Wells Fargo Bank, National Association v. PACCAR Financial Corp. et al, No. 1:2008cv00904 - Document 36 (E.D. Cal. 2009)
Court Description: ORDER GRANTING Plaintiff Weills Fargo's Motion for Judgment in Interpleader and Award of Attorneys' Fees and Entry of Default Judgment as to Sidhu Truck 22 , signed by Chief Judge Anthony W. Ishii on 1/27/09. (cc via email: Fresno & Sacramento Financial Clerk)(Hellings, J)
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Wells Fargo Bank, National Association v. PACCAR Financial Corp. et al Doc. 36 1 2 3 4 5 IN THE UNITED STATES DISTRICT COURT FOR THE 6 EASTERN DISTRICT OF CALIFORNIA 7 8 9 10 11 12 13 14 ) ) ) Plaintiff, ) ) v. ) ) PACCAR FINANCIAL CORP., a ) Washington corporation; and SIDHU ) TRUCK LINE, INC., a California ) corporation, ) ) Defendants. ) ____________________________________) WELLS FARGO BANK, NATIONAL ASSOCIATION, NO. 1:08-CV-00904-AWI-SMS ORDER GRANTING PLAINTIFF WELLS FARGO’S MOTION FOR JUDGMENT IN INTERPLEADER AND AWARD OF ATTORNEYS’ FEES AND ENTRY OF DEFAULT JUDGMENT 15 16 17 Pending before the court are Plaintiff Wells Fargo Bank, National Association’s (“Wells 18 Fargo”) motion for discharge from liability and for an award of attorneys’ fees and costs and 19 motion for entry of default judgment in this interpleader action. Defendants PACCAR Financial 20 Corp. (“PACCAR”) and Sidhu Truck Line, Inc. (“Sidhu”) have not filed any oppositions to 21 Plaintiff’s motions. 22 BACKGROUND 23 On February 28, 2008, Sidhu deposited check No. 00217398 in the amount of $6371.39 24 payable to Sidhu and PACCAR to Sidhu’s account with Wells Fargo. The check was only 25 endorsed by Sidhu and not PACCAR. 26 On April 23, 2008, PACCAR contacted Wells Fargo and demanded payment of the full 27 amount of the check. Wells Fargo withdrew the proceeds of the check from Sidhu’s account and 28 Dockets.Justia.com 1 delivered the funds in the amount of $6371.39 into the United States District Court Registry. 2 On June 26, 2008, Wells Fargo filed a complaint for interpleader against Defendants. 3 On September 23, 2008, PACCAR answered the complaint. Sidhu did not answer the 4 5 6 7 complaint. On November 12, 2008, Wells Fargo filed a motion for entry of default against Sidhu with a corresponding proof of service. On November 14, 2008, the clerk of the court entered a default entry as to Sidhu for 8 failing to appear, plead, or answer Plaintiff’s complaint within the time allowed under the 9 Federal Rules of Civil Procedure. 10 On December 18, 2008, Plaintiff filed a motion for discharge from liability and for an 11 award of attorneys’ fees and costs and a motion for entry of default judgment. Defendants have 12 not filed any oppositions to Plaintiff’s motions. 13 On January 13, 2009, the court took the matter under submission pursuant to L.R. 78- 14 230(h) and directed Plaintiff to provide evidence that $315.00 is a reasonable hourly rate in the 15 Fresno legal community. 16 On January 19, 2009, Plaintiff and PACCAR filed a stipulation that all funds remaining 17 in the custody of the clerk after the court exercises its discretion and awards attorneys’ fees and 18 after the clerk pays Plaintiff the sum, the remaining balance, if any, shall be payable to 19 PACCAR. 20 21 On January 22, 2009, Plaintiff filed the declaration of attorney Tamara Lyles (“Ms. Lyles”) in support of attorney Robert Fisher’s (“Mr. Fisher”) hourly rate of $315.00. 