy court's factual findings--that appellee did not submit its fee application by the bar date per appellant's request and promise to pay, and therefore "cause" for the extension existed--are not clearly erroneous. Poppin's testimony that appellant had requested the application delay was not contradicted by appellant's testimony that she could not recall discussing such a request or the lack of written confirmation of the request. Poppin's testimony that appellant had promised to pay appellee's fees and appellant's testimony that she had always intended to pay, execution of the waiver (after consultation with independent counsel), representation to appellee that she intended to use the house sale proceeds to pay the fees, and provision in her amended Plan for paying the fees all strongly support the view that appellee let the deadline pass in reliance in part upon appellant's promise to pay.

Accordingly, appellant's arguments regarding the consequences of the 'modification' and waiver are inapposite. Similarly, because the extension was pursuant to the Order Confirming the Plan, the extension did not constitute relief from a final order and hence appellant's arguments regarding Bankruptcy Rules 9024 and 9006 and Fed.R.Civ.Pro.Rule 60 are inapposite.

See In Re Siesta Sands Development Corp., 84 B.R. 789 (Bankr.M.D. Fla .1988) (bankruptcy court could extend bar date fixed in its order confirming plan for cause; where debtor's attorney failed to file fee application by bar date in reasonable reliance on debtor's repeated promises to pay for services, debtor should not be permitted to urge untimeliness of fee application as basis for its denial).¹ 

II

Postconfirmation Fees

A conflict in interest by a debtor's attorney "would clearly warrant a total forfeiture of all fees." In Re Siesta Sands Development Corp., 84 B.R. at 792. 11 U.S.C. § 328(c) provides:

[T]he court may deny allowance of compensation for services ... of a professional person employed under section 327 ... of this title if, at any time during such professional person's employment under section 327 ..., such professional person is not a disinterested person, or represents or holds an interest adverse to the interest of the estate with respect to the matter on which such professional person is employed.

In finding that appellant always intended to pay appellee, appellee's postconfirmation work was appropriate, and sufficient assets existed in the estate to compensate all creditors including appellee, the bankruptcy court implicitly found that appellee did not have a conflict of interest after expiration of the fee application deadline. These findings are not clearly erroneous and are supported by the record.² 

Accordingly, the district court's decision is

AFFIRMED.