OneWest Bank, FSB v. Farrar et al

Filing 231

ORDER Adopting As Modified Magistrate Judge's 229 Findings and Recommendation Regarding Attorneys' Fees Incurred in Connection With The Motion For OSC. Signed by JUDGE ALAN C KAY on 3/31/2014. (gab, )CERTIFICATE OF SERVICEParticipants registered to receive electronic notifications received this document electronically at the e-mail address listed on the Notice of Electronic Filing (NEF). Participants not registered to receive electronic notifications were served by first class mail on 04/1/2014. Modified on 3/31/2014 (gab, ).

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF HAWAII

ONEWEST BANK, FSB,

)
)
Plaintiff,
)
)
v.
)
)
J RANDALL FARRAR; CHRISTOPHER
)
SALEM; WAYNE WAGNER; MARY
)
WAGNER; LOT 48A LLC; POOL PRO, )
INC.; CREDIT ASSOCIATES OF MAUI,)
LTD.; JOHN AND MARY DOES 1-20; )
DOE PARTNERSHIPS 1-20; DOE
)
CORPORATIONS 1-20; OTHER
)
ENTITIES 1-20,
)
)
)
Defendants.
)
)
)

Civ. No. 12-00108 ACK-KSC

ORDER ADOPTING AS MODIFIED MAGISTRATE JUDGE’S FINDINGS AND
RECOMMENDATION REGARDING ATTORNEYS’ FEES INCURRED IN CONNECTION
WITH THE MOTION FOR OSC
For the following reasons, the Court hereby ADOPTS AS
MODIFIED the Magistrate Judge’s Findings and Recommendation
Regarding Attorneys’ Fees Incurred in Connection with the Motion
for OSC, entered March 10, 2014. (Doc. No. 229.)
PROCEDURAL AND FACTUAL BACKGROUND
This case arises out of two loans that Defendants J.
Randall Farrar and Christopher Salem obtained from La Jolla Bank,
FSB, which were secured by two mortgages for each loan on two
pieces of residential property. Because the Court and the parties
are familiar with the extensive history of this case, the Court

includes here only those facts necessary for the disposition of
the instant matter.
On August 26, 2013, the parties placed a settlement on
the record, and the magistrate judge set a status conference
regarding the completion of the settlement agreement for
September 11, 2013. (Doc. Nos. 140, 142, 145.) At the status
conference, the parties informed the magistrate judge that they
were circulating and reviewing the draft settlement agreement.
(Doc. No. 144.) The magistrate judge held another status
conference on September 19, 2013, during which the parties stated
that the settlement documents had been circulated, but that
Defendant Salem needed additional time to review and sign them.
The magistrate judge set a deadline of September 23, 2013 for
Salem to either execute the final settlement agreement or submit
a final redline to the parties for review. (Doc. No. 148.)
Salem did not comply with the magistrate judge’s
instructions, instead circulating to the parties an entirely new
settlement agreement. Plaintiff OneWest Bank, FSB (“Plaintiff”)
therefore filed a Motion to Enforce Settlement Agreement on
October 1, 2013. (Doc. No. 156.) A hearing was held on the Motion
to Enforce on October 15, 2013, and on October 31, 2013 the
magistrate judge issued its Findings and Recommendations Granting
Plaintiff’s Motion to Enforce Settlement Agreement. (Doc. No. 171

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(“10/31/13 F&R”).)1/ There being no objections to the 10/31/13
F&R, this Court issued its order adopting it on November 19,
2013. (Doc. No. 173 (“Order to Enforce Settlement”).) Defendant
Salem has appealed the Order to Enforce Settlement to the Ninth
Circuit.2/ (Doc. No. 174.)
Because Salem did not comply with the Court’s Order to
Enforce Settlement, on December 5, 2013, Plaintiff filed a Motion
for an Order for Defendant Christopher Salem to Show Cause Why He
Should Not Be Held In Civil Contempt for Violating the Court’s
Order, and for an Order to Enforce Judgment for Specific Action.
(Doc. No. 177 (“Motion for OSC”).) The magistrate judge held a
hearing on the Motion for OSC on January 6, 2014, during which

