Cross v. Wells Fargo Bank, N.A.

Filing 45

MEMORANDUM AND ORDER granting 44 MOTION for Attorney Fees. (Signed by Judge Lee H Rosenthal) Parties notified. (wbostic, 4)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION
FINIS A. CROSS,
Plaintiff,
VS.
WELLS FARGO BANK, N.A.,
Defendant.

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CIVIL ACTION NO. H-13-1756

MEMORANDUM AND ORDER ON ATTORNEY'S FEES

I.

Background
Wells Fargo foreclosed on a home Finis Cross had purchased and financed through a

mortgage. Cross sued Wells Fargo in state court, asserting claims for breach of contract, promissory
estoppel, breach of the covenant of good faith and fair dealing, violations of the Real Estate
Settlement Procedures Act ("RESPA"), and violations ofHUD regulations. Cross sought damages,
including origination costs, restitution of all loan payments, lost rental income, and attorney's fees
and costs. Wells Fargo timely removed and moved for summary judgment.
The court held a hearing on the summary judgment motion at which Wells Fargo appeared
through counsel and Cross appeared pro se. The court granted Wells Fargo's motion for summary
judgment on all of Cross's claims, finding and concluding that Cross's claims for breach of contract
and promissory estoppel were barred by the statute offrauds; Cross failed to perform under the Note
and Deed of Trust; the implied covenant of good faith and fair dealing did not apply; the RESPA
claims lacked merit; Cross had no private right of action against Wells Fargo under HUD
regulations; and Wells Fargo had not waived its right to accelerate the Note and conduct a
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nonjudicial foreclosure sale. After this ruling, Wells Fargo moved for an award of $33,296.50 in
fees and $1,782.84 in costs incurred in responding to Cross's claims. (Docket Entry No. 44). Cross
has not responded to the motion.
Based on the motion, the record, and the applicable law, the court finds and concludes that
Wells Fargo is entitled to recover fees and costs, and that a reasonable fee is $13,581. An order is
entered awarding Wells Fargo that amount, as well as $1,782.84 in costs. The reasons are explained
below.

II.

Analysis
A.

The Legal Standard for Fee Awards

Texas law governed the substantive issues in this case and applies to the fee application as
well. Mathisv. Exxon Corp., 302 F.3d448, 461 (5th Cir. 2002). Texas law allows a party to recover
attorney's fees when a statute or contract provides. In re Velazquez, 660 F.3d 893,895-96 (5th Cir.
2011); Tony Gullo Motors 1, L.P. v. Chapa, 212 S.W.3d 299,311 (Tex. 2006). Wells Fargo has

shown both a contractual and a statutory basis for the fees it seeks.
Section 9 of Cross's Deed of Trust entitles Wells Fargo to "do and pay for whatever is
reasonable or appropriate to protect Lender's interest in the Property and rights under this Security
Instrument .... " These actions "can include, but are not limited to ... paying reasonable attorneys'
fees to protect its interest in the Property and/or rights under this Security Instrument, including its
secured position in a bankruptcy proceeding." (ld.). The Fifth Circuit has held that such a "Deed
of Trust contemplates entitlement to attorney's fees incurred to protect [the lender's] interest in the
property or rights under the Deed of Trust. " In re Velazquez, 660 F.3d at 899 (interpreting identical
provisions in a deed of trust). Although the Fifth Circuit's Velazquez decision concerned the

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recovery of attorney's fees in the bankruptcy context, other courts have found that an attorney's fee
provision in a deed of trust applies when, as here, the plaintiff sought to "enj oin defendants from
selling or attempting to sell the property, an action that, if successful, could have permanently
affected defendants' ability to enforce the terms of the note and deed of trust through foreclosure and
eviction if plaintiff persisted in her default." Richardson v. Wells Fargo Bank, NA., 2012 WL
6028912, at *3 (N.D. Tex. Dec. 3,2012).
Texas courts generally use the lodestar method for calculating attorney's fees. Toshiba

Mach. Co., Am. v. SPM Flow Control, Inc., 180 S.W.3d 761, 782 (Tex. App. -

Fort Worth 2005,

pet. granted,judgm't vacated w.r.m.); see also Guity v. C. C.l Enter., 54 S. W.3d 526, 528 (Tex. App.
- Houston [1 st Dist.] 2001, no pet.) ("In determining the reasonableness of attorney's fees, the fact
finder must be guided by a specific standard. This standard is substantially similar under both
federal law and state law. "). The first lodestar step is to determine the reasonable hourly rate for the
attorneys and nonlegal personnel who worked on the case. The reasonable hourly rate is based on
"the prevailing market rates in the relevant community." Blum v. Stenson, 465 U. S. 886, 895 (1984).
The second step is to determine the number of hours "reasonably expended." McClain v. Lufkin

Indus., Inc., 519 F.3d 264,284 (5th Cir. 2008).
One consideration in determining reasonableness is whether the party seeking attorney's fees
exercised billing judgment. "Billing judgment requires documentation ofthe hours charged and of
the hours written off as unproductive, excessive, or redundant." Saizan v. Delta Concrete Products

Co., 448 F.3d 795, 799 (5th Cir. 2006). "The proper remedy for omitting evidence of billing
judgment does not include a denial of fees but, rather, a reduction of the award by a percentage

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intended to substitute for the exercise of billing judgment." Id. at 799; see also Walker v. City of
Mesquite, Tex., 313 F.3d 246, 251 (5th Cir. 2002).

