                                                           FILED
                                                            NOV 30 2011
 1
                                                       SUSAN M SPRAUL, CLERK
                                                          U.S. BKCY. APP. PANEL
 2                                                        OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )      BAP No.    CC-11-1050-HKiPa
                                   )
 6   SHANEL ANN STASZ,             )      Bk. No.    LA 05-43980
                                   )
 7                  Debtor.        )
     ______________________________)
 8                                 )
     SHANEL ANN STASZ,             )
 9                                 )
                    Appellant,     )
10                                 )
     v.                            )      M E M O R A N D U M1
11                                 )
     ROSENDO GONZALEZ, Chapter 7   )
12   Trustee,                      )
                                   )
13                  Appellee.      )
     ______________________________)
14
                        Submitted Without Oral Argument
15                            on November 17, 2011
16                         Filed - November 30, 2011
17               Appeal from the United States Bankruptcy Court
                     for the Central District of California
18
              Honorable Alan M. Ahart, Bankruptcy Judge, Presiding
19
20   Appearances:     Shanel Stasz, pro se, on brief.
                      Patrick Kelly McClellan on brief for Rosendo
21                    Gonzalez, Chapter 7 Trustee.
22
     Before: HOLLOWELL, KIRSCHER and PAPPAS, Bankruptcy Judges.
23
24
25
26        1
            This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.
 1        Shanel Stasz (the Debtor) appeals the bankruptcy court’s
 2   order approving the chapter 72 bankruptcy trustee’s Final Report,
 3   Application for Compensation and Application for Compensation for
 4   Professionals (Final Report).      We conclude that the Debtor’s
 5   standing to appeal is tenuous; however, assuming she does have
 6   standing, we AFFIRM.
 7                                 I.   FACTS3
 8        On October 13, 2005, the Debtor filed a voluntary petition
 9   for relief under chapter 7.    Rosendo Gonzales was appointed the
10   bankruptcy trustee (Trustee).      In January 2006, the Trustee filed
11   an application to employ Patrick K. McClellan (McClellan) as
12   general bankruptcy counsel to assist him in the investigation,
13   recovery and liquidation of assets.      The application was approved
14   on March 1, 2006.
15        Throughout the Debtor’s bankruptcy case, the Debtor
16   challenged the Trustee’s efforts to recover and monetize assets
17
18
          2
19          Unless otherwise indicated, all chapter, section and rule
     references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330, as
20   enacted and promulgated prior to the effective date of the
     Bankruptcy Abuse Prevention and Consumer Protection Act of 2005,
21
     Pub. L. 109-8, 119 Stat. 23 and Bankruptcy Rules 1001-9036.
22
          3
            Many of the facts recited here were obtained by taking
23   judicial notice of documents filed with the bankruptcy court’s
     electronic docketing system since they were not submitted by the
24
     Debtor in the record on appeal. Such documents include the
25   bankruptcy trustee’s declaration, which supported the Final
     Report, his supplemental declaration supporting the Final Report,
26   and his responses to the Debtor’s objection to the Final Report.
27   See O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert), 887 F.2d
     955, 957-58 (9th Cir. 1988); Atwood v. Chase Manhattan Mortg. Co.
28   (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).

                                        -2-
 1   of the estate.4    On September 21, 2010, the Trustee filed the
 2   Final Report.     In the Final Report, the Trustee accounted for
 3   $618,639.23 in estate assets that had been reduced to cash and
 4   sought approval for the following distributions:
 5        (1)   $36,864.58 for his fees and $672.98 for his expenses
 6              pursuant to § 326(a);
 7        (2)   $325,260.00 in fees and $2,655.19 in expenses for
 8              McClellan’s work performed throughout the bankruptcy
 9              case, pursuant to § 330(a);
10        (3)   $8,815.50 in fees and $102.13 in expenses for work
11              performed by the Trustee’s hired accountant;
12        (4)   $4,101.01 to pay the allowed priority claim of the
13              Internal Revenue Service (IRS); and,
14        (5)   a $239,407.84 payment on creditor Hugo W. Quackenbush’s
15              nondischargeable unsecured claim of $1,984,778.10.
16        A declaration to support the requested fees was submitted on
17   September 29, 2010, which described the Trustee’s and his
18   counsel’s various and protracted efforts in investigating the
19   Debtor’s interest in real property, in avoiding and recovering
20   the fraudulent transfer of that interest to a family trust, and
21
22
          4
            Background on salient events and disputes in this
23   bankruptcy case are chronicled in: Stasz v. Gonzales
     (In re Stasz), 2007 WL 7370101 (9th Cir. BAP Aug. 9, 2007),
24
     dismissed, 348 Fed. Appx. 234 (9th Cir. 2009), cert. denied,
25   131 S.Ct. 209 (2010); Stasz v. Gonzales (In re Stasz), 387 B.R.
     271 (9th Cir. BAP 2008); Stasz v. Quakenbush (In re Stasz),
26   2007 WL 75401964 (9th Cir BAP Feb. 28, 2009), aff’d 352 Fed.
27   Appx. 154 (9th Cir. 2009), cert. denied, 130 S.Ct. 3293 (2010);
     Stasz v. Gonzales (In re Stasz), 2011 WL 3299162 (9th Cir. BAP
28   Apr. 5, 2011).