22 DISCUSSION 23 Discharge of Liability 24 Rule 22 provides: “Persons having claims against the plaintiff may be joined as 25 defendants and required to interplead when their claims are such that the plaintiff is or may be 26 exposed to double or multiple liability.” Fed. R. Civ. P. 22(1). A party seeking to bring an 27 28 2 1 interpleader action under Rule 22 must first establish jurisdiction over its claims. Aetna Life Ins. 2 Co. v. Bayona, 223 F.3d 1030, 1033 (9th Cir. 2000). Here, pursuant to 28 U.S.C. §1335(a), 3 Plaintiff holds money of the value of more than $500 and the two adverse claimants are of 4 diverse citizenship as defined in 28 U.S.C. § 1332.1 “Interpleader’s primary purpose is not to 5 compensate, but rather to protect stakeholders from multiple liability as well as from the expense 6 of multiple litigation.” Aetna, 223 F.3d at 1034. The principle requirement for interpleader is a 7 real and reasonable fear of double liability or vexatious, conflicting claims. Indianapolis Colts v. 8 Mayor of Baltimore, 741 F.2d 954, 957 (7th Cir. 1984). 9 In this case, Plaintiff has received conflicting claims as to the $6371.39. Wells Fargo 10 itself has no interest in the $6371.39. If an interpleading plaintiff has no interest in the stake, the 11 plaintiff should be dismissed. Sun Life Assur. Co. of Canada v. Chan’s Estate, 2003 WL 12 22227881, *2 (N.D. Cal. Sept. 22, 2003). Moreover, Defendants do not object to Wells Fargo 13 being discharged in this action. Thus, Plaintiff’s motion for discharge can be granted. 14 Award of Attorneys’ Fees and Costs 15 Plaintiff asks for attorneys’ fees ands costs to compensate it for bringing this interpleader 16 action. Defendants have not objected to Plaintiff’s request for fees and costs. Courts generally 17 have discretion to award attorneys’ fees to a disinterested stakeholder in an interpleader action. 18 Abex Corp. v. Ski’s Enters., Inc., 748 F.2d 513, 516 (9th Cir. 1984). Courts routinely grant such 19 awards absent a showing of bad faith. Schirmer Stevedoring Corp. Ltd. v. Seaboard Stevedoring 20 Corp., 306 F.2d 188, 194-95 (9th Cir. 1962). “The amount of fees to be awarded in an 21 interpleader action is committed to the sound discretion of the district court.” Trustees of 22 Directors Guild of America-Producer Pension Benefits Plans v. Tise, 234 F.3d 415, 426 (9th Cir. 23 2000). The stakeholder will typically be compensated for reasonable attorneys’ fees out of the 24 25 26 1 Defendant PACCAR is a Washington corporation with its principal place of business in Bellevue, Washington. Defendant Sidhu is a California corporation with its principal place of business in Bakersfield, California. (Mr. Fisher’s Decla. ¶9 & ¶11.) 27 28 3 1 2 interpleader fund deposited in the court. Id. at 427. Thus, the court has discretion to award attorneys’ fees in this case. As a general matter, a 3 court will award fees from the proceeds whenever: “ (1) the party seeking fees is a disinterested 4 stakeholder; (2) who had conceded liability; (3) has deposited the funds into court; and (4) has 5 sought a discharge from liability.” Septembertide Publ’g v. Stein & Day, Inc., 884 F.2d 675, 683 6 (2d Cir. 1989). Based on the evidence before the court, it appears that Wells Fargo has met all of 7 the criteria for being awarded attorneys’ fees and costs. There is no argument or evidence that 8 Wells Fargo has any interest in the funds or that this case arises from Wells Fargo’s wrongdoing. 9 Wells Fargo has attempted to resolve all of the Defendants’ claims by initiating the complaint in 10 interpleader and this instant action. Moreover, there is no opposition from either Defendant to 11 Plaintiff’s motion. Accordingly, the court finds that an award of attorneys’ fees is warranted in 12 this action. Thus, the remaining question is the amount to which Plaintiff is entitled. 