MEMORANDUM OPINION
This case arises on cross-appeal
1. BACKGROUND
On March 26, 2009 the debtor, Lillian P. Iannini (the “Debtor”), filed a voluntary bankruptcy petition under Chapter 13 of the United States Bankruptcy Code. Dkt. No. 2:12-cv-225, ECF No. 6 at 2; Dkt. No. 2:12-cv-225, ECF No. 4 at 5.
While that appeal was pending before the Third Circuit, the Debtor’s Chapter 13 case was dismissed on August 26, 2010 for failure to make the required payments under the approved plan. ECF No. 6 at 3. On October 22, 2010, the Bankruptcy Court denied the Debtor’s motion to reconsider dismissal of the Chapter 13 case. Id.; ECF No. 4 at 5. On December 21, 2010,
On July 29, 2011, our Court of Appeals dismissed as moot the Debtor’s appeal of the dismissal of the adversary proceeding because the underlying Chapter 13 case had been dismissed. In re Iannini,
II. JURISDICTION AND STANDARD OF REVIEW
This Court has jurisdiction over these appeals pursuant to 28 U.S.C. § 158(a). The primary issue presented on appeal is whether the Bankruptcy Court had subject matter jurisdiction to hear the claim for attorney’s fees after the bankruptcy case had been dismissed.
III. DISCUSSION
Like other federal courts, bankruptcy cоurts are courts of limited jurisdiction. In re W.R. Grace & Co.,
However, once the bankruptcy case has been closed, disputes arising post-closure of the underlying case, including applications for counsel fees, cannot have an effect on the administration of the estate. Id. at *4 (quoting Walnut Assocs. v. Saidel,
Here, Debtor’s counsel filed his initial, albeit non-compliant, application for counsel fees in December 2010, nearly three months after the dismissal of the underlying bankruptcy case and just over one month after the Bankruptcy Court denied Debtor’s motion to reconsider such dismissal. In fact, the application for counsel fees related to legal services rendered in the adversarial proceeding against the Bank, and that proceeding was initially dismissed in December 2009, a dismissal affirmed by this Court in May 2010. The record is devoid of any evidence that Debtor’s counsel filed for compensation, or requested the Bankruptcy Court to hold open its jurisdiction over the case and fee application pending the appeal, at any time before dismissal.
In any event, a bankruptcy court has the ability under 11 U.S.C. § 349 to retain jurisdiction over the administration of the estate in its dismissal order, if it finds cause to do so. In re Ragland,
However, where the court does not explicitly retain such jurisdiction, the court thereafter presumptively lacks jurisdiction over the issue. See In re Ragland,
The fee application in question was filed well after the administration of the estate was terminated and nearly a full year after the dismissal of the adversary proceeding. As the courts in In re Ragland and In re Lewis noted, debtors’ counsel arе in the unique position to know when debtor is failing to make plan payments and that dismissal is a likely result for such failure. Counsel waited until well after the proceeding in the bankruptcy court had concluded. There is no economy to be had in stretching to reopen that proceeding after the fact.
Counsel also well knew that his legal fees were accruing in the adversary proceeding and he could have notified the Bankruptcy Court and the Trustee of this fact at аny time before the dismissal of the underlying bankruptcy case. In fact, when the Trustee argued that this fee application was moot, given the timing of the application and exhaustion of any estate funds,
Counsel argues that the law in the lower courts in the Third Circuit on the jurisdiction for bankruptcy courts to hear applications for fees after dismissal is “hopelessly fraсtured.” ECF No. 5 at 8. Counsel candidly cites to two opinions holding that where a fee application is filed after a case is dismissed and jurisdiction was not specifically retained, the bankruptcy court lacks jurisdiction to award fees. In re Ragland,
Counsel then cites to two cases for the proposition that bankruptcy courts may review fee applications post-dismissal. However, these cases are readily distinguishable from the case at hand. In In re Quaker, the court in its dismissal order еxplicitly required counsel to file their fee applications by a certain date, thus at least implicitly preserving jurisdiction to later decide the fee issue.
Counsel alsо argues that “if a court loses jurisdiction over determining fee applications at the time of the dismissal, the Court also would lose the authority to disallow unearned or improper fees or to use disallowance of fees as a sanction for attorney misconduct.” ECF No. 4 at 9. Fear of this parade of horribles is not warranted. First, as discussed above, a bankruptcy court can retain jurisdiction for cause pursuant to 11 U.S.C. § 349. Secondly, the Supreme Court has recognized that federal courts may exercise ancillary jurisdiction “(1) to permit disposition by a single court of claims that are, in varying respects and degrees, factually interdependent; and (2) to enable a court to function successfully, that is, to manage its proceedings, vindicate its authority, and effectuate its decrees.” Kokkonen v. Guardian Life Ins. Co.,
Here, we are concerned only with the latter. Courts are able to invoke ancillary jurisdiction post-dismissal to interpret and effectuatе previous decrees. In re Ragland,
Finally, Counsel proposes that
the wiser course for this Court is to allow a Bankruptcy Court to retain jurisdiction over fee applications even after dismissal or closing of a bankruptcy case. Even if a state court remedy may be available to Counsel, that remedy does not relieve the Bankruptcy Court of the duty to review counsel’s fee applications. To hold otherwise would thwart the Bankruptcy Court’s ability to reopen a previously closed case.
