OPINION
Presently pending before me is the application of Morris & Adelman, P.C. (applicant) for allowance of fees and reimbursement of costs. 1 The applicant is counsel for certain petitioning creditors in this involuntary chapter 11 bankruptcy case. A hearing on the application was held on November 5, 1986. Objections have been interposed by Union National Bank and Trust Co., Univest Mortgage Co., the trustee and Dr. Richard G. Paolino (one of the debtors).
The applicant seeks cоmpensation for work done in securing the involuntary order for relief.
See
11 U.S.C. § 503(b)(3)(A). The order for relief was entered on May 24, 1985.
In re Paolino,
For the reasons set forth below, I will (1) allow reasonable compensation for work performed in connection with the entry of the involuntary order for relief; (2) allow compensation for a portion of the work performed in connection with the appointment of the trustee; and (3) deny the balance of the request. 3
I.
I turn first to the request for compensation for services performed other than those in connection with either the appointment of a trustee or the entry of the involuntary order for relief. The applicant seeks compensation for its work in connection with: (1) certain motions for relief from stay that were filed against the debtor in 1985; (2) a motion which sought turnover to the debtor of certain funds in the hands of the receiver appointed under state law prior to the filing of this bankruptcy case; and (3) “miscellaneous matters.”
With respect to these requests, the applicant can prevail only if it has established that the work made a “substantial contribution” in this case. The leading definition of that term is as follows:
Services which substantially contribute a case are those which foster and enhance, rather than retard or interrupt the progress of reorganization.... Those services which are provided solely for the client-as-creditor, such as those servicesrendered in prosecuting a creditor’s claim, are not compensable. [Compensa-ble services] are those which facilitated the progress of these casеs....
In re Richton International Corp.,
The main thrust of the objectors’ argument is that the applicant’s participation in the various post-order for relief contested matters duplicated the efforts of other parties in interest and therefore, did not contribute substantially, or otherwise, to the outcome of this litigation. I agree.
With respect to the relief from stay motions, the debtors opposed the motion for relief vigorously and were represented by counsel in doing so. Similarly, when debtors and trustee sought turnover, they, too, were represented by competent counsel. In short, the applicant has not articulated or demonstrated how its particular efforts facilitated the prоgress of the case in the distinct manner contemplated by Congress before compensation may be awarded under 11 U.S.C. § 503(b)(3)(D).
See generally In re J.E. Jennings, Inc.,
II.
The applicant next argues that its services in connection with the appointment of a trustee in this chapter 11 case were necessary to preserve the estate and therefore, constitute a per se basis for the award of compensation under 11 U.S.C. § 503(b)(1)(A). While I find it unnecessary to reach the broad issue posed by thе applicant, I do find that, in this case, the appointment of a trustee made a substantial contribution to this bankruptcy case under section 503(b)(3)(D).
Section 503(b)(3)(D) is derived from sections 242 and 243 of the prior Act, 11 U.S.C. §§ 642, 643 (repealed 1978) and therefore, decisions under the prior Act are relevant in construing this section of the Code. My research reveals at least two Act cases in which courts have approved the compensаtion of a creditor’s attorney for services rendered in procuring the appointment of a receiver.
See Morse & Tyson v. Irving-Pitt Manufacturing Co.,
In this case, the court appointed a trustee due to (1) the debtors’ failure to file adequate financial reports to the prepetition receiver and with the court after the entry of the order for relief and (2) the debtors’ prepetition fraudulent conduct manifested in a “check kiting” scheme.
In re Paolino,
It does not automatically follow, however, that the applicant is entitled to be
In these circumstances, I conclude it would be inequitable to either grant or deny the application in full. While the applicant’s motion and proof was distinct from that of Union National Bank, its legal theory was at least partially related to that of the prevailing motion and the movants were fully successful in the litigation.
See generally Hensley v. Eckerhardt,
III.
From January 11, 1985 through May 20, 1985, the applicant claims it expended 52.8 hours of work on the following tasks in connection with the petitioning creditors’ efforts to secure an involuntary order for relief: drafting pleadings, conducting discovery, preparing for trial, conducting the trial and preparing post-trial submissions.