                                        -3-
 1   in monetizing the asset for the benefit of the estate.
 2   Additionally, McClellan provided his full billing records.
 3        The United States Trustee (UST) filed a limited objection to
 4   the Final Report, questioning the benefit to the estate of the
 5   fees incurred in the effort to declare the Debtor a vexatious
 6   litigant.   The Trustee filed a supplemental declaration
 7   addressing the issue and the UST made no further objection to the
 8   requested fees.
 9        On October 15, 2010, the Debtor requested that the hearing
10   on the Final Report be continued to November 10, 2010.     The
11   Debtor then filed, on October 20, 2010, a motion for the
12   disqualification and recusal of the bankruptcy judge under
13   28 U.S.C. § 455(a), and to set aside all prior rulings, orders
14   and judgments in the case, as well as to disgorge all funds
15   received by the Trustee (Motion to Recuse).
16        On October 28, 2010, the Debtor filed an opposition to the
17   Final Report, contending that the bankruptcy judge lacked
18   jurisdiction to rule on the Final Report as a result of the
19   Motion to Recuse.   Additionally, she contended that McClellan’s
20   “fee application [was] telltale of the fraud allowed to occur in
21   the case” and that $62,294.53 of McClellan’s fees did not benefit
22   the estate.   She alleged that there was no benefit to the estate
23   generally for work related to compelling the Debtor to appear for
24   the Rule 2004 examination, for discussions with the Debtor’s
25   homeowner’s association regarding her real property, and for work
26   done in connection with declaring her a vexatious litigant.      The
27   declaration supporting her opposition consisted of simply
28


                                     -4-
 1   enclosing the Motion to Recuse and McClellan’s billing statements
 2   with various amounts underlined.
 3        The Motion to Recuse was scheduled to be heard on
 4   November 10, 2010, before a different bankruptcy judge; however,
 5   that judge declined to rule on the Motion to Recuse based on
 6   contacts he previously had with the Debtor.      At the hearing on
 7   the Final Report the same day, the Trustee stated that he was
 8   trying to expedite having the Motion to Recuse heard by a
 9   different judge in the district.       The bankruptcy court decided to
10   rule on the Final Report in the interim, on the condition that,
11   if the Motion to Recuse were granted, the Final Report would be
12   heard de novo by a new bankruptcy judge.      See Hr’g Tr. (Nov. 10,
13   2010) at 5.    The bankruptcy court then approved the Final Report
14   on the basis that the Debtor did not provide any evidence to
15   support her allegations that the fees should be denied.
16        Another bankruptcy judge in the district subsequently ruled
17   on the Motion to Recuse, denying the Debtor’s request on
18   December 28, 2010; the Debtor filed a motion for reconsideration,
19   which was denied on January 14, 2011.5      After the Motion to
20   Recuse was finally decided, on January 20, 2011, the bankruptcy
21   court entered the order approving the Final Report.      The Debtor
22   timely appealed.
23
24
25
26        5
            The   Debtor appealed that order to the Bankruptcy Appellate
27   Panel, but   the appeal was dismissed for failure to prosecute.
     The Debtor   then appealed the dismissal of the appeal to the Ninth
28   Circuit on   July 27, 2011.

