Mortensen v. Bank of America Home Loans Servicing et al
Filing
95
ORDER granting 82 Motion for Attorney Fees. An award of $111,344.60 in reasonable attorney's fees and $9,651.61 in costs and expenses is properly included in the judgment previously entered in this matter. An amended judgment will beentered contemporaneously herewith. Signed by Chief Judge William H. Steele on 5/3/2011. (tgw)
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
ROBERT MORTENSEN,
Plaintiff,
v.
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., et al.,
Defendants.
BAC HOME LOANS SERVICING, LP,
Counterclaim Plaintiff,
v.
ROBERT MORTENSEN,
Counterclaim Defendant.
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CIVIL ACTION 09-0787-WS-N
ORDER
This matter comes before the Court on defendant / counterclaim plaintiff BAC Home
Loans Servicing, LP’s Motion for Award of Attorney’s Fees and Expenses (doc. 82).1 The
Motion has been briefed and is ripe for disposition at this time.
I.
Procedural Background.
In December 2009, Robert Mortensen (by and through counsel of record) sued BAC
Home Loans Servicing, LP (“BAC Servicing”), and four other defendants on well over a dozen
1
Also before the Court are several filings relating to that Motion, including
plaintiff’s three overlapping opposition memoranda (docs. 90, 92, 93) -- all of which were filed
after the briefing deadline had expired -- as well as a Reply (doc. 91) and a Supplement to the
Motion (doc. 85) filed by BAC Servicing. The Court has reviewed all of these materials, as well
as all other portions of the file deemed relevant.
statutory and common-law theories.2 Mortensen’s stated basis for bringing these claims was that
BAC Servicing and other defendants had failed to provide him with a mortgage loan
modification to his liking after he became unable to meet his payment obligations on the existing
loan, and then threatened to initiate foreclosure proceedings. Beginning with his Complaint, and
at every step thereafter, Mortensen consistently stated that the relief he sought in this action
included not only money damages, but also injunctive relief “enjoining any foreclosure sale” of
the subject property. In other words, Mortensen expressly sought to use this lawsuit to block
BAC Servicing from exercising its contractual remedies arising from his admitted default on the
loan.
BAC Servicing responded by bringing counterclaims against Mortensen for, inter alia,
breach of contract based on Mortensen’s default of the promissory note he had used to obtain
funds to purchase the rental property in question. BAC Servicing’s position was that Mortensen
had executed a note in the principal amount of $110,051, had executed a mortgage on the
property to secure repayment, and had subsequently defaulted, thereby entitling BAC Services to
foreclose the mortgage and to a money judgment for the owed funds. Mortensen has never
disputed that he is, in fact, in default on the subject loan.
This action was fiercely litigated from its inception. Indeed, the docket sheet reflects a
contentious discovery period including multiple motions to compel, as well as unsuccessful Rule
2
Mortensen’s Complaint was a classic example of an improper “shotgun pleading.”
It reeled off federal statutory claims under the Truth in Lending Act, Real Estate Settlement
Procedures Act, and Home Ownership and Equity Protection Act; as well as state-law claims for
breach of implied covenant of good faith and fair dealing, intentional infliction of emotional
distress, violation of Alabama Code § 35-10-9, slander of title, and violation of notice of sale
requirements under Alabama Code § 35-10-13. In addition to these causes of action,
Mortensen’s Complaint interposed numerous additional legal theories under the confusing
heading “Affirmative Defenses to the Foreclosure Action,” including claims of “original note not
provided,” unconscionability, improper party to foreclose, breach of implied covenant of good
faith and fair dealing, breach of contract, concealment in negotiations, unclean hands,
assumption of risk, and consent. As the Court has previously observed, “In neither his pleadings
nor his Rule 56 briefs has Mortensen endeavored to flesh out or explain the vast majority of
these claims, or even to link them to particular defendants, facts or legal elements; rather, the
bulk of these claims appear to have been pleaded to obfuscate, proliferate, misdirect and
otherwise bog down these proceedings in a mass of ill-fitting, make-work legal theories that have
consumed considerable resources of defendants and this Court, while plaintiff fails to exert even
minimal effort to advance or defend many of them.” (Doc. 79, at 2-3 n.5.)
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12(b) and Rule 15 motions by Mortensen. At the close of discovery, the parties filed crossmotions for summary judgment. After briefing, the Court entered a pair of lengthy Orders (docs.
78 and 79) on December 23, 2010. Those rulings denied Mortensen’s Motion for Summary
Judgment, granted defendants’ and BAC Servicing’s Motion for Summary Judgment, dismissed
all of Mortensen’s claims against all defendants, declared that Mortensen is in default under the
mortgage and note and that BAC Servicing is entitled to foreclose the mortgage, and awarded
BAC Servicing damages of $127,442.44 on its breach of contract and money had and received
claims against Mortensen. A corresponding Judgment in BAC Servicing’s favor was entered on
that date.
More than a month later, on January 29, 2011, Mortensen filed a Motion for Rehearing
(doc. 84) seeking reconsideration of the December 23 summary judgment orders and judgment.
