Jimenez et al v. Suntrust Mortgage Inc.
Filing
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ORDER granting 20 Motion for Attorney Fees signed by Judge Edward J. Davila on August 11, 2014. (ejdlc4S, COURT STAFF) (Filed on 8/11/2014)
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UNITED STATES DISTRICT COURT
United States District Court
For the Northern District of California
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NORTHERN DISTRICT OF CALIFORNIA
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SAN JOSE DIVISION
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MARGARITO JIMENEZ and EFREN
JIMENEZ,
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Plaintiffs,
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v.
SUNTRUST MORTGAGE INC. and DOES 1
through 20 Inclusive,
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Defendants.
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Case No.: 5:13-CV-04615-EJD
ORDER GRANTING DEFENDANT’S
MOTION FOR ATTORNEY’S FEES
[Re: Docket No. 20]
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Presently before the court is Defendant Suntrust Mortgage Inc.’s (“Defendant”) Motion for
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Attorney’s Fees. Dkt. No. 20. Defendant seeks $12,844 in fees from Plaintiffs Margarito Jimenez
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and Efren Jimenez (collectively, “Plaintiffs”) based on the attorney’s fees provisions contained in
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two written agreements between them. The court found this matter suitable for decision without
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oral argument pursuant to Civil Local Rule 7-1(b) and previously vacated the hearing. Having
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reviewed the submissions, and for the following reasons, the court GRANTS Defendant’s motion.
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I.
Background
Plaintiffs executed a promissory note (the “subject note”) with Defendant on January 27,
2006 and thereby obtained a mortgage loan in the original principal amount of $536,000. Not. of
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Case No.: 5:13-CV-04615-EJD
ORDER GRANTING DEFENDANT’S MOTION FOR ATTORNEY’S FEES
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Removal Ex. A (Complaint) ¶ 17, Docket Item No. 1; Def. Req. for Judicial Not. Ex. 1, Docket
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Item No. 21. 1 The subject note was secured by a first-lien deed of trust (the “subject deed of trust”)
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on a parcel of real property purchased by Plaintiffs at 1062 Woodminster Drive, San Jose,
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California 95121 (the “property”). Dkt. No. 21 Ex. 2. After the loan origination, Plaintiffs
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allegedly received a loan modification from Defendant under the impression that the new terms
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were more favorable to them than the original ones. Dkt. No. 1 Ex. A ¶¶ 18-19. Plaintiffs
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allegedly later discovered that these new terms were not in fact beneficial to them. See id. ¶¶ 27-28,
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35-37.
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Plaintiffs filed this action in the Santa Clara County Superior Court on September 4, 2013,
United States District Court
For the Northern District of California
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alleging that Defendant’s conduct in offering and executing the loan modification constituted
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fraud, breach of the covenant of good faith and fair dealing, and a violation of California’s Unfair
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Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200 et seq. Dkt. No. 1 Ex. A. Defendant
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removed the case to this district on October 4, 2013. Id. Defendant filed a Motion to Dismiss on
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October 15, 2013, which Plaintiffs failed to oppose. Docket Item No. 9. The court scheduled a
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Case Management Conference for February 7, 2014 and required the parties to file a Joint Case
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Management Statement by January 31, 2014. See ADR Sched. Order, Docket Item No. 5.
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Plaintiffs failed to submit this statement. Accordingly, the court issued an Order to Show Cause
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why the case should not be dismissed for failure to prosecute, requiring Plaintiffs to respond by
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February 10, 2014. Order to Show Cause, Docket Item No. 16. When Plaintiffs did not respond to
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the court’s Order, the court dismissed this action in its entirety pursuant to Federal Rule of Civil
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Procedure 41(b). Order Dismissing Case, Docket Item No. 17. In doing so, the court entered
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judgment in favor of Defendant. Judgment, Docket Item No. 18. Defendant filed the instant
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Motion for Attorney Fees on February 25, 2014. Dkt. No. 20. Plaintiff did not timely file an
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Opposition to this motion. 2
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The court hereby GRANTS Defendant’s Request for Judicial Notice, Dkt. No. 21, because the documents Defendant
submits are matters of public record. See Fed. R. Evid. 201; Gilbert v. World Sav. Bank, FSB, No. 10-CV-05162WHA, 2011 WL 995966, at *3 (N.D. Cal. Mar. 21, 2011).
