Salinas et al v. Wachovia Mortgage et al
Filing
39
ORDER signed by Judge John A. Mendez on 11/9/2011 ORDERING that Defendant's 30 Motion for an Award of Attorneys' Fees is GRANTED and Plaintiffs are ordered to pay $9,715.00 in costs and fees to Defendant. (Duong, D)
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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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MAMERTO Q. AND MINDA C. SALINAS, )
individuals
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Plaintiffs,
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v.
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WACHOVIA MORTGAGE, A DIVISION OF )
WELLS FARGO BANK, N.A.; a
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Corporation; CAL-WESTERN
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RECONVEYANCE CORPORATION; a
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Corporation; and DOES 1 through )
50, inclusive,
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Defendants.
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Case No. 2:11-CV-01220 JAM-DAD
ORDER GRANTING DEFENDANT‟S
MOTION FOR AN AWARD OF
ATTORNEYS‟ FEES
This matter comes before the Court on Defendant Wachovia
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Mortgage, a division of Wells Fargo Bank, N.A., successor by
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merger to Wells Fargo Bank Southwest, N.A., f/k/a Wachovia
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Mortgage, FSB, f/k/a defendant World Savings Bank, FSB‟s
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(“Defendant”) Motion for an Award of Attorneys‟ Fees (Doc. #30).
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Defendant asks the Court to award attorneys‟ fees in the amount
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of $21,594.50.
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collectively (“Plaintiffs”), oppose the motion (Doc. #34).1
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Plaintiffs Mamerto Q. Salinas and Minda Salinas,
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This motion was determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). The hearing was scheduled
for October 19, 2011.
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I.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiffs borrowed $548,000.00 from Defendant on or around
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March 1, 2007.
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mortgage note (“Note”) and secured by a Deed of Trust (“DOT”)
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recorded against the subject property.
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The loan was memorialized by a fixed rate
Plaintiffs originally filed this action against Defendant
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in the Superior Court for the State of California, County of San
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Joaquin on April 4, 2011.
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Court on May 5, 2011 (Doc. #1) and moved to dismiss the
Defendant removed the case to this
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Complaint on May 12, 2011 (Doc. #7).
On May 16, 2011,
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Plaintiffs filed a Motion for Preliminary Injunction (Doc. #10).
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The Court denied Plaintiffs‟ Motion for Preliminary Injunction
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(Doc. #26) and it granted Defendant‟s Motion to Dismiss with
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Prejudice (Doc. #27).
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fees.
Defendant now seeks to recover attorneys‟
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II.
A.
OPINION
Legal Standard
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Attorneys‟ Fees
Under the American rule, the prevailing litigant ordinarily
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is not entitled to collect reasonable attorney's fees from the
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losing party.
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Gas & Electric Co., 549 U.S. 443, 448 (2007).
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enforceable contract allocating attorney's fees, however, can
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overcome this rule.
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of attorney's fees in contract provisions.
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Co. v. Powers, 278 U.S. 149, 153 (1928).
Travelers Casualty & Surety Co. of Am. v. Pacific
Id.
A statute or
State law governs the enforceability
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Security Mortgage
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California permits parties to allocate attorney's fees by
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contract.
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Code Section 1717 governs the recovery of attorneys‟ fees
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pursuant to an underlying contract.
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reasonable attorney‟s fees „[i]n any action on a contract, where
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the contract specifically provides that attorney‟s fees and
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costs, which are incurred to enforce the contract, shall be
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awarded either to one of the parties or to the prevailing
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party.‟”
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See Cal. Code Civ. Proc. § 1021.
California Civil
The statute “authorizes
Barrientos v. 1801-1825 Morton LLC, 583 F.3d 1197,
1216 (9th Cir. 2009) (quoting Cal. Civ. Code § 1717(a)).
2.
The Note and Deed of Trust
Defendant argues that its right to recover attorneys‟ fees
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is set forth in two clauses in the Note and the DOT.
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The Note
provides at paragraph 7(E):
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Payment of Lender’s Costs and Expenses:
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The Lender 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 may include, for example, reasonable
attorneys‟ fees and court costs.
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(Doc. #32, Exh. B at 4).
Similarly, the DOT contains an attorneys‟ fee provision at
paragraph 7:
If: (A) I do not keep my promises and agreements made
in this Security Instrument, or (B) someone, including
me, begins a legal proceeding that may significantly
affect Lender‟s rights in the Property (including but
not limited to any manner of legal proceeding in
bankruptcy, in probate, for condemnation or to enforce
laws or regulations), then Lender may do and pay for
whatever it deems reasonable or appropriate to protect
the Lender‟s rights in the Property. Lender‟s actions
may include, without limitation, appearing in court,
paying reasonable attorneys‟ fees . . .