13 Amount of Attorneys’ Fees 14 Plaintiff hired attorney Mr. Fisher of the firm of Barton Klugman & Oetting LLP to 15 represent it in this interpleader action. Plaintiff seeks attorneys’ fees in the amount of $4788.00 16 and costs in the amount of $787.55 for a total sum of $5575.55. Mr. Fisher declares that he 17 expended 15.2 hours in bringing this action, which included reviewing bank records, 18 investigating the claims of the competing parties, drafting the complaint in interpleader and 19 motions for judgment in interpleader and entry of default judgment, and locating and serving the 20 claimants. (Mr. Fisher’s Decla. ¶13.) The Ninth Circuit has found that these expenses are 21 compensable. Trustees of Directors Guild of America-Producer Pension Benefits Plans, 234 22 F.3d at 426 (compensable expenses include “preparing the complaint, obtaining service of 23 process on the claimants to the fund, and preparing an order discharging the plaintiff from 24 liability and dismissing it from action.”). 25 26 Plaintiff contends that Mr. Fisher is entitled to an hourly rate of $315.00. The burden of establishing entitlement to an attorneys’ fee award lies solely with the claimant. Hensley v. 27 28 4 1 Eckerhart, 461 U.S. 424, 437 (1983). Additionally, the fee applicant “has the burden of 2 producing satisfactory evidence, in addition to the affidavits of its counsel, that the requested 3 rates are in line with those prevailing in the community for similar services of lawyers of 4 reasonably comparable skill and reputation.” Blum v. Stenson, 465 U.S. 886, 896 n.11 (1984); 5 Schwarz v. Secretary of Health and Human Servs., 73 F.3d 895, 908 (9th Cir. 1995). 6 Accordingly, Wells Fargo has the burden to establish that $315.00 is a reasonable rate in 7 the Eastern District of California, Fresno area. See Mendenhall v. NTSB, 213 F.3d 464, 471 n.5 8 (9th Cir. 2000) (stating that “[u]nder Ninth Circuit caselaw, . . . the relevant legal community is 9 the ‘forum district.’”); see also A&S Air Conditioning v. John J. Moore Co., 184 Cal. App. 2d 10 617, 621 (1960) (“The determination of reasonable attorneys’ fees is controlled by the amounts 11 customarily charged in the locale of the action . . .”). 12 In support of Mr. Fisher’s hourly rate, Plaintiff submits the declaration of Ms. Lyles, a 13 Fresno attorney. Ms. Lyles states in her declaration: “It is my opinion that $315 per hour is a 14 reasonable rate in the Fresno legal community for the services provided by Wells Fargo Bank’s 15 attorney . . .” (Ms. Lyles’s Decla. ¶7.) Ms. Lyles further provides: “In my experience, litigators 16 with 20 or more years experience generally bill fees ranging from $275 to $400 per hour, with 17 those similar experiences to Wells Fargo Bank’s attorney generally billing between $300 to $400 18 per hour.” (Ms. Lyles’s Decla. ¶ 6.) Mr. Fisher has been practicing law for over 30 years. (Ms. 19 Lyles’s Decla. ¶ 5.) 20 Based on Ms. Lyles’s declaration and given that Defendants have not submitted any 21 oppositions to Plaintiff’s request for attorneys’ fees, the court finds that Plaintiff has met its 22 burden of proof that $315 is a reasonable rate in this case. 23 Default Judgment 24 Rule 55(b)(2) provides that judgment may be entered: 25 26 By The Court. In all other cases, the party must apply to the court for a default judgment . . . If the party against whom judgment by default is sought has appeared in the action, the party (or, if appearing by representative, the party’s representative) shall be served with written notice of the application for judgment 27 28 5 1 2 3 at least 3 days prior to the hearing on such application. Fed. R. Civ. P. 55 (b)(2). Thus, a party in default is only entitled to Rule 55 (b)(2) notice if he has “appeared” in the 4 action. However, the appearance need not necessarily be a formal one, such as one involving a 5 submission or presentation to the court. In limited situations, informal contacts between the 6 parties have sufficed when the party in default has thereby demonstrated a “clear purpose to 7 defend the suit.” Wilson v. Moore & Associates, 564 F.2d 366, 368-69 (9th Cir. 1977). 