In re Sarasota Land Co.

Citations: 91 B.R. 152; 1988 Bankr. LEXIS 1465; 1988 WL 93715Docket: Bankruptcy No. 83-63-BKC-8P1

Court: United States Bankruptcy Court, M.D. Florida; September 6, 1988; Us Bankruptcy; United States Bankruptcy Court

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Compensation for Richardson Realty, Inc. for services rendered in the sale of Sarasota Land Company’s assets is under review in this confirmed Chapter 11 case. The matter was remanded by the United States District Court for the Middle District of Florida for further consideration. On May 29, 1984, the bankruptcy court authorized the nunc pro tunc employment of Richardson Realty and approved a $32,000 commission for brokerage services related to a court-sanctioned property sale. Almost a year later, on May 23, 1985, the Debtor filed a motion to revoke this order, citing that net proceeds from the sale were lower than expected, leaving insufficient funds to cover the attorney fees of M. Jay Lancer, Debtor’s counsel. The motion sought to vacate prior orders and required professionals to return funds pending a court review of compensations. Following a rehearing on August 30, 1985, the court reduced Richardson Realty’s commission to $8,340 and ordered a refund of $23,660. This ruling was appealed, and on February 19, 1988, the District Court instructed the bankruptcy court to evaluate its authority to vacate orders under 11 U.S.C. § 328(a), its inherent equitable powers, or Bankruptcy Rule 9024, which aligns with Federal Rule of Civil Procedure 60. The bankruptcy court clarified that while § 328(a) allows for the reconsideration of employment terms, it does not apply to nunc pro tunc orders for services already performed, and the court's review was based on its equitable powers rather than § 328(a).

All motions for reconsideration of bankruptcy court orders are governed by Bankruptcy Rule 9024, which incorporates Federal Rule of Civil Procedure (F.R.C.P.) 60. The court's approval of nunc pro tunc professional fees constitutes a final order, and any party seeking relief must do so under F.R.C.P. 60. This rule allows relief from judgments for reasons including mistakes, inadvertence, and other justifiable causes, provided that the motion is made within a reasonable time, and generally within one year from the order's entry.

The Debtor claims reconsideration is warranted due to a misunderstanding regarding the sale's proceeds and their sufficiency for attorney fees, asserting that the motion was timely filed within one year. In contrast, Richardson Realty contends that the motion lacks valid grounds under F.R.C.P. 60(b) and was not filed within a reasonable timeframe.

The court finds that F.R.C.P. 60(b)(2) and (5) do not apply, as there are no claims of newly discovered evidence or fraud. The court considers whether the motion can be justified based on mistake or the catchall provision of F.R.C.P. 60(b). Although the motion was filed just short of the one-year limit, the court deems it unreasonable for the Debtor to have waited until nearly the deadline to realize the insufficiency of funds for attorney fees. The court concludes that the motion was not filed within a reasonable time and therefore should be denied.

The Court evaluates the Debtor's motion for relief based on an alleged mistake but finds no grounds to support this claim. The detailed Application for sale approval outlined the real estate contract's terms, including the purchase price and commission structure, which were previously deemed fair and reasonable by the Debtor's counsel. The Court identifies that the issue stems from a miscalculation of the total debt secured by liens on the property, rather than an honest mistake by all parties. The Debtor's dissatisfaction arises not from the fairness of the commissions but from insufficient funds to cover the counsel's fees. Given these undisputed facts, the Court concludes that the Debtor has not justified the relief sought. Consequently, the Court vacates the Order concerning Nunc Pro Tunc Employment and Compensation of Professionals, denies the Motion to Revoke the Nunc Pro Tunc Order, and affirms the Order authorizing the Debtor to employ real estate brokers and pay the commission.