Wallace v. Nationstar Mortgage LLC

• Court: District Court, E.D. California
• Decided: April 22, 2021
• Docket: 2:18-cv-02768
• Status: Unknown

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 DENISE WALLACE, ) Case No. 2:18-cv-02768-JAM-DB ) 12 Plaintiff, ) ) ORDER GRANTING DEFENDANTS’ 13 v. ) MOTION FOR ATTORNEYS’ FEES AND ) COSTS 14 NATIONSTAR MORTGAGE, LLC, ) individually and dba MR. COOPER, ) 15 CENTREX HOME EQUITY, LLC, THE ) BANK OF NEW YORK MELLON, THE ) 16 MORTGAGE LAW FIRM, and DOES 1- ) 100, inclusive, 17 Defendants. 18 On December 7, 2020, the Court granted in part and denied in 19 part Denise Wallace’s (“Plaintiff”) motion for summary judgment and 20 granted in part and denied in part The Bank of New York Mellon and 21 Nationstar Mortgage, LLC’s (“Defendants”) cross-motion for summary 22 judgment. See Order, ECF No. 65. The Court granted summary 23 judgment for Defendants and against Plaintiff on all of her claims 24 against them. Id. In addition, the Court granted summary judgment 25 for Plaintiff and against Defendants on their counterclaims against 26 her. Id. 27 Defendants now seek $58,103.27 in attorneys’ fees pursuant to 28 1 68. Defendants also seek $1,966.02 in costs pursuant to 28 U.S.C. 2 § 1924 and Federal Rule of Civil Procedure 54(d)(1). See Bill of 3 Costs, ECF No. 67. For the reasons stated below, the Court GRANTS 4 Defendants’ motion and awards Defendants $51,914.77 in attorneys’ 5 fees and $1,872.30 in costs.1 6 7 I. OPINION 8 A. Request for Judicial Notice 9 Defendants request that the Court take judicial notice of the 10 following documents: (1) the Adjustable Rate Note signed by 11 Plaintiff, dated August 24, 2004; (2) the Deed of Trust which 12 secured the subject note and encumbered the parcel of real property 13 at 8194 Treecrest Avenue, Fair Oaks, California 95628, dated August 14 24, 2004, and recorded with the Sacramento County Recorder on 15 August 31, 2004; and (3) a copy of the Assignment of Deed of Trust 16 which assigned the subject deed of trust to The Bank of New York 17 Mellon, recorded with the Sacramento County Recorder as Document 18 No. 201804200150. See Defs.’ Req. for Judicial Notice (“RJN”), ECF 19 No. 70. Plaintiff does not oppose this request. 20 The above documents are matters of public record, and, 21 therefore, proper subjects of judicial notice. The Court GRANTS 22 Defendants’ request for judicial notice. 23 B. Attorneys’ Fees 24 1. Legal Standard 25 Generally, the prevailing litigant is not entitled to collect 26 reasonable attorneys’ fees from the losing party. Travelers Cas. &

27 1 This motion was determined to be suitable for decision without 28 oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled 1 Sur. Co. of Am. v. Pac. Gas & Elec. Co., 549 U.S. 443, 448 (2007). 2 However, a statute or enforceable contract allocating attorneys’ 3 fees can overcome this rule. Id. “State law governs the 4 enforceability of attorneys’ fees in contract provisions.” Gilbert 5 v. Wold Sav. Bank, FSB, 2011 WL 995966, at *1 (N.D. Cal. 2011) 6 (citing Sec. Mortgage Co. v. Powers, 278 U.S. 149, 154 (1928)). 7 California allows parties to allocate attorneys’ fees by contract. 8 Id. (citing Cal. Code Civ. P. § 1021). 9 When determining whether and how attorneys’ fees should be 10 awarded under a contract, California Civil Code § 1717 applies. 11 Winding v. Wells Fargo Bank, 2012 WL 603217, at *10 (E.D. Cal. 12 2012) (citing Sears v. Baccaglio, 60 Cal.App.4th 1136, 1157 13 (1998)). It provides:

