HSBC Bank USA NA v. Crum
MEMORANDUM OPINION AND ORDER: The Court GRANTS Plaintiff's 65 Motion for Award of Attorney's Fees in the amount of $12,867.00, but DENIES Plaintiff's Motion with respect to the request for attorney's fees for post-judgment motions or for an appeal. It is further ORDERED, ADJUDGED and DECREED that said award shall not be a money judgment but only a further obligation on Defendant's Texas Home Equity Note and his Texas Home Equity Security Instrument. (Ordered by Judge Jane J. Boyle on 5/31/2017) (ran)
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF TEXAS
HSBC BANK USA, N.A., AS
TRUSTEE FOR MERRILL LYNCH
MORTGAGE INVESTORS TRUST,
MORTGAGE LOAN ASSETBACKED CERTIFICATES, SERIES
KENNETH E. CRUM,
CIVIL ACTION NO. 3:14-CV-3522-B
MEMORANDUM OPINION AND ORDER
Before the Court is Plaintiff’s Motion for Award of Attorney’s Fees. Doc. 65. For the
following reasons, the Court GRANTS in part and DENIES in part Plaintiff’s Motion.
The Court previously granted Plaintiff’s Motion for Summary Judgment (Doc. 38) in its
entirety and entered a Final Judgment granting Plaintiff, among other things, the right to enforce its
lien on the subject property through non-judicial foreclosure. Doc. 69, Final J. Now Plaintiff seeks
an award of attorney’s fees in the amount of $12,678.00. Doc. 65, Mot. for Att’y Fees 1; Doc 66-1,
Cronenwett Decl. Ex. A ¶ 5. Plaintiff also seeks an additional $2,500 for post-judgment motions,
$5,000 for an appeal to the Fifth Circuit Court of Appeals, and $2,500 for an appeal to the United
States Supreme Court. Doc. 66-1, Cronenwett Decl. Ex. A ¶ 9. In support of its Motion, Plaintiff
attaches: (1) the Declaration of attorney Mark D. Cronenwett; (2) the resume of Cronenwett; and
(3) redacted billing invoices. Doc. 66, Pl.’s App.
Rule 54(d) of the Federal Rules of Civil Procedure governs costs and attorneys’ fees. Under
the American Rule, prevailing parties generally cannot recover attorneys’ fees without a statutory
or contractual basis. Summit Valley Indus., Inc. v. United Bhd. of Carpenters & Joiners, 456 U.S. 717,
721 (1982). Rule 54(d)(2) provides the procedure for the prevailing party, by motion, to specify the
statute, rule, or other grounds entitling them to the award. Here, Plaintiff moves for attorney’s fees
according to the subject home equity note and security instrument.
Courts in the Fifth Circuit “apply a two-step method for determining a reasonable attorneys’
fee award.” Combs v. City of Huntington, 829 F.3d 388, 391 (5th Cir. 2016) (citing Jimenez v. Wood
Cty., 621 F.3d 372, 379 (5th Cir. 2010), on reh’g en banc, 660 F.3d 841 (5th Cir. 2011)). Courts first
calculate the lodestar, “‘which is equal to the number of hours reasonably expended multiplied by
the prevailing hourly rate in the community for similar work.’ In calculating the lodestar, ‘[courts]
should exclude all time that is excessive, duplicative, or inadequately documented.’” Id. (quoting
Jimenez, 621 F.3d at 379–80).
“There is a strong presumption of the reasonableness of the lodestar amount.” Black v.
SettlePou, P.C., 732 F.3d 492, 502 (5th Cir. 2013) (citing Perdue v. Kenny A., 559 U.S. 542, 552
(2010); Saizan v. Delta, 448 F.3d 795, 799 (5th Cir. 2006)). But after calculating the lodestar, courts
move to the second step and evaluate the resulting value in relation to “the twelve factors set forth
in Johnson v. Georgia Highway Express, Inc.” Jimenez, 621 F.3d at 380 (citing Johnson v. Ga. Highway
Express, Inc., 488 F.2d 714, 717–19 (5th Cir. 1974), overruled on other grounds by Blanchard v.
Bergeron, 489 U.S. 87, 90 (1989)). Those factors are addressed more in depth below.
Under certain circumstances, “a district court may enhance or decrease the amount of
attorneys’ fees based on ‘the relative weights of the twelve’” Johnson factors. Black, 732 F.3d at 502
(quoting Saizan, 448 F.3d at 800). Lodestar enhancements, however, are permitted only in rare and
exceptional circumstances. Perdue, 559 U.S. at 554. And “the lodestar may not be adjusted due to
a Johnson factor that was already taken into account during the initial calculation of the lodestar.”
Black, 732 F.3d at 502.
As mentioned above, Plaintiff moves for attorney’s fees according to the subject home equity
note and security instrument. The note to which Plaintiff refers is a Texas Home Equity Note, and
it provides that in the event a borrower fails to pay as required, the “Note Holder will have the right
to be paid back by [the borrower] for all of its costs and expenses in enforcing this Note to the extent
not prohibited by applicable law, including Section 50(a)(6) Article XVI of the Texas Constitution.
Those expenses include, for example, reasonable attorneys’ fees.” Doc. 1-1, Texas Home Equity Note
Ex. A, at 2. And the security instrument is a Texas Home Equity Security Instrument providing that
the “Lender” is “entitled to collect all expenses incurred in pursuing the remedies provided in . . .
