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BORING v. NATIONSTAR MORTGAGE, LLC, 2:13-cv-01404-GEB-CMK. (2016)

Court: District Court, E.D. California Number: infdco20160610a00 Visitors: 14
Filed: Jun. 08, 2016
Latest Update: Jun. 08, 2016
Summary: ORDER GRANTING DEFENDANT'S MOTION FOR ATTORNEYS' FEES GARLAND E. BURRELL, Jr. , Senior District Judge . Defendant Nationstar Mortgage, LLC ("Nationstar") seeks attorneys' fees as the prevailing party in this lawsuit. Summary judgment was entered in Nationstar's favor on certain issues, and it prevailed on the remaining claims at trial. 1 (Notice of Mot. & Nationstar's Mot. For Att'ys' Fees ("Mot."), ECF No. 125.) A jury returned a general verdict in Nationstar's favor on Plaintiff's breach
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ORDER GRANTING DEFENDANT'S MOTION FOR ATTORNEYS' FEES

Defendant Nationstar Mortgage, LLC ("Nationstar") seeks attorneys' fees as the prevailing party in this lawsuit. Summary judgment was entered in Nationstar's favor on certain issues, and it prevailed on the remaining claims at trial.1 (Notice of Mot. & Nationstar's Mot. For Att'ys' Fees ("Mot."), ECF No. 125.) A jury returned a general verdict in Nationstar's favor on Plaintiff's breach of the implied covenant of good faith and fair dealing claim, and the jury answered written questions on Plaintiff's claims alleged under California Civil Code sections 2923.6 and 2923.7 submitted to the jury under Federal Rule of Civil Procedure 39(c)(1), which authorizes use of an advisory jury on claims that a trial judge is required to decide. (ECF Nos. 120-1, 123.) The trial judge issued findings of fact and conclusions of law in favor of Nationstar on Plaintiff's remaining claims alleged under California Civil Code sections 2923.6 and 2923.7. (ECF No. 123.) Plaintiff opposes Nationstar's attorneys' fees motion. (Pl.'s Opp'n to Mot. ("Opp'n"), ECF No. 126.)

I. DISCUSSION

A. Entitlement to Attorneys' Fees

Nationstar argues its motion should be granted under California Civil Code section 1717, contending this statute "authorizes reasonable attorney fees `[i]n any action on a contract, where the contract specifically provides that attorney's fees and costs, . . . incurred to enforce [a] contract[] shall be awarded either to one of the parties or to the prevailing party.'" Barrientos v. 1801-1825 Morton LLC, 583 F.3d 1197, 1216 (9th Cir. 2009) (quoting Cal. Civ. Code § 1717(a)). Nationstar argues both the Deed of Trust and the Note signed by Plaintiff constitutes the contract underlying its entitlement to recover attorneys' fees in this lawsuit. (Mot. 7:4-6, 20-21.)

Nationstar argues the following portion of the Deed of Trust supports its motion for an award of attorneys' fees:

If (a) Borrower fails to perform the covenants and agreements contained in this Security Instrument, [or] (b) there is a legal proceeding that might significantly affect Lender's interest in the Property and/or rights under this Security Instrument . . . Lender's actions can include, but are not limited to: (a) paying any sums secured by a lien which has priority over this Security Instrument; (b) appearing in court; and (c) paying reasonable attorneys' fees to protect its interest in the Property and/or rights under this Security Instrument. . . . Any amounts disbursed by Lender under this Section 9 shall become additional debt of Borrower secured by this Security Instrument. These amounts shall bear interest at the Note rate from the date of disbursement and shall be payable, with such interest, upon notice from Lender to Borrower requesting payment.

(Ex. A Deed of Trust § 9 at pp. 6-7, ECF No. 125-2.)

Nationstar also relies on the following language in the Note:

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.

(Ex. B Note § 6(E) at p. 2, ECF No. 125-3.)

Plaintiff's operative Third Amended Complaint (TAC) consists of the following five claims alleged under California law: three California Civil Code claims, a California Unfair Competition Law claim, and a claim that Nationstar breached the implied covenant of good faith and fair dealing. (TAC, ECF No. 68.) These claims concerned Nationstar's interest in the property and bore on "the underlying validity of [Plaintiff's mortgage] obligation." Siligo v. Castellucci, 21 Cal.App.4th 873, 878 (1994). Nationstar argues all "claims . . . challenge . . . its right to foreclose on the [subject] Property," (Mot. 8:2-3), and therefore the claims are within the scope of the attorney-fee provisions in the Deed of Trust and Note. California authority construing section 1717 has stated it "is settled that an obligation to pay attorneys' fees incurred in the enforcement of a contract includes attorneys' fees incurred in defending against a challenge to the underlying validity of the obligation." Siligo, 21 Cal. App. 4th at 878 (internal quotation marks omitted). Nationstar is the prevailing party, since it prevailed on all claims in the TAC. Therefore, Nationstar is entitled to recover reasonable attorneys' fees under section 1717(a).

