State Bank of Texas v. Parabia et al

Filing 359

ORDER. No later than August 9, 2021, Attorney Stephen Lopez shall pay Plaintiff the sum of $19,575 as sanctions pursuant to 28 U.S.C. § 1927. Signed by Judge M. James Lorenz on 8/06/2021.(jpp)

Case 3:14-cv-03031-L-DHB Document 359 Filed 08/06/21 PageID.4491 Page 1 of 5

1
2
3
4
5
6
7
8

UNITED STATES DISTRICT COURT

9

SOUTHERN DISTRICT OF CALIFORNIA

10
11

STATE BANK OF TEXAS,

Case No.: 14-cv-3031-L-DHB
Plaintiff,

12
13

v.

14

ORDER

SAM PARABIA, ET AL.,
Defendants.

15
16
17

On March 29, 2021, the Court granted Plaintiff’s Motion for Sanctions Against

18

Stephen F. Lopez, Esq. under 28 U.S.C. § 1927. (Docs. no. 334, 346.) The Court found

19

that the requirements for sanctions against defense counsel Lopez were met but reserved

20

the issue of the amount of attorneys’ fees because Plaintiffs’ evidence was insufficient to

21

perform a lodestar analysis. (Doc. no. 346 (“Order”).) The Court requested additional

22

evidence and supplemental briefing. (Id.)

23

Pending before the Court is Plaintiff’s supplemental briefing (docs. no. 347, 349)

24

and Lopez’ responses (docs. no. 348, 351.) Immediately after Lopez filed his sur-reply,

25

he also filed a notice of appeal appealing the Order. (Doc. no. 352.) On June 17, 2021,

26

the appeal was dismissed by joint motion. (Doc. no. 356.) Upon consideration of the

27

record, Plaintiff is awarded $19,575 in reasonable attorneys’ fees against Lopez pursuant

28

to 28 U.S.C. § 1927.
1
14-cv-3031-L-DHB

Case 3:14-cv-03031-L-DHB Document 359 Filed 08/06/21 PageID.4492 Page 2 of 5

1

Based on extensive analysis of the record, the Court found that Lopez

2

unreasonably and vexatiously multiplied proceedings in this action by advancing

3

frivolous arguments and stonewalling reasonable efforts to meet and confer for the

4

improper purpose of delay and interference with Plaintiff’s rights after foreclosure.

5

(Order at 1-14.) Under 28 U.S.C. § 1927, Plaintiff was entitled to reasonable attorneys’

6

fees for performing tasks, listed in the Order, which were necessitated by Lopez’s

7

sanctionable conduct. (Id. at 15.) Because Plaintiff had submitted insufficient evidence

8

to determine whether its request for $23,872.50 in fees was reasonable, the amount of

9

reasonable fees was reserved for supplemental briefing. (Id. at 15-16.) The facts and

10

analysis set out in the Order are incorporated herein by reference.

11

Plaintiff submitted supplemental briefing, including billing records and increased

12

its fee request to $39,964.40. Lopez opposes initially by denying that he engaged in any

13

sanctionable conduct at all, or alternatively, that his conduct leading to the tasks itemized

14

in the Order was not sanctionable.

15

The Court declines to revisit the issue whether Lopez engaged in sanctionable

16

conduct, as he presents no new evidence or argument, and the issues are already

17

thoroughly addressed in the Order. This order addresses solely the reasonableness of the

18

amount Plaintiff’s fee request.

19

Section 1927 sanctions must be reasonable. See 28 U.S.C. § 1927. Reasonable

20

attorneys’ fees are determined by following the lodestar approach. Mirch v. Frank, 266

21

Fed. Appx. 586, 588 (9th Cir. 2008) (citing Intel Corp. v. Terabyte Int’l, 6 F.3d 614, 622

22

(9th Cir. 1993)).1 Under this approach, the court calculates the presumptively reasonable

23

lodestar figure by multiplying the hours reasonably spent in countering sanctionable

24

conduct by a reasonable hourly rate. Mirch, 266 Fed. Appx. at 588; (citing Hensley v.

25

Eckerhart, 461 U.S. 424, 433-34 (1983)). The Court may also consider a departure from

26
27
1

28

Unless otherwise noted, internal quotation marks, ellipses, brackets, citations, and
footnotes are omitted from citations.
2
14-cv-3031-L-DHB

Case 3:14-cv-03031-L-DHB Document 359 Filed 08/06/21 PageID.4493 Page 3 of 5

1

the lodestar by analyzing the factors enumerated in Kerr v. Screen Extras Guild, Inc., 526

2

F.2d 67, 69-70 (9th Cir. 1975). See Chalmers v. City of Los Angeles, 796 F.2d 1205,

3

1212 (9th Cir. 1986). “The party seeking an award of fees should submit evidence

4

supporting the hours worked and rates claimed.” Hensley, 461 U.S. at 433.

5

Plaintiff’s requested amount has increased substantially since its initial motion. In

6

part, the increase is due to the inclusion of fees incurred for supplemental briefing.

7

Because supplemental briefing was necessitated by counsel’s own error rather than

8

Lopez’s sanctionable conduct, the request to add those fees is denied.

9

The increase is also in part due to Plaintiff’s increase in the requested hourly rates.

10

In its initial motion, Plaintiff claimed under oath that a reasonable hourly rate for

11

Lawrence Hilton was $375, and for Robert Hunt $300. (See doc. no. 334-11 at 2.) In

12

supplemental briefing Plaintiff requests higher hourly rates: $467 for Hilton, and $375

13

for Hunt. (Doc. no. 347 at 2-4.)

