Furia v. Hirsch

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 ANDREW FURIA, No. 2:19-cv-00942-JAM 12 Plaintiff, 13 v. ORDER GRANTING THE BANK OF AMERICA AND WELLS FARGO BANK’S 14 SUSANNE MARIE MCGREW, an MOTIONS TO DISMISS individual; LAURIE HIRSCH, an 15 individual; PURHYDRO, LLC, a Nevada corporation; WELLS 16 FARGO BANK NATIONAL ASSOCIATION; BANK OF AMERICA, 17 NATIONAL ASSOCIATION; JPMORGAN CHASE BANK, National 18 ASSOCIATION; and DOES 1 through 50, inclusive, 19 Defendants. 20 And Related Actions. 21 22 On November 26, 2019, the Court granted Bank of America, 23 N.A. (“Bank of America” or “BofA”) and Wells Fargo Bank’s, N.A. 24 (“Wells Fargo”) (collectively “the Banks”) joint motion to 25 intervene, as they possessed the disputed funds at the heart of 26 this litigation. See Order Granting Mot. to Intervene, ECF No. 27 36. The Banks have since deposited the disputed funds with the 28 Court. They now move to be discharged from the suit and to be 1 reimbursed for the attorneys’ fees and costs incurred by 2 interpleading the funds. BofA’s Mot., ECF No. 97; see also Wells 3 Fargo’s Mot., ECF No. 96. Plaintiff Andrew Furia (“Plaintiff”) 4 and Defendant Laurie Hirsch (“Hirsch”) oppose the motions only as 5 to reimbursement for attorney’s fees. See Plf’s Opp’n, ECF No. 6 109; see also Hirsch’s Opp’n, ECF No. 111. For the reasons 7 stated below, the Court GRANTS the Banks’ motions but DEFERS 8 assessment and allocation of the fees until all claims have been 9 resolved.1 10 11 I. FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND 12 On March 25, 2019, Plaintiff deposited $340,000 into a Wells 13 Fargo checking account he jointly held with his then girlfriend, 14 Defendant Susanne Marie McGrew (“McGrew”). BofA Mot. at 3. He 15 also executed a Relationship Change Application, giving McGrew 16 the ability to withdraw the money. Plf’s Opp’n at 7. 17 McGrew withdrew the entire balance of the joint account 18 ($324,918.27) while Plaintiff was away on April 8, 2019. Id. 19 She deposited the funds into her own personal Wells Fargo account 20 and obtained two cashier’s checks made payable to herself—one for 21 $300,000 and the other for $24,918.27. Id. Plaintiff discovered 22 the withdrawal the same day and immediately contacted Wells 23 Fargo. Id. After many conversations with the bank, Wells Fargo 24 informed Plaintiff that their hands were tied because he had 25 given McGrew authorization to withdraw the funds when he made the 26

27 1 This motion was determined to be suitable for decision without oral argument. E.D. Cal. L.R. 230(g). The hearing was 28 scheduled for June 16, 2020. 1 relationship change. Id. at 6. 2 Plaintiff filed a complaint in the Superior Court of 3 California, County of El Dorado, against McGrew two days later, 4 seeking to recover the disputed funds. BofA Mot. at 1. 5 Plaintiff was able to obtain a Temporary Restraining Order(“TRO”) 6 the next day to freeze McGrew’s personal Wells Fargo account. 7 Id. But the TRO was to no avail, since she had already deposited 8 the cashier’s checks into her Bank of America account. Id. A 9 week later, the court issued a second TRO and ordered Wells Fargo 10 to turn over information about the disbursement of the contested 11 funds. Id. Based on that information, Plaintiff obtained a 12 third TRO to freeze all of McGrew’s Bank of America accounts. 13 Plf’s Opp’n at 10. But Bank of America was only able to freeze 14 $2,364.69. Id. 15 The court issued a fourth TRO, so Plaintiff could obtain 16 information from Bank of America regarding the disputed funds. 