Via Order (doc. 88) entered on February 9, 2011, the undersigned denied this request on the
grounds that Mortensen’s Motion was in derogation of well-settled legal standards for
reconsideration, that he was repeating (often in verbatim form) arguments the Court had
previously considered and rejected, and that he improperly sought to develop previously
available facts and legal arguments for the first time via his post-judgment motion.
BAC Servicing now petitions the Court for an award of its expenses and attorney’s fees
incurred in this action, which it contends Mortensen is contractually obligated to pay pursuant to
the terms of the applicable mortgage and promissory note. All told, BAC Servicing seeks to
recover $112,821.20 in attorney’s fees and $9,651.61 in expenses, for a total fees and expenses
award of $122,472.81. Movant has submitted nearly 200 pages of itemized billing records, as
well as a detailed Declaration of Alan Warfield (“Warfield Decl.”) to document those fees and
expenses, and a Declaration of Patrick Sims (“Sims Decl.”) as further evidence of the
reasonableness of the rates charged and hours accrued by the billing attorneys. (See doc. 85.)
II.
Defendant’s Entitlement to Attorney’s Fees and Expenses.
A.
Fees and Expenses are Recoverable in this Action.
The threshold question, of course, is whether BAC Servicing is entitled to a fee award at
all. “Alabama follows the American rule, whereby attorney fees may be recovered if they are
provided for by statute or by contract ….” Jones v. Regions Bank, 25 So.3d 427, 441 (Ala. 2009)
(citations omitted); see also Battle v. City of Birmingham, 656 So.2d 344, 347 (Ala. 1995)
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(same).3 Here, BAC Servicing maintains that attorney’s fees were provided for by the subject
contracts, namely, the Mortgage and Note. In this context, the Alabama Supreme Court has
explained that “[t]he allowance of attorney’s fees as a part of the secured debt is dependent upon
the agreement of the contracting parties, within the terms of which the claim for fees must fall.”
Taylor v. Jones, 276 So.2d 130, 134 (Ala. 1973) (citation omitted). As such, the initial inquiry is
whether BAC Servicing’s claim for fees falls within the scope of the relevant agreements
authorizing recovery of attorney’s fees.
BAC Servicing identifies two contractual provisions that it contends bind Mortensen to
pay its attorney’s fees and expenses. First, the Note executed by Mortensen includes his
acknowledgment that if he defaults and the note holder accelerates the debt, “the Note Holder
will have the right to be paid back by [Mortensen] for all of its costs and expenses in enforcing
this Note to the extent not prohibited by applicable law. Those expenses include, for example,
reasonable attorneys’ fees.” (Doc. 66, Exh. 3, § 6(E).) Second, the Mortgage executed by
Mortensen specifies that in the event of a default that is not timely cured, “Lender at its option
may require immediate payment in full of all sums … and may invoke the power of sale and any
other remedies permitted by Applicable Law. Lender shall be entitled to collect all expenses
incurred in pursuing the remedies provided in this Section 22, including but not limited to,
reasonable attorneys’ fees and costs of title evidence.” (Doc. 66, Exh. 1, § 22.)
These provisions are valid and enforceable. Under Alabama law, “[a] mortgagee … may
recover the attorney fees incurred in the enforcement of the mortgage where the mortgage
contractually imposes a duty on the mortgagor to pay those fees.” Austin Apparel, Inc. v. Bank
of Prattville, 872 So.2d 158, 166 (Ala.Civ.App. 2003); see also Lunceford v. Monumental Life
3
The Court applies Alabama law to the Motion for Award of Attorney’s Fees and
Expenses with respect to fee-shifting provisions in both the Mortgage and the Note because: (i)
movant cites to Alabama precedents on this issue without objection or dissent from Mortensen;
(ii) the Mortgage instrument provides that it is governed by “the law of the jurisdiction in which
the Property is located” (doc. 66, Exh. 1, ¶ 16), and the subject property lies in Foley, Alabama;
(iii) “a federal court sitting in diversity will apply the choice of law rules for the state in which it
sits,” Manuel v. Convergys Corp., 430 F.3d 1132, 1139 (11th Cir. 2005); (iv) under Alabama law,
where the parties have not specified a particular sovereign’s law to govern, courts “follow the
principle of lex loci contractus, applying the law of the state where the contract was formed,”
Stovall v. Universal Const. Co., 893 So.2d 1090, 1102 (Ala. 2004); and (v) the Note reflects that
that contract was formed in Gulf Shores, Alabama (doc. 66, Exh. 3, at 1).
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Ins. Co., 641 So.2d 244, 247 (Ala. 1994) (opining that borrower “had a contractual duty to pay
attorney fees incurred by” lender where “mortgage contract expressly provided that the
mortgagees could recover attorney fees in their efforts to enforce any obligation pertaining to the
mortgage”); Wells Fargo, N.A. v. Pierre, 2010 WL 1753789, *5 (M.D. Ala. Apr. 13, 2010)
(under Alabama law, “a mortgagee may recover attorney fees incurred when the contract
imposes a duty on the mortgagor to pay those fees”). Thus, the fee-shifting provisions of the
Mortgage and Note are both cognizable and enforceable under Alabama law.4
B.
