Clair S. Huffman and Estate of Patricia C. Huffman, Deceased, Clair S. Huffman, Executor v. Commissioner., United States Tax Court - Memorandum Decision, T.C. Memo. 1994-73, Docket No. 8542-89., Filed February 23, 1994

Clair S. Huffman and Estate of Patricia C. Huffman, Deceased, Clair S. Huffman, Executor v. Commissioner.

United States Tax Court - Memorandum Decision

T.C. Memo. 1994-73

Docket No. 8542-89.

Filed February 23, 1994.

Steven L. Staker, P.O. Box 3590, Camarillo, Calif., for the petitioner. Stephen R. Asmussen, for the respondent.

Supplemental Memorandum Opinion

NAMEROFF, Special Trial Judge: This case, involving petitioners' motion for litigation costs, is before us on remand from the United States Court of Appeals for the Ninth Circuit. ^* In our prior opinion, [Dec. 47,266(M)] T.C. Memo. 1991-144, affd. in part, revd. in part, and remanded [92-2 USTC ╤ 50,570] 978 F.2d 1139 (9th Cir. 1992), we held, in part, that the effective date from which to measure the cost of living adjustment provided in section 7430 ¹ is October 1, 1981. The Court of Appeals reversed and held that the effective date was January 1, 1986. The effect of this reversal will be reflected in a Rule 155 proceeding. The Court of Appeals further remanded the case to us for a detailed explanation as to how the award of attorney's fees and costs was calculated. In this connection the Court of Appeals indicated that the cost of the filing fee in this Court should have been allowed, because the petition was necessitated by the Commissioner's unjustified failure to respond in a timely fashion in the administrative phase.

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^* This opinion supplements Huffman v. Commissioner [Dec. 47,266(M)], T.C. Memo. 1991-144.

¹ All section references are to the Internal Revenue Code. All Rule references are to the Tax Court Rules of Practice and Procedure.

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We begin by noting, initially, that the Ninth Circuit Court of Appeals has stated, in connection with the quantum of explanation required in an attorney's fees determination: On the one hand, we need some "indication or explanation of how the district court arrived at the amount of fees awarded" because without an adequate explanation, "it is simply not possible for this court to review such an award in a meaningful manner." Chalmers v. City of Los Angeles, 796 F.2d 1205, 1213 (9th Cir. 1986), amended 808 F.2d 1373 (9th Cir. 1987); Cunningham v. County of Los Angeles, 879 F.2d 481, 484 (9th Cir. 1988). "On the other hand, we do not require an elaborately reasoned, calculated, or worded order; a brief explanation of how the court arrived at its figures will do". Cunningham v. County of Los Angeles, supra at 484.

The fee applicant has the burden of producing satisfactory evidence as to the number of hours reasonably spent on the case. This is normally done by submission of time charge records. In the instant case, petitioners' counsel has submitted summaries of the time charges. In the appendix to this opinion we reproduce, in part, the summary of the claims made by petitioners' counsel, both in the original motion for litigation costs and in the supplemental motion. It is to be noted that there are numerous instances of combinations of activities for which a one-time charge is made, and it is extremely difficult for the Court to determine precisely the number of hours spent on various tasks. We observe the following with respect to charges made subsequent to the filing of respondent's answer conceding the case: (1) Some portion of 23.5 hours was charged to research with regard to the fees application; (2) some portion of 11.4 hours was charged to conferences or activities with another attorney; (3) some portion of 16 hours was charged to research with regard to a reply to respondent's objection.

We think the amount of time assigned to legal research solely for the purpose of enhancing the fee petition is unreasonable. We question the need to bring in another attorney for review and consultation and to charge the client with the time spent by each. Petitioners' counsel, in his motion, had claimed a higher rate for the attorney's fees than provided by statute based upon his alleged expertise as a special factor. We denied the higher rate in our prior opinion, and the claimed charges do not reflect such expertise. The elaborateness of the motion, affidavits, supplemental motions and affidavits, and reply to respondent's objection was unnecessary.

Accordingly, using our best judgment, we award petitioners legal fees for 5.9 hours charged prior to filing of the petition. Further, we award petitioners' counsel the attorney's fees claimed as set forth in the motion and supplement to the motion (including paralegal fees) reduced as follows: for the period beginning September 26, 1989, we reduce the time spent for legal research by 8 hours. ² Further, we reduce the claim by 4 hours for conferences with KGS, 2 hours pertaining to 1989, and 2 hours pertaining to 1990. Accordingly, petitioners are entitled to recover for 55.2 hours of attorney services.

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² To simplify the calculations, this latter reduction of 8 hours should be made from 1990 time charges.

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Furthermore, we allow petitioners to recover their paralegal fee, costs, and filing fee as set forth in the motion and amendment to the motion in the total amount of $156.77.

Decision will be entered under Rule 155.

Appendix

Time spent by petitioner's counsel is designated with the initials "SLS", and time spent by another attorney with the law firm is indicated by the initials "KGS". Paralegal time is represented with the initials "LS".

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