17 Id. Plaintiff learned that McGrew had transferred at total of 18 $321,000 from her Bank of America accounts to her sister Hirsch’s 19 accounts. BofA Mot. at 2. Hirsch then transferred $20,000 to 20 her Wells Fargo account, and purchased a cashier’s check in the 21 amount of $300,936.94. Id. She then bought two more cashier 22 checks with these funds: (1) one payable to Defendant PurHydro, 23 LLC in the amount of $100,000, and (2) one payable to Little 24 Trouble LLC in the amount of $200,936.94. Id. Pursuant to the 25 fourth TRO, Bank of America placed holds on McGrew and Hirsch’s 26 accounts and successfully stopped payment on the cashier’s check 27 to Little Trouble LLC. Id. However, the cashier’s check to 28 PurHydro, LLC was deposited at JP Morgan Chase before Bank of 1 America could stop payment. Id. 2 On May 1, 2019, Plaintiff amended his complaint to join 3 Hirsch, PurHydro, LLC, and the Banks (including JP Morgan Chase) 4 as Defendants. Notice of Removal, Ex. B, First Amended Verified 5 Complaint (“FAC”), ECF No. 1. But Plaintiff did not assert any 6 causes of action against the Banks. Id. McGrew then removed the 7 case to this Court. Notice of Removal ¶ 6. Soon after, 8 Plaintiff dismissed the Banks as defendants. Amended Notice of 9 Voluntary Dismissal, ECF No. 8. 10 Despite being dismissed, the Banks continuously urged 11 Plaintiff, Hirsch, and McGrew, to stipulate to the interpleading 12 of the funds with the Court. BofA Mot. at 3. The Banks’ 13 requests were ignored and they were forced to move to intervene 14 for the purpose of interpleading the funds themselves. Mot. to 15 Intervene, ECF No. 20. The Court granted the motion. Order, ECF 16 No. 36. The Banks subsequently filed their Crossclaims and 17 Counterclaims for interpleader, ECF Nos. 38-40, and filed motions 18 to deposit the contested funds into the registry of the Court, 19 ECF Nos. 39-41. The Court granted these motions as well, ECF No. 20 53, and the funds were ultimately deposited with the Court. 21 22 II. OPINION 23 A. Request for Judicial Notice 24 Plaintiff asks the Court to take judicial notice of the 25 Wyoming Secretary of State’s Webpages related to the business 26 filings of Little Trouble LLC. Req. for Judicial Notice 27 (“RJN”), ECF No. 110; see also Plf’s Opp’n, Exh. K, ECF No. 109- 28 13. Neither Hirsch nor the Banks oppose this request. 1 Under Federal Rule of Evidence 201, a district court may 2 take judicial notice of a fact that is “not subject to 3 reasonable dispute because it can be accurately and readily 4 determined from sources whose accuracy cannot reasonably be 5 questioned.” Fed. R. Evid. 201(b)(2). Because these documents 6 “are not subject to reasonable dispute and their authenticity is 7 not in question,” the Court will take judicial notice of them. 8 Trudeau v. Google LLC, 349 F. Supp. 3d 869, 876 (N.D. Cal. 9 2018). However, the Court can take notice of the existence of 10 these documents but not of the truths asserted in them. Id. 11 B. Legal Standard 12 “An interpleader action typically involves two stages.” 13 Mack v. Kuckenmeister, 619 F.3d 1010, 1023 (9th Cir. 14 2010)(citations omitted). First, the district court determines 15 whether the requirements for an interpleader action have been 16 met. Id. To make this determination the court looks to 17 whether there is a single fund at issue and adverse claimants to 18 that fund. Id. If the interpleader action is proper, the Court 19 then determines “the respective rights of the claimants.” Id. 20 at 1023-24. 21 Once the interpleader action has been properly brought and 22 the funds have been deposited, “the court should readily 23 discharge a stakeholder absent bad faith or delay by the 24 stakeholder.” Metropolitan Life Ins. Co v. Billini, No. CIV. S- 25 06-02918-WBS-KJM, 2007 WL 4209405, at *2 (E.D. Cal. Nov. 27, 26 2007). The court also has discretion “to award attorney fees to 27 a disinterested stakeholder in an interpleader action.” Id. at 28 *3 (quoting Abex Corp. v. Ski’s Enters., Inc., 748 F.2d 513, 516 1 (9th Cir. 1984)). 2 C. Analysis 3 1. Discharge 4 The Banks seek to be discharged from this suit since they 5 have “disclaimed any interest in the stake and ha[ve] deposited 6 the contested funds with the Court.” BofA Mot. at 4; Wells 7 Fargo Mot. at 3. Plaintiff and Hirsch do not oppose. See Plf’s 8 Opp’n at 4; see also Hirsch’s Opp’n at 3. Because the opposing 9 parties concede and dismissal is proper, the Court GRANTS the 10 Banks’ request to be discharged from this action. 