Id. at 7. The statutory grant of authority to reopen a bankruptcy case is found in 11 U.S.C. § 350(b), which allows a closed case to be reopened “to accord relief for the debtor, or for other cause.” Counsel’s argument is misplaced for three reasons. First, “closed” in the cоntext of § 350(a) refers to when a case is “fully administered and the court has discharged the trustee.” 11 U.S.C. § 350(a); In re Rag-
Secondly, 11 U.S.C. § 350(b) states that a case may be reopened “to accord relief for the debtor, or for other cause.” (emphasis added). Counsel asks this Court to reopen the case not to accord relief to the Debtor but to provide relief to Debtor’s counsel and award fees against the Debtor personally or the Debtor’s estate.
Third, even if the Bankruptcy Court could reopen a dismissed case, it did not do so here and it is generally accepted thаt a bankruptcy court has no power to decide a bankruptcy dispute after the case is closed unless it is first reopened. In re Ragland,
IV. CONCLUSION
The Bankruptcy Court was without jurisdiction to consider Counsel’s application for counsel fees. Any such appliсation, absent the Bankruptcy Court’s express pre-dismissal retention of jurisdiction over attorney compensation, should have been filed before dismissal of the underlying bankruptcy case. Therefore, the order of the Bankruptcy Court allowing the partial payment of counsel fees is vacated for lack of subject matter jurisdiction.
An appropriate order will issue.
Notes
. Because both parties filed an appeal separately, the cross-appeals are docketed at separate civil actions. For purposes of resolving each of the appeals, the Court has consolidated the actions in accordance with Fed. R. Bankr. P. 8002.
. These documents are on this Court's docket.
. Counsel for the Debtor made various attempts to file his fee application for legal services rendered in the adversary proceeding. The initial fee application was filed on November 23, 2010 — nearly three months after the case was dismissed on August 26, 2010, and one month after the motion to reconsider dismissal was denied on October 22, 2010. Two applications for compensation were filed on December 2, 2010 to address corrective entries. A corrective fee application was filed again on December 7, 2010 and was dismissed for noncompliance with certain local rules on December 8, 2010. Another fee application was filed on December 21, 2010. The Bankruptcy Court entered an order requiring counsel to amend the December 21, 2010 fee application to identify time keepers and to adjust the hourly rate for an associate to the amount at which that associate’s time was actually charged. That amended fee application was filed nearly ten months later on September 8, 2011, after the Bankruptcy Court’s hearing on the fee application. Ianni-ni III,
. The total fees requested by Debtor’s counsel were $21,551.50 plus expenses of $1,027.72. Iannini III,
. While not raised by the Bankruptcy Court, subject matter jurisdiction cannot be waived, and counsel does not assert that the Trustee has somehow abandoned the issue. See In re Caterbone,
.The Bankruptcy Court noted in its Opinion that its jurisdiction to rule on the fee application wаs not at issue. Iannini III,
. This result has been reached in courts outside of the Third Circuit. See In re Lawson,
. Notably, the dismissal Order of August 26, 2010 did specifically provide that "Debtor(s) remain legally liable for all of their debts as if the bankruptcy petition had not been filed.” Bankr. Dkt. No. 111. Whether or not Debt- or's counsel is owed fees for the engagement of his legal services in the adversary proceeding is based in theories of contract law that our Commonwealth courts are well equipped to handle. In re Ragland, 05-18142,
. Even so, the Court recognizеs that some courts have held that bankruptcy courts have jurisdiction over post-dismissal fee determinations. See In re Fox,
. "Although Kokkonen was not a bankruptcy case, its holding is plainly applicable to bankruptcy courts, for which jurisdiction is also limited.” In re Synergistic Technologies, Inc.,
. This decision preceded Kokkonen.
. The path suggested by the Kokkonen Court.
. This line of cases demonstrates the various weapons in a Bankruptcy Court's remedial arsenal for dealing with unscrupulous lawyers, thus undercutting Counsel’s "protect us from ourselves” argumеnt. A Court could presumably enter an order fixing a date certain for the submission of fee petitions and direct that failure to do so will result in an order affirmatively denying fees. Or, the Court could expressly retain jurisdiction for the purpose of addressing any later-filed fee petitions. Or, the Court could enter a "show cause” directive pre-dismissal as to why fees should not be denied. In short, the mechanisms for the preservation of adjudicative power to address the concеrns advanced by Counsel do exist, and they exist within the express grants of jurisdiction noted above.
. The Court recognizes that the Ninth Circuit and a District Court in the Eastern District of New York have held that a post-dismissal motion to enforce a fee agreement is ancillary to the bankruptcy court's function of adjudicating the estate. That utilization of such jurisdiction is, of course, discretionary. See In re Elias,
. As discussed above, 11 U.S.C. § 349 includes a statutory exception to the general rule that dismissal of a case ends all administration of the bankruptcy case when the court "for cause, orders otherwise.” Consequently, in contrast to what Counsel suggests, a bankruptcy court is able to retain jurisdiction pre-dismissal in order to address fee issues after a case’s dismissal. However, the Court in this instance did not do so.
. Because the order below is vacated, the Court need not decide the second issue presented by Counsel as to whether or not the Bankruptcy Court erred in failing to allow payment of travel time at the full rate charged.