NSEW Holdings LLC v. Wells Fargo Bank, N.A.

Filing 63

MEMORANDUM ADOPTING REPORT AND RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE Granting 60 Sealed Motion filed by Wells Fargo Bank, N.A., Granting 30 Sealed Motion, filed by Wells Fargo Bank, N.A., Granting 56 Sealed Motion filed by Wells Fargo Bank, N.A., 50 Report and Recommendations. Defendant is entitled to subrogation in the amount of $189,295.18, comprised of $83,552.89 paid to satisfy the balance of the Second Loan, $69,607.19 in attorneys fees, $17,007.63 in hazard insurance, and $19,127.47 in property taxes, as well as any interest on the balance of the Second Loan and escrow advances that continue to accrue. Signed by Judge Amos L. Mazzant, III on 3/17/17. (cm, )

United States District Court
EASTERN DISTRICT OF TEXAS
SHERMAN DIVISION

NSEW HOLDINGS LLC

v.
WELLS FARGO BANK, N.A.

§
§
§ Civil Action No. 4:15-CV-828
§ (Judge Mazzant/Judge Nowak)
§

MEMORANDUM ADOPTING REPORT AND
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Came on for consideration the report of the United States Magistrate Judge in this action,
this matter having been heretofore referred to the Magistrate Judge pursuant to 28 U.S.C. § 636.
On December 6, 2016, the report of the Magistrate Judge (Dkt. #50) was entered containing
proposed findings of fact and recommendations that Defendant Wells Fargo Bank, N.A.’s
(“Defendant”) Motion for Final Summary Judgment Against Plaintiff’s Claims and in Support of
Its Own Claims (“Motion for Summary Judgment”) (Dkt. #30) be granted. The Magistrate Judge
recommended Plaintiff’s claims be dismissed with prejudice, and Defendant be granted summary
judgment on its counterclaim. Having received the report of the Magistrate Judge (Dkt. #50),
having considered each of Plaintiff’s timely filed objections (Dkt. #54), Defendant’s Response
(Dkt. #58), and having conducted a de novo review, the Court is of the opinion that the findings
and conclusions of the Magistrate Judge are correct, and the Court hereby adopts the Magistrate
Judge’s report (Dkt. #50) as the findings and conclusions of the Court. The Court also considers
herein Defendant’s Motion for Entry of Final Judgment (Dkt. #56) and Defendant’s Supplement
to Wells Fargo’s Motion for Entry of Final Judgment to Amend Total Amount of Attorney Fees
(Dkt. #60).

BACKGROUND
This suit arises from the foreclosure of a homeowners’ association lien against a property
located at 437 Crest View Point Drive, Lewisville, Texas 75067 (the “Property”). The underlying
facts recited in the Report and Recommendation are pertinent and thus are restated herein. Lloyd
Payne (the “Borrower”) purchased the Property on or about March 31, 2000; he financed the
purchase with a $143,500 purchase-money, first-lien mortgage loan (the “First Loan”) from
Provident Home Loans, a Division of Provident Funding Associates, L.P., a California Limited
Partnership, secured by a Deed of Trust dated March 31, 2000, and recorded on April 10, 2000.
On June 14, 2000, Provident assigned and transferred the First Loan to Norwest Mortgage, Inc.,
which later became Wells Fargo Home Mortgage, Inc. (“Wells Fargo Mortgage”).
On or about December 14, 2001, Borrower refinanced the Property, obtaining a $144,700
second first-lien mortgage loan from Wells Fargo Mortgage (the “Second Loan”), which paid off
the Borrower’s indebtedness under the First Loan. The Second Loan Deed of Trust included a
Renewal and Extension Rider reflecting that the proceeds of the Second Loan were a renewal and
extension of the amounts owing from the First Loan. The Renewal and Extension Rider expressly
subrogated Wells Fargo Mortgage “to all the rights, powers, and equities of the original owners
and holders of the prior promissory notes (whether such current holder shall assign and transfer its
respective liens to the holder hereof or shall release its respective liens upon satisfaction of the
indebtedness owing to such holder).” This deed of trust was recorded on December 26, 2001.
Defendant Wells Fargo Bank later succeeded Wells Fargo Mortgage by merger.
Borrower subsequently entered into a Texas Home Equity Note (Fixed Rate – First Lien)
with Defendant. This Note was secured by a Texas Home Equity Security Instrument (First Lien),
recorded on February 18, 2010, that expressly stated Defendant “shall be subrogated to any and

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all rights, superior title, liens and equities owned or claimed by any owner or holder of any liens
and debts outstanding immediately prior to the execution hereof, regardless of whether said liens
or debts are acquired by [Defendant] by assignment or are released by the holder thereof upon
payment.” A portion of the proceeds from this Loan, specifically $83,552.89, was used to pay off
the remaining balance of the Second Loan.
The Property is part of the Vista Ridge Estates Homeowners Association, and the
Declaration of Covenants, Conditions and Restrictions for Vista Ridge Estates (the “HOA
Declaration”) authorizes Vista Ridge Estates Homeowners Association to charge assessments to
their property owners.