The objectors do not challenge the applicant’s entitlement to reasonable compensation for this work. However, they assert that the applicant has not adequately documented its application as required by
In re Meade Land and Development Co.,
The objectors are correct in asserting that the applicant must comply with the requirements of
Meade Land
and that the applicant is guilty of improper lumping. The time entries for February 28, March 1, 1985, all contain multiple activities which make it impossible to determine the reasonableness of the time expended on compensable work.
5
The same
Finally, in light of counsel’s experience and hourly rate, the applicant’s request for compensation for 10.7 hours for preparation of a modest post-trial memorandum of law is excessive and will be reduced to 8 hours.
See Matter of Combined Croft Corp.,
In light of the nature of this case and counsel’s success in obtaining the ordеr for relief, I find that the applicant reasonably expended 42.1 hours in connection with the entry of the order for relief. Again using an hourly rate of $150.00, I will award the applicant a reasonable attorney’s fee of $6,315.00.
IV.
The applicant has requested reimbursement of its expenses as follows:
Certified copies $ 90.40
Telephone charges 23.06
Photocopying 407.10
Transcripts 196.75
Filing fees 100.00
Miscellaneous 7.61
Total $824.92
The objectors, quite properly, point out that the applicant must be denied reimbursement of expenses attributable to legаl services which are not compensable. The applicants have not particularized which expenses are related to the services performed in obtaining the order for relief and which were related to the other activities which I have held non-compensable. For this reason alone, I cannot award the applicant any expenses at this time.
The objectors do not address, more fundamеntally, whether any of the categories of claimed expenses are themselves non-compensable. In
In re National Paragon Corp.,
Section 503(b)(3)(A) provides that a creditor filing an involuntary petition under 11 U.S.C. § 303 shall be allowed an administrative expense for “the actual, necessary
In examining the non-bankruptcy cases, it is first necessary to distinguish between the concepts of “costs” and “expenses.” The term “costs” is usually used to refer to those items which may be taxed by a prevailing party in a federal court pursuant to 28 U.S.C. § 1920. Most common among the items of costs allowed include fees of the clerk and marshal, deposition and transcript fees and witness fees.
See
Bartell,
Taxation of Costs and Awards of expenses in Federal Court,
By comparison, other expenses are often incurred in litigation, sometimes in significant amounts, which are not taxable as costs. “If the case provides no basis for an award of attorney’s fees in addition to сosts, courts uniformly reject an award of ‘expenses’ in addition to the statutory costs to a prevailing party.”
Id.
at 590,
citing, In re Penn Central Transportation Co.,
There is a division of authority whether expenses other than the statutory costs set forth in 28 U.S.C. § 1920 may be awarded when there is authorization for an award of attorney’s fees.
Bartell,
Not surprisingly, bankruptcy courts are divided on the question whether items such as photocopying and telephone charges may be reimbursed under 11 U.S.C. §§ 330, 503.
Compare, e.g., In re Pacific Express,
After cоnsidering the conflicting authorities, I conclude that photocopying and long distance telephone charges are reimbursable expenses under 11 U.S.C. § 503(b)(3). In reaching this conclusion, I am greatly influenced by the rationale articulated by the “fund in court” or “common fund” cases. In such cases, where a party creates, increases or preserves a fund which benefits a class of persons, the
[F]ederal courts have long rеcognized “the historic power of equity to permit the trustee of a fund or property, or a party preserving or recovering a fund for the benefit of others in addition to himself, to recover his costs, including his attorney’s fees, from the fund or property itself or from the other parties enjoying the benefit.” ''
Lindy Brothers Builders, Inc. v. American Radiator & Standard Sanitary Corp.,
Bankruptcy cases share two characteristics of common fund cases. First, in both kinds of cases, parties often seek fees and expenses from a limited fund on the basis of work which purportedly has contributed to a successful result for various parties in interest. Second, “the adversarial process is often diminished or absent, and hence the need for ‘judicial scrutiny’ is heightened.”
In re Shaffer-Gordon Associates, Inc.,
My research reveals that federal courts in this circuit have allowed reimbursement of photocopying and long distance telephone expenses in “fund-in-court” cases.