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Pursuant to the briefing schedule set for this motion, Plaintiffs’ Opposition would have been due by March 11, 2014.
Months later, on July 15, 2014, Plaintiffs’ attorney filed a declaration from his paralegal attempting to excuse
Plaintiffs’ attorney’s failure to timely file a response. See Docket Item No. 25. To the extent Plaintiffs’ attorney
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Case No.: 5:13-CV-04615-EJD
ORDER GRANTING DEFENDANT’S MOTION FOR ATTORNEY’S FEES
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II.
Discussion
a. Entitlement to Attorney’s Fees
“Under the American Rule, the prevailing litigant is ordinarily not entitled to collect
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reasonable attorney’s fees from the losing party;” however, a statute or enforceable contract can
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overcome this default. Travelers Cas. and Sur. Co. of Am. v. Pac. Gas and Elec. Co., 549 U.S.
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443, 448 (2007) (internal citations and quotations omitted). “In a diversity case, the law of the
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state in which the district court sits determines whether a party is entitled to attorney fees, and the
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procedure for requesting an award of attorney fees is governed by federal law.” Carnes v. Zamani,
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488 F.3d 1057, 1059 (9th Cir. 2007). Thus, state law governs the enforceability of a contract’s
United States District Court
For the Northern District of California
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attorney’s fees provision. In California, Civil Code § 1717(a) governs fee applications stemming
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from contract actions, providing:
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In any action on a contract, where the contract specifically provides that attorney’s fees and
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costs, which are incurred to enforce that contract, shall be awarded either to one of the
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parties or to the prevailing party, then the party who is determined to be the party prevailing
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on the contract, whether he or she is the party specified in the contract or not, shall be
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entitled to reasonable attorney’s fees in addition to other costs.
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The court determines which party, if any, has prevailed on the contract for the purposes of
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awarding fees. Cal. Civ. Code § 1717(b)(1). Under this section, the prevailing party on a contract
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is the party that recovered a greater relief in the action on the contract. Id. § 1717(b)(2).
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Here, both the subject note and the subject deed of trust contain attorney’s fees provisions.
The subject note specifies:
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If the Note Holder has required me to pay immediately in full as described above, the Note
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Holder will have the right to be paid back by me for all of its costs and expenses in
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enforcing this Note to the extent not prohibited by applicable law. Those expenses include,
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for example, reasonable attorneys’ fees.
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Dkt. No. 21 Ex. 1 ¶ 7(E). Likewise, the subject deed of trust states:
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intended that declaration to serve as a Motion to Extend Time or other motion to reopen the briefing schedule, that
motion is DENIED for failure to demonstrate good cause.
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Case No.: 5:13-CV-04615-EJD
ORDER GRANTING DEFENDANT’S MOTION FOR ATTORNEY’S FEES
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Lender may charge Borrower fees for services performed in connection with Borrower’s
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default, for the purpose of protecting Lender’s interest in the Property and rights under this
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Security Instrument, including, but not limited to, attorneys’ fees, property inspection and
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valuation fees.
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Dkt. No. 21 Ex. 2 ¶ 14.
As each of Plaintiffs’ claims was premised on the alleged modified terms of the subject
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note and subject deed of trust, this action is indisputably based on these agreements. See Dkt. No.
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1 Ex. A. Section 1717’s limitation to actions “on a contract” has been construed liberally to mean
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any action involving a contract; moreover, courts in California have held that fee clauses in
United States District Court
For the Northern District of California
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promissory notes and deeds of trust authorize attorney’s fees for actions implicating these
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agreements, regardless of whether a party incurred these fees offensively or defensively. See
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Turner v. Schultz, 175 Cal. App. 4th 974, 979 (Cal. Ct. App. 2009). Plaintiffs’ action can thus
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properly be considered an action “on a contract,” sufficient to invoke Section 1717 and support the
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enforcement of the attorney’s fee provisions contained in the subject note and subject deed of trust.