14 In any action on a contract, where the contract 15 specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be 16 awarded either to one of the parties or to the prevailing 17 party, then the party who is determined to be the prevailing party on the contract, whether he or she is 18 the party specified in the contract or not, shall be 19 entitled to reasonable attorney’s fees in addition to other costs. 20 21 Cal. Civ. Code § 1717(a). It further provides that “[r]easonable 22 attorney’s fees shall be fixed by the court, and shall be an 23 element of the costs of suit.” Id. To be a prevailing party, “the 24 party must have received an enforceable judgment on the merits.” 25 U.S. v. Milner, 583 F.3d 1174, 1196 (9th Cir. 2009). 26 Courts decide the reasonableness of attorneys’ fees by 27 engaging in a two-step process. First, the amount of a reasonable 28 fee is determined by multiplying the number of hours reasonably 1 expended on the litigation by a reasonable hourly rate. Hensley v. 2 Eckerhart, 461 U.S. 424, 433 (1983). This total, the “lodestar” 3 amount, yields a presumptively reasonable fee. Gonzalez v. City of 4 Maywood, 729 F.3d 1196, 1202 (9th Cir. 2013). Second, the Court 5 decides whether to adjust the lodestar figure upward or downward 6 pursuant to a variety of factors. Id. at 1209. 7 Those factors include: (1) time and labor required; 8 (2) novelty and difficulty of questions involved; (3) skill 9 requisite to perform legal service properly; (4) preclusion of 10 other employment by attorney due to acceptance of the case; 11 (5) customary fee; (6) time limitations imposed by client or 12 circumstances; (7) amount involved and results obtained; 13 (8) experience, reputation, and ability of attorneys; (9) nature 14 and length of professional relationship with client; and 15 (10) awards in similar cases. Kerr v. Screen Extras Guild, Inc., 16 526 F.2d 67, 70 (9th Cir. 1975). 17 “The essential goal in shifting fees (to either party) is to 18 do rough justice, not to achieve auditing perfection.” Fox v. 19 Vice, 563 U.S. 826, 838 (2011). Thus, the Court may consider its 20 “overall sense of a suit and may use estimates in calculating and 21 allocating an attorney’s time.” Id. 22 2. Analysis 23 Defendants argue that they are entitled to attorneys’ fees 24 because: (1) the adjustable rate note and the deed of trust contain 25 contractual attorney’s fees provisions; (2) they are the prevailing 26 party; and (3) the attorney’s fees are reasonable. See Mot. at 3– 27 9. Plaintiff contends that the provisions are not enforceable, do 28 not mutually apply to the parties, and are ambiguous. See Opp’n at 1 5–8, ECF No. 82. Plaintiff also disputes that Defendants are the 2 prevailing party. Id. at 8–9. 3 a. Attorney’s Fees Provisions 4 The adjustable rate note and the deed of trust signed by 5 Plaintiff both included fees clauses. The adjustable rate note 6 provided at paragraph (7)(E) that, the note holder—Defendants—“will 7 have the right to be paid back by [the borrower]”—Plaintiff—“for 8 all of [their] costs and expenses in enforcing this Note to the 9 extent not prohibited by applicable law.” Adjustable Rate Note at 10 5, Ex. A to RJN, ECF No. 70-1. It goes on to specify that, 11 “[t]hose expenses include, for example, reasonable attorney’s 12 fees.” Id. The deed of trust contained an attorney’s fees 13 provision under the Loan Charges section at paragraph 14. It 14 states: “Lender may charge Borrower fees for services performed in 15 connection with Borrower’s default, for the purpose of protecting 16 Lender’s interest in the Property and rights under this Security 17 Instrument, including, but not limited to, attorney’s fees . . . .” 18 Deed of Trust at 11, Ex. B to RJN, ECF No. 70-2. 19 These clauses are applicable to the instant lawsuit. 20 Plaintiff’s lawsuit affected Defendants’ rights in the property 21 because Plaintiff sued Defendants for breach of contract, slander 22 of title, and infliction of emotional distress. California Civil 23 Code § 1717 applies only in an action “on a contract.” “The 24 meaning of ‘on a contract’ has been liberally construed to mean any 25 action involving a contract for the purposes of [§] 1717.” 26 Gilbert, 2011 WL 995966, at *2 (citing Turner v. Schultz, 175 27 Cal.App.4th 974, 979-80 (2009)). Plaintiff’s claim for breach of 28 contract is unquestionably “on a contract.” 