11 2. Attorneys’ Fees 12 The Banks seek a total of $42, 051.76 in combined legal 13 fees. Reply at 1. Plaintiff and Hirsch oppose, arguing that 14 intervention was not necessary and that the fees are 15 unreasonable. See Hirsch Opp’n at 2; See also Plf’s Opp’n at 4. 16 a. Proper and Necessary 17 Plaintiff argues that “the Banks’ improper addition of 18 McGrew to Plaintiff’s account and their delays in freezing or 19 failure to claw back funds, prevents any award of fees.” Plf’s 20 Opp’n at 15. Hirsch argues reimbursement of fees is improper 21 because she planned to intervene, so it was unnecessary for the 22 Banks to interplead the funds. Hirsch Opp’n at 2. The Court 23 finds all these arguments to be unpersuasive. 24 First, Plaintiff’s arguments fail because they are not 25 grounded on any legal authority. He argues the “whole fiasco” 26 could have been avoided if the Banks had simply advised him 27 against granting McGrew with authorization to withdraw funds. 28 Plf’s Opp’n at 18. But he cites no authority to support his 1 contention that the Banks are to blame here. Instead, as the 2 Banks point out, that McGrew had the rightful authority to 3 withdraw the funds is “no one’s fault but [Plaintiff’s] own.” 4 Reply at 5. Plaintiff signed the relationship change 5 application, thereby acknowledging that he understood and agreed 6 to be bound by that agreement. Id. Under that agreement, it is 7 clear that a joint accountholder has the authority to “withdraw 8 and transfer funds, make payments, or close the account.” Id. 9 (citing Lee v. Yang, 111 Cal. App. 4th 481, 490-493 (2003)). 10 As for Plaintiff’s second argument, Wells Fargo was not 11 able to initially claw back or freeze McGrew’s account because 12 it was served with the first TRO days after the funds had 13 already been transferred to Bank of America. Reply at 5. Bank 14 of America was only able to claw back the $200,936.94 cashier’s 15 check to Little Trouble, LLC, because the payment had not yet 16 made it to a different bank by the time the Fourth TRO was 17 issued. BofA Mot. at 2. Plaintiff also fails, once again, to 18 cite any authority in support of his argument that the Banks 19 were required to comply differently to the multiple TRO’s than 20 they did 21 Hirsch’s arguments are equally unpersuasive. Hirsch first 22 argues that the Banks’ intervention was unnecessary because she 23 planned to interplead the funds herself. Hirsch’ Opp’n at 5. 24 However, she did not file a request to amend her answer to 25 include interpleader claims until October 14, 2019—four months 26 after her initial answer and two weeks after the Banks had filed 27 their motion to intervene. Reply at 6-7. Moreover, Hirsch’s 28 accounts did not contain the majority of the funds. Id. at 7. 1 The $200,936.94 that she tried to send to Little Trouble were 2 held “in suspense” after Bank of America stopped the payment. 3 Id. Lastly, Hirsch might not have been able to meet the 4 interpleader requirements. Id.; see Lee v. W. Coast Life Ins. 5 Co., 688 F.3d 1004, 1012 (9th Cir. 2012)(“[T]hose who have acted 6 in bad faith to create a controversy over the stake may not 7 claim the protection of interpleader.”). 8 Accordingly, the Court finds the Banks are entitled to 9 reimbursement because their intervention was necessary and 10 proper under the circumstances. 11 b. Reasonableness of Fees 12 The Court has discretion over “[t]he amount of fees to be 13 awarded in an interpleader action.” Trs. of Dirs. Guild of Am- 14 Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 426 (9th 15 Cir. 2000). Interpleader plaintiffs are entitled to attorneys’ 16 fees since “the plaintiff benefits all parties ‘by promoting 17 early litigation on the ownership of the fund, thus preventing 18 dissipation.’” Id. (quoting Shirmer Stevedoring Co. Ltd. v. 19 Seabord Stevedoring Corp., 306 F.2d 188, 193 (9th Cir. 1962)). 