Warren v. Wells Fargo & Company et al

Filing 89

ORDER Granting Motion for Attorney's Fees [Doc. No. 80 ]. Signed by Judge Cathy Ann Bencivengo on 3/7/2018. (All non-registered users served via U.S. Mail Service)(jjg)

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1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 9 SOUTHERN DISTRICT OF CALIFORNIA MARK WARREN, Case No.: 3:16-cv-2872-CAB-(NLS) Plaintiff, 10 11 v. ORDER GRANTING MOTION FOR ATTORNEY’S FEES 12 WELLS FARGO & CO., WELLS FARGO BANK, N.A., et al. [Doc. No. 80] 13 Defendants. 14 15 16 The parties are familiar with the procedural history of this case, so only a brief 17 summary is needed here. On October 27, 2016, Plaintiff Mark Warren filed suit in the 18 Superior Court of the State of California against Wells Fargo alleging a myriad of claims 19 stemming from a mortgage on a property located in San Diego (the “Property”). On 20 November 22, 2016, Wells Fargo removed the action to this Court. After extensive motion 21 practice, the Court denied Warren’s motion for a preliminary injunction on foreclosure of 22 the Property and eventually dismissed all of Warren’s claims with prejudice. Wells Fargo 23 now moves for its attorney’s fees pursuant to provisions in the deed of trust and promissory 24 note. The motion has been fully briefed, and the Court deems it suitable for submission 25 without oral argument. The motion is granted. 26 I. 27 “State law governs the interpretation and enforceability of attorney’s fees provisions 28 in contracts.” Bassam v. Bank of Am., No. CV1500587ABFFMX, 2016 WL 6267930, at Legal Standards 1 3:16-cv-2872-CAB-(NLS) 1 *1 (C.D. Cal. Mar. 4, 2016) (citing Security Mortgage Co v. Powers, 278 U.S. 149, 154 2 (1928)). Under California law, “[p]arties may validly agree that the prevailing party will 3 be awarded attorney fees incurred in any litigation between themselves, whether such 4 litigation sounds in tort or in contract.” Santisas v. Goodin, 17 Cal.4th 599, 608 (1998) 5 (quoting Xuereb v. Marcus & Millichap, Inc., 3 Cal. App. 4th 1338, 1341 (1992)). 6 “When attorneys’ fees are to be awarded pursuant to a contractual agreement, the 7 party requesting such fees must demonstrate: (1) that the fee award is authorized by the 8 contract; (2) that they are the prevailing party; and (3) that the fees requested are 9 reasonable. Schroeter v. Wells Fargo Bank, Nat. Ass’n, No. 12CV2052 AJB JMA, 2013 10 WL 3190696, at *2 (S.D. Cal. June 20, 2013) (citing Cal. Civ.Code § 1717); see also Cal. 11 Code. Civ. Proc. § 1033.5(a)(10) (allowing attorney’s fees to be recovered as costs to the 12 prevailing party when authorized by contract). When these requirements are satisfied, 13 district courts have no discretion to deny fees. See Omega v. Wells Fargo & Co., 2012 WL 14 2906240 (N.D. Cal. June 25, 2012) (“[U]nder California statutory and Supreme Court law, 15 prevailing parties are entitled to contractual attorneys fees as a matter of right and district 16 courts have no discretion to deny such fees.”) (citing Hsu v. Abbara, 9 Cal.4th 863, 877– 17 78 (1995)). 18 19 20 II. Discussion A. The Promissory Note and Deed of Trust Specifically Provide for the Award of Attorney’s Fees 21 Wells Fargo argues that it is entitled to its attorney’s fees pursuant to fee provisions 22 in the promissory note and deed of trust on the property. The relevant provision of the 23 deed of trust states: 24 25 26 27 If: (A) I do not keep my promises and agreements made in this Security Instrument, or (B) someone, including me, begins a legal proceeding that may significantly affect Lender’s rights in the Property (including but not limited to any manner of legal proceeding in bankruptcy, in probate, for condemnation or to enforce laws or regulations), then Lender may do and pay for whatever it deems reasonable or appropriate to protect the Lender’s rights 28 2 3:16-cv-2872-CAB-(NLS) in the Property. Lender’s actions may include, without limitations, appearing in court, paying reasonable attorneys’ fees . . . . 1 2 3 I will pay to Lender any amounts which Lender advances under this Paragraph 7 with interest . . . . 4 5 [Doc. No. 10-3 at 18.]1 Among his many arguments in opposition to the instant motion, 6 Warren argues that this language is unconscionable, but district courts repeatedly have held 7 that these exact fee-shifting provisions entitled Wells Fargo to its attorney’s fees in lawsuits 8 filed by borrowers seeking to quiet title or stay foreclosure of their homes that were 9 subsequently dismissed by the court. See, e.g., Schroeter, 2013 WL 3190696; Tyson v. 10 Wells Fargo Bank N.A., No. 12-CV-593-MMA WMC, 2012 WL 3126811 (S.D. Cal. July 11 31, 2012); Rivera v. Wachovia Bank, No. 09 CV 433 JM (AJB), 2009 WL 3423743 (S.D. 12 Cal. Oct. 23, 2009). 13 Warren also argues that these provisions do not apply because, according to Warren, 14 “this case has nothing to do with” the deed of trust and promissory note. This argument is 15 preposterous. This case had everything to do with the deed of trust and promissory note. 16 Moreover, the relevant question, based on these fee provisions, is whether this lawsuit may 17 have “significantly affected Lender’s rights in the Property.” [Doc. No. 10-3 at 18.] 