The HOA Declaration explicitly empowers Vista Ridge Estates

Homeowners Association to secure the payment of assessments levied on the Property by lien;
however, “such lien shall be specifically made secondary, subordinate and inferior to all liens,
present and future, given, granted and created by or at the insistence of the [Borrower] . . . to secure
the payment of monies advanced on account of the purchase price and/or the improvement of [the
Property].” Vista Ridge Estates Homeowners Association executed a lien on the Property on
April 25, 2013 to secure the payment of assessments levied on the Property, and subsequently
foreclosed on such interest. On May 5, 2015, the Sheriff of Denton County, Texas conducted a
foreclosure sale, at which Plaintiff NSEW Holdings LLC (“Plaintiff”) purchased the Property for
$40,100, and the Sheriff’s Deed was recorded on May 7, 2015.
The Magistrate Judge entered a report and recommendation on December 6, 2016,
recommending Defendant’s Motion for Summary Judgment be granted (Dkt. #52). Specifically,
the Magistrate Judge recommended that the Court find as follows: (1) Defendant is entitled to
contractual subrogation; (2) Defendant is entitled to equitable subrogation; (3) the HOA
Declaration establishes the homeowners’ association’s lien is expressly subordinate to Defendant’s

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lien; (4) Defendant is entitled to a declaratory judgment; and (5) Defendant’s lien is valid to the
extent the lien is subrogated to the purchase money liens, attorney’s fees, hazard insurance, and
real property taxes. Subsequently, on December 20, 2016, Plaintiff filed its objections to the
Magistrate Judge’s report and recommendation (Dkt. #54).

Also on December 20, 2016,

Defendant filed its Motion for Entry of Final Judgment (Dkt. #56). On January 3, 2017, Defendant
filed its Response to Plaintiff’s objections to Magistrate Judge’s Recommendation (Dkt. #58). On
January 27, 2017, Defendant filed its Supplement to Wells Fargo’s Motion for Entry of Final
Judgment to Amend Total Amount of Attorney Fees (Dkt. #60). To date, Plaintiff has failed to
file a response to either Defendant’s Motion for Entry of Final Judgment and/or its Supplement.
ANALYSIS
Under the law, a party who files timely written objections to a magistrate judge’s report
and recommendation is entitled to a de novo determination of those findings or recommendations
to which the party specifically objects. 28 U.S.C. § 636(b)(1)(c); Fed. R. Civ. P. 72(b)(2)-(3).
Plaintiff objects to each of the Magistrate Judge’s findings; specifically, Plaintiff argues that:
(1) contractual subrogation does not apply; (2) equitable subrogation does not apply; (3) the HOA
Declaration did not subordinate assessment liens to Defendant’s lien; (4) Defendant is entitled to
a declaratory judgment; and (5) Defendant is not entitled to recover attorney’s fees or prior escrow
advances. The Court now addresses each of Plaintiff’s objections in turn.
Objection 1: Contractual Subrogation
Plaintiff first objects to the Magistrate Judge’s finding that contractual subrogation applies.
Plaintiff argues that the Magistrate Judge conflates contractual subrogation with equitable
subrogation and improperly relied on cases analyzing equitable subrogation rather than contractual
subrogation—specifically Vogel v. Veneman, 276 F.3d 729, 735 (5th Cir. 2002), and TFHSP LLC

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v. Wells Fargo Bank, N.A., No. 4:12CV554, 2013 WL 12114023, at *1 (E.D. Tex. May 21, 2013).
Plaintiff is incorrect. The Fifth Circuit in Vogel specifically held that a chain of financings from
one lienholder to another, in which each lender advanced money to extinguish prior amounts
owing, and executed a deed of trust on the property at issue, established that the subsequent
lienholder was both equitably and contractually subrogated to the previous lienholder’s valid
purchase money lien. 276 F.3d at 735 (“The chain of financings from Westside to FSA, in which
each lender advanced money to extinguish prior amounts owing, and executed a deed of trust on
the property, establish that FSA was both equitably and contractually subrogated to Westside’s
valid purchase money lien on the Vogels’ homestead.”). Plaintiff similarly argues that TFHSP
LLC “relies on considerations arising out of equitable subrogation, not contractual.” One court in
the Eastern District of Texas found in TFHSP LLC that the homeowner’s association assessment
lien therein was contractually subrogated to the valid purchase money lien when “the chain of
financings from Sebring to Bank of America in which money was advanced to extinguish prior
amounts owing, coupled with the assignment from Bank of America to Wells Fargo.” TFHSP
LLC, 2013 WL 12114023, at *2. The case law relied upon by the Magistrate Judge, contrary to
Plaintiff’s assertion, discusses contractual subrogation.1
Moreover, here, as in Vogel, Defendant has proffered competent summary judgment
evidence showing a chain of financing from Provident Home Loans to (Norwest Mortgage, Inc.,
which later became Wells Fargo Mortgage, and subsequently) Defendant in which money was