1 As is the slander of title claim because it was, in effect, a 2 challenge to the underlying validity of the obligation. See Siligo 3 v. Castellucci, 21 Cal.App.4th 873, 878 (1994) (“California law is 4 settled that an obligation to pay attorney[’s] fees incurred in the 5 enforcement of a contract includes attorney’s fees incurred in 6 defending against a challenge to the underlying validity of the 7 obligation.”). Insofar as the emotional distress claims are 8 concerned, they were based solely on Defendants’ allegedly wrongful 9 foreclosure proceedings, which stemmed from Defendants’ alleged 10 breach of Plaintiff’s loan modification agreement. They are, 11 therefore, inextricably intertwined with the contract claims. See 12 Nguyen v. Wells Fargo Bank, N.A., 2011 WL 9322, at *3 (N.D. Cal. 13 2011) (“All of Plaintiff’s claims are inextricably intertwined with 14 the contract claims and fees need not be apportioned claim by 15 claim.”). 16 The Court finds Plaintiff’s argument regarding the mutual 17 application of the provisions is without merit. See Opp’n at 6–7. 18 Plaintiff argues that, because the provisions in the adjustable 19 rate note and deed of trust only authorize attorney’s fees in favor 20 of the lender, they are invalid. Id. However, this is not true 21 where attorney’s fees are awarded pursuant to California Civil Code 22 § 1717. Section 1717(a) specifies that, where the contract 23 provides that attorney’s fees and costs incurred to enforce the 24 contract “shall be awarded either to one of the parties or the 25 prevailing party, then the [prevailing party] on the contract, 26 whether he or she is the party specified in the contract or not, 27 shall be entitled to reasonable attorney’s fees in addition to 28 other costs.” Cal. Civ. Code § 1717(a). Thus, if the Court had 1 determined Plaintiff was the prevailing party, she would have been 2 entitled to attorneys’ fees even where the relevant provisions 3 arguably apply only to the lender. See Scott Co. of Cal. v. 4 Blount, Inc., 20 Cal.4th 1103, 1113-14 (1999) (“The goal of section 5 1717 is full mutuality of remedy between parties to a contract, 6 whether plaintiff or defendants, in the matter of attorney[’s] 7 fees.”). 8 In sum, Plaintiff’s lawsuit was based on a contract arising 9 from the adjustable rate note and deed of trust. Enforceable and 10 unambiguous provisions within both allow for the recovery of 11 attorneys’ fees. Thus, Defendants may be awarded attorneys’ fees 12 incurred to defend against the challenge so long as they are the 13 prevailing party and the fees are reasonable. 14 b. Prevailing Party 15 Plaintiff argues Defendants are not entitled to an award of 16 attorneys’ fees because they are not the prevailing parties in this 17 action. Opp’n at 8–9. The Court disagrees. Plaintiff asserted 18 multiple claims for relief against Defendants, arguing the 19 promissory note and deed of trust were not the applicable loan 20 documents between the parties. See generally First Am. Compl. 21 (“FAC”) ¶¶ 26–29, ECF No. 10. The Court granted summary judgment 22 in Defendants’ favor on all of Plaintiff’s claims against them. 23 See Order, ECF No. 65. While Defendants did not prevail on their 24 counterclaims for fraud and unjust enrichment against Plaintiff, 25 see id., this is of no consequence. Where claims and counterclaims 26 arise in connection with a contract containing attorney’s fees 27 provisions, the party who obtains a favorable judgment is deemed 28 the prevailing party, even if it did not obtain all the relief 1 which it sought in the action. Epstein v. Frank, 125 Cal.App.3d 2 111, 124 (1981). Defendants, in defeating Plaintiff’s affirmative 3 claims against them, obtained the favorable judgment here. As the 4 prevailing parties they are entitled to reasonable attorneys’ fees. 5 c. Reasonableness 6 Turning to the reasonableness of the requested attorneys’ 7 fees, the declarations of Natalie L. Winslow and Michele Zerr 8 