No Distinction Between Offensive and Defensive Fees.
Significantly, Alabama law does not restrict the fees recoverable under contractual feeshifting provisions to those that a lender incurs in pursuit of direct claims to enforce mortgage
and note obligations. Rather, a lender may also recover its attorney’s fees incurred in defending
against the borrower’s claims challenging the validity or enforceability of a mortgage or note.
The leading Alabama Supreme Court case on a mortgagee’s right to recover attorney’s fees for
defending against a mortgagor’s claims is Taylor v. Jones, 276 So.2d 130 (Ala. 1973). In Taylor,
the borrower filed suit seeking a declaration that it owed no indebtedness to the lender under a
mortgage, and the lender likewise brought claims against the borrower requesting leave to
foreclose. After the lender prevailed, the lender sought recovery of attorney’s fees accrued in
litigating both the offensive and defensive claims, pursuant to a provision in the note that
obligated the borrower “to pay all costs of Collecting or Securing, or attempting to Collect or
Secure, this note, including a reasonable attorney’s fee.” Id. at 133. The Taylor Court affirmed
an award of attorney’s fees under that provision, even for fees incurred in the lender’s defense of
the borrower’s claims, reasoning as follows: “The evidence is clear that at the inception, when
the matter was turned over to an attorney the indebtedness could have been liquidated by paying
principal, interest and a nominal attorney’s fee. The [borrower] did not elect to allow collection
at that time and consequently [the lender] was caused to incur substantial attorney’s fees.” Id.5
4
“An award of attorney fees, where permissible, is a matter within the discretion of
the trial court and will not be reversed on appeal absent a showing that the trial court abused its
discretion.” Jones v. Sherrell, 52 So.3d 527, 531 (Ala.Civ.App. 2010) (citations omitted).
5
Other Alabama authorities have reached the same result through similar
reasoning. See Hunt v. NationsCredit Financial Services Corp., 902 So.2d 75, 82 (Ala.Civ.App.
2004) (where borrower signed note promising to pay costs of collection, including reasonable
(Continued)
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Under Taylor and its progeny, then, it is unnecessary to separate BAC Servicing’s
attorney’s fees into those incurred in pursuing its direct claims against Mortensen, on the one
hand, and those incurred in defending against Mortensen’s claims, on the other. The record
shows that Mortensen initiated his myriad claims against BAC Servicing for the express purpose
of canceling and invalidating his repayment obligations, as well as BAC Servicing’s foreclosure
rights, under the Mortgage and Note. As such, BAC Servicing’s costs of defending against
Mortensen’s claims plainly constitute “costs and expenses in enforcing this Note” and “expenses
incurred in pursuing the remedies provided” in the Mortgage, such that those expenses (including
reasonable attorney’s fees) are recoverable under Alabama law and the relevant contracts. For
purposes of BAC Servicing’s fee petition, then, the Court will not distinguish between attorney’s
fees relating to its defense of Mortensen’s claims and those relating to its prosecution of its
claims against Mortensen. All are equally recoverable both as a matter of contract and under
Alabama law.
C.
Plaintiff’s Counterarguments Lack Merit.
In response to BAC Servicing’s Motion, Mortensen submits a series of arguments against
awarding fees and costs. First, he suggests that he should be excused from liability for BAC
Servicing’s attorney’s fees because he “has no extra funds.” (Doc. 92, at 1.) On this point,
Mortensen elaborates that “[i]n some jurisdictions, if the Plaintiff lacks the funds to pay the
attorneys fees they are excused from paying.” (Id. at 1-2.) But Mortensen offers neither
argument nor authority that Alabama recognizes an ability-to-pay defense to the contractual
award of attorney’s fees.6 To develop a hardship argument properly, plaintiff would have needed
attorney’s fee, the “mortgagee is entitled to attorney fees for defending an action challenging the
terms of a promissory note or a mortgage”); Johnson v. U.S. Mortg. Co., 991 F. Supp. 1302,
1307 (M.D. Ala. 1997) (recognizing that, under Alabama law, “the mortgagee could still recover
fees for defending against the mortgagors’ declaratory action under the terms of the note, which
provided for a reasonable attorney’s fee in connection with the collection or securing of the
note”).
