Balboa Capital Corporation v. Okoji Home Visits MHT LLC

District Court, N.D. Texas·Decided May 15, 2025·No. 3:18-cv-00898·Unknown

Opinion

IN THE UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF TEXAS DALLAS DIVISION

BALBOA CAPITAL CORPORATION, § § Plaintiff, § § V. § No. 3:18-cv-898-M § OKOJI HOME VISITS MHT, LLC et al., § § Defendants. § §

FINDINGS, CONCLUSIONS, AND RECOMMENDATION OF THE UNITED STATES MAGISTRATE JUDGE Defendants-Appellees Siddiqui Transitions MHT LLC, Abdul Siddiqui, M.D., Ltd., Abdul Siddiqui, Las Vegas Transitions MHT, LLC, Sushil Patel, El-Salibi Transitions MHT LLC, El-Salibi Infectious Diseases Of Southern Nevada, Fadi Daoud El-Salibi, Wahab Transitions MHT LLC, Naz Wahab M.D. P.C., Naz Wahab, Saghir Transitions MHT LLC, Sheikh S. Saghir Professional Limited Liability Company, Sheikh Saghir, Godswill Okoji, ULNACS Medical Care P.C., El Sherif Omar Shafie, Zaigham But, Jaideep Patel, Vu Thi, Hailegiorgis Woldegiorgis, Scotty Ortega, Cedric Poku-Dankwah Cedric Poku-Dankwah MD, Uchechi Opaigbeogu, Love Nakandi Sozi, and Tabasum Imran filed a Joint Application for Appellate Attorneys’ Fees in the Fifth Circuit. See Dkt No. 837-8. The Fifth Circuit denied without prejudice Defendants-Appellees’ request that it award appellate attorneys’ fees and non-taxable expenses but granted their alternative request to remand this case to this Court solely for the consideration of

-1- such attorneys’ fees and non-taxable expenses. See Dkt. No. 832. Senior United States District Judge Barbara M. G. Lynn then referred Defendants-Appellees’ Joint Application for Appellate Attorneys’ Fees (the “Appellate

Attorneys’ Fees Application”) to the undersigned United States Magistrate Judge for hearing, if necessary, and findings, conclusions, and recommendation under 28 U.S.C. § 636(b). See Dkt. No. 833. In the Fifth Circuit, Plaintiff-Appellant Balboa Capital Corporation (“Balboa”) filed an opposition, see Dkt. No. 837-9, and Defendants-Appellees filed a reply, see Dkt. No. 837-10. And, as the Parties stipulated to in their joint status report, see Dkt. No.

837, the parties filed supplemental briefs, see Dkt Nos. 840 & 841. For the reasons explained below, the Court should grant in part the Appellate Attorneys’ Fees Application [Dkt. No. 837-8]. Background Judge Lynn has documented the background and procedural history of these consolidated cases in prior orders. See Dkt. Nos. 706 & 829. The information that follows is repeated here for reference and supplemented with information relevant to

the issues now presented before the Court. These consolidated cases arise out of the operation of the Medical Home Team Services Program, through which physicians could remotely supervise nurse practitioners, by America’s Medical Home Team, Inc.’s (“MHT”). As part of a physician’s participation, MHT required that a limited liability company (the “Physician LLC”) be created to obtain financing from a lender to fund the purchase of

-2- one or more licenses from MHT. In October 2016, Plaintiff Balboa became a lender for MHT, after being referred by a previous lender, Ascentium Capital, LLC (“Ascentium”). After approving the

physician’s credit application, Balboa generated loan documents, including an MHT Installment Payment Agreement (“IPA”) or Monthly Payment Agreement (“MPA”), to be executed by the Physician LLC, and a guaranty agreement, to be executed by the physician and, if applicable, the physician’s professional corporation. Balboa executed MPA and IPA agreements with Physician LLCs between October 2016 and February 2017.

By June 2017, all the Physician LLCs had defaulted on their loan obligations to Balboa, and Balboa initiated collection suits against each of them, naming as defendants in each respective suit the Physician LLC and the physician as guarantor. The first sixteen cases were filed in California state court in May of 2017, before being removed to the Central District of California and then transferred to this Court in April 2018. The last four cases were filed in this Court. On January 24, 2019, this Court consolidated these cases for pretrial management.

The sixteen consolidated cases involved two groups based on defense counsel. In eleven of the cases, the physician guarantors were represented by Hall Griffin LLP (the “Hall Griffin Defendants”). And, in the remaining five cases, the Physician LLCs and guarantors were represented by Ferguson Braswell Fraser & Kubasta PC (the “FBFK Defendants”). At summary judgment, this Court concluded that both the Hall Griffin and

-3- FBFK Defendants were entitled to summary judgment on Balboa’s breach of contract and breach of guaranty claims, on the grounds that no enforceable contract existed between Balboa and any of the Physician LLCs. See Dkt. Nos. 702 & 706.

Before the Court granted summary judgment in their favor, the Hall Griffin and FBFK Defendants had objected to and moved to strike certain paragraphs of and exhibits to the declaration of Patrick Byrne and Robert Rasmussen submitted in Balboa’s response to the motions for summary judgment, and the Court separately sustained and granted the motions to strike. See Dkt. No. 699. The Court then entered Judgment in each of the sixteen cases that Balboa take

nothing on its claims. See Dkt. No. 708. Balboa appealed from this Court’s rulings and the parties briefed the relevant issues. See Dkt Nos. 837-3 to 837-6. The Hall Griffin and FBFK Defendants prepared and filed separate appellee briefs. See Dkt Nos. 837-4 & 837-5. The Fifth Circuit affirmed this Court’s rulings in all respects in an opinion issued on July 30, 2024. See Dkt. No. 837-7. On the day before the Fifth Circuit entered its decision, this Court issued a

Memorandum Opinion and Order awarding the Hall Griffin and FBFK Defendants attorneys’ fees and litigation expenses from the trial stage of the litigation but determined that the requested amount should be reduced by 25 percent. See Dkt. No. 839. Defendants-Appellees then filed their Appellate Attorneys’ Fees Application in the Fifth Circuit. See Dkt. No. 837-8. And the Fifth Circuit remanded the case to this

-4- Court for the consideration of such attorneys’ fees and non-taxable expenses. See Dkt. No. 832. Legal Standard

California law governs the undersigned’s analysis of the amount and reasonableness of the requested attorneys’ fees. A fee award is governed by the same law that serves as the rule of decision for the substantive issues in the case. See AMS Sensors USA Inc. v. Renesas Elecs. Am. Inc., No. 4:08-CV-00451, 2022 WL 3270007, at *2 n.1 (E.D. Tex. Aug. 10, 2022) (quoting Mathis v. Exxon Corp., 302 F.3d 448, 461 (5th Cir. 2002)).

Judge Lynn has previously explained the legal standard applied by California courts to determine reasonable attorneys’ fees: California Civil Code § 1717(a) authorizes the award of attorneys’ fees to the prevailing party “[i]n any action on a contract, where the contract specifically provides that attorney’s fees and costs.” Cal. Civ. Code § 1717(a). Reasonable attorney’s fees incurred to enforce that contract “shall be fixed by the [C]ourt, and shall be an element of the costs of suit.” Id. When § 1717(a) applies, the award of fees is mandatory. See Common Cause v. Board of Supervisors, 49 Cal. 3d 432, 443 (1989). The “prevailing party” is “the party who recovered a greater relief in the action on the contract.” Cal. Civ. Code § 1717(b)(1). California court have construed § 1717 liberally. See, e.g., Reyes v. Beneficial State Bank, 76 Cal. App. 5th 596, 617 (2022).

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