However, Plaintiff argues Nationstar was not a prevailing party before January 22, 2014, since during the referenced time period Plaintiff obtained "injunctive relief" against Nationstar under the California Homeowner Bill of Rights (HBOR). (See Opp'n 1:12-18.) Specifically, Plaintiff argues since he "obtained injunctive relief and [Nationstar] did not cure the violations that formed the basis of the injunctive relief until January 22, 2014, [Nationstar] should not be entitled to collect its fees incurred from June 25, 2013, the date that Plaintiff obtained injunctive relief, and January 22, 2014, the date . . . [on which Nationstar] cured its violations of the HBOR." (Opp'n 1:20-24.)

Nationstar replies that the referenced injunctive relief was a temporary restraining order, and "Nationstar incurred fees between June 25, 2013[,] and January 22, 2014[,] defending all of Plaintiff's claims, which were not limited to the HBOR." (Nationstar's Reply ISO of Mot. ("Reply") 2:27-3:1, ECF No. 127.)

Plaintiff has not shown that Nationstar is precluded from recovering attorneys' fees incurred during the referenced time period.

B. Reasonable Attorneys' Fees

Section 1717(a) prescribes attorneys' fees are "fixed by the court." Cal. Civ. Code § 1717(a). "[T]he trial court has broad authority to determine the amount of a reasonable fee." PLCM Grp. v. Drexler, 22 Cal.4th 1084, 1095 (2000), as modified (June 2, 2000). "[T]he fee setting inquiry in California ordinarily begins with the `lodestar,' i.e., the number of hours reasonably expended multiplied by the reasonable hourly rate." Id.

1. Reasonable Hours

Nationstar submits billing entries itemizing the time spent by its following attorneys: Edward Buell, Megan Kelly, Laszlo Ladi, John Sullivan, Mary Kate Sullivan, and Mark Wraight; and by its following paralegals: Gina Filice, Rozie Firoozabadi, Jennifer Negrete, and Seana Tilton. (Ex. C, ECF No. 125-4.)

Plaintiff asserts the reimbursement hours Nationstar seeks are unreasonable, arguing "the time expended on the Motion to Dismiss the First Amended Complaint and the Motion to Dismiss the Second Amended Complaint should be disallowed or, in the alternative, substantially reduced." (Opp'n 2:18-21.) However, Plaintiff has not shown that the referenced hours were unreasonable.

Plaintiff also argues that the forty hours incurred by Nationstar for preparation of its summary judgment motion are "[un]reasonable given the matters at hand—a simple foreclosure dispute." (Opp'n 2:23-24.) Plaintiff has not shown that these are unreasonable.

Further, Plaintiff asserts that the billings of Nationstar's attorneys Wraight and Ladi for time attending the trial are unreasonable, arguing:

[O]n December 2, 2015, Mr. Wraight billed 8.5 hours for attending trial while Mr. Ladi billed only 8 hours for attending trial, despite the fact that both individuals were in trial for the same amount of time. Further, on December 3, 2015, Mr. Wraight was only in trial for 6 hours while Mr. Ladi billed for 7.2 hours, despite the fact that (1) both attorneys were in trial for the same amount of time and (2) trial on that date began at approximately 10 [AM] and ended at approximately 2:00 [PM], for a maximum time of 4 hours, not the 6 hours or 7.2 included in the bills.

(Opp'n 2:28-3:6.) Nationstar replies: "these time entries reflect more than just time spent in the courtroom[,] and they include time spent communicating with the client concerning the trial, time spent preparing for Court, and time spent preparing for the post-verdict hearing with the Court on December 3, 2015, among others." (Reply 4:23-26.)

However, the referenced December 2-3, 2015, billing entries state "Attend trial" without further elaboration, and therefore do not reflect the communication and preparation work Nationstar asserts is included in these entries. (Ex. C, Invoice No. 419639.) Moreover, Nationstar has submitted separate billing entries for time spent communicating with the client, preparing for trial, and preparing for post-trial motions, (id.); this indicates that some of the "Attend trial" hours are duplicative of other entries. Nor has Nationstar explained in its December 2, 2015, billing entry why attorney Wraight attended trial for a half hour longer than attorney Ladi. Further, on December 3, 2015, trial started at 9:00 AM, (ECF No. 117), and ended at approximately 2:00 PM, totaling five hours. Therefore, the fees requested for attorneys Wraight and Ladi are reduced as follows: Wraight's time to attend trial on December 2, 2015, is reduced to eight hours; Wraight's time to attend trial on December 3, 2015, is reduced to five hours; and Ladi's time to attend trial on December 3, 2015, is reduced to five hours.

2. Reasonable Hourly Rate

"The reasonable hourly rate is that prevailing in the community for similar work." Drexler, 22 Cal. 4th at 1095. In general, "the relevant community is the forum in which the district court sits." Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997); accord Syers Props. III, Inc. v. Rankin, 226 Cal.App.4th 691, 700 (2014), reh'g denied (May 27, 2014), review denied (Sept. 10, 2014) ("The determination of the `market rate' is generally based on the rates prevalent in the community where the court is located."). The burden is on the party seeking fees "to produce satisfactory evidence . . . that the requested rates are in line with those prevailing in the community for similar services by lawyers of reasonably comparable skill, experience and reputation." Blum v. Stenson, 465 U.S. 886, 895 n.11 (1984).