6
Nor does Mortensen present evidence to support his lawyer’s conclusory
statement that Mortensen “has no extra funds.” As the Court has explained repeatedly in this
litigation, federal courts do not blindly accept counsel’s representations as to operative facts of
the case during motion practice. (See doc. 88, at 4; doc. 78, at 5-6; doc. 79, at 16 n.23 & 17
(Continued)
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to furnish the Court with (i) case authorities showing that Alabama recognizes such a defense to
the enforcement of contractual fee-shifting provisions, and (ii) record evidence that Mortensen is
indeed unable to pay any judgment entered against him. Plaintiff has satisfied neither prong.7
Second, Mortensen attempts to reopen the merits of this action by arguing that his claims
were “not frivolous.” (Doc. 92, at 2; doc. 93, ¶ 18.) Whether they were or were not frivolous is
irrelevant for purposes of the fee petition. What is relevant is that when the indebtedness came
due, rather than attempting to liquidate it (as Mortensen says he could have done), he did not
allow collection and enforcement of the lender’s remedies at that time, but instead filed a
sprawling 18- or 19-count complaint against the lender seeking to enjoin it from pursuing
contractual remedies and to recover monetary damages. By electing that course of action,
Mortensen forced BAC Servicing to incur substantial attorney’s fees to vindicate its contractual
rights to enforce the Note and foreclose the Mortgage. By the plain terms of the Note and
Mortgage that he signed, Mortensen is liable to BAC Servicing for those attorney’s fees,
irrespective of any frivolity determination concerning his underlying claims.
Third, Mortensen apparently forgets the procedural posture of this case, because he reargues summary judgment. He recites the Rule 56 standard, explains why he believes he is
entitled to summary judgment on all of his claims, and demands “Summary Judgment against the
Defendants,” as well as “damages of no less than Two Hundred Thousand Dollars ($200,000)
from the Defendants.” (Doc. 93, at 6-9.) The cross-motions for summary judgment were ruled
n.25.) Yet Mortensen’s counsel once again presents his own unvarnished representations as fact,
with no supporting evidence of any kind. This is improper.
7
At best, Mortensen argues in his third brief in opposition to the Motion for
Attorney’s Fees that “there are numerous Alabama cases where the Court considered ability to
pay when determining the legality of ordering a party to pay another party’s attorney’s fees.”
(Doc. 93, ¶ 21.) However, the two cases he cites for this proposition, McRae v. Seafarers’
Welfare Plan, 726 F. Supp. 817 (S.D. Ala. 1989) and Stevenson v. International Paper Co.,
Mobile, Alabama, 352 F. Supp. 230 (S.D. Ala. 1972), are inapposite. McRae addresses Eleventh
Circuit guidelines for award of attorney’s fees under ERISA. See McRae, 726 F. Supp. at 82122. Likewise, Stevenson (which makes no mention of ability to pay, in any event) concerns a
statutory award of attorney’s fees under Title VII. See Stevenson, 352 F. Supp. at 249. Neither
decision sheds light on whether Alabama courts applying Alabama law recognize an “ability-topay” defense to contractual claims for award of attorney’s fees.
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on four months ago. Mortensen’s motion for rehearing was denied more than two months ago.
BAC Servicing’s attorney’s fee petition does not confer license on Mortensen to ignore those
rulings, reopen summary judgment briefing, and seek a third bite at the apple. Besides,
Mortensen’s disagreement with the undersigned’s resolution of the case on summary judgment is
not a valid defense to BAC Servicing’s request for award of attorney’s fees, as expressly
provided for by the contracts Mortensen signed.8
Fourth, Mortensen suggests that attorney’s fees should be denied because “[t]he bank
created this case” and “the bank created its own problem.” (Doc. 92, at 3-4.) These statements
are false. Mortensen alone created this case. He sued BAC Servicing, not the other way around.
And Mortensen created the problem by defaulting on monthly payments for his mortgage loan
obligation in October 2008. Plaintiff’s attempts to shift the blame to BAC Servicing for his
default are disingenuous, given his testimony that his “money was running out” and that he
“knew that [he] would have to default” in 2008 because he lacked the funds to stay current on his
payments. (Mortensen Dep., at 242-43, 248.) What’s more, when defendants offered Mortensen
a loan modification in June 2009 that would have reduced his monthly payments and allowed
him to become current on his loan in short order, all without a large lump-sum payment for
considerable past due sums, Mortensen refused, even though he now admits that he wishes he
had accepted the offer and that he “made a mistake” in turning it down. (Id. at 294, 306.) In
light of this clear record evidence, Mortensen’s revisionist rhetoric (i.e., that he defaulted only at
the “Lender banks [sic] insistence,” that “[t]he bank could and should have done better” (doc. 92,
at 3-4) in the modification process, that BAC Servicing was “illegally stealing” property on
whose mortgage he had defaulted years earlier, and that BAC Servicing created this case) all
rings hollow. It was Mortensen who stopped making payments and never resumed them (except
8
Plaintiff does not advance his cause by ignoring those inconvenient summary
judgment rulings. For example, he carries on at length that BAC Servicing fraudulently induced
him to breach the loan agreement. (Doc. 92, at 4; doc. 93, ¶¶ 13-19, 23-25.) But the Court has
already held that Mortensen’s fraudulent inducement claim fails as a matter of law for want of
evidence of either a false representation or reliance on same. (Doc. 79, at 16-18; doc. 88, at 3-4.)