1

Plaintiff also argues that Leonard v. Brazosport Bank of Tex., 628 S.W.2d 216, 219 (Tex. App.—Houston [14th Dist.]
1982, writ ref’d n.r.e.) is distinguishable because the plaintiff was in privity with the party seeking contractual
subrogation. This argument is unavailing because, as the Magistrate Judge properly concluded, “contractual
subrogation arises out of privity between one lienholder paying off the prior lienholder, thus stepping into the shoes
of the prior lienholder.” Vogel v. Glickman, 117 F. Supp. 2d 572, 579 (W.D. Tex. 2000) (holding contractual
subrogation is created by and between successive lenders; thus, “[c]ontractual privity between the borrower and the
new lender is not required”).
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advanced to extinguish prior amounts owing. The Magistrate Judge properly found that Defendant
is entitled to contractual subrogation; accordingly, Plaintiff’s first objection is overruled.
Objection 2: Equitable Subrogation
Plaintiff next objects to the Magistrate Judge’s finding that equitable subrogation applies.
Plaintiff argues that the Magistrate Judge did not consider the principles of equity, namely that
Plaintiff’s principal, Jeffrey Morser, and his family will suffer pecuniary loss and would be forced
to move from their home. Plaintiff further asserts AMC Mortgage Services, Inc. v. Watts, 260
S.W.3d 582 (Tex. App.—Dallas 2008, no pet.) applies to the instant case and dictates a different
result from that recommended by the Magistrate Judge. Defendant argues, to the contrary, that the
equities favor Defendant and allowing Plaintiff to take the Property free and clear of Defendant’s
lien despite the fact that Plaintiff conducted an independent title examination of the Property (and
thus had actual notice of the lien) would be inequitable and also that Watts is readily
distinguishable from the instant case.
“Equitable subrogation ‘is a legal fiction’ whereby an obligation, extinguished by a
payment made by a third person, is treated as still subsisting for the benefit of this third person, so
that by means of it one creditor is substituted to the rights, remedies, and securities of another.”
Bank of Am. v. Babu, 340 S.W.3d 917, 925 (Tex. App.—Dallas 2011, no pet.); Premium Plastics
v. Seattle Specialty Ins. Servs., Inc., No. CIV.A. H-10-3960, 2012 WL 1029528, at *4 (S.D. Tex.
Mar. 26, 2012), aff’d, 544 F. App’x 287 (5th Cir. 2013). The trial court must balance the equities
in view of the totality of the circumstances to determine whether a party is entitled to equitable
subrogation. Babu, 340 S.W.3d at 926. Factors a court may consider in conducting this balancing
test are the negligence of the party claiming subrogation, whether that party had notice of the
intervening lien, and whether the intervening lienholder will be prejudiced if equitable subrogation

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is allowed. Id. The determination of whether subrogation prejudices intervening interests is made
as of the time of the transaction supporting subrogation, and the consequences of subsequent
transactions or events are not relevant to this inquiry. Id.
Assuming arguendo that the HOA assessment lien in this case was in fact an intervening
interest to Defendant’s liens (discussed more fully infra), equity does weigh in favor of allowing
Plaintiff to take the Property free and clear. Plaintiff argues—unsupported by case law—that
forcing the Plaintiff’s principal and his family to move out of the Property which they use as their
homestead would cause prejudice.

Courts must however determine whether subrogation

prejudices an interest by looking to the time of the transaction; the consequences of subsequent
events are not relevant therefore to the Court’s analysis. Id.;  see  Sonia Vou Books, LLC v. BAC
Home Loans Servicing, LP, No. CIV.A. H-11-1809, 2011 WL 3438435, at *3 (S.D. Tex. Aug. 5,
2011) (“Texas law clearly provides that a purchaser at a foreclosure sale takes the property subject
to any properly filed lien.”). As such, the fact that Plaintiff’s principal and his family now occupy
the Property—an event which occurred well after the creation of the HOA assessment lien—is
generally not relevant to the Court’s determination of whether subrogation prejudices Plaintiff’s
interest. Moreover, Plaintiff conducted an independent examination of the Property, and thus had
actual notice of the lien.
Plaintiff further argues that the Fifth District Court of Appeals decision in Watts should
instruct the Court’s analysis of equitable subrogation in this case. In Watts, Lillie Gonzalez
purchased a property in 1996 with two loans, one from Long Beach Mortgage, secured by a deed
of trust, and one from the seller, Richard Smith, secured by a deed of trust stating it was subordinate
to the Long Beach deed of trust. AMC Mortg. Servs., Inc., 260 S.W.3d at 584. Smith subsequently
sold and assigned his note and deed of trust to HSH Corporation. Id. In 1999, Gonzalez refinanced