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In addition, Defendant is plainly the prevailing party in this action. Plaintiffs’ complaint
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was involuntarily dismissed for failure to prosecute and judgment was entered on behalf of
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Defendant. See Dkt. Nos. 17-18; Fed. R. Civ. P. 41(b) (specifying that an involuntary dismissal
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“operates as an adjudication on the merits” unless it is “for lack of jurisdiction, improper venue, or
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failure to join a party under Rule 19”). Therefore, Defendant is entitled to reasonable attorney’s
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fees pursuant to Section 1717 and the fee provisions in the subject note and subject deed of trust.
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b. Reasonableness of Fees
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Having found Defendant eligible for an award of attorney’s fees, the court must next
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consider the reasonableness of the requested fees. The determination of whether requested fees are
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reasonable is left to the court’s discretion. Hancock Lab., Inc. v. Admiral Ins. Co., 777 F.2d 520,
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526 (9th Cir. 1985). Generally, the court begins by calculating the “lodestar,” or the number of
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hours reasonably expended multiplied by the reasonable hourly rate. McCown v. City of Fontana,
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565 F.3d 1097, 1102 (9th Cir. 2009). In addition, the court may consider “(1) the time and labor
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required, (2) the novelty and difficulty of the questions involved, (3) the skill necessary to perform
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Case No.: 5:13-CV-04615-EJD
ORDER GRANTING DEFENDANT’S MOTION FOR ATTORNEY’S FEES
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the legal services properly, (4) the preclusion of other employment by the attorney due to
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acceptance of the case, (5) the customary fee, (6) whether the fee is fixed or contingent, (7) time
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limitations imposed by the client or circumstances, (8) the amount involved and the results
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obtained, (9) the experience, reputation and ability of the attorneys, (10) the ‘undesirability’ of the
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case, (11) the nature and length of the professional relations with the client, and (12) awards in
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similar cases.” LaFarge Conseils et Etudes, S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d
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1334, 1341-42 (9th Cir. 1986) (citation omitted). Ultimately, California law permits a judge to
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determine a reasonable fee based on his or her own knowledge and experience. See Scott, Blake &
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Wynne v. Summit Ridge Estates, Inc., 251 Cal. App. 2d 347, 358 (Cal. Ct. App. 1967).
United States District Court
For the Northern District of California
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Here, Defendant requests a fee award based on the work of two attorneys: Mr. Leifer, an
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attorney with four years of relevant experience who bills at a rate of $235/hour and Mr. Yap, an
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attorney with five years of relevant experience who bills at a rate of $250/hour. These billing rates
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appear to be in step with the range of rates awarded to similarly situated counsel. See, e.g.,
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Kennedy v. Wells Fargo Bank, N.A., No. 11-CV-00675-MMC, 2012 WL 4343295, at *3 (N.D.
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Cal. Sept. 20, 2012). Accordingly, the court finds defense counsel’s billing rates to be reasonable.
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Defendant seeks a total award of $12,844. Dkt. No. 20-1 ¶ 2. Of that amount, Defendant
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incurred $9,016.50 from the time of the filing of this litigation until judgment. 3 Id. ¶ 12. Counsel
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billed these hours for reviewing the file, removing Plaintiffs’ action to this court, preparing a
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Motion to Dismiss, meeting and conferring with Plaintiffs’ counsel regarding alternative dispute
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resolution and case management issues, drafting a case management statement, and preparing
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Defendant’s Rule 26 initial disclosures. Id. ¶ 13. Defendant additionally incurred $1,477.50 in
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attorney’s fees for the preparation of the instant motion 4 and budgeted an additional $2,350 for its
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counsel to prepare a reply and travel to California for the hearing. Id. ¶ 14. As this last item
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accounts for work that did not actually occur, the court will subtract that amount ($2,350) from the
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requested amount. Thus the true lodestar is $10,494.
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Mr. Leifer rendered 23.9 hours of service until judgment for a total of $5,616.50 in attorney’s
fees. Dkt. No. 20-1 ¶ 8. Mr. Yap rendered 13.6 hours of service until judgment for a total of
$3,400 in attorney’s fees. Id. ¶ 10.
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Mr. Yap spent 4.5 hours ($1,125) preparing the instant motion and Mr. Leifer spent 1.5 hours
($352.50) reviewing it. Dkt. No. 20-1 ¶ 14.
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Case No.: 5:13-CV-04615-EJD
ORDER GRANTING DEFENDANT’S MOTION FOR ATTORNEY’S FEES
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