1/

On November 18, 2013, the magistrate judge issued its
Findings and Recommendations Regarding Attorneys’ Fees,
recommending that this Court award Plaintiff attorneys’ fees in
the amount of $16,680.10 incurred in connection with the Motion
to Enforce. (Doc. No. 172.) There being no objections, this Court
adopted the Findings and Recommendation on December 10, 2013.
(Doc. No. 179.)
2/

In a January 9, 2014 order, the Ninth Circuit stated that
Defendant Salem’s pending appeal of this Court’s Order Adopting
the Finding and Recommendation to Enforce Settlement Agreement
does not divest this District Court of jurisdiction to supervise
compliance with that order. See Order Denying Motion for
Emergency Review of Jurisdiction/Motion for Stay of Proceeding in
District Court, OneWest Bank, FSB v. Christopher Salem, Civ. No.
13-17447, Doc. No. 12 at 2 (9th Cir. Jan. 9, 2014) (citing
Meinhold v. United States, 34 F.3d 1469, 1480 n.14 (9th Cir.
1994)). The Ninth Circuit further found that Salem failed to make
a showing sufficient to warrant the issuance of a stay of
proceedings in this District Court, and noted that Salem will
have the opportunity to appeal any contempt order or sanction
that issues from this district court.
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Salem represented that he would comply with the Order to Enforce
Settlement on that day. (See Doc. No. 208 at 6.) In light of this
statement, the magistrate judge stated that he would hold his
order in abeyance and give Salem until 4:30pm on January 9, 2014
to comply with the Order to Enforce Settlement. (Doc. No. 204.)
On January 10, 2014, after receiving notice from
Plaintiff’s counsel that Plaintiff still had not received
executed settlement documents or payment from Defendant Salem as
required by the Order to Enforce Settlement, the magistrate judge
issued his Findings and Recommendation to Grant Plaintiff OneWest
Bank, FSB’s Motion for an Order for Defendant Christopher Salem
to Show Cause Why He Should Not Be Held in Civil Contempt for
Violating the Court’s Order, and for an Order to Enforce Judgment
For Specific Action. (Doc. No. 208 (“OSC F&R”).) On January 27,
2014, Defendant Salem filed an untimely Motion for
Reconsideration of the OSC F&R. (Doc. No. 212.) The magistrate
judge nevertheless addressed the motion on the merits and denied
it in an order issued on January 29, 2014. (Doc. No. 215.) Salem
did not object to the OSC F&R, and this Court adopted it as the
order of the Court on February 18, 2014. (Doc. No. 223 (“OSC
Order”).)
In the OSC F&R, the magistrate judge recommended that
Plaintiff be awarded its reasonable fees and costs incurred in
connection with the Motion for OSC, and stated that it would

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issue a supplemental findings and recommendation regarding the
amount of fees and costs to be awarded. (OSC F&R at 14-15.) On
March 10, 2014, the magistrate judge issued its Findings and
Recommendations Regarding Attorneys’ Fees Incurred in Connection
with the Motion for OSC. (Doc. No. 229 (“3/10/14 F&R”).) On March
24, 2014, Defendant Salem filed his Objection to Recommendations
Regarding Attorney Fees.3/ (Doc. No. 230 (“Objection”).)
STANDARD
A district court reviews de novo those portions of a
magistrate judge’s findings and recommendation to which an
objection is made and may accept, reject, or modify, in whole or
in part, the findings and recommendation made by the magistrate
judge. 28 U.S.C. § 636(b)(1); Fed. R. Civ. P. 72(b); Local Rule
74.2. The district court may accept those portions of the
findings and recommendation that are not objected to if it is
satisfied that there is no clear error on the face of the record.
United States v. Bright, 2009 WL 5064355, *3 (D. Haw. Dec. 23,
2009); Stow v. Murashige, 288 F. Supp. 2d 1122, 1127 (D. Haw.
2003). The district court may receive further evidence or
recommit the matter to the magistrate judge with instructions. 28
U.S.C. § 636(b)(1). It may also consider the record developed
before the magistrate judge. Local Rule 74.2. The district court