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the Long Beach loan with a loan from “Ameriquest,” and Ameriquest filed a release of lien
applicable to the Long Beach deed of trust. Id. In September 2000, Gonzalez obtained a home
equity extension of credit from Ameriquest. Id. In November 2000, Ameriquest filed a release of
lien that specifically identified and released the 1999 deed of trust and stated, “Further, Holder
hereby releases the property from all other liens held by Holder.” Id. In October 2003, Gonzalez
obtained another home equity extension of credit from Ameriquest. Id. Ameriquest executed and
filed of record a release of the 2000 deed of trust in November 2003. Id. Gonzalez then later
defaulted on the note to Smith that had been assigned to HSH Corporation. Id. At a May 2005
foreclosure sale, HSH Corporation sold the property to the Wattses. Id. In December 2005,
Ameriquest foreclosed on the 2003 home equity loan. Id. Ameriquest filed suit to evict the
Wattses, and the Wattses sued to quiet title. Id. The court of appeals stated, in part, that the
summary judgment evidence showed the Wattses purchased the property with “full knowledge
and constructive notice” that the 1999 lien had been released, and nothing showed the 1996 Smith
deed of trust did not become the superior lien. Id. at 587. Further, the court stated, “Nothing in
the summary judgment evidence shows [the Wattses] were on notice of the claim that equitable
subrogation made the November 2003 deed of trust a renewal of the 1999 deed of trust.” Id.
Unlike Watts where the Wattses purchased an interest that was created before the 2000
home equity extension of credit, here, the interest Plaintiff purchased—the HOA assessment lien—
was created subsequent to the creation and recording of each of Defendant’s liens. For example,
the Fourth Loan Security Instrument was recorded on February 12, 2010, while the Vista Ridge
Estates Homeowners Association’s lien was not executed until April 25, 2013. Plaintiff asserts
Defendant’s lien is subsequent in time, but absolutely no evidence exists to support Plaintiff’s
assertion. Vista Ridge Estates Homeowners Association’s lien could not be an intervening

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lienholder here when it was executed and recorded more than three years in time after the Fourth
Loan Security Instrument. In addition, the summary judgment evidence shows an unbroken chain
of financing from one lien to the next secured by deeds of trust expressly demonstrating
Defendant’s entitlement to subrogation. Further, each of the deeds of trust were properly recorded
in the official records of Denton County, Texas, prior to the foreclosure sale at which Plaintiff
purchased its interest in the Property. Watts is readily distinguishable. There is no fact issue
regarding whether the liens at issue here were recorded prior to the date the assessments became
due; Defendant is entitled to equitable subrogation. Vogel, 276 F.3d at 735. Plaintiff’s second
objection is overruled.
Objection 3: Subordination of Assessment Lien by HOA Declaration
Plaintiff also objects to the Magistrate Judge’s finding that the HOA Declaration expressly
subordinated the HOA lien to Defendant’s lien. Plaintiff argues that the Magistrate Judge
improperly relied upon TFHSP LLC to make such finding and that the HOA Declaration in this
case is more narrow than that in TFHSP LLC. In TFHSP LLC, the Court held that a Deed of Trust
related to a refinance loan was superior to a homeowners’ association assessment lien when the
conditions of the subsequent loans were expressly included in the language of the homeowners’
association declaration.

Notably, the Magistrate Judge did not apply language from the

Declaration of Covenants, Conditions & Restrictions in TFHSP LLC to find subordination in this
case, but rather applied the express language from Vista Ridge Estates Homeowners Association’s
HOA Declaration, thus the fact that the HOA Declaration may be narrower is not relevant. Indeed,
here, the HOA Declaration empowered Vista Ridge Estates Homeowners Association to secure
the payment of assessments levied on the Property by lien; however, “such lien shall be specifically
made secondary, subordinate and inferior to all liens, present and future, given, granted and created

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by or at the insistence of the [Borrower] . . . to secure the payment of monies advanced on account
of the purchase price and/or the improvement of [the Property].” Competent summary judgment
evidence reflects the proceeds from Defendant’s loans were used to satisfy previous liens securing
the loans for the purchase price; Defendant’s lien was granted to secure the payment of monies
advanced on account of the purchase price and/or improvement of the Property. Accordingly, the
HOA Declaration expressly subordinated the HOA assessment lien to Defendant’s lien.
Defendant’s lien is superior. Plaintiff’s third objection is overruled.
Objection 4: Defendant’s Counterclaim
Plaintiff objects to the Court’s finding that Defendant’s counterclaim should be granted.
Plaintiff argues that the Magistrate Judge relied on the erroneous findings regarding Defendant’s
entitlement to contractual and equitable subrogation, and that the HOA Declaration expressly
subordinated the HOA assessment lien to Defendant’s lien in recommending that Defendant’s
counterclaim be granted. Because the Court has already adopted the Magistrate Judge’s findings
for each of these issues, the Court agrees that summary judgment should be granted in favor of
Defendant on its counterclaim. Plaintiff’s fourth objection is overruled.
Objection 5: Extent of Subrogation
Plaintiff’s final objection relates to the Magistrate Judge’s determination that Defendant is
entitled to recover attorney’s fees and/or prior escrow advances. Plaintiff asserts Defendant is not
entitled to recover any attorney fees or prior escrow amounts and asks the Court to deny all fees.
Plaintiff again cites Watts in support. Defendant asks by way of its Motion for Entry of Final
Judgment (Dkt. #56) and Supplement to Wells Fargo’s Motion for Entry of Final Judgment to
Amend Total Amount of Attorney Fees (Dkt. #60) that the Court affirm the recommendation of