                                      -5-
 1                                       II.    ISSUE
 2        Did the bankruptcy court abuse its discretion in approving
 3   the Final Report?
 4                                III.    JURISDICTION
 5        The bankruptcy court had jurisdiction under 28 U.S.C.
 6   § 157(b)(2)(A).   We have jurisdiction under 28 U.S.C. § 158.
 7                          IV.    STANDARDS OF REVIEW
 8        Our jurisdiction, including the issue of standing, is a
 9   question of law that we address de novo.            Menk v. Lapaglia
10   (In re Menk), 241 B.R. 896, 903 (9th Cir. BAP 1999).
11        A bankruptcy court’s award of attorneys’ fees will not be
12   disturbed on appeal absent an abuse of discretion or an erroneous
13   application of the law.       Smith v. Edwards & Hale, Ltd.
14   (In re Smith), 317 F.3d 918, 923 (9th Cir. 2002).             A bankruptcy
15   court abuses its discretion if it bases a decision on an
16   incorrect legal rule, or if its application of the law was
17   illogical, implausible, or without support in inferences that may
18   be drawn from the facts in the record.             United States v. Hinkson,
19   585 F.3d 1247, 1261–63 (9th Cir. 2009) (en banc); Ellsworth v.
20   Lifescape Med. Assocs. (In re Ellsworth), 455 B.R. 904, 914
21   (9th Cir. BAP 2011).
22        Factual findings made in the course of awarding compensation
23   are not disturbed unless clearly erroneous.            See Friedman Enters.
24   v. B.U.M. Int’l, Inc. (In re B.U.M. Int’l, Inc.), 229 F.3d 824,
25   830 (9th Cir. 2000); Rule 8013.             A finding is clearly erroneous
26   if it is “illogical, implausible, or without support in the
27   record.”   Retz v. Samson (In re Retz), 606 F.3d 1189, 1196
28


                                               -6-
 1   (9th Cir. 2010) (citing United States v. Hinkson, 585 F.3d at
 2   1261-62 & n.21)).
 3                               V.   DISCUSSION
 4        The Debtor contends that the filing of the Motion to Recuse
 5   divested the bankruptcy court of jurisdiction over proceedings in
 6   the case.    Additionally, she alleges that the Final Report
 7   demonstrated an “outrageous violation of § 330 and
 8   § 326(a).”   Appellant’s Opening Brief at 4.   We address her
 9   arguments below, but first consider whether the Debtor has
10   standing to appeal the bankruptcy court’s order approving the
11   Final Report.
12   A.   Appellate Jurisdiction
13        The Ninth Circuit has adopted the “person aggrieved” test
14   for determining whether a party has standing to challenge an
15   order of the bankruptcy court.     Fondiller v. Robertson
16   (In re Fondiller), 707 F.2d 441, 442-43 (9th Cir. 1983).       The
17   test limits appellate standing to “those persons who are directly
18   and adversely affected pecuniarily by an order of the bankruptcy
19   court.”   Id.; Sole Survivor Corp. v. Buxbaum, 2009 WL 210471 * 5,
20   6 (C.D. Cal. 2009).    A “person aggrieved” is one whose property
21   is diminished, burdens are increased, or rights are impaired by
22   the order on appeal.    Id.; Duckor Spradling & Metzger v. Baum
23   Trust (In re P.R.T.C., Inc.), 177 F.3d 774, 777 (9th Cir. 1999).
24        “Ordinarily, a debtor cannot challenge a bankruptcy court’s
25   order unless there is likely to be a surplus after bankruptcy.”
26   Id. at 778 n.2.     According to the Final Report, the allowed
27   claims in the Debtor’s bankruptcy case significantly exceed the
28   funds on hand and the Debtor will not receive any distribution