3/

On February 28, 2014, the magistrate judge issued an
Order Allowing Withdrawal of Counsel. (Doc. No. 225.) Defendant
Salem is thus currently proceeding pro se.
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must arrive at its own independent conclusions about those
portions of the magistrate judge’s report to which objections are
made, but a de novo hearing is not required. United States v.
Remsing, 874 F.2d 614, 617 (9th Cir. 1989); Bright, 2009 WL
5064355, *3; Local Rule 74.2.
Pursuant to Local Rule 74.2, the objecting party must
“specifically identify the portions of the order, findings, or
recommendations to which objection is made and the basis for such
objections.”
DISCUSSION
In the 3/10/14 F&R, the magistrate judge, after making
reductions for excessiveness/duplication, clerical tasks, and
unrelated tasks, found that Plaintiff is entitled to $21,892.66
in attorneys’ fees and tax. (3/10/14 F&R at 6.) The magistrate
judge recommended that Defendant Salem be ordered to remit
payment within one week after the entry of the order taking
action on the findings and recommendation. (Id.)
In his Objection, Defendant Salem does not address the
magistrate judge’s determinations regarding the reasonableness of
the amount of Plaintiff’s claimed attorneys’ fees, nor does he
appear to dispute Plaintiff’s entitlement to such fees. Rather,
his Objection appears to reargue the merits of this action and
accuse Plaintiff’s counsel of misconduct. (See generally
Objection.) While his Objection is at times difficult to

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interpret, Defendant Salem appears to attempt to justify his
failure to execute the settlement agreement by alleging that
Plaintiff’s employees interrupted the settlement process by
directly contacting him, and that newly obtained discovery proves
that the La Jolla Bank mortgages were unlawfully executed in
violation of federal lending laws. (Id. at 3-9.) The Objection
does not, however, address the issue of attorneys’ fees at all.
In short, the Objection fails to articulate specifically what in
the 3/10/14 F&R is being objected to and the basis of that
objection. This not only violates Local Rule 74.2, it provides no
grounds for rejecting or modifying the magistrate judge’s
findings regarding attorneys’ fees associated with the Motion for
OSC. Accordingly, the objection is overruled and the Court adopts
the 3/10/14 F&R with the modifications set forth below.4/
Based on a de novo review of the materials before the