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the Magistrate Judge and further award additional attorney’s fees accrued following the filing of
Defendant’s Motion for Summary Judgment.
In support of its position that fees are not warranted, Plaintiff turns again to Watts. In
Watts, the Fifth District Court of Appeals reversed the trial court’s award for attorney’s fees in
conjunction with a declaratory judgment pursuant to Texas Civil Practice and Remedies Code
§ 37.009. 260 S.W.3d at 588. In Texas, attorney’s fees may not be recovered from an opposing
party unless such recovery is provided for by statute or by contract between the parties. Id. The
court found that a party may not recover attorney’s fees under section 37.009 when the only issues,
aside from attorney’s fees, concern clearing title or trespass to try title. However, the Magistrate
Judge did not find that Defendant was entitled to its attorney’s fees under section 37.009, but rather
that Defendant was entitled to its attorney’s fees under the language of the First Loan Deed of
Trust, which permits recovery of attorney’s fees incurred to protect Defendant’s interest in the
property or rights under the Deed of Trust. As such, the Court adopts the Magistrate Judge’s
recommendation that Defendant is entitled to attorney’s fees.
Entry of Final Judgment
The Court now turns to Defendant’s request for entry of final judgment and request therein
for interest and additional attorney’s fees. Defendant is entitled to any interest that accrues on the
money paid to satisfy the balance of the Second Loan and any future escrow advances. See, e.g.,
Vogel, 276 F.3d at 736; Chase Home Fin., L.L.C. v. Cal W. Reconveyance Corp., 309 S.W.3d 619,
634 (Tex. App.—Houston [14th Dist.] 2010). Defendant is also entitled to its attorney’s fees
incurred to protect its interest in the Property. See  In re Velazquez, 660 F.3d 893, 899 (5th Cir.
2011); see also King v. Wells Fargo Bank, N.A., No. 3-11-CV-0945-M-BD, 2012 WL 3283473, at
*1 (N.D. Tex. July 10, 2012), report and recommendation adopted, No. 3-11-CV-0945-M-BD,

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2012 WL 3289961 (N.D. Tex. Aug. 13, 2012), aff’d, 533 F. App’x 431 (5th Cir. 2013). The
Magistrate Judge found Defendant entitled to $39,350.33 for fees and costs allowed under the
Deed of Trust; Defendant, in its Motion for Entry of Final Judgment (Dkt. #56) and Supplement
(Dkt. #60) seeks additional attorney’s fees incurred since filing its Motion for Summary Judgment.
As an initial matter, Defendant avers in its Supplement to Wells Fargo’s Motion for Entry
of Final Judgment to Amend Total Amount of Attorney Fees (Dkt. #60) that “counsel for Wells
Fargo has learned that on account of a billing software upgrade, the August 19, 2015 invoice,
which Wells Fargo submitted with its motion for summary judgment was rejected (after the motion
for summary judgment was filed) and the time entries contained on the August 19, 2016 invoice
were billed on subsequent invoices” (Dkt. #60 at 2). “[T]o correct the discrepancies in its prior
filings and ensure the Court has accurate information,” Defendant filed its “Supplement to its
Motion for Entry of Final Judgment to amend the total amount of attorney fees that should be
included in the mortgage indebtedness secured by Wells Fargo’s lien” (Dkt. #60 at 2). That amount
is $69,235.69. Plaintiff has not objected or filed any response to these invoices.
To reiterate, the Court adopts the Magistrate Judge’s recommendation that Defendant is
entitled to attorney’s fees in this case; however, in light of Defendant’s averment that there were
discrepancies in its prior filings, the Court uses the affidavit and invoice attached to the Supplement
to Wells Fargo’s Motion for Entry of Final Judgment to Amend Total Amount of Attorney Fees
to make a de novo determination as to the total amount of reasonable attorney’s fees recoverable
under the First Loan Deed of Trust. The Court uses the lodestar method to calculate attorney’s
fees. Iglehart v. Wells Fargo Bank, N.A., No. 4:13-CV-131, 2015 WL 5813400, at *2 (E.D. Tex.
Sept. 30, 2015) (applying lodestar method to calculate reasonable attorney’s fees under a mortgage
contract); see also TFHSP, LLC Series 10147 v. U.S. Bank Nat’l Ass’n, No. 3:14-CV-2589-M-BN,