18 Considering that the complaint asked for an order declaring that Wells Fargo “has no right, 19 title, estate, lien, or interest in the Subject Property” [Doc. No. 1-2 at 46], there is no 20 21 22 23 24 25 1 According to Wells Fargo’s motion, the relevant provision from the promissory note provides: The lender will have the right to be paid back by me for all of its costs and expenses in enforcing this Note to the extent not prohibited by applicable law. Those expenses may include, for example, reasonable attorneys’ fees and court costs. 26 27 28 However, the record citation Wells Fargo provides for this provision was incorrect, and the Court could not locate the note elsewhere in the record. Regardless, Warren does not dispute the existence of this language in the promissory note or the fee provision from the deed of trust, and the fee provision from the deed of trust is sufficient on its own to require an attorney’s fee award here. 3 3:16-cv-2872-CAB-(NLS) 1 question that this lawsuit could have significantly affected Wells Fargo’s rights in the 2 Property. Accordingly, the contractual fee-shifting provisions apply to this litigation. 3 B. Wells Fargo Is the Prevailing Party 4 The Court denied Warren’s motion for a preliminary injunction and dismissed all of 5 his claims with prejudice. Nevertheless, Warren argues that Wells Fargo should not be 6 considered the prevailing party for the purposes of receiving its attorney’s fees because 7 Warren’s appeal is pending. Warren cites to no authority for this proposition, and it is 8 inconsistent with the requirement that Wells Fargo move for attorney’s fees within fourteen 9 days of the judgment. See Fed. R. Civ. P. 54(d)(2)(B)(i). Wells Fargo was the prevailing 10 party on all of Warren’s claims before this Court. That incontrovertible fact does not 11 change because Warren filed an appeal. This requirement is therefore satisfied. Cf. Ng v. 12 US Bank, NA, No. 15-CV-04998-KAW, 2016 WL 6995884, at *6 (N.D. Cal. Nov. 30, 13 2016) (“Plaintiff’s appeal does not change that Defendants are, as defined by Code of Civil 14 Procedure § 1032, the prevailing party as they are defendants in whose favor a dismissal 15 was entered.”), aff’d sub nom. Ng v. U.S. Bank, NA, No. 16-16949, 2018 WL 914501 (9th 16 Cir. Feb. 16, 2018); see also Cal. Code. Civ. Proc. § 1032(a)(4) (stating that “prevailing 17 party” includes “a defendant in whose favor a dismissal was entered”). 18 C. Wells Fargo’s Fee Request Is Reasonable 19 “In calculating reasonable attorney fees the court must consider the following 20 factors: (1) the time and labor required, (2) the novelty and difficulty of the questions 21 involved, (3) the skill necessary to perform the legal services properly, (4) the preclusion 22 of other employment by the attorney due to acceptance of the case, (5) the customary fee, 23 (6) whether the fee is fixed or contingent, (7) time limitations imposed by the client or 24 circumstances, (8) the amount involved and the results obtained, (9) the experience, 25 reputation and ability of the attorneys, (10) the ‘undesirability’ of the case, (11) the nature 26 and length of the professional relations with the client, and (12) awards in similar cases.” 27 Lafarge Conseils Et Etudes, S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334, 1341– 28 42 (9th Cir. 1986) “The matter of reasonableness of attorney’s fees is within the sound 4 3:16-cv-2872-CAB-(NLS) 1 discretion of the trial judge.” Stokus v. Marsh, 217 Cal.App.3d 647, 656 (Cal. Ct. App. 2 1990). 3 Wells Fargo asks for a fee award of $26,473.50, which amount equals 80% of the 4 total fees Wells Fargo’s counsel billed on this case, excluding fees incurred in filing the 5 instant motion for which Wells Fargo does not seek its fees. In support of this amount, 6 Wells Fargo’s lead counsel has provided a declaration that states his hourly rate of 7 $265/hour, summarizes the amount billed each month, and attaches the monthly billing 8 statements that were sent to Wells Fargo for payment. Warren does not dispute the 9 reasonableness of the hourly rate, but he argues that Wells Fargo’s request is not reasonable 10 because Wells Fargo elongated this litigation by not promptly considering Warren’s 11 request for a loan modification. While it may be true that this litigation could have been 12 resolved sooner had Wells Fargo acted on Warren’s loan modification more quickly, any 13 additional attorney’s fees attributable to this delay are more than accounted for by the 20% 14 difference between the actual fees incurred by Wells Fargo and what it is requesting for a 15 fee award. Ultimately, upon review Wells Fargo’s fee materials, along with the Court’s 16 knowledge of the length and course of this litigation, which included multiple amended 17 complaints, motions for a temporary restraining order and for a preliminary injunction, and 18 multiple motions to dismiss the twenty claims asserted by Warren, the Court finds that 19 $26,473.50 is a reasonable fee award. 20 III. 21 For the foregoing reasons, Wells Fargo’s motion for attorney’s fees is GRANTED. 22 Plaintiff Mark Warren shall pay Wells Fargo $26,473.50 for its reasonable attorney’s fees 23 in this litigation. 24 25 Disposition It is SO ORDERED. Dated: March 7, 2018 26 27 28 5 3:16-cv-2872-CAB-(NLS)

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