In continuing to press these issues, plaintiff not only disregards court rulings in this case, but also
takes unwarranted and inappropriate liberties with the record, distorting the facts (and even his
own deposition testimony) to bolster his arguments. The Court has previously set forth in detail
its reasons for dismissing Mortensen’s fraud claims, and will not reiterate that reasoning now
simply because plaintiff shields his eyes to the existence of those Orders.
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to do so briefly a year later in a misguided attempt to take advantage of what he knew to be a
mistaken communication). It was Mortensen who made what he calls the “mistake” of rejecting
a favorable modification offer based on his own subjective belief that the lender should simply
write off thousands of dollars that he owed because he had become overextended financially.9 It
was Mortensen who filed a shotgun complaint numbering at least 18 causes of action against
BAC Servicing, in an attempt to wriggle out of his mortgage obligations. It was Mortensen who
unreasonably proliferated and multiplied this action at every turn by taking one unreasonable
position after another in discovery and summary judgment. And it is Mortensen who must bear
the consequences of this series of regrettable strategic decisions by paying BAC Servicing’s
attorney’s fees incurred in this action, as he promised to do in both the Note and Mortgage.
Fifth, Mortensen contends that BAC Servicing “voluntarily consented to and encouraged
all alleged actions of Plaintiff and should therefore be precluded from receiving attorneys fees,
costs and expenses.” (Doc. 92, at 5.) This statement is likewise counterfactual. BAC Servicing
neither consented to nor encouraged Mortensen to default on his promise to make regular
monthly payments on the Note. BAC Servicing neither consented to nor encouraged Mortensen
to refuse reasonable modification offers and never resume making regular monthly payments.
BAC Servicing neither consented to nor encouraged Mortensen to file a bloated complaint suing
it on every theory imaginable, without regard to whether there was even a whiff of factual or
legal support for such claims. BAC Servicing neither consented to nor encouraged Mortensen to
obstruct, delay and otherwise hinder the discovery process during this litigation, or to file
meritless Rule 12(b) and 56 motions of his own. In short, there is no factual basis for
Mortensen’s “consent” argument. He forced BAC Servicing to expend considerable sums of
money to preserve and pursue its remedies under the Note and Mortgage, and he is contractually
obligated to pay BAC Servicing’s reasonable attorney’s fees incurred in that endeavor.
9
It is telling that Mortensen now rationalizes his default by saying that “Plaintiff
defaulted with the hope and under the assumption that they would give him a better mortgage
than he currently had.” (Doc. 92, at 3.) These subjective “hopes” and “assumptions,” untethered
to anything the lender ever said or did, were manifestly unreasonable. The lender was under no
duty to give Mortensen whatever loan modification he might want, or to cross out the specific,
clear terms on which the parties had agreed. And plaintiff never identified any legal theory that
would bar BAC Servicing from insisting that Mortensen repay the full amount even after he went
into default.
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D.
Conclusion.
The Court recognizes that, under Alabama law, attorney’s fee provisions in mortgages
and promissory notes “are not to be used to oppress the debtor.” Graham v. O’Neal, 4 So.2d
897, 900 (Ala. 1941). However, Alabama law also provides that such provisions are entirely
proper “for indemnity to the payee and for his protection and reimbursement.” Id. More
generally, if a mortgage or promissory note contains a provision for the borrower to pay the
lender’s costs of collection and enforcement, “[t]he claim for an attorney’s fee is as much a part
of the contract as any other feature of it.” Taylor, 276 So.2d at 133; see also Army Aviation
Center Federal Credit Union v. Poston, 460 So.2d 139, 141 (Ala. 1984) (“provisions regarding
reasonable attorney’s fees are terms of the contracts susceptible to breach”). It is well-settled
that “[i]t is not a function of the courts to make new contracts for the parties, or raise doubts
where none exist.” Title Max of Birmingham, Inc. v. Edwards, 973 So.2d 1050, 1054 n.1 (Ala.
2007) (citations and internal quotation marks omitted).
Simply put, Mortensen agreed to pay BAC Servicing’s reasonable attorney’s fees in
enforcing the Note and pursuing its remedies under the Mortgage. Alabama courts enforce such
promises. See generally Hunt v. NationsCredit Financial Services Corp., 902 So.2d 75, 83
(Ala.Civ.App. 2004) (affirming trial court’s fee award against borrower where borrower had
unsuccessfully sued lender alleging wrongful foreclosure of her property, and reasoning that
such fees were authorized under the terms of the note). As such, BAC Servicing is entitled to
hold Mortensen to these contractual obligations, and to be reimbursed for its reasonable
attorney’s fees and costs expended in this litigation.
III.
Reasonableness of Fees and Expenses Requested.
Of course, to declare that BAC Servicing is entitled to an award of attorney’s fees and
expenses is a different issue than whether the requested amounts are reasonable. After all, the
relevant contractual documents do not specify that BAC Servicing is automatically entitled to all
of its attorney’s fees; rather, they provide that only “reasonable” fees may be recovered.10 Under
10
Such a “reasonableness” limitation would be engrafted onto these provisions by
Alabama law even if it were not explicitly stated therein. See Willow Lake Residential Ass’n,
Inc. v. Juliano, --- So.3d ----, 2010 WL 3377701, *11 (Ala.Civ.App. Aug. 27, 2010) (“Alabama
law reads into every agreement allowing for the recovery of attorney’s fees a reasonableness
limitation.”).