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I will pay to Lender any amounts which Lender advances
under this Paragraph 7 with interest, at the interest
rate in effect under the Secured Notes . . .
(Doc. # 32, Exh. C at 7).
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The Court takes judicial notice of the Note (Doc. #32, Exh.
B) and of the DOT (Doc. # 32, Exh. C).
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Plaintiffs do not challenge Defendant‟s argument that
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because Plaintiffs sought to permanently enjoin Defendant from
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foreclosing on the property, this lawsuit significantly affected
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Defendant‟s interest in the property.
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lawsuit attacked the mechanics of Defendant‟s ownership of the
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Note, the non-judicial foreclosure, and the mechanism by which
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Defendant became the beneficiary under the DOT, Defendant had to
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protect its interests in the Property.
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falls within the scope of the fee clause in the Note and the DOT
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entitling Defendant to attorneys‟ fees.
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3.
Because Plaintiff‟s
Thus, Plaintiff‟s action
Prevailing Party
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Plaintiffs argue that Defendant should not be considered
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the prevailing party because despite the Court‟s dismissal of
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the action, Plaintiffs achieved their litigation objective.
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Plaintiffs‟ contend that their sole desire was to remain in
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their home and to work with Defendant to produce a reasonable
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repayment plan on their mortgage loan.
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placed Plaintiffs on a three-month trial payment plan and
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offered Plaintiffs a final loan modification.
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counters that since the Court dismissed the complaint without
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leave to amend and the clerk entered judgment in favor of
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Defendant, it is the prevailing party.
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Defendant has apparently
Defendant
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“To be a prevailing party, the party must have received an
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enforceable judgment on the merits or a court-ordered consent
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decree.”
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(citing Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of
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Health & Human Res., 532 U.S. 598, 604 (2001) (“[E]nforceable
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judgments on the merits and court-ordered consent decrees create
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the „material alteration of the legal relationship of the
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parties' necessary to permit an award of attorney's fees.”));
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see also Cal. Civ. Code
U.S. v. Milner, 583 F.3d 1174, 1196 (9th Cir. 2009)
1717(b)(1) (“the party prevailing on
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the contract shall be the party who recovered a greater relief
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in the action on the contract.”).
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A dismissal with prejudice materially alters the legal
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relationship of the parties because the defendant does not
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remain subject to the risk that the Plaintiff will re-file.
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U.S. v. Milner, 583 F.3d 1174, 1196 (9th Cir. 2009) (concluding
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that Defendants were not the prevailing parties because
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Plaintiff‟s claims were dismissed without prejudice and thus
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Defendants were still subject to the risk of re-filing).
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Court entered judgment dismissing with prejudice all claims
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against Defendant.
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judgment on the merits which materially altered the legal rights
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of the parties.
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the prevailing party and is entitled to attorneys‟ fees.
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4.
See
This
Thus, Defendant received an enforceable
Accordingly, the Court finds that Defendant is
Reasonability of Attorneys‟ Fees
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When the underlying contract does not specify an amount of
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attorneys‟ fees, it is within the Court‟s discretion to award a
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reasonable amount.
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(Cal. Ct. App. 1d 1990).
Stokus v. Marsh, 217 Cal.App.3d 647, 654
In calculating reasonable attorney
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fees, courts consider the following factors: (1) the time and
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labor required, (2) the novelty and difficulty of the questions
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involved, (3) the skill necessary to perform the legal services
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properly, (4) the preclusion of other employment by the attorney
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due to acceptance of the case, (5) the customary fee, (6)
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whether the fee is fixed or contingent, (7) time limitations
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imposed by the client or circumstances, (8) the amount involved
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and the results obtained, (9) the experience, reputation and
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ability of the attorneys, (10) the “undesirability” of the case,
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(11) the nature and length of the professional relations with
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the client, and (12) awards in similar cases.
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et Etudes, S.A. v. Kaiser Cement & Gypsum Corp., 791 F.2d 1334,
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1341-42 (9th Cir. 1986).
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LaFarge Conseils
Defendant argues that it should receive $21,594.50 in
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attorneys‟ fees.
Defendant‟s counsel asserts that it was
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required to expend considerable time and resources to defend
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this matter and that its rates are reasonable.
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Defendant submitted the Declaration of Viddell Lee Heard (“Heard
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Decl.”) (Doc. #31) detailing the qualifications and rates for
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each individual who worked on the case, as well as the detailed
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billing records for the case showing the fees and costs incurred
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by Defendant.