Section 21, including, but not limited to . . . reasonable attorneys’ fees.” Doc. 1-1, Texas Home
Equity Security Instrument Ex. B, at 16.
The language in the contracts indicates that Plaintiff may recover attorney’s fees incurred in
pursuing its claims, insofar as such recovery does not violate the Texas Constitution. “Home equity
notes are non-recourse as a matter of Texas law, but that rule does not bar recovery of attorneys’ fees
and other expenses, as provided for in [the] security instrument, as part of the balance owed under
the note. These fees may be recovered against the property upon any foreclosure sale.” Huston v.
Bank Nat. Ass’n, 988 F. Supp. 2d 732, 742 (S.D. Tex. 2013) (citing In re Mullin, 433 B.R. 1, 18
(Bankr. S.D. Tex. 2010)); see also Tex. Const. Art. XVI § 50(a)(6)(C). Having concluded that
Plaintiff may recover attorney’s fees, the Court turns to its consideration of the lodestar amount and
the Johnson factors.
In Mr. Cronenwett’s Declaration, he asserts that he is familiar with the legal services
necessary to handle similar claims and that he is familiar with the reasonable charges for such services
in the United State District Court for the Northern District of Texas and within the state of Texas.
See Doc. 66-1, Cronenwett Decl. Ex. A. Defendant failed to file a Response opposing Plaintiff’s
After reviewing the attached billing invoices and Mr. Cronenwett’s Declaration, the Court
is satisfied that the rate at which each individual worked is the prevailing hourly rate in the
community for similar work and that the time billed was not excessive, duplicative, or inadequately
documented. See Combs, 829 F.3d at 391 (citing Jimenez, 621 F.3d at 379–80). The Court does note,
however, that by the Court’s calculation, and by the amount printed in the Billed Case Summary,
the correct lodestar amount is $12,867, not $12,678 as is represented in the Declaration. See Doc.
66-1, Invoice Ex. A-2, at 2. As it appears that this was likely a typographical mistake in the
Declaration, the Court concludes that the proper lodestar amount is $12,867.
The Court now must determine whether to alter the lodestar amount in light of the twelve
Johnson factors. They are: (1) the time and labor required; (2) the novelty and difficulty of the issues;
(3) the requisite skill to perform the legal services 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 imposed by the client or the circumstances; (8) the amount involved
and the results obtained; (9) the experience, reputation, and 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. Johnson, 488 F.2d at 717–19.
As set forth above, “[t]here is a strong presumption of the reasonableness of the lodestar
amount.” Black, 732 F.3d at 502. That said, the Court can enhance or decrease the lodestar value
in light of the Johnson factors if the party seeking adjustment meets its burden of proving an
adjustment is warranted. Id.; Wherley v. Schellsmidt, No. 3:12-cv-0242, 2014 WL 3513028, at *5
(N.D. Tex. July 16, 2014). “Many of the Johnson factors are ‘presumably fully reflected in the
lodestar amount,’ however, so such modifications are proper only in certain ‘rare’ and ‘exceptional’
cases, supported by both ‘specific evidence’ on the record and detailed findings.” Wherley, 2014 WL
3513028, at *5 (quoting Pennsylvania v. Del. Valley Citizens’ Council for Clean Air, 478 U.S. 546, 565
(1986)). What’s more, “the United States Supreme Court has barred any use of the sixth factor and
advised that the second factor generally cannot be used as a ground for enhancing the award.”
SortiumUSA, LLC v. Hunger, No. 3:11-cv-1656-M, 2015 WL 179025, at *3 (N.D. Tex. Jan. 14,
2015). Perhaps most importantly, however, “[t]he lodestar may not be adjusted due to a Johnson
factor . . . if the creation of the lodestar amount already took that factor into account; to do so would
be impermissible double counting.” Saizan, 448 F.3d at 800.
Here, Plaintiff does not request that the Court enhance the base lodestar amount by any
amount. Defendant failed to file a Response, so there is no argument for decreasing the lodestar
amount. After taking into account each of the Johnson factors, the Court is in agreement with
Plaintiff in that the lodestar amount does not require adjusting. Therefore, the Johnson factors do not
change the lodestar amount and the Court GRANTS Plaintiff’s Motion to the extent that Plaintiff
should be awarded attorney’s fees in the amount of $12,867. But the Court declines to address the
issue of attorney’s fees based on post-judgment motions or for an appeal because Plaintiff’s request
is premature and because there is insufficient information to warrant such relief. Accordingly,
Plaintiff’s Motion is DENIED in that respect. See Parker v. U.S. Bank. Nat. Ass’n, No. 3:12-cv-4297L, 2014 WL 2883919, at *6 (N.D. Tex. June 25, 2014).
For the reasons explained above, the Court GRANTS Plaintiff’s Motion for Award of
Attorney’s Fees (Doc. 65) in the amount of $12,867.00, but DENIES Plaintiff’s Motion with
respect to the request for attorney’s fees for post-judgment motions or for an appeal.
It is further ORDERED, ADJUDGED and DECREED that said award shall not be a
money judgment but only a further obligation on Defendant’s Texas Home Equity Note and his
Texas Home Equity Security Instrument.
SIGNED: May 31, 2017
JANE J. BOYLE
UNITED STATES DISTRICT JUDGE
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