Perez et al v. Mortgage Electronic Registration Systems, Inc.

Filing 42

ORDER RE 36 MOTION FOR ATTORNEY'S FEES. Signed by Judge James Donato on 9/18/2019. (jdlc3S, COURT STAFF) (Filed on 9/18/2019)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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BELLA T. PEREZ, et al.,
Plaintiffs,

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ORDER RE ATTORNEY’S FEES

v.

Re: Dkt. No. 36

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MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC., et al.,

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United States District Court
Northern District of California

Case No. 3:17-cv-04880-JD

Defendants.

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The parties’ familiarity with the record is assumed. Defendant Mortgage Electronic

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Registration Systems (“MERS”) has moved for attorney’s fees and costs. Dkt. No. 36. For

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unknown reasons, Perez did not oppose the motion. Even so, the Court has a “duty to

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independently review the applicant’s fee request.” Gates v. Deukmejian, 987 F.2d 1392, 1400 (9th

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Cir. 1992). The fee request is denied without prejudice.

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MERS relies on a clause in the deed of trust as the basis for the motion, but the plain

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language of that clause does not authorize a fee award in this case. The clause at issue, section 14,

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states in pertinent part that “Lender may charge Borrower fees for services performed in

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connection with Borrower’s default, for the purpose of protecting Lender’s interest in the Property

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and rights under this Security Instrument, including, but not limited to attorneys’ fees, property

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inspection, and valuation fees.” Dkt. No. 36-2, Ex. A at ECF p. 13. Counsel for both sides have

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confirmed that there is no default and that “plaintiffs are making their mortgage payments in a

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regular and timely fashion.” Dkt. No. 30 at 1. Consequently, section 14 does not authorize a fee

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award in this case.

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The Court also notes that even if section 14 were applicable, there does not appear to be a
justiciable case or controversy that would permit fee shifting. In response to the Court’s request

for supplemental briefing on the application of Chacker v. JPMorgan Chase Bank, N.A., 27 Cal.

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App. 5th 351 (2018), defendants “acknowledge they are not entitled to a separate award. Rather,

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by way of this motion, Defendants in essence seek a comfort order that the amount of attorneys’

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fees requested in this matter is reasonable and may be added to Plaintiffs’ underlying debt.” Dkt.

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No. 41 at 4. Whatever a “comfort order” might be precisely, it is some distance away from a

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justiciable case or controversy sufficient to authorize the Court to act under Article III. See U.S.

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Const. art. III, § 2; see also MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 139 (2007).

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MERS suggests that it would like this Court to provide a defense in advance of possible litigation

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in the future where plaintiffs might contest the reasonability of attorney’s fees. But that is not a

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proper exercise of federal judicial powers. Consequently, for the same fundamental reason that

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United States District Court
Northern District of California

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the case was dismissed -- there was no case or controversy, see Dkt. No. 30 at 2 -- no relief is

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available here.

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MERS’s other arguments for fees are unavailing. At oral argument, counsel for MERS

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confirmed that they were relying exclusively on section 14 of the deed of trust in seeking fees.

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Even if the Court were to disregard this representation, which it is not inclined to do, MERS has

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not made a prima facie showing that the standard for sanctions under 28 U.S.C. § 1927,

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recklessness or bad faith, has been met in this case. Dkt. No. 36-1 at 9. Claims that the action was

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“meritless and baseless,” id., only rise to a level of “ignorance or negligence,” which is not

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sufficient for a finding of sanctions. Barber v. Miller, 146 F.3d 707, 711 (9th Cir. 1998).

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Defendants’ arguments that another provision of the deed of trust, section 9, authorized fees was

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raised for the first time in their supplemental briefing and will not be considered here. See JG v.

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Douglas Cty. Sch. Dist., 552 F.3d 786, 803-04 n.14 (9th Cir. 2008).

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MERS’s motion for fees is denied without prejudice.

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IT IS SO ORDERED.

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Dated: September 18, 2019

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JAMES DONATO
United States District Judge

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