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Alabama law, “[t]he determination of whether an attorney fee is reasonable is within the sound
discretion of the trial court.” Ex parte Edwards, 601 So.2d 82, 85 (Ala. 1992); see also Subway
Restaurants, Inc. v. Madison Square Associates, Ltd. by CBL Wyoming, Inc., 613 So.2d 1255,
1257 (Ala. 1993) (“The reasonableness of an attorney fee under a contract providing for the
recovery of reasonable attorney fees is largely within the discretion of the trial court.”).
BAC Servicing claims entitlement to attorney’s fees of $112,821.20 and expenses of
$9,651.61. In support of these amounts, movant has submitted the following: (i) a 15-page
declaration by its lead counsel, Alan Warfield, documenting and explaining the various charges
and fees; (ii) back-up documentation, consisting of more than 170 pages of itemized billing
records, receipts for expenses, and payment records; and (iii) a 5-page declaration by attorney
Patrick Sims addressing the reasonableness of the hours and rates. (See doc. 85, Exhs. 1 & 2.)
In stark contrast to movant’s comprehensive documentation supporting the fee request,
Mortensen merely states in conclusory fashion that the claimed amounts are “exorbitant, highly
inflated and unjustifiable” (doc. 92, at 3) and that “[t]here is no doubt that the Defendant’s
current request for … attorneys fees and costs is inflated and unreasonable” (doc. 93, ¶ 26). But
he offers no specific criticisms or examples. He does not point to a single time entry or claimed
expense, or a category of time entries or expenses, that he claims is “exorbitant” or “inflated.”
He makes no effort to rebut BAC Servicing’s comprehensive explanation of why these fees and
expenses were reasonably incurred in this case. Instead, Mortensen paints with exceedingly
broad strokes, essentially asserting that the amount sought is so high as to be inherently
unreasonable, even though plaintiff omits any detail or substance that might justify such a
finding.
The Court agrees with Mortensen on one point: $112,821.20 is an unusually high
number for attorney’s fees incurred in a single-plaintiff residential mortgage loan dispute that
concluded at the summary judgment stage, without a trial. Indeed, the undersigned would expect
the median costs of defense for a lender in a lawsuit of this kind pending in this District Court
through summary judgment to be substantially lower than the amount claimed by BAC Servicing
here. But that doesn’t necessarily mean that BAC Servicing’s fee request is unreasonable.
Closer examination confirms that, in the context of this case, the fees sought are, in large
measure, appropriate and reasonable.
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“The initial estimate of a reasonable attorney’s fee is properly calculated by multiplying
the number of hours reasonably expended on the litigation times a reasonable hourly rate.”
Edwards, 601 So.2d at 85 (citation omitted); see also City of Birmingham v. Horn, 810 So.2d
667, 682 (Ala. 2001) (first step in attorney-fee calculation using lodestar method is to “determine
the number of hours reasonably expended by counsel and a reasonable hourly rate of
compensation for counsel’s representation”). “When an applicant for attorney fees has carried
his burden of showing that the claimed rate and number of hours are reasonable, the resulting
product is presumed to be the reasonable fee to which counsel is entitled.” Edwards, 601 So.2d
at 85 (citation and internal quotation marks omitted). BAC Servicing’s attorneys were billing by
the hour, so the petition seeks recovery of fees calculated as the actual number of hours billed
multiplied by the actual hourly rates of the attorneys involved.11
The reasonableness of the hourly rates charged by BAC Servicing’s counsel in this matter
cannot plausibly be contested (and has not been called into question by Mortensen). Attorney
Warfield, a partner at a large law firm’s Birmingham office, bears some 13 years of litigation
experience, during which time he has represented lenders and banks in more than 100 lawsuits
concerning residential mortgage loans. (Warfield Decl., ¶¶ 4, 10.) Given Warfield’s
qualifications and experience, as well as prevailing rates in the relevant legal market, his hourly
billing rate of $190 in this matter is eminently reasonable. The same goes for the associates
whose time was billed to BAC Servicing at hourly rates of $125 to $131. In that regard, the
Court agrees with Attorney Sims’ assessment that “[t]he billing rates charged by defendants’
lawyers are below local market rates.” (Sims Decl., ¶ 13.)
With respect to the number of hours, BAC Servicing seeks reimbursement for 724.3
hours of attorney time actually expended. The heft of that hours figure certainly warrants
11
To evaluate the reasonableness of an attorney’s fee, Alabama courts consider the
following criteria: “(1) [T]he nature and value of the subject matter of the employment; (2) the
learning, skill, and labor requisite to its proper discharge; (3) the time consumed; (4) the
professional experience and reputation of the attorney; (5) the weight of his responsibilities; (6)
the measure of success achieved; (7) the reasonable expenses incurred; (8) whether a fee is fixed
or contingent; (9) the nature and length of a professional relationship; (10) the fee customarily
charged in the locality for similar legal services; (11) the likelihood that a particular employment
may preclude other employment; and (12) the time limitations imposed by the client or by the
circumstances.” Madison County Dep’t of Human Resources v. T.S., 53 So.3d 38, 44 (Ala.
