Garcia v. JP Morgan Chase Bank NA et al

Filing 308

ORDER granting Defendants' 294 Motion for Attorney Fees. (See Order for details.) Signed by Judge Douglas L Rayes on 9/6/2018. (MMO)

1

WO

2
3
4
5
6

IN THE UNITED STATES DISTRICT COURT

7

FOR THE DISTRICT OF ARIZONA

8
9

Patricia Garcia,
Plaintiff,

10
11

ORDER

v.

12

No. CV-15-01493-PHX-DLR

JPMorgan Chase Bank NA, et al.,

13

Defendants.

14
15
16

Having prevailed on all claims in this action, Defendants JPMorgan Chase Bank,

17

N.A. (“Chase”) and Bank of America, N.A. (“BANA”) move for an award of attorneys’

18

fees against Plaintiff Patricia Garcia pursuant to the fee shifting provisions in Garcia’s

19

promissory note (“Note”) and corresponding deed of trust (“DOT”), and A.R.S. § 12-

20

341.01. (Doc. 294.) The motion is fully briefed (Docs. 300, 303), neither party requested

21

oral argument, and the relevant factual background may be found in the Court’s April 5,

22

2017 order granting summary judgment for Defendants in this case (Doc. 278), and its

23

June 22, 2017 order dismissing the related case of Garcia v. JPMorgan Chase Bank NA,

24

et al., No. CV-16-01023-PHX-DLR (“Garcia II”) (Doc. 117 in Garcia II).1 For the

25

following reasons, Defendants’ motion is granted.

26

I. Entitlement

27

Defendants argue that four provisions in the Note and DOT require the Court to

28
1

Unless otherwise specified, record citations refer to documents filed in this case.

1

award reasonable attorneys’ fees in this case. These same provisions were the basis of

2

Defendants’ entitlement to attorneys’ fees in Garcia II, in which the Court concluded that

3

Defendants’ defense of the action fell within the scope of the fee-shifting provisions

4

because Garcia’s claims challenged Defendants’ rights under and interest in the Note and

5

DOT.

6

contractual provisions in the context of Garcia II is equally applicable here.

(Doc. 160 in Garcia II at 8-11.)

The Court’s discussion of the pertinent

7

Garcia argues that, unlike in Garcia II, Defendants’ defense of this action does not

8

fall within the scope of the contractual fee-shifting provisions. She contends that this

9

action is more akin to the case of Rich v. BAC Home Loans Servicing L.P., No. CV-11-

10

00511-PHX-DLR, 2015 WL 12090226 (D. Ariz. Mar. 20, 2015), aff’d in relevant part by

11

Rich v. Bank of Am., N.A., 666 Fed. App’x 635 (9th Cir. 2016), in which this Court found

12

that the plaintiffs’:

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

various statutory and tort claims were premised on allegations
that Defendant had engaged in wrongful conduct separate and
apart from the terms of the Note and Deed of Trust. Simply
put, Defendant did not initiate this action to pursue its
remedies under the Note and Deed of Trust, nor did Plaintiffs’
properly pled claims directly challenge Defendant’s authority
under those instruments.
Id. at *3. Garcia argues that her statutory and tort claims likewise are outside the scope
of the fee-shifting provisions.
Garcia’s reliance on Rich is misplaced. She largely ignores that, in Rich, the Court
awarded fees to the defendant pursuant to materially similar contractual fee-shifting
provisions for its defense of a belatedly introduced “unfunded loan” theory that “was a
direct challenge” to the defendant’s “ability and authority to collect on the Note.” Id.
Here, unlike in Rich, Garcia’s direct challenge to Defendants’ rights under and interest in
the Note and DOT was not belatedly introduced. As thoroughly detailed in the Court’s
June 22, 2017 dismissal order in Garcia II, Garcia has used this litigation to challenge
Defendants’ rights under and interest in the Note and DOT since the case’s inception,
notwithstanding the formal labels attached to her claims. (See Doc. 117 in Garcia II.)
Accordingly, for substantially the same reasons articulated in the Court’s March 30, 2018
-2-

1

order granting Defendants’ motion for attorneys’ fees in Garcia II (Doc. 160 in Garcia

2

II), the Court finds that Defendants are entitled to an award of reasonable attorneys’ fees

3

in this case pursuant to the fee-shifting provisions in Garcia’s Note and DOT.2

4

II. Reasonableness

5

Where reasonable attorneys’ fees are sought pursuant to a contractual provision, a

6

fee award must be supported by proof of what is reasonable. Schweiger v. China Doll

7

Rest., Inc., 673 P.2d 927, 931 (Ariz. Ct. App. 1983). “A fee award calculated by a

8

lodestar method—multiplying a reasonable hourly rate by the number of hours

9

expended—is presumptively reasonable.”

10

Paloma Inv. Ltd. P’ship, 279 P.3d 1191, 1212 (Ariz. Ct. App. 2012).

11

Once the prevailing party makes a prima facie case that the
fees requested are reasonable, the burden shifts to the party
opposing the fee request to establish that the amount
requested is clearly excessive. If that party fails to make such
a showing of unreasonableness, the prevailing party is entitled
to full payment of the fees. If, however, the party opposing
the award shows that the otherwise prima facie reasonable fee
request is excessive, the court has discretion to reduce the
fees to a reasonable level.