Nationstar seeks the following rates for its attorneys: $320 for Buell; $275 for Kelly; $285 for Ladi; $410 for John Sullivan; $350 for Mary Kate Sullivan; and $340 for Wraight. (Decl. of Laszlo Ladi ISO of Mot ("Ladi Decl.") ¶ 25, ECF No. 125-1.) It also seeks a $150 rate for each of its four paralegals: Filice, Firoozabadi, Negrete, and Tilton. (Id.)

Ladi submits a declaration detailing the qualifications and rates of each attorney who provided services in this lawsuit. Plaintiff has not contested the rates Nationstar seeks.

Nationstar argues that the hourly rates it seeks are consistent with the rates awarded in similar cases in this district for legal services, citing Hopkins v. Wells Fargo Bank, N.A., No. 2:13-umbia cv-444-WBS-CKD, 2014 WL 2987753, at *4 (E.D. Cal. July 1, 2014), appeal dismissed (Sept. 3, 2014), where the court awarded hourly rates ranging from $240 to $496 for attorneys, and $180 for paralegals, and Becker v. Wells Fargo Bank, NA, Inc., No. 2:10-cv-2799-TLN-KJN, 2014 WL 7409447, at *8 (E.D. Cal. Dec. 30, 2014), report and recommendation adopted, No. 2:10-cv-2799-TLN-KJN, 2015 WL 509662 (E.D. Cal. Feb. 5, 2015), where the court awarded hourly rates ranging from $265 to $330 for attorneys. Nationstar has shown that the rates it seeks are reasonable.

Accordingly, the actual lodestar in this case is $135,017.50, calculated as follows:

NAME TITLE HOURS HOURLY RATE FEE AMOUNT Buell Associate .1 $320 $32.00 Kelly Associate .1 $275 $27.50 Ladi Associate 263 $285 $74,955.00 John Partner .3 $410 $123.002 Sullivan MaryKate Partner 16.3 $350 $5,705.00 Sullivan Wraight Partner 136 $340 $46,240.00 Filice Paralegal 4.2 $150 $630.00 Firoozabadi Paralegal 1.5 $150 $225.00 Negrete Paralegal 26.1 $150 $3,915.00 Tilton Paralegal 21.1 $150 $3,165.00

However, Nationstar has submitted the declaration of one of its attorneys in which its attorney declares that Nationstar's law firm discounted "the amounts . . . billed to Nationstar by $29,958.94 . . . to $106,218.06." (Ladi Decl. ¶ 23.) Since the total amount of attorneys' fees Nationstar seeks is less than the $135,017.50 lodestar calculated fee, it is evident that Nationstar's attorneys' fees request is reasonable. Therefore, Nationstar is awarded $106,218.06 for the attorneys' fees incurred in this lawsuit.

Nationstar seeks to add to this fee award the attorney's fees it incurred preparing its motion for attorneys' fees. Attorneys' "fees recoverable . . . include compensation for all hours reasonably spent . . . [and] necessary to establish and defend the fee claim." Serrano v. Unruh, 32 Cal.3d 621, 639 (1982). Nationstar cites the declarations of Ladi in support of this portion of its motion where he avers the following reasonable fees are involved with the preparation of the motion and reply:

NAME TITLE HOURS HOURLY RATE FEE AMOUNT Ladi Associate 13.5 $285 $3,847.50

(Ladi Decl. ¶ 23; Supplemental Decl. of Laszlo Ladi ISO Mot. ¶ 3, ECF No. 127-1.) This portion of the request is reasonable and therefore granted.

II. CONCLUSION

For the stated reasons, Nationstar is awarded $110,065.56 in attorneys' fees. In light of this ruling, and the previous decisions in this lawsuit, the following judgment shall enter:

Judgment is entered in favor of Nationstar on Plaintiff's claims alleged under California Civil Code section 2924(a) and California Unfair Competition Law, since the order filed on August 17, 2015, summarily adjudicated these claims in favor of Nationstar. (ECF No. 88.) Judgment is entered in Nationstar's favor on Plaintiff's implied covenant of good faith and fair dealing claim in accordance with the jury's general verdict filed on December 4, 2015. (ECF No. 123.) Judgment is entered in Nationstar's favor on Plaintiff's California Civil Code sections 2923.6 and 2923.7 claims in accordance with the findings of fact and conclusions of law in the order filed on December 21, 2015. (Id.) Lastly, the judgment includes Nationstar's award of $110,065.56 in attorneys' fees.

FootNotes


1. Nationstar also mentions costs in its attorneys' fees motion, but the cost issue is not addressed herein since the procedure concerning costs is prescribed in Local Rule 292. (See Mot. 9:23.)
2. Although Nationstar lists John Sullivan as billing $145, (Ladi Decl. ¶ 25), he actually billed .3 hours multiplied by a $410 hourly rate, which is $123 in attorney's fees.
Source:  Leagle

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