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2016 WL 2856006, at *4 (N.D. Tex. Apr. 18, 2016) (same), report and recommendation adopted
sub nom. TFHSP, LLC v. U.S. Bank Nat’l Ass’n, No. 3:14-CV-2589-M-BN, 2016 WL 2853565
(N.D. Tex. May 13, 2016), appeal dismissed (July 20, 2016); Simicek v. Wells Fargo Bank, N.A.,
No. CIV.A. H:12-1545, 2013 WL 5425126, at *5 (S.D. Tex. Sept. 26, 2013) (same). The lodestar
is calculated by multiplying the number of hours that an attorney reasonably spent on the case by
an appropriate hourly rate, which is the market rate in the community for this work. See Smith &
Fuller, P.A. v. Cooper Tire & Rubber Co., 685 F.3d 486, 490 (5th Cir. 2012). The parties seeking
reimbursement of attorney’s fees bear the burden of establishing the number of hours expended
through the presentation of adequately recorded time records as evidence. See Watkins v. Fordice,
7 F.3d 453, 457 (5th Cir. 1993).
To determine the amount of reasonable attorney’s fees, the Court must thus review the
records and exclude all time that is excessive, duplicative, or inadequately documented. See
Hensley v. Eckerhart, 103 S. Ct. 1933, 1939 (1983); Von Clark v. Butler, 916 F.2d 255, 259 (5th
Cir. 1990). The hours that survive this vetting process are those reasonably expended on the
litigation. See Watkins v. Fordice, 7 F.3d 453, 457 (5th Cir. 1993). The court then must determine
a reasonable hourly rate. “Where counsel requests compensation at his normal billing rate and that
rate is shown to be within the range of market rates for attorneys of similar skill and experience,
the burden is on the opposing party to show that a lower rate should be used.” United States v.
Cornerstone Wealth Corp., Inc., No. 3–98–CV–0601–D, 2006 WL 1524592 at *2 (N.D. Tex. Jun.
2, 2006), citing Islamic Ctr. of Miss., Inc. v. City of Starkville, 876 F.2d 465, 469 (5th Cir. 1989);
see also Watkins, 7 F.3d at 459 (court must articulate reasons for rejecting normal billing rate).
Once the Court calculates the “lodestar” fee, the lodestar may be adjusted upward or downward
depending on the twelve (12) factors set forth in Johnson v. Georgia Highway Express, Inc., 488

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F.2d 714 (5th Cir. 1974). These factors are: (1) the time and labor required for the case; (2) the
novelty and difficulty of the issues involved; (3) the skill required to litigate the case; (4) the ability
of the attorney to accept other work; (5) the customary fee for similar work in the community; (6)
whether the fee is fixed or contingent; (7) time limitations imposed by the client or the
circumstances of the case; (8) the amount involved and the results obtained; (9) the experience,
reputation, and ability of the attorney; (10) the “undesirability” of the case; (11) the nature and
length of the attorney-client relationship; and (12) awards in similar cases. Johnson, 488 F.2d at
717-19; see also Shipes v. Trinity Indus., 987 F.2d 311, 319-20 (5th Cir.), cert. denied, 510 U.S.
991 (1993). Of these factors, the court should give special heed to the time and labor involved,
the customary fee, the amount involved and the result obtained, and the experience, reputation,
and ability of counsel. See Migis v. Pearle Vision, Inc., 135 F.3d 1041, 1047 (5th Cir. 1998).
There is a strong presumption of the reasonableness of the lodestar amount. See Perdue v. Kenny
A., 559 U.S. 542, 552 (2010). Because the lodestar is presumed to be reasonable, it should be
modified only in exceptional cases. See Watkins, 7 F.3d at 457.
Defendant is represented by Locke Lord LLP in this matter. The Court has considered the
declaration of Robert Mowrey, a Locke Lord LLP partner, who declares, under penalty of perjury,
that he has been licensed in the state of Texas and has practiced in commercial litigation, including
consumer finance and mortgage litigation. Mowrey declares that Locke Lord partner Jennifer
Kinney Parnell and associates Matthew B. Buongiorno and Matthew K. Hansen regularly assisted
him in this matter. Mowrey declares he received limited assistance from partners Jason L. Sanders
and Johnathan Collins. Mowrey also received assistance from Locke Lord paralegals and litigation
assistance employees M. Barras, A. Wilson, Nelsene Richards, Shelly Sheets, and M. Robbins,
and Lee Bernstein. Mowrey’s billing rate is $569.00, Sanders’ rate is $439.00, Collins’ and Kinney