12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Flood Control Dist. of Maricopa Cty. v.

Geller v. Lesk, 285 P.3d 972, 976 (Ariz. Ct. App. 2012).
When analyzing the reasonableness of a requested fee award, the Court begins by
determining the billing rate charged by the attorneys who worked on the case.
Schweiger, 673 P.2d at 931. “[I]n corporate and commercial litigation between feepaying
clients, there is no need to determine the reasonable hourly rate prevailing in the
community for similar work because the rate charged by the lawyer to the client is the
best indication of what is reasonable under the circumstances of the particular case.” Id.
at 931-32. However, “upon the presentation of an opposing affidavit setting forth the
reasons why the hourly billing rate is unreasonable, the court may utilize a lesser rate.”
Id. at 932.
Having reviewed Defendants’ supporting documentation, the Court finds that the
2

28

Because the Court concludes that Defendants’ are entitled to fees under the feeshifting provisions of the Note and DOT, Defendants are not entitled to fees under A.R.S.
§ 12-341.01. See Rich, 666 Fed. App’x at 642.
-3-

1

hourly rates charged by Defense Counsel are reasonable. In doing so, the Court again

2

rejects Garcia’s argument, previously made and rejected in the context of Garcia II, that

3

these rates are unreasonably high because the results of a 2013 survey conducted by the

4

Arizona State Bar indicated that the mean billing rates for attorneys and paralegals are

5

lower. These survey results are several years old and discuss factors such as firm size,

6

experience, location, and field of practice in isolation, without analyzing how these

7

factors might affect fee rates in combination.

8

Next, the Court must assess whether Defendants’ attorneys billed a reasonable

9

number of hours for appropriate tasks. A reasonable attorneys’ fee award compensates

10

only for those “item[s] of service which, at the time rendered, would have been

11

undertaken by a reasonable and prudent lawyer to advance or protect his client’s

12

interest.” Schweiger, 673 P.2d at 932 (internal quotation and citation omitted). To that

13

end, the party seeking a fee award must submit an affidavit indicating “the types of legal

14

services provided, the date the service was provided, the attorney providing the service . .

15

., and the time spent providing the service.” Id.; see also LRCiv 54.2(d)(3), (e). Once that

16

party establishes its entitlement to fees and submits a sufficiently-detailed affidavit, “the

17

burden shifts to the party opposing the fee award to demonstrate the impropriety or

18

unreasonableness of the requested fees.” Nolan v. Starlight Pines Homeowners Ass’n,

19

167 P.3d 1277, 1286 (Ariz. Ct. App. 2007). The opposing party must “present specific

20

objections to the reasonableness of the fees requested.” Id. Generic assertions that the

21

fees “are inflated and that much of counsel’s work was unnecessary . . . are insufficient as

22

a matter of law.” Id. at 1285-86

23

Defendants have met their prima facie burden by submitting a detailed, task-based

24

itemization of the fees incurred in defending against this action, which total $488,292.10.

25

(Doc. 294-1.) This itemization includes the date each task was performed, the attorney or

26

paralegal performing the task, a description of the task, the amount of time spent

27

performing it, and the total amount billed for each task. Defendants also seek $14,604.09

28

in non-taxable costs, which have been similarly itemized. (Id.) The burden therefore

-4-

1

shifts to Garcia to present specific objections to the reasonableness of the fees requested.

2

The Court has reviewed Garcia’s objections and finds that, in many cases, they are

3

too generic and simply criticize Defendants’ counsel for overworking the case or for

4

drafting motions that were not granted. But simply because a motion might not have been

5

granted does not mean that it was unreasonable or imprudent to file it. With that said, the

6

Court sustains Garcia’s objections to the following billing entries: 503, 506, 507, 513,

7

597, 598, 599, 604, 799, 805, 867, 911, 950, 972, 1032, 1036, 1038, 1049, and 1163.

8

These entries total $6,449.50. The Court therefore reduces Defendants’ fee award against

9

Garcia pursuant to the fee-shifting provisions in the Note and DOT to $481,842.60. The

10

Court also awards Defendants $14,604.09 in non-taxable costs pursuant to those same

11

contractual provisions.

12

III. Conclusion

13

The Court acknowledges that the fee award in this case in substantial. But given

14

the Court’s understanding of the lengthy and contentious history of this case, the Court

15

cannot say that the work performed by Defense Counsel was unreasonable or imprudent.

16

In the Court’s experience, promissory notes and deeds of trust securing home loans

17

routinely include such fee-shifting provisions.

18

substantial attorneys’ fees awards underscores how important it is for homeowners to

19

base challenges to their lenders’ authority under such instruments on reasonable, good-

20

faith evaluations of the facts and evidence, and reasonable, coherent interpretations of

21

applicable law.

22

//

23

//

24

//

25

//

26

//

27

//

28

//

-5-

The risk of incurring liability for

1

IT IS ORDERED that Defendants’ motion for attorneys’ fees (Doc. 294) is

2

GRANTED. Defendants are awarded attorneys’ fees in the amount of $481,842.60 and

3

non-taxable costs in the amount of $14,604.09 against Garcia.

4

Dated this 6th day of September, 2018.

5
6
7
8
9

Douglas L. Rayes
United States District Judge

10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

-6-