20 Since the interpleader plaintiff is supposed to be 21 disinterested in the disposition of the funds, fees are limited 22 to those “incurred in filing the action and pursuing the plan’s 23 release from liability.” Id. Expenses that may be reimbursed 24 include: “preparing the complaint, obtaining service of process 25 on the claimants fund, and preparing an order discharging the 26 plaintiff from liability and dismissing it from the action.” 27 Id. at 427. Because the scope of fees is limited, attorneys’ 28 fee awards are “typically modest.” Id. Lastly, since the fees 1 are paid from the interpleader funds themselves, “there is an 2 important policy interest in seeing that the fee award does not 3 deplete the fund at the expense of the party who is ultimately 4 deemed entitled to it.” Id. 5 The Banks seek the following in attorneys’ fees and costs: 6 (1) $20,769.08 for Wells Fargo and (2) $21,282.68 for Bank of 7 America. Reply at 2. Both Plaintiff and Hirsch argue that 8 these fees are unreasonable. The Court disagrees. 9 First, Plaintiff and Hirsch argue the fee amount is 10 unreasonable because the filings for the Banks are “nearly 11 identical.” Hirsch Opp’n at 7; Plf’s Opp’n at 192. But as the 12 Banks’ detailed billing entries show, each bank was only billed 13 for half of the time spent on any work applicable to both Banks. 14 Reply at 4. In other words, the Banks split the bill 50-50. 15 The attorneys thus did not charge twice the amount in fees for 16 doing identical work, as Plaintiff and Hirsch attempt to argue. 17 Plaintiff also argues that “since [the Banks] are routinely 18 confronted with competing claims to funds held in joint 19 accounts,” their award should reflect those “inevitable and 20 normal risks” they assume. Plf’s Opp’n at 17. Plaintiff relies 21 on Fidelity Nat’l Co. v. U.S. Small Bus. Admin., which stated 22 that “courts have declined to award attorneys fees’” to 23 stakeholders that face multiple claims in their ordinary course 24 of business. No. 2:13-cv-02030-KJM-AC, 2014 WL 6390275, at *3-4 25 (E.D. Cal. 2014). But Fidelity concerns claims to insurance 26 proceeds—insurers regularly assume the risk of competing claims. 27 Unlike insurers, the Banks are not regularly in this business. 28 Reply at 4. And even though the stakeholder in Fidelity did 1 assume such risk in its ordinary course of business, the court 2 nevertheless awarded attorneys’ fees. 2014 WL 6390275 at *5. 3 Hirsch also argues that the Banks should not be compensated 4 for fees associated with their motion for intervention. Hirsch 5 Opp’n at 6. Hirsch argues these fees are not recoverable under 6 Tise. But the list of compensable expenses in Tise is not 7 exhaustive. Reply at 2. The court in Tise did however 8 differentiate between fees “litigating the merits of the adverse 9 claimants’ positions” and those fees incurred in “filing the 10 action and pursuing the plan’s release from liability.” 234 11 F.3d at 426. Only the latter may properly be awarded. And 12 here, the Banks motion for intervention falls within that 13 category. Unlike the pension plan in Tise, the Banks did not 14 “oppose the [plaintiff’s] entitlement to the funds . . . [and 15 did not] [] tak[e] sides.” Id. at 427. Instead, the motion to 16 intervene was made so they could file their interpleader claims 17 and obtain a release from liability. 18 Lastly, Hirsch argues that the fees sought are unreasonable 19 because Wells Fargo is seeking $700 more than it interpleaded, 20 and the attorneys’ fees combined compose 19% of the fees both 21 Banks deposited with the Court. Hirsch Opp’n at 6-7. She 22 contends being awarded such a high percentage of the funds is in 23 no way “modest” and therefore goes against the important policy 24 interest against depleting the fund. Id. The Banks argue that 25 while they recognize this important policy interest, the amount 26 of fees sought is proper here because this “has not been a 27 typical interpleader case.” Reply at 3. Moreover, they argue 28 $42,051.76 (the total amount sought) will not significantly 1 deplete fund of $223,413.96, plus accrued interest. Id. The 2 Court agrees. 