include a breakdown of the billing rates and qualifications of the 9 attorneys and staff who worked on the matter from Akerman LLP and 10 Reed Smith LLP, respectively. See Winslow Decl., ECF No. 71; Zerr 11 Decl., ECF No. 72. Reed Smith LLP acted as counsel for Defendants 12 in this matter from its inception until February 4, 2020, when 13 Akerman LLP was substituted as counsel. See ECF Nos. 31, 32. A 14 detailed breakdown of the legal services provided by each firm is 15 included as exhibits to the declarations. See Ex. A to Winslow 16 Decl., ECF No. 71; Ex. A to Zerr Decl., ECF No. 72. Plaintiff does 17 not dispute the reasonableness of the attorney’s fees requested. 18 The Court has nonetheless closely reviewed the declarations 19 and their attached billing statements. It finds that the hours 20 billed by Defendants’ attorneys are reasonable. However, the 21 hourly rates are somewhat inconsistent. Reed Smith LLP lists the 22 following personnel as having rendered billable legal services in 23 the defense against Plaintiff’s action: 24 (1) Michele Zerr, J.D., $200 per hour; 25 (2) Abraham Colman, J.D., $405 per hour; 26 (3) Le Duong, J.D., $305 per hour; 27 (4) Raffi Kassabian, J.D., $305 per hour; 28 (5) Marian Kennady, J.D.; $200 per hour; 1 (6) Barbara Moskovitz, paralegal; Christopher Hansen, case 2 assistant; and Kevin Hernandez, paralegal, $175 per hour. 3 Zerr Decl. ¶¶ 4–10. In terms of experience, each of the attorneys 4 is cited as having “multiple years” of litigation experience 5 defending financial institutions, lenders, and mortgage servicers. 6 Id. Given that each attorney is described as having the same 7 amount of experience with this type of action, the Court finds the 8 disparities in their hourly rates inappropriate. As such, the 9 Court lowers Colman’s hourly rate to $305. This is a reasonable 10 rate for the Eastern District of California. See Winding v. NDEX 11 West, LLC, 2011 WL 5244335, at *5 (E.D. Cal. 2011) (“The court 12 finds that the rate of $325 per hour for the services of a lead 13 attorney with 30 years experience is within the range normally 14 billed in the Fresno area for legal services in cases such as 15 this.”). The Court also lowers the hourly rate of the paralegals 16 and case assistant to $110 per hour. 17 Akerman LLP lists the following personnel as having rendered 18 billable legal services in this action: 19 (1) Natalie Winslow, J.D., $350 per hour; 20 (2) Justin Balser, J.D., $350 per hour; 21 (3) Katalina Baumann, J.D., $265 per hour; 22 (4) Elizabeth Streible, paralegal; and Amanda Herrera, 23 paralegal, $110 per hour. 24 Winslow Decl. ¶¶ 4–8. Winslow is cited as having ten years of 25 litigation experience, with nine years spent specializing in the 26 defense of financial institutions, lenders, and mortgage servicers. 27 Id. ¶ 7. Balser is cited as having twenty years of litigation 28 experience specializing in defending financial institutions, 1 lenders, and mortgage servicers. Id. ¶ 5. Baumann is cited as 2 having “multiple years” of litigation experience defending 3 financial institutions, lenders, and mortgage servicers. Id. ¶ 6. 4 Considering Balser has significantly more experience than Winslow, 5 the Court lowers Winslow’s rate to $305 per hour. The rates of all 6 the other attorneys and staff remain the same. 7 Accordingly, for the attorneys and staff with reduced hourly 8 rates, the lodestar is as follows:

9 Individual Hours Rate Total 10 Colman 1.4 $305.00 $ 427.00 Moskovitz 1.6 $110.00 $ 176.00 11 Hansen 0.5 $110.00 $ 55.00 Hernandez 2.4 $110.00 $ 572.00 12 Winslow 117.9 $305.00 $35,959.50 13 As a result, Colman’s fees are reduced by $140; Moskovitz’s fees 14 are reduced by $104; Hansen’s fees are reduced by $32.50; 15 Hernandez’s fees are reduced by $338; and Winslow’s fees are 16 reduced by $5,305.50. Reed Smith LLP also billed $43.50 for work 17 done by Teresa Ingram, who is not accounted for in the declaration. 18 That amount will also be subtracted from the attorneys’ fees. 19 Accordingly, Reed Smith LLP’s reasonable attorneys’ fees amount to 20 $14,002.67 and Akerman LLP’s reasonable attorneys’ fees amount to 21 $36,387.10, for a total of $50,389.77 in attorneys’ fees already 22 incurred. The reasonable attorneys’ fees incurred by Akerman LLP 23 in drafting the instant motion and associated documentation amount 24 to $1,525 ($305 per hour x 5 hours). The Court finds the total 25 amount of recoverable attorneys’ fees incurred by Defendants is 26 $51.914.77. 27 /// 28 1 C. Costs 2 28 U.S.C. § 1924 and Federal Rule of Civil Procedure 54(d)(1) 3 allow for the prevailing party to recover costs. Taxed costs may 4 include the following: 5 (1) Fees of the clerk and marshal; 6 (2) Fees for printed or electronically recorded 7 transcripts necessarily obtained for use in the 8 case; 9 (3) Fees and disbursements for printing and witnesses; 10 (4) Fees for exemplification and the costs of making 11 copies of any materials where the copies are 12 necessarily obtained for use in the case; 13 (5) Docket fees under section 1923 of this title; 14 (6) Compensation of court appointed experts, 15 compensation of interpreters, and salaries, fees, 16 expenses, and costs of special interpretation 17 services under section 1828 of this title. 18 28 U.S.C. § 1920(1)-(6). Federal courts are bound by the 19 limitations set out in 28 U.S.C. § 1821 and § 1920 when taxing 20 expenses as costs. Crawford Fitting Co. v. J. T. Gibbons, Inc., 21 482 U.S. 437, 445 (1987). 22 For the reasons set forth above, Defendants are the prevailing 23 party and their request for taxable costs was timely. See E.D. 24 Cal. L.R. 292(b) (specifying that a bill of costs must be filed 25 within 14 days of the entry of judgment); ECF No. 66 (judgment 26 entered on December 7, 2020); ECF No. 67 (bill of costs submitted 27 on December 21, 2020). Defendants seek $1,966.02 in costs. See 28 Bill of Costs. Those costs are composed of fees for: deposition 1 transcripts ($1,000), postage ($39.14), copies ($350), 2 transcription ($572.30), and document retrieval ($4.58). Aff. in 3 Supp. of Costs at 4, ECF No. 67-1. 4 Plaintiff objects to several of the costs listed. See Objs. 5 to Defs.’ Bill of Costs (“Objs.”), ECF No. 75. First, Plaintiff 6 objects to the postage costs. Objs. at 2–3. Postage costs are not 7 taxable under 28 U.S.C. § 1920. But one of the costs objected to 8 by Plaintiff as a postage cost is primarily a copying cost: 9 “Delivery and copies from Akerman to Spinelli, Donald, Nott re: 10 deposition of Edward Hyne.” See Objs. at 3. The cost of copying 11 materials is taxable under 28 U.S.C. § 1920. And Plaintiff’s other 12 objection to this cost is without merit. Id. However, embedded in 13 the total cost of those copies is a $50 shipping cost. That amount 14 will be deducted from the $350 total. The other $39.14 in 15 accurately categorized postage costs will also be deducted from the 16 Bill of Costs. 17 Next, Plaintiff objects to the data retrieval costs. These 18 costs are similarly not taxable under 28 U.S.C. § 1920. As a 19 result, the Court denies Defendants $4.58 in data retrieval costs. 20 Finally, Plaintiff objects to part of the cost of her own 21 deposition. See Objs. at 3. This objection is without merit. The 22 cost of deposition transcripts is taxable under 28 U.S.C. § 1920. 23 Accordingly, only postage and data retrieval costs are 24 deducted from the Bill of Costs. The Court GRANTS Defendants 25 $1,872.30 in costs. 26 27 II. ORDER 28 For the reasons set forth above, the Court GRANTS Defendants’ eI IIE IID EE OO II EEE Dee ee

1 ]/Motion for Attorneys’ Fees and Costs. The Court awards Defendants 2 ||}$51,914.77 in attorneys’ fees ($14,002.67 for Reed Smith, LLP and 3 11$37,912.10 for Akerman, LLP) and $1,872.30 in costs. 4 IT IS SO ORDERED. 5 |/Dated: April 21, 2021 : ke A et crac 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28