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Parnell’s rates are $321.00 each, Buongiorno’s and Barras’ rates are $325.00 each, Hansen’s rate
is $258.00, Wilson’s rate is $250.00, Richards’, Sheets’, and Robbins’ rates are $180.00 each, and
Bernstein’s rate is $150.00. Mowrey declares that “[t]he rates and fees charged for work done by
Locke Lord attorneys, paralegals, and litigation assistance employees in this matter are both
reasonable and consistent with the rates charged by comparable firms in Texas[,] . . . [and]
consistent with the rates charged by Locke Lord in similar matters in which Locke Lord represents
Wells Fargo.” Mowrey further avers that the total amount of fees incurred (not including taxable
costs, discussed infra) is $69,235.69 and resulted from no duplication of effort.
Defendant also submitted Locke Lord’s billing invoices to establish the number of hours
that Locke Lord expended in this matter. The invoices show that Locke Lord performed legal
work to advance Defendant’s counterclaims and protect Defendant’s interest in the Property.
Locke Lord charged U.S. Bank for the following hours expended by the aforementioned attorneys,
paralegals, and litigation support employees: Mowrey—10.4; Sanders—2.7; Collins—8.3; Kinney
Parnell—21.6; Buongiorno—83.2; Hansen—91.8; Barras—2.8; Wilson—2.5; Richards—3.4;
Sheets—8.8; Robbins—1.4; and Bernstein—0.3. Plaintiff has not contested any of the hours
performed by Defendant’s counsel as duplicative, excessive, or otherwise improper. See KeyCorp
v. Holland, No. 3:16-CV-1948-D, 2017 WL 606617, at *7 (N.D. Tex. Feb. 15, 2017) (“Further, if
a party does not object to particular billing entries as inadequately documented, the court is not
obligated sua sponte to sift through fee records searching for vague entries or block billing. It is a
common practice for courts to address only those potentially inadequate entries brought to the
court’s attention.”). Nonetheless, the Court has independently reviewed the billing invoices and
has found no duplicative, excessive, or otherwise improper hours billed therein.

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The Court finds that the rates charged by Locke Lord for Mowrey, Sanders, Collins, Kinney
Parnell, Buongiorno, Hansen, Barras, Wilson,2 Richards, Sheets, Robbins, and Bernstein’s efforts
are consistent with the prevailing rates in Dallas County. The Court concludes that the requested
hourly rates enumerated in Mowrey’s declaration are reasonable and within the market rate for
attorneys handling this type of litigation in the Dallas area. See generally Iglehart, 2015 WL
5813400, at *3 (finding Robert Mowrey’s $564.00 hourly rate as reasonable); Fashina v. Fed.
Home Loan Mortg. Corp., No. 3:12-CV-822-N-BK, 2013 WL 5300652, at *2 (N.D. Tex. Sept. 20,
2013) (“The Court also finds that the hourly rates charged by Defendant’s counsel, ranging from
$200 to $564 an hour, and $180 per hour for paralegals, were reasonable.”); Vanliner Ins. Co. v.
DerMargosian, No. 3:12–cv–5074–D, 2014 WL 1632181, at *2 (N.D. Tex. Apr. 24, 2014) (noting
that the Court is an expert regarding reasonableness of attorneys’ fees).
The undersigned concludes that the appropriate lodestar here to be calculated as 10.4
hours for Mowrey at $569.00 an hour ($5,917.60), 2.7 hours for Sanders at $439.00 an hour
($1,185.30), 8.3 hours for Collins at $321.00 an hour ($2,664.30), 21.6 hours for Kinney Parnell
at $321.00 an hour ($6,933.60), 83.2 hours for Buongiorno at $325.00 an hour ($27,040.00), 91.8
hours for Hansen at $258.00 an hour ($23,684.40), 2.8 hours for Barras at $325.00 an hour
($910.00), 2.5 hours for Wilson at $250.00 an hour ($625.00), 3.4 hours for Richards at $180.00
an hour ($612.00), 8.8 hours for Sheets at $180.00 an hour ($1,584.00), 1.4 hours for Robbins at
$180.00 an hour ($252.00), and 0.3 hours for Bernstein at $150.00 an hour ($45.00), for a total of
$71,453.20. The Court notes that Mowrey avers that prior to invoicing Defendant, he “sometimes
reduce[s] the amount of time which was billed to Defendant . . . to ensure that all time billed was
reasonable” (Dkt. #60, Exhibit A at 5). Indeed, the invoices at issue herein reflect a reduction of