3 Courts consider a number of factors in determining the fair 4 award of attorneys’ fees and costs: (1) the complexity of the 5 case; (2) unique services the stakeholder provided; (3) the 6 stakeholder’s good faith and diligence ; (4) “whether the 7 services rendered benefited the stakeholder;” and (5) “whether 8 the claimants improperly protracted the proceedings.” Fidelity, 9 2014 WL 6390275, at *4. All of these factors weigh in favor of 10 awarding the Banks the amount in fees requested. The case was 11 complex—the Banks were required to respond to four TRO’s, had to 12 freeze multiple accounts, were added to the suit and then 13 dismissed, and later had to move to intervene so they could 14 finally interplead the funds. BofA Mot. at 9. They also 15 provided unique services since they were the only parties that 16 actually possessed the funds. Id. Moreover, they acted in good 17 faith, and did not benefit from this lawsuit. Id. at 8-9. 18 Most importantly, the Banks only seek to recover fees for 19 the costs directly related to their intervention and 20 interpleader. Id. at 11. In fact, the attorneys’ fees the 21 Banks have incurred since the start of this litigation are much 22 higher than what they seek to recover. Reply at 2. And while 23 neither Plaintiff nor Hirsch dispute this, it is worth 24 mentioning that the hourly rates of the attorneys are 25 reasonable. The supervising attorney in this case billed 26 between $388 and $400 an hour, and all other associates billed 27 between $265 to $315 an hour. See Melamed Decl. in Support of 28 Banks’ Mot’s, ECF No. 98, ¶¶ 6-11. As the Banks attorneys’ 1 point out, these rates are in line with those charged for 2 attorneys of comparable experience within this Court’s district. 3 See Smothers v. NorthStar Alarm Servs., LLC, 2:17-cv-00548-KJM- 4 KJN, 2020 WL 1532058, at *9-10(E.D. Cal. March 31, 2020)(finding 5 rates of $300 per hour for associates with fewer than three 6 years of experience, and between $495-$695 per hour for partners 7 with 11 to 30 years of experience to be reasonable). 8 Accordingly, the Court GRANTS the Banks’ request to be awarded 9 attorneys’ fees in the amount they requested. 10 c. Stay of Award 11 Plaintiff asks the Court to stay payment of the fees awarded 12 until all competing claims to the funds are resolved. “Courts 13 occasionally defer assessment of attorneys’ fees until resolution 14 of the claims.” Fidelity, 2014 WL 6390275, at *5. The Court 15 “has discretion to assess fees from the interpleaded funds, as a 16 cost to the losing claimant, or divide them among the claimants.” 17 Id. 18 The Banks argue this action is usually only taken under 19 exceptional circumstances. Reply at 8. But they concede that 20 the Court can award the Banks their fees and costs now, and then 21 charge the amounts to the responsible claimant when the claims 22 are finally resolved. Id. The Court finds this is the most 23 equitable course of action. Accordingly, the Court DEFERS its 24 determination of the allocation of this award until resolution of 25 all claims against the funds. 26 27 III. ORDER 28 For the reasons set forth above, the Court GRANTS the Banks’ MOAI Ge □□□ EAINIT □□□ IN RYU Le POU Veale PF Aye AV VI tl

1 Motions to be discharged from this suit and to be awarded 2 attorneys’ fees and costs in the amount of $20,769.08 to Wells 3 Fargo Bank and $21,282.68 to Bank of America. The Court DEFERS 4 assessment and allocation of the fees and costs awarded until the 5 resolution of all claims. 6 IT IS SO ORDERED. 7 Dated: July 21, 2020 ke A teiren staves odermacr 7008 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 13