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Lopez v. Wachovia Mortgage

July 29, 2010

PATRICIA LOPEZ, PLAINTIFF,
v.
WACHOVIA MORTGAGE; WORLD SAVINGS BANK FSB; ETS SERVICES, LLC; MAESTRE HOME LOANS; DANNY MAESTRE; AND DOES 1-20 INCLUSIVE, DEFENDANT.



ORDER GRANTING DEFENDANT'S MOTION FOR AWARD OF ATTORNEYS' FEES

This matter comes before the Court on Defendant Wachovia Mortgage, FSB's ("Defendant's") Motion for Award of Attorneys' Fees (Doc. No. 36) from Plaintiff Patricia Lopez (Plaintiff). The motion for attorneys' fees is brought pursuant to California Code of Civil Procedure (CCP) Section 1033.5(a)(10)(A) which permits recovery of attorney fees as costs when authorized by contract. Plaintiff opposes the motion.*fn1

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff began her lawsuit against Defendant by filing a Complaint in this Court on August 21, 2009. (Doc. No. 1). Defendant thereafter brought a Motion to Dismiss the Complaint. (Doc. No. 9). Before the motion could be heard, Plaintiff filed a First Amended Complaint ("FAC") (Doc. No. 14), which was substantially identical to the original Complaint. The filing of the FAC caused Defendant's motion to be vacated. Accordingly, Defendant then brought a Motion to Dismiss the FAC. (Doc. No. 16). Plaintiff did not file either an opposition to the motion, or a statement of non-opposition, in violation of the Local Rules. The Court granted Defendant's unopposed motion to dismiss. The Court also held a show cause hearing, at which Plaintiff's counsel was sanctioned for failing to comply with the local rules, and ordered to inform her client and her contractor of the Court's sanctions.

On February 18, 2010 this Court entered judgment dismissing Wachovia Mortgage, FSB, formerly known as World Savings Bank, FSB, with prejudice pursuant to FRCP 12(b)(6). (Doc. No. 31). The judgment states that FSB shall be entitled to their costs, including attorneys' fees, in a sum according to a motion for such fees and costs.

On March 1, 2010 Plaintiff filed a Notice of Voluntary Dismissal pursuant to FRCP 41(a)(1)(I) as to the remaining Defendants. (Doc. No. 32). On April 5, 2010 Plaintiff re-filed this matter against Defendant, Wachovia, et al., in Sacramento County Superior Court, Case No. 34-2010-00074531.

Defendant filed this motion on March 15, 2010 arguing: (1) attorneys' fees are recoverable under the Promissory Note ("Note") and Deed of Trust ("DOT"); (2) the fee clauses are applicable to, and encompass, Plaintiff's claims; and (3) Defendant's attorneys' fees are reasonable.

Plaintiff opposes this motion (Doc. No. 38), arguing: (1) Defendant's motion is untimely and barred under FRCP 54(d)(2); and (2) Defendant is not a "prevailing party" for the purposes of California Civil Code (CCC) section 1717. Plaintiff also contends that Defendant has failed to substantiate its fee requests. However, Plaintiff does not bring any specific substantive challenges to Defendant's request, nor does she support her general allegations. For the reasons set forth below, Defendant's motion for attorneys' fees is GRANTED.

II. OPINION

A. Legal Standard

"In an action where a federal district court exercises subject matter jurisdiction over a state law claim, so long as state law does not contradict a valid federal statute, state law denying the right to attorney's fees or giving a right thereto . . . should be followed." Avery v. Management, 568 F.3d 1018, 1023 (9th Cir. 2009)(citing MRO Communications, Inc. v. AT&T Co., 197 F.3d 1276, 1281 (9th Cir. 1999) (holding state law controls entitlement to attorney's fees if the district court exercises subject matter jurisdiction over a state law claim)). This Court exercised subject matter jurisdiction in dismissing all of Plaintiff's claims. Therefore, California law supplies the rules of decision in this matter.

Moreover, "[s]tate law controls both the award and the reasonableness of fees awarded where state law supplies the rule of decision. California Code of Civil Procedure section 1033.5(a)(1) permits recovery of attorney fees when authorized by contract. . . . California Civil Code section 1717(a) addresses recovery of attorney fees in contract actions and provides:

In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract . . . shall be entitled to reasonable attorney's fees in addition to other costs." Whittle v. Wells Fargo Bank, 2009 WL 1854110, at **3-4 (E.D. Cal. May 6, 2010) (internal citations omitted).

"To be a prevailing party, the party must have received an enforceable judgment on the merits or a court-ordered consent decree." U.S. v. Milner, 583 F.3d 1174, 1196 (9th Cir. 2009) (citing Buckhannon Bd. & Care Home, Inc. v. W. Va. Dep't of Health & Human Res., 532 U.S. 598, 604 (2001) ("[E]nforceable judgments on the merits and court-ordered consent decrees create the "material alteration of the legal relationship of the parties' necessary to permit an award of attorney's fees.")). An involuntary dismissal, "except one for lack of jurisdiction, improper venue, or failure to join a party under Rule 19--operates as an adjudication on the merits." Fed. R. Civ. P. ("FRCP") 41.

A dismissal with prejudice materially alters the legal relationship of the parties because the defendant does not remain subject to the risk that the Plaintiff will re-file. See U.S. v. Milner, 583 F.3d 1174, 1196 (9th Cir. 2009) (concluding that Defendants did not prevail because Plaintiff's claims were dismissed without prejudice and thus Defendants were still subject to the risk of re-filing). See also Avery v. First Resolution Management Corp., 568 F.3d 1018, 1024 (9th Cir. 2009). This Court entered judgment dismissing with prejudice all claims against Defendant for failure to state a claim, not for lack of subject matter jurisdiction. Thus, Defendant received an enforceable judgment ...


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