4/

In his Objection, Salem also appears to seek (1) relief
from this Court’s Order to Enforce Settlement and OSC Order under
Federal Rule of Civil Procedure 60, (2) sanctions against
Plaintiff’s attorneys pursuant to Federal Rule of Civil Procedure
11, and (3) “a stay of further substance matter decisions by the
Court until the [Plaintiff’s] legal counsel produces all
documents relating to the newly discovered evidence and explains
why they have not been honest with Magistrate Judge Kevin S.
Chang.” (Id. at 4, 9-12.) An objection to a magistrate judge’s
findings and recommendation pursuant to Local Rule 74.2 is not,
however, the appropriate vehicle for such requests. To the extent
Salem wishes to seek Rule 60 relief from judgment, Rule 11
sanctions, or a stay of the instant case, he must do so in a
separate motion filed in accordance with the Federal Rules of
Civil Procedure and the Local Rules of Practice for the U.S.
District Court for the District of Hawaii.
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magistrate judge on the matter of attorneys’ fees incurred in
association with the filing of Plaintiff’s Motion for OSC, the
Court concludes that additional reductions in the hours
reasonably expended by Plaintiff’s attorneys are necessary. In
determining the amount of reasonable attorneys’ fees the Court
uses the traditional “lodestar” calculation, multiplying the
number of hours reasonably expended on the litigation by a
reasonable hourly rate. See Hensley v. Eckerhart, 461 U.S. 424,
433 (1983). With respect to the reasonable hourly rate, this
Court already determined a reasonable hourly rate for Plaintiff’s
attorneys based on their experience, skills, and reputations when
it adopted the magistrate judge’s findings and recommendation
regarding attorneys’ fees associated with the Motion to Enforce
Settlement on December 10, 2013. (Doc. No. 179.) The Court thus
concludes that the same rates are reasonable here. Specifically,
the Court finds the following hourly rates are reasonable: (1)
Mr. Shikuma - $300.00; (2) Mr. Schiel - $250.00; (3) Ms. Moriarty
- $160.00; and (4) Mr. Monlux - $145.00.
As to the number of hours reasonably expended, the
Court agrees with the magistrate judge’s recommended reductions
for excessiveness/duplication, clerical tasks, and tasks
unrelated to the Motion for OSC. The Court finds, however, that
additional reductions are required for tasks unrelated to the
Motion for OSC. The Court notes that its order adopting the

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Findings and Recommendations Granting Plaintiff’s Motion to
Enforce Settlement Agreement was entered on November 19, 2013.
(See Doc. No. 173.) Plaintiff’s counsel could not have reasonably
done work related to their Motion for OSC until this Court had
entered the order that Defendant Salem was, in their view, acting
in contempt of. Nevertheless, in their itemization of work
performed, Mr. Shikuma, Mr. Schiel, and Mr. Monlux all make
claims for work done prior to November 19, 2013. (See Decl. of
Craig K. Shikuma in Supp. of Request for Attorneys’ Fees and
Related Costs, Ex. 1.) For example, on October 25, 2013, Mr.
Shikuma expended 1.1 hours drafting an email to Defendant Salem’s
former counsel regarding execution of the settlement agreement.
(Id.) Given that this correspondence occurred prior to the entry
of the Order to Enforce Settlement, it cannot have been related
to a contempt motion based upon Salem’s failure to adhere to that
order. This and similar entries by Mr. Shikuma, Mr. Schiel, and
Mr. Monlux, all for work occurring prior to November 19, 2013,
cannot reasonably be related to work on the Motion for OSC. As
such, the Court deducts the following hours from these attorneys’
time: (1) Mr. Shikuma - 6.0 hours; (2) Mr. Schiel - 0.7 hours;
and (3) Mr. Monlux - 4.0 hours.
Based on the foregoing, the Court finds that the
following hours are compensable: (1) Mr. Shikuma - 21.4 hours;
(2) Mr. Schiel - 11.5 hours; (3) Ms. Moriarty - 4.5 hours; and

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(4) Mr. Monlux - 57.5 hours. Applying the reasonable hourly rates
to these hours results in a fee award of $18,352.50, plus $864.77
in tax, for a total of $19,217.27.
CONCLUSION
For the foregoing reasons, the Court ADOPTS AS MODIFIED
the magistrate judge’s Finding and Recommendation Regarding
Attorneys’ Fees Incurred in Connection with the Motion for OSC
dated March 10, 2014. In accordance with the finding and
recommendation, Defendant Salem is ordered to pay to Plaintiff
within one week of the entry of this Order $18,352.50 in
attorneys’ fees, plus $864.77 in tax, for a total of $19,217.27.
IT IS SO ORDERED.
DATED:

Honolulu, Hawaii, March 31, 2014

________________________________
Alan C. Kay
Senior United States District Judge

Onewest Bank, FSB v. Farrar et al., Civ. No. 12-00108 ACK-KSC, Order Adopting
as Modified Magistrate Judge’s Findings and Recommendation Regarding
Attorneys’ Fees Incurred in Connection with the Motion for OSC.

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