2009) (citations omitted). These factors inform the Court’s discussion of reasonableness infra.
-12-
skepticism and careful scrutiny.12 But BAC Servicing chronicles various unusual circumstances
that it contends can justify the steep accrued hours figure in this case. Specifically, movant
points to plaintiff’s persistent pattern of unreasonably multiplying, delaying, and obstructing
these proceedings. (Warfield Decl., ¶ 14.) The explanation consumes approximately seven
pages of the Warfield Declaration. In summary, BAC Servicing shows that it was necessary to
devote an unusually large quantity of attorney time to this case for the following reasons: (i)
Mortensen’s confusing, vague pleadings purported to raise as many as 19 legal theories for
recovery, each of which BAC Servicing had to investigate, explore during discovery, research
and brief on summary judgment;13 (ii) in investigating plaintiff’s claims, defendant reviewed
voluminous records concerning Mortensen’s similar acts of defaulting, seeking loan
modifications, and asserting similar legal claims against BAC Servicing and other entities as to
numerous other loans, encompassing thousands of pages of documents spanning at least six
active loan files and four lawsuits; (iii) BAC Servicing had to research and prepare responses to
confusing (and ultimately meritless) dispositive motions filed by Mortensen in the form of both
Rule 12(b) and Rule 56 motions; (iv) the parties engaged in protracted discovery disputes arising
from Mortensen’s refusal to provide substantive responses to discovery requests and his
submission of numerous piecemeal and sometimes internally inconsistent supplemental
12
BAC Servicing does not, and cannot, gloss over the magnitude of these hours, but
instead confronts the issue head-on. Attorney Warfield concedes that “[t]he amount of fees and
expenses incurred by BAC Servicing in this matter is greater than in many cases of this nature
that I have handled in recent years.” (Warfield Decl., ¶ 13.) And Attorney Sims admits that
upon hearing that BAC Servicing sought recompense for approximately 750 hours of attorney
time in this matter, “my thought was that the time seemed high for a case involving claims and
counterclaims for a residential mortgage foreclosure and Truth in Lending Act and supplemental
jurisdiction state law claims.” (Sims Decl., ¶ 10.)
13
This is so despite plaintiff’s failure to make more than a half-hearted, cursory
attempt on summary judgment to support the vast majority of these theories. Just because
plaintiff made no serious attempt to develop or support numerous of his claims did not excuse
BAC Servicing from presenting thorough, well-researched, and factually-supported summary
judgment arguments as to each of them. See, e.g., Mann v. Taser Int’l, Inc., 588 F.3d 1291, 1303
(11th Cir. 2009) (“even in an unopposed motion [for summary judgment], the moving party still
bears the burden of identifying the pleadings, depositions, answers to interrogatories, and
admissions on file, together with the affidavits, if any, which it believes demonstrates the
absence of a genuine issue of material fact”) (citation and internal quotation marks omitted).
-13-
discovery responses, culminating in multiple motions to compel; (v) plaintiff’s
uncooperativeness as to depositions required defense counsel to travel to Miami, Florida, on
multiple occasions for depositions, and to expend resources locating and subpoenaing non-party
witnesses whom Mortensen almost certainly could have found and/or produced as a matter of
professional courtesy; (vi) settlement negotiations were ongoing for more than a year, but were
invariably stymied by plaintiff’s unrealistic valuation of the case and his refusal to provide
information that BAC Servicing would need in order to formulate possible loan modifications;
and the like. Plaintiff has not endeavored to rebut any of these circumstances, much less to
explain why they did not reasonably cause BAC Services to devote an abnormally high amount
of attorney time to litigating this matter.
The point is simple: In a garden variety residential loan modification/default case, the
expenditure of 724.3 hours of defense attorney time to get the case through summary judgment
would be unreasonable. This could and should have been such a garden variety case. But it
wasn’t, in large part because of choices that plaintiff made to maximize the litigation burden on
the defense, to refuse to cooperate on discovery matters, to thwart settlement negotiations with
unreasonable demands and withheld information, and to multiply the number of claims, causes
of action, and motion practice far beyond the borders of reason. Having implemented a “slash
and burn” litigation philosophy throughout this case, plaintiff cannot now be heard to balk that
defense counsel was unreasonable for putting in the long hours needed to mount a
comprehensive, successful defense against such tactics. This is particularly true where, as here,
the only reasonableness objection posited by plaintiff is so vague and conclusory that it does not
highlight any specific portion of the fees (either on the hours or the rates side of the equation)
that plaintiff believes to be unreasonable.14
In light of the foregoing, it is the finding of this Court that, under the case-specific
circumstances presented here, BAC Servicing has met its burden of establishing that the number
of hours claimed in its petition for attorney’s fees is reasonable. That said, there are two small
14
In other words, it is incumbent on plaintiff to recite in specific terms why he
believes the requested fee award is unreasonable and to rebut BAC Servicing’s specific showing
of reasonableness as to hours and rates. But Mortensen’s objection is merely that he thinks he
deserved to win the case and the requested amount is a big number. The former assertion is
immaterial, and the latter observation, in and of itself, says little about reasonableness.