                                        -7-
 1   from the bankruptcy estate.    As a result, the bankruptcy court’s
 2   order would not diminish her property or detrimentally affect her
 3   rights.
 4           However, if we were to reverse the bankruptcy court’s order
 5   approving the Final Report and a subsequent hearing resulted in a
 6   potential reduction of the trustee’s fees, there could be a
 7   resulting increase in distribution to creditor Quakenbush and
 8   reduction in the Debtor’s liability on that nondischargeable
 9   debt.    Therefore, the Debtor’s burden could be increased,
10   providing her sufficient standing to appeal.
11           On the other hand, it is speculation that the bankruptcy
12   court would, upon reversal and remand, find a factual basis to
13   reduce the Trustee’s or McClellan’s fees.    Thus, the Debtor’s
14   standing to appeal the order approving the Final Report is
15   tenuous at best.    In any event, we address the merits below, and
16   conclude that the bankruptcy court did not abuse its discretion
17   in approving the Final Report.
18   B.      Bankruptcy Court Jurisdiction
19           The Debtor opposed the Final Report because she asserted
20   that the pendency of the unresolved Motion to Recuse divested the
21   bankruptcy court of jurisdiction in the case.    The Debtor
22   asserted that the Motion to Recuse:
23        establishes that Judge Ahart’s actual bias violated Due
          Process and he has no jurisdiction over this bankruptcy
24        proceeding and that all of his prior rulings, orders or
25        judgments are void ab initio and that all assets held
          by the Trustee . . . must be returned to the Trusts
26        that they were illegally taken from.
27           The Debtor provided no legal authority for her assertion.
28   On appeal, the only argument the Debtor submits is that Fed. R.


                                       -8-
 1   Civ. P. 62(a) provided a 14-day stay of orders and judgments and
 2   therefore, the bankruptcy court’s order approving the Final
 3   Report was improperly entered before the stay period dissolved.
 4        Neither of the Debtor’s arguments have merit.     First,
 5   28 U.S.C. § 455 governs the disqualification of bankruptcy judges
 6   for reasons of bias or when a judge’s impartiality may reasonably
 7   be questioned.   There is no provision in 28 U.S.C. § 455 that
 8   requires the disqualification of the judge upon presentation of a
 9   motion to recuse.
10        We note that under limited circumstances, pursuant to
11   28 U.S.C. § 144, a district court judge may be disqualified upon
12   the presentation of a timely and properly filed motion and
13   affidavit that the judge assigned to a case has demonstrated
14   personal bias or prejudice.    28 U.S.C. § 144.   That section
15   requires that proceedings cease until another judge is assigned.
16   However, 28 U.S.C. § 144 does not apply to bankruptcy judges.
17   Seidel v. Durkin (In re Goodwin), 194 B.R. 214, 221 (9th Cir. BAP
18   1996) (internal citations omitted).     Furthermore, unlike motions
19   made under § 28 U.S.C. 144, a motion to recuse under 28 U.S.C.
20   § 455 does not require the judge to take the factual allegations
21   as true.   Id. at 222.    Therefore, there is no legal basis to
22   support the Debtor’s contention that the bankruptcy judge in this
23   case lacked jurisdiction over approval of the Final Report.       See
24   28 U.S.C. 157(b)(2)(A).
25        Rule 7062 makes Fed. R. Civ. P. 62 applicable in adversary
26   proceedings.   Fed. R. Civ. P. 62(a) provides that “no execution
27   may issue on a judgment nor may proceedings be taken to enforce
28   it, until 14 days have passed after its entry.”    Rule 7062 is


                                       -9-
 1   inapplicable here.   The Final Report was not brought by motion in
 2   an adversary proceeding but in conjunction with the general
 3   administration of the bankruptcy estate.   Moreover, the entry of
 4   the bankruptcy court’s order approving the Final Report does not
 5   constitute “executing” or “enforcing a judgment” against the
 6   Debtor.   In sum, the bankruptcy court was not divested of
 7   jurisdiction and did not err in ruling on the Final Report.
 8   C.   Merits
 9        Bankruptcy Code §§ 330(a)(1) and 326(a) govern the
10   bankruptcy court’s determination of the amount of reasonable
11   compensation to be awarded to a chapter 7 trustee.   Boldt v. U.S.
12   Trustee (In re Jenkins), 130 F.3d 1335, 1337 (9th Cir. 1997).
13   Section 326(a) sets forth the maximum compensation payable to a
14   chapter 7 trustee.   It limits a chapter 7 trustee’s compensation
15   to a percentage of the funds disbursed by the trustee.    The
16   policy underlying § 326(a) is to ensure that a trustee is
17   compensated commensurate with the value of the services conferred
18   on the bankruptcy estate.   Sw. Media, Inc. v. Rau, 708 F.2d 419,
19   423 (9th Cir. 1983).   “The crucial test seems to be . . . whether
20   or not the particular property or fund has been justifiably
21   administered in the bankruptcy court, or whether or not the
22   trustee has properly performed services in relation thereto.”
23   Id. at 424 n.4 (quoting In re Schautz, 390 F.2d 797, 800 (2d Cir.
24   1968)).
25        Additionally, § 330(a)(3)(A)-(E) lists the criteria the
26   bankruptcy court must consider in determining the amount of
27   reasonable compensation to be awarded a trustee’s counsel under
28


