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Jacob Winding Dba Top To Bottom Cleaning Service v. Ndex West

November 1, 2011

JACOB WINDING DBA TOP TO BOTTOM CLEANING SERVICE, PLAINTIFF,
v.
NDEX WEST, LLC AS TRUSTEE; WELLS FARGO BANK, N.A., AND DOES 1 THROUGH 100, INCLUSIVE,
DEFENDANTS



ORDER ON DEFENDANTS' REQUEST FOR AWARD OF ATTORNEYS' FEES Doc. # 62

In this action for damages and declaratory relief, the court entered judgment in favor of defendants NDEX West and Wells Fargo Bank, N.A. (Collectively "Defendants") on May 18, 2011. Currently before the court is Defendants' motion for an award of attorneys' fees, which was filed on June 15, 2011. Defendants' claim for attorney's fees arises from a promissory note secured by a trust deed on property located in Salida, California, (the "Property") that plaintiff, Jacob Winding ("Plaintiff") became subject to when he accepted title to the property by way of quitclaim deed. Defendants seek attorneys' fees pursuant to provisions in the promissory note for legal fees and expenses relating to their successful defense of Plaintiff's action to quiet title and cancel void instruments. For the reasons that follow the court will grant Defendants' motion with minor adjustments to requested rates.

FACTUAL BACKGROUND AND PROCEDURAL HISTORY

On April 13, 2007, a first trust deed (the "2007 Trust Deed") was executed by then owners, Warner and Iris Bowers, ("Owners") using the Property to secure a loan in the amount of $255,500.00 (the "2007 Loan"). The lender was World Savings Bank, FSB, which eventually became Wells Fargo Bank, N.A. ("Wells Fargo"). The court has previously judicially noticed documents denoting the transition of World Savings Bank, FSB, through sales, mergers and name changes to its current identity as Wells Fargo. On December 4, 2009, the owner Warner Bowers transferred his interest in the Property via quitclaim deed to TTB Services, Inc. The quitclaim deed was recorded on December 7, 2009. The 2007 Loan went into default at sometime prior to March 24, 2010. Wells Fargo recorded a Notice of default on March 24, 2010, and recorded a Notice of Sale on June 25, 2010. A trustee's sale was conducted on September 22, 2010. Wells Fargo took title to the Property at the trustee's sale pursuant to its credit bid.

Plaintiff's First Amended Complaint ('FAC") was filed on March 16, 2011, following the dismissal of Plaintiff's original complaint pursuant to Defendants' motion to dismiss. The FAC alleged three claims for relief. The first requested the court to declare Plaintiff's rights with regard to the priority of the Plaintiff's and Defendants' claims on the Property. The second claim for relief requested injunctive relief to hold void the promissory note secured by 2007 Deed of Trust and the Deed of Trust Upon Sale. Plaintiff's third claim for relief alleged fraud based on Defendants' representation of the status of their Deed of Trust as superior to Plaintiff's. Defendants successfully defended Plaintiff's action challenging their claim to their interest in the Property by way of motions to dismiss and to strike filed on March 31, 2011. On May 18, 2011, the court granted Defendants' motion to dismiss in its entirety with prejudice and direct entry of judgment. The court's order of judgment in favor of Defendants was entered on the same day. Plaintiff filed notice of appeal on June 13, 2011. Defendants' motion for attorneys' fees was filed on June 15, 2011. The hearing on Defendants' request for attorneys' fees was vacated by the court on August 23, 2011. Plaintiff's opposition to the motion for attorneys' fees was filed on September 6, 2011.

Defendants' claim to attorneys' fees is pursuant to two sections of the Promissory Note securing the 2007 Loan. Defendants quote Section 7(E) of the Promissory Note as follows:

Payment of Lender's Costs and Expenses: The Lender will have the right to be paid 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.

Defendants also cite a fee clause in the Deed of Trust 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' sees, purchasing insurance required under Paragraph 5, above (such insurance may cost more and provide less coverage than the insurance I might purchase), and entering on the Property to make repairs Lender must give me notice before Lender may take any of these actions. Although Lender may take action under this Paragraph 7, Lender does not have to do so. Any action taken by Lender under this Paragraph 7, will not release me from my obligations under this Security Instrument. ¶ 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. # 62 at 2:22-3:9.

Plaintiff's opposition to Defendants' motion for attorneys' fees is somewhat difficult to interpret, but Plaintiff's primary contention appears to be that Defendant's motion for attorneys' fees is time-barred.