-14-
exceptions that the Court will delete from the final tally of compensable hours. First, BAC
Servicing has not shown why it was reasonably necessary to bill for the time of legal assistant
Taylor Blalock in the amount of 12.1 hours at $76/hour (as opposed to such services falling
under the rubric of law firm overhead that attorney billable hourly rates are intended to capture);
therefore, the sum of $919.60 will be deducted from the total fee award. Second, the Court finds
that the attorney time expended in analyzing and addressing Mortensen’s threat to sue Attorney
Warfield individually, while proper and reasonable, does not bear a sufficiently close nexus to
the types of fees for which recovery was authorized under the Note and Mortgage, but instead
relates to a collateral matter. On that basis, the Court deducts 1.9 hours of Attorney Warfield’s
time (at $190/hour) and 0.7 hours of Attorney Wells’ time (at $280/hour), for a total deduction of
$557.00. After making these adjustments, the total attorney’s fee award obtained from
multiplying BAC Servicing’s reasonable hours expended by the reasonable hourly rates charged
is $111,344.60.15
That figure of $111,344.60, which is merely the product of multiplying reasonable hours
by reasonable hourly rates, is known as the “lodestar.” See Horn, 810 So.2d at 680; Edwards,
601 So.2d at 85 (when number of hours reasonably expended on the litigation is multiplied by a
reasonable hourly rate, “[t]his amount is known as the ‘lodestar’ amount”). As noted, the
lodestar is “presumed to be the reasonable fee to which counsel is entitled.” Edwards, 601 So.2d
at 85 (citation omitted). Having determined what the lodestar amount is, the Court’s next task is
to examine whether an adjustment is necessary, such as “a multiplier determined by considering
a variety of factors, including the complexity of the case and counsel’s experience,” Horn, 810
So.2d at 670, or a reduction if, for example, “only a partial or limited result was obtained.”
Edwards, 601 So.2d at 86. No party has requested any such adjustment (up or down) of the
lodestar amount in this case, and the Court’s independent review reveals that none is warranted.
Accordingly, it is the opinion of this Court that BAC Servicing is entitled to an award of
attorney’s fees in the amount of $111,344.60.16
15
For clarity’s sake, the arithmetic is as follows: BAC Servicing claimed a total of
$112,821.20 in attorney’s fees, from which the Court subtracted $919.60 for legal assistant time,
as well as $557.00 of attorney time related to the “threat” issue, for a total of $111,344.60.
16
In awarding such an amount, the Court is cognizant that the fee award nearly
equals the principal and interest owed by Mortensen on the loan. But that fact is not troubling.
(Continued)
-15-
BAC Servicing also seeks an award of $9,651.61 in expenses pursuant to the fee-shifting
provisions of the Note and Mortgage. Those agreements plainly obligate Mortensen to pay not
only BAC Servicing’s reasonable attorney’s fees, but also its other expenses. As such, this
category of expenditure is plainly within the scope of the contractual provisions at issue. The
particular items for which defendant seeks recovery include filing fees, photocopies, service fees,
witness fees, deposition transcripts, other deposition-related expenses (airfare, lodging, ground
transportation), and Fed Ex charges. (Warfield Decl., at Exh. B.) These expenses are fully
documented and appear reasonable and proper on their face. Plaintiff has interposed specific
objections to none of them. Accordingly, BAC Servicing will also be awarded its costs and
expenses of litigation in the amount of $9,651.61 pursuant to the relevant contractual provisions.
IV.
Conclusion.
For all of the foregoing reasons, BAC Servicing’s Motion for Award of Attorney’s Fees
and Expenses (doc. 82) is granted pursuant to Rules 54(d) and 59(e), Fed.R.Civ.P. Pursuant to
the contractual fee-shifting obligations set forth in the Note and Mortgage, an award of
$111,344.60 in reasonable attorney’s fees and $9,651.61 in costs and expenses is properly
included in the judgment previously entered in this matter. An amended judgment will be
entered contemporaneously herewith pursuant to Rule 59(e).
DONE and ORDERED this 3rd day of May, 2011.
s/ WILLIAM H. STEELE
CHIEF UNITED STATES DISTRICT JUDGE
By itself, the magnitude of the fees requested relative to the amount of the underlying
indebtedness does not forbid their award. See Taylor, 276 So.2d at 134 (“Even though the fee
greatly exceeds the amount of principal and interest on the original obligations, the fee is not so
excessive as to pronounce error in the allowance accepted by the trial court.”).
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