                                     -10-
 1   § 330(a), including whether the services were necessary to the
 2   administration of, or beneficial toward the completion of a
 3   bankruptcy case.   The burden of establishing entitlement to the
 4   fees requested from the estate rests with the trustee.    Roderick
 5   v. Levy (In re Roderick Timber Co.), 185 B.R. 601, 606 (9th Cir.
 6   BAP 1995).
 7        The Debtor did not initially dispute the compensation sought
 8   by the Trustee under § 326(a), but on appeal argues that the
 9   Trustee’s calculation of his percentage is wrong, that his fees
10   were not itemized, and are excessive.    Because these arguments
11   were not presented to the bankruptcy court, we do not address
12   them here.   In re E.R. Fegert, Inc., 887 F.2d at 957 (internal
13   citation omitted).     Furthermore, we note that the Trustee
14   provided a lengthy declaration explaining the work performed
15   throughout the bankruptcy case and the resulting benefit of that
16   work to recovering assets for the estate, as well as a form
17   outlining his calculations.
18        Before the bankruptcy court, the Debtor opposed the approval
19   of the Final Report by contending that $62,894.53 of McClellan’s
20   fees did not benefit the estate.    She argued that there was no
21   benefit to the estate from his fees generally incurred in
22   attempting to complete a Rule 2004 Examination of the Debtor, in
23   talking to the Debtor’s homeowners’ association, in attempting to
24   deem the Debtor a vexatious litigant, and in revoking the
25   Debtor’s discharge.6    However, the Debtor did not identify
26
27
          6
            No fees were sought by the Trustee related to revoking the
28   Debtor’s discharge.
                                     -11-
 1   specific line item amounts or present any reasoned legal
 2   arguments or facts as to why such efforts did not benefit the
 3   estate.
 4        The Debtor asserts that the bankruptcy court erred in
 5   determining that she did not provide evidence to support her
 6   argument.   She contends that she supported her argument with
 7   “detailed findings of $62,894.53 in false billings included
 8   within McClellan’s outrageous $327,925.19 bill and her [Motion to
 9   Recuse].”   Appellant’s Opening Brief at 7.
10        While McClellan submitted comprehensive billing records to
11   support his fee request, our review of the record reveals that
12   the Debtor did not provide any detail about the source of her
13   $64,894.53 calculation and did not provide a declaration setting
14   forth facts to support her conclusory assertion that certain work
15   performed by McClellan did not benefit the estate.   As a result,
16   her assertions are merely argument and provide insufficient
17   evidentiary support or facts which the bankruptcy court may use
18   in its findings.   See, e.g., British Airways Bd. v. Boeing Co.,
19   585 F.2d 946, 952 (9th Cir. 1978).
20        The record supports the bankruptcy court’s ruling that the
21   Debtor did not provide any evidence or factual support for her
22   allegation that certain work performed by the Trustee and
23   McClellan did not benefit the estate.   Indeed, the Trustee
24   submitted a lengthy declaration detailing his and his counsel’s
25   protracted efforts in conducting a Rule 2004 Examination of the
26   Debtor, in interviewing the homeowner’s association in his
27   efforts to recover real property for the estate, and in his
28   efforts to limit the expenses and fees in responding to the
                                     -12-
 1   numerous challenges by the Debtor, throughout the administration

 2   of the estate, by having her deemed a vexatious litigant.   The

 3   Trustee stated in his declaration that all of those various

 4   efforts taken by McClellan resulted in assets being recovered and

 5   reduced to cash.   Accordingly, the bankruptcy court had

 6   uncontroverted evidence that the work performed by the Trustee

 7   and McClellan benefitted the estate.    Under these circumstances,

 8   we conclude that the bankruptcy court did not abuse its

 9   discretion by approving the Final Report.

10                             VI.   CONCLUSION

11        For the foregoing reasons, we AFFIRM the bankruptcy court’s

12   order approving the Final Report.

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