LEGAL STANDARD

An award of reasonable attorney's fees is determined through the hybrid lodestar multiplier approach. Van Gerwen v. Guarantee Mut. Life Co., 214 F.3d 1041, 1045 (9th Cir. 2000); McElwaine v. U.S. West, Inc., 176 F.3d 1167, 1173 (9th Cir. 1999); cf. Ketchum v. Moses, 24 Cal.4th 1122, 1133-36 (2001) (discussing the lodestar approach in California). The Ninth Circuit has explained the hybrid lodestar approach as follows:

The lodestar/multiplier approach has two parts. First, a court determines the "lodestar" amount by multiplying the number of hours reasonably expended on the litigation by a reasonable hourly rate. See D'Emanuelle [v. Montgomery Ward & Co., Inc., 904 F.2d 1379, 1383 (9th Cir. 1990)]; Hensley [v. Eckerhart, 461 U.S. 424,] 461 (1983). The party seeking an award of fees must submit evidence supporting the hours worked and the rates claimed. See Hensley, 461 U.S. at 433. A district court should exclude from the lodestar amount hours that are not reasonably expended because they are "excessive, redundant, or otherwise unnecessary." Id. at 434. Second, a court may adjust the lodestar upward or downward using a "multiplier" based on factors not subsumed in the initial calculation of the lodestar. See Blum v. Stenson, 465 U.S. 886, 898-901 (1984) (reversing upward multiplier based on factors subsumed in the lodestar determination); Hensley, 461 U.S. at 434 n.9 (noting that courts may look at "results obtained" and other factors but should consider that many of these factors are subsumed in the lodestar calculation).

The lodestar amount is presumptively the reasonable fee amount, and thus a multiplier may be used to adjust the lodestar amount upward or downward only in "'rare' and 'exceptional' cases, supported by both 'specific evidence' on the record and detailed findings by the lower courts" that the lodestar amount is unreasonably low or unreasonably high. See Pennsylvania v. Delaware Valley Citizens' Council for Clean Air, 478 U.S. 546, 565 (1986) (quoting Blum, 465 U.S. at 898-901); Blum, 465 U.S. at 897; D'Emanuele, 904 F.2d at 1384, 1386; Cunningham v. County of Los Angeles, 879 F.2d 481, 487 (9th Cir. 1989).

Van Gerwen, 214 F.3d at 1045; cf. Ketchum, 24 Cal.4th at 1132-39 (discussing lodestar and multipliers in California).

The fee applicant "has the burden of producing satisfactory evidence, in addition to the affidavits of its counsel, that the requested rates are in line with those prevailing in the community for similar services of lawyers of reasonably comparable skill and reputation." Blum, 465 U.S. at 896 n.11; Dang v. Cross, 422 F.3d 800, 814 (9th Cir. 2005); Schwarz v. Secretary of Health and Human Servs., 73 F.3d 895, 908 (9th Cir. 1995). The Ninth Circuit has elaborated that:

Once the number of hours is set, "the district court must determine a reasonable hourly rate considering the experience, skill, and reputation of the attorney requesting fees." [Chalmers v. City of Los Angeles, 796 F.2d 796 F.2d1205, 1210.] This determination "is not made by reference to rates actually charged by the prevailing party." Id. The court should use the prevailing market rate in the community for similar services of lawyers "of reasonably comparable skill, experience, and reputation." Id. at 1210-11. Either current or historical rates prevailing rates may be used. Missouri v. Jenkins, 491 U.S. 271 (1984). The use of current rates may be necessary to adjust for inflation if the fee amount would otherwise be unreasonable; the district court must look to the "totality of the circumstances and the relevant factors, including delay in payment." [Jordan v. Multnomah County, 815 F.2d 1258, 1262 (9th Cir. 1987).]

D'Emanuelle v. Montgomery Ward & Co., Inc., 904 F.2d 1379, 1384 (9th Cir. 1990); cf. Ketchum, 24 Cal.4th at 1139 ("Indeed, the 'reasonable hourly rate [used to calculate the lodestar] is the product of a multiplicity of factors . . . the level of skill necessary, time limitations, the amount to be obtained in the litigation, the attorney's reputation, and the undesirability of the case.'"). The "relevant legal community" in the lodestar calculation is generally the forum in which the district court sits.*fn1 Mendenhall v. NTSB, 213 F.3d 464, 471 (9th Cir. 2000); Barjon v. Dalton, 132 F.3d 496, 500 (9th Cir. 1997); Schwarz, 73 F.3d at 906; Deukmejian, 987 F.2d at 1405; Davis v. Mason County, 927 F.2d 1473, 1488 (9th Cir. 1991); cf. Childrens Hospital and Medical Center v. Belshe, 97 Cal. App. 4th 740, 782-783 (2002) (upholding rate in a case tried in San Francisco after trial court reviewed rates of attorneys in the San Francisco ...


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