2

The invoices reflect A. Wilson’s billing rate is $275.00. Through Mowrey’s averment as such, the Court determines
that $250 is a reasonable rate for Wilson’s services.
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the amount billed to Defendant by $2,280.01; such reduction would bring the attorney’s fee total
to $69,173.19. The Court, upon review of the evidence and after giving due consideration to the
relevant Johnson factors, Mowrey’s declaration, and Locke Lord’s invoices, concludes that a total
of $69,173.19 is a reasonable and appropriate attorney’s fee in this case.
Defendant also seeks $1,854.153 in costs apart from attorney’s fees. The Court must
determine whether these costs are “reasonable” under the language of the First Loan Deed of Trust.
Taxable court costs include: (1) fees paid to the clerk and marshal; (2) court reporter fees for all or
part of the deposition transcript; (3) printing costs and witness fees; (4) fees for copies of papers
necessarily obtained for use in the case; (5) certain docket fees; and (6) compensation of court
appointed experts and interpreters. See 28 U.S.C. § 1920. Locke Lord’s billing invoices show
that Wells Fargo’s costs consists of $86.60 in title report charges (research); $680.55 in postage;
$434 in filing fees to the clerk; and $3.00 for Secretary of State inquiries (research); and $650 in
mediator fees. Defendant is limited to the categories of costs recoverable under 28 U.S.C. § 1920.
See Gagnon v. United Technisource, Inc., 607 F.3d 1036, 1045 (5th Cir. 2010). Section 1920 does
not permit recovery of mediator fees, research costs, or postage. See Condon v. Hunting Energy
Servs. L.P., No. CIV.A. H-04-3411, 2006 WL 2882857, at *7 (S.D. Tex. Oct. 4, 2006) (mediation
fees not recoverable under § 1920); Gomez v. Managing Innovation & Tech., Inc., 3:14–CV–0936–
M, 2015 WL 6150905, at *2 (N.D. Tex. Oct. 15, 2015) (court declined to award costs for research);
Auto Wax Co. v. Mark v. Prods., Inc., No. 3:99-CV-982-M, 2002 WL 265091, at *5 (N.D. Tex.
Feb. 22, 2002) (Lynn, J.) (postage and delivery fees are not recoverable under § 1920). The Court
finds $434.00 for Defendant’s filing fee is included under the reasonable attorney fee language in

3

The Court arrives at this number by adding up the fees charged to Wells Fargo through each invoice. However,
Mowrey avers that “[t]he amended figure for the total amount of expenses Wells Fargo has been billed in this matter
from the beginning of this case through December 20, 2016 is $1,854.69.” This appears to be in error.
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the First Loan Deed of Trust. Accordingly, the Court finds Defendant is subrogated as to
$69,607.194 for the total attorney’s fees and costs allowed under the Deeds of Trust.
Defendants’ Motion for Entry of Final Judgment (Dkt. #56) and Defendant’s Supplement
to Wells Fargo’s Motion for Entry of Final Judgment to Amend Total Amount of Attorney Fees
(Dkt. #60) are GRANTED, and Defendant is entitled to subrogation in the amount of $189,295.18,
comprised of $83,552.89 paid to satisfy the balance of the Second Loan, $69,607.19 in attorney’s
fees, $17,007.63 in hazard insurance, and $19,127.47 in property taxes, as well as any interest on
the balance of the Second Loan and escrow advances that continue to accrue.
CONCLUSION
Having received the report of the United States Magistrate Judge, having considered each
of Plaintiff’s timely filed objections (Dkt. #54), Defendant’s Response (Dkt. #58), Defendant’s
Motion for Entry of Final Judgment (Dkt. #56), Defendant’s Supplement to Wells Fargo’s Motion
for Entry of Final Judgment to Amend Total Amount of Attorney Fees (Dkt. #60), and having
conducted a de novo review, the Court is of the opinion that the findings and conclusions of the
Magistrate Judge are correct and adopts the Magistrate Judge’s report (Dkt. #50) as the findings
and conclusions of the Court.
It is, therefore, ORDERED that Defendant Wells Fargo Bank, N.A.’s Motion for Final
Summary Judgment Against Plaintiff’s Claims and in Support of Its Own Claims (Dkt. #30) is
GRANTED, and Plaintiff’s claims against Defendant Wells Fargo Bank, N.A. are DISMISSED
with prejudice.
It is further ORDERED that Defendant’s Motion for Entry of Final Judgment (Dkt. #56)
and Defendant’s Supplement to Wells Fargo’s Motion for Entry of Final Judgment to Amend Total

4

The Court reaches this amount by adding the total amount of fees recoverable, $69,235.69, to the total amount of
costs recoverable, $434.00.
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Amount of Attorney Fees (Dkt. #60) are GRANTED. Defendant is entitled to subrogation in the
amount of $189,295.18, comprised of $83,552.89 paid to satisfy the balance of the Second Loan,
. $69,607.19 in attorney’s fees, $17,007.63 in hazard insurance, and $19,127.47 in property taxes,

as well as any interest on the balance of the Second Loan and escrow advances that continue to
accrue. 
IT IS SO ORDERED.
SIGNED this 17th day of March, 2017.

___________________________________
AMOS L. MAZZANT
UNITED STATES DISTRICT JUDGE

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