8 9 Here Sidhu has not filed a formal appearance nor has it demonstrated a “clear purpose to defend the suit.” It appears that Mr. Fisher and Kevin Sidhu2 (“Mr. Sidhu”) had several 10 telephonic conversations about Plaintiff’s interpleader complaint and the possibility of Sidhu 11 defaulting if Sidhu did not file an answer.3 (Mr. Fisher’s Decla. ¶10.) Plaintiff contends that Mr. 12 Sidhu told Mr. Fisher that he was not going to spend money for an attorney in this matter. Id. 13 Based on the evidence before the court, the court finds that Sidhu has not demonstrated a “clear 14 purpose to defend the suit.” Therefore, Defendant Sidhu is not entitled to Rule 55 (b)(2) notice 15 in this matter. 16 In this case, the clerk entered a default entry as to Sidhu for failing to appear, plead, or 17 answer Plaintiff’s complaint. With the entry of default, this court may accept the factual 18 allegations of Plaintiff’s complaint as true. TeleVideo Systems, Inc. v. Heidenthal, 826 F.2d 915, 19 917-918 (9th Cir. 1987) (“Upon default, the factual allegations of the complaint, except those 20 21 22 2 Mr. Fisher submits that he believed Mr. Sidhu to be an officer and principal of Sidhu Truck Lines. (Mr. Fisher’s Decla. ¶10.) 3 27 Mr. Fisher submits that he called Mr. Sidhu on several occasions and encouraged him to get an attorney to assert Sidhu’s claim to the proceeds of check No. 00217398. (Mr. Fisher’s Decla. ¶10.) Mr. Fisher alleges that he informed Mr. Sidhu that Sidhu would be placed in default if Sidhu Truck Lines did not answer. Id. Mr. Fisher alleges that Mr. Sidhu stated that he did not know any Fresno attorneys. Id. Mr. Fisher alleges that he located Fresno attorney Paul Franco and informed Mr. Sidhu that Paul Franco would be receptive to representing Sidhu. Id. Thereafter, Mr. Fisher alleges that Mr. Sidhu told him that he was not going to spend money for an attorney in this matter and that he would try to get the money from Wells Fargo a different way. Id. Mr. Fisher also submits that he personally served Plaintiff’s interpleader complaint upon Sidhu in Texas. Id. 28 6 23 24 25 26 1 relating to the amount of damage, will be taken as true.”). Thus, based on Plaintiff’s uncontested 2 allegations, they are entitled to relief and this court grants a default judgment as to Sidhu. 3 4 ORDER 5 Accordingly, it is hereby ORDERED as follows: 6 (1) 7 8 and demands asserted against Wells Fargo; (2) 9 Defendants are restrained from instituting or prosecuting any action in any court related to the rights and obligations of Plaintiff to the Defendant’s with respect to 10 11 Plaintiff is discharged from any and all liability on account of any and all claims check No. 00217398 in the amount of $6371.39; (3) Plaintiff’s motion for attorneys’ fees and costs is granted. Plaintiff is awarded 12 attorneys’ fees in the amount of $4788.00 and costs in the amount of $787.55 for a 13 total of $5575.55 in attorneys’ fees and costs. 14 (4) Plaintiff’s motion for entry of a default judgment as to Sidhu is granted; and 15 (5) Pursuant to Plaintiff’s and Defendant PACCAR’s stipulation, after the clerk pays 16 Plaintiff attorneys’ fees in the sum of $5575.55 from the proceeds, the remaining 17 balance of $795.84 shall be payable to PACCAR. 18 19 IT IS SO ORDERED. 20 Dated: 0m8i78 21 January 27, 2009 /s/ Anthony W. Ishii CHIEF UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 7
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