Seе In re Fine Paper Antitrust Litigation; Zeffiro v. First Pennsylvania Bank N.A.; accord, In re Agent Orange Product Liability Litigation,
The result in the “fund-in-court” cases is buttressed by the statutory text of the Bankruptcy Code which refers to reimbursement of “necessary expenses.” 11 U.S.C. §§ 330(a)(2), 503(b)(3). Those decisions which have restricted the scope of allowable expenses appear to treat the term synonymously with “costs” which are taxable under 28 U.S.C. § 1920. I believe that by emplоying the term “expenses,”
For these reasons, the applicant may wish to submit an amended application for reimbursement of those allowable expenses
10
which are attributable to its com-pensable services.
See In re American International Airways, Inc.,
Notes
. The applicant seeks only a determination allowing compensation at this time and not payment of such allowed compensation.
. A trustee was appointed ovеr the debtors’ objection on October 2, 1985.
See In re Paolino,
.This opinion constitutes the court’s findings of fact and conclusions of law pursuant to Bankr. Rules 9014 and 7052.
. Two motions were filed seeking appointment of a trustee. The motion filed by the applicant on behalf of the petitioning creditors sought appointment of a trustee pursuant to 11 U.S.C. § 1104(a)(2). Union National Bank and Trust Co.’s motion was based on section 1104(a)(1). The court appointed the trustee pursuant to section 1104(a)(1).
See In re Paolino,
. The applicant's records show the expenditure of a total of 4.4 hours on February 28 and March 1, 1985 for preparation of the involuntary petition, the motion for appointment of a trustee and a motion for expedited hearing. There is no allocation of the time among the motions. While there may be situations where an applicant might combine closely related activities within a single time entry, this is not such a case. A motion for appointment of a trustee is quite distinct from an involuntary petition and, in fact, in this case, I have found that the applicant’s work on the motion partially non-compensable. Therefore, I am not able to accurately determine whether the time expended on the fully compensable service was reasonable. Ordinarily, this lumping would result in the total disallowance of the requested compensation. E.g., In re Bible Deliverance Evangelistic Church. In this case, however, due to the relatively minor amount of time involved and the fact that undoubtedly a significant portion of the time is compensable, I have attributed one-half the time requested to the motion for appointment of a trustee and the other one half to the involuntary petition.
.The April 2, 1985 entry states that 2.3 hours were expended on the following:
Filed Answer to Motion for a Protective Order, Counter-Motion to Compel, Motion for Expedited Hearing, conference with Bankruptcy Clerk regarding expedited hearing conference with Judge’s Secretary and Judge’s Law Clerk, regarding expedited hearing; Hearing on Motion for Protective Order, etc.
This entry is garbled and I do not understand precisely what actions the applicant took. I do note that the actual delivery of the motions to the clerk’s office is not "lеgal” work and is not compensable at the attorney’s hourly rate.
In re Bible Deliverance Evangelistic Church; In re Global International Airways Corp.,
. I note also that thе applicant requested compensation for 5.7 hours preparation for and attendance at a hearing on March 11, 1985 "on Involuntary Petition." The dockets reflect that the March 11, 1985 hearing related to the motion for appointment of a trustee. These hours will not be fully compensated. See Part III, supra. Similarly, the applicant will not be fully compensated for 1.5 hours for preparation and attendance at a hearing on March 15, 1985, which also related to the motion for appointment of a trustee.
. Strictly speaking, it is not necessary for me to reach this issue at this time. However, it is extremely likely that the applicant will resubmit its request for expenses related to the securing of the order for relief. There is little point in requiring the applicant to document its photocopying and telephone expenses if, as a matter of law, these сategories of expenses are non-compensable absent extraordinary circumstances.
. Some courts have concluded that items such as photocopying, postage and long distance telephone are not reimbursable because they are part of an attorney’s overhead. As one court has stated,
Overhead ... includes all continuous administrative or general costs or expensеs incident to the operation of the firm which cannot be attributed to a particular client or case. The term is not definable with exact precision, but may be exemplified by such items as rent, taxes, insurance, lighting, hearing, and other office expenses, including secretarial services.
In re Jensen-Farley Pictures, Inc.,
. I have not separately discussed the request for reimbursement of the costs of certified copies, transcripts and filing fees. Those expenses are clearly reimbursable. No reimbursement, however, will be allowed for any item denoted "miscellaneous.”