14
15
16
17
18

[T]he district court must determine a reasonable hourly rate considering the
experience, skill, and reputation of the attorney requesting fees.
[D]etermining a reasonable or prevailing rate of compensation is inherently
difficult. [It] is not made by reference to rates actually charged the
prevailing party. In determining a reasonable hourly rate, the district court
should be guided by the rate prevailing in the community for similar work
performed by attorneys of comparable skill, experience, and reputation.

19
20

Chalmers, 796 F.2d at 1210-11. “The fee applicant has the burden of producing

21

satisfactory evidence, in addition to the affidavits of its counsel, that the requested rates

22

are in line with those prevailing in the community for similar services.” Intel Corp., 6

23

F.3d at 622.

24

With supplemental briefing, Plaintiff filed a one-page excerpt from an attorney fee

25

research report to argue that the higher requested hourly rates are reasonable. (See docs.

26

no. 347-1 (“Hilton Decl.”) at 1-2; 347-4 (“Hunt Decl.”) at 1-2; 347-2 (“Report

27

Excerpt”).) Neither the Report Excerpt nor the declarations show that the cited rates are

28

for similar services, i.e., real estate, foreclosure, or debtor/creditor practice area. (Cf.
3
14-cv-3031-L-DHB

Case 3:14-cv-03031-L-DHB Document 359 Filed 08/06/21 PageID.4494 Page 4 of 5

1

Hilton Decl. at 1 (“According to the 2018 Real rate Report, in the year 2018, for

2

attorneys (a) who were partners, (b) practiced in San Diego, and (c) who had more than

3

21 years of experience, the hourly rate for attorneys in the median was $467, and the

4

hourly rate for attorneys in the third quartile (more sophisticated work) was $980.”); Hunt

5

Decl. at 1 (same); Report Excerpt (not specifying any area of practice).) Further, Hilton

6

and Hunt have presented no evidence to show that they have developed a specialty in real

7

estate, foreclosure, or debtor/creditor law. Both state that lender/borrower disputes are

8

only one of their practice areas practice, rather than a specialty. (Hilton Decl. at 2; Hunt

9

Decl. at 2.) But for Defendants’ vexatious tactics, this would be an ordinary judicial

10

foreclosure action. The underlying facts did not involve any sophisticated or complex

11

lending, foreclosure, or real estate transactions. Based on Plaintiff’s prior representation

12

under oath that the lower hourly rates are reasonable, and given the skill required and

13

displayed to prosecute this action, the Court finds that the lower hourly rates ($300 for

14

Hunt, and $375 for Hilton) are reasonable under the circumstances of this case.

15

The Court has reviewed Plaintiff’s billing statements (doc. no. 349-2) in light of

16

the tasks found to have been necessitated by Lopez’s sanctionable conduct (see Order at

17

15). To arrive at a reasonable number of hours, the Court excluded the hours which

18

appeared to be duplicative or excessive relative to the task. The areas where hours were

19

reduced were primarily with regard to drafting ex parte application for writ of possession,

20

opposition to motion to quash writ of possession, and drafting of the motion for

21

sanctions. Based on the foregoing, the Court finds the lodestar is $19,575.

22

Plaintiff suggests that the Court should use a multiplier to increase the fee award.

23

The lodestar is presumptively reasonable. Mirch, 266 Fed. Appx. at 588; (citing Hensley,

24

461 U.S. at 433-34). It may be adjusted by an appropriate positive or negative multiplier

25

using Kerr factors if necessary to achieve reasonableness:

26
27
28

(1) the time and labor required; (2) the novelty and difficulty of the questions
involved; (3) the skill requisite to perform the legal service properly; (4) the
preclusion of other employment by the attorney due to acceptance of the case; (5)
the customary fee; (6) whether the fee is fixed or contingent; (7) time limitations
4
14-cv-3031-L-DHB

Case 3:14-cv-03031-L-DHB Document 359 Filed 08/06/21 PageID.4495 Page 5 of 5

1
2
3

imposed by the client or the circumstances; (8) the amount involved and the results
obtained; (9) the experience, reputation, and the ability of the attorneys; (10) the
"undesirability" of the case; (11) the nature and length of the professional
relationship with the client; and (12) awards in similar cases.[ ]

4
5

Kerr v. Screen Extras Guild, Inc., 526 F.3d 67, 70 (9th Cir. 1975)). Because "[m]any of

6

these factors are subsumed within the calculation of hours reasonably expended at a

7

reasonable rate[, . . .] the Kerr factors only warrant a departure from the lodestar in rare

8

and exceptional cases." In re Bluetooth Headset Prod. Liability Litig., 654 F.3d 935, 942

9

n.7 (9th Cir. 2011).

10

Under the circumstances of this case, the Kerr factors are subsumed in the lodestar.

11

Plaintiff cites Lopez’ vexatious conduct as a reason to enhance the fee request. (See doc.

12

no. 347 at 7-8.) Without this, however, Plaintiff would not be entitled to any sanctions at

13

all. Plaintiff’s request for a fee enhancement is denied. The Court finds that $19,575

14

represents reasonable attorneys’ fees.

15
16
17
18

For the foregoing reasons, no later than August 9, 2021, Attorney Stephen Lopez
shall pay Plaintiff the sum of $19,575 as sanctions pursuant to 28 U.S.C. § 1927.
IT IS SO ORDERED.
Dated: August 6, 2021

19
20
21
22
23
24
25
26
27
28
5
14-cv-3031-L-DHB