In support,
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In Rivera v. Wachovia Bank, No. 09 CV 433 JM, 2009 WL
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3423743, *3 (S.D.Cal. Oct. 23, 2009), the court granted the fee
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motion, but reduced the requested attorneys‟ fees by almost half
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because:
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“[t]he time and
were not great,
difficult. The
dismiss, before
labor required to defend the matter
nor were the legal questions novel or
case was resolved on a motion to
[Defendant] prepared an answer or
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conducted discovery. As a mortgage provider,
[Defendant] has undoubtedly defended similar cases in
the past. . . . On these facts, it is unclear why
[Defendant] required the services of so many
experienced and highly-credentialed attorneys. While
the experience, reputation, and ability of the
attorneys is not questioned, it seems that these
attorneys had an overabundance of skill and experience
necessary to perform the legal services properly.
Rivera, 2009 WL 3423743 at *3.
Similar to Rivera, this case was entirely disposed of on a
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motion to dismiss.
There was no need for discovery or an answer
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and the legal questions were routine, as in Rivera.
It is
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similarly unclear why so many experienced and highly-
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credentialed attorneys were necessary to perform the legal
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services.
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The Court has examined the billing records and the Heard
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Decl. and concludes that a reduction of fees is warranted.
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case was staffed by two attorneys with over 30 years of
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experience each (Mr. Flewelling and Mr. Carr) and an attorney
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with seventeen years of experience (Mr. Heard).
In addition,
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the attorneys were assisted by four paralegals.
The Court finds
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the billing rates of the attorneys ($320-$350/hour) and
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paralegals ($135-$160) to be reasonable, but that Defendant‟s
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counsel spent an excessive amount of time on the case.
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Defendant itself points out in its reply, Plaintiff‟s counsel,
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Mr. Graham, “has used nearly identical complaints in a host of
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cases in this district that assert basically the same nine to
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thirteen claims; and that counsel‟s briefing was „superficial
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and contained boilerplate arguments that parrot the same
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conclusory allegations from the complaint.‟”
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This
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Reply Br. at 6:18-
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WL 2197534, *1 (N.D. Cal. June 06, 2011)).
Because of the
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standard boilerplate legal arguments in this case, the amount of
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time billed on this case by experienced lawyers such as Mr.
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Heard, Mr. Flewelling, and Mr. Carr was excessive.
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the principal attorney on this action, alone billed 52.5 hours.
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Not only were the hours excessive, they were also duplicative.
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For example, upon receiving the complaint, Mr. Flewelling
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devoted 0.7 hours to reviewing it, Mr. Heard dedicated an
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additional 0.60 hour review, followed by another 0.40 hour
Mr. Heard,
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review, and then Ms. Dries, a paralegal, spent 0.6 hours also
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reviewing it.
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fee request is unreasonably inflated.
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The Court agrees with Plaintiff that Defendant‟s
Furthermore, as Plaintiff‟s counsel points out, Defendant‟s
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counsel billed for activities that have no apparent relation to
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the instant case.
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Heard, and Ms. Dries, charged $567.50 for work relating to a
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class action and a construction defect complaint.
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Defendant did not respond to that mistake or offer to adjust its
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billing records.
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For example, on April 11, 2011, Mr. Carr, Mr.
In its reply,
The Court finds that, based on the factors outlined above,
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twenty-six hours of one attorney‟s (Mr. Heard) time and the nine
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hours for one paralegal‟s (Mr. Hernandez) time for a total of
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$9,715.00 is warranted.2
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The Court notes that Mr. Graham has filed several complaints
containing similar meritless claims on behalf of his clients. See
Fernandez v. GMAC Mortgage, LLC, No. C 11–2365 JF, 2011 WL 3795077
(N.D. Cal. Aug. 26, 2011); Nunez v. Bank of Am., N.A., No. C 11–
0081 MMC, 2011 WL 2181326 (N.D. Cal. June 02, 2011); Melegrito v.
CitiMortgage Inc., 2011 WL 2197534 (N.D. Cal. June 06, 2011);
Corazon v. Aurora Loan Serv., No. 11-00542 SC , 2011 WL 1740099
(N.D. Cal. May 05, 2011); De Jose v. EMC Mortg. Corp., No. 11–0139
JCS, 2011 WL 1539656 (N.D. Cal. Apr. 18, 2011).
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For all of the foregoing reasons, the Court GRANTS
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Defendant‟s motion for an award of costs and fees; Defendant is
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entitled to $9,715.00 in costs and fees.
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III. ORDER
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For the reasons set forth above,
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Defendant‟s Motion for an Award of Attorneys‟ Fees is
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GRANTED and Plaintiffs are ordered to pay $9,715.00 in costs and
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fees to Defendant.
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IT IS SO ORDERED.
Dated:
November 9, 2011
____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE
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