In re Pedisich

LEMMON, District Judge. There is before me the “Certificate and Report of Referee Relative to Petitions for Allowance of Attorneys’ Fees and Disbursements made and also relative to the Fixing of Court Costs.” The findings of fact embraced within the Certificate and Report beginning on line 2 of page 26 and .ending with line 23 on page 34 thereof are approved and are adopted as the findings of fact of this Court except that the Court finds that the services rendered by each and all of the attorneys for the debtor in the actions instituted by Louis Hozz and Ettie Hozz in the Superior Court of the County of Sonoma, State of California, and in the case of Creedon v. Pedisich in this Court were not rendered and the costs incurred by them were not incurred for the benefit of or on behalf of the debtor estate and that said services were rendered and said costs were incurred solely for the personal benefit of said debt- or and other parties named with debtor as defendants. I am unable to agree with the conclusion of the Referee or the recommendation which he has made relative to the allowance of attorneys’ fees to the several attorneys who appeared for the debtor in this proceeding and in the proceedings attendant thereto. I am of the opinion that General Order 44 precludes an allowance to any of the attorneys so appearing. The General Orders have the force of law and a showing that services rendered were beneficial to the estate does not permit a disregard of the plain wording of the Order. Gochenour v. Cleveland Terminal Buildings Co., 6 Cir., 142 F.2d 991. “The order and the rule were passed to control serious abuses and are to be strictly observed; without an order of court upon full presentation of the relation of the proposed attorney with all other interests involved, not only may he not be retained, but he can recover nothing, no matter how beneficial, or how arduous, his services.” In re Eureka Upholstering Co., Inc., 2 Cir., 48 F.2d 95. In the Gochenour case the court stated, “This General Order cannot be by-passed by the creditors or their attorneys acting for the debtor without the consent of the court. Since appellants do not bring themselves within the General Order in question, it is immaterial whether or not their services were beneficial to the subsidiary debtor. They were entitled to nothing here.” This rule is announced in this Circuit in Beecher v. Leavenworth State Bank, 9 Cir., 184 F.2d 498. Although proscription in General Order 44 does not extend to costs expended by such attorneys for the benefit of the estate and in a proper case such costs may be allowed, I have concluded and I have above found that the costs in the cases mentioned were neither incurred nor expended for the benefit of the debtor .estate. It appears that costs and expenses were incurred by said attorneys, or some of them, other than in connection with the cases instituted by Louis Hozz and Ettie Hozz or in connection with the case of Creedon v. Pedisich [201] and the matter is re-referred to the Referee with directions to the Referee to segregate such costs incurred in the administration of the debtor estate and which were incurred other than those here disallowed and which were foi the benefit of the debtor estate. The Court agrees with the recommendations of the Referee that $800 should be paid to the Clerk of this Court to apply on the account of the Referee’s Salary Fund, the sum of $400 to the Clerk of this Court to apply on account of the Referee’s Expense Fund, $15 to Frank P. Walsh for f . . r. fees and expenses as appraiser, and to Carolyn R. Blair $217.70 for stenographic reporting service and $1.06 to the Referee for incidental expenses incurred by him.