Mustapha et al v. HSBC Bank, USA et al

Filing 53

ORDER granting 51 Motion for Attorney Fees.(Signed by Magistrate Judge George C. Hanks, Jr) Parties notified.(jegonzalez, )

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
GIBRILL MUSTAPHA, et al,
Plaintiffs,

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VS.

CIVIL ACTION NO. 4: 12-CV-01924

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HSBC BANK, USA, et al,
Defendants.

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ORDER

Before the Court is the Motion for Attorney's Fees and Costs filed by Defendants
HSBC Bank USA, NA and Wells Fargo Bank, N.A.

Plaintiffs have not filed any

response to this Motion nor have they filed any objections to the evidence attached to the
Motion. Having considered the applicable legal authorities and all matters of record, the
Court GRANTS Defendants' motion.

I.

Background
As set out in more detail in the Court's recent Memorandum and Order (Dkt. #49),

this case is the latest in a series of lawsuits filed by the Mustaphas regarding the property
at issue. On March 2, 2010, Wells Fargo foreclosed on the property.

HSBC then

purchased the property at the foreclosure sale. The Mustaphas have filed myriad lawsuits
relating to the property, the associated loan documents, and foreclosure-appearing

in

seven different courts over the past two-and-a-half years.
In 2012, the Mustaphas again sued Defendants in this Court, bringing twenty-five
various claims against Wells Fargo and HSBC. The Court dismissed their suit in its

entirety on February 20, 2013, on the grounds that all of their asserted claims are barred
by res judicata. Defendants now seek to recover their attorney's fees and costs.
11.

Analysis
When state law governs the substantive issues in a case, state law also controls

both the award and reasonableness of attorney's fees. Mathis v. Exxon Corp., 302 F.3d
448, 461-62 (5th Cir. 2002). Under Texas law-the
case-attorney's

governing law in this diversity

fees or expenses incurred in a lawsuit are not recoverable unless

authorized by statute or contract. Dallas Cent. Appraisal Dist. v. Seven Inv. Co., 835
S.W.2d 75,77 (Tex. 1992).
In support of their claim for attorney's fees, Defendants rely on Section 7(E) of the
Note executed by the Mustaphas:
7(E). Payment of Note Holder's Costs and Expenses: If the Note Holder
has required me to pay immediately in full as described above, the Note
Holder 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 include, for example, reasonable attorneys' fees. 1
The Court agrees that this contractual provision allows Defendants' to recover their
reasonable attorney's fees and expenses from the Mustaphas.
Texas courts accept the lodestar method as a means of calculating reasonable
attorney's fees. See El Apple I, Ltd. v. Olivas, 370 S.W.3d 757 (Tex. 20 12). The Texas
Supreme Court has outlined a two-step process for calculating the lodestar value. El
Apple I, Ltd., 370 S.W.3d at 759. Courts first determine the reasonable hours spent by
counsel on the case and a reasonable hourly rate-the

' Dkt. 24-3, p. 8.

number of hours is then multiplied

by the hourly rate to arrive at the lodestar, or base fee. Id. Once the lodestar value is
calculated, the court may then adjust the amount up or down if relevant factors indicate
an adjustment is necessary to reach a reasonable fee in the case.

Id.

The Texas

Disciplinary Rules provide the non-exhaustive list of factors for consideration:
(1) the time and labor required, the novelty and difficulty of the questions
involved, and the skill required to perform the legal service properly;
(2) the likelihood ... that the acceptance of the particular employment will
preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;

(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers
performing the services; and
(8) whether the fee is fixed or contingent on results obtained or uncertainty
of collection before the legal services have been rendered.

El Apple I, Ltd., 370 S.W.3d at 760 (citing TEX DISCIPLINARY R. PROF'LCONDUCT
1.04(b)); see also Arthur Andersen & Co. v. Perry Equip. Corp., 945 S.W.2d 8 12, 8 1819 (Tex.1998). These factors mirror those set out by the Fifth Circuit in Johnson v.

Georgia Highway Express, Inc., 488 F.2d 714, 717-19 (5th. Cir. 1974). Because Mathis
mandates the application of state law in this case, this Court performs the analysis
described in El Apple to determine the reasonableness of the requested fees. Mathis 302

Here, Defendants rely exclusively on the Affidavit of Branch A. Sheppard and
eight attached pages of billing invoices. Texas courts will accept an uncontroverted
affidavit filed by the movant's attorney setting forth the attorney's qualifications, opinion

regarding reasonable attorney's fees, and basis for the opinion as sufficient evidence for
an analysis of the reasonableness of the requested fees. See, e.g., Sheffield Dev. Co. v.
Carter & Burgess, Inc., 2012 Tex. App. LEXIS 10599 (Tex. App.-Fort

Worth Dec. 21,

20 12)(pet. dismd.)(upholding attorney's fees award, finding counsel's uncontroverted
affidavit presented competent evidence of three of the Arthur Anderson factors-the

time

and labor required, the customary local fee, and the experience of the lawyers providing
services.."). Mr. Sheppard's uncontested affidavit sets forth his qualifications, including
that he has been a licensed attorney in the State of Texas for eleven years and is familiar
with the usual and customary fees charged in the Southern District of Texas for similar
representation. The attached billing invoices show that several different attorneys at the
law firm of Johnson DeLuca Kurisky & Gould, P.C. ("JDKG") performed a total of 114.2
hours of legal services at rates ranging from $275 per hour to $400 per hour. (See Def.'s
Suppl., Dkt. 51).

The bulk of this work was performed by associates Branch M.

Sheppard, Mark A. Bankston, Jeffrey Lawson, and Justin Allen, and this work included
investigating the case, researching applicable law, drafting various pleadings, and
conferring with other attorneys. The affidavit establishes that the billing rate for these
attorneys is comparable to rates charged by attorneys of similar skill and experience in
this locality. JDKG attorneys drafted an answer, removal documents, responses, and a
motion to dismiss on behalf of Defendants. In addition, they appeared at multiple
hearings, many times only to have the hearing rescheduled when the Mustaphas failed to
attend the hearing at the set times without timely notice to either the Court or opposing
counsel. Furthermore, the Mustaphas have not objected to any of the hours of work
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reported by JDKG as being duplicative, redundant, excessive, or otherwise improper.
Finally, the amounts sought include expenses that are detailed in the Affidavit and are
reasonable for a case of this kind. Reviewing these facts in light of the above case law
and factors, the Court finds that the requested attorney's fees and expenses are
reasonable.

Conclusion
Upon review of the written submissions of Defendants, and after giving due
consideration to the relevant factors, the Court determines that $46,509.02 is a reasonable
and appropriate amount for attorney's fees and expenses in this case. Accordingly,
Defendant's Motion is GRANTED.

Signed at Houston, Texas, on May 28,2013.

United States Magistrate Judge