Another consideration is whether the hours claimed yield a fee that is excessive compared
to the amount at stake or owed. See Sibley v. RMA Partners, L.P., 138 S.W.3d455, 459 (Tex. App.
- Beaumont 2004, no pet.). "Attorney's fees must bear some reasonable relationship to the amount
in controversy." Cordova v. Southwestern Bell Yellow Pages, 148 S.W.3d 441,448 (Tex. App.EI Paso 2004, no pet.) (citing Rep. Nat'/ Life Ins. Co. v. Heyward, 568 S.W.2d 879 (Tex. Civ. App.
- Eastland 1978, writ refd n.r.e.). Texas law, however, does not require precise proportionality
between the fees awarded and either the relief obtained or the original amount in controversy.
"[D]isproportion alone does not render the award of attorneys' fees excessive." Northwinds
Abatement, Inc. v. Emp'rs Ins. of Wausau, 258 F.3d 345, 355 (5th Cir. 2001) (affirming $712,000

in attorney's fees on recovery of$74,570 in actual damages on various state statutory and commonlaw claims); see also Quanta Serv's Inc. v. Am. Admin. Grp. Inc., 384 Fed. App'x 291, 298 (5th Cir.
2008) (affirming $116,767.68 in attorney's fees for a $1 00,000 damages award obtained in a contract
suit).
After the court completes both steps, it multiplies the hours "reasonably expended" by the
reasonable hourly rates to determine the lodestar figure. Id. A court then decides whether to
increase or decrease the amount based on the factors set out in Johnson v. Georgia Highway Express,
488 F.2d 714 (5th Cir. 1974). The twelve Johnson factors are (1) the time and labor involved, (2)
the novelty and difficulty of the questions, (3) the skill requisite to perform the legal services
properly, (4) the preclusion of other employment due to this case, (5) the customary fee, (6) whether

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the fee is fixed or contingent, (7) time limitations, (8) the amount involved and results obtained, (9)
the experience, reputation, and ability of counsel, (10) the undesirability of the case, (11) the nature
and length of the professional relationship with the client, and (12) awards in similar cases. Id at
717-19. Texas courts weigh similar factors under Rule 1.04 of the Texas Disciplinary Rules of
Professional Conduct to determine reasonable fees. See Arthur Andersen & Co. v. Perry Equip.

Corp., 945 S.W.2d 812, 818 (Tex. 1997); Brazos Elec. Power Co-op., Inc. v. Weber, 238 S.W.3d
582,585-87 (Tex. App. -

B.

Dallas 2007, no pet.).

The Fee Application

Wells Fargo argues that it is entitled to $33,296.50 in attorney's fees for work that included
performing "legal research . . . , drafting pleadings, drafting removal papers, drafting motions to
dismiss, preparing and serving written discovery, preparing for and taking depositions, and attending
Court mandated hearings." (Docket Entry No. 44 at 6-7).
Lead counsel George A Kurisky, Jr.'s affidavit and the accompanying time records indicate
that he and his colleagues spent over 180 hours on this case. (Docket Entry No. 44, Ex. C). Wells
Fargo's application is based on an hourly rate of$350 for Kurisky and $240 for Branch M. Sheppard,
another lawyer. The application also includes time spent by other individuals whose roles were not
specified in the motion or the affidavit, with hourly billing rates between $100 and $350.

C.

The Lodestar Calculation

The court finds that the hourly rates for Kurisky and Sheppard are reasonable for attorneys
of Kurisky's and Sheppard's experience.

Wells Fargo has not provided information on the

experience or roles of the other individuals who billed time on this case, and the court is unable to
determine whether their billing rates or time spent are reasonable. In its application, Wells Fargo

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stated that it also paid for paralegal services, but neither the application nor Kurisky's affidavit
provides sufficient information to allow the court to evaluate the time spent or the rates charged for
these services. The court declines to award fees for work performed by persons other than Kurisky
and Sheppard.
The time Kurisky and Sheppard spent is reasonable. The court found for Wells Fargo on all
of Cross's claims. Cross often did not comply with the court's orders, and Wells Fargo was required
to spend additional time responding to Cross's claims as a result. In total, Sheppard billed 91.3
hours on the case, and Kurisky billed 15 hours. The ledger report Wells Fargo provided reflects that
Sheppard and Kurisky spent additional time that was not included in the fee application, showing
the application of billing judgment. The court concludes that 106.3 hours is a reasonable amount
of time for the two attorneys to spend on this litigation.

D.

Adjusting the Lodestar

The time each attorney spent on the case, calculated at that attorney's hourly rate, leads to
a lodestar amount of $27,162. A reduction is appropriate because the issues presented in Cross's
complaint were neither novel nor difficult, Kurisky and Branch have both represented Wells Fargo
in many other cases raising issues similar to those raised here, and Cross proceeded pro se. The
court concludes that an appropriate reduction is 50 percent. Applying a 50 percent reduction results
in a fee award of$13,581, which is within the range suggested by other similar cases.

III.

Conclusion
The court awards Wells Fargo its attorney's fees in the amount of $13,581, as well as

$1,782.84 in costs that were reasonable and necessary in defending this suit, for a total award of
$15,363.84.

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SIGNED on February 9, 2015, at Houston, Texas.

Lee H. Rosenthal
United States District Judge

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