Geddes et al v. HSBC Bank USA NA et al

Filing 41

ORDER denying defendants' 34 Motion for Exoneration of the Bonds. IT IS FURTHER ORDERED granting defendants' 40 Motion for Summary Disposition and granting defendants' 32 Motion for Attorney Fees and awarding fees to defendants in the amount of $14,000. Signed by Judge Frederick J Martone on 9/18/2012.(LFIG)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE DISTRICT OF ARIZONA

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Richard Geddes; Delania Geddes,
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Plaintiffs,
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vs.
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HSBC Bank USA, et al.,
Defendants.

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No. CV-12-0667-PHX-FJM
ORDER

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The court has before it defendants’ motion for an award of attorney’s fees (docs. 32,

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39) and memorandum in support (doc. 39), to which plaintiffs have not responded, and

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defendants’ motion for summary disposition (doc. 40). We also have before us defendants’

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motion to exonerate and release bonds (doc. 34), plaintiffs’ response (doc. 37), and

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defendants’ reply (doc. 38).

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I.

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Plaintiffs brought this action in state court challenging a trustee’s sale of their

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residence, notwithstanding their default, by asserting arguments that have consistently been

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rejected by this court and the Arizona Court of Appeals. Defendants subsequently removed

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the action to federal court. On June 1, 2012, we granted defendants’ motion to dismiss with

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prejudice, concluding that plaintiffs had failed to state a claim upon which relief can be

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granted (doc. 30). Plaintiffs have appealed that order. At the same time, we also granted

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defendants’ motion to dissolve a temporary restraining order (“TRO”) that was entered in

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state court, without notice to the defendants, enjoining the trustee’s sale of plaintiffs’

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residence. Two bonds in the amount of $3,200 each were posted by plaintiffs in state court

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in connection with the TRO. After removal, the bonds were transferred to this court (doc.

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29). Having successfully moved to dismiss this case and dissolve the TRO, defendants now

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seek an award of attorney’s fees (doc. 32) and an order exonerating and releasing the bond

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funds (doc. 34). Plaintiffs object to the exoneration of the bonds, arguing that their filing of

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a notice of appeal divests this court of jurisdiction to grant the relief requested.

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II.

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Generally, the filing of a notice of appeal “confers jurisdiction on the court of appeals

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and divests the district court of its control over those aspects of the case involved in the

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appeal.” Griggs v. Provident Consumer Discount Co., 459 U.S. 56, 58, 103 S. Ct. 400, 402

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(1982). Nevertheless, pursuant to Rule 62(c), Fed. R. Civ. P., the district court retains limited

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jurisdiction to “suspend, modify, restore, or grant an injunction” during the pendency of an

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appeal, as long as the status quo of the parties and the status of the case on appeal are

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preserved. Natural Res. Def. Council v. Sw. Marine, Inc., 242 F.3d 1163, 1166 (9th Cir.

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2001). Because an injunction is immediately enforceable regardless of whether an appeal

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is pending, Fed. R. Civ. P. 62(a), we have authority under Rule 62(c) to exonerate the bonds

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in connection with our order dissolving the TRO.

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There is a “rebuttable presumption that a wrongfully enjoined party is entitled to have

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the bond executed and recover provable damages up to the amount of the bond.” Nintendo

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of Am. v. Lewis Galoob Toys, Inc., 16 F.3d 1032, 1036 (9th Cir. 1994). For the reasons

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stated in our order granting defendants’ motion to dismiss (doc. 30), we conclude that

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defendants were wrongfully enjoined.

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exonerate the bonds because they have made no showing of damages. While we assume that

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defendants suffered damages as a result of the wrongful injunction of the trustee’s sale,

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defendants are only entitled to recover “provable” damages. Fidelity Nat’l Fin. Inc. v.

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Friedman, 472 Fed. Appx. 577, 579 (9th Cir. 2012). Without any showing of damages,

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defendants have inadequately supported their motion. Therefore, the motion to exonerate the

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bonds is denied (doc. 34), without prejudice to refiling a new motion.

Nevertheless we deny defendants’ motion to

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III.

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We also have before us defendants’ unopposed motion for attorney’s fees pursuant

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to A.R.S. § 12-341.01(A) or (C). Plaintiffs’ failure to respond to the motion for attorney’s

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fees may be deemed a consent to the granting of the motion and we may dispose of the

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motion summarily. LRCiv 7.2(i). Defendants seek attorney’s fees and costs in the amount

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of $30,321.90. Under the analysis set forth in Assoc. Indemn. Corp. v. Warner, 143 Ariz.

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567, 570, 694 P.2d 1181, 1184 (1985), we conclude that defendants are entitled to fees.

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Plaintiffs asserted meritless claims; because plaintiffs filed the claim, litigation was

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unavoidable; defendants prevailed on every claim; plaintiffs’ legal claims were not novel;

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and a fee award would not discourage other parties from brining meritorious claims.

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Although they did not respond, we can only conjecture that a substantial award of fees would

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cause a hardship on plaintiffs who have been unable to pay their mortgage. In sum, the

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Warner factors support an award of fees.

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Defendants request compensation for a total of 150 of work in connection with this

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action. We believe this is excessive in a case that was resolved on a motion to dismiss, and

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on issues which defendants recognize are routinely dismissed. Therefore, we reduce the

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number of compensable hours to 70 and award total fees in the amount of $14,000.

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IV.

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IT IS ORDERED DENYING defendants’ motion for exoneration of the bonds (doc.

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34). IT IS FURTHER ORDERED GRANTING defendants’ motion for summary

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disposition (doc. 40) and GRANTING defendants’ motion for attorney’s fees (docs. 32, 39)

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and awarding fees to defendants in the amount of $14,000.

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DATED this 18th day of September, 2012.

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