Martenson v. RG Financing et al

Filing 123

ORDER: Defendants' 115 Motion for Attorneys' Fees is DENIED. See order for details. Signed by Judge Neil V Wake on 03/10/11. (NKS)

Martenson v. RG Financing et al

Doc. 123

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF ARIZONA

Holly Martenson, Plaintiff, vs. RG Financing, et al.,

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No. CV-09-01314-PHX-NVW ORDER

Before the Court is Defendant RG Financing's and Defendant JL Financing's "Motion for Attorneys' Fees" (Doc. 115). Defendants, however, have foreclosed on a residential parcel of less than 2.5 acres through a non-judicial trustee's sale. Accordingly, "no action may be maintained to recover any difference between the amount obtained by sale and the amount of the indebtedness and any interest, costs and expenses." A.R.S. § 33-814(G). "Costs and expenses" in this context includes attorneys fees. Sec. Sav. & Loan Ass'n v. Milton, 171 Ariz. 75, 77, 828 P.2d 1216, 1218 (Ct. App. 1991). Technically speaking, Defendants are not asking for the "difference between the amount obtained by sale and the amount of the indebtedness and any interest, costs and expenses" -- Defendants are only seeking "costs and expenses." However, the Court does not believe that a trust deed beneficiary can avoid § 33-814(G) simply by seeking only a subset of everything it might have otherwise sought, but for the statute. Accordingly, Defendants cannot recover their

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attorneys fees with respect to Plaintiff's state law claims or by virtue of attorneys fees provisions in the promissory note. RESPA, on the other hand, is a federal statute which gives this Court discretion to award attorneys fees. 12 U.S.C. § 2607(d)(5). This Court does not believe that A.R.S. § 33814(G) shields Plaintiff from RESPA's attorneys fees provision -- otherwise, Arizona would be upsetting federal policy regarding such fee awards. Nonetheless, Defendants must satisfy the "frivolous, unreasonable or without foundation" standard to receive fees. See Lane v. Residential Funding Corp., 323 F.3d 739, 746­48 (9th Cir. 2003) (holding that the standard for defendants' recovery under fee-shifting provisions in civil rights statutes also applies to fee-shifting provision in RESPA). The Court will not say, on this record, that Plaintiff's RESPA claim was frivolous, unreasonable, or without foundation. The Court never reached the merits of this claim, but dismissed it for failure to satisfy the statute of limitations. (See Doc. 98 at 2.) Therefore, the Court will not award attorneys fees to Defendants under RESPA. IT IS THEREFORE ORDERED that Defendants' "Motion for Attorneys' Fees" (Doc. 115) is DENIED. DATED this 10th day of March, 2011.

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